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[2016] FCA 1496
Federal Court of Australia
2016-12-09
Mr J, Foster J
Original judgment source is linked above.
FOSTER J: 1 On 1 November 2016, I made orders pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Corps Act) convening a meeting of the holders of fully paid ordinary shares in the plaintiff (SAI) for the purpose of considering and, if thought fit, agreeing (with or without modification) to a scheme of arrangement (scheme) the terms of which are contained in Attachment C to the scheme booklet, a copy of which was exhibited to the Orders which I made on 1 November 2016. My reasons for making the orders which I made on 1 November 2016 are found at SAI Global Limited; In the Matter of SAI Global Limited [2016] FCA 1312 (SAI No 1). Persons reading these Reasons should also read my earlier Reasons in order to understand these Reasons. 2 On 9 December 2016, I made orders approving the scheme. These are my Reasons for making those orders. 3 The evidence before me at the second Court hearing established the following matters: (a) SAI is a Pt 5.1 of the Corps Act body; (b) The scheme meeting was held on 5 December 2016, as planned. The ordinary shareholders of SAI approved the scheme, both by a majority in number and by more than 75% of the votes cast. Approximately 99.88% of shares voted on the scheme resolution and approximately 95.42% of members by number who voted on that resolution voted in favour of the scheme. An issue arose at the first Court hearing as to whether or not the treatment of holders of Vesting Securities and Rollover Incentive Securities under the scheme creates separate classes (see [71]-[76] in SAI No 1). As foreshadowed at the first Court hearing, the votes of shareholders who also held Rollover Incentive Securities were tagged. Of the 63 shareholders in SAI who held Rollover Incentive Securities who were present at the scheme meeting (in person or by proxy), 40 voted in favour of the scheme resolution, none voted against the scheme resolution and 23 abstained from voting at the scheme meeting. The tagged shareholders cast a total of 625,055 eligible votes in favour of the scheme resolution. The percentage of votes cast in favour of the scheme resolution by the tagged shareholders was 0.46% of the total eligible votes cast in favour of the scheme resolution; (c) On 1 November 2016, the Explanatory Statement was lodged with Australian Securities and Investments Commission (ASIC). It was registered pursuant to s 412(6) of the Corps Act on the same day; (d) The relevant scheme materials, including the scheme booklet, were dispatched to the shareholders of SAI on 4 November 2016. This fact was proved by the tender of the requisite statement in writing of the Notice of Meeting in respect of the scheme meeting (Form 530) and by additional affidavit evidence; (e) The course of the scheme meeting was proved by detailed evidence tendered before the Court at the second Court hearing (see the affidavit of Andrew Mark Rendle Dutton affirmed on 7 December 2016); (f) Notwithstanding that various shareholders asked questions at the scheme meeting, no shareholder gave notice of any intention to appear at the second Court hearing nor did any shareholder appear at that hearing; (g) By letter dated 8 December 2016, ASIC notified SAI that, pursuant to s 411(17)(b) of the Corps Act, ASIC did not object to the scheme; (h) Casmar (Australia) Pty Ltd (ACN 615 021 479) (Bidco) executed the bidder's deed poll on 26 October 2016 (as to which, see [20]-[27] of SAI No 1, esp at [27]). Bidco had been nominated by Casmar Holdings Pte Limited to acquire all of the ordinary shares in SAI under the scheme; (i) The fulfilment of all of the conditions precedent to the implementation of the scheme (with the exception of Court approval) (as to which, see Exhibit 2); and (j) The scheme is fair and reasonable and in the best interests of the scheme shareholders. 4 Accordingly, in light of the above evidence, I was satisfied that all relevant procedural requirements for the scheme had been satisfied and that the scheme continued to be in the best interests of the shareholders of SAI. 5 As submitted by SAI at the second Court hearing, the role of the Court in approving schemes is supervisory in nature. In deciding whether to approve a scheme, the Court must consider whether there has been compliance with the Corps Act, whether the majority of shareholders are acting in good faith in voting in favour of the scheme and whether the scheme is one that is capable of being accepted by shareholders looking to their own commercial advantage (see Re NRMA Ltd (No 1) (2000) 156 FLR 349 at 361 [41]; Re Seven Network Ltd (No 3) (2010) 267 ALR 583 at 588-589 [31]-[44]). 6 Where there is no opposition to the order for approval and there is no public policy reason for withholding approval, considerable weight should be given to the commercial judgment of those who have voted to approve the scheme (see Re Bond Corporation Holdings Ltd (1991) 5 WAR 143 at 154-155; Re Anaconda Nickel Holdings Pty Ltd (2003) 44 ACSR 229 (Anaconda) at 237 [47]; Re BRL Hardy Ltd (2003) 45 ACSR 397 at 399 [20]; Re Central Pacific Minerals NL [2002] FCA 239 [13]). 7 A useful summary of the above principles is to be found in Re Signature Capital Investments Ltd (No 2) [2016] FCA 385. 8 For all of the above reasons, I was satisfied that I should make the orders sought approving the scheme and did so on 9 December 2016. 9 In addition to the usual order approving the scheme, SAI sought an order exempting it from the requirements of s 411(11) of the Corps Act. That subsection requires a corporation in respect of which a scheme of arrangement has been approved to annex a copy of every Order of the Court made for the purposes of s 411(4)(b) to every copy of the constitution of the corporation issued after the Order has been made unless the Court exempts the corporation from compliance with that requirement. Subsection (12) of s 411 of the Corps Act empowers the Court to grant such an exemption. In the present case, there is no utility in requiring SAI to comply with s 411(11) because the scheme does not effect any change to its constitution (Anaconda at 240 [65]). Further, the scheme does not involve a modification of any of the rights of shareholders or of creditors or of persons dealing with SAI. 10 In light of the matters discussed at [9] above, I made the exempting order sought by SAI. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster.