Provet Holdings Limited, in the matter of Provet Holdings Limited (No 2)

[2010] FCA 1412

FEDERAL COURT OF AUSTRALIA

Provet Holdings Limited, in the matter of Provet Holdings Limited (No 2) [2010] FCA 1412

Citation:		Provet Holdings Limited, in the matter of Provet Holdings Limited (No 2) [2010] FCA 1412
Parties:		PROVET HOLDINGS LIMITED
File number:		NSD 1358 of 2010
Judge:		STONE J
Date of judgment:		16 December 2010
Legislation:		Corporations Act 2001 (Cth) ss 411(4)(b), 411(12) s 441(17)(b)
Cases cited:		Re Seven Network Ltd (No3)  [2010] 77 ACSR 701 Provet Holdings Limited, in the matter of Provet Holdings Limited [2010] FCA 1388
Date of hearing:	15 December 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	No catchwords
Number of paragraphs:	13
Counsel for the Plaintiff:	M Oakes SC
Solicitor for the Plaintiff:	McCullough Robertson
Counsel for Pelican Acquisition Company Pty Ltd:	I Jackman SC
Solicitor for Pelican Acquisition Company Pty Ltd:	Baker & McKenzie

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1358 of 2010

IN THE MATTER OF PROVET HOLDINGS LIMITED (ACn 092 593 774)

BETWEEN: PROVET HOLDINGS LIMITED
Plaintiff

JUDGE:	STONE J
DATE OF ORDER:	15 DECEMBER 2010
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Pursuant to subsection 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the Plaintiff and its members, in the form of Attachment A to these orders, be approved.

2.Pursuant to section 411(12) of the Act, the Plaintiff be exempted from compliance with section 411(11) in relation to Order 1.

3.        These orders be entered forthwith.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s web.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1358 of 2010

IN THE MATTER OF PROVET HOLDINGS LIMITED (ACn 092 593 774)

BETWEEN: PROVET HOLDINGS LIMITED
Plaintiff

JUDGE:	STONE J
DATE:	16 DECEMBER 2010
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. These reasons relate to orders made on 15 December 2010 following the second Court hearing of an application for the Court to approve a scheme of arrangement (Scheme) between the plaintiff, Provet Holdings Limited, and its members pursuant to s 411 of the Corporations Act 2001 (Cth). At the conclusion of the hearing I made the orders sought by the plaintiff. These are my reasons for making those orders.

2. The first Court hearing was held on 4 November 2010 and orders in relation to the convening of the Scheme meeting were made on that date. Affidavits read at that hearing were also in evidence at the second Court hearing. The Scheme is described in my reasons for judgment given on 4 November 2010 (earlier reasons); [2010] FCA 1388. These reasons should be read in conjunction with those earlier reasons.

3. In Re Seven Network Ltd (No3) [2010] 77 ACSR 701 at [31] Jacobson J observed:

   The principles which govern the exercise of the court’s discretion to approve a scheme are well settled.  The court has a discretion whether to approve a scheme, and is not bound to approve it merely because it has previously made orders for the convening of meetings or … because the statutory majorities have been achieved … the court’s jurisdiction is supervisory; it is concerned to be satisfied that there has been an absence of oppression, and that the compromise or arrangement is one which is capable of being accepted.

4. That supervisory jurisdiction is directed to ensuring that the scheme has been fairly and fully presented to members so that they can make an informed decision and that those voting at the meeting have done so in good faith and not in pursuit of special interests not shared by the ordinary independent members. It is for the members and not the court to make a judgement as to the commerciality of the scheme. Applying those principles, I am satisfied on the basis of the evidence put by the plaintiff that the orders approving the Scheme in accordance with s 411(4)(b) should be made.

