FEDERAL COURT OF AUSTRALIA
Wellcom Group Limited, in the matter of Wellcom Group Limited [2019] FCA 1655
File number: VID 878 of 2019 Judge: O'BRYAN J Date of judgment: 4 October 2019 Date of publication of reasons: 18 October 2019 Catchwords: CORPORATIONS – scheme of arrangement – first court hearing – order sought under s 411(1) of the Corporations Act 2001 (Cth) – exercise of discretion – whether separate class meeting required – whether director should make a voting recommendation to members – orders made for convening of shareholders’ meeting Legislation: Corporations Act 2001 (Cth) ss 411(1), 411(17), 412(1)
Corporations Regulations 2001 (Cth) Pt 3, reg 5.1.01, Sch 8, reg 8301(a)
Federal Court (Corporations) Rules 2000 (Cth)
Cases cited: ASC v Marlborough Gold Mines Ltd (1993) 177 CLR 485
FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69
Nordic Bank Plc v International Harvester Australia Ltd [1983] 2 VR 298
Re ACM Gold Ltd (1992) 34 FCR 530
Re Amcor Ltd [2019] FCA 346
Re Arthur Yates & Co Ltd (2001) 36 ACSR 758
Re Biosceptre International Limited [2013] FCA 1429
Re Coles Group Ltd (2007) 25 ACLC 1380
Re DuluxGroup Ltd [2019] FCA 961
Re Dyno Nobel Ltd [2008] VSC 154
Re English, Scottish and Australian Chartered Bank [1893] 3 Ch 385
Re Foundation Healthcare Ltd (2002) 42 ACSR 252
Re Gazal Corporation Limited [2019] FCA 701
Re Healthscope Ltd [2010] VSC 367
Re Healthscope Ltd [2019] FCA 542
Re Hills Motorway Ltd(2002) 43 ACSR 101; (2003) 21 ACLC 35
Re Hostworks Group Ltd (2008) 26 ACLC 137
Re Kidman Resources Ltd [2019] FCA 1226
Re Macquarie Private Capital A Ltd (2008) 26 ACLC 366
Re Mod Resources Ltd [2019] WASC 326
Re Navitas Ltd(No 2) [2019] WASC 218
Re NRMA Insurance Ltd (No 1) (2000) 156 FLR 349; 33 ACSR 595
Re Nzuri Copper Ltd [2019] WASC 189
Re Opes Prime Stockbroking Ltd (No 2) (2009) 179 FCR 20
Re Ruralco Holdings Limited [2019] FCA 878
Re Skilled Group Ltd (No 1) (2015) 113 ACSR 525
Re SMS Management and Technology Limited [2017] VSC 257
Re Spicers Ltd (No 2) [2019] FCA 1110
Re Toll Holdings [2015] VSC 123
Re Verdant Minerals Ltd [2019] FCA 556
Re Villa World Ltd [2019] NSWSC 1207
Re Westfield Holdings Ltd (2004) 49 ACSR 734
Date of hearing: 4 October 2019 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 84 Counsel for the Plaintiff: Mr M Oakes SC Solicitor for the Plaintiff: Minter Ellison Counsel for Innocean Worldwide Inc: Ms K A O’Gorman Solicitor for Innocean Worldwide Inc: Ashurst Australia ORDERS
VID 878 of 2019 IN THE MATTER OF WELLCOM GROUP LIMITED (ACN 114 312 542)
BETWEEN: WELLCOM GROUP LIMITED (ACN 114 312 542)
Plaintiff
INNOCEAN WORLDWIDE INC
Interested Person
JUDGE:
O'BRYAN J
DATE OF ORDER:
4…
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- AGLC
- Re Wellcom Group Limited [2019] FCA 1655
- Case
- [2019] FCA 1655
- Decision Date
CaseChat Overview and Summary
The court's reasoning focused on the statutory framework provided by section 411(1) of the Corporations Act, which allows the court to approve an explanatory statement once a meeting has been convened. The court noted that its practice did not include approving the explanatory booklet, consistent with recent case law. The court found that the scheme was of such a nature that, if it achieved the necessary statutory majorities, the court would likely approve it. This conclusion was based on the scheme's terms and the likelihood of its approval, which justified making the orders sought by Wellcom.
The court issued several orders, including granting Innocean Worldwide Inc leave to be heard without becoming a party, directing Wellcom to convene a shareholders' meeting to consider and potentially approve the scheme, and detailing the process for notifying shareholders and conducting the meeting. Voting was to be conducted by poll, and the court also addressed procedural matters such as proxy forms, meeting adjournments, and advertising requirements. The further hearing of the originating process was adjourned to a later date.
The court concluded that the scheme was likely to be approved if it met the statutory majorities and granted the orders requested by Wellcom, including convening the shareholders' meeting and specifying the meeting's procedures and timing.
Orders
Orders of the court
1. Pursuant to rule 2.13(1) of the Federal Court (Corporations) Rules 2000 (Cth) (Rules), Innocean Worldwide Inc has leave to be heard in the proceeding without becoming a party to it.
