In the matter of Energy Developments Limited (No 2)

[2015] NSWSC 2138

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of Energy Developments Limited (No 2) [2015] NSWSC 2138
Hearing dates:	12 October 2015
Date of orders:	12 October 2015
Decision date:	12 October 2015
Jurisdiction:	Equity - Corporations List
Before:	Brereton J
Decision:	Scheme approved.
Catchwords:	CORPORATIONS – arrangements and reconstructions – schemes of arrangement or compromise – compliance with procedures for convening of meeting – where statutory majorities for approval of scheme by shareholders met – absence of objection to scheme by ASIC – absence of member opposition at hearing – whether conditions precedent to scheme taking effect have been met – where scheme deemed fair and reasonable.
Legislation Cited:	(CTH) Corporations Act 2001, s 411(4), s 411(11), s 411(12), s 411(17), s 412(6)
Category:	Principal judgment
Parties:	Energy Developments Limited ACN 053 410 263 (plaintiff)
Representation:	Counsel: A S Bell SC w P Munro (plaintiff)   Solicitors: Gilbert + Tobin (plaintiff)
File Number(s):	2015/230020

Judgment (ex tempore)

1. HIS HONOUR: On 3 September 2015, the Court made orders for the convening of a meeting of all holders of shares in the company Energy Developments Limited (“EDL”) for the purpose of considering, and, if thought fit, agreeing (with or without modification) to a scheme of arrangement substantially in the form of a draft scheme, a copy of which was in evidence, and made further orders and directions approving the explanatory statement for the scheme and making provision in connection with the convening and holding of the scheme meeting.

2. Pursuant to those orders, the explanatory statement was distributed to shareholders on 7 September 2015, and the scheme meeting was held on 8 October 2015. Of the 2872 shareholders in the company, 298 – or a little over 10% by number – attended the meeting in person or via proxy. However, that 10% of shareholders represented some 89% of the issued share capital in EDL. The scheme resolution was carried by 99.95% of the shareholders by value and 91.95% by number of those present and voting at the meeting. Accordingly, the statutory majorities referred to in (CTH) Corporations Act 2001, s 411(4)(a)(ii), are satisfied.

3. No shareholder has given notice of intention to appear to oppose the approval of the scheme, and none has in fact appeared before the Court at this second hearing today to do so. The record of the scheme meeting does not record any agitated opposition to the approval of the scheme at that meeting.

4. At this second hearing, the Court is concerned to be satisfied that the procedural requirements for the convening of the meeting in accordance with the Court's orders made at the first hearing have been complied with; that the requisite statutory majorities at the scheme meeting have been achieved; that the requisite statement from ASIC, referred to in s 411(17), has been provided; that any conditions precedent to the scheme taking effect have been satisfied; and that there is no substantive reason why the scheme should not be approved.

5. The explanatory statement was registered with ASIC, as required by CorporationsAct, s 412(6), on 4 September 2015. The affidavit of Byen Nah of 9 October 2015 proves distribution in accordance with the orders of 3 September 2015 of the notice of meeting and explanatory statement. An advertisement in the form approved in the earlier orders was published in The Australian newspaper on 25 September 2015. The affidavit of Mr Koczkar of 9 October 2015 establishes the conduct of the meeting, the presence of the requisite quorum, and the achievement of the relevant statutory majorities. Certificates establishing the satisfaction of the relevant conditions precedent on the part of the company and the offeror DUET have been tendered and confirm that each of the conditions precedent referred to in the scheme has been satisfied or waived.

6. By letter dated 9 October 2015, ASIC has stated that for the purposes of Corporations Act, s 411(17)(b), it has no objection to the proposed scheme. The reasons given on 3 September 2015 addressed the fairness and reasonableness of the proposed scheme, and concluded that the scheme was not one so obviously unfair or unreasonable that it could not be approved if approved by the requisite statutory majorities. These reasons also concluded that those provisions of the scheme implementation document, including exclusivity provisions and deemed warranties which are customarily mentioned in these applications, did not provide a reason why the scheme could not be approved.

7. In the absence of opposition to approval of the scheme from any shareholder, and in light of the very substantial majorities of votes by number and by value – and more so by value – in favour of the scheme, there is no reason why this scheme should not be approved.

8. The Court orders that:

1. pursuant to Corporations Act, s 411(4)(b), the scheme of arrangement between Energy Developments Limited and the holders of fully paid ordinary shares in Energy Developments Limited as at 7 pm Sydney time on the third business day following the date on which the proposed scheme becomes effective in the form set out in the document entitled “Annexure A”, initialled by me, dated this day and placed with the papers, be approved.

2. Pursuant to s 411(12), the requirements of Corporations Act, s 411(11), be dispensed with.

3. The plaintiff lodge with the Australian Securities and Investments Commission a copy of the approved scheme at the time of lodging a copy of these orders.

4. These orders are to be entered forthwith.

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Decision last updated: 22 September 2017