Federal Court of Australia

GetSwift Limited, in the matter of GetSwift Limited [2020] FCA 1382

ORDERS

THE COURT ORDERS THAT:

1.    The originating process filed on 21 September 2020 be listed for hearing at 2.15 pm on 8 October 2020 (AEDT) (First Court Hearing).

2.    Pursuant to ss 411 and 1319 of the Corporations Act 2001 (Cth) (Act), if at the First Court Hearing the Court makes orders in accordance with the relief sought in prayers 1 – 3 of the Originating Process, then the following orders will apply to the conduct of the meeting (Scheme Meeting) of the plaintiff’s members (GetSwift Shareholders) convened by the Court under s 411 of the Act, in connection with the proposed scheme of arrangement between the plaintiff and the GetSwift Shareholders (Scheme):

(a)    the Scheme Meeting be conducted as a virtual meeting by live webcast using audio and audio-visual technology without any requirement for a physical gathering of two or more persons;

(b)    the Chair, members of the board of directors of the plaintiff, and such other officers and employees of the plaintiff as it thinks fit, be given access to the Scheme Meeting online via a website or other technology in such manner as the plaintiff thinks fit;

(c)    GetSwift Shareholders and proxies, attorneys and corporate representatives validly appointed by GetSwift Shareholders be given access to the Scheme Meeting online via a website or an application on their mobile device (Mobile App) using registration procedures, login procedures and passwords provided to them and explained in the Notice of Meeting;

(d)    the plaintiff provide website and mobile access to the Scheme Meeting for such other persons (Guests) as it thinks fit;

(e)    GetSwift Shareholders and proxies, attorneys and corporate representatives validly appointed by GetSwift Shareholders be permitted to participate in discussion and voting at the Scheme Meeting through the use of audio and audio-visual technology as follows:

(i)    GetSwift Shareholders and proxies, attorneys and corporate representatives validly appointed by GetSwift Shareholders are to be permitted during the course of the Scheme Meeting to submit questions or motions in writing to the moderator of the Scheme Meeting for consideration by the Chair during the Scheme Meeting, subject to the functions and powers of the Chair under the plaintiff’s Constitution and the general law;

(ii)    any procedural motions, if accepted by the Chair, are to be conducted by way of a poll and may be dealt with by vote of GetSwift Shareholders, proxies, attorneys and corporate representatives using the voting procedures available through the website and Mobile App ;

(iii)    voting on the resolution to approve the Scheme is to be conducted by way of a poll;

(iv)    all voting on a poll at the Scheme Meeting will occur by vote using the voting procedures on the website and Mobile App; and by the use of technology made available to the plaintiff to count the number of votes cast by GetSwift Shareholders and proxies, attorneys and corporate representatives on behalf of GetSwift Shareholders and the number of shares to which each vote relates, so that information will be available for the Chair to determine whether the voting requirements of s 411(4)(a)(ii) of the Act have been satisfied;

(v)    notwithstanding clause 5.12(l) of the plaintiff’s Constitution and s 249Y(3) of the Act, the appointment of a proxy or attorney shall not be revoked or suspended by the appointing GetSwift Shareholder (Appointor) attending and taking part in the Scheme Meeting, but if the Appointor votes on a resolution at the Scheme Meeting, the proxy or attorney is not entitled to vote as the Appointor’s proxy or attorney on that resolution and any such vote must not be counted in the results of the relevant poll;

(vi)    the plaintiff must use technology to exclude the counting of any vote by a proxy or attorney on a resolution where the relevant Appointor has also cast a vote on that resolution at the Scheme Meeting; and

(vii)    the plaintiff must have available at all times during the Scheme Meeting a helpline to assist GetSwift Shareholders, proxies, attorneys and corporate representatives who experience technical difficulties with voting or participation in the Scheme Meeting;

(f)    Subject to the Court's orders set out above, the provisions of Pt 2G.2 of the Act (save for any replaceable rule) that apply in relation to meetings of the plaintiff’s members, and the provisions of the plaintiff’s Constitution that apply in relation to meetings of the plaintiff’s members which are not inconsistent with Pt 2G.2, will apply to the conduct of the Scheme Meeting.

