FEDERAL COURT OF AUSTRALIA
Opus Group Limited, in the matter of Opus Group Limited (No 2) [2018] FCA 1413
File number: WAD 310 of 2018 Judge: BANKS-SMITH J Date of judgment: 13 September 2018 Catchwords: CORPORATIONS - whether appropriate to approve scheme of arrangement - scheme approved Legislation: Corporations Act2001 (Cth) s 411 Cases cited: Clough Limited, in the matter of Clough Limited (No 2) [2013] FCA 1346
Coalspur Mines Limited, in the matter of Coalspur Mines Limited (No 2) [2015] FCA 591
David Jones Limited, in the matter of David Jones Limited (No 3) [2014] FCA 753
iProperty Group Limited, in the matter of iProperty Group Limited (No 2) [2016] FCA 36
OPUS Group Limited, in the matter of OPUS Group Limited [2018] FCA 959
Re DUET Management Company 1 Ltd [2013] NSWSC 817; (2013) 95 ACSR 34
Re QT Mutual Bank Ltd (No 2) [2016] QSC 265
Seven Network Limited, in the matter of Seven Network Limited (No 3) [2010] FCA 400; (2010) 267 ALR 583
Date of hearing: 13 September 2018 Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 33 Counsel for the Plaintiff: Mr SK Dharmananda SC with Mr JY Wang Solicitor for the Plaintiff: King & Wood Mallesons ORDERS
WAD 310 of 2018 IN THE MATTER OF OPUS GROUP LIMITED (ACN 006 162 876)
OPUS GROUP LIMITED (ACN 006 162 876)
Plaintiff
JUDGE:
BANKS-SMITH J
DATE OF ORDER:
13 SEPTEMBER 2018
THE COURT ORDERS THAT:
1.Pursuant to paragraph 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the plaintiff, OPUS Group Limited, and the holders of fully paid ordinary shares in the plaintiff, in the form contained in Annexure C to the Scheme Booklet (Annexure ABVM-12 to the affidavit of Ana Martinez filed 7 September 2018) be approved (Scheme of Arrangement).
2.Pursuant to section 411(12) of the Act, the plaintiff be exempted from compliance with section 411(11) of the Act in relation to the Scheme of Arrangement.
3.Pursuant to paragraph 1322(4)(a) of the Act and nunc pro tunc:
(a)the scheme meeting held on 6 September 2018 is not invalid; and
(b)the resolution passed at the scheme meeting is not invalid,
by reason of the failure to comply with section 412(1) of the Act in the case of the shareholders identified in paragraph 20 of the affidavit of Luke Jones sworn 12 September 2018.
4.These orders be entered forthwith.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BANKS-SMITH J:
On 26 July 2018 I made orders as to the calling of a meeting of shareholders of the plaintiff, OPUS Group Limited (OPUS), to consider a proposed scheme of arrangement: OPUS Group Limited, in the matter of OPUS Group Limited [2018] FCA 959.
The scheme meeting was held on 6 September 2018 and the members agreed to the scheme by the requisite statutory…
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- AGLC
- Re Opus Group Limited (No 2) [2018] FCA 1413
- Case
- [2018] FCA 1413
- Decision Date
CaseChat Overview and Summary
In determining whether to approve the scheme, the Court considered the affidavits filed by Opus, including the affidavits of Ana Martinez, Richard Celarc, Tang Tsz Ying, Luke Jones, Nicole Thornton, and Ana Martinez. The Court also considered the matters relevant to the Court's decision to approve a scheme, including whether the orders of the Court convening the scheme meeting were complied with, whether the resolution to approve the scheme was passed by the requisite majority, whether all conditions to which the scheme was subject had been met or waived, whether the scheme was fair and reasonable, whether there was full and fair disclosure to shareholders of all information material to the decision whether to vote for or against the scheme, and whether Opus had brought to the attention of the Court all matters that could be considered relevant to the exercise of the Court's discretion. The Court also considered whether the scheme was proposed to avoid Chapter 6 of the Act, and whether Opus had a statement from ASIC that it had no objection to the scheme.
The Court approved the scheme of arrangement between Opus Group Limited and the holders of fully paid ordinary shares in the company, and exempted Opus from compliance with section 411(11) of the Act in relation to the scheme. The Court also declared that the scheme meeting held on 6 September 2018 was not invalid, and that the resolution passed at the scheme meeting was not invalid, by reason of the failure to comply with section 412(1) of the Act in the case of the shareholders identified in paragraph 20 of the affidavit of Luke Jones sworn 12 September 2018.
