ThinkSmart Limited, in the matter of ThinkSmart Limited [2022] FCA 1314
File number:
WAD 206 of 2022
Judgment of:
JACKSON J
Date of judgment:
21 October 2022
Date of publication of reasons:
2 November 2022
Catchwords:
CORPORATIONS - scheme of arrangement - first hearing to convene meetings of members pursuant to s 411(1) of the Corporations Act 2001 (Cth) - transfer of shares of company to takeover vehicle, paid for by sale of company's share assets on market - consideration of prerequisites and relevant matters - two classes of shareholders based on rights conferred by scheme - scheme booklet approved - orders made to convene meeting - orders made approving scripts for call centres
[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.
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AGLC
Re ThinkSmart Ltd [2022] FCA 1314
Case
[2022] FCA 1314
Decision Date
CaseChat Overview and Summary
The case of Re ThinkSmart Ltd involved the applicant company, ThinkSmart Ltd, seeking orders to convene meetings of its members under section 411(1) of the Corporations Act 2001 (Cth). The purpose of these meetings was to consider a scheme of arrangement involving the transfer of shares in the company to a takeover vehicle, with the consideration being paid through the sale of the company's share assets on the market. The scheme involved two distinct classes of shareholders, each with different rights. The primary legal issue before the court was whether the prerequisites and relevant matters for convening the meetings and approving the scheme booklet and other shareholder communications were adequately met.
The court found that the applicant had demonstrated that it was appropriate to convene the scheme meetings and approve the scheme booklet and other shareholder communications as proposed. This included the approval of the scripts for inbound and outbound call centres to be used in communicating with shareholders. The court noted that the need for such approval at the first hearing was not in dispute, as the applicant had provided sufficient information for the court to make an informed decision. The court did, however, require some additional disclosure to reflect changes in the scheme booklet.
Consequently, the court approved the call campaigns and scripts, subject to certain conditions such as the correction of minor typographical and grammatical errors, updates to date references and financial data, and any other amendments approved by the court. The court also made orders allowing the applicant to run a telephone information line and a call campaign for shareholders and ThinkSmart DI Holders, provided that the persons involved followed the approved scripts. The court's decision was based on the applicant's demonstration of the appropriateness of convening the scheme meetings and approving the scheme booklet and other shareholder communications in the manner proposed.
Orders
Orders of the court
1. Pursuant to s 1319 of the Corporations Act 2001 (Cth), the plaintiff may run a telephone information line which Shareholders and ThinkSmart DI Holders (all defined terms as in the orders of 21 October 2022) may call in relation to the Scheme and a telephone call campaign in which Shareholders and ThinkSmart DI Holders may be called in relation to the Scheme, provided that the persons answering or making the calls (as applicable) substantially follow the script which is in the form of annexure JWCJ-20 of the Johnson Affidavit at pages 466 to 468 (for the call campaign for ThinkSmart DI Holders), pages 464 to 465 and pages 469 to 477 (for the information line for ThinkSmart DI Holders), pages 478 to 485 (for the call campaign for Shareholders), and pages 486 to 507 (for the information line for Shareholders), subject to:
(a) the correction of any minor typographical errors or grammatical errors;
(b) the correction or update of any relevant date references, interests held by Shareholders, issued capital or last trading prices, or other references to figures and data; and
(c) any other amendments approved by the Court.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
ThinkSmart also sought directions for both inbound and proactive outbound call centres to be set up to communicate with shareholders. It provided scripts for the call centres to use, and they are not to depart from those scripts. Since the company proposed approval of these measures there was no occasion to consider whether such approval is always necessary or desirable at the first hearing: cf Re Galaxy Resources Ltd [No 2] [2021] WASC 314 at [33] (Hill J). It was appropriate to seek approval here. Subject to some additional disclosure, to reflect the additional disclosure in the scheme booklet, I approved the call campaigns and scripts by orders made administratively on 24 October 2022.Conclusion For those reasons I was satisfied that it was appropriate to convene scheme meetings and to approve the scheme booklet and other shareholder communications in the terms described, and orders were made accordingly.