in the matter of ross human directions limited (aCn 003 758 709)

REASONS FOR JUDGMENT

1                     On 1 October 2010 I ordered, pursuant to s 411(1) of the Corporations Act 2001 (Cth) (“the Act”), that Ross Human Directions Limited (“RHD”) convene a meeting of shareholders for the purpose of considering a scheme of arrangement.  I also ordered that the meeting be held on 11 November 2010 (see Ross Human Directions Limited, in the matter of Ross Human Directions Limited [2010] FCA 1089).

2                     The meeting was convened on that date but shortly before the meeting a proposal was received from the Chandler Macleod Group Limited (“CMG”) which resulted in the scheme meeting being adjourned.  At the meeting a motion was unanimously passed to adjourn the scheme meeting to 25 November 2010.

3                     Since that time there were further developments which culminated in a proposal from CMG for an off-market takeover at a price which is considered by the Directors to be a superior proposal to that which was contemplated by the scheme of arrangement.  The scheme meeting was re-opened on 25 November 2010 and adjourned to 16 December 2010 so that RHD and CMG could conclude negotiations.

4                     On 6 December 2010 an announcement was made to the ASX in which it was stated that the RHD Board unanimously recommended that RHD shareholders accept the offer from CMG in the absence of a superior proposal.  The announcement also states that as a consequence the RHD Board has withdrawn its previous recommendation of the scheme proposal from Peoplebank Holdings Pty Limited.

5                     As a consequence a break fee of $500,000 is payable.  A Deed of Termination and Release was entered into between RHD and Peoplebank Holdings on 6 December 2010.  In those circumstances there is plainly no utility in proceeding with the scheme meeting. 

6                     Mr T.F. Bathurst QC, who appears for RHD, asks me to make orders providing for the dissolution of the adjourned scheme meeting and for an appropriate announcement to be made to the ASX. 

7                     He referred me this morning to a number of authorities which dealt with the form of the orders which I should make.  I do not propose to refer in any detail to those authorities but I will mention them briefly.

8                     The authorities up to May 2008 were collected and referred to by Lindgren J in Re Anzon Energy Limited (No 2) (2008) 66 ACSR 355 (“Re Anzon”).  Those authorities include a decision of Emmett J in Re Australian Gas Light Company (2006) 57 ACSR 67.  In that case, a scheme meeting had been ordered by the court, however before the meeting was held the Board of Directors withdrew its support for the scheme.  The company sought orders that the meeting not be held.  Emmett J held that s 1319 of the Act empowered the court to make the orders and noted that considerable confusion would be created if the meeting were to proceed; that some further costs would be saved if it did not; and that there would be no utility in holding the meeting.  His Honour accordingly ordered that the meeting convened by the company not be held. 

9                     Other forms of order have been made in some of the other authorities.  The most recent authority is that of Siopis J in Re White Energy Co Limited [2009] FCA 1424. 

10                  What seems to me to be important in the present case is that the meeting has been opened and adjourned.  In Re Anzon a scheme meeting had been ordered by the court pursuant to s 411(1) of the Act and the scheme meeting was convened but adjourned by the chairperson to a date to be fixed.  The scheme of arrangement was subsequently abandoned and the court was asked to dissolve the scheme meeting.  Lindgren J held at [14] – [15]:

[14] ...I think that the reference in s 1319 to “directions with respect to the convening, holding or conduct of the meeting” is wide enough to include a direction that the meeting commenced…be dissolved and not be resumed.

[15] Since any further holding of the scheme meeting in the present case would lack utility, I made the order sought.

11                  As there is no utility in the present scheme meeting being re-convened, it seems to me to be appropriate to follow the course taken by Lindgren J in Re Anzon.  I will therefore order that the adjourned scheme meeting be dissolved and not be resumed.  I will also order that RHD publicly announce on the ASX the cancellation of the scheme meeting. 

12                  For these reasons I will make orders in accordance with the draft order handed to me by Mr Bathurst which I will sign and date.

Associate:

Dated:         14 December 2010