CCI HOLDINGS LIMITED (ABN 51 000 680 740), in the matter of CCI Holdings Limited (ABN 51 000 680 740)

[2007] FCA 1283

FEDERAL COURT OF AUSTRALIA

CCI HOLDINGS LIMITED (ABN 51 000 680 740), in the matter of CCI Holdings Limited (ABN 51 000 680 740) [2007] FCA 1283

CCI HOLDINGS LIMITED (ABN 51 000 680 740), IN THE MATTER OF CCI HOLDINGS LIMITED (ABN 51 000 680 740)  

NSD829 OF 2007

EMMETT J

20 JUNE 2007

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD829 OF 2007

CCI HOLDINGS LIMITED ABN 51 000 680 740 Plaintiff
JUDGE:	EMMETT J
DATE OF ORDER:	20 JUNE 2007
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Pursuant to section 411(4)(b) of the Corporations Act 2001 the scheme of arrangement between the Plaintiff and its members in the form annexed hereto and marked "A" be approved.

2.Pursuant to section 411(12) of the Corporations Act 2001, the Plaintiff be exempted from compliance with section 411(11) of the Corporations Act 2001 in relation to the order at paragraph 1.

3.These orders be entered forthwith.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Scheme of Arrangement

CCI Holdings Limited

The holders of fully paid ordinary shares,

other than holders of Excluded Shares,
in CCI Holdings Limited

Contents

Clause

Number         Heading  Page

1  Definitions and interpretation  2

2  Preliminary  2

3  Conditions precedent  2

4  Implementation of Scheme  2

5  Payment of Scheme Consideration  2

6  Dealings in CCI Shares  2

7  Quotation of CCI Shares  2

8  General Scheme provisions  2

9  Governing law and jurisdiction  2

Scheme of Arrangement pursuant to section 411 of the Corporations Act 2001 (Cth)
between:	CCI Holdings Limited (ABN 51 000 680 740) (CCI)
and:	The holders of fully paid ordinary shares in CCI

Operative provisions

1         Definitions and interpretation

Definitions
1.1      In this Scheme, unless the context requires otherwise:

ASIC means the Australian Securities and Investments Commission.
ASX means ASX Limited or, where the context requires, the financial market operated by it.
Business Day means a day that is not a Saturday, Sunday, public holiday or bank holiday in Sydney.
BV means Bureau Veritas Australia Pty Ltd (ABN 15 090 894 570).
CCI Dividend means an interim fully franked cash dividend of up to 3 cents per CCI Share (if any) to be paid on or before the Implementation Date to CCI Shareholders at the Scheme Record Date in accordance with the terms of the Merger Implementation Agreement.
CCI Register means the register of CCI maintained by or on behalf of CCI in accordance with section 168(1) of the Corporations Act.
CCI Share means a fully paid ordinary share in CCI.
CCI Shareholder means a person who is registered in the CCI Register as a holder of CCI Shares.
CHESS means the Clearing House Electronic Subregister System of share transfers operated by ASX Settlement and Transfer Corporation Pty Ltd.
Corporations Act means the Corporations Act 2001 (Cth).
Court means the Federal Court of Australia or Supreme Court of New South Wales.
Deed Poll means the deed poll dated 15 May 2007 executed by BV under which BV covenants in favour of each Scheme Shareholder to perform its obligations under the Merger Implementation Agreement and the Scheme.
Effective means, when used in relation to this Scheme, the coming into effect, pursuant to section 411(10) of the Corporations Act, of the order of the Court made for the purposes of section 411(4)(b) of the Corporations Act in relation to this Scheme, but in any event at no time before an office copy of the order of the Court is lodged with ASIC.
Effective Date means the date on which this Scheme becomes Effective.
End Date means 31 August 2007, or such later date as CCI and BV agree.
Excluded Shares means any CCI Shares held by BV or its Related Bodies Corporate.
Implementation Date means the next Business Day after the Scheme Record Date.
Marketable Parcel has the meaning given in the ASX Market Rules.
Merger Implementation Agreement means the Amended and Restated merger implementation agreement dated 12 March 2007 as amended on 11 May 2007 between CCI, BV and Bureau Veritas SA.
Registered Address means, in relation to a CCI Shareholder, the address shown in the CCI Register.
Related Body Corporate has the meaning given in section 50 of the Corporations Act.
Scheme means this scheme of arrangement under Part 5.1 of the Corporations Act between CCI and Scheme Shareholders, subject to any alterations or conditions made or required by the Court pursuant to section 411(6) of the Corporations Act.
Scheme Consideration means $ 0.58 in respect of each Scheme Share less the CCI Dividend.
Scheme Meetings means the meetings of CCI Shareholders ordered by the Court to be convened pursuant to section 411(1) of the Corporations Act in relation to this Scheme.
Scheme Record Date means 7.00 pm on the fifth Business Day after the Effective Date.
Scheme Share means a CCI Share held by a Scheme Shareholder at the Scheme Record Date.
Scheme Shareholder means a CCI Shareholder, other than a holder of Excluded Shares, as at the Scheme Record Date.
Second Court Date means the first day on which the application made to the Court for an order approving this Scheme pursuant to section 411(4)(b) of the Corporations Act is heard, or if the hearing of the application is adjourned for any reason, the first day of the adjourned hearing.

