Re RP Data Ltd - [2011] FCA 228

FEDERAL COURT OF AUSTRALIA
RP Data Limited, in the matter of RP Data Limited [2011] FCA 228

Citation: RP Data Limited, in the matter of RP Data Limited [ 2011] FCA 228

Parties: RP DATA LIMITED ACN 087 759 171

File number: NSD 223 of 2011

Judge: STONE J

Date of judgment: 17 March 2011

Catchwords: CORPORATIONS – Corporations Act 2001 (Cth) – s 411(1) – scheme of arrangement – application for orders approving company convening meeting of shareholders to consider proposed scheme of arrangement

Legislation:
Corporations Act 2001 (Cth) ss 411(1), 412
Foreign Acquisitions and Takeovers Act 1975 (Cth)

Federal Court (Corporations) Rules 2000 (Cth) r 3.4(3)

Cases cited: APN News & Media Ltd (2007) 62 ACSR 400
Re Arthur Yates & Co Ltd (2001) 35 ACSR 758
Re Adelaide Bank [2007] FCA 1582
Re Dyno Nobel Limited [2008] VSC 154
RePermanent Trustee Co Ltd (2003) 43 ACSR 601
Re Provet Holdings Ltd [2010] FCA 1388
Re Sylvastate Limited [2011] FCA 211
Re Tower Australia Group Limited [2011] FCA 224

Date of hearing: 14 March 2011

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 39

Counsel for the Plaintiff: M Oakes SC

Solicitor for the Plaintiff: Allen & Overy

Solicitor for CoreLogic Inc R Shankland, Clayton Utz

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 223 of 2011

IN THE MATTER OF RP DATA LIMITED ACN 087 759 171

RP DATA LIMITED ACN 087 759 171
Plaintiff

JUDGE:

STONE J

DATE OF ORDER:

14 MARCH 2011

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.Pursuant to subsection 411(1) of the Corporations Act 2001 (Cth) (Corporations Act):
(a)RP Data Limited ACN 087 759 171 (RP Data) convene a meeting (Scheme Meeting) of the holders of ordinary shares in RP Data (other than ordinary shares held by or for the benefit of CoreLogic Inc. (CoreLogic) and/or its subsidiaries) (RP Data Shareholders), for the purpose of considering, and if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed to be made between RP Data and RP Data Shareholders (Scheme), being the scheme substantially in the form of the draft contained in Annexure “B” of the explanatory memorandum containing the explanatory statement in relation to the Scheme, being Exhibit “3” in these proceedings (Explanatory Memorandum).
(b)The Scheme Meeting be held at 10.00 am (Sydney time) on 20 April 2011, at Level 9, 70 Pitt Street, Sydney, NSW 2000.
(c)The Chairperson of the Scheme Meeting be Mr Ian Fraser and in his absence, Mr Edward Pretty as Alternate Chairperson.
(d)The Chairperson appointed to the Scheme Meeting has the power to adjourn the Scheme Meeting in his absolute discretion.
(e)All voting at the Scheme Meeting be by poll as declared by the Chairperson.
(f)The explanatory statement in the Explanatory Memorandum for the Scheme be approved for distribution to RP Data Shareholders.
(g)RP Data cause to be published on a website:

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 RP Data Ltd

Details

AGLC: Re RP Data Ltd [2011] FCA 228
Case: [2011] FCA 228
Decision Date: 17 March 2011

CaseChat Overview and Summary

The case of Re RP Data Ltd involved RP Data Limited and CoreLogic, with the dispute centering on an application for orders approving the company to convene a meeting of shareholders to consider a proposed scheme of arrangement under the Corporations Act 2001 (Cth). The primary legal issue was whether the scheme of arrangement was bona fide and properly proposed, and if all necessary conditions and requirements under the Act had been met. Specifically, the court needed to determine if the scheme was fair and reasonable to the shareholders and if the requisite notices and approvals, including from the Australian Securities and Investments Commission (ASIC), were adequately provided.

