FEDERAL COURT OF AUSTRALIA
iProperty Group Limited, in the matter of iProperty Group Limited [2015] FCA 1507
Citation: iProperty Group Limited, in the matter of iProperty Group Limited [2015] FCA 1507 Parties: IPROPERTY GROUP LIMITED ACN 126 188 538 File number(s): NSD 1324 of 2015 Judge(s): YATES J Date of judgment: 14 December 2015 Catchwords: CORPORATIONS – scheme of arrangement – application for order for meeting of members Legislation: Corporations Act 2001 (Cth) ss 411, 412, 1322
Federal Court (Corporations) Rules 2000 r 3.2
Capital Markets and Services Act 2007 (Malaysia)Takeovers Panel, Lock-up devices, GN 7, 11 February 2010
Cases cited: Atlassian Corporation Pty Limited, in the matter of Atlassian Corporation Pty Limited [2013] FCA 1451
In the matter of DUET Management Company 1 Limited; DUET Management Company 1 Limited as responsible entity of Diversified Utility and Energy Trust No. 1; DUET Management Company 2 Limited as responsible entity of Diversified Utility and Energy Trust No. 3 (No 2) [2013] NSWSC 1060
Investa Properties Limited, in the matter of Investa Properties Limited (2007) 25 ACLC 1,186; [2007] FCA 1104
Re AXA Asia Pacific Holdings Ltd [2011] VSC 4
Re DUET Management Company 1 Ltd (2013) 95 ACSR 34; [2013] NSWSC 817
Re NRMA Ltd (2000) 33 ACSR 595; [2000] NSWSC 82
Re Westfield Holdings Ltd (2004) 49 ACSR 741; [2004] NSWSC 602Date of hearing: 14 December 2015 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 65 Counsel for the Plaintiff: Mr IM Jackman SC Solicitor for the Plaintiff: Herbert Smith Freehills Counsel for REA Group Limited Dr RCA Higgins Solicitor for REA Group Limited Gilbert + Tobin
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1324 of 2015
IN THE MATTER OF IPROPERTY GROUP LIMITED ACN 126 188 538
IPROPERTY GROUP LIMITED ACN 126 188 538
Plaintiff
JUDGE:
YATES J
DATE OF ORDER:
14 DECEMBER 2015
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.Pursuant to ss 411(1) and 1319 of the Corporations Act 2001 (Cth) (Corporations Act), the plaintiff, iProperty Group Limited (iProperty), convene and hold a meeting (the Scheme Meeting) of its members holding fully paid ordinary shares in iProperty (other than REA Group Limited (REA) or its related bodies corporate or any member who holds fully paid ordinary shares in iProperty on behalf of REA or its related bodies corporate) (Shareholders) for the purpose of considering and, if thought fit, agreeing to (with or without modification) a scheme of arrangement proposed to be entered into between iProperty and the Shareholders (Scheme), the terms of which are contained in Annexure 5 of the scheme booklet, a copy of which is Exhibit A (Scheme Booklet).
2.The Scheme Meeting be held on 28 January 2016 at the Radisson Blu Hotel, 27 O’Connell Street, Sydney, NSW 2000, commencing at 10.00 am (Sydney time).
3.Subject to these orders, the Scheme Meeting be convened, held and conducted in accordance…
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- AGLC
- Re iProperty Group Ltd [2015] FCA 1507
- Case
- [2015] FCA 1507
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the court was whether the plaintiff had complied with the necessary statutory requirements to convene a meeting of its members to consider the scheme of arrangement. The court had to consider whether the scheme was fair and reasonable to the members of the company and whether the necessary information had been provided to the members to enable them to make an informed decision.
The court found that the plaintiff had complied with the necessary statutory requirements and that the scheme was fair and reasonable to the members. The court also found that the necessary information had been provided to the members to enable them to make an informed decision. The court, therefore, ordered the convening of the meeting of members to consider the scheme of arrangement.
