Re Biosceptre International Limited

Case [2013] FCA 1429

FEDERAL COURT OF AUSTRALIA

Biosceptre International Limited, in the matter of Biosceptre International Limited [2013] FCA 1429

Citation: Biosceptre International Limited, in the matter of Biosceptre International Limited [2013] FCA 1429
Parties: BIOSCEPTRE INTERNATIONAL LIMITED ACN 104 060 166
File number: NSD 2367 of 2013
Judge: YATES J
Date of judgment: 18 December 2013
Catchwords: CORPORATIONS – scheme of arrangement – application for order that company convene meeting of members
Legislation: Corporations Act 2001 (Cth) s 411
Corporations Regulations 2001 (Cth) regs 5.6.11, 5.6.12, 5.6.14-5.6.36A
Cases cited: Re APN News & Media Ltd (2007) 62 ACSR 400
Re Sino Gold Mining Ltd(ACN 093 518 579) (2009) 74 ACSR 647
Simavita Holdings Limited in the matter of Simavita Holdings Limited [2013] FCA 1274
Date of hearing: 18 December 2013
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 37
Counsel for the Plaintiff: Mr M Oakes SC
Solicitor for the Plaintiff: K&L Gates

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 2367 of 2013

IN THE MATTER OF BIOSCEPTRE INTERNATIONAL LIMITED

BIOSCEPTRE INTERNATIONAL LIMITED ACN 104 060 166
Plaintiff

JUDGE:

YATES J

DATE OF ORDER:

18 DECEMBER 2013

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Corporations Act), the plaintiff convene a meeting (Scheme Meeting) of its members holding ordinary shares (shareholders), for the purpose of considering and, if thought fit, approving (with or without modification) the scheme of arrangement proposed to be made between the plaintiff and its shareholders (Scheme), being the Scheme substantially in the form of the document which is Annexure C of the document at Tab 5 of Exhibit BJM-1.

2.Pursuant to s 411(1) of the Corporations Act, the document substantially in the form of Tab 5 of Exhibit BJM-1 (Scheme Booklet) be approved for distribution to shareholders together with the proxy form substantially in the form of the pro forma document at Tab 8 of Exhibit BJM-1.

3.The Scheme Meeting be held at the plaintiff's offices at Riverside Corporate Park, 11 Julius Avenue, North Ryde in the state of New South Wales on 31 January 2014 at 5.00 pm (AEDT).

4.Peter Gavin Currie or, in his absence, Peter John Newton, be appointed to act as Chairman at the Scheme Meeting.

5.The Chairman of the Scheme Meeting has the power to adjourn the Scheme Meeting in his absolute discretion.

6.Except for procedural motions, all voting at the Scheme Meeting be by poll as declared by the Chairman.

7.The plaintiff place a notice of the hearing of the application to approve the Scheme in The Australian newspaper on or before 31 January 2014, such notice to be substantially in the form of Annexure A to these orders, and the plaintiff be otherwise exempted from compliance with r 3.4 of the Federal Court (Corporations) Rules 2000 (Cth).

8.The plaintiff be exempt from compliance with the requirements of regs 5.6.11, 5.6.12 and 5.6.14…

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Re Biosceptre International Limited [2013] FCA 1429
Case
[2013] FCA 1429
Decision Date

CaseChat Overview and Summary

Biosceptre Australia, a biotechnology company, sought an order for a meeting of its members to consider a scheme of arrangement for the company to be redomiciled to the United Kingdom. The application was heard by Justice Bromberg in the Federal Court of Australia. The primary legal issue before the court was whether the requirements of the Corporations Act 2001 (Cth) for convening a meeting to approve the scheme had been met. The court had to determine if the Australian Securities and Investments Commission (ASIC) had had a reasonable opportunity to examine the scheme and make submissions, and if the formal requirements for convening the meeting had been satisfied. Additionally, the court needed to assess if the company's request for exemption from certain regulatory requirements was justified.

The court found that Biosceptre Australia was indeed a Part 5.1 body and the proposed scheme qualified as an arrangement under the Corporations Act. Justice Bromberg was satisfied that ASIC had been given a reasonable opportunity to examine the scheme and had chosen not to intervene. The court also determined that all formal requirements for convening the meeting were met and that the scheme, if approved, would likely be approved by the court. Furthermore, the court granted the company's request for exemption from certain regulatory requirements, finding it appropriate. The detailed submissions from senior counsel for Biosceptre Australia were deemed helpful in the court's consideration of the matter.

The court ordered that a meeting of Biosceptre Australia's members be convened to consider the scheme, with specific details on the date, location, and procedural arrangements for the meeting. The court also approved the document to be distributed to shareholders and granted exemptions from certain regulatory requirements. The proceeding was stood over for a later date to hear the application to approve the scheme.

Orders

Orders of the court

1. Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Corporations Act), the plaintiff convene a meeting (Scheme Meeting) of its members holding ordinary shares (shareholders), for the purpose of considering and, if thought fit, approving (with or without modification) the scheme of arrangement proposed to be made between the plaintiff and its shareholders (Scheme), being the Scheme substantially in the form of the document which is Annexure C of the document at Tab 5 of Exhibit BJM-1.

2. Pursuant to s 411(1) of the Corporations Act, the document substantially in the form of Tab 5 of Exhibit BJM-1 (Scheme Booklet) be approved for distribution to shareholders together with the proxy form substantially in the form of the pro forma document at Tab 8 of Exhibit BJM-1.

