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Re Pulse Health Ltd

Re Pulse Health Ltd

Case [2017] NSWSC 651 3 May 2017

Scheme of Arrangement

Shareholders

Collateral Benefit

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Pulse Health Limited [2017] NSWSC 651
Hearing dates: 3 May 2017
Decision date: 03 May 2017
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
The Court approves the proposed scheme of arrangement pursuant to s 411 of the Corporations Act 2001 (Cth).

Catchwords: CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement or compromise – Application for approval of scheme of arrangement – where scheme of arrangement involves the Plaintiff’s shareholders transferring their shares to a purchaser for cash consideration – whether certain shareholder would receive collateral benefit – whether scheme of arrangement should be approved
Cases Cited: - Perpetual Custodians Limited (as custodian for Tamoran Pty Ltd as trustee for Crivelli) v IOOF Investment Management Limited [2013] NSWCA 231; (2013) 304 ALR 436
- Re Amcom Telecommunications Limited (No 4) [2015] FCA 720; (2015) 107 ACSR 341
- Re Aston Resources Limited [2012] FCA 229
- Re Boart Longyear Limited [2017] NSWSC 567
- Re Central Pacific Minerals NL [2002] FCA 239
- Re David Jones Limited (No 2) [2014] FCA 720; (2014) 101 ACSR 381
- Re David Jones Limited (No 3) [2014] FCA 753
- Re iSoft Group Limited [2011] FCA 680
- Re Mosaic Oil NL (No 2) [2010] FCA 1186; (2010) 80 ACSR 281
- Re Opes Prime Stockbroking Limited (No 2) [2009] FCA 813; (2009) 179 FCR 20
- Re People Telecom Limited [2009] FCA 180
- Re Redcape Property Fund Ltd and Trust Company (RE Services) Ltd (as the responsible entity for the Redcape Property Trust) [2012] NSWSC 486
- Re Seven Network Ltd (No 3) [2010] FCA 400; (2010) 77 ACSR 701
- Re Straits Resources Limited [2010] FCA 1466
- Sovereign Life Assurance Company v Dodd [1892] 2 QB 573
Category: Principal judgment
Parties: Pulse Health Limited (Plaintiff)
Representation:
Counsel:
G Rich SC/R Foreman (Plaintiff)
N Kidd SC (Healthe Care Australia Pty Ltd)
Solicitors:
Norton Rose Fulbright (Plaintiff)
Allens (Healthe Care Australia Pty Ltd)

File Number(s): 2017/12556

Judgment

Background

By Originating Process filed on 13 January 2017, Pulse Health Limited (“Pulse”) sought an order under s 411(1) of the Corporations Act 2001 (Cth) that a meeting of the members of Pulse be held to consider and, if thought fit, approve, with or without modification, a proposed scheme of arrangement between Pulse and its members, and ancillary orders.
As I noted in an earlier judgment (“Earlier Judgment”), Pulse is listed on Australian Securities Exchange (“ASX”) and operates several private hospitals in Australia and New Zealand. On 20 October 2016, Pulse announced to ASX that it had received a non-binding indicative proposal from Healthe Care Australia Pty Ltd (“Healthe Care”) to acquire all of the shares in Pulse for $0.47 per share by a scheme of arrangement. Healthe Care also operates private hospitals, and is a subsidiary of Luye Medical International Pte Ltd, incorporated and headquartered in Singapore. Its ultimate holding company is Luye…

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 Pulse Health Ltd

Details

AGLC: In the matter of Pulse Health Limited [2017] NSWSC 651
Case: [2017] NSWSC 651
Decision Date: 03 May 2017

CaseChat Overview and Summary

In the case of Re Pulse Health Ltd, the parties involved were the company, Pulse Health Ltd, and its shareholders. The nature of the dispute was whether the scheme of arrangement proposed by Pulse Health Ltd, which involved the transfer of shareholders' shares to a purchaser for cash consideration, should be approved by the court. This application was brought before the Federal Court of Australia. The legal issues that the court was required to decide included whether certain shareholders would receive a collateral benefit and whether the scheme of arrangement should be approved.

The court considered the relevant provisions of the Corporations Act 2001 (Cth) and the case law interpreting those provisions. It found that the scheme of arrangement was fair and equitable to the shareholders as a whole and that the interests of the minority shareholders were protected. The court also found that certain shareholders would receive a collateral benefit, but that this did not affect the fairness of the scheme to the majority of shareholders. The court was satisfied that the scheme was in the best interests of the company and its shareholders and granted the application for approval of the scheme of arrangement.

The court's decision was based on a detailed analysis of the evidence and arguments presented by the parties. The court found that the scheme of arrangement was fair and equitable to the shareholders as a whole and that the interests of the minority shareholders were protected. The court also found that the scheme was in the best interests of the company and its shareholders and that the collateral benefit received by certain shareholders did not affect the fairness of the scheme to the majority of shareholders. The court granted the application for approval of the scheme of arrangement, and the orders were made accordingly.

Orders