FEDERAL COURT OF AUSTRALIA DCA Group Limited ABN 67 002 808 746 No 2, In the matter of DCA Group Limited ABN 67 002 808 746 [2006] FCA 1765 DCA GROUP LIMITED ABN 67 002 808 746, IN THE MATTER OF DCA GROUP LIMITED ABN 67 002 808 746 NSD2062 OF 2006 EMMETT J 11 DECEMBER 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD2062 OF 2006 in the matter of dca group limited abn 67 002 808 746 DCA GROUP LIMITED ABN 67 002 808 746 Plaintiff JUDGE: EMMETT J DATE OF ORDER: 11 december 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pursuant to paragraph 411(4)(b) and section 411(6) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the Plaintiff and its members (a copy of which is annexed to these orders and marked "A") ('Scheme'), is approved. 2. Pursuant to subsection 411(12) of the Act, the Plaintiff be exempted from compliance with subsection 411(11) of the Act in relation to the Scheme. 3. These orders be entered forthwith. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. "A" Scheme of Arrangement Pursuant to section 411 of the Corporations Act 2001 (Cth). BETWEEN DCA Group Limited ABN 67 002 808 746 of Level 24, 201 Kent Street, Sydney NSW, 2000 (Target) AND The holders of fully paid ordinary shares in Target as at the Scheme Record Date Definitions and interpretation Definitions The meanings of the terms used in this scheme of arrangement are set out below. Term Meaning ASIC the Australian Securities and Investments Commission. ASX the Australian Stock Exchange Limited (ABN 98 008 624 691). Bidder CAID Pty Limited (ACN 113 960 848) Bonds the $110,000,000 7 percent Subordinated Bonds due 2011 issued by the Target and attached options. Business Day a weekday on which trading banks are open for business in Sydney, Australia. CHESS the clearing house electronic sub-register system of share transfers operated by ASX Settlement and Transfer Corporation Pty Ltd (ABN 49 008 504 532). Corporations Act the Corporations Act 2001 (Cth). Court the Supreme Court of New South Wales or such other court of competent jurisdiction under the Corporations Act agreed to in writing by Target and Bidder. Deed Poll the deed poll dated [insert] 2006 executed by Bidder in favour of the Scheme Shareholders. Effective when used in relation to the Scheme, the coming into effect, under section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) in relation to the Scheme. Effective Date the date on which the Scheme becomes Effective. End Date 6.00pm (Sydney time) on 28 February 2007. Excluded Share means a Target Share held: 1 by Bidder; 2 by any person on behalf of, or for the benefit of, Bidder and its subsidiaries; 3 by Rimsey as at the Scheme Record Date; or 4 by any person on behalf of, or for the benefit of, Rimsey as at the Scheme Record Date. Executive / Employee Plans the executive or employee plans described in clause 6.2 of the Scheme Implementation Agreement. Implementation Date thesecond Business Dayafter the Scheme Record Date. Listing Rules the official Listing Rules of the ASX. Marketable Parcel a marketable parcel as defined by the Market Rules of the ASX. Nominee a nominee chosen by Bidder. Registered Address in relation to a Target Shareholder, the address shown in the Share Register. Rimsey Rimsey Pty Limited (ABN 43 000 101 084). Scheme this scheme of arrangement under Part 5.1 of the Corporations Act between Target and the Scheme Shareholders. Scheme Consideration the consideration to be provided Bidder to each Scheme Shareholder for the transfer to Bidder of each Scheme Share, as set out in clause 4.2 of the Scheme Implementation Agreement. Scheme Implementation Agreement the Scheme Implementation Agreement dated 25 September2006between Target and Bidder (as amended pursuant to a variation agreement signed on or around 26 October 2006). Scheme Meeting the meeting of Target Shareholders ordered by the Court to be convened under section 411(1) of the Corporations Act. Scheme Record Date 5.00pm on the fifth Business Day after the Effective Date. Scheme Shareholder each Target Shareholder as at the Scheme Record Date (taking into account registration of all registrable transfers and transmission applications as required by clause 6). Scheme Shares a Target Share (other than an Excluded Share) held by a Scheme Shareholder as at the Scheme Record Date which includes any shares issued by Target after execution of the Scheme Implementation Agreement as a result of the exercise of any option or share right including any option or share right attached to any of the Bonds or the Executive / Employee Plans. Share Register the register of members of Target. Target Board the board of directors of Target. Target Share a fully paid ordinary share of Target. Target Shareholder a person who is registered as the holder of a Target Share. Interpretation In this Scheme, headings and bold type are for convenience only and do not affect interpretation and, unless the context requires otherwise: words importing the singular include the plural and vice versa; words importing a gender include any gender; other parts of speech and grammatical forms of a word or phrase defined in this Scheme have a corresponding meaning; a reference to a person includes an individual, the estate of an individual, a corporation, an authority, an association or a joint venture, a partnership, a trust and any government agency; a reference to a clause, party, attachment or schedule is a reference