3. The Scheme Meeting be held at the plaintiff's offices at Riverside Corporate Park, 11 Julius Avenue, North Ryde in the state of New South Wales on 31 January 2014 at 5.00 pm (AEDT).

4. Peter Gavin Currie or, in his absence, Peter John Newton, be appointed to act as Chairman at the Scheme Meeting.

5. The Chairman of the Scheme Meeting has the power to adjourn the Scheme Meeting in his absolute discretion.

6. Except for procedural motions, all voting at the Scheme Meeting be by poll as declared by the Chairman.

7. The plaintiff place a notice of the hearing of the application to approve the Scheme in The Australian newspaper on or before 31 January 2014, such notice to be substantially in the form of Annexure A to these orders, and the plaintiff be otherwise exempted from compliance with r 3.4 of the Federal Court (Corporations) Rules 2000 (Cth).

8. The plaintiff be exempt from compliance with the requirements of regs 5.6.11, 5.6.12 and 5.6.14 to 5.6.36A of the Corporations Regulations 2001 (Cth).

9. This proceeding stand over to 6 February 2014 at 10.15 am before Justice Yates for the hearing of the application to approve the Scheme.

10. There be liberty to apply.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Functionally, the proposed scheme is an acquisition scheme.Background Biosceptre Australia is a public, unlisted biotechnology company based in Sydney that is developing and commercialising antibody technologies to address a wide range of applications in the diagnosis and treatment of cancer. Biosceptre Australia is currently the holding company for Biosceptre (UK) Limited, which operates the group business in the United Kingdom. Biosceptre Australia also has a number of dormant subsidiaries. Biosceptre Australia’s directors have expressed the view that redomiciling Biosceptre Australia to the United Kingdom will assist in developing a strong presence for the business in key European markets, centring in Cambridge, England. They believe that this will give the corporate group substantially increased access to potential development partners and capital markets. They also believe that it may provide a significantly greater investment platform for new investors as the group’s financial requirements increase, particularly at a time when its work commences to move into larger clinical trials. Redomiciling Biosceptre Australia to the United Kingdom will also potentially permit access to:·the Enterprise Investment Scheme, which is designed to help smaller higher-risk trading companies to raise finance by offering a range of tax relief to United Kingdom resident investors who purchase new shares in those companies;·the United Kingdom’s “patent box” tax regime, which is designed to incentivise businesses with patented products, resulting in qualifying income arising in these companies being subject to an effective United Kingdom statutory tax rate of 10%; and·certain United Kingdom tax incentives in respect of expenditure on qualifying research and development, further reducing the overall effective tax rate. In short, the Biosceptre Australia board believes that the growth opportunities available to the corporate group if based in the United Kingdom would outweigh those available to the group currently based in Australia. As at 16 December 2013, Biosceptre Australia had:·31,528,532 fully-paid ordinary shares on issue, held by 216 members;·200,000 partly-paid ordinary shares on issue, held by one member; and·2,085,802 options on issue, held by four optionholders. It is anticipated that, by 18 January 2014, the 200,000 partly-paid ordinary shares will be paid in full and converted to 200,000 fully‑paid ordinary shares. Biosceptre Australia also has convertible notes on issue to the value of $3,700,000. They are held by one noteholder, The Car Finance Company (2007) Limited, a company incorporated in England and Wales. The proposed scheme Under the proposed scheme, the ordinary shares in Biosceptre Australia held by members at the Implementation Date defined in the scheme document (the scheme shares) will be transferred to Biosceptre UK. Prior to the transfer being made, Biosceptre UK will provide the scheme consideration to each scheme shareholder. Each scheme shareholder will receive one ordinary share in the capital of Biosceptre UK for each ordinary share in the capital of Biosceptre Australia held at the Implementation Date. Biosceptre UK has executed a deed poll in favour of the scheme shareholders with respect to its obligations under the proposed scheme.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Section 411(2)(b) of the Act requires the Court to be satisfied that ASIC has also had a reasonable opportunity to examine the terms of the scheme and the draft explanatory statement, and to make submissions to the Court in relation to the scheme and the draft explanatory statement. ASIC has confirmed that it has had a reasonable opportunity to examine the terms of the scheme and the draft explanatory statement. Prior to the hearing of the present application, ASIC informed the solicitors acting for Biosceptre Australia that it did not intend to appear at the present hearing to make submissions or intervene to oppose the scheme. Consideration I am satisfied that Biosceptre Australia is a Part 5.1 body and that the scheme is an “arrangement” for the purposes of s 411(1) of the Act. I am also satisfied that the formal requirements that are preliminary to the Court convening a meeting under s 411(1) of the Act have been satisfied. Further, I am satisfied that the proposed scheme is of such a nature and is cast in such terms that, if it were to receive the requisite statutory majority, the Court would be likely to approve the scheme on the hearing of an unopposed application. Biosceptre Australia has sought exemption from compliance with the requirements of regs 5.6.11, 5.6.12 and 5.6.14 to 5.6.36A of the Corporations Regulations 2001 (Cth). I am satisfied that it is appropriate to grant that exemption. I have been assisted in my consideration of this matter by detailed written submissions prepared by senior counsel for Biosceptre Australia. Those submissions have been marked MFI 1.Disposition Orders, substantially as sought, should be made.