ENSURANCE LIMITED - [2023] WASC 371

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   ENSURANCE LIMITED [2023] WASC 371
CORAM:   LUNDBERG J
HEARD:   28 SEPTEMBER 2023
DELIVERED          :   28 SEPTEMBER 2023
PUBLISHED           :   28 SEPTEMBER 2023
FILE NO/S:   COR 129 of 2023
MATTER:   IN THE MATTER OF ENSURANCE LIMITED
EX PARTE

ENSURANCE LIMITED
Plaintiff

Catchwords:

Corporations Law - Scheme of arrangement under s 411 of the Corporations Act 2001 (Cth) - Plaintiff insurance company to be wholly acquired by another insurance company - First court hearing - Whether appropriate for orders to be made convening scheme meeting and for dispatch of scheme booklet - No issue of principle arising - Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 411, s 1319
Corporations Regulations 2001 (Cth), sch 8
Rules of the Supreme Court 1971 (WA), O 37 r 6(2)(d)
Supreme Court (Corporations) (WA) Rules 2004, r 1.8, r 2.4, r 3.2, r 3.4

Result:

Orders made to convene scheme meeting and for dispatch of scheme booklet

Category: B

Representation:

Counsel:

Plaintiff	:	Mr J M Healy
PSC Insurance Group Limited	:	Mr A J Papamatheos

Solicitors:

Plaintiff	:	Steinepreis Paganin
PSC Insurance Group Limited	:	Maddocks

Case(s) referred to in decision(s):

FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69
Re Anatolia Energy Limited [2015] FCA 1134
Re DDH1 Limited (No 2) [2023] FCA 1046
Re Essential Metals Ltd [2023] FCA 240
Re NRMA Insurance Ltd (No 1) [2000] NSWSC 82; (2000) 156 FLR 349
Re SRG Limited [2018] FCA 1092
Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [2018] WASC 308

Table of Contents

A. Introduction

B. Evidence and submissions

C. Scheme booklet

D. Disposition

E. Orders

ATTACHMENT A

LUNDBERG J:

A. Introduction

On 8 August 2023, the plaintiff insurance company (Ensurance Limited) entered into a scheme implementation deed (SID) with PSC Insurance Group Limited (PSC), which was announced to the market on the same day.[1] The SID concerns a scheme of arrangement which involves the acquisition of all of the fully paid ordinary shares in the plaintiff by PSC. I will refer to the scheme in these reasons as the Share Scheme.
[1] The SID was later varied by the parties.
On 25 August 2023, the plaintiff filed an originating process seeking orders under ss 411(1) and 1319 of the Corporations Act 2001 (Cth) (CA)[2] in relation to the Share Scheme. At today's hearing, the plaintiff sought orders to convene a virtual scheme meeting (to be held on 2 November 2023) and associated orders for the dispatch of a scheme booklet. These orders represent the first stage of the scheme of arrangement approval process under s 411(1).
[2] References to statutory provisions in these reasons are to the CA unless stated otherwise.
The plaintiff and PSC are both public companies listed on the ASX. Ensurance operates an Australian-based underwriting agency, with a product suite that incudes professional, casualty and environmental lines. PSC is…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading ENSURANCE LIMITED

Details

AGLC: ENSURANCE LIMITED [2023] WASC 371
Case: [2023] WASC 371
Decision Date: 28 SEPTEMBER 2023

CaseChat Overview and Summary

In Ensuance Limited, the plaintiff insurance company sought approval for a scheme of arrangement to be acquired by another insurance company. The application was brought before the court for its initial hearing. The primary legal issue was whether it was appropriate to make orders convening a scheme meeting and for the dispatch of a scheme booklet. The case did not raise any novel principles but hinged on the specific facts of the case.

The court considered the relatively low value of the transaction and the ongoing efforts by the Harmonisation Committee to prepare a national Practice Note to enhance the efficiency and cost-effectiveness of scheme applications. The court communicated with the plaintiff's solicitors to propose measures to streamline the process. These included requesting brief submissions unless novel issues arose, confirming that the requirements of certain procedural rules had been met, indicating that certain affidavits might be sworn on information and belief, and suggesting alternatives to newspaper advertisement for the second court hearing. The court also invited counsel to seek dispensation from certain procedural requirements if alternative arrangements could be made.

In light of these communications, the court found that the plaintiff's legal advisors had appropriately addressed the court's concerns in preparing the materials for the hearing. The court proceeded to make the orders convening the scheme meeting and for the dispatch of the scheme booklet, emphasizing the importance of efficient and cost-effective processes in such applications.

Orders

Orders of the court

Full text does not contain this section.

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

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Ratio Decidendi

Legal Principle Established

Additionally, I should mention that, following consultation with the Judge in Charge of the Corporations List, I caused an email to be sent by my Associate to the solicitors for the plaintiff to raise several matters in the interests of improving the efficiency and cost effectiveness of the scheme process from both the court's and the plaintiff's perspective.[3] The court considered this appropriate given the relatively low value of the transaction which underlies this present scheme application and given the steps which are presently being undertaken by the Harmonisation Committee, which have not yet concluded, to prepare a national Practice Note to advance such objectives in the context of scheme applications generally. The matters raised with the plaintiff were:[4](a)an indication that submissions may be brief unless any novel issues were raised by the proposed scheme;(b)my view that the requirements of r 2.4(1) of the Supreme Court (Corporations) (WA) Rules 2004 (CorporationsRules) had been appropriately discharged in the First Ardon Affidavit;[5](c)an indication that the requirements of r 3.2 of the Corporations Rules may be dealt with by an affidavit sworn on information and belief;[6](d)an indication that a separate affidavit from the independent expert would not be required;(e)an indication that, in the event ASIC gives a statement that it does not raise any objection to the proposed scheme, the court would not require the affidavits to annex copies of all email exchanges between the plaintiff's solicitors and ASIC. If there is any qualification to ASIC's position and the proponent wishes to make submissions on it, any submissions would need to be supported by appropriate evidence; and(f)an invitation to counsel that he or she may wish to seek an order dispensing with the requirement in r 3.4(2) of the Corporations Rules for the advertisement of the second court hearing in a newspaper, provided some suitable alternative announcement process is proposed.[3] Email to Ms Ardon sent on 30 August 2023.[4] The communication from the court confirmed that these additional matters were naturally subject to any ex parte obligations of the parties. [5] Rule 2.4(1) provides that: 'Unless the Court otherwise directs, an originating process, or interlocutory process, must be supported by an affidavit stating the facts in support of the process.'[6] Rule 3.2 concerns the nomination of a chairperson and alternative chairperson for the purposes of a scheme meeting. Further, and more generally, the court indicated that, in the event there were other aspects of the application which would benefit from a direction from the court, it would be receptive to such matters being addressed in a letter to the court setting out the matters in sufficient terms for the court to consider exercising the dispensation power in r 1.8 of the Corporations Rules. As will be seen, the matters raised by the court were embraced by the plaintiff's legal advisors in preparing the materials for the purposes of today's first hearing.