FEDERAL COURT OF AUSTRALIA

Scarborough Equities Limited, in the matter of Scarborough Equities Limited [2009] FCA 24

IN THE MATTER OF SCARBOROUGH EQUITIES LIMITED (ABN 58 061 287 045)

SCARBOROUGH EQUITIES LIMITED (ABN 58 061 287 045)

WAD 302 of 2008

SIOPIS J

16 JANUARY 2009

PERTH

IN THE MATTER OF SCARBOROUGH EQUITIES LIMITED (ABN 58 061 287 045)

THE COURT ORDERS THAT:

1.                  The Plaintiff convene a meeting of all persons who are registered at 7.00 pm (Sydney time) on Wednesday, 18 February 2009 in the Plaintiff’s register of shareholders as the holders of fully paid ordinary shares in the capital of the Plaintiff (the Scarborough Shareholders) to be held commencing at or about 10.00 am (Sydney time) on Friday, 20 February 2009 at The Westin Sydney, No 1 Martin Place, Sydney, New South Wales (the Scheme Meeting), for the purposes of considering and, if thought fit, agreeing (with or without modification) to the scheme of arrangement set out in Annexure D of the document referred to in paragraph 2(a) of these orders (the Scheme).

2.                  The Scheme Meeting be convened by the Plaintiff causing to be sent on or before Thursday, 22 January 2009 to each of the Scarborough Shareholders:

(a)                a document substantially in the same form, and with the changes accepted, as the scheme booklet in annexure “VPH14” to the third affidavit of Victor Poh Hong Ho affirmed 15 January 2009 and filed in this proceeding; and

(b)               a proxy form substantially in the same form, and with the changes accepted, as the document in annexure “VPH15” to the third affidavit of Victor Poh Hong Ho affirmed 15 January 2009 and filed in this proceeding.

3.                  On or before 22 January 2009, the Plaintiff file a copy of the Scheme Booklet referred to in paragraph 2(a) above.

4.                  The documents set out in paragraph 2 above be sent:

(a)                by ordinary prepaid post or parcel post to Scarborough Shareholders with addresses in the Plaintiff’s register of Scarborough Shareholders within Australia; and

(b)               by airmail to Scarborough Shareholders with addresses in the Plaintiff’s register of Scarborough Shareholders outside of Australia.

5.                  Pursuant to section 411(1) of the Corporations Act 2001 (Cth) (Corporations Act), the Scheme Booklet, containing the explanatory statement required by section 412(1)(a) of the Corporations Act, be approved.

6.                  Mr William Johnson or failing him, Mr Alan Winduss, be authorised to act as chairperson for the Scheme Meeting.

7.                  The Scheme Meeting be convened and conducted in accordance with:

(a)                the provisions of Part 2G.2 of the Corporations Act that apply to members of a company; and

(b)               the provisions of the Plaintiff’s constitution that apply in relation to meetings of members and are not inconsistent with Part 2G.2 of the Corporations Act.

8.                  A quorum for the purpose of the Scheme Meeting be two (2) members entitled to be present and vote at the Scheme Meeting.

9.                  The Scheme Meeting be advertised once in each of The Australian and The Sydney Morning Herald newspapers, in the form or to the effect of Attachment A to these orders, on or before 22 January 2009.

10.              Any Court hearing concerning approval of the Scheme Meeting be advertised once in each of The Australian and The Sydney Morning Herald newspapers, in the form or to the effect of Attachment B to these orders, on or before 21 February 2009.

11.              The application be otherwise adjourned to 10.15 am (Perth time) on 27 February 2009 for the hearing of any application to approve the Scheme, if approved at the Scheme Meeting.

12.              The Plaintiff have liberty to apply.

Attachment A

SCARBOROUGH EQUITIES LIMITED

(ABN 58 061 287 045)

NOTICE OF MEETING OF ORDINARY SHAREHOLDERS SUMMONED

PURSUANT TO AN ORDER OF THE FEDERAL COURT OF AUSTRALIA

UNDER SECTION 411 OF THE CORPORATIONS ACT 2001 (Cth)

TO all shareholders of Scarborough Equities Limited (ABN 58 061 287 045) (Scarborough).

TAKE NOTICE that pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Corporations Act) the Federal Court of Australia has ordered that a meeting of shareholders of Scarborough (Scheme Meeting) be held at The Westin Sydney, No 1 Martin Place, Sydney, New South Wales on Friday, 20 February 2009 at 10.00 am (Sydney time).  The shareholders summoned (being entitled to receive notice of the Scheme Meeting) are the ordinary shareholders registered as at 7.00 pm (Sydney time) on 18 February 2009 in the Scarborough register of members as the holder of fully paid ordinary shares in the capital of Scarborough (Scarborough Shareholders).

