Hedge, the application of Hedge in his capacity as Administrator of Federation Health Ltd (Administrator Appointed)

[2005] FCA 687

FEDERAL COURT OF AUSTRALIA

Hedge, the application of Hedge in his capacity as Administrator of Federation Health Ltd (Administrator Appointed) [2005] FCA 687

HEALTH – national health legislation – application for approval of scheme of arrangement for transfer of contributors between registered health insurance funds under s 82XZE of National Health Act – procedure to ensure proper consideration of proposed course of action by administrator – necessary directions

National Health Act 1953 (Cth), s 82XB, s 82XZE

Re Hedge, as Administrator of Goldfields Medical Fund Incorporated [2002] FCA 1303, cited
Re Hedge, as Administrator of Goldfields Medical Fund Incorporated (No 2) (2002) 196 ALR 557, cited

THE APPLICATION OF PETER HEDGE IN HIS CAPACITY AS ADMINISTRATOR OF FEDERATION HEALTH LTD (ADMINISTRATOR APPOINTED)
ACD 15 OF 2005

GYLES J
2 JUNE 2005
CANBERRA

IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY	ACD 15 OF 2005

THE APPLICATION OF PETER HEDGE IN HIS CAPACITY AS ADMINISTRATOR OF FEDERATION HEALTH LTD (ADMINISTRATOR APPOINTED) APPLICANT
JUDGE:	GYLES J
DATE OF ORDER:	16 MAY 2005
WHERE MADE:	CANBERRA

THE COURT ORDERS THAT:

1.The Applicant shall by 23 May 2005 give notice to the contributors of Federation Health in the form of the draft letter and draft Explanatory Statement at Annexure PJH 5 to the affidavit of Peter James Hedge sworn on 11 May 2005.

2.For the purposes of clause 2.7 of the draft Explanatory Statement the date for appearances be specified as 6 June 2005 and the date for filing and service of affidavits be specified as 10 June 2005.

3.For the purposes of clause 3 and the definition of ‘Second Court Hearing’ in clause 6.1 of the Explanatory Statement, the date be fixed, and this application be adjourned to 20 June 2005.

4.The Applicant shall, as soon as practicable after the date of this order, give notice of this application in The Australian and the Latrobe Valley Examiner newspapers, including:

(a)the date and time of the hearing of the application;

(b)the manner in which a copy of the Explanatory Statement relating to the proposed merger can be obtained;

(c)the requirement that any interested person wishing to be heard must file an appearance by no later than 10 June 2005; and

(d)the further requirement that any interested person who has entered an appearance file and serve on the administrator at an address for service specified in the advertisement, by 14 June 2005, any affidavit setting out matters in respect of which that person wishes to be heard.

5.The Applicant shall provide, within 48 hours of a request from any interested person, a copy of the Explanatory Statement relating to the proposed merger free of charge.

6.The Applicant have liberty to file and serve any affidavit in reply by 17 June 2005.

7.The Applicant is not be required to hold a meeting or meetings of contributors of Federation Health.

8.The costs of this directions hearing be the costs and expenses of the administration.

9.There be liberty to apply, including liberty to apply to vary the order set out in paragraph 4 above.

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

IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY	ACD 15 OF 2005

THE APPLICATION OF PETER HEDGE IN HIS CAPACITY AS ADMINISTRATOR OF FEDERATION HEALTH LTD (ADMINISTRATOR APPOINTED)
APPLICANT

JUDGE:	GYLES J
DATE:	2 JUNE 2005
PLACE:	CANBERRA

REASONS FOR JUDGMENT

1. On 16 May last I made interlocutory orders in this application.  I will give short reasons for doing so.

2. The substantive application is made pursuant to s 82XZE of the National Health Act 1953 (Cth) (the Act) by Peter Hedge (the applicant) in his capacity as Administrator of Federation Health Ltd (Federation) for an order that a Scheme of Arrangement Deed (the Deed) between Latrobe Health Services Incorporated (Latrobe), Federation and the applicant dated 11 May 2005 be given effect to, together with an ancillary order pursuant to s 447A of the Corporations Act 2001 (Cth) (as applied by s 82XB of the Act).

3. The statutory scheme is explained by French J in Re Hedge, as Administrator of Goldfields Medical Fund Incorporated [2002] FCA 1303 and Re Hedge, as Administrator of Goldfields Medical Fund Incorporated (No 2) (2002) 196 ALR 557. I shall refer to the Deed in more detail when the proceeding comes on for substantive hearing.

4. The application is supported by an affidavit by the applicant in which the history of the matter leading to the execution of the Deed is recounted.  It is also supported by an affidavit of the Chief Executive Officer of the Private Health Insurance Administration Council (PHIAC), the relevant regulator. 

5. The purpose of this hearing was to determine a procedure that will ensure proper consideration of the proposed orders by the Court.  That includes ensuring that interested parties are appropriately informed about the application.  The parties to the Deed and the PHIAC are, of course, aware of this proceeding.  Those most directly affected are the contributors of Federation and they will be notified pursuant to these orders in a satisfactory manner.  The statutory scheme does not provide for a meeting of contributors to be held.  The interests of contributors of Latrobe are represented by it.  In addition, public advertisements will bring the matter to the attention of such contributors together with other potential interested parties such as creditors of either organisation. 

6. This is not the occasion for close scrutiny of the Deed, although, if there were any obvious defect, it should be pointed out immediately rather than have further expense of, and incidental to, the substantive hearing incurred.  No such defect is apparent to me.

7. I was satisfied that the orders made were appropriate to achieve the statutory purpose.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated:             2 June 2005

Solicitor for the Applicant:	S Gath of Blake Dawson Waldron
Date of Hearing:	12 May 2005
Date of Orders:	16 May 2005
Date of Judgment:	2 June 2005