Federal Court of Australia
DWS Limited, in the matter of DWS Limited [2020] FCA 1590
File number: VID 663 of 2020 Judgment of: BEACH J Date of judgment: 30 October 2020 Date of publication of reasons: 2 November 2020 Catchwords: CORPORATIONS – members’ scheme of arrangement – first court hearing – order sought under s 411(1) of the Corporations Act 2001 (Cth) –performance risk – break fee – exclusivity arrangements – director interests– exercise of discretion – order made for convening of meeting Legislation: Corporations Act 2001 (Cth) ss 411, 412 and 602
Corporations (Coronavirus Economic Response) Determination (No.3) 2020 (Cth)
Corporations Regulations 2001 (Cth) reg 5.1.01 and Sch 8
Federal Court (Corporations) Rules 2000 (Cth) rr 2.15 and 3.4; form 6
Cases cited: Re Foundation Healthcare Ltd (2002) 42 ACSR 252
Re Healthscope (2019) 139 ACSR 608
Re Kidman Resources Ltd [2019] FCA 1226
Re SMS Management and Technology Limited [2017] VSC 257
Re Villa World Ltd (2019) 139 ACSR 550
Re Wellcome Group Limited [2019] FCA 1655
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 67 Date of hearing: 30 October 2020 Counsel for the Plaintiff: Mr B Holmes Solicitor for the Plaintiff: SBA Law Counsel for the Intervener: Mr C Moller Solicitor for the Intervener: DLA Piper ORDERS
VID 663 of 2020 IN THE MATTER OF DWS LIMITED
BETWEEN: DWS LIMITED (ACN 085 656 088)
Plaintiff
order made by:
BEACH J
DATE OF ORDER:
30 OCTOBER 2020
OTHER MATTERS:
1.The Court notes that the Australian Securities and Investments Commission (ASIC) was provided with at least 14 days’ notice of the hearing of this application.
2.The Court is satisfied that ASIC has had a reasonable opportunity to:
(a)examine the terms of the proposed scheme of arrangement to which the application relates and a draft explanatory statement relating to that arrangement; and
(b)make submissions to the Court in relation to the proposed scheme of arrangement and the draft explanatory statement.
3.The Court notes the letter from ASIC to the Directors of DWS Limited dated 29 October 2020 at Annexure KAP-3 to the affidavit of Kelly Ann Powers dated 29 October 2020
THE COURT ORDERS THAT:
1.Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Act), the Plaintiff convene and hold a meeting of its shareholders (Scheme Meeting):
(a)for the purpose of considering, and, if thought fit, agreeing (with or without modification), to the scheme of arrangement (Scheme) proposed to be made between the Plaintiff and its shareholders (DWS Shareholders), the terms of which are set out in Annexure A to these orders; and
(b)to be held on Tuesday 3 December 2020 at 10.00 am (AEDT) and to be conducted electronically through an online platform (which is to be accessed in accordance with the instructions included in the Notice of Meeting to be sent to shareholders in accordance with order 2 below) in accordance with the provisions of Part 2 of the Corporations (Coronavirus Economic Response) Determination (No.3)…
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- AGLC
- Re DWS Ltd [2020] FCA 1590
- Case
- [2020] FCA 1590
- Decision Date
CaseChat Overview and Summary
The court found that the scheme was in a conventional form for an acquisition scheme, and there was no reason why it would not be approved if adopted by the members. The DWS shareholders would be provided with a detailed analysis of the scheme by an independent expert, along with the recommendation of the DWS directors. The scheme booklet had been verified by DWS and HCL and examined by ASIC. The court was satisfied that the scheme did not appear so unfair or inappropriate that it should be stopped before proceeding further. The court exercised its discretion to make orders convening a meeting of DWS shareholders to enable the scheme to be considered.
Accordingly, the court made the following orders: the plaintiff was required to convene and hold a meeting of its shareholders for the purpose of considering and agreeing to the scheme. The meeting was to be held electronically on 3 December 2020. The court also ordered that the meeting be convened by sending emails and hard-copy documents to the DWS shareholders. The court further ordered that voting on the resolution to approve the scheme be conducted by way of a poll, and that the chair of the scheme meeting have the power to adjourn the meeting to a time, date, and place considered appropriate.
