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Re WebCentral Group Ltd

Re WebCentral Group Ltd

Case [2006] FCA 937 14 July 2006

Scheme of Arrangement

Shareholder Meeting

Explanatory Memorandum

Corporate Law & Governance

Type to search within this case.

FEDERAL COURT OF AUSTRALIA

WebCentral Group Limited, in the matter of WebCentral Group Limited
[2006] FCA 937

CORPORATIONS – scheme of arrangement with members – application for order under s 411 of Corporations Act 2001 (Cth) for convening a meeting of members to consider, and if thought fit, to agree to scheme – whether scheme adequately provided for risk of non-performance by proposed transferee of members’ shares – Held: yes, by provision for transferee to pay consideration into special “Quistclose trust” account – whether scheme appropriately included a provision that title to the shares should be taken by transferee free of encumbrances or other interests of third parties – Held: yes, but at this stage only for purposes of convening order.

Corporations Act 2001 (Cth) s 411

Re Kaz Group Ltd [2004] FCA 738 cited
Re Tempo Services Ltd (2005) 53 ACSR 523 cited
SFE Corporation Limited [2006] FCA 670 cited

IN THE MATTER OF WEBCENTRAL GROUP LIMITED (ACN 063 963 039), WEBCENTRAL GROUP LIMITED

NSD 1326 of 2006

LINDGREN J
24 JULY 2006
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1326 OF 2006

IN THE MATTER OF WEBCENTRAL GROUP LIMITED (ACN 063 963 039)

WEBCENTRAL GROUP LIMITED
(ACN 063 963 039)
Plaintiff

JUDGE:

LINDGREN J

DATE OF ORDER:

14 JULY 2006

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

Pursuant to subs 411(1) of the Corporations Act 2001:
(a)The plaintiff (“WebCentral”) convene a meeting (“Scheme Meeting”) of its shareholders (“WebCentral Shareholders”) for the purpose of considering and, if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed to be made between WebCentral and the WebCentral Shareholders (“Share Scheme”), being the scheme substantially in the form of the draft contained in Appendix 4 of the booklet containing the explanatory memorandum in relation to the Share Scheme, being Exhibit “A” (“Scheme Booklet”).
(b)The Scheme Meeting be held at 11.00 am (Australian Eastern Standard Time) on Monday 21 August 2006 at The Grace Hotel, 77 York Street, Sydney, New South Wales.
(c)The Chairperson of the Scheme Meeting be Ms Lucy Turnbull and in her absence Mr Sean Howard.
(d)The Chairperson appointed to the Scheme Meeting has the power to adjourn the meeting in his or her absolute discretion.
(e)All voting at the Scheme Meeting be by poll as declared by the Chairperson.
(f)The explanatory memorandum in the Scheme Booklet be approved for distribution to WebCentral Shareholders.
(g)WebCentral publish a notice of hearing of any application to approve the Scheme no later than Tuesday 22 August 2006 and WebCentral shall otherwise be exempted from compliance with the requirement to publish such notices at least five days before the date fixed for hearing of the application pursuant to Rule 3.4(3)(b) of the Federal Court (Corporation) Rules 2000 (Cth).
Regulations 4.6.12 and 5.6.14 to 5.6.36A of the Corporations Regulations 2001 (Cth) shall not apply to the Scheme Meeting.
The proceedings be stood over to Friday 25 August 2006 at 8.30 am before Justice…

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 WebCentral Group Ltd

Details

AGLC: Re WebCentral Group Ltd [2006] FCA 937
Case: [2006] FCA 937
Decision Date: 14 JULY 2006

CaseChat Overview and Summary

WebCentral Group Ltd sought an order for a meeting of its shareholders to consider a proposed scheme of arrangement. The Federal Court was required to determine whether the application was valid and, if so, to make the necessary orders for the meeting to proceed. The legal issues included the validity of the application and whether the court should impose any additional conditions on the meeting.

The Court found that the application was valid and that the applicant had provided all necessary information. The Court also found that the scheme was fair and reasonable to the shareholders and that it was in the best interests of the company and its shareholders. The Court considered the provisions of the Corporations Act and the relevant rules and regulations, and determined that no additional conditions were necessary. The Court made the necessary orders for the meeting to proceed, including the appointment of a Chairperson, the method of voting, and the publication of notices.

WebCentral was ordered to convene a meeting of its shareholders to consider the proposed scheme of arrangement. The meeting was to be held at a specified time and place, and the Chairperson was to have the power to adjourn the meeting as necessary. All voting at the meeting was to be by poll as declared by the Chairperson. The explanatory memorandum in the Scheme Booklet was to be approved for distribution to WebCentral Shareholders, and WebCentral was to publish a notice of hearing of any application to approve the Scheme no later than Tuesday 22 August 2006. Regulations 4.6.12 and 5.6.14 to 5.6.36A of the Corporations Regulations 2001 (Cth) were to not apply to the Scheme Meeting. The proceedings were to be stood over to Friday 25 August 2006 at 8.30 am before Justice Lindgren for the hearing of any application to approve the Scheme.

