Hibernian Friendly Society (NSW) Limited [2002] FCA 913

FEDERAL COURT OF AUSTRALIA

Hibernian Friendly Society (NSW) Limited [2002] FCA 913

CORPORATIONS – scheme of arrangement – proposal for demutualisation of established friendly society referrable to accumulated reserves not otherwise distributable to members – criteria for quantification of shareholdings referrable to existing policies for payment of medical etc benefits – policies to continue unaffected after demutualisation – factors to be taken into consideration in deciding to order convention of meeting of members of society to consider and approve the scheme of arrangement - state of Court's satisfaction required to order the meeting – observations upon implications of regulatory requirements as to "advantages and disadvantages" of scheme – form of orders made for convening of meeting of members as proposed by society Life Insurance Act 1995 (Cth) s 16C(1)(b) Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999 (Cth) Sch 8 item 11 Corporations Act 2001 (Cth) subss 411(1), (2), (11), (12) Central Pacific Minerals NL [2002] FCA 239 applied F T Easement & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977-1978) 3 ACLR 69 referred to Re Hastings Deering Pty Ltd (1985) 3 ACLC 474 cited HIBERNIAN FRIENDLY SOCIETY (NSW) LIMITED N 3034 OF 2002 CONTI J 22 JULY 2002 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 3034 OF 2002

