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Re People Telecom Limited

Re People Telecom Limited

Case [2009] FCA 180 25 February 2009

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FEDERAL COURT OF AUSTRALIA
People Telecom Limited, in the matter of People Telecom Limited [2009] FCA 180
CORPORATIONS – application to convene scheme meeting and approve explanatory statement – maximum break fee payable in excess of Takeover Panel’s one percent guideline – break fee not excessive in the circumstances – provision in proxy deeds for shareholders who have committed themselves in favour of voting for transaction – application approved
Corporations Act 2001 (Cth) – ss 411(1), 1319
Corporations Regulations 2001 (Cth)
Federal Court (Corporations) Rules 2000 – rules 2.15, 3.4(3)(b)
Re APN News & Media Ltd (2007) 62 ACSR 400 referred to
Re SFE Corporation Limited [2006] FCA 670 referred to
PEOPLE TELECOM LIMITED (ACN 009 273 152)
NSD 138 of 2009
JACOBSON J
25 FEBRUARY 2009
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 138 of 2009

BETWEEN:
PEOPLE TELECOM LIMITED (ACN 009 273 152)
Plaintiff

JUDGE:

JACOBSON J

DATE OF ORDER:

25 FEBRUARY 2009

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.Pursuant to section 411(1) of the Corporations Act 2001 (Cth) (Corporations Act), that the Plaintiff convene a meeting (Shareholders’ Meeting) of its members holding ordinary shares, other than the holders of Excluded Shares in respect of those Excluded Shares (Shareholders), for the purpose of considering, and if thought fit, approving (with or without modification), a scheme of arrangement proposed to be made between the Plaintiff and its Shareholders (Scheme), being substantially in the form of Exhibit B in the proceeding.
2.In Order 1, Excluded Shares has the meaning in the Scheme.
3.Pursuant to section 411(1) of the Corporations Act, that the Scheme Booklet be approved for distribution to Shareholders.
4.The Shareholders’ Meeting take place at the offices of the Plaintiff at the People Telecom Centre, 76 Berry St, North Sydney, New South Wales at 10am on 6 April 2009.
5.Barry John Hamilton, or failing him Stephe Wilks, be appointed and act as Chairman of the Shareholders’ Meeting.
6.The Chairman of the Shareholders’ Meeting have the power to adjourn the Shareholders’ Meeting in his absolute discretion.
7.All voting at the Shareholders’ Meeting be by poll as declared by the Chairman.
8.The Plaintiff place a notice of the hearing of the application to approve the Scheme in The Australian newspaper on or before 7 April 2009, such notice to be substantially in the form of Form 6 of the Federal Court (Corporations) Rules 2000.
9.The Plaintiff be given leave to truncate the notice period required by Rule 3.4 (3)(b) of the Federal Court (Corporations Rules) 2000.
10.The proceeding be stood over to 9 April 2009 at 9.30 am before Justice Jacobson for the hearing of any application to approve the Scheme.
11.Pursuant to section 1319 of the Corporations Act, and Rule 2.15 of the Federal Court (Corporations) Rules 2000, the Plaintiff be exempted from compliance with the requirements of Regulations 5.6.12 to 5.6.36A of the Corporations Regulations 2001, save that Regulation 5.6.13…

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 People Telecom Limited

Details

AGLC: Re People Telecom Limited [2009] FCA 180
Case: [2009] FCA 180
Decision Date: 25 February 2009

CaseChat Overview and Summary

In the Federal Court, the plaintiff People Telecom Limited sought a series of orders to facilitate the approval of a scheme of arrangement between the company and its shareholders. The primary focus was to convene a shareholders' meeting for the consideration and potential approval of the proposed scheme. The case addressed the legalities surrounding the implementation of the scheme, including the distribution of the scheme booklet and the procedural aspects of the shareholders' meeting.

