FEDERAL COURT OF AUSTRALIA
Amcom Telecommunications Limited, in the matter of Amcom Telecommunications Limited (No 2) [2015] FCA 410
Citation: Amcom Telecommunications Limited, in the matter of Amcom Telecommunications Limited (No 2) [2015] FCA 410 Parties: AMCOM TELECOMMUNICATIONS LIMITED ACN 062 046 217 File number: WAD 54 of 2015 Judge: MCKERRACHER J Date of judgment: 5 May 2015 Catchwords: CORPORATIONS - scheme of arrangement – application for orders pursuant to s 1319 of the Corporations Act 2001 (Cth) – supplementary disclosure – orders for dispatch of additional material to shareholders Legislation: Corporations Act 2001 (Cth) ss 411(1), 1319 Cases cited: Re Amcom Telecommunications Limited [2015] FCA 341
Re Associated Advisory Practices Ltd (No 2) [2013] FCA 979
Re Australian Gas Light Company (2006) 57 ACSR 67
Re Cape Alumina Ltd (No 2) [2013] FCA 1238
Re Cellestis Limited (No 2) [2011] VSC 329
Re Citect Corporation Ltd (2006) 225 ALR 137
Cleary v Australian Co-operative Foods Ltd (Nos 2 and 3) (1999) 32 ACSR 701
CMPS & F Pty Ltd v Crooks Mitchell Ltd (1997) 76 FCR 366
Re Coates Hire Limited (No 2) [2007] FCA 2105
Re David Jones Ltd (No 2) (2014) 101 ACSR 381
Re HIH Casualty and General Insurance Ltd (2006) 57 ACSR 791
Re Horizon Oil Limited [2014] FCA 733
Re Lend Lease Primelife Ltd; Re Lend Lease Village Responsible Entity Ltd [2009] NSWSC 1340
Re Nexus Energy Ltd [2014] FCA 558Date of hearing: 21 April 2015 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 24 Counsel for the Plaintiff: Mr S K Dharmananda SC with Mr CD Belyea Solicitor for the Plaintiff: Clayton Utz
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 54 of 2015
IN THE MATTER OF AMCOM TELECOMMUNICATIONS LIMITED
ACN 062 046 217
BETWEEN: AMCOM TELECOMMUNICATIONS LIMITED
ACN 062 046 217
Plaintiff
JUDGE:
MCKERRACHER J
DATE OF ORDER:
21 APRIL 2015
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.Valid proxy forms for the meeting of Amcom shareholders to consider the scheme of arrangement (Scheme Meeting) that have been lodged by Amcom shareholders are deemed to still be valid unless revoked, and members who voted in favour of the scheme of arrangement are deemed to have voted in favour of the resolutions to be considered at the Scheme Meeting.
2.Pursuant to s 411(1) and 1319 of the Corporations Act 2001 (Cth), the supplementary explanatory statement in a form substantially equivalent to the form that is annexure MAP11 to the fourth affidavit of Mark Anthony Paganin sworn on 20 April 2015, is approved for despatch to each ordinary shareholder of the plaintiff (Shareholder).
3.The supplementary explanatory statement be despatched to each Shareholder in the manner set out in subparagraphs 4(a), 4(b) and 4(c) of the orders in this proceeding on 30 March 2015.
4.The proceeding remain stood over to 10:15 am on Wednesday, 13 May 2015 before McKerracher J for the hearing of any application to approve the scheme of arrangement.
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- AGLC
- Re Amcom Telecommunications Ltd (No 2) [2015] FCA 410
- Case
- [2015] FCA 410
- Decision Date
CaseChat Overview and Summary
The court considered the need for adequate disclosure to shareholders, especially in light of new information that had emerged after the initial explanatory statement was sent. The court acknowledged the importance of ensuring shareholders are informed of material information that could impact their voting decisions. The court examined the balance between providing enough information for shareholders to make informed decisions and avoiding overburdening them with excessive detail. The court noted that the Australian Securities and Investments Commission (ASIC) generally requires target shareholders to have at least 10 days to consider any supplementary information. The court also recognised that the complexity of the supplementary information and its significance were factors in determining the appropriate timing and content of the disclosure.
