FEDERAL COURT OF AUSTRALIA
SAI Global Limited; In the Matter of SAI Global Limited [2016] FCA 1312
File number: NSD 1776 of 2016 Judge: FOSTER J Date of Judgment: 1 November 2016 Date of Orders: 1 November 2016 Date of Publication of Reasons: 8 November 2016 Catchwords: CORPORATIONS – whether, pursuant to s 411(1) of the Corporations Act 2001 (Cth), the Court should order that a meeting of the shareholders of the plaintiff be convened for the purpose of considering a scheme of arrangement propounded by the plaintiff whereby all of the issued capital of the plaintiff is to be acquired by a bidder and certain rights under the plaintiff’s executive incentive scheme are to be converted into shares in the plaintiff or lapse Legislation: Corporations Act 2001 (Cth), s 411, Pt 5
Corporations Regulations 2001 (Cth)
Foreign Acquisitions and Takeovers Act 1975 (Cth)
Cases cited: FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69
Idameneo (No 123) Pty Ltd v Symbion Health Limited (2007) 165 FCR 19
Re Abacus Funds Management Ltd (2006) 24 ACLC 211
Re Adelaide Bank Ltd [2007] FCA 1582
Re APN News & Media Ltd (2007) 62 ACSR 400
Re Arthur Yates & Co Ltd (2001) 36 ACSR 758
Re Aston Resources Ltd [2012] FCA 229
Re Bolnisi Gold NL (No 2) (2007) 165 FCR 45
Re Central Pacific Minerals NL [2002] FCA 239
Re Centrebet International Ltd [2011] FCA 870
Re CSR Ltd (2010) 183 FCR 358
Re Foster’s Group Ltd (No 2) [2011] VSC 547
Re Hills Motorway Ltd (2002) 43 ACSR 101
Re Macquarie Private Capital A Ltd (2008) 26 ACLC 366
Re SFE Corporation Ltd (2006) 59 ACSR 82
Date of hearing: 1 November 2016 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 77 Counsel for the Plaintiff: Mr J Lockhart SC Solicitor for the Plaintiff: Gilbert + Tobin Counsel for the Intervener (Casmar (Australia) Pty Ltd (ACN 615 021 479)): Dr RP Austin Solicitor for the Intervener (Casmar (Australia) Pty Ltd (ACN 615 021 479)): Minter Ellison ORDERS
NSD 1776 of 2016 IN THE MATTER OF SAI GLOBAL LIMITED (ACN 050 611 642)
SAI GLOBAL LIMITED (ACN 050 611 642)
Plaintiff
JUDGE:
FOSTER J
DATE OF ORDER:
1 NOVEMBER 2016
THE COURT ORDERS THAT:
1.Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act):
(a)SAI Global Limited (ACN 050 611 642) (SAI) convene a meeting (Scheme Meeting) of holders of fully paid ordinary shares in SAI (Scheme Shareholders) for the purpose of considering and, if thought fit, agreeing (with or without modification) to a scheme of arrangement (Scheme), the terms of which are contained in Attachment C of the scheme booklet, a copy of which is at Exhibit 1 to these Orders [not attached hereto] (Scheme Booklet);
(b)The Scheme Meeting be held on…
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- Re SAI Global Ltd [2016] FCA 1312
- Case
- [2016] FCA 1312
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CaseChat Overview and Summary
The legal issues before the court included whether the proposed scheme of arrangement was fair and equitable to the shareholders and whether it complied with the provisions of the Corporations Act. Additionally, there was a question regarding whether the proposed conversion of executive incentive rights into shares constituted a prohibited collateral benefit under Chapter 6 of the Corporations Act. SAI Global argued that the conversion did not constitute a collateral benefit and would not be an incentive or inducement to shareholders.
The court found that the scheme was fair and equitable to the shareholders and complied with the requirements of the Corporations Act. The court was satisfied that the proposed scheme did not involve any prohibited collateral benefits. It was also determined that the tagging of shares voted by the holders of Rollover Incentive Securities would allow for further consideration of the issue, if necessary, at a subsequent court hearing. Consequently, the court ordered the convening of the scheme meeting and specified the manner in which the meeting should be conducted, including the distribution of the scheme booklet, the timing of the meeting, and the process for voting on the scheme.