3.    The plaintiff has liberty to apply to the Court in relation to any variation of these orders.

4.    These orders be entered forthwith.

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

REASONS FOR JUDGMENT

YATES J:

1    The plaintiff, GetSwift Limited, has filed an interlocutory application seeking, amongst other orders, orders providing for a proposed scheme meeting to be conducted as a virtual meeting by live webcast using audio and audio-visual technology without the requirement for a physical gathering of two or more persons.

2    These orders have been sought in advance of the Court deciding whether a scheme meeting should, in fact, be convened pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act). Such orders have been made by the Court in at least one other case: see Avita Medical Limited, in the matter of Avita Medical Limited [2020] FCA 592. In other cases, such orders have been made at the First Court Hearing, as would usually be the case when giving directions with respect to the convening, holding and conduct of scheme meetings pursuant to s 411(1) and s 1319 of the Act.

3    The proposed scheme of arrangement is part of a transaction to effect a redomiciliation, where the shares in the plaintiff will be acquired by a newly-formed company incorporated in the Province of British Columbia, Canada and the plaintiff’s current members (other than certain ineligible foreign shareholders) will receive, in exchange, shares in the new company.

4    The plaintiff’s registered office is in Sydney and, in the normal course, the scheme meeting, if ordered to be convened, would be held in Sydney at either the office of its accountants or at another suitable venue, with the participants in the meeting present in person or by proxy. However, in response to the COVID-19 pandemic, Australian State and Territory governments have implemented a range of public health orders and other measures which have restricted movement within Australia and the number of people that can gather in one place, in such a way as to render the holding of a physical scheme meeting in Sydney infeasible.

5    For example, cl 14A of the Public Health (COVID-19 Restrictions on Gathering and Movement) Order (No 4) 2020, declared pursuant to the Public Health Act 2010 (NSW), prohibits the holding of corporate events in New South Wales with attendees exceeding the lower of either 150 attendees or the number of attendees that is equivalent to one person per 4 m² of space in the premises at which the event is to be held. Clause 5 of the Public Health (COVID-19 Border Control) Order 2020, also declared pursuant to the Public Health Act 2010 (NSW), directs, in effect, that the New South Wales – Victoria border is closed to persons who have spent time in Victoria within the previous 14 days, unless one of the exceptions set out in the Order applies and the person holds a relevant permit to enter New South Wales. Persons falling within the exceptions and holding a current entry permit are obliged to comply with certain conditions. None of the exceptions set out in the Order permit entry into New South Wales for the purpose of attending a scheme meeting. The plaintiff’s solicitor, Mr Crean, has made an affidavit in which he has deposed to other similar State and Territory restrictions. There has since been an easing of restrictions in one of the States, but the overall picture presented in Mr Crean’s affidavit remains substantially the same.

6    The Australian Securities and Investments Commission (ASIC) acknowledges that virtual technology is a valuable tool for addressing the challenges of the COVID-19 pandemic. It strongly encourages companies and responsible entities to hold either virtual meetings (where all members participate via online facilities) or, where circumstances permit, “hybrid” meetings (where a small physical meeting is linked with online facilities that allow remote participation). ASIC has been informed of the present application but does not wish to comment on the form of the orders and has not appeared.

7    The Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (the Determination) has made temporary modifications to the Act which are designed to further facilitate the holding of meetings via virtual technology. Amongst other things, the Determination deems persons participating via virtual technology to be present at the meeting; confirms virtual technology may be used to provide persons a reasonable opportunity to speak at the meeting; and allows notices of meeting, and other information regarding a meeting, to be provided by including it in an electronic communication, or providing details of an online location where it can be viewed and downloaded.