In summary, the court granted the plaintiff's application for an order convening a meeting of its members to consider the proposed scheme of arrangement. The meeting was ordered to be held on 28 January 2016, and the court provided detailed instructions for the conduct of the meeting, including the voting process, the dispatch of the scheme booklet, and the return of proxy forms. The court also noted that the approval of the scheme, if given, would qualify Austin Rollco Limited and realestate.com.au Pty Limited for exemption from the registration requirements of the Securities Act of 1993 (US).
Orders
Orders of the court
1. Pursuant to ss 411(1) and 1319 of the Corporations Act 2001 (Cth) (Corporations Act), the plaintiff, iProperty Group Limited (iProperty), convene and hold a meeting (the Scheme Meeting) of its members holding fully paid ordinary shares in iProperty (other than REA Group Limited (REA) or its related bodies corporate or any member who holds fully paid ordinary shares in iProperty on behalf of REA or its related bodies corporate) (Shareholders) for the purpose of considering and, if thought fit, agreeing to (with or without modification) a scheme of arrangement proposed to be entered into between iProperty and the Shareholders (Scheme), the terms of which are contained in Annexure 5 of the scheme booklet, a copy of which is Exhibit A (Scheme Booklet).
2. The Scheme Meeting be held on 28 January 2016 at the Radisson Blu Hotel, 27 O’Connell Street, Sydney, NSW 2000, commencing at 10.00 am (Sydney time).
3. Subject to these orders, the Scheme Meeting be convened, held and conducted in accordance with:
(a) the provisions of Pt 2G.2 of the Corporations Act (save for any applicable replaceable rule) that apply to a meeting of iProperty’s members; and
(b) the provisions of the plaintiff’s constitution that apply in relation to meetings of members and that are not inconsistent with Pt 2G.2 of the Corporations Act.
4. Patrick Grove or, failing him, John Armstrong, be authorised to act as Chairperson of the Scheme Meeting.
5. The Chairperson of the Scheme Meeting shall have the power to adjourn the meeting in his absolute discretion to such time, date and place as he considers appropriate.
6. At the Scheme Meeting, a Shareholder, present and entitled to vote, in person or by proxy or by an attorney under power, shall constitute a quorum.
7. At the Scheme Meeting, each Shareholder, present and entitled to vote, will be entitled to one vote for each fully paid ordinary share in the capital of iProperty that the Shareholder is registered as holding at 7.00 pm (Sydney time) on 26 January 2016.
8. A poll must be taken to decide the resolutions put to the vote at the Scheme Meeting, except for procedural motions.
9. The Scheme Booklet be approved for distribution to the Shareholders (which Scheme Booklet be and is hereby approved for the purposes only of s 411(1) of the Corporations Act).
10. On or before 24 December 2015, there be dispatched:
(a) to each Shareholder, other than any Shareholder who has a registered address in Malaysia:
(i) if the Shareholder has nominated an electronic address for the purposes of receiving notices of meeting and proxy forms from iProperty at such address (via the on-line “InvestorServe” portal maintained by Boardroom Pty Limited), an email substantially in the form of the document behind tab 8 of Exhibit JAA1, including URL links to documents substantially in the form of the Scheme Booklet and a proxy form in respect of the Scheme Meeting, a copy of which is behind tab 6 of Exhibit JAA1 (Proxy Form);
(ii) if the Shareholder has not nominated an electronic address for the purposes of receiving notices of meeting and proxy forms from iProperty at such address, by hand or by pre-paid post or courier to the address of that Shareholder as set out in the register of members of iProperty, a document in substantially the form of the Scheme Booklet, a Proxy Form and a reply envelope addressed to Boardroom Pty Limited, GPO Box 3993, Sydney NSW 2001 Australia; and
(b) to each Shareholder who has a registered address in Malaysia:
(i) a letter substantially in the form of the document behind tab 9 of Exhibit JAA1 and a Proxy Form.
11. If an email notification of a failure to deliver an email to a Shareholder’s nominated electronic address pursuant to Order 10(a)(i) of these orders is received, there be dispatched by hand at, or prepaid post or courier to, the address of each such Shareholder as set out in the register of members of iProperty, a copy of the Scheme Booklet, a Proxy Form and a reply envelope addressed in the manner described in Order 10(a)(ii).
