FEDERAL COURT OF AUSTRALIA

St George Bank Ltd , in the matter of St George Bank Ltd (No 2)
[2008] FCA 1850

IN THE MATTER OF ST GEORGE BANK LIMITED (ACN 055 513 070)

NSD 1416 of 2008

LINDGREN J

17 NOVEMBER 2008

SYDNEY

IN THE MATTER OF ST GEORGE BANK LIMITED (ACN 055 513 070)

THE COURT ORDERS THAT:

1.                  The Plaintiff has leave to file in Court the affidavit of Jeremy Wei Shern Low sworn 17 November 2008 and the affidavit of Richard Willcock affirmed 17 November 2008.

2.                  Pursuant to section 411(4)(b) of the Corporations Act 2001 (Cth) (Act):

(a)                the scheme of arrangement between all holders of fully paid ordinary shares of the             Plaintiff (excluding Westpac Banking Corporation (Westpac) and any of its Related Bodies Corporate as defined in the Act in respect of shares in which any of those companies has a beneficial interest) and the Plaintiff;

(b)               the scheme of arrangement between all holders of non-cumulative, redeemable and convertible preference shares of the Plaintiff known as "SAINTS" (SAINTS) (excluding Westpac and any of its Related Bodies Corporate as defined in the Act in respect of SAINTS in which any of those companies has a beneficial interest) and the Plaintiff; and

(c)                the scheme of arrangement between all holders of options acquired under the "Executive Performance Share Plan" of the Plaintiff (each an Award Option) (excluding those Award Option holders who have entered into a Deed of Cancellation in respect of those Award Options) and the Plaintiff,

(together, the Schemes), each in the form set out in the explanatory statement entitled "Scheme Booklet" provided to the Court on 29 September 2008 and marked "Exhibit AA" (the Scheme Booklet), be approved.

3.                  Pursuant to section 411(12) of the Act, the Plaintiff be exempt from compliance with section 411(11) of the Act in relation to the Schemes.

4.                  These orders be entered forthwith.

5.                  Westpac have liberty to apply at 3 days’ notice.

IN THE MATTER OF ST GEORGE BANK LIMITED (ACN 055 513 070)

REASONS FOR JUDGMENT (No 2)

1                                             On 29 September 2008, the Court made orders for the convening of meetings to be held on 13 November 2008 of those concerned to consider, and if thought fit, to agree, with or without modification, to the Share Scheme, the SAINTS Scheme and the Options Scheme referred to in those orders (I am using the abbreviated forms of reference that were used in the earlier reasons for judgment:  see In the matter of St George Bank Limited [2008] FCA 1839). 

2                                             At the second court hearing on 17 November 2008 I made orders that the respective Schemes be approved.  There are the reasons why I did so.

3                                             At the second court hearing, Mr I Jackman SC appeared for St George and, with leave, Mr TF Bathurst QC and Mr A J Payne of counsel appeared for Westpac.

4                                             The evidence on the second court hearing established that each of the Share Scheme meeting, the SAINTS Scheme meeting and the Options Scheme meeting was convened in accordance with Orders made on 29 September 2008 and was advertised in accordance with Order 11 made on that date.  As well, the evidence establishes that the application to the Court for orders approving the Share Scheme, the SAINTS Scheme and the Options Scheme was advertised in conformity with Order 12 of the orders made on that date.

5                                             The evidence shows that the three meetings were held on 13 November 2008.  So was an extraordinary general meeting of St George at which it was resolved that St George’s constitution be amended to eliminate the “10 percent maximum shareholding” term which would have stood in the way of Westpac’s becoming the 100 percent owner of the shares in St George.

6                                             The Share Scheme, the SAINTS Scheme and the Options Scheme were all agreed to by majorities well in excess of those stipulated in s 411(4)(a)(ii) of the Corporations Act 2001 (Cth) (Act).  Similarly, the resolution for modification of St George’s constitution was passed as a special resolution:  see s 136(2) of the Act.

7                                             There was evidence before the Court that the conditions precedent to the operation of the Schemes had been satisfied.  Perhaps for more abundant precaution there was independent evidence on the hearing that:

·                    the Australian Competition and Consumer Commission had concluded that the acquisition of St George by Westpac was unlikely to substantially lessen competition under of s 50 of the Trade Practices Act 1974 (Cth) in the markets in which St George and Westpac competed;

·                    the Treasurer of the Commonwealth of Australia (Treasurer) approved under s 13 of the Financial Sector (Shareholdings) Act 1988 (Cth) of Westpac’s holding interest of up to 100 percent in St George;

·                    the Treasurer consented to the Share Scheme under s 63 of the Banking Act 1959 (Cth); and

·                    the Australian Prudential Regulatory Authority confirmed that approval was not required under the Insurance Acquisitions and Takeovers Act 1991 (Cth) if approval under s 13 of the Financial Sector (Shareholdings) Act 1988 (Cth)was granted by the Treasurer.

8                                             A letter dated 14 November 2008 from the Australian Securities and Investments Commission advised that it had no objection to the Share Scheme, the SAINTS Scheme or the Options Scheme:  see s 411(17)(b) of the Act.

9                                             I note that the Court was informed at the first court hearing on 29 September 2008 and again at the second court hearing on 17 November 2008 that St George and Westpac intended to rely on the Court’s approvals under s 411(4) of the Act for the purposes of the exemption referred to in s 3(a)(10) of the United States Securities Act 1933.

10                                          It was for the above reasons that I made the orders approving the Share Scheme, the SAINTS Scheme and the Options Scheme.

Associate:

Dated:         8 December 2008