Re Cassini Resources Ltd;
[2020] WASC 317
•7 SEPTEMBER 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE CASSINI RESOURCES LTD; EX PARTE CASSINI RESOURCES LTD [2020] WASC 317
CORAM: HILL J
HEARD: 12 AUGUST 2020
DELIVERED : 7 SEPTEMBER 2020
FILE NO/S: COR 96 of 2020
COR 97 of 2020
MATTER: Cassini Resources Ltd
EX PARTE
CASSINI RESOURCES LTD
Plaintiff
OZ MINERALS LTD
Interested Party
Catchwords:
Corporations law - Schemes of arrangement - Acquisition of applicant by scheme of arrangement - Demerger of some subsidiaries of applicant by scheme of arrangement - Associated proposed capital reduction of applicant - Interconditional schemes of arrangement - Application for orders convening scheme meetings under s 411(1) of the Corporations Act 2001 (Cth) - Whether requirements to order scheme meetings are satisfied - Orders made convening meetings
Legislation:
Corporations Act 2001 (Cth), s 256C, s 411, s 1319
Supreme Court (Corporations) (WA) Rules 2004 (WA)
Result:
Orders made convening scheme meetings and giving directions sought
Category: B
Representation:
Counsel:
| Plaintiff | : | A J Papamatheos |
| Interested Party | : | P J Tydde |
Solicitors:
| Plaintiff | : | DLA Piper Australia - Perth |
| Interested Party | : | Gilbert + Tobin |
Case(s) referred to in decision(s):
Re Alchemia Ltd [2012] FCA 927
Re Amcom Telecommunications Ltd [2015] FCA 341
Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400
Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358
Re David Jones Ltd [No 2] [2014] FCA 720; (2014) 101 ACSR 381
Re Doray Minerals Ltd; Ex Parte Doray Minerals [2019] WASC 57
Re DUET Management Company 1 Ltd [2013] NSWSC 817; (2013) 95 ACSR 34
Re Investa Properties Ltd [2007] FCA 1104
Re Kangaroo Resources Ltd; Ex Parte Kangaroo Resources Ltd [No 2] [2018] WASC 388
Re Macquarie Private Capital A Ltd [2008] NSWSC 323
Re Nzuri Copper Ltd [2019] WASC 189
Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20
Re Scarborough Equities Ltd [No 2] [2009] FCA 484
Re SRG Limited [2018] FCA 1092
Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [2018] WASC 308
Re Zenith Energy Ltd; Ex parte Zenith Energy Ltd [2020] WASC 266
HILL J:
Overview
The plaintiff, Cassini Resources Limited (Cassini), is an Australian public company listed on the official list of the Australian Securities Exchange (ASX).
On 22 June 2020, Cassini announced it had entered into two scheme implementation deeds. The first, with OZ Minerals Limited (OZ Minerals), was for the acquisition by OZ Minerals of all the fully paid ordinary shares of Cassini by way of a scheme of arrangement (Acquisition Scheme).[1] Under the Acquisition Scheme, it is proposed that OZ Minerals, by a wholly owned subsidiary, will acquire all the shares in Cassini in exchange for scrip in Oz Minerals on a one for 68.5 basis. Cassini also proposes a demerger of its wholly owned subsidiary Caspin Minerals Ltd (Caspin) by way of scheme of arrangement (Demerger Scheme). Under the proposed Demerger Scheme and an associated capital reduction pursuant to s 256 of the Corporations Act 2001 (Cth) (Act) (Demerger Capital Reduction), shareholders will receive a shareholding in Caspin proportionate to their existing holding in Cassini as well a cash payment of $0.01 per share.[2]
[1] Affidavit of Steven Douglas Wood filed 24 July 2020 (COR 96 of 2020) [3], 'SDW-1'.
[2] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 97 of 2020) [3]; Affidavit of Steven Douglas Wood filed 24 July 2020 (COR 96 of 2020) [4], 'SDW-1'.
The Acquisition Scheme and the Demerger Scheme are inter-conditional. That is, the Acquisition Scheme will only be implemented if the shareholders and the court approve the Demerger Scheme and vice versa.[3]
[3] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 97 of 2020) [5].
By originating processes dated 24 July 2020, Cassini sought orders under s 411 of the Act in relation to each of the proposed Schemes. The application came before me for the first court hearing on 12 August 2020.
At the conclusion of the hearing, I made orders pursuant to s 411(1) of the Act to convene two meetings of Cassini's members to consider and vote on the proposed Acquisition Scheme and Demerger Scheme. Orders were also made for the approval for distribution of Scheme booklets under s 412(1)(a) of the Act. I also made ancillary orders as to the convening and conduct of the Scheme meetings under s 1319 of the Act. I said that I would publish written reasons for my orders subsequently. These are my reasons for decision.
Factual background
Cassini
The plaintiff is an Australian base and precious metals developer and explorer. The West Musgrave Project, Cassini's flagship project, has three existing nickel and copper sulphide deposits and a number of other significant regional exploration targets. Cassini also has an 80% interest in the Yarawindah Brook Project which has nickel, copper and cobalt deposits and a 100% interest in the Mount Squires Project, a large scale greenfield gold project.[4]
[4] Acquisition Scheme booklet, [6.2].
As at 23 July 2020, Cassini had 427,757,093 fully paid ordinary shares (Shares) on issue. It also had 16,072,302 share options on issue with varying expiry dates and vesting conditions,[5] and 2,751,757 performance rights which entitle the holder on a change of control to be issued one fully paid ordinary share in Cassini.[6]
OZ Minerals
[5] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [32] - [34], 'RGB-5'.
[6] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [37] - [39].
