Re Veda Advantage Limited - [2007] FCA 822

FEDERAL COURT OF AUSTRALIA
Veda Advantage Limited, in the matter of Veda Advantage Limited
[2007] FCA 822
IN THE MATTER OF VEDA ADVANTAGE LIMITED (ACN 080 662 568)
NSD 694 OF 2007
LINDGREN J
4 MAY 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 694 OF 2007

IN THE MATTER OF VEDA ADVANTAGE LIMITED (ACN 080 662 568)

VEDA ADVANTAGE LIMITED
(ACN 080 662 568)
Plaintiff

JUDGE:

LINDGREN J

DATE OF ORDER:

4 MAY 2007

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.There be convened by the plaintiff a meeting of its shareholders to be held at 10.00 am on 14 June 2007, for the purposes of considering and, if thought fit, agreeing (with or without modification) to the scheme of arrangement proposed to be made between the plaintiff and its shareholders pursuant to section 411(4)(a)(ii) of the Corporations Act 2001 (Cth) (“Act”) in the form set out in section 9 of Part C to the draft share scheme booklet, which is Exhibit P2 (“Scheme Meeting”).
2.The scheme booklet in the form of Exhibit P2 be approved for distribution to the shareholders of the plaintiff.
3.The shareholder proxy form behind Tab 9 of Exhibit JJ1 be sent to shareholders of the plaintiff.
4.The Scheme Meeting be held at 10.00 am at the AGL Theatre, Museum of Sydney, 37 Phillip Street, Sydney, New South Wales.
5.Glenn Lawrence Lord Barnes or, failing him, Gavin Ronald Walker be authorised to act as chairperson for the Meeting, and any adjournment of the Meeting, and report to the Court on the outcome of the Meeting.
6.The Meeting can resolve to be adjourned.
7.Liberty to apply.
8.The application be stood over to 22 June 2007 at 9.15 am before his Honour Justice Lindgren or as he directs for consideration of orders to approve the scheme of arrangement.
9.These orders be entered forthwith.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 694 OF 2007

IN THE MATTER OF VEDA ADVANTAGE LIMITED (ACN 080 662 568)

VEDA ADVANTAGE LIMITED
(ACN 080 662 568)
Plaintiff

JUDGE:

LINDGREN J

DATE:

4 MAY 2007

PLACE:

SYDNEY

REASONS FOR JUDGMENT
(first court hearing)
Introduction

The plaintiff, Veda Advantage Limited (“Veda”), a public company listed by Australian Stock Exchange Limited (“ASX”) and New Zealand Exchange Limited (“NZX”), seeks orders pursuant to s 411 of the Corporations Act 2001 (Cth) (“the Act”) in connection with a proposed scheme of arrangement between it and each holder of fully paid ordinary shares in Veda (“the Scheme”).
The Scheme concerns the proposed acquisition of all of the shares in Veda by VA Australia Finance Pty Limited (“VA Finance”), a special purpose company formed by a private equity consortium comprising Pacific Equity Partners and Merrill Lynch Global Private Equity.
Under the Scheme all shares in Veda would be transferred to VA Finance in exchange for payment…

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 Veda Advantage Limited

Details

AGLC: Re Veda Advantage Limited [2007] FCA 822
Case: [2007] FCA 822
Decision Date: 4 May 2007

CaseChat Overview and Summary

In the case of Re Veda Advantage Limited, the primary focus was on a scheme of arrangement proposed to be executed between the company and its shareholders. The dispute involved the reasonableness of a break fee provision, which was contested by certain parties. The matter was heard and determined in the Federal Court of Australia. The central legal issues revolved around whether the break fee provision, as stipulated in the proposed scheme, could be considered unreasonable according to established legal principles. The court was tasked with assessing the fairness and reasonableness of the break fee in the context of the overall scheme of arrangement.

The court examined the break fee provision in light of existing judicial precedents and legal standards that govern such provisions. It considered the balance of interests between the company and its shareholders, and whether the break fee provision was fair and equitable. The court found that, based on the developed approach to break fees, the provision in question was not unreasonable. This determination was pivotal in the decision, as it paved the way for the approval of the scheme. The reasoning was rooted in the understanding that the break fee provision aligned with the principles set out in previous cases, ensuring that the interests of the shareholders were adequately protected.

Ultimately, the court concluded that the scheme of arrangement was likely to be approved at the final hearing. This positive outlook was based on the finding that the break fee provision was reasonable and the scheme itself was fair to all parties involved. Consequently, the court issued several orders to facilitate the implementation of the scheme. These included convening a shareholder meeting, approving the scheme booklet, and authorizing a chairperson for the meeting. The orders also included provisions for potential adjournments and a stand-over date for the final approval hearing. This comprehensive approach ensured that the scheme could proceed with the necessary legal formalities and protections in place.

Orders

Orders of the court

1. There be convened by the plaintiff a meeting of its shareholders to be held at 10.00 am on 14 June 2007, for the purposes of considering and, if thought fit, agreeing (with or without modification) to the scheme of arrangement proposed to be made between the plaintiff and its shareholders pursuant to section 411(4)(a)(ii) of the Corporations Act 2001 (Cth) (“Act”) in the form set out in section 9 of Part C to the draft share scheme booklet, which is Exhibit P2 (“Scheme Meeting”).

2. The scheme booklet in the form of Exhibit P2 be approved for distribution to the shareholders of the plaintiff.

3. The shareholder proxy form behind Tab 9 of Exhibit JJ1 be sent to shareholders of the plaintiff.

4. The Scheme Meeting be held at 10.00 am at the AGL Theatre, Museum of Sydney, 37 Phillip Street, Sydney, New South Wales.

5. Glenn Lawrence Lord Barnes or, failing him, Gavin Ronald Walker be authorised to act as chairperson for the Meeting, and any adjournment of the Meeting, and report to the Court on the outcome of the Meeting.

6. The Meeting can resolve to be adjourned.

7. Liberty to apply.

8. The application be stood over to 22 June 2007 at 9.15 am before his Honour Justice Lindgren or as he directs for consideration of orders to approve the scheme of arrangement.

9. These orders be entered forthwith.

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

LINDGREN J

I do not think that in accordance with the approach that has developed in relation to break fees, the break fee provision in the present case is unreasonable.Conclusion The Scheme is likely to be approved at the final Court hearing. For the above reasons, I ordered Veda to convene a meeting of its shareholders to consider, and if thought fit, agree to, the Scheme, and I approved of the Scheme Booklet as the relevant explanatory statement.

Ratio Decidendi

Legal Principle Established

Established by: LINDGREN J

Full text does not contain this section.

JUDGE:	LINDGREN J
DATE OF ORDER:	4 MAY 2007
WHERE MADE:	SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 694 OF 2007

JUDGE:	LINDGREN J
DATE:	4 MAY 2007
PLACE:	SYDNEY