FEDERAL COURT OF AUSTRALIA

Alstom Signalling Solutions Pty Ltd, in the matter of Alstom Signalling Solutions Pty Ltd v Alstom Transport Australia Pty Limited (No 2) [2016] FCA 852

ORDERS

PURSUANT TO RULES 39.05(e) AND (g) OF THE FEDERAL COURT RULES 2011, THE COURT VARIES THE ORDERS ENTERED ON 25 JULY 2016 TO READ AS FOLLOWS:

THE COURT ORDERS:

1.    Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between Alstom Signalling Solutions Pty Limited (ASSPL) and Alstom Transport Australia Pty Ltd (ATAPL), in the form set out in the explanatory statement marked “Exhibit 2”, be approved.

2.    Pursuant to s 413(1) of the Act, the transfer to ATAPL from ASSPL of all of the assets, liabilities and employees of ASSPL, immediately after 00.00 am on 27 July 2016.

3.    Pursuant to s 413(1) of the Act, the continuation by or against ATAPL of any legal proceedings pending by or against ASSPL, on and from 27 July 2016.

4.    Pursuant to s 413(1) of the Act, the deregistration of ASSPL by the Australian Securities and Investments Commission, without winding up, on 27 July 2016.

5.    The parties have liberty to apply.

THE COURT NOTES THAT:

6.    Pursuant to s 1322(2) of the Act, the proceeding constituted by the Scheme Meeting held on Thursday 14 July 2016 is not invalidated by reason of the fact that it took place in person rather than by telephone conference as required by order 2 of the Orders of Justice Gleeson made on 12 July 2016.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

GLEESON J:

1    On 25 July 2016, I conducted the second court hearing concerning a single member scheme of arrangement proposed to be made between the plaintiff (“ASSPL”) and the defendant (“ATAPL”). The details of the scheme are described in Alstom Signalling Solutions Pty Ltd, in the matter of Alstom Signalling Solutions Pty Ltd v Alstom Transport Australia Pty Limited [2016] FCA 838. At the conclusion of the hearing, I made orders, including an order pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (“Act”) approving the scheme and orders pursuant to s 413(1) of the Act.

2    These are my reasons for making those orders.

3    In support of the orders sought, senior counsel for ASSPL, Mr Giles SC, relied upon the following evidence:

(1)    Affidavit of Paul Gerard McIvor affirmed on 21 July 2016, and an accompanying bundle of documents marked exhibit “PGM-3”;

(2)    Affidavit of Adrian Gerard Ahern sworn on 23 July 2016, and an accompanying bundle of documents marked exhibit “AGA-2”;

(3)    Affidavit of Rahil Pravin Patel affirmed on 25 July 2016.

4    No party appeared to oppose the orders sought. ASSPL received no notice of any intention to appear at the second court hearing from any creditor of ASSPL, or from any other party.

5    By letter dated 22 July 2016, ASIC informed ASSPL that, under s 411(17)(b) of the Act, ASIC has no objection to the proposed scheme of arrangement.

6    The Court’s approval, at the second hearing, requires it to be satisfied that procedural requirements have been met and that the scheme is fair and reasonable: Re Simeon Wines Limited [2002] SASC 204; (2002) 42 ACSR 454 at [11]; Solution 6 Holdings Limited ACN 003 264 006, in the matter of Solution 6 Holdings Ltd ACN 003 264 006 [2004] FCA 1049; (2004) 50 ACSR 113 at [21]. Relevant considerations, including whether the scheme offends public policy, are stated by Jacobson J in Seven Network Limited (ACN 052 816 789), in the matter of Seven Network Limited (No 3) [2010] FCA 400; (2010) 77 ACSR 701 at [31]-[40].

Compliance with 12 July 2016 orders

7    I am satisfied that:

(1)    The explanatory statement (with minor amendments to the form approved by the Court) was dispatched to ATAPL in accordance with orders 5 and 7;

(2)    The scheme meeting was held in accordance with orders 2 and 4;

(3)    The date of the second court hearing was advertised in The Australian newspaper in the form required by order 6.

Compliance with other statutory requirements

8    On 14 July 2016 (before the scheme meeting), the board of ATAPL held a meeting at which resolutions were passed approving the scheme, and ATAPL’s company secretary, Kirsten Stewart, was appointed to attend the scheme meeting as ATAPL’s proxy and vote in favour of the scheme.

