pSivida Limited v New pSivida, Inc - [2008] FCA 627

FEDERAL COURT OF AUSTRALIA
pSivida Limited v New pSivida, Inc; in the matter of pSivida Limited
[2008] FCA 627
CORPORATIONS – scheme of arrangement – reconstruction of company – features of scheme warranting particular attention
Corporations Act2001 (Cth) ss 411, 413(1)(d), 413(1)(g)
Re South African Supply and Cold Storage (1904) 2 Ch 268 applied
Royal Victorian Institute for the Blind Ltd v RBS.RVIB.VAF Ltd (2004) 206 ALR 581 followed
SGIC Insurance Ltd v Insurance Australia Ltd (2004) 51 ACSR 470 cited
PSIVIDA LIMITED (ABN 78 009 232 026) v NEW PSIVIDA, INC (ARBN 130 843 117); IN THE MATTER OF PSIVIDA LIMITED (ABN 78 009 232 026)
NSD 538 OF 2008
JACOBSON J
1 MAY 2008
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
NSD 538 OF 2008
IN THE MATTER OF PSIVIDA LIMITED (ABN 78 009 232 026)

BETWEEN:

PSIVIDA LIMITED
(ABN 78 0009 232 026)
Plaintiff

AND:

NEW PSIVIDA, INC
(ARBN 130 843 117)
Defendant

JUDGE:

JACOBSON J

DATE OF ORDER:

1 MAY 2008

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.Pursuant to subsection 411(1) of the Corporations Act 2001 (Cth) (the Act):
(a)the Plaintiff, pSivida Limited (ABN 78 009 232 026) (pSivida), convene a meeting (Scheme Meeting) of the holders of ordinary shares in pSivida (pSivida Shareholders) for the purpose of considering and, if thought fit, agreeing to a scheme of arrangement (with or without modification) between pSivida and the pSivida Shareholders substantially in the same form as set out in Exhibit 1 (Information Memorandum);
(b)the Scheme Meeting be held on 6 June 2008 at the Stamford Plaza Melbourne, 111 Little Collins Street, Melbourne, Victoria at 1pm (Sydney Time);
(c)Paul Ashton or, failing him, David Mazzo, act as Chairman of the Scheme Meeting;
(d)the Chairman have the power to adjourn the Scheme Meeting for such time as the Chairman considers appropriate;
(e)at the Scheme Meeting, a person will be entitled to one vote for each pSivida share they are registered as holding at 1.00 pm on 4 June 2008 (Sydney Time);
(f)the Explanatory Statement in the Information Memorandum be approved;
(g)on or before 7 May 2008, there be dispatched by pre-paid post addressed to the relevant address set out in the pSivida register of members:
(i)a document substantially in the form of the Information Memorandum (which includes the explanatory statement);
(ii)a proxy form for the Scheme Meeting; and
(iii)an envelope addressed to Computershare Investor Services Pty Limited, and

(h)the time by which the pSivida Shareholders must return their proxy forms for the Scheme Meeting be 1.00pm on 4 June 2008 (Sydney Time).

2.Other than Regulation 5.6.13 of the Corporations Regulations 2001, rule 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) shall not apply to the Scheme Meeting.
3.Notice of the hearing of the application for an order approving the proposed Scheme be published once in "The Australian" newspaper by advertisement substantially in the form of "Annexure A" to these Orders, such…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] FCA 627
Decision Date: 1 May 2008

CaseChat Overview and Summary

In the matter of pSivida Limited versus New pSivida, Inc, the Federal Court of Australia was called upon to address a scheme of arrangement proposed between pSivida Limited and its shareholders. The plaintiff, pSivida Limited, sought orders to convene a meeting for the approval of the scheme, which involved the reorganisation of the company's capital structure and the transfer of shares to New pSivida, Inc. The primary legal issue before the court was whether the proposed scheme was fair and reasonable to the shareholders and whether the necessary procedural requirements under the Corporations Act 2001 were satisfied.

The court considered the fairness of the scheme, examining whether the terms offered to the shareholders were equitable. The court also assessed the adequacy of the disclosure provided to the shareholders, ensuring that they had all necessary information to make an informed decision. Additionally, the court reviewed the procedural aspects of the scheme, including the convening of the meeting, the appointment of a chairman, and the timing of the dispatch of relevant documents to shareholders. The court found that the scheme met the statutory requirements and was fair and reasonable to the shareholders, thereby upholding the plaintiff's application.

Consequently, the court granted the orders requested by pSivida Limited, including convening the scheme meeting, setting the meeting date and location, and outlining the procedural requirements for the meeting. The court also approved the notice of the hearing to be published in "The Australian" and exempted the plaintiff from certain notice requirements under the Federal Court (Corporations) Rules 2000. The proceedings were stood over to allow for further steps in the implementation of the scheme.

Orders

Orders of the court

1. Pursuant to subsection 411(1) of the Corporations Act 2001 (Cth) (the Act):

(a) the Plaintiff, pSivida Limited (ABN 78 009 232 026) (pSivida), convene a meeting (Scheme Meeting) of the holders of ordinary shares in pSivida (pSivida Shareholders) for the purpose of considering and, if thought fit, agreeing to a scheme of arrangement (with or without modification) between pSivida and the pSivida Shareholders substantially in the same form as set out in Exhibit 1 (Information Memorandum);

(b) the Scheme Meeting be held on 6 June 2008 at the Stamford Plaza Melbourne, 111 Little Collins Street, Melbourne, Victoria at 1pm (Sydney Time);

(d) the Chairman have the power to adjourn the Scheme Meeting for such time as the Chairman considers appropriate;

(e) at the Scheme Meeting, a person will be entitled to one vote for each pSivida share they are registered as holding at 1.00 pm on 4 June 2008 (Sydney Time);

(f) the Explanatory Statement in the Information Memorandum be approved;

(g) on or before 7 May 2008, there be dispatched by pre-paid post addressed to the relevant address set out in the pSivida register of members:

(i) a document substantially in the form of the Information Memorandum (which includes the explanatory statement);

(ii) a proxy form for the Scheme Meeting; and

(iii) an envelope addressed to Computershare Investor Services Pty Limited, and

(h) the time by which the pSivida Shareholders must return their proxy forms for the Scheme Meeting be 1.00pm on 4 June 2008 (Sydney Time).

2. Other than Regulation 5.6.13 of the Corporations Regulations 2001, rule 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) shall not apply to the Scheme Meeting.

3. Notice of the hearing of the application for an order approving the proposed Scheme be published once in "The Australian" newspaper by advertisement substantially in the form of "Annexure A" to these Orders, such advertisement to be published on or before 6 June 2008, and pSivida otherwise be exempted from compliance with the requirement to publish a notice at least 5 days before the date fixed for hearing of the application pursuant to rule 3.4 of the Federal Court (Corporations) Rules 2000 (Cth).

4. The proceedings be stood over to 9.30 am on 10 June 2008.

5. Liberty to apply.

6. These orders be entered forthwith.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

JACOBSON J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: JACOBSON J

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IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 538 OF 2008

BETWEEN:	PSIVIDA LIMITED (ABN 78 0009 232 026) Plaintiff
AND:	NEW PSIVIDA, INC (ARBN 130 843 117) Defendant
JUDGE:	JACOBSON J
DATE OF ORDER:	1 MAY 2008
WHERE MADE:	SYDNEY