OZ Minerals is an ASX listed Australian mining company with a focus on copper.[7] In August 2016, OZ Minerals entered into an agreement with Cassini to earn up to 70% of the West Musgrave Project and currently has a 70% interest in the project.[8] OZ Minerals has interests in a number of other copper-gold and copper-nickel mining operations.
[7] Acquisition Scheme booklet, [7.2(a)].
[8] Acquisition Scheme booklet, [7.2(b)].
If the Acquisition Scheme is implemented, Cassini will become a wholly owned subsidiary of OZ Minerals and Cassini's subsidiaries (with the exception of those being demerged under the Demerger Scheme) will become part of the OZ Minerals group.[9]
Proposed Schemes
[9] Acquisition Scheme booklet, [7.3].
The purpose of the proposed Acquisition Scheme between Cassini and OZ Minerals is for OZ Minerals to acquire the plaintiff, except for the demerged subsidiaries.[10] Under the Demerger Scheme, Caspin, a wholly owned subsidiary of Cassini will be demerged from the plaintiff. Caspin will hold the Yarawindah Brook and Mount Squires assets via four subsidiaries, the shares in which will be transferred by Cassini to Caspin prior to the Implementation Date.[11]
[10] Acquisition Scheme booklet, p 38.
[11] Demerger Scheme booklet, Directors letter, [7.1].
If the Acquisition Scheme is implemented, the plaintiff's shareholders (other than Ineligible Shareholders and Non-Electing Small Shareholders) will receive one OZ Minerals share for every 68.5 shares of the plaintiff (Scheme Consideration).[12] Ineligible Shareholders and Non-Electing Small Shareholders will receive a pro rata share of the net proceeds from the sale of their Scheme Consideration sold through a sale facility.[13]
[12] Acquisition Scheme, cl 7.1 and cl 7.2
[13] Acquisition Scheme, cl 7.6 and cl 7.7.
If the Demerger Scheme is implemented, each shareholder of the plaintiff (other than Ineligible Foreign Shareholders and Non‑Electing Small Shareholders) will receive one Caspin share for every 22 Cassini shares held and a cash distribution of $0.01 for each share held (Demerger Capital Reduction Entitlement).[14] The Ineligible Foreign Shareholders and Non‑Electing Small Shareholders will receive a pro rata share of the net proceeds from the sale of all the Caspin shares they would have been entitled to receive.[15]
[14] Demerger Scheme, cl 4.3.2.1, cl 4.4.1, cl 4.4.2 and cl 4.4.3.
[15] Demerger Scheme, cl 4.3.2.2, cl 4.4.1, cl 4.4.2, cl 4.4.3 and cl 5.
On 21 June 2020, the plaintiff and OZ Minerals entered into a scheme implementation deed (Acquisition SID) for the proposed acquisition.[16] On 24 July 2020, a scheme implementation deed (Demerger SID) was entered into between the plaintiff and Caspin.[17]
[16] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [9].
[17] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 97 of 2020) [10].
The directors of Cassini unanimously recommend that their shareholders vote in favour of the Acquisition and Demerger Schemes.[18]
[18] Acquisition Scheme booklet, [2.1]; Demerger Scheme booklet, [2.1].
Cassini has retained an independent expert to give an opinion on the proposed Schemes. The independent experts, Jannaya James and Andrea De Cian of Grant Thornton Corporate Finance Pty Ltd (Grant Thornton), have concluded that the Schemes are fair and reasonable and in the best interests of the shareholders.[19]
[19] Acquisition Scheme booklet, Annexure '1'; Demerger Scheme booklet, Annexure '1'.
Evidence for first court hearing
Cassini and OZ Minerals relied on 16 affidavits that were filed prior to the first hearing in both matters. At the hearing, the evidence filed in each matter was ordered to be evidence in the other matter. The affidavits relied upon by the parties were:
(a)an affidavit of Steven Douglas Wood filed 24 July 2020. Mr Wood is the company secretary of Cassini. Mr Wood's affidavit annexed the ASX announcement of the proposed Schemes dated 22 June 2020, the Acquisition SID, information about Cassini obtained from the Australian Securities and Investments Commission (ASIC) and Cassini's constitution.
(b)an affidavit of Richard Gwynn Bevan filed 27 July 2020, the managing director of Cassini. Mr Bevan confirmed a number of formal matters, outlined the nature of the proposed Scheme and notice to shareholders of the Acquisition Scheme meeting and attested to the verification process that had been undertaken by Cassini in relation to the draft Scheme booklet. His affidavit annexed the draft Acquisition Scheme booklet, the various security registers of Cassini, the forms for Ineligible Shareholders and Small Shareholders and the proxy form proposed to be given to shareholders.
(c)an affidavit of Scott Douglas Gibson filed 29 July 2020. Mr Gibson is a partner of DLA Piper, the solicitors for the plaintiff, and is the proposed chairperson of the Acquisition Scheme meeting. By his affidavit, Mr Gibson consented to act as chairperson of the meeting and provided the necessary disclosures required by r 3.2 of the Supreme Court (Corporations) (WA) Rules 2004 (WA) (Corporations Rules). Mr Gibson gave evidence that Michael Phillip Bowen, a partner of DLA Piper, who is nominated as the alternate chairperson for the Acquisition Scheme meeting, consented to this nomination and provided the necessary disclosures required by r 3.2 of the Corporations Rules on behalf of Mr Bowen.
(d)an affidavit of Michael Choon Ming Ng filed 5 August 2020. Mr Ng is a solicitor employed by DLA Piper. His affidavit confirmed the draft Acquisition Scheme booklet was submitted to ASIC on 24 July 2020 and annexed the correspondence that had been exchanged between DLA Piper and ASIC.