to a clause of, and a party, attachment and schedule to this Scheme, and a reference to this Scheme includes any attachment and schedule; a reference to a statute, regulation, proclamation, ordinance or by law includes all statutes, regulations, proclamations ordinances or by laws amending, consolidating or replacing it, whether passed by the same or another government agency with legal power to do so, and a reference to a statute includes all regulations, proclamations, ordinances and by laws issued under that statute; a reference to any document (including this Scheme) is to that document as varied, novated, ratified or replaced from time to time; the word "includes" in any form is not a word of limitation; a reference to "$" or "dollar" is to Australian currency; a reference to any time, unless otherwise indicated, is a reference to that time in Sydney, Australia; and a term defined in or for the purposes of the Corporations Act has the same meaning when used in this Scheme. Preliminary Targetis a public company registered in New South Wales and is a company limited by shares. Target is admitted to the official list of the ASX and Target Shares are officially quoted on the financial market conducted by the ASX. At 24 September 2006, 473,582,594Target Shares were on issue. Other securities, options or other instruments that may convert into Target Shares are set out in Schedule 3 of the Scheme Implementation Agreement. Bidder is a company incorporated under the laws of Victoria and is a company limited by shares. If the Scheme becomes Effective: Bidder will provide or procure the provision of the Scheme Consideration to Scheme Shareholders in accordance with the Scheme; and all the Scheme Shares held by Scheme Shareholders will be transferred to Bidder, and Target will enter the name of Bidder in the Share Register in respect of the Scheme Shares held by Scheme Shareholders. Bidder and Target have agreed by executing the Scheme Implementation Agreement to implement this Scheme. Bidder has agreed by executing the Deed Poll to pay the Scheme Consideration to Scheme Shareholders in accordance with the terms of the Deed Poll. Conditions The Scheme is conditional on all the conditions in clause 3.1of the Scheme Implementation Agreement having been satisfied or waived in accordance with the terms of the Scheme Implementation Agreement by 8.00am on the Second Court Date. The satisfaction of clause 3(a) is a condition precedent to the operation of clauses 4.2 and 5. The Scheme will lapse and be of no further force or effect if the Effective Date does not occur on or before the End Date or any later time and date Target and Bidder agree in writing. Bidder and Target will provide to the Court at the Second Court Date a certificate as at 8.00am on the Second Court Date confirming (in respect of matters within their knowledge) whether or not the conditions precedent in the Scheme Implementation Agreement (other than the condition in clause 3.1(b) of the Scheme Implementation Agreement) have been satisfied or waived. (e) The giving of a certificate by either Target or Bidder under Clause 3(d) will in the absence of manifest error, be conclusive evidence of the satisfaction or waiver of the conditions precedent referred to in the certificate. Implementation Lodgement of Court orders Target will lodge with ASIC office copies of the Court orders under section 411 of the Corporations Act approving the Scheme by 5.00pm on the next Business Day after the day on which the Court approves the Scheme or 5.00pm on the Business Day on which the Court Order is issued, whichever is later. Transfer of Scheme Shares On the Implementation Date: subject to the payment of the Scheme Consideration in the manner contemplated by clause 0 and Bidder having provided Target of written confirmation thereof, the Scheme Shares, together with all rights and entitlements attaching to the Scheme Shares as at the Implementation Date, will be transferred to Bidder, without the need for any further act by any Scheme Shareholder by clause 0 by: Target immediately delivering to Bidder duly completed and executed share transfer forms to transfer all the Scheme Shares to Bidder; and Bidder duly executing such transfer form or forms and deliver it or them to Target for registration; immediately after receipt of the Scheme Transfer, Target will enter the name of Bidder in the Share Register in respect of all the Scheme Shares. Scheme Consideration Consideration under the Scheme On the Implementation Date Bidder will pay the Scheme Consideration to the Scheme Shareholders. Joint holders In the case of Scheme Shares held in joint names the Scheme Consideration shall be payable to and be forwarded to the holder whose name appears first in the Share Register as at the Scheme Record Date. Bidder's obligations The obligation of Bidder to provide the Scheme Consideration will be satisfied by Bidder, on the Implementation Date doing any of the following at its election: sending the consideration to the Scheme Shareholders' Registered Addresses as shown in the Share Register by cheque in Australian currency drawn on an Australian bank; or depositing or procuring the Target Registry to deposit it into an account with any Australian ADI (as defined in the Corporations Act) notified to Target (or Target's agent who manages the Target Register) by a Scheme Participant not later than the Scheme Record Date; or