Re Staging Connections Group Ltd (No 2)

Case [2015] FCA 1102

FEDERAL COURT OF AUSTRALIA

Staging Connections Group Limited, in the matter of Staging Connections Group Limited (No 2) [2015] FCA 1102

Citation: Staging Connections Group Limited, in the matter of Staging Connections Group Limited (No 2) [2015] FCA 1102
Parties: STAGING CONNECTIONS GROUP LIMITED ACN 083 269 701
File number: NSD 898 of 2015
Judge: GLEESON J
Date of judgment: 16 October 2015
Catchwords: CORPORATIONS – scheme of arrangement – scheme approved – Corporations Act 2001 (Cth), s 411
Legislation: Corporations Act 2001 (Cth), s 411
Cases cited: Avoca Resources Limited, in the matter of Avoca Resources Limited [2011] FCA 208
CSR Limited, in the matter of CSR Limited [2010] FCAFC 34; (2010) 265 ALR 703
Fowler v Lindholm [2009] FCAFC 125; (2009) 178 FCR 563
Lion Nathan Limited, in the matter of Lion Nathan Limited (No 2) [2009] FCA 1261
Re Foundation Healthcare Ltd (No 2) [2002] FCA 973; (2002) 43 ACSR 680
Re MB Group PLC [1989] BCLC 672
Re NRMA Ltd (No 2) [2000] NSWSC 408; (2000) 156 FLR 412
Re Permanent Trustee Co Ltd [2002] NSWSC 1177; (2002) 43 ACSR 601
Re Ranger Minerals Ltd; Ex parte Ranger Minerals Ltd [2002] WASC 207; (2002) 42 ACSR 582
Re Seven Network Ltd (ACN 052 816 789) (No 3) [2010] FCA 400; (2010) 267 ALR 583
Staging Connections Group Limited, in the matter of Staging Connections Group Limited [2015] FCA 1012
Date of hearing: 1 October 2015
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 21
Counsel for the Plaintiff: Mr M Oakes SC
Solicitor for the Plaintiff: Thomson Geer
Counsel for the Third Party: Mr RM Foreman

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 898 of 2015

IN THE MATTER OF STAGING CONNECTIONS GROUP LTD ACN 083 269 701

STAGING CONNECTIONS GROUP LIMITED ACN 083 269 701
Plaintiff

JUDGE:

GLEESON J

DATE OF ORDER:

1 OCTOBER 2015

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the plaintiff and its shareholders, being in the form contained in Annexure C of the scheme booklet which is Tab 1 of Exhibit “ADC2” to the Second Affidavit of Antony Douglas Chamberlain sworn on 25 September 2015, be approved.

2.The plaintiff lodge with the Australian Securities and Investments Commission a copy of the approved scheme of arrangement at the time of lodging a copy of these orders.

3.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 order in paragraph 1 above.

4.There be no order as to costs.

5.These orders be entered forthwith.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 898 of 2015

IN THE MATTER OF STAGING CONNECTIONS GROUP LTD…

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Re Staging Connections Group Ltd (No 2) [2015] FCA 1102
Case
[2015] FCA 1102
Decision Date

CaseChat Overview and Summary

The case of Re Staging Connections Group Ltd (No 2) involved Staging Connections Group Limited and its shareholders. The matter before the court was the approval of a scheme of arrangement under s 411(4)(b) of the Corporations Act 2001 (Cth). The court had to determine whether the statutory requirements for the approval of the scheme had been met, including whether the necessary majority of shareholders had approved the scheme, whether the conditions precedent had been fulfilled, and whether ASIC had raised any objections to the scheme. The court also had to consider whether the scheme was in accordance with public policy.

The court found that the statutory majority required for the approval of the scheme had been obtained, and that all conditions precedent had been met or waived. The court was also satisfied that ASIC had not raised any objections to the scheme. The court concluded that the scheme was in accordance with public policy, and that there were no reasons to deny approval of the scheme.

The court made orders approving the scheme of arrangement between Staging Connections Group Limited and its shareholders, and exempted the company from compliance with certain provisions of the Corporations Act 2001 (Cth) in relation to the scheme. The court also ordered that the company lodge a copy of the approved scheme with ASIC. There was no order as to costs, and the orders were to be entered forthwith.