(e)a second affidavit of Mr Bevan filed 10 August 2020 confirmed the verification of the amended Acquisition Scheme booklet, the approval of the amended booklet by the directors of the plaintiff and the date of issue of the performance rights in the plaintiff to him. Mr Bevan's affidavit annexed the draft letter to shareholders who have not elected to receive communications electronically.
(f)a second affidavit of Mr Ng filed 10 August 2020 which annexed the correspondence between ASIC and DLA Piper in relation to the Acquisition Scheme booklet, a marked up copy of the Acquisition Scheme booklet, the deed of amendment and restatement of the Acquisition SID and the final draft of the Acquisition Scheme booklet.
(g)an affidavit of Robert Mario Mancini filed 10 August 2020. Mr Mancini is the head of legal at OZ Minerals. By his affidavit, Mr Mancini confirmed the amendment of the Acquisition SID, the Contingent Payment Deed entered into with Caspin, the verification of the OZ Minerals' information in the Acquisition Scheme booklet and the nomination of OZ Minerals' subsidiary to acquire Cassini's shares under the Acquisition Scheme. Mr Mancini's affidavit annexed information about OZ Minerals obtained by ASIC, copies of the various deeds, a copy of the executed deed poll, verification information and certificates and information on OZ Minerals' subsidiary, OZ Musgrave Operations Pty Ltd (OZ Musgrave), and the nomination made by OZ Minerals for this subsidiary to receive the shares.
(h)a third affidavit of Mr Ng filed 11 August 2020 which annexed the letter from ASIC confirming ASIC did not intend to appear at the first court hearing.
(i)an affidavit of Jamie Matthew Ammendolea filed 11 August 2020. Mr Ammendolea is a solicitor of Gilbert + Tobin, solicitors for OZ Minerals. Mr Ammendolea confirmed that OZ Minerals Musgrave Holdings Pty Ltd (OZ Musgrave Holdings), a wholly owned subsidiary of OZ Minerals, holds the entire issued capital of OZ Musgrave and annexed information obtained from ASIC on OZ Musgrave Holdings.
(j)an affidavit of Mr Wood filed 24 July 2020 in relation to the Demerger Scheme. Mr Wood confirmed he was also the company secretary of Caspin and annexed the ASX announcement of 22 June 2020, the Acquisition SID, information about Cassini and Caspin obtained from ASIC and Caspin's constitution.
(k)an affidavit of Mr Bevan filed 27 July 2020 which set out the proposed scheme, confirmed the verification of the Demerger Scheme booklet and the despatch of the booklet and holding of the Demerger Scheme meeting and general meeting to approve the proposed capital reduction. The affidavit annexed the draft Demerger Scheme booklet, the Contingent Payment Deed entered into by Caspin and OZ Minerals, the Demerger Deed, the proxy forms for the Demerger Scheme meeting and General meeting and the draft pro forma New Zealand Investor Certificate to be sent to each shareholder with the Demerger Scheme booklet to enable qualifying New Zealand shareholders to participate in the Demerger Scheme.
(l)an affidavit of Mr Gibson filed 29 July 2020, who has also been nominated as chairperson of the Demerger Scheme meeting. Mr Bowen has been nominated as alternate chairperson. The affidavit provided the necessary disclosures under r 3.2 of the Corporations Rules for Mr Gibson and Mr Bowen.
(m)an affidavit of Christopher John George Seotis filed 5 August 2020. Mr Seotis is a solicitor employed by DLA Piper. Mr Seotis confirmed that the draft Demerger Scheme booklet had been submitted to ASIC on 24 July 2020 and that ASIC had been given notice of the first court hearing. The affidavit annexed correspondence between DLA Piper and ASIC.
(n)a second affidavit of Mr Bevan filed 10 August 2020 confirming the verification of the amended Demerger Scheme booklet and the approval of the Demerger Scheme booklet by the directors. The affidavit annexed a draft letter to shareholders for those who have not elected to receive communications electronically.
(o)a second affidavit of Mr Seotis filed 10 August 2020, annexing the correspondence between ASIC and DLA Piper in relation to the Demerger Scheme booklet, the final version of the scheme booklet, and the deed of amendment and restatement of the Demerger SID.
(p)a third affidavit of Mr Seotis filed 11 August 2020 which annexed the letter from ASIC confirming that ASIC did not propose appearing at the first court hearing.
Nature of Proposed Schemes
Acquisition Scheme
The proposed Acquisition Scheme contemplates that OZ Minerals will acquire all of the fully paid ordinary shares of Cassini and that shareholders will receive one OZ Minerals share for every 68.5 Cassini shares held. That is, the effect of the scheme is to make Cassini a wholly owned subsidiary of OZ Minerals.
The Ineligible Shareholders are those shareholders whose address is shown in the Cassini share register as being outside Australia and its external territories, New Zealand, Hong Kong, Singapore, Malaysia and the People's Republic of China, or in an ineligible jurisdiction which OZ Minerals has determined, acting reasonably, is a place that it is unlawful or unduly onerous to issue shares in OZ Minerals.[20] The Ineligible Foreign Shareholders will not receive any shares but will receive a pro rata share of the net proceeds from the sale of all the shares they would have been entitled to receive.[21] As at 23 July 2020, there were 11 Ineligible Shareholders holding 1,321,858 shares which comprise approximately 0.31% of the shares on issue.[22]
[20] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [17]; Acquisition Scheme booklet, [5.2].
[21] Demerger Scheme, cl 4.3.2.2, cl 4.4.1, cl 4.4.2, cl 4.4.3 and cl 5.
[22] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [21], 'RGB-2'.