The court examined the evidence presented, including affidavits from various directors and experts, and the contents of the Implementation Agreement and Scheme Booklet. It was established that the scheme provided for CoreLogic to acquire RP Data shares, with a cash payment to shareholders. The Independent Board Committee had unanimously recommended the scheme, and ASIC had not opposed the scheme at the time of the hearing. The court was satisfied that the scheme met all statutory requirements, was fair and reasonable to the shareholders, and had been properly proposed.

Consequently, the court made orders approving the convening of a meeting of shareholders to consider the scheme, with specific details on the meeting's conduct, the distribution of the explanatory statement, and exemptions from certain regulatory requirements. The court also set a date for the next hearing to approve the scheme, should it be passed by the requisite majority of shareholders. These orders enabled RP Data to proceed with the scheme, subject to shareholder approval and further court scrutiny.

Orders

Orders of the court

1. Pursuant to subsection 411(1) of the Corporations Act 2001 (Cth) (Corporations Act):

(a) RP Data Limited ACN 087 759 171 (RP Data) convene a meeting (Scheme Meeting) of the holders of ordinary shares in RP Data (other than ordinary shares held by or for the benefit of CoreLogic Inc. (CoreLogic) and/or its subsidiaries) (RP Data Shareholders), for the purpose of considering, and if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed to be made between RP Data and RP Data Shareholders (Scheme), being the scheme substantially in the form of the draft contained in Annexure “B” of the explanatory memorandum containing the explanatory statement in relation to the Scheme, being Exhibit “3” in these proceedings (Explanatory Memorandum).

(b) The Scheme Meeting be held at 10.00 am (Sydney time) on 20 April 2011, at Level 9, 70 Pitt Street, Sydney, NSW 2000.

(c) The Chairperson of the Scheme Meeting be Mr Ian Fraser and in his absence, Mr Edward Pretty as Alternate Chairperson.

(d) The Chairperson appointed to the Scheme Meeting has the power to adjourn the Scheme Meeting in his absolute discretion.

(e) All voting at the Scheme Meeting be by poll as declared by the Chairperson.

(f) The explanatory statement in the Explanatory Memorandum for the Scheme be approved for distribution to RP Data Shareholders.

(g) RP Data cause to be published on a website:

(A) the Explanatory Memorandum including Notice of the Scheme Meeting and proxy form; and

(B) a facility by which RP Data Shareholders can electronically lodge a proxy online.

(h) RP Data place an advertisement in The Australian newspaper, substantially in the form of Annexure “A” to these Orders, on or before 21 April 2011 and RP Data shall otherwise be exempted from compliance with the requirement to publish such notice following the Scheme Meeting and prior to the second court hearing for approval of the Scheme pursuant to Rule 3.4(3)(a) of the Federal Court (Corporations) Rules 2000 (Cth).

2. Pursuant to section 1319 of the Corporations Act, RP Data be exempted from compliance with the requirements of rule 2.15 of the Federal Court (Corporations) Rules 2000 save that regulation 5.6.13 of the Corporations Regulations 2001 shall apply to the RP Data Scheme Meeting.

3. The proceeding be stood over to 28 April 2011 at 10:15 am before Justice Stone for the hearing of any application to approve the Scheme.