IN THE MATTER OF HIBERNIAN FRIENDLY SOCIETY (NSW) LIMITED

ACN 987 648 691

HIBERNIAN FRIENDLY SOCIETY (NSW) LIMITED ACN 087 648 691

APPLICANT

JUDGE: CONTI J

DATE OF ORDER: 22 JULY 2002

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. Pursuant to section 411(1) of the Corporations Act 2001 (Cth) the plaintiff convene: (a) a meeting of members of the plaintiff ('Hibernian') (other than Income Beneficiary Pty Limited ('Income Beneficiary') and Demutualisation Nominee Pty Limited ('Demutualisation Nominee')); (b) a meeting of Demutualisation Nominee; and (c) a meeting of Income Beneficiary, for the purpose of considering and if thought fit, agreeing (with or without modification) to a scheme of arrangement to be made between Hibernian and its members ('Members'), a copy of which forms part of a document tendered in the proceedings as Exhibit A4 ('Hibernian Scheme'). 2. The meeting referred to in subparagraph 1(a) ('Meeting of Members') be convened at the Grand Lodge Room, Level 1, Sydney Masonic Centre, 279 Castlereagh Street, Sydney on 2 September 2002 at 10.00am. 3. The meeting referred to in subparagraph 1(b) ('Meeting of Demutualisation Nominee') be convened at the Grand Lodge Room, Level 1, Sydney Masonic Centre, 279 Castlereagh Street, Sydney on 2 September 2002 at 9.15am. 4. The meeting referred to in subparagraph 1(c) ('Meeting of Income Beneficiary') be convened at the Grand Lodge Room, Level 1, Sydney Masonic Centre, 279 Castlereagh Street, Sydney on 2 September 2002 at 9.20am or so soon thereafter as the previous meeting concludes or is adjourned. 5. Mr Allen Kavanagh or failing him Mr Michael Skennar be Chairperson of: (a) the Meeting of Members; (b) the Meeting of Demutualisation Nominee; and (c) the Meeting of Income Beneficiary, convened pursuant to Order 1. 6. In respect of the Meeting of Members convened pursuant to Order 1, 10 Members of Hibernian present at the meeting in person or by proxy or by representative shall constitute a quorum. 7. In respect of the Meeting of Demutualisation Nominee convened pursuant to Order 1, 1 Member present at the meeting in person or by proxy or by representative shall constitute a quorum. 8. In respect of the Meeting of Income Beneficiary convened pursuant to Order 1, 1 Member present at the meeting in person or by proxy or by representative shall constitute a quorum. 9. On or before 1 August 2002 there be: (a) personally served on; or (b) despatched by pre-paid ordinary post (or in the case of overseas members, by airmail) to, each Member of Hibernian whose names appear in the Hibernian register of Members (other than a Member who is Demutualisation Nominee or Income Beneficiary) as at 5.00pm on 25 June 2002 ('Register Time'), a document substantially in the form to the effect of the Explanatory Memorandum and Notice of Scheme Meeting, Disclosure Statement and Notice of General Meeting, a copy of which forms part of a document tendered in these proceedings as Exhibit A4 ('Explanatory Memorandum') together with a personalised letter, Confirmation of Details form and proxy form, an unpersonalised copy of which forms part of a document has been tendered in these proceedings as Exhibit A4. 10. Within 3 business days of such person being entered in the Hibernian register of Members, there be: (a) personally served on; or (b) despatched by pre-paid ordinary post (or in the case of overseas residents by airmail) to, each person whom the Disputes Committee (referred to in the Explanatory Memorandum), determines in its discretion was, or should have been, or should be treated as, a Member of Hibernian at the Cut-Off Date (referred to in the Explanatory Memorandum), as a document substantially in the form or to the effect of the Explanatory Memorandum together with a personalised letter and proxy form, an unpersonalised copy of which forms part of a document tendered in these proceedings as Exhibit A4. 11. On or before 1 August 2002 there be: (a) personally served on; or (b) despatched by pre-paid ordinary post to, Demutualisation Nominee, a document substantially in the form or to the effect of the Explanatory Memorandum together with a proxy form, a Notice of Meeting of Demutualisation Nominee, a copy of which forms part of a document tendered in these proceedings as Exhibit A4. 12. On or before 1 August 2002 there be: (a) personally served on; or (b) despatched by pre-paid ordinary post to, Income Beneficiary, a document substantially in the form or to the effect of the Explanatory Memorandum together with a Notice of Meeting of Income Beneficiary and proxy form, an unpersonalised copy of which forms part of a document tendered in these proceedings as Exhibit A4. 13. Proxy forms for the Meeting of Members must be lodged: (a) at the offices of ASX Perpetual Registrars at Level 8, 580 George Street, Sydney, New South Wales; (b) by post at Locked Bag A14, Sydney South, New South Wales 1232; or (c) by facsimile to (02) 8280 7646; so that they are received no later than 10am on 30 August 2002. 14. Proxy forms for the Meeting of Demutualisation Nominee must be lodged: (a) at the offices of ASX Perpetual Registrars at Level 8, 580 George Street, Sydney, New South Wales; (b) by post at Locked Bag A14, Sydney South, New South Wales 1232; or (c) by facsimile to (02) 8280 7646; so that they are received no later than 48 hours before the commencement of that Meeting. 15. Proxy forms for the Meeting of Income Beneficiary must be lodged: (a) at the offices of ASX Perpetual Registrars at Level 8, 580 George Street, Sydney, New South Wales; (b) by post at Locked Bag A14, Sydney South, New South Wales 1232; or (c) by facsimile to (02) 8280 7646; so that they are received no later than 48 hours before the commencement of that Meeting. 16. Except as otherwise provided in this Order, the Meeting of Members must be convened and conducted as if it were a general meeting of Hibernian, regulated by the constitution of Hibernian and the Corporations Act 2001 (Cth), except that: (a) every Member may vote; (b) subject to the Corporations Act 2001 (Cth), every Member has 1 vote on a show of hands and on a poll; and (c) every Member may by a written appointment signed by the Member or the Member's attorney appoint any person (whether or not a Member) as his or her proxy to attend and vote at the Meeting of Members; (d) clause 15.3 and 15.5 of the constitution of Hibernian (relating to Notice of General Meetings) will not be applicable; and (e) clause 16.10 of the constitution of Hibernian (relating to standing orders) will not be applicable. 17. Except as otherwise provided in this Order, the Meeting of Demutualisation Nominee must be convened and conducted as if it were a general meeting of Hibernian, regulated by the constitution of Hibernian and the Corporations Act 2001 (Cth), except that: (a) a quorum is constituted by 1 Member; (b) the Member may vote; (c) subject to the Corporations Act 2001 (Cth), the Member has 1 vote on a show of hands and on a poll; (d) clause 15.3 and 15.5 of the constitution of Hibernian (relating to Notice of General Meetings) will not be applicable; (e) the Member may by a written appointment signed by the Member or the Member's attorney appoint any person (whether or not a Member) as his or her proxy to attend and vote at the Meeting of Demutualisation Nominee; and (f) clause 16.10 of the constitution of Hibernian (relating to standing orders) will not be applicable. 18. Except as otherwise provided in this Order, the Meeting of Income Beneficiary must be convened and conducted as if it were a general meeting of Hibernian, regulated by the constitution of Hibernian and the Corporations Act 2001 (Cth), except that: (a) a quorum is constituted by 1 Member; (b) the Member may vote; (c) subject to the Corporations Act 2001 (Cth), the Member has 1 vote on a show of hands and on a poll; and (d) clause 15.3 and 15.5 of the constitution of Hibernian (relating to Notice of General Meetings) will not be applicable; (e) the Member may by a written appointment signed by the Member or the Member's attorney appoint any person (whether or not a Member) as his or her proxy to attend and vote at the Meeting of Income Beneficiary; and (f) clause 16.10 of the constitution of Hibernian (relating to standing orders) will not be applicable. 19. The Court approves the Explanatory Memorandum which forms part of a document which is Exhibit A4 tendered in these proceedings. 20. The plaintiff will advertise the notice of the Meeting of Members in the form of the attached document in a national Australian newspaper. 21. The application be stood over to 11 September 2002 before Conti J with the liberty to restore on 3 days notice. 22. These Orders be entered forthwith. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.