Shareholders who are not Ineligible Shareholders and who, on the record date, would receive less than $AUD 500 of OZ Minerals shares as Scheme Consideration will be regarded as unmarketable parcel shareholders (Small Shareholders). A Small Shareholder who would be entitled to receive at least one OZ Minerals share as Scheme Consideration may elect to receive this consideration by making a valid election under the Acquisition Scheme (Electing Small Shareholder). Small Shareholders who do not make, or are unable to make, an election to receive the Scheme Consideration will not be issued any OZ Minerals shares (Non‑Electing Small Shareholders).[23] Instead, the shares that would have been issued to the Non‑Electing Small Shareholders will be sold through the Sale Facility and they will receive a pro‑rata distribution from this facility. As at 23 July 2020, there were 81 shareholders who would be entitled to less than $AUD 500 of the OZ Minerals shares as Scheme Consideration. They held 26,399 shares which comprised approximately 0.01% of the shares on issue.[24]
[23] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [23] - [26]; Acquisition Scheme booklet, [5.3].
[24] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [29], 'RGB-4'.
Both the options and the performance rights are being dealt with outside the Acquisition Scheme. The Acquisition SID proposes that each holder of options (Optionholders) either exercises all of their options and has Cassini shares issued to them prior to the record date, or enters into a deed to cancel these securities in return for a cash payment (Option Cancellation Deed).[25] The plaintiff and OZ Minerals have entered into Option Cancellation Deeds with each of the Optionholders.[26]
[25] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [35]; Acquisition SID, cl 3.1(h).
[26] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [36]; Acquisition Scheme booklet, [11.21].
For performance rights holders, the terms of Cassini's employee incentive plan provides that where a change of control event has occurred, or it is the Board's opinion that one will occur, all performance rights that have not yet vested or lapsed will automatically and immediately vest.[27] The plaintiff is obliged under the Acquisition SID to ensure that any performance rights have vested prior to the record date and that the number of shares required have been issued to the performance rights holders.[28] Should the Acquisition Scheme become effective, the performance rights will automatically convert to Cassini shares on a one-for-one basis.[29]
[27] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [37].
[28] Acquisition Scheme, cl 4.6.
[29] Acquisition Scheme booklet, [11.20].
If the Acquisition Scheme is implemented, Cassini will become a wholly owned subsidiary of OZ Minerals and will be delisted from the ASX. The Scheme will not be effective unless and until a number of conditions precedent are satisfied or waived. The conditions precedent which are required to be satisfied are disclosed in the Acquisition Scheme booklet.[30]
[30] Acquisition Scheme booklet, [11.15].
If the Acquisition Scheme is approved by shareholders and by the court at the second court hearing, on the implementation date, all existing Cassini shares will be transferred to OZ Minerals and OZ Minerals will be entered in the Cassini share register as the holder of all Cassini shares.[31] OZ Minerals will provide the Scheme Consideration to shareholders in return for their shares in Cassini.[32]
[31] Acquisition Scheme, cl 6.2.
[32] Acquisition Scheme, cl 7.1.
OZ Minerals is obliged to provide the Scheme Consideration prior to the transfer of the shares.[33] The obligations of OZ Minerals under the Acquisition Scheme are supported by a deed poll dated 7 August 2020 which has been executed by OZ Minerals (Deed Poll).[34]
[33] Acquisition Scheme, cl 10.3.
[34] Affidavit of Robert Mario Mancini filed 10 August 2020 (COR 96 of 2020) [15], 'RMM-4'.
The directors of Cassini unanimously recommend that shareholders vote in favour of the Acquisition Scheme.[35]
[35] Acquisition Scheme booklet, 'Letter from the Directors of Cassini Resources Limited', page 1.
The Acquisition SID and Scheme were amended following conferral with ASIC.[36]
[36] Second affidavit of Michael Choon Ming Ng filed 10 August 2020 (COR 96 of 2020) [7], 'MCN-6'.
An independent expert report (IER) has been prepared by Grant Thornton. The IER expresses the opinion that the Schemes are fair and reasonable and in the best interests of shareholders.[37] The IER determined that the range for the value of a share in Cassini was between $0.11 (low) and $0.21 (high) and that the implied value of the consideration under both Schemes was between $0.19 (low) and $0.22 (high). The basis of the valuation and the methodology used are set out in the IER. In reaching their conclusion, the IER determined that the Scheme Consideration represents a significant premium over the trading price of Cassini shares prior to the announcement of the Acquisition Scheme. The consideration of advantages, disadvantages and other factors that are likely to impact shareholders are set out comprehensively in the IER.
[37] Acquisition Scheme booklet, Annexure '1'.
I was provided with the draft Acquisition Scheme booklet which was submitted to ASIC on 24 July 2020[38] and the various amendments that have been made to the document since then.[39]
[38] Affidavit of Michael Choon Ming Ng filed 5 August 2020 (COR 96 of 2020) [2.1]; affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [57], 'RGB-1'.
[39] Second affidavit of Michael Choon Ming Ng filed 10 August 2020 (COR 96 of 2020) [4], 'MCN-4', 'MCN-5' and 'MCN-7'.
The Acquisition Scheme booklet contains the following sections:
(a)a letter from the directors of Cassini and a separate letter from the directors of OZ Minerals;
(b)important notices giving an overview of the Acquisition Scheme and advising shareholders to obtain independent financial and taxation advice;
(c)a listing of all important dates and times for the Acquisition Scheme;
(d)a summary of the Acquisition Scheme and actions for shareholders to take;
(e)a section on reasons to vote for or against the Acquisition Scheme;
(f)a 'frequently asked questions' table, which addresses all the essential matters;
(g)information on the Acquisition Scheme meeting and voting;
(h)key considerations for shareholders in relation to the Acquisition Scheme;
(i)information about Cassini, OZ Minerals and the Combined Group should the Acquisition Scheme be successful;
(j)a section on risk factors;
(k)a section on the taxation implications for Cassini shareholders;
(l) information on certain sections of the Acquisition SID; and
(m)a section on additional information, which included details of the relevant interests of Cassini's directors and the benefits they will obtain if the Scheme is approved.