Interpretation
1.2In this Scheme, unless the context requires otherwise:

(a)       a reference:

(i)to the singular includes the plural and vice versa;

(ii)to a gender includes all genders;

(iii)to a document or instrument is a reference to that document or instrument as amended, consolidated, supplemented, novated or replaced;

(iv)to a party means a party to this Scheme;

(v)to a clause, paragraph, Schedule or Annexure is to a clause, paragraph, Schedule or Annexure of or to this Scheme;

(vi)     to a person (including a party) includes:

(A)an individual, company, other body corporate, association, partnership, firm, joint venture, trust or government agency; and

(B)the person’s successors, permitted assigns, substitutes, executors and administrators;

(vii)to a law includes any legislation, judgment, rule of common law or equity or rule of any applicable stock exchange, and is a reference to that law as amended, consolidated, supplemented or replaced and includes a reference to any regulation, by-law or other subordinate legislation; and

(viii)    to any time is to Sydney time;

(b)the word "includes" in any form is not a word of limitation;

(c)where a word or phrase is defined, its other grammatical forms have a corresponding meaning;

(d)headings are for convenience only and do not affect interpretation;

(e)if a payment or other act must (but for this clause) be made or done on a day that is not a Business Day, then it must be made or done on the next Business Day; and

(f)if a period must be calculated from, after or before a day or the day of an act or event, it must be calculated excluding that day.

2         Preliminary

CCI

2.1CCI is a public company limited by shares, incorporated in Australia and registered in New South Wales.  Its registered office is at Unit 5, 585 Maitland Road, Mayfield West, New South Wales.

2.2CCI is admitted to the official list of ASX and CCI Shares are officially quoted on the financial market operated by ASX.

2.3      As at 11 March 2007, 135,665,713 CCI Shares were on issue.

BV

2.4BV is a proprietary company limited by shares, incorporated in Australia and registered in Western Australia.  Its registered office is at Suite 8, 57 Labouchere Road, South Perth, Western Australia.

Effect of Scheme

2.5      If this Scheme becomes Effective:

(a)BV will provide the Scheme Consideration to each Scheme Shareholder in accordance with the terms of this Scheme;

(b)all of the Scheme Shares will be transferred to BV; and

(c)CCI will enter the name and address of BV in the CCI Register as the holder of all of the Scheme Shares.

Merger Implementation Agreement and Deed Poll

2.6CCI and BV have entered into the Merger Implementation Agreement which sets out the terms on which CCI and BV have agreed to implement this Scheme.