12. The time by which Proxy Forms must be returned or lodged online in accordance with the instructions given on the Proxy Form is 10.00 am (Sydney time) on 26 January 2016.
13. On or before 28 January 2016, the plaintiff publish a Notice of Hearing substantially in the form of Annexure “A” hereto once in The Australian newspaper and the plaintiff be relieved from compliance with r 3.4 of the Federal Court (Corporations) Rules 2000 (Cth) to the extent necessary.
14. Rule 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) shall not apply to the Scheme Meeting, except in so far as that Rule applies reg 5.6.13 of the Corporations Regulations 2001 (Cth).
15. The proceedings be stood over to 10.15 am (Sydney time) on 2 February 2016 before Yates J for the hearing of any application to approve the Scheme Meeting.
16. There be liberty to apply.
17. These orders be entered forthwith.
THE COURT NOTES THAT:
18. Austin Rollco Limited ACN 609 413 505 and realestate.com.au Pty Limited ACN 080 195 535 will rely on the Court’s approval of the Scheme, if given, for the purposes of qualifying for exemption from the registration requirements of the Securities Act of 1993 (US), provided for by s 3(a)(10) of that Act, in connection with the implementation of, and the provision of consideration under, the Scheme.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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
Under the scheme, scheme shareholders (other than Excluded Shareholders) will be entitled to receive $4.00 in cash per scheme share (the cash consideration). Alternatively, scheme shareholders other than Excluded Shareholders and Ineligible Foreign Shareholders may elect to receive consideration comprising $1.20 in cash and 0.7 B-class shares to be issued in an unlisted Australian entity, Austin Rollco Limited (Rollco), for each of their shares in the plaintiff (the mixed consideration). Rollco has been incorporated to hold Bidco shares on and from the Implementation Date (as to which, see [12] below) and to issue B-class shares to scheme shareholders who make a valid election for mixed consideration in accordance with the scheme. At the present time, the only issued share in Rollco is one A-class share held by realestate.com.au. Following implementation of the scheme, this share will continue to be held by realestate.com.au, but with limited rights. Once the B-class shares in Rollco are issued to the scheme shareholders who elect to receive the mixed consideration, realestate.com.au will no longer have any voting rights in Rollco, although it will have certain veto rights. Prior to any B-class shares being issued to scheme shareholders, Bidco must allot and issue to Rollco such number of Bidco shares equal to the total number of B-class shares to be issued by Rollco to scheme shareholders by way of mixed consideration. Rollco’s only asset will be its shares in Bidco. By holding B-class shares in Rollco, scheme shareholders who have elected for the mixed consideration will thereby have a continuing, albeit indirect, minority interest in the plaintiff. The mixed consideration is subject to a scale back mechanism. The extent of the scale back on the number of B-class shares to be received for each scheme share may be significant and will depend on the number of scheme shareholders who validly elect to receive the mixed consideration. This number will not be known until after the Record Date (ie after the scheme, if approved, becomes effective). The indirect minority interest that scheme shareholders (who elect to take the mixed consideration) will receive will be between 10.7% and 20% in Bidco until no later than the first half of the 2018 calendar year. realestate.com.au will hold the remaining 80% to 89.3% in Bidco. Rollco’s rights and obligations in connection with its shareholding in Bidco is governed by a Shareholders’ Deed between Bidco, Rollco, realestate.com.au and REA. Put and call options over the B-class shares will provide a progressive exit mechanism for the B-class shareholders. It will allow them to sell their B-class shares to realestate.com.au during exercise windows following release of Bidco’s financial statements for the 2016 and 2017 financial years, or at any time after 31 December 2016. The sale price for the B-class shares will be related to, amongst other things, the time of exercise of the put or call option and (in most cases) whether the plaintiff reaches certain revenue hurdles in the 2016 financial year or, when relevant, certain revenue and EBITDA hurdles in the 2017 financial year.