The Acquisition Scheme booklet includes a number of important annexures which will form part of the Scheme booklet. These include the IER, the Acquisition SID, the proposed Acquisition Scheme, the Deed Poll and the relevant notice of meeting.
Demerger Scheme
The proposed Demerger Scheme contemplates that Caspin, currently a wholly-owned subsidiary of Cassini, will be demerged and hold the Yarawindah Brook and Mount Squires assets through four companies, who are currently subsidiaries of Cassini and will become wholly‑owned subsidiaries of Caspin. In the event the Demerger Scheme becomes effective, Cassini shareholders will receive one Caspin share for every 22 Cassini shares they hold and a cash distribution of $AUD 0.01 per Cassini share (Demerger Capital Reduction Entitlement). To facilitate the Demerger Scheme, shareholders will be asked to approve a capital reduction at a separate general meeting of Cassini.
The effect of the Demerger Scheme is to demerge Caspin from the plaintiff to become a standalone entity. Following the de‑merger, Caspin intends to conduct an equity capital raising for an initial public offering as soon as practicable.[40]
[40] Demerger Scheme booklet, [7.3].
The Demerger Scheme is conditional on the Acquisition Scheme being approved.
The Ineligible Foreign Shareholders are those shareholders who have an address in the plaintiff's share register (as at the record date) outside Australia and its external territories, Hong Kong, Singapore, Malaysia and the People's Republic of China, as well as certain qualifying investors in New Zealand.[41] In respect of these shareholders, it is proposed that they will receive a pro rata share of the net proceeds from the sale of their Caspin shares through a sale facility. As at 23 July 2020, there were 11 Ineligible Shareholders holding 1,321,858 shares which comprises approximately 0.31% of the shares on issue.[42]
[41] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 97 of 2020) [19]; Demerger Scheme booklet, [5.2].
[42] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 97 of 2020) [22], 'RGB-3'.
Upon the satisfaction of certain conditions, certain New Zealand shareholders of the plaintiff are eligible to participate in the Demerger Scheme. Each shareholder whose registered address is in New Zealand will receive an Investor Certificate declaration form (New Zealand Investor Certificate) allowing qualifying shareholders to declare they are a 'wholesale investor' as defined in the Financial Markets Conduct Act 2013 (New Zealand) and not an Ineligible Foreign Shareholder.[43]
[43] Demerger Scheme booklet, [5.4], [13.13(b)]; affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 97 of 2020) [52] - [55], 'RGB-7'.
On 21 June 2020, Caspin and OZ Minerals entered into a contingent payment deed. Under this deed, Caspin will receive a potential payment from OZ Minerals under two potential scenarios relating to the West Musgrave project, with an aggregate cap of $AUD 20 million.[44]
[44] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 97 of 2020), 'RGB-2'; Demerger Scheme booklet [7.6(b)].
The directors of Cassini unanimously recommend that shareholders vote in favour of the Demerger Scheme.[45]
[45] Demerger Scheme booklet, 'Letter from the Directors of Cassini Resources Limited', page 1.
The Demerger SID and Scheme were amended following conferral with ASIC.[46]
[46] Second affidavit of Christopher John George Seotis filed 10 August 2020 (COR 97 of 2020) [6], 'CJS-6'.
An independent expert report (IER) has been prepared by Grant Thornton. The IER expresses the opinion that the Demerger Scheme is fair and reasonable and is in the best interests of the shareholders.[47] In reaching this conclusion, the IER had regard to the interdependency of the two schemes and the transaction as a whole. The consideration of advantages, disadvantages and other factors that are likely to impact shareholders are set out comprehensively in the IER.
[47] Demerger Scheme booklet, Annexure '1'.
I was provided with the draft Demerger Scheme booklet which was submitted to ASIC on 24 July 2020[48] and the various amendments that have been made to the document since then.[49]
[48] Affidavit of Christopher John George Seotis filed 5 August 2020 (COR 97 of 2020) [2.1]; affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 97 of 2020) [43], 'RGB-1'.
[49] Second affidavit of Michael Choon Ming Ng filed 10 August 2020 (COR 96 of 2020) [4], 'MCN-4', 'MCN‑5' and 'MCN-7'.
The Demerger Scheme booklet was set out in substantially the same form as the Acquisition Scheme booklet with the following sections:
(a)a letter from the Directors of Cassini;
(b)important notices giving an overview of the Demerger Scheme and advising shareholders to obtain independent financial and taxation advice;
(c)a listing of all important dates and times for the Demerger Scheme;
(d)an overview of the Demerger Scheme and actions for shareholders to take;
(e)a section on reasons to vote for or against the Demerger Scheme;
(f)a 'frequently asked questions' table, which addresses all the essential matters;
(g)information on the Demerger Scheme meeting, the Capital Reduction meeting and voting;
(h)key considerations for shareholders in relation to the Demerger Scheme;
(i)information about Cassini and Caspin;
(j)an independent limited assurance report prepared BDO Corporate Finance Pty Ltd;
(k)a report by DLA Piper on the mining tenements held by Cassini;
(l) a section on risk factors;
(m)a section on the taxation implications for Cassini shareholders;
(n) information on certain sections of the Demerger SID; and
(o)a section on additional information, which included details of the relevant interests of Cassini's directors and the benefits they will obtain if the Scheme is approved.