Orders
Orders of the court
1. Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Act), the Plaintiff convene and hold a meeting of its shareholders (Scheme Meeting):
(a) for the purpose of considering, and, if thought fit, agreeing (with or without modification), to the scheme of arrangement (Scheme) proposed to be made between the Plaintiff and its shareholders (DWS Shareholders), the terms of which are set out in Annexure A to these orders; and
(b) to be held on Tuesday 3 December 2020 at 10.00 am (AEDT) and to be conducted electronically through an online platform (which is to be accessed in accordance with the instructions included in the Notice of Meeting to be sent to shareholders in accordance with order 2 below) in accordance with the provisions of Part 2 of the Corporations (Coronavirus Economic Response) Determination (No.3) 2020.
2. The Scheme Meeting be convened by sending on or before 4 November 2020:
(a) an email to each DWS Shareholder who has nominated an electronic address for the purposes of receiving notices of meeting and proxy forms from the Plaintiff (Email Shareholder) (or, in the case of joint holders, to the holder whose name appears first in the Plaintiff’s register), such email to be substantially in the form of Annexure SKW-4 to the affidavit of Stuart Keith Whipp sworn on 29 October 2020 (Whipp Affidavit) which contains links accessible by the Email Shareholder and which enables the Email Shareholder to:
(i) download an electronic copy of a document substantially in the form of the Scheme Booklet, a draft of which is at Annexure SKW-1 to the Whipp Affidavit (which contains among other things the proposed Scheme of Arrangement at Annexure B and Notice of Scheme Meeting at Annexure D) (Scheme Booklet); and
(ii) complete and lodge their proxy for the Scheme Meeting and voting instructions online.
(b) the following hard-copy documents to each DWS Shareholder who is not an Email Shareholder (or, in the case of joint holders, to the holder whose name appears first in the Plaintiff’s register):
(i) a document substantially in the form of the Scheme Booklet (which contains among other things the proposed Scheme of Arrangement at Annexure B and Notice of Scheme Meeting at Annexure D);
(ii) a personalised proxy/voting form for the Scheme Meeting (Proxy Form), substantially in the form of Annexure SKW-5 to the Whipp Affidavit and a reply-paid envelope for the return of completed Proxy Forms.
3. The documents referred to in order 2(b) be sent:
(a) in the case of DWS Shareholders whose registered address is within Australia, by prepaid ordinary post addressed to the relevant addresses recorded in the Plaintiff’s register; and
(b) in the case of DWS Shareholders whose registered address is outside Australia, by airmail or international courier service addressed to the relevant addresses recorded in the Plaintiff’s register.
4. Compliance with r 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) (Rules) be dispensed with, except in so far as that rule applies r 75-15(2) of the Insolvency Practice Rules (Corporations) 2016 (Cth).
5. Voting on the resolution to approve the Scheme is to be conducted by way of a poll.
6. A proxy in respect of the Scheme Meeting will be valid and effective if, and only if, a Proxy Form is completed and delivered in accordance with its terms or a proxy is lodged online in accordance with the instructions by 10.00 am (AEDT, being Melbourne time) on 1 December 2020.
7. Mr Martin Ralston or failing him Mr Hayden Michael Kelly, be Chair of the Scheme Meeting.
8. The Chair of the Scheme Meeting shall have the power to adjourn the meeting to such time, date and place as he considers appropriate.
9. Compliance with r 3.4 and Form 6 of the Rules is dispensed with.
10. The Plaintiff publish a Notice of Hearing in The Australian newspaper, in substantially the form that appears at Annexure B hereto, not later than 5 days prior to the date fixed for the hearing of any application to approve the Scheme.
11. The further hearing of the Originating Process is adjourned to the Honourable Justice Beach at 9.30 am (AEDT, being Melbourne time) on Friday, 4 December 2020 or as soon thereafter as the business of the Court allows.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
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