Orders

Orders of the court

1. Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the plaintiff and its shareholders, being in the form contained in Annexure C of the scheme booklet which is Tab 1 of Exhibit “ADC2” to the Second Affidavit of Antony Douglas Chamberlain sworn on 25 September 2015, be approved.

2. The plaintiff lodge with the Australian Securities and Investments Commission a copy of the approved scheme of arrangement at the time of lodging a copy of these orders.

3. 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 order in paragraph 1 above.

4. There be no order as to costs.

5. 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

On 1 October 2015, I made orders, including an order pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (“Act”) approving the scheme of arrangement between the plaintiff, Staging Connections Group Limited (“STG”), and its shareholders. These are my reasons for making those orders.BACKGROUND The details of the scheme are described in Staging Connections Group Limited, in the matter of Staging Connections Group Limited [2015] FCA 1012. Senior counsel for STG, Mr Oakes SC, provided a document entitled “Road Map forSecond Court Hearing” which sets out the matters to be proved and the affidavit evidence supporting each matter. All of the affidavits referred to in that document were read. In addition, Mr Oakes SC tendered a certificate certifying compliance with conditions precedent from STG. No representative of the Australian Securities and Investments Commission (“ASIC”) and no creditor or shareholder of STG appeared at the second court hearing.FORMAL AND STRUCTURAL MATTERS I must be satisfied that:(1)The statutory majority required for a members scheme by s 411(4)(a)(ii) of the Act has been obtained;(2)There has been compliance with the orders made at the first hearing; and(3)ASIC has indicated that it has no objectionsto the scheme under s 411(17).Statutory majorities and voter turnout The statutory majorities in favour of the scheme have been obtained. At the meeting of STG’s shareholders apart from Equity Management Unit Holdings Pty Ltd (“EMUH”), the resolution to approve the scheme was passed by 99.98% of votes cast and 96.51% of persons present at the meeting. No one spoke against the resolution at the meeting. There was one abstention. The voter turnout percentages for the meeting of non-EMUH shareholders were 81.69% of votes and 16.99% of shareholders. The latter figure compares favourably with the shareholder turnout at the 2014 annual general meeting of 6.32%. The figures also compare favourably with the voter turnout percentages recorded in Lion Nathan Limited, in the matter of Lion Nathan Limited (No 2) [2009] FCA 1261 at [6], Re MB Group PLC [1989] BCLC 672 at 675 and Avoca Resources Limited, in the matter of Avoca Resources Limited [2011] FCA 208. At the meeting of EMUH, EMUH passed the resolution to approve the scheme. EMUH held a meeting alone, because it was treated differently under the scheme from the other shareholders. EMUH is a bank-owned entity.Compliance with 17 August 2015 orders I am satisfied that:(1)The orders made on 17 August 2015 and the scheme booklet were provided to ASIC. This was demonstrated by the evidence of Mr Pietersz including a copy of the scheme booklet stamped by ASIC;(2)Scheme booklets (with immaterial changes from the document tendered at the first court hearing) and proxy forms were printed and served on members of STG by Link Market Services Limited (“Link”), which provides share registry services to STG. There was a conversion of E class shares to ordinary shares and, on conversion, the relevant shareholders were sent proxy forms;(3)Proxy forms for each of the scheme meetings were received. An employee of Link collated the proxy forms which were returned. No invalid proxy forms were detected; (4)Gregory James Robertson chaired the scheme meetings which were held on 24 September 2015 at the time and place specified in the scheme booklet. An employee of Link was appointed to act as returning officer for each of the meetings;(5)The date of thesecond court hearingwas advertised in The Australian newspaper on 25 September 2015;(6)No notice of intention to appear at the second court hearing was received;(7)All conditions precedent (other than court approval of the scheme) have been either satisfied or waived. No objections from ASIC

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Nothing has been brought to my attention which suggests that the scheme may offend public policy in any way.CONCLUSION For those reasons, I was satisfied that I should approve the scheme and make the other orders that I made on 1 October 2015.

Ratio Decidendi

Legal Principle Established

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