FEDERAL COURT OF AUSTRALIA
Diversa Limited, in the matter of Diversa Limited (No 2)
[2016] FCA 1142
File number: NSD 1197 of 2016 Judge: RARES J Date of judgment: 2 September 2016 Legislation: Corporations Act 2001 (Cth) s 411 Cases cited: Amcom Telecommunications Limited (No. 2) [2015] FCA 410 Date of hearing: 2 September 2016 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: No Catchwords Number of paragraphs: 9 Counsel for the Plaintiff: Mr DFC Thomas Solicitor for the Plaintiff: McCullough Robertson ORDERS
NSD 1197 of 2016 IN THE MATTER OF DIVERSA LIMITED ACN 079 201 835
DIVERSA LIMITED ACN 079 201 835
Plaintiff
JUDGE:
RARES J
DATE OF ORDER:
2 SEPTEMBER 2016
THE COURT ORDERS THAT:
1.The supplementary scheme booklet, in the form of Exhibit 2 in the proceeding, be approved for dispatch to members of the plaintiff.
2.The supplementary scheme booklet be dispatched:
(a)electronically in respect of those members of the plaintiff for whom the plaintiff has an electronic address for the purposes of receiving notices of meeting and proxy forms from Diversa;
(b)by prepaid post to each other member of the plaintiff or, in the case of members whose registered address is outside the country, by pre-paid airmail post.
3.These orders be entered forthwith.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)RARES J:
On 11 August 2016, I made orders under s 411(1) of the Corporations Act 2001 (Cth) that Diversa Ltd convene a meeting of its members to consider, and if thought fit, agree to a scheme of arrangement that, in effect, would see Diversa merged with OneVue Limited: Diversa Limited, in the matter of Diversa Limited [2016] FCA 1137.
I approved a detailed scheme booklet that Diversa was to send to its members.
Diversa has applied for an order to approve it sending a supplementary scheme booklet to its members to update some of the information in the scheme booklet, namely:
(1)up to date financial information:
on 29 August 2016, Diversa published its audited accounts for the year ended 30 June 2016 and OneVue released to the Australian Securities Exchange its unaudited preliminary final report for the same period.
(2)update on finance facility:
Diversa has now agreed an extension of the maturity date of its finance facility with Macquarie Bank by two months to 30 November 2016.
(3)renegotiation of share sale agreement of Tranzact:
Diversa renegotiated the manner of payment of the balance of consideration payable under the transaction by which it acquired Tranzact Financial Services Pty Limited, referred to in section 3.5 of the scheme booklet, from being the issue of shares in itself in 2016 and 2017 to becoming deferred payments in cash by it, or, if the scheme is implemented, by OneVue.
(4)appointment of new OneVue director:
a new director has been appointed to the board of OneVue.
Diversa has obtained a letter dated 29 August 2016 from the independent expert, Grant Thornton Corporate Finance Pty Limited, written by Andrea De Cian, who was the author of the original independent expert report included in the scheme booklet. Mr De Cian reviewed the updated information, to which I have referred above, for the purpose of expressing a view as to whether it has a material impact, or alters, the opinion recorded in the independent expert report. He said that Grant Thornton concluded that the updated information did not have a material impact on the analysis or conclusions included in its original report. Specifically Mr de Cian noted, that while the supplementary booklet proposes to include financial information based on the annual report of Diversa and financial reporting by OneVue as at 30 June 2016, that is different from the material in the scheme booklet, Grant Thornton had relied on year-to-date financial information of Diversa and OneVue as at 31 May 2016 in the preparation of its original independent expert’s report. Grant Thornton said that it remained of the view, as at the date of its letter to the directors of Diversa of 29 August 2016, that the proposed scheme is fair and reasonable and, hence, in the best interests of the shareholders of Diversa.