2.7BV has executed the Deed Poll in favour of each Scheme Shareholder pursuant to which it has covenanted to perform its obligations under this Scheme, including to provide the Scheme Consideration to Scheme Shareholders.

3         Conditions precedent

Conditions precedent to Scheme

3.1      This Scheme is conditional on:

(a)as at 8.00 am on the Second Court Date, the Merger Implementation Agreement having not been terminated in accordance with its terms;

(b)all of the conditions precedent set out in clause 3.1 of the Merger Implementation Agreement having been satisfied or waived in accordance with the terms of that agreement;

(c)the Court having approved this Scheme, with or without modification, pursuant to section 411(4)(b) of the Corporations Act; and

(d)such other conditions made or required by the Court pursuant to section 411(6) of the Corporations Act in relation to this Scheme as are acceptable to CCI and BV, having been satisfied,

and the provisions of clauses 0 to 0 will not come into effect unless and until each of these conditions precedent has been satisfied.

Certificate in relation to conditions precedent

3.2On the Second Court Date, CCI and BV will each provide to the Court a certificate confirming whether or not all of the conditions precedent set out in clause 3.1 of the Merger Implementation Agreement (other than in relation to the Scheme being approved by the Court pursuant to section 411(4)(b) of the Corporations Act) have been satisfied or waived in accordance with the terms of that agreement.

3.3The giving of a certificate by each of CCI and BV under clause 0 will, in the absence of manifest error, be conclusive evidence of the satisfaction or waiver of the conditions precedent referred to in the certificate.

Lapse of Scheme

3.4This Scheme will lapse and be of no further force or effect if the Effective Date has not occurred on or before the End Date.

4         Implementation of Scheme

Lodgement of Court order

4.1On or before 5.00 pm on the first Business Day following approval of this Scheme by the Court pursuant to section 411(4)(b) of the Corporations Act, CCI will lodge with ASIC an office copy of the Court order approving this Scheme.

Transfer of Scheme Shares

4.2On the Implementation Date, in consideration of and subject to the payment of the Scheme Consideration to each Scheme Shareholder in accordance with clause 0:

(a)all of the Scheme Shares, together with all rights and entitlements attaching to those shares at that date, other than the right and entitlement to the CCI Dividend, will be transferred to BV without the need for any further act by any Scheme Shareholder;

(b)to transfer all of the Scheme Shares to BV, CCI will effect a valid transfer or transfers of the Scheme Shares under section 1074D of the Corporations Act or deliver to BV duly completed and executed share transfer forms (or a master transfer form) in accordance with section 1071B of the Corporations Act and BV will execute and deliver those share transfer form(s) to CCI; and

(c)subject to CCI’s receipt of the duly completed and executed share transfer form(s), CCI will enter the name and address of BV in the CCI Register as the holder of all of the Scheme Shares.

Provision of Scheme Consideration

4.3On the Implementation Date, CCI must procure BV to pay the Scheme Consideration to each Scheme Shareholder in accordance with clause 0.

5         Payment of Scheme Consideration

Payment of Scheme Consideration

5.1The obligation of CCI to procure BV to pay the Scheme Consideration will be satisfied by:

(a)on the Business Day prior to the Implementation Date, CCI procuring that BV, in accordance with its covenant in favour of Scheme Shareholders contained in clause 3.3 of the Deed Poll, deposits in cleared funds an amount equal to the aggregate amount of the Scheme Consideration payable to Scheme Shareholders, into an Australian dollar denominated trust account, operated by CCI as trustee for those Scheme Shareholders, to be held on trust for those Scheme Shareholders, except that any interest on the amounts deposited (less bank fees and other charges) shall be to BV’s account;

(b)on the Implementation Date and subject to BV having complied with clause 00 CCI paying or procuring the payment of the Scheme Consideration to each Scheme Shareholder from the account referred to in clause 00;

(c)the obligations of CCI under clause 00 shall be satisfied by CCI taking the following actions on the Implementation Date:

