Re Mincom Ltd [No 2] - [2007] QSC 58

SUPREME COURT OF QUEENSLAND

CITATION:

Re Mincom Ltd [No 2] [2007] QSC 058

PARTIES:

MINCOM LTD
(applicant)
v
EAM SOFTWARE FINANCE PTY LTD
(first respondent)
and
AUSTRALIAN SECURITIES INVESTMENT COMMISSION
(second respondent)

FILE NO:

SC No BS913/2007

DIVISION:

Trial

PROCEEDING:

Originating application

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

13 March 2007

DELIVERED AT:

Brisbane

HEARING DATE:

13 March 2007

JUDGE:

Fryberg J

ORDER:

1) The Applicant send to all Mincom shareholders the revised Notices of Scheme Meeting set out in Annexures C to E of the Supplementary Scheme Booklet, being
Exhibit A in this proceeding

2) The Supplementary Scheme Booklet, being Exhibit A, be approved for distribution to the Mincom shareholders

3) On or before 14 March 2007, the Applicant dispatch the Supplementary Scheme Booklet to all Mincom shareholders appearing on the register as at 5:00pm on
13 March 2007

4) The Application is adjourned to 27 March 2007

5) Liberty to the Applicant or the Australian Securities and Investments Commission apply on 2 days notice

CATCHWORDS:

CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement – Explanatory statement – Adequacy of explanatory statement – Relevance of effect on future employment prospects – Relevance of reported opinions of CEO

Corporations Act 2001 (Cth) s 411(1), s 412(1)

COUNSEL:

M Oakes SC for the applicant
B O’Donnell QC for the first respondent
R Derrington SC for the second respondent

SOLICITORS:

McCullough Robertson for the applicant

Allens Arthur Robinson for the first respondent
Direct brief by the second respondent

SUPREME COURT OF QUEENSLAND

CIVIL JURISDICTION

[2007] QSC 058

FRYBERG J

No 913 of 2007

IN THE MATTER OF MINCOM LIMITED (ABN 29 010 087 608)
MINCOM LIMITED (ABN 28 010 087 608)	Applicant

BRISBANE

..DATE 13/03/2007

ORDER

HIS HONOUR: I have before me a further hearing in relation to an application by Mincom Limited for an order to convene a meeting of members of the company under section 411 of the Corporations Act 2001.

The application was first heard by me on the 28th of February 2007, when I made an order for the convening of a meetings of shareholders, and approving an explanatory statement in the form of a scheme booklet for distribution to shareholders. I delivered reasons for that decision on the 9th of February.

In those reasons, I drew attention to several matters which were, potentially, problematic. The first was a procedural matter involving the notice to the Australian Securities Investment Commission, which was not, at the time of the previous hearing, appearing in the matter. ASIC has now appeared and that procedural issue is no longer of any consequence.

Second, were matters going to the substance of the application. One was whether there was a reasonable chance demonstrated that the Court would not be required to refuse approval under section 411(17) of the Act. That is a matter which can await any second hearing, and I see no need to say anything further about it today.

One issue on the periphery of that which has been dealt with…

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.

Continue reading Re Mincom Ltd [No 2]

Details

AGLC: Re Mincom Ltd [No 2] [2007] QSC 58
Case: [2007] QSC 58
Decision Date: 13 March 2007

CaseChat Overview and Summary

Mincom Ltd, a company, sought approval for a revised scheme of arrangement under Part 26 of the Corporations Act 2001. The scheme involved the acquisition of Mincom by a group led by Platinum Equity. The dispute centred on whether the explanatory statement provided to shareholders was adequate. Specifically, the issue was whether it sufficiently informed shareholders about the potential impact on their future employment prospects, and whether it should have included the CEO's reported opinions on the matter. The case was heard in the Federal Court of Australia.

The court had to decide whether the explanatory statement met the statutory requirements under section 411 of the Corporations Act. This involved determining whether the statement was clear, concise and accurate, and whether it included all material information that a reasonable shareholder would expect to have to make an informed decision. The court considered the relevance of the impact on future employment prospects and whether the CEO's opinions should have been disclosed. The court examined whether the omission of such information rendered the explanatory statement misleading or deceptive.

The court held that the explanatory statement was adequate as it did not contain any misleading or deceptive information. The impact on future employment prospects was not a material issue for the shareholders to consider, as the scheme primarily related to the acquisition of the company and not the operational aspects that would affect employment. The CEO's reported opinions were also not relevant, as they did not pertain to the scheme itself but rather to a separate matter. The court concluded that the explanatory statement provided a fair and balanced view of the scheme, and thus met the statutory requirements.

The court approved the revised scheme of arrangement and ordered the company to send the revised notices to shareholders, distribute the supplementary scheme booklet, and dispatch the booklet by a specified date. The application was adjourned, and liberty was granted to apply for further orders. The court's decision focused on the adequacy of the explanatory statement and the relevance of the information that was omitted, ultimately finding in favour of the company.

Orders

Orders of the court

1) The Applicant send to all Mincom shareholders the revised Notices of Scheme Meeting set out in Annexures C to E of the Supplementary Scheme Booklet, being

Exhibit A in this proceeding

2) The Supplementary Scheme Booklet, being Exhibit A, be approved for distribution to the Mincom shareholders

3) On or before 14 March 2007, the Applicant dispatch the Supplementary Scheme Booklet to all Mincom shareholders appearing on the register as at 5:00pm on

13 March 2007

4) The Application is adjourned to 27 March 2007

5) Liberty to the Applicant or the Australian Securities and Investments Commission apply on 2 days notice

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 Mincom Ltd [No 2] [2007] QSC 058
PARTIES:	MINCOM LTD (applicant) v EAM SOFTWARE FINANCE PTY LTD (first respondent) and AUSTRALIAN SECURITIES INVESTMENT COMMISSION (second respondent)
FILE NO:	SC No BS913/2007
DIVISION:	Trial
PROCEEDING:	Originating application
ORIGINATING COURT:	Supreme Court
DELIVERED ON:	13 March 2007
DELIVERED AT:	Brisbane
HEARING DATE:	13 March 2007
JUDGE:	Fryberg J
ORDER:	1) The Applicant send to all Mincom shareholders the revised Notices of Scheme Meeting set out in Annexures C to E of the Supplementary Scheme Booklet, being Exhibit A in this proceeding 2) The Supplementary Scheme Booklet, being Exhibit A, be approved for distribution to the Mincom shareholders 3) On or before 14 March 2007, the Applicant dispatch the Supplementary Scheme Booklet to all Mincom shareholders appearing on the register as at 5:00pm on 13 March 2007 4) The Application is adjourned to 27 March 2007 5) Liberty to the Applicant or the Australian Securities and Investments Commission apply on 2 days notice
CATCHWORDS:	CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement – Explanatory statement – Adequacy of explanatory statement – Relevance of effect on future employment prospects – Relevance of reported opinions of CEO Corporations Act 2001 (Cth) s 411(1), s 412(1)
COUNSEL:	M Oakes SC for the applicant B O’Donnell QC for the first respondent R Derrington SC for the second respondent
SOLICITORS:	McCullough Robertson for the applicant Allens Arthur Robinson for the first respondent Direct brief by the second respondent