Re Facilitate Digital Holdings Limited - [2013] QSC 301

SUPREME COURT OF QUEENSLAND

CITATION:

Re Facilitate Digital Holdings Limited [2013] QSC 301

PARTIES:

FACILITATE DIGITAL HOLDINGS LIMITED
ACN 093 823 253

(applicant)

FILE NO/S:

BS 10058 of 2013

DIVISION:

Trial Division

PROCEEDING:

Originating Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

30 October 2013

DELIVERED AT:

Brisbane

HEARING DATE:

30 October 2013

JUDGE:

Philip McMurdo J

ORDERS:

Pursuant to section 411(2) of the Corporations Act 2001 (“the Act”), time is abridged to the extent necessary to allow this matter to proceed today.1.

The applicant is to convene a meeting of those members of the applicant who come within the meaning of the term “Scheme Shareholders” within the proposed scheme in the manner contemplated by the notice of meeting set out in the schedule to this order (“Notice of Meeting”) and to consider the business set out in the Notice of Meeting.2.

Approval be given for the publication of the explanatory statement forming exhibit RR-02 to the affidavit of Rocco Russo filed by leave today to accompany the Notice of meeting on condition that:3.

paragraph 6.8 be amended to state the last recorded sale price on the day before lodgement of the statement with ASIC provided that the statement must be lodged no later than 31 October 2013; and a.

the notice of meeting in appendix 3 be that referred to in these orders;b.

the table in paragraph 7.7(d) be amended in accordance with the attachment to Exhibit MMH20 to the affidavit of Michelle Marie Hyams filed by leave today; andc.

a statement be included in paragraph 7.7(d) explaining that the table in that section differs from the table in section 5.3 of the Independent Expert’s Report because it is based on a share price of 13 cents (the closing price of Adslot Ltd shares on 25 October 2013) whereas the table in the Independent Expert’s Report is based on a share price of 5.5 cents (Adslot Ltd’s 90-day volume weighted average price of $0.055 on 11 September 2013).d.

CATCHWORDS:

CORPORATIONS – ARRANGEMENTS AND RECONSTRUCTIONS – SCHEMES OF ARRANGEMENT OR COMPROMISE – APPLICATION FOR ORDER FOR MEETING – where the proposed arrangement is for the applicant company to obtain shares in another company in exchange for that company transferring shares to the applicant company – whether the court should order for a meeting of the applicant company’s shareholders to be convened

COUNSEL:

N H Ferrett for the applicant

SOLICITORS:

Cooper Grace Ward for the applicant

HIS HONOUR: This is the first hearing of an application for the approval of a scheme under section 411 of the Corporations Act 2001. The applicant, Facilitate Digital Holdings Limited, is a company listed on the ASX. Clearly it is a part 5.1 body and the proposed arrangement is an arrangement within section 411. The scheme is for the acquisition of the shares in the applicant by Adslot Limited, another ASX listed company, in exchange for shares in Adslot. The scheme provides for the transfer of one share…

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: [2013] QSC 301
Decision Date: 30 October 2013

CaseChat Overview and Summary

Facilitate Digital Holdings Limited applied to the Court for an order convening a meeting of its shareholders to consider a proposed scheme of arrangement. The proposed arrangement involved the applicant obtaining shares in another company, Adslot Limited, in exchange for Adslot transferring shares to Facilitate. The application was brought under the Corporations Act 2001, specifically section 411(2), which allows the Court to order a meeting of the company’s shareholders if it is satisfied that the applicant has made the necessary application and provided the required information.

The primary legal issue before the Court was whether it should order a meeting of the applicant company’s shareholders to consider the proposed scheme of arrangement. In determining this, the Court needed to consider whether the applicant had complied with the procedural requirements of the Corporations Act and whether the necessary information had been provided to the shareholders to enable them to make an informed decision. Additionally, the Court had to consider the fairness of the proposed scheme to the shareholders and whether the explanatory statement provided sufficient information to enable the shareholders to understand the arrangement and its implications.

In deciding the matter, the Court found that the applicant had complied with the procedural requirements and provided the necessary information to the shareholders. The Court was satisfied that the explanatory statement, subject to certain amendments, provided sufficient information for the shareholders to make an informed decision. The Court also found that the proposed scheme was fair and reasonable to the shareholders. Consequently, the Court ordered the convening of a meeting of the applicant’s shareholders to consider the proposed scheme of arrangement, subject to the conditions outlined in the orders.

