Rubik Financial Limited, in the matter of Rubik Financial Limited (No 2) [2017] FCA 493

YATES J: 1 On 23 March 2017, I made orders pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act) that the plaintiff, Rubik Financial Limited (Rubik), convene a meeting of its members for the purpose of considering and, if thought fit, agreeing to (with or without modification) a scheme of arrangement under which 100% of its ordinary shares would be acquired by, and transferred to, Temenos Solutions Australia Pty Ltd (TSA), a subsidiary of Temenos Group AG (TG) (the scheme): Rubik Financial Limited, in the matter of Rubik Financial Limited [2017] FCA 379 (my earlier reasons). 2 On 26 April 2017, the meeting was held and the scheme was agreed to by the majorities required under s 411(4)(a)(ii) of the Act. Rubik now seeks orders pursuant to s 411(4)(b) of the Act that the scheme be approved. The scheme document is Exhibit 5. 3 The following affidavits have been read in support of the orders now sought: Adam Githens Laura, affirmed 4 May 2017; Craig Evan Coleman, sworn 3 May 2017; Rodney Rex Somes, affirmed 3 May 2017; and Dieter Andreas Gericke, affirmed 3 May 2017. 4 On the evidence before me, I am satisfied that the explanatory statement, represented by the scheme booklet (Exhibit 1), was registered with the Australian Securities and Investments Commission (ASIC) on 24 March 2017, prior to it being sent out on 27 March 2017: see s 412(6) of the Act. 5 The scheme meeting was convened and held under s 411 of the Act in accordance with the orders made on 23 March 2017. At the meeting, 87.1% of the members present and voting (either in person or by proxy) voted in favour of the scheme and 97.72% of the votes were cast in favour of the scheme. 6 A notice of the second court hearing was published in The Australian newspaper on 28 April 2017. A further advertisement was published in The Australian on 2 May 2017, for the reasons explained below. 7 ASIC has provided a statement in writing that it has no objection to the scheme. Accordingly, there is no impediment under s 411(17) of the Act to the Court giving the approval that is sought. 8 I am satisfied that the scheme is fair and reasonable. In coming to this conclusion, I have taken into account the fact that Rubik's directors unanimously recommended the scheme to members; no superior proposal has been forthcoming; the independent expert, Grant Thornton Corporate Finance Pty Ltd, has provided an opinion that the scheme is fair and reasonable and, therefore, in the best interests of members; the scheme has been agreed to by the members, with the significant majorities I have recorded; and no person has come forward to oppose the scheme. 9 I record the following additional matters. 10 First, as I recorded at [21] of my earlier reasons, TG has executed a Deed Poll in favour of the scheme shareholders under which it covenants to deposit or procure the deposit of the scheme consideration in cleared funds into a trust account and to undertake all other actions attributed to it under the scheme. It has also covenanted to procure that TSA undertakes all actions attributed to it under the scheme. I am satisfied, on the basis of Dr Gericke's affidavit, that TG had power to enter into the Deed Poll and has the power to perform its obligations thereunder; that the Deed Poll has been duly executed by TG under Swiss law; and that the persons who executed the Deed Poll on behalf of TG were authorised by TG to act as its representatives for that purpose. 11 Secondly, approval of the scheme is subject to certain pre-conditions being satisfied: see clause 3.1 of the scheme. I am satisfied that the conditions identified in paragraphs (a) and (b) of clause 3.1 have been satisfied. The other pre-conditions either relate to or are consequent upon the Court's approval. Certificates concerning satisfaction of the conditions precedent have been provided by Rubik and TG (Exhibits 2 and 3). Further, a Deed acknowledging satisfaction of the conditions precedent has been made by Rubik, TG and TSA (Exhibit 4). 12 Thirdly, in relation to advertising the second court hearing, the advertisement placed in The Australian newspaper on 28 April 2017 misnamed Rubik as Rubik Group Limited. As it happens, publication of the advertisement in this form was in accordance with Order 3 made on 23 March 2017. Unbeknown to the Court and Rubik's lawyers, the advertisement annexed to the Court's orders contained this mistake, which was not realised until after the advertisement was published on 28 April 2017. Unfortunately, the earliest time that an amended advertisement could be published was 2 May 2017. 13 Rubik submits that nothing of substance turns on this. It says that the mistake was really procedural in nature. It also points to the fact that there was a strong attendance at the scheme meeting and that the outcome of the meeting was published by the Australian Securities Exchange on 26 April 2017, including the fact that the second court hearing would be held on 5 May 2017. Based on these matters, Rubik submits that anyone with a real interest in the scheme would have attended the scheme meeting (either in person or by proxy) and/or would have been apprised of the second court hearing, quite apart from the advertisements placed in The Australian. Rubik seeks an order pursuant to r 1.39 of the Federal Court Rules 2011 (Cth) (the Federal Court Rules) and r 1.10 of the Federal Court (Corporations) Rules 2000 (Cth) (the Corporations Rules), that the time referred to in r 3.4(3)(b) of the Corporations Rules (publication at least 5 days before the second court hearing) be abridged to 3 days. Alternatively, it seeks an order pursuant to s 1322(4)(a) of the Act, which provides: Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes: (a) an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation; 14 Section 1322(6) provides: The Court must not make an order under this section unless it is satisfied: (a) in the case of an order referred to in paragraph (4)(a): (i) that the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature; (ii) that the person or persons concerned in or party to the contravention or failure acted honestly; or (iii) that it is just and equitable that the order be made; and (b) in the case of an order referred to in paragraph (4)(c) - that the person subject to the civil liability concerned acted honestly; and (c) in every case - that no substantial injustice has been or is likely to be caused to any person. 15 As I have noted, there has been no breach of Order 3. However, strictly speaking, there may not have been compliance with r 3.4(3)(b) of the Corporations Rules. I am not persuaded that s 1322(4)(a) of the Act is the appropriate source of power to overcome any non-compliance in that regard. Further, I am not persuaded that recourse to r 1.39 of the Federal Court Rules via r 1.10 of the Corporations Rules to abridge time, after the event, is appropriate. 16 Order 3, as made, was intended to cover the operation of r 3.4(3) of the Corporations Rules in the present case. Order 3 was complied with. I am satisfied that, in the particular circumstances of this case, the misnaming of Rubik in the advertisement published on 28 April 2017 was without material consequence and that the better course is to order that the publication of the advertisements on 28 April 2017 and 2 May 2017 be taken together as sufficient compliance with the requirement of r 3.4(3)(b) of the Corporations Rules. 17 Fourthly, Rubik seeks the exemption provided in s 411(12) of the Act with respect to the requirement of s 411(11) that the Court's approval order be annexed to every copy of its constitution. I accept Rubik's submission that the requirement of s 411(11) would serve no useful purpose in the present case and that, accordingly, the exemption provided by s 411(12) should be granted: Re Equinox Resources Ltd (2004) 49 ACSR 692 at [22]. 18 Having regard to the matters I have noted and the observations I have made above, I am satisfied that all necessary procedural requirements have been satisfied for the approval that is now sought from the Court. There is no discretionary reason why approval should not be given. I therefore propose to order that the scheme be approved. I will also order that, pursuant to s 411(12) of the Act, Rubik be exempted from compliance with s 411(11) of the Act. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.