Legal principles in respect of the Scheme
Pursuant to s 411 of the Act, a scheme of arrangement can be used to re‑organise a company in a manner which will be binding on its members provided that:
(a)the arrangement is agreed by the requisite majorities as prescribed by s 411(4)(a) of the Act, namely 75% of shareholders by value and 50% by number; and
(b)the court approves the arrangement pursuant to s 411(4)(b) of the Act.
There are three stages to an application under s 411 of the Act. First, the court approves the convening of a scheme meeting and the draft explanatory statement to be sent to the scheme members. Second, the members vote on the proposed scheme at the scheme meeting. Third, assuming the first two stages have occurred, the court approves the proposed scheme.[50]
[50] Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358 [7].
There are well‑established principles which apply to the first stage of proceedings. The court will order the convening of the scheme meeting and approve the dispatch of the scheme booklet if is satisfied that:[51]
(a)there is a pt 5.1 body;
(b)there is a compromise or arrangement within the meaning of s 411 of the Act;
(c)the proposed scheme booklet contains the prescribed information[52] and provides proper disclosure;[53]
(d)the scheme is bona fide and properly proposed;
(e)ASIC has had at least 14 days' notice of the proposed hearing date and a reasonable opportunity to examine the terms of the scheme and the scheme booklet and make submissions;[54]
(f)the procedural requirements of the Act and the Corporations Rules have been met;
(g)the scheme is of such a nature that, if it receives the necessary statutory majority at the scheme meeting, the court will be likely to approve it.
[51] Re SRG Limited [2018] FCA 1092 [11]; Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [2018] WASC 308Error! Bookmark not defined. [60].
[52] Corporations Act, s 412(1)(a)(ii); Corporations Regulations 2001 (Cth) reg 5.1.01 and sch 8 cl 8301 ‑ 8310.
[53] Corporations Act s 412(1)(a)(i).
[54] Corporations Act s 411(2)(b).
Any issue about classes of members is usually determined at the first hearing.[55] This is so that costs and court time are not wasted which would otherwise occur if this issue was left to the second hearing.[56]
[55] Re CSR Ltd [73].
[56] Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20 [20].
The standard of review that is undertaken by the court at the first hearing is whether the proposed scheme is not inappropriate and is one that sensible business people might consider is of benefit to its members.[57] If the proposed arrangement is one that appears fit for consideration by a meeting of members and is a commercial proposition likely to gain the Court's approval if passed by the necessary majority, leave should be given to convene the meeting.[58]
[57] Re Amcom Telecommunications Ltd [2015] FCA 341 [10].
[58] Re SRG Limited [12]; Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [72] - [76].
Disposition
The formal matters that Cassini had to prove are satisfied.
Cassini is a company and, accordingly, is a pt 5.1 body. The proposed Acquisition Scheme and Demerger Scheme both constitute an 'arrangement'. These types of share acquisition and demerger schemes have been approved by courts as arrangements on numerous occasions.[59]
[59] See Re Wesfarmers [83] and the authorities cited therein.
Cassini filed the affidavits required by r 3.2 of the Corporations Rules regarding the persons who have been nominated to be the chairperson and alternate chairperson for the Acquisition Scheme meeting and Demerger Scheme meeting.[60]
[60] Affidavit of Scott Douglas Gibson filed 29 July 2020 (COR 96 of 2020) [4] - [13]; affidavit of Scott Douglas Gibson filed 29 July 2020 (COR 97 of 2020) [4] - [13].
By letter dated 11 August 2020, ASIC confirmed that it had been given 14 days' notice of the hearing and had a reasonable opportunity to examine the terms of the Acquisition Scheme and the Demerger Scheme and the draft explanatory statement or scheme booklet for both schemes.[61] ASIC also gave notice that it did not propose to appear at the first hearing to make submissions or intervene to oppose the Schemes.[62]
[61] Third affidavit of Christopher John George Seotis filed 11 August 2020 (COR 97 of 2020), 'CJS-8'; third affidavit of Michael Choon Ming Ng filed 11 August 2020 (COR 96 of 2020), 'MCN-8'.
[62] Third affidavit of Christopher John George Seotis filed 11 August 2020 (COR 97 of 2020), 'CJS-8'; third affidavit of Michael Choon Ming Ng filed 11 August 2020 (COR 96 of 2020), 'MCN-8'.
On the materials before me, there was nothing to suggest that the proposed Schemes were not properly proposed. The constitution of Cassini does not prevent the Acquisition Scheme, nor does Caspin's constitution prevent the Demerger Scheme.[63]
[63] Affidavit of Steven Douglas Wood filed 24 July 2020 (COR 96 of 2020), 'SDW-5'; affidavit of Steven Douglas Wood filed 24 July 2020 (COR 97 of 2020), 'SDW-5' and 'SDW-8'.
No class issue arose in relation to the Acquisition Scheme or the Demerger Scheme. All shareholders are being treated equally and, as a result, constitute a single class.
There are number of conditions precedent to the Acquisition Scheme.[64] Mr Bevan deposed that he is not aware of any basis to believe that any condition precedent will not be satisfied by the necessary time.[65] The Demerger Scheme also has a number of conditions precedent.[66] Mr Bevan deposed that he is not aware of any basis to believe that any condition precedent will not be satisfied by the necessary time.[67]
[64] Acquisition Scheme, cl 1.1.
[65] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [91] - [93].
[66] Demerger Scheme, cl 2.1.
[67] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 97 of 2020) [58] - [59].
