Folkestone Limited, in the matter of Folkestone Limited (No 2)

[2018] FCA 1593

FEDERAL COURT OF AUSTRALIA

Folkestone Limited, in the matter of Folkestone Limited (No 2) [2018] FCA 1593

File number:

NSD 1545 of 2018

Judge:

YATES J

Date of judgment:

22 October 2018

Catchwords:

CORPORATIONS – scheme of arrangement – second court hearing – application for approval

Legislation:

Corporations Act 2001 (Cth), ss 411, 412

Federal Court (Corporations) Rules2000, r 3.5

Cases cited:

Folkestone Limited, in the matter of Folkestone Limited [2018] FCA 1412

Date of hearing:

22 October 2018

Registry:

New South Wales

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

Corporations and Corporate Insolvency

Category:

Catchwords

Number of paragraphs:

13

Counsel for the Plaintiff:

Mr M Izzo SC with Ms S Scott

Solicitor for the Plaintiff:

Clayton Utz

Counsel for the Charter Hall Limited:

Mr P M Wood

Solicitor for the Charter Hall Limited:

Allens

ORDERS

NSD 1545 of 2018

IN THE MATTER OF FOLKESTONE LIMITED ACN 004 715 226

FOLKESTONE LIMITED ACN 004 715 226

Plaintiff

JUDGE:

YATES J

DATE OF ORDER:

22 OCTOBER 2018

THE COURT ORDERS THAT:

1.Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the plaintiff, Folkestone Limited (Folkestone), and the holders of fully paid ordinary shares in the capital of Folkestone (Scheme), which is in the form contained in Annexure B to the explanatory statement in relation to the Scheme being Exhibit 1 in the proceeding, be approved.

2.Pursuant to s 411(12) of the Act, Folkestone be exempted from compliance with s 411(11) of the Act in relation to the Scheme.

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

YATES J:

1. On 12 September 2018, the Court made orders (the earlier orders) for the convening of a meeting of Folkestone’s members to consider, and if thought fit agree to (with or without modification), a scheme of arrangement with the company: Folkestone Limited, in the matter of Folkestone Limited [2018] FCA 1412 (my earlier reasons).  The abbreviations used in my earlier reasons are also used in these reasons.

2. The meeting was convened and held on 17 October 2018.  The scheme was agreed to, without modification, by the members.

3. Folkestone now seeks an order pursuant to s 411(4)(b) of the Act that the scheme be approved.

4. The following affidavits have been read in support of the present application: 

   ·Lula Liossi, sworn 19 October 2018 (read subject to minor corrections);

   ·Alan Vernon O’Neil, affirmed 18 October 2018;

   ·Emma Marie Collins, sworn 18 October 2018 (read subject to minor corrections);

   ·Garry Roy Sladden, sworn 17 October 2018;

   ·Kwan Ho Leung, affirmed 22 October 2018;

   ·Mark John Stewien, affirmed 22 October 2018; and

   ·Mark Robert Bryant, sworn 22 October 2018.

5. On the basis of this evidence, I am satisfied of the following matters.

6. First, on 13 September 2018, the explanatory statement was registered with ASIC, as required by s 412(6) of the Act. On the same day, the earlier orders were lodged with ASIC, as required by r 3.5 of the Federal Court (Corporations) Rules2000.

7. Secondly, the Scheme Booklet, with minor corrections and updated share information (as contemplated by the explanatory statement approved by the Court) was dispatched to members, in accordance with the earlier orders.

8. Thirdly, the scheme meeting was duly convened and held in accordance with the earlier orders.  At the meeting, 98.89% of members present and voting, and 99.6% of the votes cast, were in favour of the scheme.  I am satisfied that the statutory majorities in favour of the scheme were attained. I note that, of the eligible voting shares then on issue, 72.4% were voted on the resolution. 

9. The conditions precedent to the scheme (other than Court approval) have been satisfied.  This has been confirmed by affidavit evidence and the provision of a certificate to that effect, in the form of a deed.

10. The hearing of the present application was advertised on 15 October 2018, in accordance with the earlier orders.

11. ASIC has provided a letter dated 19 October 2018 which states that, pursuant to s 411(17)(b) of the Act, it has no objection to the scheme.

12. I am satisfied that the scheme is fair and reasonable, and should be approved.  In coming to this conclusion, I have taken into account:

    ·the nature and terms of the scheme;

    ·the provisional view expressed in my earlier reasons (see at [45]);

    ·the substantial support provided by the members, represented by the high voter turnout and substantial voting majorities attained in favour of the scheme;

    ·the recommendation of the directors;

    ·the expert opinions expressed by Lonergan Edwards; and

    ·the fact that no person has come forward to oppose the scheme.

13. Orders as sought should be made.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.

Associate:

Dated:        24 October 2018