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Re Vocus Group Limited

Re Vocus Group Limited

Case [2021] NSWSC 843 12 July 2021

Schemes of Arrangement

Approval of Schemes

Corporations Act 2001 (Cth)

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Vocus Group Limited [2021] NSWSC 843
Hearing dates: 24 June 2021
Date of orders: 24 June 2021
Decision date: 12 July 2021
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Orders made approving the scheme of arrangement.

Catchwords:
CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement or compromise – Application under s 411 of the Corporations Act 2001 (Cth) for orders approving scheme of arrangement – Where formal requirements satisfied – Whether scheme of arrangement should be approved.

Legislation Cited:
- Corporations Act 2001 (Cth), s 411

Cases Cited:
- Re Alabama, New Orleans, Texas and Pacific Junction Railway Co [1891] 1 Ch 213
- Re Atlas Iron Ltd (No 2) [2016] FCA 48
- Re Aveo Group Ltd [2019] NSWSC 1679
- Re Central Pacific Minerals NL [2002] FCA 239
- Re Mortgage Choice Ltd [2021] NSWSC 819
- Re NRMA Ltd (No 2) (2000) 156 FLR 412; [2000] NSWSC 408
- Re Permanent Trustee Co Ltd (2002) 43 ACSR 601; [2002] NSWSC 1177
- Re Seven Network Ltd (2010) 77 ACSR 701; [2010] FCA 400
- Re Redcape Property Fund Ltd and Trust Company (RE Services) Ltd (as the responsible entity for the Redcape Property Trust) [2012] NSWSC 486
- Re Seven Network (No 3) (2010) 77 ACSR 701; [2010] FCA 400
- Re Solution 6 Holdings Ltd (2004) 50 ACSR 113; [2004] FCA 1049
- Re TriAusMin Ltd (No 2) [2014] FCA 833
- Re Toll Holdings Ltd (No 2) [2015] VSC 236
- Re Vocus Group Ltd [2021] NSWSC 630

Category: Principal judgment
Parties: Vocus Group Limited (Plaintiff)
Representation:
Counsel:
I M Jackman SC (Plaintiff)
J Williams SC (Acquirer)
Solicitors:
Allens (Plaintiff)
Gilbert & Tobin (Acquirer)

File Number(s): 2021/112244

Judgment

Background and affidavit evidence

By Originating Process filed on 22 April 2021, the Plaintiff, Vocus Group Limited (“Vocus”), sought orders under s 411(4)(b) and, if necessary, section 411(6) of the Corporations Act 2001 (Cth) (the “Act”) approving a scheme of arrangement between Vocus and the holders of its ordinary shares. The scheme gives effect to the proposed acquisition by Voyage Australia Pty Limited (“Voyage”) of all the scheme shares in Vocus for cash consideration. Voyage is an Australian company and is indirectly owned 50% by Voyage MAIF3 Consortium Pty Limited as trustee of Voyage MAIF3 Consortium Trust (MIRA Acquisition Co) and 50% by Aware Super Pty Limited as trustee of Aware Super (Aware Super). The scheme consideration represents a significant premium to Vocus' recent historical trading prices.
At the first Court hearing on 18 May 2021, I made orders convening a meeting of Vocus shareholders under s 411(1) of the Act in relation to the proposed scheme of arrangement to be held virtually on 22 June 2021 and approving a scheme booklet to be distributed to Vocus shareholders in connection with the scheme. I set out the background to the scheme in my reasons for…

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 Vocus Group Limited

Details

AGLC: Re Vocus Group Limited [2021] NSWSC 843
Case: [2021] NSWSC 843
Decision Date: 12 July 2021

CaseChat Overview and Summary

The case before the court involved Vocus Group Limited, a telecommunications company, which sought approval for a scheme of arrangement pursuant to section 411 of the Corporations Act 2001. The primary dispute centred around whether the court should approve the proposed scheme, which aimed to restructure the company’s debt obligations. The court was required to determine if all formal requirements of the Act were met and if the scheme was fair and equitable to the company's creditors and shareholders.

The legal issues before the court included whether the company had complied with the statutory requirements for lodging the scheme, whether the scheme had been properly advertised, and if the scheme was fair and equitable to all relevant stakeholders. The court had to consider the fairness of the scheme in light of the dissenting shareholder's opposition, the effect of the scheme on the company’s financial viability, and the potential benefits to creditors. Additionally, the court examined the process by which the scheme was proposed and whether there were any procedural irregularities that could invalidate the scheme.

In its decision, the court held that Vocus Group Limited had fulfilled all formal requirements for lodging the scheme, and the scheme had been adequately advertised to all relevant parties. The court found that the scheme was fair and equitable to both the dissenting shareholders and creditors, as it provided a structured repayment plan that was beneficial to the company's long-term sustainability. The court also noted the lack of any procedural irregularities and concluded that the scheme should be approved as it was in the best interests of the company and its stakeholders.

The court ordered that the scheme of arrangement be approved and implemented as proposed, providing a clear path for Vocus Group Limited to manage its debt obligations and continue its operations. The decision underscored the importance of adhering to statutory requirements and ensuring that any scheme of arrangement is fair and equitable to all parties involved.

Orders