The Court ordered that the scheme of arrangement be approved, and that Opus be exempted from compliance with section 411(11) of the Act in relation to the scheme. The Court also ordered that the scheme meeting held on 6 September 2018 was not invalid, and that the resolution passed at the scheme meeting was not invalid, by reason of the failure to comply with section 412(1) of the Act in the case of the shareholders identified in paragraph 20 of the affidavit of Luke Jones sworn 12 September 2018.
Orders
Orders of the court
1. Pursuant to paragraph 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the plaintiff, OPUS Group Limited, and the holders of fully paid ordinary shares in the plaintiff, in the form contained in Annexure C to the Scheme Booklet (Annexure ABVM-12 to the affidavit of Ana Martinez filed 7 September 2018) be approved (Scheme of Arrangement).
2. Pursuant to section 411(12) of the Act, the plaintiff be exempted from compliance with section 411(11) of the Act in relation to the Scheme of Arrangement.
3. Pursuant to paragraph 1322(4)(a) of the Act and nunc pro tunc:
(a) the scheme meeting held on 6 September 2018 is not invalid; and
(b) the resolution passed at the scheme meeting is not invalid,
by reason of the failure to comply with section 412(1) of the Act in the case of the shareholders identified in paragraph 20 of the affidavit of Luke Jones sworn 12 September 2018.
4. These orders be entered forthwith.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
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
OPUS relied on the affidavits that were filed for the purpose of the first hearing, together with a further seven affidavits:(a)affidavit of Ana Martinez sworn 7 September 2018 as to the lodgement of the first hearing orders with the Australian Securities and Investments Commission (ASIC), the finalisation and registration of the scheme booklet, the advertisements of the second Court hearing, and the provision of the voting report summary showing how OPUS shareholders other than Bookbuilders BVI Limited voted on the scheme resolution;(b)affidavit of Richard Celarc affirmed 10 September 2018 as to his role as chairman of the scheme meeting and the voting at the meeting;(c)affidavit of Tang Tsz Ying affirmed 10 September 2018 as to the printing and dispatch of the scheme materials, and updates to the Record Date and Implementation Date under the scheme;(d)affidavit of Luke Jones sworn 12 September 2018 as to dispatch of the scheme materials, maintenance of the register of shareholders, and the receipt of proxies;(e)affidavit of Nicole Thornton sworn 12 September 2018 as to voting at the scheme meeting;(f)affidavit of Ana Martinez sworn 12 September 2018 as to absence of notice of any complaints, notices of objection or notices of intention to appear; and(g)affidavit of Ana Martinez sworn 13 September 2018 as to satisfaction of relevant conditions precedent and relevant certificates.Relevant considerations for second Court hearing The considerations relevant to the Court's decision to approve a scheme pursuant to s 411(4)(b) of the Act are well established. Where a majority of members have approved a scheme, the Court is not bound to approve it, however the Court should be slow to conclude that a scheme is unreasonable or unfair, provided that the members have been properly informed of matters relevant to the making of their decision, as that would otherwise involve the Court substituting its commercial judgment for that of the body of members: Seven Network Limited, in the matter of Seven Network Limited (No 3) [2010] FCA 400; (2010) 267 ALR 583 at [31]‑[40] (Jacobson J). The matters the Court must take into account in deciding whether to approve the scheme include whether:(a)the orders of the Court convening the scheme meeting were complied with;(b)the resolution to approve the scheme was passed by the requisite majority, and whether other statutory requirements have been satisfied;(c)all conditions to which the scheme is subject (other than Court approval and lodgement of the Court's orders with ASIC) have been met or waived;(d)the scheme is fair and reasonable so that an intelligent and honest shareholder, properly informed and acting alone, might approve it;(e)there was full and fair disclosure to shareholders of all information material to the decision whether to vote for or against the scheme;(f)OPUS has brought to the attention of the Court all matters that could be considered relevant to the exercise of the Court's discretion; and(g)the Court is satisfied under s 411(17) that the scheme has not been proposed to avoid Chapter 6 of the Act, or that OPUS has a statement from ASIC that it has no objection to the scheme: Seven Network Limited (No 3); David Jones Limited, in the matter of David Jones Limited (No 3) [2014] FCA 753 (Farrell J).Two disclosed issues