Chesser Resources Limited, in the matter of Chesser Resources Limited (No 2)

Chesser Resources Limited, the plaintiff, sought approval for a proposed scheme of arrangement to be implemented for the reorganisation of the company. The defendant, the Australian Securities and Investments Commission, challenged the approval of the scheme, raising concerns about various aspects of the proposal, including the performance risk, exclusivity provisions, breach fees, and non-scheme considerations. The case was heard in the Federal Court of Australia. The primary legal issues the court had to address were whether the plaintiff had complied with its duties and responsibilities under the Corporations Act 2001 (Cth) in proposing the scheme, and whether the scheme should be approved despite the objections raised by the defendant.

The court found that the plaintiff had discharged its duty and responsibility in proposing the scheme. The court approved the scheme of arrangement, noting that the plaintiff had complied with the relevant provisions of the Corporations Act, including the requirement to convene a shareholders' meeting. The court considered the role of the Australian Securities and Investments Commission and exercised its discretion in approving the scheme, taking into account the performance risk, exclusivity provisions, breach fees, and non-scheme considerations. The court also noted that the disclosure of director interests and voting intentions, as well as the director recommendations, were adequately addressed in the scheme documentation. The court concluded that the scheme was in the best interests of the company and its shareholders.

The court made orders approving the scheme of arrangement, exempting the plaintiff from certain compliance requirements, and requiring the lodgement of an office copy of the orders with the Australian Securities and Investments Commission. The court also confirmed that the publication of an announcement in the form of Exhibit “ADG-15” to the affidavit of Andrew Dean Grove was good and sufficient compliance with the previous court orders. The final orders were entered in accordance with Rule 39.32 of the Federal Court Rules 2011.