5. I am satisfied that the facts as stated in these reasons are established by the evidence relied upon by the plaintiff.  In addition to the evidence adduced at the hearing on 4 November 2010 the following affidavits were read at the second scheme hearing:

   ·affidavit of BeeYen Nah, Client Relationship Manager, Link Market Services Limited, sworn on 10 December 2010;

   ·affidavit of Samantha Ren’ee Morris, a solicitor employed by McCullough Robertson, solicitors for the plaintiff, sworn on 9 December 2010;

   ·affidavit of Timothy Richard McCusker Wilkins, a solicitor employed by McCullough Robertson, solicitors for the plaintiff, sworn on 9 December 2010;

   ·affidavit of Christopher Ashley Lowndes, Chief Financial Officer and Company Secretary of Provet, sworn on 9 December 2010;

   ·affidavit of Ian Richard Jedlin, partner and executive director of KPMG Corporate Finance (Aust) Pty Ltd, sworn on 9 December 2010;

   ·affidavit of Peter William Stokes, a solicitor employed by McCullough Robertson, solicitors for the plaintiff, sworn on 15 December 2010;

   ·affidavit of Garth Alexander McGilvray, Director and Chairman of Provet Holdings Ltd sworn on 9 December 2010.

   In addition, exhibits to those affidavits were tendered.

6. The Scheme Booklet was lodged with ASIC after the first Court hearing.  That Booklet corresponded with the Scheme Booklet tendered at the first Court hearing except that: (i) some immaterial aspects of presentation were different; and (ii) the signature of the Chairman of Provet, Mr Garth McGilvray, was appended to the Chairman’s letter.

7. The Scheme Booklet, which included a notice of the time and place of the Scheme Meeting, was sent by pre-paid post to Provet members as described in the affidavit of BeeYen Nah.  A shareholder’s proxy form and a reply-paid envelope were sent with the Scheme Booklet.  Proxies received from members were collated and processed as described in paragraphs 11-14 of that affidavit. 

8. The hearing of the present application to approve the Scheme was advertised in accordance with order 7 made on 4 November 2010.   The notice of hearing appeared in The Australian newspaper on 6 December 2010.  The notice directed persons who wished to oppose the approval of the Scheme to file and serve on the plaintiff a notice of appearance and affidavit in support at the address for service given in the advertisement.   Mr Stokes, who was mentioned in the notice of hearing deposed that no notice of an intention to oppose approval of the Scheme had been received by the time he had last checked being approximately half an hour before the hearing.  There were no appearances when the matter was called outside the Court at the commencement of the hearing.

9. The BeeYen Nah affidavit also annexed the declaration of the poll taken at the Scheme Meeting which was held at 9.00 am on 9 December 2010. The declaration shows that at the Scheme meeting, 37.17% of the Provet Shareholders were represented. The shareholders at the Scheme meeting approved the Scheme by a 94.63% majority. In addition 92.01% of the votes cast were in favour of the Scheme. The votes cast at the meeting represented 79.68% of the total number of issued shares in Provet. These percentages more than meet the required threshold set out in s 411(4)(a)(ii).

10. Mr McGilvray who chaired the Scheme Meeting, deposed that the minutes of the Meeting annexed to his affidavit were a copy of the minutes of the Meeting.  Those minutes record comments made by two shareholders each of whom had reservations about the Scheme.  The minutes record that Bill Allen from KPMG, the Independent Expert, responded to these comments and confirmed that the Independent Expert regarded the offer as fair and reasonable to shareholders.

11. An executed copy of the Deed Poll in favour of Provet Shareholders was annexed to the affidavit of Mr Lowndes. The Deed Poll was executed as a deed in accordance with s 127 of the Corporations Act.

12. Finally, the plaintiff tendered a letter from Australian Securities & Investments Commission (ASIC) dated 13 December 2010. It advises that ASIC has no objection to the Scheme under s 441(17)(b) of the Act. The plaintiff has also tendered two Certificate – Conditions Precedent signed for the plaintiff and for Pelican Acquisition Company Pty Ltd confirming in each case that the conditions precedent in clause 3.1 of the Scheme (other than clause 3.1(a) (iii) and 3.1(a)(iv) of the Scheme) “have been satisfied or waived as at 8.00 am on the Second Court Hearing Date”. Clause 3.1 (a)(iii) relates to the acceptance of any modification by the Court. As no modification was required this clause is not relevant. Clause 3.1(a)(iv) relates to the requirement to lodge an official copy of the Court’s order approving the Scheme with ASIC.

13. The plaintiff has addressed all the elements needed to establish that the requirements of procedural and substantive fairness have been met.  Over the course of the two hearings in this matter the Court’s attention has been drawn to the matters needed to be proved and those matters relevant to the exercise of the Court’s discretion.   For these reasons I was satisfied at the conclusion of the second hearing that the Court should approve the Scheme and make the orders sought by the plaintiff.

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

Associate:

Dated:       21 December 2010