Re Healthscope Limited (No. 2)

[2010] VSC 440

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

LIST E
No. 04192 of 2010

IN THE MATTER of HEALTHSCOPE LIMITED (ACN 006 405 152)

HEALTHSCOPE LIMITED
(ACN 006 405 152) Plaintiff

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JUDGE:	Davies J
WHERE HELD:	Melbourne
DATE OF HEARING:	24 September 2010
DATE OF JUDGMENT:	24 September 2010 (delivered ex tempore, revised 4 October 2010)
CASE MAY BE CITED AS:	Re Healthscope Limited (No. 2)
MEDIUM NEUTRAL CITATION:	[2010] VSC 440

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CORPORATIONS – Schemes of arrangement – Approval of scheme – Discretion – Corporations Act 2001 (Cth) ss 411 (11), 411(12) and 411 (17).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr. JG Santamaria QC with Mr. GJ Ahern	Minter Ellison

HER HONOUR:

1. The applicant, Healthscope Ltd (“Healthscope”), seeks an order approving the scheme of arrangement proposed to be made between Healthscope and its shareholders.  The scheme, if approved, will result in the acquisition for cash consideration of all the ordinary shares in Healthscope by Asia Pacific Healthcare Group Pty Ltd.

1. On 20 August 2010 I ordered that Healthscope convene a meeting of its shareholders to consider, and if thought fit, to approve the proposed scheme.[1]

   [1]Re Healthscope Limited [2010] VSC 367 (Unreported, Davies J, 3 September 2010).

1. The scheme meeting was held on 22 September 2010 and on 23 September 2010 Gardiner AsJ made orders pursuant to r 16.6 of the Supreme Court (Corporations) Rules 2003 that the meeting was duly convened and that the resolution considered at the meeting was duly passed.

1. The implementation of the scheme is conditional upon a number of conditions precedent being satisfied or waived.  Those conditions include Court approval of the scheme. Healthscope has provided certificates to the Court in accordance with cl 3.3 of the Scheme and cl 3.5 of the Scheme Implementation Agreement confirming that each condition precedent other than the Court’s approval and lodgement of the Court order of approval with Australian Securities and Investments Commission have been satisfied.

1. The role of the Court in approving a scheme is supervisory in nature. When deciding whether to approve a scheme the Court must consider whether there has been compliance with the Corporations Act 2001 (Cth) (“the Act”), whether the majority of shareholders are acting in good faith in voting in favour of the scheme and whether the scheme is one that is capable of being accepted by shareholders looking to their own commercial advantage. [2]

   [2]See Re Coles Group Limited(No. 2) (2007) 65 ACSR 494 [24], [33], [47] – [65], [68], [71] – [72], [77]; Re Lonsdale Financial Group Limited (No. 2) [2007] VSC 525 (Unreported, Robson J, 17 December 2007) [21]; Re IWL Limited [2007] VSC 530 (Unreported, Robson J, 17 December 2007) [7]; Re Mitre 10 Limited [2010] VSC 100 (Unreported, Robson J, 17 March 2010) [15]; Re Rusina Mining NL (No. 2) (2010) 78 ACSR 609 [39] – [40]; Re Lion Selection [2009] VSC 546 (Unreported, Judd J, 3 December 2009) [20] – [22].

1. I am satisfied that the order should be made for the reasons that:

(a)        the order is not opposed by any shareholder or by ASIC;

(b)the scheme is overwhelmingly supported by the shareholders. The requisite majority for the purposes of s 411(4)(a) of the Act was satisfied as 96.72% of the number of shareholders that were present and voting in person or proxy at the scheme meeting voted in favour of the resolution and 99.50% of the votes cast in person and by proxy at the scheme meeting were in favour of the resolution;

(c)the opinion of the independent expert is that the scheme is in the best interests of shareholders;

(d)the scheme has the unanimous recommendation of the board of directors of Healthscope;

(e)Healthscope has received a statement in writing from ASIC under s 411(17)(b) of the Act stating that ASIC has no objection to the scheme.

1. In light of these matters and having regard to the matters that I took into account in ordering the convening of the meeting, I am satisfied that it is appropriate to approve the scheme.

1. Healthscope also seeks an order under s 411(12) of the Act for exemption from compliance with s 411(11) of the Act. In my view such an order is also appropriate. There is no alteration to the constitution and once the scheme is implemented Healthscope will become a wholly owned subsidiary. The scheme will then be of historical interest only.[3]

   [3]Re Lion Selection [2009] VSC 546 (Unreported, Judd J, 3 December 2009) [23] – [24]; Re Cytopia (No. 2) [2010] VSC 4 (Unreported, Croft J, 15 January 2010) [19] – [20]; Re GRD Limited [2009] FCA 1595 (Unreported, Gilmour J, 24 December 2009) [36] – [38].

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