Re Trust Company Ltd
[2013] NSWSC 1946
•19 November 2013
Supreme Court
New South Wales
Medium Neutral Citation: In the matter of The Trust Company Limited [2013] NSWSC 1946 Hearing dates: 19 November 2013 Decision date: 19 November 2013 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Orders made approving the proposed supplementary material for distribution to shareholders.
Catchwords: CORPORATIONS - scheme of arrangement - where court has ordered the convening of a meeting and approved the explanatory statement to be sent to members in connection with that meeting - order sought approving for distribution to creditors the supplementary target's statement and form of cover. Legislation Cited: - Corporations Act 2001 (Cth) ss 411, 411(1), 412(1)(a), 1319 Cases Cited: - Re Anzon Energy Ltd [2008] FCA 1579
- Re Blue Freeway Ltd (No 2) [2009] FCA 708
- Re Citect Corporation Ltd [2006] NSWSC 143; (2006) 56 ACSR 663
- Re Centro Retail Ltd and Centro MCS Manager Ltd in its capacity as responsible entity of Centro Retail Trust [2011] NSWSC 1321
- Re Coates Hire Ltd (No 2) [2007] FCA 2105
- Re Felix Resources Pty Ltd (No 2) [2009] FCA 1337Category: Interlocutory applications Parties: The Trust Company Limited (Plaintiff) Representation: Counsel:
M. Oakes SC (Plaintiff)
Solicitors:
King & Wood Mallesons (Plaintiff)
File Number(s): 2013/187096
Judgment - EX TEMPORE
On 16 October 2013, I made orders convening a meeting of members of the Trust Company Limited ("TCL") under s 411 of the Corporations Act 2001 (Cth) to consider and vote upon a proposed scheme of arrangement which provides for a subsidiary of Perpetual Limited ("Perpetual") to acquire all of the shares in TCL. As I noted in my judgment ([2013] NSWSC 1680), that scheme of arrangement was proposed in circumstances that a higher bid had previously been made by Equity Trustees Limited ("ETL") to acquire the shares in TCL; another entity had also made a proposal to acquire its shares; and Perpetual had advanced a scheme proposal and an amended scheme proposal, which is currently reflected in the proposed scheme of arrangement. The orders made on 16 October 2013 provided for the scheme meeting to be held on 28 November 2013 and for a second court hearing on 3 December 2013.
Subsequent to those orders being made, on 13 November 2013, ETL announced a revised takeover offer for TCL and, on 15 November 2013, TCL released to Australian Securities Exchange Limited ("ASX") a further announcement indicating that it continued to recommend Perpetual's proposal which is the subject of the scheme.
On 18 November 2013, ETL issued its Supplementary Bidder's Statement in connection with its revised offer announced on 13 November 2013.
TCL now intends to lodge a Supplementary Target's Statement with the Australian Securities and Investments Commission ("ASIC") and provide it to ASX for release to the market and also seeks to send a copy of that Supplementary Target's Statement and a covering letter to its members in connection with the scheme. The Supplementary Target's Statement will attach a copy of TCL's announcement to ASX on 15 November 2013 in relation to ETL's revised takeover offer, which in turn attaches a copy of a further report of Mr Craig Edwards dated 15 November 2013. Mr Edwards had previously prepared an independent expert's report contained in the scheme documentation dispatched in accordance with the Court's previous order.
TCL now seeks an order that the Supplementary Target's Statement be approved for distribution to its shareholders, together with the form of covering letter that is in evidence, which indicates that TCL's directors recommend that its shareholders reject ETL's revised offer and vote in favour of Perpetual's proposal at the scheme meeting on 28 November 2013.
TCL has appropriately recognised that the approval of the Court should be sought before dispatching additional explanatory material where the Court has ordered the convening of a meeting and approved the Explanatory Statement to be sent to members in connection with that meeting. In Re Coates Hire Ltd (No 2) [2007] FCA 2105 at [6], Emmett J observed that:
"Where the Court orders that a document in a particular form be sent to shareholders, the document should not be accompanied by any further document that has not itself been approved by the Court. If it is proposed that other documents, such as covering letters, be sent, a draft of those other documents should be put before the Court at the time of the application for the order that the meeting be convened. The other documents can then be incorporated into the Court's order."
The same principle also applies so far as it is proposed that a further document be sent after the initial documents that were approved by the Court for dispatch to shareholders. In Re Centro Retail Ltd and Centro MCS Manager Ltd in its capacity as responsible entity of Centro Retail Trust [2011] NSWSC 1321 at [11], Barrett J observed that that approach reflected the function assigned to the Court by s 411(1) of the Corporations Act in relation to the explanatory statement required under s 412(1)(a) and that it:
"... applies with equal force to any proposal for later supplementation of the approved explanatory statement. Because the meeting is convened in accordance with an order of the Court and the Court has approved the explanatory statement, the Court-approved 'message' should not be interfered with by unilateral supplementation by the Company."
His Honour referred to earlier cases in which directions have been made, in substance, approving the distribution of supplementary material, including Re Anzon Energy Ltd [2008] FCA 1579; Re Blue Freeway Ltd (No 2) [2009] FCA 708 and Re Citect Corporation Ltd [2006] NSWSC 143; (2006) 56 ACSR 663 and observed that the Court had jurisdiction to take that course under s 1319 of the Corporations Act, which authorises it to give ancillary or consequential directions in relation to a meeting which it has convened. A similar view was taken in Re Felix Resources Pty Ltd (No 2) [2009] FCA 1337.
In the present case, the Supplementary Bidder's Statement would in the ordinary course at least be lodged with the ASIC and released to ASX and there seems to me to be no reason why it should not be sent to members considering whether to vote in favour of or against the Perpetual proposal at the scheme meeting, where it is plainly relevant to that decision. I note that ASIC Regulatory Guide 60 Schemes of Arrangement (September 2011) contemplates that, if a scheme company proposes to provide supplementary information to members after the explanatory statement has been dispatched, that information would need to be given to ASIC for review prior to being given to the Court for approval. TCL has taken that course and ASIC has not opposed that course and has, in particular, recognised that the substance of the disclosure in respect of any supplementary scheme booklet and the Supplementary Bidder's Statement would be materially similar. TCL also, appropriately, raised with ASIC the fact that members would have a little less than the 10 days contemplated by Regulatory Guide 60 to consider the supplementary information, after its receipt by post. ASIC did not indicate any concern with the timing of dispatch of the supplementary information in respect of the scheme, and I also do not have concern as to that matter in circumstances that the substance of the information was previously announced by TCL in its ASX announcement of 15 November 2013, nearly two weeks before the proposed scheme meeting.
For these reasons, I made orders, in substance, approving the proposed Supplementary Target's Statement for distribution to TCL's shareholders together with the proposed covering letter in the form that were in evidence before the Court.
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Decision last updated: 17 January 2014
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