4. Liberty to restore to the list.

5. These orders to be entered forthwith.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

At the conclusion of the first court hearing on 14 March 2011 I made the orders sought by the plaintiff. These are my reasons for making those orders.Evidence The details of the Scheme were established by evidence tendered at the hearing including by the following affidavits and their exhibits, which were read in support of the application:·Two affidavits of Michael James Field Parshall affirmed respectively on 25 February and 10 March 2011. Mr Parshall is a partner of Allen & Overy, the solicitors acting on behalf of the plaintiff in this proceeding; ·Affidavit of Graham Brian Sergio Mirabito, affirmed on 10 March 2011. Mr Mirabito is a director and the Chief Executive Officer of the plaintiff;·Affidavit of Ian Harley Fraser affirmed on 9 March 2011. Mr Fraser is an independent director and Chairman of the plaintiff. He has agreed to act as chairman of the Scheme Meeting;·Affidavit of Edward Noel Pretty affirmed on 8 March 2011. Mr Pretty is an independent director of the plaintiff. Mr Pretty has agreed to act as alternate chairman of the Scheme Meeting;·Affidavit of Sebastian Stevens affirmed on 9 March 2011. Mr Stevens is a director and the authorised representative of BDO Securities (NSW-VIC) Pty Limited, the independent expert engaged by the plaintiff; and·Affidavit of Jerald Lee Hoerauf sworn on 9 March 2011. Mr Hoerauf is the Executive Vice President, Corporate Development for CoreLogic, Inc and a director of CoreLogic Australia.The Implementation Agreement On 12 January 2011, the plaintiff and CoreLogic entered into a Scheme Implementation Agreement. A copy of the agreement was attached to the plaintiff’s announcement of 12 January 2011. On 9 March 2011, the agreement was amended and restated to facilitate CoreLogic being able to elect which of CoreLogic Australia or Corelogic ISH, both of whom are parties to the amended and restated agreement, should be the entity to acquire the Scheme Shares (Acquirer Entity). The amendments did not alter the material terms and conditions upon which the parties intend to implement the Scheme. References in these reasons to the Implementation Agreement should be taken to refer to the Amended and Restated Implementation Agreement. In his affidavit, Mr Mirabito explained why the Implementation Agreement provided for the Acquirer Entity to be one of two companies. It is intended that CoreLogic Australia acquire the Scheme Shares, however if the approval of the Foreign Investment Review Board (FIRB) is not received by the date of the second hearing then the shares will be acquired by CoreLogic ISH which is a US company entitled to the higher threshold applying to US Enterprises under the Foreign Acquisitions and Takeovers Act 1975 (Cth). As both companies are parties to the Implementation Agreement and to the Deed Poll the rights of Scheme Shareholders are equally protected in either case. Clause 3.1 of the Scheme provides that it is subject to certain conditions which, except for the approval of the Court, must be waived or satisfied by 8.00 am on the date of the second court hearing. The conditions are clearly summarised in section 5 of the Scheme Booklet. ‘No shop’ and ‘no talk’ provisions

Decision

Reasons for decision

I am satisfied that the Scheme is bona fide and properly proposed and that ASIC has been given an opportunity to examine the proposal and adequate notice of the first court hearing date. The plaintiff has tendered a letter dated 14 March 2011 from ASIC stating that it does not propose to appear at the first court hearing or to oppose the Scheme at that time. Conclusion On the basis of the evidence tendered by the plaintiff and for the reasons given above, I was satisfied that the orders sought by the plaintiff should be made.