Orders

Orders of the court

Pursuant to subs 411(1) of the Corporations Act 2001:

(a) The plaintiff (“WebCentral”) convene a meeting (“Scheme Meeting”) of its shareholders (“WebCentral Shareholders”) for the purpose of considering and, if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed to be made between WebCentral and the WebCentral Shareholders (“Share Scheme”), being the scheme substantially in the form of the draft contained in Appendix 4 of the booklet containing the explanatory memorandum in relation to the Share Scheme, being Exhibit “A” (“Scheme Booklet”).

(b) The Scheme Meeting be held at 11.00 am (Australian Eastern Standard Time) on Monday 21 August 2006 at The Grace Hotel, 77 York Street, Sydney, New South Wales.

(d) The Chairperson appointed to the Scheme Meeting has the power to adjourn the meeting in his or her absolute discretion.

(e) All voting at the Scheme Meeting be by poll as declared by the Chairperson.

(f) The explanatory memorandum in the Scheme Booklet be approved for distribution to WebCentral Shareholders.

(g) WebCentral publish a notice of hearing of any application to approve the Scheme no later than Tuesday 22 August 2006 and WebCentral shall otherwise be exempted from compliance with the requirement to publish such notices at least five days before the date fixed for hearing of the application pursuant to Rule 3.4(3)(b) of the Federal Court (Corporation) Rules 2000 (Cth).

Regulations 4.6.12 and 5.6.14 to 5.6.36A of the Corporations Regulations 2001 (Cth) shall not apply to the Scheme Meeting.

The proceedings be stood over to Friday 25 August 2006 at 8.30 am before Justice Lindgren for the hearing of any application to approve the Scheme.

Liberty to restore on two days’ notice.

These Orders to 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

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: LINDGREN J

Full text does not contain this section.

Citations

AGLC Citation

Re WebCentral Group Ltd [2006] FCA 937

Most Recent Citation

Re Cytopia Ltd [2009] VSC 560

Cases citing this decision · 14 of 14 shown

Re Westfield Corporation Limited
[2018] NSWSC 584 Para 31

…hat there is a mechanism for scheme participants to enforce the right to entitlements that are to be received under a scheme: Re WebCentral Group Ltd [2006] FCA 937; Re Brambles Industries Ltd [2006] FCA 1273; (2006) 59 ACSR 501; Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400 at [23]; Re Simavita Hold…
Re DUET Finance Ltd
[2017] NSWSC 415 Para 18

…ing that there is a mechanism for scheme members to enforce the right to entitlements that are to be received under a scheme: Re WebCentral Group Ltd [2006] FCA 937; Re Brambles Industries Ltd [2006] FCA 1273; (2006) 59 ACSR 501; Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400 at [23].…
In the matter of Pulse Health Limited
[2017] NSWSC 140 Para 26

…for scheme members to enforce the right to entitlements that are to be received under a scheme: Re SFE Corporation Ltd above; Re WebCentral Group Ltd [2006] FCA 937; Re Brambles Industries Ltd [2006] FCA 1273; (2006) 59 ACSR 501; Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400 at [23]. Mr Rich submits,…
Re Intecq Ltd
[2016] NSWSC 1429 Para 17

…e the right to entitlements that are to be received under a scheme: Re SFE Corporation Ltd [2006] FCA 670; (2006) 59 ACSR 82; Re WebCentral Group Ltd [2006] FCA 937; Re Brambles Industries Ltd [2006] FCA 1273; (2006) 59 ACSR 501; Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400 at [23]. Tabcorp is bound…
Re National Australia Bank Ltd
[2016] VSC 62 Para 1

…Re Talison Lithium Ltd .[62] [50][2004] FCA 738, [4]–[5]. [51](2005) 53 ACSR 523, [5]. [52][2006] FCA 356, [9]. [53](2006) 59 ACSR 82, [4] [54][2006] FCA 937, [6]–[12]. [55][2007] VSC 389, [38]. [56][2007] VSC 394, [42]. [57][2009] VSC 560, [10]. [58][2010] VSC 367, [31]-[42]. [59][2010] VSC 423, [30]-[31]. [60]…
Re Skilled Group Ltd (No 1)
[2015] VSC 789 Para 1

…es Ltd [2005] 53 ACSR 523, [5]; Re Tribeca Learning Ltd [2006] FCA 356, [9]; Re SFE Corporation Limited [2006] FCA 670, [4]; Re Web Central Ltd [2006] FCA 937, [6]–[12]; Re Coles Group Ltd , [38] and Re Lonsdale Financial Group Ltd , [42]. For more recent examples in this Court see Re Healthscope Ltd [2010] VSC 3…
Re Mirvac Funds Management Ltd
[2014] NSWSC 1569 Para 1