The purpose of the Scheme Meeting is to consider and, if thought fit, approve (with or without modification) a scheme of arrangement proposed between Scarborough and Scarborough Shareholders pursuant to section 411 of the Corporations Act (Scheme).

If you wish to vote at the Scheme Meeting, you must either:

1.1       attend the Scheme Meeting; or

1.2       to vote at the Scheme Meeting, send a completed proxy form for the Scheme Meeting to Scarborough by mail or facsimile so that it is received prior to 10.00 am (Sydney time) on Wednesday, 18 February 2009.

The proxy form for the Scheme Meeting, accompanied by the Scheme Booklet (which includes the scheme documents and the explanatory statement under section 412 of the Corporations Act), were sent to the Scarborough Shareholders on or before Thursday, 22 January 2009.  If you are a shareholder of Scarborough and you did not receive the Scheme Booklet or proxy form, you may request Scarborough to send it to you.  Scarborough Shareholders may also obtain copies of the Scheme Booklet or proxy form by collecting copies of the Scheme Booklet or proxy form personally at:

Suite 202

Angela House

30‑36 Bay Street

DOUBLE BAY  NSW  2028

or

Level 14

The Forrest Centre

221 St Georges Terrace

PERTH  WA  6000

between the hours of 9.00 am and 5.00 pm on each week day excluding public holidays and including the date of the Scheme Meeting in Sydney.

Mr Victor Poh Hong Ho, Scarborough Company Secretary

Attachment B

NOTICE OF HEARING TO APPROVE COMPROMISE OR ARRANGEMENT

TO all shareholders of Scarborough Equities Limited (ABN 58 061 287 045) (Scarborough).

TAKE NOTICE that at 10.15 am on 27 February 2009, the Federal Court of Australia at the Commonwealth Law Courts Building, 1 Victoria Street, Perth in Western Australia will hear an application by Scarborough seeking the approval of a compromise or arrangement between Scarborough and its members as proposed by resolution passed by the meeting of the members of Scarborough held on Friday, 20 February 2009.

If you wish to oppose the approval of the compromise or arrangement, you must file and serve on Scarborough (being the Plaintiff) a notice of appearance, in the prescribed form, together with any affidavit on which you may wish to rely at the hearing.  The notice of appearance and affidavit must be served on Scarborough at its address for service at least one day before the date fixed for the hearing of the application.

The address for service of Scarborough is c/- Mallesons Stephen Jaques, Level 10 Central Park, 152‑158 St Georges Terrace, Perth, Western Australia.

Mallesons Stephen Jaques, Solicitors for the Plaintiff.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

IN THE MATTER OF SCARBOROUGH EQUITIES LIMITED (ABN 58 061 287 045)

REASONS FOR JUDGMENT

1                     This is an application for the convening of meetings for members to consider and, if thought fit, approve a proposed scheme of arrangement between the plaintiff and its members pursuant to s 411(1) of the Corporations Act 2001 (Cth).

2                     The scheme of arrangement proposes that there will be a merger between a company, Bentley International Limited (Bentley), and the plaintiff.  The scheme of arrangement contemplates that the shareholders of the plaintiff will transfer their shares to Bentley, that the plaintiff will become a wholly owned subsidiary of Bentley, and the plaintiff’s shareholders will be issued shares in Bentley.  The scheme consideration will be assessed by reference to a formula, which is described in the scheme booklet.

3                     There is evidence before me that the Australian Securities and Investments Commission (ASIC) has had an opportunity to peruse the scheme booklet.  Mr Lundberg, counsel for the plaintiff, has taken me today to a number of amendments which have been made to the scheme booklet, consequent upon the consultation with ASIC.  ASIC have issued their customary letter, dated 16 January 2009, wherin it advises that it does not propose to appear to make submissions, or intervene to oppose the making of orders at the first hearing.

4                     I also note that the scheme booklet includes an expert opinion by accountants, BDO Kendalls, which says that the scheme is fair and reasonable.

5                     I have also been referred to the materials in helpful submissions by Mr Lundberg.  I am of the view that the requirements, which need to be satisfied at the first hearing, which had been identified by Barrett J in Re Hills Motorway Ltd (2002) 43 ACSR 101 at 103, at [5], have been satisfied.

6                     Mr Lundberg also drew my attention to four specific matters affecting the scheme of arrangement.  These were:  the assurance of performance by Bentley of its obligations under the merger implementation agreement, the treatment of ineligible overseas shareholders, the presence in the scheme of arrangement of a provision which is sometimes referred to as a “no encumbrances” provision, and the deemed warranty provision.  Those matters will be considered and dealt with at the second hearing.  From the submissions made, I do not anticipate that there is anything relating to these matters which may cause the scheme of arrangement, assuming it is approved at the meeting of members, not to be approved by the Court at the second hearing.

7                     I will, therefore, make orders in terms of the plaintiff’s amended minute of orders, which was handed to me today.

Associate:

Dated:         23 January 2009