Ratio Decidendi

Legal Principle Established

If the Scheme is approved by the requisite majority of Scheme Shareholders and by the Court, and if all other conditions precedent are satisfied or waived (see [6] above), all of the Scheme Shares will be transferred to the Acquirer Entity. Scheme Shareholders who are on the register of members of RP Data at 7pm on the eighth business day following the date on which the Scheme becomes effective (Record Date) will receive a cash payment of $1.65 (Scheme Consideration) for each RP Data share paid for by the CoreLogic group. In addition it is proposed that RP Data will declare a special dividend of $0.05 per share which will be franked “to the fullest extent possible”. This dividend is not part of the Scheme Consideration and its payment is not part of the Scheme. The letter in the Scheme Booklet from the Chairman of RP Data, Mr Fraser, advises that the cash payment that Scheme Shareholders will receive represents a premium of 57% over the closing price of $1.08 per share on 11 January 2011 which was the last trading day immediately before the announcement of the proposed Scheme. Other, more favourable, comparisons are also made. CoreLogic is listed on the New York Stock Exchange. As at 31 December 2010 the company had US$447 million in addition to undrawn debt facilities of about US$300 million. CoreLogic ISH has had the largest shareholding in RP Data since 2006. As at 14 March 2011 it had approximately 40.2% of the issued share capital of RP Data. According to information in the Scheme Booklet the next largest shareholder at that date had 14.63% of the issued share capital. The Chairman’s letter also refers to the Independent Board Committee established to assess the proposed Scheme. The Committee members are the three independent directors, namely, Mr Mirabito, Mr Pretty and Mr Fraser. The letter states:The Independent Directors have given the CoreLogic Proposal careful consideration and believe that the CoreLogic Proposal represents a compelling premium to the historical trading price of RP Data shares and is a highly attractive outcome for Shareholders. In the absence of a Superior Proposal, each Independent Director unanimously recommends that RP Data shareholders vote in favour of the Scheme and intends to vote his Shares in favour of the Scheme. The Scheme Booklet contains a list of questions and answers concerning aspects of the Scheme. There are many questions and the answers are quite detailed. By this device the Scheme Booklet explains aspects of the proposal that may not be apparent to some Shareholders and summarises information that is provided in more detail in other parts of the Booklet. 17The Scheme Booklet lists key reasons that the Independent Directors have recommended that Shareholders vote in favour of the proposed Scheme and identifies the following:·that the Independent Directors unanimously recommend the Scheme;·the cash payments are substantially higher than the most recent trading price of the Scheme Shares and substantially above the analysts’ price targets for the Shares prior to the announcement of the proposed Scheme;·the Independent Expert’s conclusion that the Scheme is fair and reasonable and in the best interests of Scheme Shareholders; see below at [26]·the absence of a competing superior proposal; and·the likelihood that the share price will fall if the Scheme is not implemented.18These advantages are explained in more detail in other parts of the Scheme Booklet. The Booklet also identifies potential disadvantages. These include:·disagreement with the Independent Directors’ recommendation;·no longer being able to participate in benefits of being an RP Data shareholder; ·losing exposure to a business that may be “a proxy for the Australian property market”; ·the “tax consequences of the Scheme may not be preferable in individual circumstances; and·belief that a superior proposal may emerge.Options and performance rights

Citation:		RP Data Limited, in the matter of RP Data Limited [ 2011] FCA 228
Parties:		RP DATA LIMITED ACN 087 759 171
File number:		NSD 223 of 2011
Judge:		STONE J
Date of judgment:		17 March 2011
Catchwords:		CORPORATIONS – Corporations Act 2001 (Cth) – s 411(1) – scheme of arrangement – application for orders approving company convening meeting of shareholders to consider proposed scheme of arrangement
Legislation:		Corporations Act 2001 (Cth) ss 411(1), 412 Foreign Acquisitions and Takeovers Act 1975 (Cth) Federal Court (Corporations) Rules 2000 (Cth) r 3.4(3)
Cases cited:		APN News & Media Ltd (2007) 62 ACSR 400 Re Arthur Yates & Co Ltd (2001) 35 ACSR 758 Re Adelaide Bank [2007] FCA 1582 Re Dyno Nobel Limited [2008] VSC 154 RePermanent Trustee Co Ltd (2003) 43 ACSR 601 Re Provet Holdings Ltd [2010] FCA 1388 Re Sylvastate Limited [2011] FCA 211 Re Tower Australia Group Limited [2011] FCA 224
Date of hearing:	14 March 2011
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	39
Counsel for the Plaintiff:	M Oakes SC
Solicitor for the Plaintiff:	Allen & Overy
Solicitor for CoreLogic Inc	R Shankland, Clayton Utz

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 223 of 2011

JUDGE:	STONE J
DATE OF ORDER:	14 MARCH 2011
WHERE MADE:	SYDNEY