The court concluded that the supplementary disclosure was necessary and should be provided in a straightforward manner. The court found that the supplementary disclosure should be sent to shareholders at least 10 days before the scheme meeting, in line with ASIC guidance. The court approved the form of the supplementary explanatory statement and ordered it to be dispatched to shareholders by a specific date. The court also directed that the proceeding remain stood over until a later date for the hearing of any application to approve the scheme of arrangement.
The court made several orders to facilitate the scheme of arrangement. Valid proxy forms were deemed to remain valid unless revoked, and shareholders who voted in favour of the scheme were deemed to have voted in favour of the resolutions at the scheme meeting. The court approved the supplementary explanatory statement for dispatch to shareholders and specified the manner and timing of the despatch. The proceeding was stood over to allow for the hearing of any application to approve the scheme of arrangement.
Orders
Orders of the court
1. Valid proxy forms for the meeting of Amcom shareholders to consider the scheme of arrangement (Scheme Meeting) that have been lodged by Amcom shareholders are deemed to still be valid unless revoked, and members who voted in favour of the scheme of arrangement are deemed to have voted in favour of the resolutions to be considered at the Scheme Meeting.
2. Pursuant to s 411(1) and 1319 of the Corporations Act 2001 (Cth), the supplementary explanatory statement in a form substantially equivalent to the form that is annexure MAP11 to the fourth affidavit of Mark Anthony Paganin sworn on 20 April 2015, is approved for despatch to each ordinary shareholder of the plaintiff (Shareholder).
3. The supplementary explanatory statement be despatched to each Shareholder in the manner set out in subparagraphs 4(a), 4(b) and 4(c) of the orders in this proceeding on 30 March 2015.
4. The proceeding remain stood over to 10:15 am on Wednesday, 13 May 2015 before McKerracher J for the hearing of any application to approve the scheme of arrangement.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
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
Ratio Decidendi
Legal Principle Established
Amcom has provided evidence that Scheme participants are likely to receive the supplementary disclosure statement at least 10 days before the scheme meeting on 6 May 2015 (which is consistent with ASIC guidance in RG60.93). The documents will also be available at the Scheme Meeting.CONSIDERATION Where, as here, there has been no consequent amendment to a proposed scheme of arrangement, there is no, or little, reason to doubt that all original proxy forms are deemed to still be valid. In other situations, the members who originally voted in favour of the scheme are deemed to have voted in favour of the two resolutions relating to the revised scheme: Damian T and Rich A, Schemes, Takeovers and Himalayan Peaks (3rd ed, Ross Parsons Centre of Commercial, Corporate and Taxation Law, 2013) (at 144) and the cases there cited. Importantly, members can withdraw the proxy by revoking it if they so choose: see also Re Citect Corporation Ltd (2006) 225 ALR 137 per Barrett J. It is well established that the obligation on the target company and its directors to provide its members with all material information does not cease once the explanatory statement has been dispatched. The nature of the obligation is similar to that which applies to the initial explanatory statement. Members should be informed of all new material information which arises after the explanatory statement has been sent and before the final court hearing. This includes, where appropriate, a supplementary opinion from the same independent expert and any adjustment to voting or other processes that may be appropriate. The approach of ASIC has been generally that the target membership should have at least 10 days to consider any supplementary information. The Courts have approached this with some flexibility, but factors which govern the exercise of discretion as to the content and timing of the supplementary disclosure include the question of whether the information had already been made available through a market announcement, as it has in this instance, how complex the supplementary information is, how significant the supplementary information is and the corresponding response from the target directors, the expert and ASIC. It may also be, in some circumstances, that the supplementary material was effectively foreshadowed at the time of the first hearing. In the present circumstances, the transaction concerned was of some magnitude and there could be little doubt, in my view, that it was appropriate to bring the transaction to the attention of shareholders to update them. It is conceivable that the information would be material, at least to some shareholders, in terms of the capacity to influence a voting decision, one way or the other, or even to refrain from voting in the sense discussed by Barrett J, as his Honour then was, in Re HIH Casualty and General Insurance Ltd (2006) 57 ACSR 791 (at [82]). One of the difficulties is in striking the balance between taking a conservative view as to providing full disclosure of anything that might be material on the one hand, and over burdening shareholders with so much information that the real effect of a transaction or event is lost within a myriad of detail. It is one thing to advise shareholders to take their own advice, but in reality not all shareholders will be in a position or wish to do so. There is a need for simplicity of communication in circumstances where such a vast amount of material can be made available to shareholders.