(i)dispatching, or procuring the dispatch of, a cheque to the Scheme Shareholder by prepaid post to their address recorded in the Register (as at the Scheme Record Date), such cheque being drawn in the name of the Scheme Shareholder (or, in the case of joint holders, in accordance with the procedure set out in clause 0); or

(ii)making a deposit in an account with any ADI (as defined in the Banking Act 1959 (Cth)) in Australia notified by the Scheme Shareholder at the Scheme Record Date (including any account notified by the Scheme Shareholder to CCI for the purposes of payment of dividends),

for the relevant amount, with that amount being denominated in Australian dollars; and

(d)to the extent that there is a surplus in the amount held in the trust account, that surplus must be paid by CCI to BV following the satisfaction of CCI’s obligations under clause 00.

Joint holders

5.2In the case of Scheme Shares held in joint names, any cheque required to be paid to Scheme Shareholders with respect to Scheme Consideration must be payable to the joint holders and will be forwarded to the holder whose name appears first in the CCI Register on the Scheme Record Date.

6         Dealings in CCI Shares

Determination of Scheme Shareholders

6.1For the purpose of determining who are Scheme Shareholders, dealings in CCI Shares will only be recognised if:

(a)in the case of dealings of the type to be effected using CHESS, the transferee is registered in the CCI Register as the holder of the relevant CCI Shares by the Scheme Record Date; or

(b)in all other cases, registrable transfers or transmission applications in respect of those dealings are received on or before the Scheme Record Date at the place where the CCI Register is kept.

6.2CCI must register registrable transfers or transmission applications of the kind referred to in clause 0 by the Scheme Record Date provided that nothing in this clause 0 requires CCI to register a transfer that would result in a CCI Shareholder holding a parcel of CCI Shares that is less than a Marketable Parcel.

6.3CCI will not accept for registration, nor recognise for any purpose, any transfer or transmission application in respect of CCI Shares received after the Scheme Record Date (other than the transfers contemplated by clause 0).

Maintenance of CCI Register

6.4For the purpose of determining entitlements to the Scheme Consideration, CCI will, until the Scheme Consideration has been provided, maintain or procure the maintenance of the CCI Register in accordance with this clause 0.  The CCI Register in this form will solely determine entitlements to the Scheme Consideration.

Effect of certificates and holding statements

6.5From the Scheme Record Date (other than for BV after the Implementation Date), all certificates and holding statements for the Scheme Shares will cease to have effect as documents of title, and each entry on the CCI Register at that date will cease to have any effect other than as evidence of an entitlement to the Scheme Consideration.

Information to be made available to BV

6.6CCI will procure that, as soon as reasonably practicable after the Scheme Record Date, details of the names, Registered Addresses and holdings of Scheme Shares of every Scheme Shareholder as shown in the CCI Register at the Scheme Record Date are made available to BV in such form as BV or the BV Share Registry reasonably requires.

7         Quotation of CCI Shares
7.1      CCI will apply to ASX for:

(a)suspension of CCI Shares from official quotation on ASX with effect from close of trading on the Effective Date; and

(b)termination of official quotation of CCI Shares on ASX with effect as soon as practicable after the Implementation Date.

8         General Scheme provisions

Appointment of CCI as agent and attorney

8.1Each Scheme Shareholder, without the need for any further act, irrevocably appoints CCI and each of the directors and officers of CCI, jointly and severally, as its attorney and agent for the purpose of:

(a)       in the case of Scheme Shares in a CHESS holding:

(i)causing a message to be transmitted to ASTC in accordance with ASTC Settlement Rules so as to transfer the Scheme Shares held by the Scheme Shareholder from the CHESS subregister of CCI to the issuer sponsored subregister operated by CCI at any time after BV has provided the Scheme Consideration which is due under this Scheme to the Scheme Shareholders; and

(ii)completing and signing on behalf of Scheme Shareholders any required form of transfer of Scheme Shares; and

(b)in the case of Scheme Shares registered in the issuer sponsored subregister operated by the CCI Share Registry, completing and signing on behalf of Scheme Shareholders any required form of transfer; and

(c)in all cases, executing any document or doing any other act necessary to give full effect to this Scheme and the transactions contemplated by it.