The court had to determine whether the proposed scheme of arrangement was in the best interests of the shareholders and whether the procedural steps outlined in the application were compliant with the Corporations Act 2001 and the relevant federal court rules. Additionally, the court examined the necessity of certain exemptions from specific regulatory requirements under the Corporations Regulations 2001 and the appropriateness of the notice period for the shareholders' meeting.

The court found that the scheme was beneficial to the shareholders and that the procedural steps outlined by the plaintiff were appropriate. The judge approved the convening of the shareholders' meeting and the distribution of the scheme booklet, noting that the proposed exemptions from regulatory requirements were justified. The judge also determined that the notice period could be truncated and set the hearing date for any objections to the scheme. Ultimately, the court granted all the orders sought by the plaintiff, allowing the process to proceed as planned.

The orders granted included convening the shareholders' meeting at a specified location and time, appointing the chairman, and setting out the voting procedures. The court also approved the notice of the hearing to be published in a newspaper and granted exemptions from certain regulatory requirements. This decision allowed People Telecom Limited to move forward with the proposed scheme of arrangement, subject to any objections raised by shareholders.

Orders

Orders of the court

1. Pursuant to section 411(1) of the Corporations Act 2001 (Cth) (Corporations Act), that the Plaintiff convene a meeting (Shareholders’ Meeting) of its members holding ordinary shares, other than the holders of Excluded Shares in respect of those Excluded Shares (Shareholders), for the purpose of considering, and if thought fit, approving (with or without modification), a scheme of arrangement proposed to be made between the Plaintiff and its Shareholders (Scheme), being substantially in the form of Exhibit B in the proceeding.

2. In Order 1, Excluded Shares has the meaning in the Scheme.

3. Pursuant to section 411(1) of the Corporations Act, that the Scheme Booklet be approved for distribution to Shareholders.

4. The Shareholders’ Meeting take place at the offices of the Plaintiff at the People Telecom Centre, 76 Berry St, North Sydney, New South Wales at 10am on 6 April 2009.

5. Barry John Hamilton, or failing him Stephe Wilks, be appointed and act as Chairman of the Shareholders’ Meeting.

6. The Chairman of the Shareholders’ Meeting have the power to adjourn the Shareholders’ Meeting in his absolute discretion.

7. All voting at the Shareholders’ Meeting be by poll as declared by the Chairman.

8. The Plaintiff place a notice of the hearing of the application to approve the Scheme in The Australian newspaper on or before 7 April 2009, such notice to be substantially in the form of Form 6 of the Federal Court (Corporations) Rules 2000.

9. The Plaintiff be given leave to truncate the notice period required by Rule 3.4 (3)(b) of the Federal Court (Corporations Rules) 2000.

10. The proceeding be stood over to 9 April 2009 at 9.30 am before Justice Jacobson for the hearing of any application to approve the Scheme.

11. Pursuant to section 1319 of the Corporations Act, and Rule 2.15 of the Federal Court (Corporations) Rules 2000, the Plaintiff be exempted from compliance with the requirements of Regulations 5.6.12 to 5.6.36A of the Corporations Regulations 2001, save that Regulation 5.6.13 shall apply.

12. There be liberty to apply.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

JACOBSON J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: JACOBSON J

Full text does not contain this section.

Citations

AGLC Citation

Re People Telecom Limited [2009] FCA 180

Most Recent Citation

Re Cytopia Ltd [2009] VSC 560

Cases citing this decision · 9 of 9 shown

Re Tawana Resources NL
[2018] FCA 1456 Para 26

…milar or greater percentage than the 39.5% applicable in this case; see for example People Telecom Limited, in the matter of People Telecom Limited [2009] FCA 180 (Jacobson J) (aggregate representing over 50% of shares).…
Re Pulse Health Ltd
[2017] NSWSC 651 Para 13

…tal had undertaken to vote its shares in favour of the scheme did not, in itself, require that it vote in a separate class: Re People Telecom Limited [2009] FCA 180 at [7]–[8]; Re Straits Resources Limited [2010] FCA 1466 at [43]–[45]. The votes cast by Sante Capital at the scheme meeting were, appropriately, tag…
Re Transcomm Credit Co-operative Ltd
[2016] VSC 835 Para 1

