GIO Australia Holdings Ltd v AMP Insurance Investment Holdings Pty Ltd

[1998] FCA 1669

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 3172  of  1998

BETWEEN:

GIO AUSTRALIA HOLDINGS LIMITED
Applicant

AND:

AMP INSURANCE INVESTMENT HOLDINGS PTY LTD
First Respondent

AMP LIMITED
Second Respondent

JUDGE:	EMMETT J
DATE OF ORDER:	30 NOVEMBER 1998
WHERE MADE:	SYDNEY

THE COURT DECLARES THAT:

1. There has been a contravention of clause 18 of Part A of s 750 of the Corporations Law by the Respondent in its Part A Statement registered on 7 September 1998.

THE COURT ORDERS THAT:

1. Notwithstanding the contravention, the Part A Statement be validated ab initio.

1. The Respondent supply to holders of shares in the Applicant, with the same prominence as the Offer and the accompanying Part A Statement, the supplementary material in the form annexed hereto.

1. The Offers, Part A Statement and supplementary material be dispatched by 4 December 1998.

1. Pursuant to section 739 of the Corporations Law:

(a)the “takeover period” in relation to the offers made pursuant to the Part A Statement for the purposes of Chapter 6 of the Corporations Law be taken to end at the end of the offer period (as that term is defined in section 603 of the Corporations Law); and

(b)the Cross-claimant will not contravene section 746(4) of the Corporations Law provided the Cross-claimant despatches the offers relating to the Part A Statement by 4 December 1998.

1. The latest date for dispatch, under s 637 of the Corporations Law, of the offers relating to the Part A Statement be extended to 4 December 1998.

1. The question of costs be stood over for further submissions on 4 December 1998 at 2.15pm.

1. The Respondents be released from their undertakings given on 25 September 1998.

1. These orders be entered forthwith.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 3172  of  1998

BETWEEN:

GIO AUSTRALIA HOLDINGS LIMITED
Applicant

AND:

AMP INSURANCE INVESTMENT HOLDINGS PTY LTD
First Respondent

AMP LIMITED
Second Respondent

JUDGE:	EMMETT J
DATE:	30 NOVEMBER 1998
PLACE:	SYDNEY

EX TEMPORE REASONS FOR JUDGMENT

HIS HONOUR:  On 27 November 1998, I indicated that, on the material then before me, I was disposed to make the orders I foreshadowed, so long as I was satisfied as to two matters.  The first matter was that it was impracticable for a meaningful forecast to be enclosed with the Part A statement at the time when it was contemplated that the Part A Statement and offer would be dispatched.  I indicated that I considered that, having regard to the time of the year, the offers and the accompanying Part A Statement should be dispatched by the end of this week.

I have now had further evidence from Mr Scott in which he addressed the extent to which it would be possible for a 1999 profit forecast to be prepared in a form which was appropriate for dispatch to GIO shareholders.  Mr Scott indicated that, in order to complete the forecast, a number of steps would be required, which would include management and Board approval for AMP's 1999 business plan, an independent review of management's plan, assumptions and projections, a review by the Due Diligence Committee and then final Board approval of the forecast.

The independent review would involve Ernst & Young although I have had no evidence from Mr Siviour as to what would be involved in Ernst & Young's review.  Nevertheless, I do have evidence before me both in the form of Mr Scott's affidavit of today and the evidence that was before me earlier as to the steps that were required and were involved in connection with the Prospectus Forecast.  I am satisfied that before the AMP Board would be in a position to make a forecast for 1999, considerable effort would be required such that it would be impracticable to have such a forecast before early or mid-January 1999.  However, I consider that the shareholders of GIO should be given a reasonable opportunity to consider AMPII's offer before the vacation period. 

A compromise was suggested on behalf of GIO which I found very tempting.  That involved the imposition of terms on AMPII requiring it, in effect, to prepare a profit forecast and to dispatch that to GIO shareholders as soon as practicable.  In the meantime, AMPII would be required to undertake to extend the offer until such time as that material was made available.

As I indicated last Friday, I am troubled by the fact that the forecast which is being given to the GIO shareholders relates only to the current year, which is almost complete.  However, as I indicated in my reasons of 25 November 1998, there are difficulties in making forecasts and, on one view, their utility is in any event quite limited.  I do not consider that it is appropriate to impose any requirement on AMPII to prepare a profit forecast and dispatch it.  It would, to some extent, involve supervision by the Court of the preparation of the document and I do not consider that that is appropriate.

It is also arguable that to impose such a regime involves a variation of the scheme of the takeover provisions.  It would be one thing, of course, if I were satisfied that GIO shareholders were not being given adequate information as to the assets, liabilities, financial position, profits and losses and prospects of AMP within the meaning of section 1022.  However, I have formed the view that, notwithstanding the limited period of time to elapse before the end of the current financial year, the information which GIO shareholders will be given concerning AMP is no less than they would reasonably require and would reasonably expect to find for the purposes of making an assessment of those matters in relation to AMP.  It is not necessary in every case for a profit forecast to be provided in order to give information concerning prospects.

Accordingly, I propose to make the orders which I foreshadowed on 27 November 1998.  I have now had the opportunity of seeing a further version of the proposed supplement and, in the course of argument, I have indicated the appropriate amendments that should be made to the current draft in order to satisfy the requirements that I indicated on Friday.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:             30 November 1998

Counsel for the Applicant:	N.J. Young QC S.J. Gageler A.S. Bell R.A. Dick
Solicitor for the Applicant:	Atanaskovic Hartnell
Counsel for the Respondents:	T.F. Bathurst QC M.B. Oakes SC R.G. McHugh
Solicitor for the Respondents:	Mallesons Stephen Jaques
Date of hearing:	30 November 1998
Date of judgment:	30 November 1998