Espreon Limited, in the matter of Espreon Limited

[2008] FCA 1996

FEDERAL COURT OF AUSTRALIA

Espreon Limited, in the matter of Espreon Limited [2008] FCA 1996

ESPREON LIMITED, IN THE MATTER OF ESPREON LIMITED

NSD 1527 of 2008

EMMETT J

7 NOVEMBER 2008

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1527 of 2008

IN THE MATTER OF ESPREON LIMITED,

ESPREON LIMITED (ACN 090 651 700) Plaintiff
JUDGE:	EMMETT J
DATE OF ORDER:	7 NOVEMBER 2008
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Orders 1(a), 1(b), 1(c), 1(d), 3 and 4 of the orders made in these proceedings on 9 October 2008 be vacated.

2.The hearing set down for 17 November 2008 be vacated.

3.The Plaintiff publish in the Australian newspaper on or before 11 November 2008 a notice substantially in t he form of “Annexure A” hereto.

4.The proceeding be otherwise dismissed.

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

Annexure A

Notice of termination of Espreon Scheme of Arrangement

To all members of Espreon Limited ACN 090 651 700 (Espreon)

TAKE NOTICE that the meeting of members of Espreon convened pursuant to an order of the Federal Court of Australia made on 9 October 2008 and to be held on 12 November 2008 for the purpose of considering a scheme of arrangement proposed to be made between Espreon and its members other than Vectis Group Pty Limited (Vectis) will be order of the Federal Court of Australia made on 7 November 2008 no longer be held.  The Scheme Implementation Agreement has been terminated by Vectis in accordance with clauses 3.9(b), 14.1(f)(ii) and 14.2 of the Scheme Implementation Agreement following the breach of the index decline condition precedent in clause 3.1(1) of the Scheme Implementation Agreement.

Name of person giving notice or of person’s legal practitioner:  Maria Coffill O’Brien.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1527 of 2008

IN THE MATTER OF ESPREON LIMITED,

ESPREON LIMITED (ACN 090 651 700) Plaintiff
JUDGE:	EMMETT J
DATE:	7 NOVEMBER 2008
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 9 October 2008, Jacobson J made orders pursuant to s 411(1) of the Corporations Act2001 (Cth) (the Act), requiring the plaintiff, Espreon Limited (the Plaintiff), to convene a meeting of its members, for the purpose of considering and, if thought fit, agreeing to a scheme of arrangement proposed to be made between Espreon the Plaintiff and its members.  The scheme was proposed pursuant to a scheme implementation agreement (the Agreement) made between the Plaintiff and another company, Vectis Group Pty Limited (Vectis), on 22 August 2009. 

2. Clause 3.1 of the Agreement made it a condition precedent to the implementation of the proposed scheme that, after the date of the Agreement and prior to 8.00 am on the proposed date for hearing of the scheme confirmation application, the S&P ASX 200 index did not close for five consecutive trading days below a level that is 85 per cent or less of the level as at the close of trading on the date of entry into the Agreement.  As at the close of trading on 28 October 2008, that condition precedent was breached. 

3. Following breach of the condition, the parties to the Agreement consulted in good faith to determine whether the scheme could continue by way of alternative means or methods, as contemplated by cl 3.8 of the Agreement.  However, the Plaintiff and Vectis failed to reach agreement.  On 5 November 2008, Vectis formally notified the Plaintiff that, as a result of that failure, Vectis terminated the Agreement. 

4. The consequence is that the scheme cannot proceed.  The Plaintiff has therefore applied for variation of the orders made by Jacobson J on 9 October 2008.  The meeting to consider the scheme was to be held on 12 November 2008.  There is no utility in the meeting proceeding.  The application before me is to vacate the relevant orders made by Jacobson J on 9 October 2008, and to direct that an advertisement to that effect be published in a newspaper circulating throughout Australia.  I propose to accede to that application.  There is no point for the proceeding to remain on foot, and accordingly it is appropriate that it be otherwise dismissed. 

I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:        13 January 2009

Counsel for the Plaintiff:	Mr IM Jackman SC
Solicitor for the Plaintiff:	Baker & McKenzie

Date of Hearing:	7 November 2008
Date of Judgment:	7 November 2008