…ns) Rules 2000 , which is similar to r 3.4(3)(b) of our rules requiring five days’ notice, however no reasons were given for this allowance. [5][2009] FCA 180.…
Re Unity Mining Limited (No 2)
[2016] VSC 830 Para 1

…topia Ltd ;[26] Re Toll Holdings Ltd ;[27] and Re Staging Connections Group Ltd .[28] [19][2013] FCA 1212, [40]. [20][2012] FCA 1295, [34], [43]. [21][2009] FCA 180, [4]. [22](2007) 62 ACSR 400, [39]. [23][2010] VSC 367, [27]. [24][2010] VSC 423, [28]. [25][2010] FCA 1190, [22]. [26][2009] VSC 560, [16]. [27][201…
Cape Alumina Limited, in the matter of Cape Alumina Limited
[2013] FCA 1212 Para 9

…nsaction, it would have a material financial effect on CBX. CBX relied on People Telecom Limited, in the matter of People Telecom Limited [2009] FCA 180 at [3]-[6] in which similar factors weighed in favour of Jacobson J making orders under s 411(1) notwithstanding that the break fee exceeded the 1% guideline.…
Re Straits Resources Ltd
[2010] FCA 1466 Para 9

…I dealt with the position in relation to proxy voting deeds in Re People Telecom Limited [2009] FCA 180 at [7] – [8], although in that case the proxy deeds were given in favour of a person other than the acquirer of the shares. Here the voting agreements are with the company that will acquire the shares if the Ac…
Re MAC Services Group Ltd
[2010] NSWSC 1316

…000] NSWSC 408; (2000) 156 FLR 412 Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20 Re Orica Ltd [2010] VSC 231 Re People Telecom Ltd [2009] FCA 180 Re T & N Ltd (No 3) [2006] EWHC 1447 (Ch); [2007] 1 All ER 851 Re Telewest Communications plc [2004] BCC 342 UDL Argos Engineering & Heavy Industries…
Re Healthscope Limited
[2010] VSC 367 Para 1

…ders into agreeing to the scheme. [17] Scheme Implementation Agreement cl 12.2(a). [18] Guidance Note 7: Lock-up devices [9]; Re People Telecom Ltd [2009] FCA 180 (Unreported, Jacobson J, 25 February 2009). [19] Scheme Implementation Agreement cl 12.4. [20] Scheme Implementation Agreement cl 12.3(ii)(c).…
Re Cytopia Ltd
[2009] VSC 560 Para 1

…mstances the provision of the break fee is unlikely to be a matter which could influence voting at the scheme meeting.[25] [25] Re People Telecom Ltd [2009] FCA 180 (Unreported, Jacobson J, 25 February 2009).…

View all 9 citing cases →

Cases cited in this decision · 2 of 2 shown

Re APN News & Media Ltd
[2007] FCA 770 Para 4

…uld influence voting at the scheme meeting: see Re SFE Corporation Limited [2006] FCA 670 per Gyles J at [6] to [7]; see also Re APN News & Media Ltd (2007) 62 ACSR 400 at [43].…
Re SFE Corporation Ltd
[2006] FCA 670 Para 4

…pproved by the shareholders, thus it cannot be said to be a matter which could influence voting at the scheme meeting: see Re SFE Corporation Limited [2006] FCA 670 per Gyles J at [6] to [7]; see also Re APN News & Media Ltd (2007) 62 ACSR 400 at [43].…

Legislation cited in this decision · 3

Corporations Act 2001 (Cth)
1 mention (from Para 1)
Corporations Regulations 2001 (Cth)
1 mention
Federal Court (Corporations) Rules 2000 (Cth)
1 mention

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 138 of 2009

JUDGE:	JACOBSON J
DATE OF ORDER:	25 FEBRUARY 2009
WHERE MADE:	SYDNEY