2. Pursuant to section 411(1) of the Corporations Act 2001 (Cth) (Act), the Plaintiff, Wellcom Group Limited ACN 114 312 542 (Wellcom), convene and hold a meeting (Scheme Meeting) of holders of fully paid ordinary shares in Wellcom, other than SIDCOM Pty Ltd (ACN 635 070 049) (Wellcom Shareholders):
(a) to consider and, if thought fit, to approve (with or without modification) the scheme of arrangement (Scheme) proposed to be made between Wellcom and Wellcom Shareholders, the terms of which are set out in Annexure B to these Orders;
(b) to be held at 10.00am (Melbourne time) on Friday, 8 November 2019 at the offices of Minter Ellison, Rialto Towers, 525 Collins Street, Melbourne, Victoria.
3. The Scheme Meeting be convened by sending on or before 9 October 2019:
(a) in the case of Scheme Shareholders who have elected to receive shareholder communications electronically by way of email (Email Shareholders), and whose registered address is in Australia, an email substantially in the form at Annexure ‘CA14’ to the affidavit of Charles Arthur Anzarut sworn 2 October 2019 (Anzarut Affidavit) and which contains links to:
(i) an electronic copy of a document substantially in the form of the explanatory booklet, a draft of which is at Annexure 'BOV6' to the Third Oude-Vrielink Affidavit (Scheme Booklet), which contains, among other things, the Notice of Scheme Meeting at Appendix 3 to the Scheme Booklet; and
(ii) an online portal or website that is accessible by the Email Shareholder and which enables the Email Shareholder to lodge their proxy for the Scheme Meeting and voting instructions online; and
(b) in the case of Email Shareholders, and whose registered address is outside Australia, an email substantially in the form at Annexure ‘CA14’ to the Anzarut Affidavit, and which contains links to:
(i) an electronic copy of a document substantially in the form of the Scheme Booklet, which contains, among other things, the Notice of Scheme Meeting at Appendix 3 to the Scheme Booklet; and
(ii) an online portal or website that is accessible by the Email Shareholder and which enables the Email Shareholder to lodge their proxy for the Scheme Meeting and voting instructions online; and
(c) in the case of Scheme Shareholders who are not Email Shareholders and whose registered address is in Australia, the following documents by pre-paid post addressed to the relevant addresses recorded in Wellcom’s register:
(i) a document substantially in the form of the Scheme Booklet, which contains, among other things, the Notice of Scheme Meeting at Appendix 3 to the Scheme Booklet;
(ii) a personalised proxy form for the Scheme Meeting, substantially in the form at Annexure ‘CA15’ to the Anzarut Affidavit (Proxy Form); and
(iii) a reply paid envelope for the return of the Proxy Form;
(d) in the case of Scheme Shareholders who are not Email Shareholders and whose registered address is outside Australia, the following documents by airmail addressed to the relevant addresses recorded in Wellcom’s register:
(i) a document substantially in the form of the Scheme Booklet, which contains, among other things, the Notice of Scheme Meeting at Appendix 3 to the Scheme Booklet;
(ii) a personalised Proxy Form; and
(iii) a return envelope for the return of the Proxy Form.
4. Voting on the resolution to approve the Scheme is to be conducted by way of a poll.
5. A Proxy Form in respect of the Scheme Meeting will be valid and effective if, and only if, it is completed and delivered in accordance with its terms by 10.00am (Melbourne time) on Wednesday, 6 November 2019.
6. Mr Charles Arthur Anzarut, or failing him, Ms Janette Anne Kendall, be Chairman of the Scheme Meeting.
7. The Chairman of the Scheme Meeting shall have the power to adjourn the meeting to such time, date and place as he or she considers appropriate.
8. Compliance with rule 2.15 of the Rules be dispensed with.
9. Compliance with rule 3.4 and Form 6 of the Rules be dispensed with.
10. Wellcom publish in The Australian newspaper once on or before 30 October 2019 an advertisement substantially in the form of Annexure A to these Orders.
11. The further hearing of the Originating Process be adjourned to a hearing before the Honourable Justice O'Bryan on 13 November 2019 at 10.15am (Melbourne time) or as soon thereafter as the business of the Court allows.
12. There be liberty to apply.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Annexure A
Notice of second Court hearing
Notice of hearing to approve compromise or arrangement
TO all the members of Wellcom Group Limited (ACN 114 312 542) (Wellcom)
TAKE NOTICE that at 10.15am (Melbourne time) on 13 November 2019 the Federal Court of Australia (Victorian Registry) at 305 William Street, Melbourne, Victoria 3000 will hear an application by Wellcom seeking the approval of a compromise or arrangement between Wellcom and its members if agreed to by a resolution to be considered, and, if thought fit, passed at a meeting of such members to be held on 8 November 2019 at MinterEllison, Rialto Towers, 525 Collins Street, Melbourne, Victoria 3000, commencing at 10.00am (Melbourne time).
If you wish to oppose the approval of the compromise or arrangement, you must file and serve on Wellcom a notice of appearance, in the prescribed form, together with any affidavit on which you wish to rely at the hearing. The notice of appearance and affidavit must be served on Wellcom at its address for service by 5.00pm on 12 November 2019.
The address for service of Wellcom is: c/o MinterEllison, Rialto Towers, 525 Collins Street, Melbourne, Victoria 3000, Attention: Bart Oude-Vrielink.
Annexure B
Scheme
[The Order entered is available on the Commonwealth Courts Portal, which attaches the Scheme.]
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
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