Scheme Shareholders' consent

8.2Each Scheme Shareholder consents to CCI doing all things and executing all deeds, instruments, transfers and other documents as may be necessary or desirable to give full effect to this Scheme and the transactions contemplated by it.

Agreement by Scheme Shareholders

8.3Each Scheme Shareholder agrees to the transfer of all of their Scheme Shares to BV in accordance with the terms of this Scheme.

Warranty by Scheme Shareholders

8.4Each Scheme Shareholder is deemed to have warranted to BV that:

(a)all of their Scheme Shares (including any rights and entitlements attaching to those shares) transferred to BV under this Scheme will, on the date of the transfer, be fully paid and free from all mortgages, charges, liens, encumbrances, pledges, security interests and other interests of third parties of any kind, whether legal or otherwise; and

(b)they have full power and capacity to sell and transfer their Scheme Shares (including any rights and entitlements attaching to those shares).

CCI undertakes in favour of each Scheme Shareholder that it will provide such warranty to BV on behalf of the Scheme Shareholder.

Rights in Scheme Shares

8.5CCI Shareholders shall be entitled to any dividends and other distributions declared or paid on CCI Shares in accordance with the Merger Implementation Agreement prior to the Implementation Date.

Title to Scheme Shares

8.6BV will be beneficially entitled to all of the Scheme Shares transferred to it under this Scheme pending registration by CCI of BV in the CCI Register as the holder of all of the Scheme Shares.

Appointment of BV as sole proxy

8.7From the Implementation Date until CCI registers BV in the CCI Register as the holder of all of the Scheme Shares, each Scheme Shareholder:

(a)is deemed to have irrevocably appointed the Chairman of BV as their sole proxy and, where applicable, corporate representative, to attend shareholders' meetings of CCI, exercise the votes attached to the Scheme Shares registered in their name and sign any shareholders' resolutions, whether in person, by proxy or by corporate representative;

(b)must not attend or vote at any shareholders' meetings of CCI, or sign any resolutions, whether in person, by proxy or by corporate representative, other than under this clause 0; and

(c)must take all other actions in the capacity of the registered holder of Scheme Shares as BV directs.

CCI undertakes in favour of each Scheme Shareholder that it will appoint the Chairman of BV as that Scheme Shareholder’s proxy or, where applicable, corporate representative, in accordance with this clause 0.

Scheme alterations and conditions

8.8If the Court proposes to approve this Scheme subject to any alterations or conditions, CCI may, by its counsel or solicitors, and with the consent of BV, consent to those alterations or conditions on behalf of all persons concerned, including, for the avoidance of doubt, all Scheme Shareholders.

Enforcement of Deed Poll

8.9CCI undertakes in favour of each Scheme Shareholder to enforce the Deed Poll against BV on behalf of and as agent and attorney for the Scheme Shareholders.

Effect of Scheme

8.10This Scheme binds CCI and all Scheme Shareholders and, to the extent of any inconsistency and to the extent permitted by law, overrides the constitution of CCI.

Notices

8.11Where a notice, transfer, transmission application, direction or other communication referred to in this Scheme is sent by post to CCI, it will not be deemed to be received in the ordinary course of post or on a date other than the date (if any) on which it is actually received at CCI's registered office or at the place where the CCI Register is kept.

Further assurances

8.12CCI will execute all deeds, instruments, transfers and other documents and do all acts and things (on its own behalf and on behalf of each Scheme Shareholder) as may be necessary or desirable to give full effect to this Scheme and the transactions contemplated by it.

Costs and stamp duty

8.13Subject to the terms of the Merger Implementation Agreement, CCI will pay the costs of the Scheme, except that BV will pay any stamp duty payable on the transfer by Scheme Shareholders of the Scheme Shares to BV.