9    During that board meeting, the ATAPL board also noted that the notice of meeting for the scheme meeting had been provided with less than 21 days’ notice, and formally agreed to the scheme meeting being called notwithstanding that short notice: see s 249H(2) of the Act.

10    Shortly after the ATAPL board meeting, an executed proxy form identifying Ms Stewart as ATAPL’s proxy was delivered to ASSPL.

Scheme meeting

11    The scheme meeting took place at ATAPL’s offices at Macquarie Park in NSW, and was chaired by Mr McIvor.

12    Although it had been contemplated that the hearing would be by telephone conference, all attendees were able to attend in person at ATAPL’s offices, including, relevantly, Mr McIvor and Ms Stewart (ATAPL’s proxy holder).

13    At the beginning of the meeting, after calling the meeting to order, Mr McIvor asked whether there were any questions in relation to the scheme or matters in the explanatory statement, and, as there were none, then proposed a resolution for approval of the scheme.

14    Ms Stewart, as ATAPL’s proxy, voted in favour of the scheme. Thus, 100% of the votes cast were in favour of the resolution.

Is the proposal fair and reasonable?

15    ATAPL, being the sole member of ASSPL, has approved the scheme. There is evidence that no third parties will be adversely affected by the operation of the scheme, including creditors of ASSPL. I was satisfied at the first hearing that employees of ASSPL would not be adversely affected by the proposed scheme.

16    As at 14 July 2016, there were nine creditors of ASSPL, eight of which were external entities, and the other being a related entity of ASSPL. Total external creditors as at 14 July 2016 were $49,533.64. At the hearing, I was informed that the intention is to pay these creditors within 30 days, in accordance with ordinary payments terms.

17    Letters were sent to all of ASSPL’s creditors to inform them of the proposed scheme and the second court hearing. No creditor sent any communication to ASSPL, ATAPL or ASSPL’s lawyers, Norton Rose Fulbright Australia, indicating an intention to appear at the second hearing to oppose (or otherwise be heard in relation to) the scheme. Likewise, no response was received to the advertisement which published details of the second hearing.

18    In those circumstances, I was satisfied that the proposed scheme is fair and reasonable and there was no reason for the Court to exercise its discretion against approval of the scheme.

Other matters

19    There are no conditions precedent to the scheme of arrangement.

20    I have no reason to doubt that ASSPL has brought to the Court’s attention all matters that could be considered relevant to the exercise of the Court’s discretion. There is no reason to doubt that ATAPL has been provided with all material relevant to its decision to approve or reject the scheme. Nothing was brought to my attention which suggested that the scheme offends public policy in any way.

21    I was satisfied at the first court hearing that the scheme involves a “reconstruction” within the meaning of s 413 of the Act: cf. In the matter of Stork ICM; Stork ICM Australia Pty Ltd v Stork Food Systems Australasia Pty Ltd [2006] FCA 1849; (2006) 25 ACLC 208. Section 413(1) provides, relevantly:

(1)    Where an application is made to the Court under this Part for the approval of a compromise or arrangement and it is shown to the Court that the compromise or arrangement has been proposed for the purposes of, or in connection with, a scheme for the reconstruction of a Part 5.1 body or Part 5.1 bodies or the amalgamation of 2 or more Part 5.1 bodies and that, under the scheme, the whole or any part of the undertaking or of the property of a body concerned in the scheme (in this section called the transferor body) is to be transferred to a company (in this section called the transferee company), the Court may, either by the order approving the compromise or arrangement or by a later order, provide for all or any of the following matters:

(a)    the transfer to the transferee company of the whole or a part of the undertaking and of the property or liabilities of the transferor body;

…

(c)    the continuation by or against the transferee company of any legal proceedings pending by or against the transferor body;

(d)    if the transferor body is a company—the deregistration by ASIC, without winding up, of the transferor body;

…

(g)    such incidental, consequential and supplemental matters as are necessary to ensure that the reconstruction or amalgamation is fully and effectively carried out.

22    I was satisfied that the whole of the undertaking and the property of ASSPL was to be transferred to ATAPL. Consequently, I was satisfied that it was appropriate to make the orders sought pursuant to s 413(1). As to order 3, I was informed by Mr Giles SC that ASSPL is unaware of any legal proceeding pending against it, and the order was sought against the remote possibility of the existence of some legal proceeding of which ASSPL was unaware.

Associate:    

Dated:    3 August 2016