The final orders included convening the scheme meeting on 5 December 2016, specifying the procedures for the meeting, and detailing the process for the approval of the scheme. The court also directed SAI Global to publish a notice of hearing in The Australian newspaper and relieved SAI Global from certain procedural requirements of the Federal Court Rules. The hearing of any application to approve the scheme was set for 9 December 2016. The orders provided for the publication of a notice of hearing to inform creditors and members of the company of the upcoming court proceedings and outlined the steps that needed to be taken if any party wished to oppose the approval of the scheme.
Orders
Orders of the court
1. Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act):
(a) SAI Global Limited (ACN 050 611 642) (SAI) convene a meeting (Scheme Meeting) of holders of fully paid ordinary shares in SAI (Scheme Shareholders) for the purpose of considering and, if thought fit, agreeing (with or without modification) to a scheme of arrangement (Scheme), the terms of which are contained in Attachment C of the scheme booklet, a copy of which is at Exhibit 1 to these Orders [not attached hereto] (Scheme Booklet);
(b) The Scheme Meeting be held on 5 December 2016, commencing at 10.00 am (Sydney time); and
(c) The Scheme Booklet, substantially in the form that is Exhibit 1, be approved for distribution to Scheme Shareholders (which Scheme Booklet be and is hereby approved for the purposes only of sub-s 411(1) of the Act).
2. Pursuant to s 1319 of the Act:
(a) SAI may determine that, for the purposes of the Scheme Meeting, all the shares in SAI be taken to be held by the person, persons or bodies corporate who held them as at 7.00 pm on 3 December 2016 (Sydney time), in accordance with the register held and maintained by SAI;
(b) SAI may determine that only the proxy forms in relation to the Scheme Meeting received by SAI by no later than 10.00 am on 3 December 2016 (Sydney time) are valid;
(c) The Chairperson of the Scheme Meeting be Andrew Dutton or, in his absence, David Spence;
(d) The Chairperson of the Scheme Meeting shall have the power to adjourn the meeting in his or her absolute discretion to such time, date and place as he or she considers appropriate; and
(e) A poll must be taken to decide the resolutions put to the vote at the Scheme Meeting, except for procedural motions.
3. SAI publish a Notice of Hearing in The Australian newspaper in substantially the form that appears at Annexure ‘A’ hereto not later than five (5) days prior to the date fixed for the hearing of any application to approve the Scheme and SAI be relieved from compliance with r 3.4 of the Federal Court (Corporations) Rules 2000 (Cth) (Rules) to the extent necessary.
4. Rule 2.15 of the Rules shall not apply to the Scheme Meeting, except insofar as that rule applies reg 5.6.13 of the Corporations Regulations 2001 (Cth).
5. The proceeding be stood over to 2.15 pm on 9 December 2016 before Foster J for the hearing of any application to approve the Scheme.
6. There be liberty to apply on two (2) days’ notice.
7. The beginning of the period to which s 177(3) of the Evidence Act 1995 (Cth) refers regarding the expert certificate of Lawrence Tan annexed to the affidavit of Milorad Gajic sworn on 31 October 2016 is midnight on 31 October 2016.
8. These orders be entered forthwith.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ANNEXURE A
Notice of hearing to approve scheme of arrangement
(Form 6, rule 3.4)
TO all the creditors and members of SAI Global Limited (ACN 050 611 642) (SAI)
TAKE NOTICE that at 2.15 pm on 9 December 2016, the Federal Court of Australia at Law Courts Building, Queens Square, Sydney, will hear an application by SAI seeking the approval of a scheme of arrangement between the above-named company and its members (the Scheme) as proposed by a resolution passed by the meeting of the members of SAI held on 5 December 2016.
If you wish to oppose the approval of the compromise or arrangement, you must file and serve on SAI a Notice of Appearance, in the prescribed form, together with any affidavit upon which you wish to rely at the hearing. The Notice of Appearance and affidavit must be served on the plaintiff at its address for service at least one (1) day before the date fixed for the hearing of the application.
The address for service of SAI is c/o Gilbert + Tobin, Level 35, Tower Two, International Towers Sydney, 200 Barangaroo Avenue, BARANGAROO NSW 2000 (Attention: Crispian Lynch/Alexandra Whitby).
Gilbert + Tobin
Level 35, Tower Two
International Towers Sydney
200 Barangaroo Avenue
BARANGAROO NSW 2000
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
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