9         Governing law and jurisdiction

9.1      This Scheme is governed by the laws of New South Wales.

9.2      Each party irrevocably and unconditionally:

(a)submits to the non-exclusive jurisdiction of the courts of New South Wales; and

(b)waives, without limitation, any claim or objection based on absence of jurisdiction or inconvenient forum.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD829 OF 2007

CCI HOLDINGS LIMITED ABN 51 000 680 740 Plaintiff
JUDGE:	EMMETT J
DATE:	20 JUNE 2007
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 15 May 2007 the Court made orders pursuant to s 411 of the Corporations Act 2001 (Cth) (the Act) that the Plaintiff, CCI Holdings Ltd (the Company), convene meetings of shareholders of the company for the purpose of considering a scheme of arrangement between the company and certain of its shareholders. The Company now applies for orders approving the scheme of arrangement.

2. I have considered the affidavits of Peter Edward John Murray sworn 19 June 2007, Brian Gregory Milton sworn 18 June 2007, Alan Weinberg sworn 19 June 2007, Ebony Kate Keenan-Dunn sworn 19 June 2007 and Shaun Andrew Klein sworn 20 June 2007.  Those affidavits satisfy me that the meetings contemplated by the Court’s earlier orders were convened in accordance with those orders and in accordance with the Act.

3. Two meetings were convened. At the separate meeting of a single shareholder, the resolution was passed unanimously. At the meeting of other members 99.42% of votes cast were cast in favour, representing 95.16% of the members presenting person or by proxy. The resolutions have therefore been passed by the requisite majority contemplated by s 411 of the Act.

4. No one has indicated any intention to appear on the hearing of the scheme.  When the matter was called on for hearing today there was no appearance for anybody other than the Company and the offeror.  The Australian Securities and Investments Commission (the Commission) has written to the Company’s solicitors indicating that the Commission has no objection to the proposed scheme, on the basis that the Commission is satisfied that the scheme has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6 of the Act.  The Commission also indicated that it does not propose to appear to make submissions or intervene to oppose the scheme.

5. Clause 3.2 of the scheme contemplated certificates indicating that the conditions of the Scheme have either been satisfied or waived.  I have seen certificates to that effect. 

6. The Company has also tendered two documents representing the deed poll contemplated by the Scheme Implementation Agreement.  The two documents are in identical terms.  One has been signed by one director or secretary of the offeror and the other has been signed by a different director or secretary of the offeror.  I expressed some reservation as to whether execution of two counterparts of a document satisfies s 127(1) of the Act.  That section provides that a company may execute a document without using a common seal if the document is signed by two directors of the company or a director and a company secretary of the company.  Under s 127(3), a company may execute a document as a deed if the document is expressed to be executed as a deed and is executed in accordance with s 127(1).

7. The reservation that I had is that s 127(1) may be construed as requiring a single document to be signed by the two directors or the director and secretary.  In principle, however, I can see no reason why that should be, so long as the two counterparts are treated as a single instrument and that instrument is delivered as is contemplated by the Conveyancing Act 1919 (NSW). In the circumstances I am satisfied that the deed poll has been executed on behalf of the offeror. In any event, the Scheme Implementation Agreement contains obligations that would be enforceable at the suit of the Company in terms of the obligations contained in the deed poll. Further, a regime is in place whereby the purchase price is to be paid before any shares would be transferred to the offeror.

8. In all of the circumstances I am satisfied that it is appropriate to approve the scheme pursuant to s 411.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:       3 September 2007

Counsel for the Plaintiff:	Mr MB Oakes SC
Solicitor for the Plaintiff:	Deacons
Counsel for the Bureau Veritas Australia Pty Ltd:	Mr IM Jackman SC
Solicitor for Bureau Veritas Australia Pty Ltd:	Baker & McKenzie
Date of Hearing:	20 June 2007
Date of Judgment:	20 June 2007