I have read the initial draft of both Scheme booklets (as provided to ASIC). I have also been provided with the communications between ASIC and Cassini's solicitors in relation to ASIC's review of the draft Scheme booklets. Clarification was sought on the risk of Cassini shareholders receiving OZ Minerals' scrip consideration, the effect of COVID‑19 on OZ Minerals' share price and the basis for the directors joining in the recommendation to vote in favour of the Acquisition Scheme, all of which were relevantly disclosed in the Scheme booklets.[68]
[68] Affidavit of Christopher John George Seotis filed 10 August 2020 (COR 97 of 2020), 'CJGS-4' p 37 – 41 and 'CJGS-5'; affidavit of Michael Choon Ming Ng filed 10 August 2020 (COR 96 of 2020), 'MCN-4' pages 37 ‑ 41 and 'MCN-5'.
I was and am satisfied that there will be proper disclosure as to the effect of the proposed Schemes and the material considerations for shareholders of Cassini.
There is evidence before me as to the due diligence and verification process that was undertaken by both Cassini and OZ Minerals.[69] On the basis of this evidence, I accept that:
(a)Cassini undertook a process of due diligence and verification to verify the accuracy of statements attributable to Cassini in the Acquisition Scheme and Demerger Scheme booklets;
(b)OZ Minerals undertook a similar process to verify the statements attributable to it in the Acquisition Scheme booklet;
(c)appropriate steps have been taken to satisfy Cassini and OZ Minerals that the Scheme booklets do not omit any material information.
[69] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [42] - [56]; affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 97 of 2020) [29] - [42]; second affidavit of Richard Gwynn Bevan filed 10 August 2020 (COR 96 of 2020) [5] - [6]; second affidavit of Richard Gwynn Bevan filed 10 August 2020 (COR 97 of 2020) [5] - [6].
The directors of Cassini have resolved to approve the Scheme booklets in their final form.[70]
[70] Second affidavit of Richard Gwynn Bevan filed 10 August 2020 in COR 96 of 2020 [7]; second affidavit of Richard Gwynn Bevan filed 10 August 2020 in COR 97 of 2020 [7].
Based on the checklist provided by counsel for Cassini,[71] I was satisfied that the Scheme booklets contain the prescribed information in accordance with s 412(1)(a)(ii) of the Act and sch 8 of the Corporations Regulations 2001 (Cth).
[71] Submissions, pages 35 - 37.
In written and oral submissions, counsel for Cassini drew my attention to some specific matters. I address each of these below.
Treatment of other securities on issue
As noted above, Cassini has a number of other securities currently on issue, namely unlisted options and performance rights.
In respect of the unlisted options, each of the optionholders has executed a deed whereby the unlisted options will be cancelled in consideration for receipt of a cash payment, subject to the Acquisition Scheme becoming effective. If an optionholder exercise any options prior to the record date and receives shares in Cassini, the optionholder will receive the Scheme consideration.[72] Cassini has obtained the necessary waiver of Listing Rule 6.23.2 in respect of the cancellation of the options.
[72] Acquisition Scheme Booklet [11.21]; Demerger Scheme Booklet [12.18].
In respect of the performance rights, each performance right will automatically vest on approval of the Acquisition Scheme by the court at the second court hearing and the performance rights holders will receive a Cassini share on a one-for-one basis.[73]
[73] Acquisition Scheme Booklet [11.20]; Demerger Scheme Booklet [12.17].
I was and am satisfied that neither of these arrangements are class creating or a collateral benefit. These securities were on issue prior to the execution of the SIDs and the proposed arrangements do not provide any incentive to the holders of flex securities to vote in a particular way in respect of the Schemes.
Performance Risk
I was and am satisfied that the nature and terms of the proposed Acquisition Scheme are such that the shareholders are adequately protected against the risk that they will not receive the Scheme Consideration and not be able to sue OZ Minerals to recover their shares or damages.
In that respect I have had regard to the terms of the Scheme and the Deed Poll. Pursuant to these documents:
(a)OZ Minerals must allot and issue to each eligible shareholder one OZ Minerals share for every 68.5 Cassini shares they hold by the record date;[74]
(b)OZ Minerals is required to issue the Scheme Consideration on the implementation date.[75]
[74] Acquisition Scheme, cl 7.1.
[75] Acquisition Scheme, cl 7.2.
The Acquisition Scheme provides that the appointment of OZ Minerals as sole proxy will occur only following the provision of the Scheme Consideration.[76] This addresses any concern that the incoming board of OZ Minerals may potentially interfere with the implementation of the Scheme.[77]
[76] Acquisition Scheme, cl 10.4.
[77] Re Kangaroo Resources Ltd; Ex Parte Kangaroo Resources Ltd [No 2] [2018] WASC 388 [28] - [31].
The arrangements under the terms of the proposed Acquisition Scheme are supported by the Deed Poll. By the Deed Poll, OZ Minerals covenants in favour of each Cassini shareholder that it will perform all actions attributed to it under the Acquisition Scheme. There is also an acknowledgement that the Deed Poll may be relied on and enforced by any Scheme shareholder in accordance with its terms and that Cassini and each of its directors may act as agent and attorney to enforce the Deed Poll on behalf of the Cassini shareholders.[78] In my view, the shareholders are sufficiently identified within the deed poll to enable them to enforce the deed poll as against OZ Minerals.[79]
No collateral benefit which should prevent the approval of the Scheme
[78] Deed Poll, cl 1.3.
[79] Property Law Act 1969 (WA) s 11(1); Acquisition Scheme cl 1.3.