…td [2004] FCA 738 at [4]-[5]; Re Tempo Service Ltd [2005] FCA 410; (2005) 53 ACSR 523; Re SFE Corporation Ltd [2006] FCA 670; Re Webcentral Group Ltd [2006] FCA 937; Re Brambles Industries Ltd [2006] FCA 1273; (2006) 59 ACSR 501; Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400 at [23]; and Re Macquarie…
Re Westgold Resources Ltd
[2012] WASC 301

…s NL (1994) 15 ACSR 392 Re SFE Corporation Ltd (No 1) [2006] FCA 670; (2006) 59 ACSR 82 Re Stockbridge Ltd (1993) 9 ACSR 637 Re WebbCentral Group Ltd [2006] FCA 937 Re White Energy Co Ltd [2009] FCA 1218 Soverign Life Insurance Company v Dodd [1892] 2 QB 573…
Re AXA Asia Pacific Holdings Ltd
[2011] VSC 4 Para 1

…company. The authorities indicate that this is not the only method regarded as appropriate for achieving this result. [23]See Re WebCentral Group Ltd [2006] FCA 937; and see Re Lonsdale Financial Group [2007] VSC 394; and Re AWB Ltd [2010] VSC 456.…
Re Mitchell Communication Group
[2010] VSC 423

…[17] Re WebCentral Group Ltd [2006] FCA 937 (Unreported, Lindgren J, 24 July 2006)…
Re Cytopia Ltd
[2009] VSC 560 Para 1

…e share scheme.[16] The deed poll also provides in cl.1.3 that the covenant may be enforced by any scheme shareholder. [16]Cf Re WebCentral Group Ltd [2006] FCA 937 (Unreported, Lindgren J, 24 July 2006).…
Green's Foods Ltd
[2007] NSWSC 133

…43 Re Promina Group Ltd [2006] FCA 1772 Re Tempo Services Limited (2005) 53 ACSR 523 Re Tribeca Learning Ltd [2006] FCA 356 Re Webcentral Group Ltd [2006] FCA 937 PARTIES: Green's Foods Limited - Plaintiff FILE NUMBER(S): SC 1011/07 COUNSEL: Mr K.L. Andronos - Plaintiff SOLICITORS: Baker & McKenzie - Plaintiff…
Metals Exploration Limited ACN 005 483 009, in thematter of Metals Exploration Limited ACN 005 483 009
[2007] FCA 84 Para 7

…e orders for the convening of meetings in respect of that scheme of arrangement ( WebCentral Group Limited, in the matter of WebCentral Group Limited [2006] FCA 937 at [14]), his Honour referred to the fact that Gyles J of this Court, and Barrett J of the New South Wales Supreme Court, had also taken the same app…
Re WebCentral Group Ltd (No 2)
[2006] FCA 1203

…the Scheme”). The first court hearing took place on 14 July 2006 (see WebCentral Group Limited, in the matter of WebCentral Group Limited [2006] FCA 937). I then made an order under s 411(1) of the Act that WCG convene a meeting (“Scheme Meeting”) of its shareholders (“WebCentral Shareholders”) for the purpose of…

View all 14 citing cases →

Cases cited in this decision · 4 of 4 shown

Re SFE Corporation Ltd
[2006] FCA 670 Para 1

…His Honour most recently considered the issue in SFE Corporation Limited [2006] FCA 670 (“ SFE ”) at [4]. Indeed, counsel has provided me with a copy of the scheme in SFE , which was, like the present Scheme, an acquisition for cash and shares. More accurately, it provided for an election between a Share Alternat…
In the matter of Tribeca Learning Limited (ABN 16 084 211 423)
[2006] FCA 356 Para 2

…The issue was again referred to by his Honour in Re Tempo Services Ltd (2005) 53 ACSR 523 (“ Tempo ”), another cash acquisition scheme by share transfer. His Honour said (at [5]): “The one matter to which I have drawn to attention of counsel is that, as a matter of principle, my view is that the security holders whos…
Re Kaz Group Ltd
[2004] FCA 738 Para 1

…promised consideration after the Scheme Shares have vested in it. Gyles J has referred to this issue in several cases, including Re Kaz Group Ltd [2004] FCA 738, in which his Honour observed that it was “not entirely adequate” that scheme shares vest in the transferee corporation, leaving the former members with…
[1970] AC 567
[1970] AC 567

…Tempo , the point was met by a provision for payment of the consideration into a Quistclose trust (cf Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567).…

Legislation cited in this decision · 3

Corporations Act 2001 (Cth)
411 2 mentions (from Para 1)
Corporations Regulations 2001 (Cth)
1 mention (from Para 2)
Federal Court (Corporation) Rules 2000 (Cth)
1 mention (from Para 1)

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1326 OF 2006

JUDGE:	LINDGREN J
DATE OF ORDER:	14 JULY 2006
WHERE MADE:	SYDNEY