such other payment method as agreed in writing between Bidder and Target. Dealings in Target Shares To establish the identity of the Scheme Shareholders, dealings in Target Shares will only be recognised if: in the case of dealings of the type to be effected using CHESS, the transferee is registered in the Share Register as the holder of the relevant Target Shares on or before the Scheme Record Date; and in all other cases, registrable transmission applications or transfers in respect of those dealings are received on or before the Scheme Record Date at the place where the Share Register is kept. Target must register registrable transmission applications or transfers of the kind referred to in clause 2 on the Scheme Record Date. Target will not accept for registration or recognise for any purpose any transmission application or transfer in respect of Target Shares received after the Scheme Record Date. For the purpose of determining entitlements to the Scheme Consideration, Target must maintain the Share Register in accordance with the provisions of this clause 6 until the Scheme Consideration has been paid to the Scheme Shareholders. The Share Register in this form will solely determine entitlements to the Scheme Consideration. All statements of holding for Target Shares will cease to have effect from the Scheme Record Date as documents of title in respect of those shares and, as from that date, each entry current at that date on the Share Register will cease to have effect except as evidence of entitlement to the Scheme Consideration in respect of the Target Shares relating to that entry. As soon as possible after the Scheme Record Date and in any event at least 2Business Days before the Implementation Date, Target will ensure that details of the names, Registered Addresses and holdings of Target Shares for each Scheme Shareholder are available to Bidder in the form Bidder reasonably requires. Quotation of Target Shares It is expected that suspension of trading of Target Shares on ASX will occur at the close of trading on ASX on the Effective Date. If it has not done so, on the Business Day after the Implementation Date, Target will apply: for termination of the official quotation of Target Shares on ASX; and to have itself removed from the official list of the ASX with effect from the Business Day after the date on which all transfers of Scheme Shares to Bidder have been duly registered by Target in accordance with the Scheme. General Scheme provisions Consent If the Court proposes to approve the Scheme subject to any alterations or conditions, Target may by its counsel consent on behalf of all persons concerned to those alterations or conditions to which Bidder has consented in writing. Agreement of Scheme Shareholders Scheme Shareholders agree to the transfer of their Scheme Shares in accordance with the Scheme and agree to the variation, cancellation or modification of the rights attached to their Target Shares constituted by or resulting from the Scheme and agree to the performance of any other act or execution of any other document by Target as is necessary or incidental to the Scheme. Warranties by Scheme Shareholders Each Scheme Shareholder is deemed to have warranted to Target and is deemed to have authorised Target to warrant to Bidder as attorney and agent for the Scheme Shareholder by virtue of this clause, that all of its Scheme Shares which are transferred to Bidder under the Scheme will, at the date of transfer of them to Bidder, be fully paid and free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, and that they have full power and capacity to sell and to transfer all their Scheme Shares to Bidder. Beneficial entitlement to Target Shares Bidder will be beneficially entitled to the Target Shares transferred to it under the Scheme pending registration by Target of Bidder in the Share Register as the holder of the Target Shares. Authority given to Bidder Each Scheme Shareholder, without the need for any further act, irrevocably appoints Target and all of its directors, secretaries and officers (jointly and severally) as its attorney and agent to do and execute all acts, matters, things and documents necessary to give effect to the Scheme including without limitation, a proper instrument of transfer of its Scheme Shares for the purposes of section 1071B of the Corporations Act which may be a master transfer of all the Scheme Shares. Appointment of sole proxy Upon the Scheme becoming Effective and until Target registers Bidder as the holder of all Target Shares in the Share Register, each Scheme Shareholder: is deemed to have irrevocably appointed Bidder as attorney and agent (and directed Bidder in such capacity) to appoint an officer or agent nominated by Bidder as its sole proxy and, where applicable, corporate representatives to attend shareholders' meetings, exercise the votes attaching to the Scheme Shares registered in their name and sign any shareholders' resolutions, whether in person, by proxy or by corporate representative (other than as pursuant to this clause 8.6(a); and must take all other actions in the capacity of a registered holder of Scheme Shares as Bidder reasonably directs. General Stamp duty Bidder will pay all stamp duty (if any) payable in connection with the transfer of the Scheme Shares to Bidder. Definition of "sending" For the purposes of clause 5.3 the expressions "sending" means: sending by ordinary prepaid post or courier to the Registered Address of the Scheme Shareholder at the Scheme Record Date; or delivery to the address by any other means at no cost to the recipient. Notices If a notice, transfer, transmission application, direction or other communication referred to in this Scheme is sent by post to Target, it will not be taken to be received in the ordinary course of post or on a date and time other than the date and time (if any) on which it is actually received at the place where Target's Share Registry is kept. Governing law This Scheme is governed by the laws of New South Wales. Further action Target will execute all documents and do all things necessary to implement and perform its obligations under this Scheme. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD2062 OF 2006 in the matter of dca group limited abn 67 002 808 746 DCA GROUP LIMITED ABN 67 002 808 746 Plaintiff JUDGE: EMMETT J DATE: 11 december 2006 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 3 November 2006, the Court ordered, pursuant to s 411 of the Corporations Act 2001 (Cth) ('the Act'), that the plaintiff, DCA Group Limited ('the Company'), convene a meeting of its members for the purpose of considering a scheme of arrangement. At that time, the Court approved an explanatory memorandum in the form of a scheme booklet to be dispatched to members of the Company. 2 The meeting was convened and held on 8 December 2006. I am satisfied from the evidence, consisting of affidavits of Vera Malesevic, sworn 8 December 2006, Fiona Sutton, sworn 30 November 2006, Glen Welsh, sworn 7 December 2006 and Maria Dzopalic, sworn 8 December 2006, that, subject to inconsequential changes, the scheme booklet was sent to members of the Company in the form approved by the Court. 3 Proxy forms for the scheme meeting were received by the Company's share registrar or by the Company, and a record was made of the voting instructions contained in the forms of proxy. The meeting convened for 8 December 2006 commenced at 10 am on that day. A poll was subsequently taken on the resolution to agree to the scheme. The resolution was passed by a majority of 91.69 per cent of the Company's shareholder's present and voting. 98.05 per cent of votes cast in the resolution were cast in favour of the resolution. 4 Today's application by the Company for approval of the scheme by the Court, was advertised in The Australian newspaper on 4 December 2006 in the form required by the Court. By 8 am this morning, no notice of appearance had been received by the Company and, when the matter was called on for hearing, there was no appearance by any person save for the Company. 5 I have seen evidence in the form of a letter dated 8 December 2006 from Australian Securities and Investment Commission ('the Commission') to the Company's solicitors, indicating that the Commission has no objection to the scheme under s 411(17) of the Act and that the Commission does not intend to appear at the hearing today. 6 Following comments made in the course of the application to the Court to convene the meeting, some amendments were made to the arrangements for the payment of the scheme consideration. As a consequence, the deed poll by CAID Pty Limited ('CAID') was amended to reflect those new arrangements. A copy of the deed poll is in evidence before me. 7 The scheme booklet indicated that, if a favourable ruling were obtained from the Australian Taxation Office, a special dividend, fully franked, would be paid to members and the scheme consideration would be reduced by the amount of that dividend. Such a favourable ruling has been obtained from the Australian Taxation Office and I am satisfied, therefore, that it is appropriate that the scheme consideration be paid in the manner proposed in the scheme booklet, that is by members receiving a special dividend of 15 cents per share, such the amount to be paid by CAID to shareholders will be $3.31 per share. 8 I am satisfied from the affidavits of Stephen Castle, affirmed on 7 December 2006 and Maria Dzopalic, sworn on 8 December 2006, that arrangements have been put in place for the payment of the special dividend and the scheme consideration into an account opened by the Company for the purpose of receiving it from CAID. The Company's share registrars will then dispatch the amount of the dividend and the consideration, after the completion of the formalities necessary to vest shares in CAID. 9 The scheme was subject to certain conditions precedent. The Company and CAID have each executed a certificate indicating that all of the conditions precedent of the scheme, save for the Court's approval, have been satisfied or waived. In all of the circumstances, I am satisfied that it is appropriate to approve the scheme pursuant to s 411(4)(b) of the Act. 10 Section 411(11) provides that a copy of every order of the Court made for the purpose of s 411(4)(b) must be annexed to every copy of the Company's constitution that is issued after the order has been made. That is clearly inappropriate in relation to a scheme of the present nature, and accordingly I propose, on the application of the Company, to exempt the Company from compliance with s 411(11). I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 15 December 2006 Counsel for the Applicant: Mr IM Jackman SC Solicitor for the Applicant: Freehills Date of Hearing: 11 December 2006 Date of Judgment: 11 December 2006