The Court further ordered that the explanatory statement be published with the meeting notice, subject to certain amendments, to ensure that the shareholders had access to the most accurate and up-to-date information. The Court also directed that a statement be included in the explanatory statement explaining the differences between the share price used in the explanatory statement and that used in the Independent Expert’s Report. Finally, the Court abridged time to allow the matter to proceed on the day of the hearing.

Orders

Orders of the court

Pursuant to section 411(2) of the Corporations Act 2001 (“the Act”), time is abridged to the extent necessary to allow this matter to proceed today.1.

The applicant is to convene a meeting of those members of the applicant who come within the meaning of the term “Scheme Shareholders” within the proposed scheme in the manner contemplated by the notice of meeting set out in the schedule to this order (“Notice of Meeting”) and to consider the business set out in the Notice of Meeting.2.

Approval be given for the publication of the explanatory statement forming exhibit RR-02 to the affidavit of Rocco Russo filed by leave today to accompany the Notice of meeting on condition that:3.

paragraph 6.8 be amended to state the last recorded sale price on the day before lodgement of the statement with ASIC provided that the statement must be lodged no later than 31 October 2013; and a.

the notice of meeting in appendix 3 be that referred to in these orders;b.

the table in paragraph 7.7(d) be amended in accordance with the attachment to Exhibit MMH20 to the affidavit of Michelle Marie Hyams filed by leave today; andc.

a statement be included in paragraph 7.7(d) explaining that the table in that section differs from the table in section 5.3 of the Independent Expert’s Report because it is based on a share price of 13 cents (the closing price of Adslot Ltd shares on 25 October 2013) whereas the table in the Independent Expert’s Report is based on a share price of 5.5 cents (Adslot Ltd’s 90-day volume weighted average price of $0.055 on 11 September 2013).d.

Background

Background to the litigation

Full text does not contain this section.

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

Full text does not contain this section.

CITATION:	Re Facilitate Digital Holdings Limited [2013] QSC 301
PARTIES:	FACILITATE DIGITAL HOLDINGS LIMITED ACN 093 823 253 (applicant)
FILE NO/S:	BS 10058 of 2013
DIVISION:	Trial Division
PROCEEDING:	Originating Application
ORIGINATING COURT:	Supreme Court of Queensland
DELIVERED ON:	30 October 2013
DELIVERED AT:	Brisbane
HEARING DATE:	30 October 2013
JUDGE:	Philip McMurdo J
ORDERS:	*Pursuant to section 411(2) of the Corporations Act 2001* (“the Act”), time is abridged to the extent necessary to allow this matter to proceed today.1. The applicant is to convene a meeting of those members of the applicant who come within the meaning of the term “Scheme Shareholders” within the proposed scheme in the manner contemplated by the notice of meeting set out in the schedule to this order (“Notice of Meeting”) and to consider the business set out in the Notice of Meeting.2. Approval be given for the publication of the explanatory statement forming exhibit RR-02 to the affidavit of Rocco Russo filed by leave today to accompany the Notice of meeting on condition that:3. paragraph 6.8 be amended to state the last recorded sale price on the day before lodgement of the statement with ASIC provided that the statement must be lodged no later than 31 October 2013; and a. the notice of meeting in appendix 3 be that referred to in these orders;b. the table in paragraph 7.7(d) be amended in accordance with the attachment to Exhibit MMH20 to the affidavit of Michelle Marie Hyams filed by leave today; and**c. a statement be included in paragraph 7.7(d) explaining that the table in that section differs from the table in section 5.3 of the Independent Expert’s Report because it is based on a share price of 13 cents (the closing price of Adslot Ltd shares on 25 October 2013) whereas the table in the Independent Expert’s Report is based on a share price of 5.5 cents (Adslot Ltd’s 90-day volume weighted average price of $0.055 on 11 September 2013).d.
CATCHWORDS:	CORPORATIONS – ARRANGEMENTS AND RECONSTRUCTIONS – SCHEMES OF ARRANGEMENT OR COMPROMISE – APPLICATION FOR ORDER FOR MEETING – where the proposed arrangement is for the applicant company to obtain shares in another company in exchange for that company transferring shares to the applicant company – whether the court should order for a meeting of the applicant company’s shareholders to be convened
COUNSEL:	N H Ferrett for the applicant
SOLICITORS:	Cooper Grace Ward for the applicant