FEDERAL COURT OF AUSTRALIA
Hostworks Group Limited ACN 008 010 820, in the matter of Hostworks Group Limited ACN 008 010 820 (No 2) [2008] FCA 248
CORPORATIONS – Corporations Act 2001(Cth) – Scheme of Arrangement – approval of scheme by Court – excess of Court’s discretion – applications for approval of members Scheme of Arrangement whereby a third entity acquires all shares in applicant company (a transfer scheme) – whether Court satisfied that arrangement capable of being accepted – whether all conditions of s 411 complied with – scheme approved
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SAD 180 OF 2007
MANSFIELD J
22 FEBRUARY 2008
ADELAIDE
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
SAD 180 OF 2007
IN THE MATTER OF HOSTWORKS GROUP LIMITED (ACN 008 010 820)
HOSTWORKS GROUP LIMITED (ACN 008 010 820)
Plaintiff
JUDGE:
MANSFIELD J
DATE OF ORDER:
22 FEBRUARY 2008
WHERE MADE:
ADELAIDE
THE COURT ORDERS THAT:
1.Paragraph 3 of the Orders made by the Court on 21 December 2007 ("Orders"), as varied by the Orders of the Court made on 15 January 2008, be further varied by:
1.1the replacement of the date "8 January 2008" with the date "9 January 2008"; and
1.2the insertion of the words "as at the close of business on 7 January 2008" after the words "plaintiff's members" appearing therein.
2. The order in para 1 above have effect nunc pro tunc so that:
1.3the reference to "8 January 2008" in para 3 of the Orders be taken to refer, and always to have referred, to"9 January 2008"; and
1.4the words "as at the close of business on 7 January 2008" be taken to be included in paragraph 3 of the Orders, and always to have been included, after the words "plaintiff's members".
3.Pursuant to s 411(6) of the Corporations Act, 2001 (Cth) ("Act") the scheme of arrangement for the transfer of all the fully paid ordinary shares in the issued capital of the plaintiff to Broadcast Australia Pty Ltd, being the Scheme contained in and more particularly described in Appendix C to the Scheme Booklet comprising annexure "DG-1" to the affidavit of Doris Christine Grave sworn 15 February 2008 be altered so that clause 3.4(b) is to read as follows:
3.4 (b) The obligations…
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- AGLC
- Re Hostworks Group Ltd (No 2) [2008] FCA 248
- Case
- [2008] FCA 248
- Decision Date
CaseChat Overview and Summary
The central legal issues addressed in the case were the proper interpretation and modification of the scheme of arrangement, particularly clause 3.4(b), to ensure compliance with statutory requirements and fairness to the parties involved. The court had to consider whether the proposed alterations to the scheme were in accordance with the Act and whether the changes would effectively and fairly implement the transfer of shares.
In its reasoning, the court found that the alterations to the scheme of arrangement were necessary to ensure that the obligations of Broadcast Australia were clearly defined and to address any potential ambiguities in the original terms. The court approved the changes, including the modification of the date and the inclusion of additional details regarding the payment of the scheme consideration. The court concluded that the altered scheme complied with the statutory requirements and was fair and equitable for all parties involved. Consequently, the scheme was approved, and Hostworks was exempted from certain compliance provisions of the Act.
The final orders of the court included the specific modifications to the scheme of arrangement, the approval of the altered scheme, and the exemption of Hostworks from compliance with certain sections of the Act. The court also granted liberty to apply for further orders if necessary.
Orders
Orders of the court
1. Paragraph 3 of the Orders made by the Court on 21 December 2007 ("Orders"), as varied by the Orders of the Court made on 15 January 2008, be further varied by:
1.1 the replacement of the date "8 January 2008" with the date "9 January 2008"; and
1.2 the insertion of the words "as at the close of business on 7 January 2008" after the words "plaintiff's members" appearing therein.
2. The order in para 1 above have effect nunc pro tunc so that:
1.3 the reference to "8 January 2008" in para 3 of the Orders be taken to refer, and always to have referred, to"9 January 2008"; and
1.4 the words "as at the close of business on 7 January 2008" be taken to be included in paragraph 3 of the Orders, and always to have been included, after the words "plaintiff's members".
3. Pursuant to s 411(6) of the Corporations Act, 2001 (Cth) ("Act") the scheme of arrangement for the transfer of all the fully paid ordinary shares in the issued capital of the plaintiff to Broadcast Australia Pty Ltd, being the Scheme contained in and more particularly described in Appendix C to the Scheme Booklet comprising annexure "DG-1" to the affidavit of Doris Christine Grave sworn 15 February 2008 be altered so that clause 3.4(b) is to read as follows:
3.4 (b) The obligations of BA to pay the Scheme Consideration will be satisfied by BA, before 12.00 (noon) on the Implementation Date, depositing in cleared funds into an account in the name of Hostworks an amount equal to the aggregate Scheme Consideration payable to each Scheme Participant, such amount to be held by Hostworks on trust for the Scheme Participants (except that any interest on the amount will be for the account of BA) and for the purpose of sending the aggregate Scheme Consideration to the Scheme Participants either:
(i) where Scheme Participants have previously authorised Hostworks to deposit their dividends directly into their nominated bank account, and they have not instructed Hostworks otherwise prior to or on the Record Date, by direct deposit into the Scheme Participant's nominated bank account by not later than the Implementation Date;
(ii) where Scheme Participants have previously authorised Hostworks to deposit their dividends directly into their nominated bank account, and they have instructed Hostworks to pay their Scheme Consideration to them by cheque prior to or on the Record Date, by dispatching or procuring the dispatch by not later than the Implementation Date to the Scheme Participant by pre-paid post to the address of the Scheme Participant in the Register a cheque in Australian currency drawn on an Australian bank in the name of the Scheme Participant; or
(iii) where Scheme Participants have not previously authorised Hostworks to deposit their dividends directly into their nominated bank account, by dispatching or procuring the dispatch by not later than the Implementation Date to each of the Scheme Participants by pre-paid post to the address of each the Scheme Participants in the Register a cheque in Australian currency drawn on an Australian bank in the name of the Scheme Participant,
for in an amount equal to the number of Hostworks Shares held by that Scheme Participant at the Record Date multiplied by the Scheme Consideration.
4. Pursuant to s 411(4)(b) of the Act, the scheme of arrangement proposed between the plaintiff and its members as altered pursuant to para 3 and in the form of Schedule A to this order, is approved.
5. Pursuant to s 411(12) of the Act, the plaintiff be exempted from compliance with s 411(11) of the Act.
6. Liberty to apply.
7. This order be entered forthwith.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Established by: MANSFIELD J
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