8    Given these circumstances and developments, I am satisfied that it is appropriate to make orders of the kind that are now sought. There is no doubt that the Court has the power under s 411(1) and s 1319 of the Act to do so: Amcon Telecommunications Limited, in the matter of Amcon Telecommunications Limited (No 3) [2015] FCA 596 at [57] – [63]. I am also satisfied that it is appropriate to make the orders that the plaintiff seeks. There are, however, two comments I wish to make about those orders.

9    The first comment is that the orders are expressed as general prescriptions as to how the proposed meeting is to be conducted as a virtual meeting. The orders do not descend to prescribe how the outcomes stipulated in the orders are to be achieved. The draft notice of meeting indicates that the plaintiff intends to use the services of Computershare Limited and Lumi Holdings Limited to provide an online platform and an app to enable participation in the meeting by smartphone, tablet or computer. If the scheme meeting is ordered to be convened and held, and if the proposed scheme is approved by the plaintiff’s members by the requisite majorities, it may be necessary for the plaintiff to adduce evidence at the hearing at which Court approval is sought to establish that the technology employed to conduct the scheme meeting achieved the generally expressed prescriptions that are now sought.

10    The second comment is that the effect of proposed Order 2(e)(v) is that, notwithstanding cl 5.12(l) of the plaintiff’s Constitution and s 249Y(3) of the Act, the appointment of a proxy or attorney by a member will not be revoked or suspended by the appointing member attending and taking part in the proposed scheme meeting. However, if the appointing member votes on a resolution at the meeting, the proxy or attorney is not entitled to vote and any such vote, if cast, will not be counted.

11    Section 249Y(3) of the Act stipulates that a company’s Constitution may provide for the effect that a member’s presence at a meeting has on the authority of a proxy appointed to attend and vote for the member. If the Constitution does not deal with this, a proxy’s authority to speak and vote for a member at a meeting is suspended while the member is present at the meeting.

12    Clause 5.12 (l) of the plaintiff’s Constitution provides:

The authority of any proxy or attorney for an Eligible Member to speak or vote at a meeting of Members in respect of the Shares to which the authority relates is suspended while the Eligible Member is present in person at that meeting.

13    It can be seen that clause 5.12(l) reflects the default position referred to in s 249Y(3) of the Act. Thus, a member who has appointed a proxy or attorney for the purposes of the scheme meeting cannot attend and observe the conduct of the meeting without interfering with the proxy’s or attorney’s ability to cast a vote on the member’s behalf.

14    The plaintiff is concerned that, unless this position is modified, a member who attends and observes the conduct of the proposed scheme meeting online might inadvertently suspend his or her proxy’s or attorney’s voting authority. The effect of the proposed Order 2(e)(v) is to allow the member to attend and observe the proposed scheme meeting online without suspending the proxy’s or attorney’s voting authority, except where the member casts a vote on the scheme resolution.

15    The plaintiff submits that proposed Order 2(e)(v) is more favourable to members than would be the case under its Constitution because it reduces the risk that the member might unknowingly preclude his or her own proxy or attorney from voting simply because the member is observing the conduct of the scheme meeting online. I am satisfied that proposed Order 2(e)(v) is appropriate and should be made. I note that an order involving a similar concept was made in Sienna Cancer Diagnostics Limited, in the matter of Sienna Cancer Diagnostics Limited [2020] FCA 899.

16    Finally, I wish to record that, at the plaintiff’s request, I have heard the present application as the presiding Commercial and Corporations Duty Judge in New South Wales. I am not the Docket Judge for this proceeding. Nothing I have said should be taken as interfering with the exercise of the Docket Judge’s discretion under s 411(1) and s 1319 of the Act as to whether the proposed scheme meeting should be convened. Further, nothing I have said should be taken as interfering with the Docket Judge’s consideration of the appropriateness of the notice of meeting and explanatory statement, or of any other document or communication intended to be provided to members for the purposes of convening the proposed meeting or explaining the proposed scheme of arrangement.

Associate:

Dated:    24 September 2020