Diversa has also informed the Australian Securities and Investments Commission (ASIC) of the proposed changes. In its email, dated 1 September 2016, ASIC informed Diversa that its position on the proposed scheme remained the same as set out in its indication of intent letter, dated 9 August 2016, to which I referred in my previous reasons.
Diversa recognised that the supplementary scheme booklet in the form that I will approve should not be accompanied by any further document that has not been approved by the Court. No other such possible document has been put before the Court.
Consideration
The Court exercises a supervisory jurisdiction under s 411, as demonstrated in the authorities collected by McKerracher J in Amcom Telecommunications Limited (No. 2) [2015] FCA 410 at [12]-[13].
I am satisfied that it is appropriate that the members of Diversa be provided with the information in the draft supplementary scheme booklet in evidence. The provision of audited and updated financial information of Diversa and OneVue respectively, and the updating of the information about the two transactions, together with the additional information about the new director of OneVue, are matters which it is appropriate that Diversa’s members have before them in this form, together with the updated confirmatory view expressed by Grant Thornton.
For these reasons, I will make orders that the supplementary scheme booklet be approved for dispatch to the members of Diversa and that it may be sent electronically to those members for whom it has electronic addresses for service of notices, and by prepaid post to other members, including those with addresses outside of Australia.
I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate:
Dated: 16 September 2016
- AGLC
- Diversa Limited, in the matter of Diversa Limited (No 2) [2016] FCA 1142
- Case
- [2016] FCA 1142
- Decision Date
CaseChat Overview and Summary
The Court exercised its supervisory jurisdiction under section 411, as outlined in the authorities collected by McKerracher J in Amcom Telecommunications Limited (No. 2). The Court was satisfied that it was appropriate for Diversa's members to be provided with the information in the draft supplementary scheme booklet in evidence. The Court found that the provision of audited and updated financial information of Diversa and OneVue, and the updating of information about the two transactions, together with additional information about the new director of OneVue, were matters that it was appropriate for Diversa's members to have before them. The Court also took into account the updated confirmatory view expressed by Grant Thornton. As such, the Court approved the supplementary scheme booklet for dispatch to the members of Diversa.
The Court made orders approving the supplementary scheme booklet for dispatch to the members of Diversa and directing that it be sent electronically to those members for whom Diversa has an electronic address for the purposes of receiving notices of meetings and proxy forms. The booklet was to be sent by prepaid post to other members, including those with addresses outside of Australia. The orders were to be entered forthwith, in accordance with Rule 39.32 of the Federal Court Rules 2011.
Orders
Orders of the court
1. The supplementary scheme booklet, in the form of Exhibit 2 in the proceeding, be approved for dispatch to members of the plaintiff.
2. The supplementary scheme booklet be dispatched:
(a) electronically in respect of those members of the plaintiff for whom the plaintiff has an electronic address for the purposes of receiving notices of meeting and proxy forms from Diversa;
(b) by prepaid post to each other member of the plaintiff or, in the case of members whose registered address is outside the country, by pre-paid airmail post.
3. These orders be entered forthwith.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Diversa recognised that the supplementary scheme booklet in the form that I will approve should not be accompanied by any further document that has not been approved by the Court. No other such possible document has been put before the Court.Consideration The Court exercises a supervisory jurisdiction under s 411, as demonstrated in the authorities collected by McKerracher J in Amcom Telecommunications Limited (No. 2) [2015] FCA 410 at [12]-[13]. I am satisfied that it is appropriate that the members of Diversa be provided with the information in the draft supplementary scheme booklet in evidence. The provision of audited and updated financial information of Diversa and OneVue respectively, and the updating of the information about the two transactions, together with the additional information about the new director of OneVue, are matters which it is appropriate that Diversa’s members have before them in this form, together with the updated confirmatory view expressed by Grant Thornton. For these reasons, I will make orders that the supplementary scheme booklet be approved for dispatch to the members of Diversa and that it may be sent electronically to those members for whom it has electronic addresses for service of notices, and by prepaid post to other members, including those with addresses outside of Australia.