The court must examine whether a benefit exists for one shareholder in particular so as to bring into question the overall fairness of the Acquisition Scheme.[80] To determine whether there is a collateral benefit, the court considers the 'net benefits' test, to ensure that there is no overall disparity in favour of the party to the non‑Scheme transaction.[81] If no net benefit is present, then, prima facie, the equality principle under s 602(c) of the Act is satisfied.
[80] Re David Jones Ltd [No 2] [2014] FCA 720; (2014) 101 ACSR 381 [12] ‑ [16] (Farrell J).
[81] Takeovers Panel, Guidance Note 21: Collateral Benefits [15].
Cassini drew my attention to one matter which may constitute a collateral benefit, that is, the consideration received by two of Cassini's directors, Mr Bevan and Ms Simone Suen, for the performance rights and options they hold.
I accept there is no collateral benefit that accrues to shareholders who also hold performance rights or options. Any additional consideration received by option holders is consideration for the cancellation of their options and not for their shares. In relation to performance right holders, the evidence is that there is no material benefit, as holders of performance rights will be granted equivalent rights in OZ Minerals. The consideration provided to performance right holders and option holders is disclosed in the Acquisition Scheme booklet.[82]
Director benefits and director recommendations
[82] Acquisition Scheme booklet, [11.20] - [11.21].
The terms of the Acquisition SID requires the directors of Cassini to state that the Cassini board unanimously:[83]
(a)consider the Acquisition Scheme to be in the best interests of shareholders; and
(b)recommend that shareholders approve the Acquisition Scheme resolution in the absence of a superior proposal and provided that the independent expert's report continued to conclude that the Scheme is in the best interests of shareholders.
[83] Acquisition SID, cl 7.1.
In respect of the directors of Cassini, counsel drew my attention to the fact that Mr Bevan holds 1,115,803 performance rights. These performance rights will automatically vest upon the Acquisition Scheme becoming effective. Mr Bevan does not consider that this arrangement should prevent him from making a recommendation in relation to the Schemes. Counsel drew my attention to the fact that the consideration is in substitution for existing rights.
Counsel also drew my attention to the fact that Ms Suen holds 5,000,000 unlisted options. Ms Suen has entered into an Option Cancellation Deed as described above at [61]. Ms Suen does not consider that this should prevent her from making a recommendation in relation to the schemes.
For the following reasons, it was and is my view that it was not inappropriate for these directors to make a recommendation in respect of the Schemes. First, the rights arise as a result of the cancellation of performance rights and the unlisted options which were granted well before the SIDs were entered into. Second, the rights are in substitution for existing rights held by each of them and the value is not disproportionate, uncommercial or irregular. Third, these matters are fully disclosed in the Scheme booklets.[84]
Exclusivity provisions and break fee
[84] Acquisition Scheme booklet, [3], [5.7] and Demerger Scheme booklet, [3], [5.5].
The Acquisition SID contains the customary lock-up devices in the form of 'no shop', 'no talk', 'no due diligence', 'notification obligations' and 'matching right' provisions.[85] The 'no talk' and 'no due diligence' provisions are subject to a fiduciary carve‑out.[86] In certain circumstances, a reciprocal break fee of $760,000 is payable.[87]
[85] Second affidavit of Michael Choon Ming Ng filed 10 August 2020 (COR 96 of 2020) 'MCN6', cl 8.
[86] Second affidavit of Michael Choon Ming Ng filed 10 August 2020 (COR 96 of 2020) 'MCN6', cl 8.8.
[87] Second affidavit of Michael Choon Ming Ng filed 10 August 2020 (COR 96 of 2020) 'MCN6', cl 9 and cl 10.
In considering whether the exclusivity provisions impact on completion of the transaction and the duties of directors, the court has regard to:[88]
(a)the period of the exclusivity, which should be no more than a reasonable period and capable of precise ascertainment;
(b)whether the provisions are subject to an overriding obligation that the directors not breach their fiduciary duties or are otherwise unlawful; and
(c)whether there is adequate prominence given to these provisions in the scheme booklet.
[88] Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400 [29] - [35]; Re Kangaroo Resources Ltd [57] - [61].
In this case, the exclusivity period in the SID is defined as a period of up to six months. The no‑talk and no due diligence provisions contain appropriate directors' duty qualifications.[89] The exclusivity arrangements are disclosed in the Acquisition Scheme booklet.[90]
[89] Second affidavit of Michael Choon Ming Ng filed 10 August 2020 (COR 96 of 2020) 'MCN6', cl 8.8.
[90] Acquisition Scheme booklet, [11.16].
The Acquisition Scheme booklet specifically discloses the circumstances in which the obligation to pay the Break Fee will be triggered.[91] I was and am satisfied that there is adequate disclosure of the Break Fee in the Acquisition Scheme booklet.
[91] Acquisition Scheme booklet, [11.18].
Mr Bevan sets out the commercial justification for the exclusivity provisions and the Break Fee.[92] I accept his evidence that the exclusivity provisions are reasonable and appropriate for a transaction of this nature. The inclusion of these provisions in the SID followed arm's‑length commercial negotiations in which Cassini was advised and represented by external legal and financial advisers.[93]
[92] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [65] - [74].
[93] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [68].
The amount of the Break Fee represents approximately 1% of the total equity value of Cassini based on the value of the implied Acquisition Scheme consideration.[94] As such, it is within the generally accepted commercial parameters for break fees.
Demerger Capital Reduction
[94] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020) [70].
The Demerger Scheme is conditional upon the approval of the Demerger Capital Reduction at a separate general meeting of Cassini shareholders to be held immediately after the Scheme meetings.[95]
[95] Demerger SID, cl 3.1.1; Demerger Scheme cl 4.3.
In considering whether to exercise the discretion conferred by s 411(1) of the Act to convene a meeting of shareholders, it is relevant to consider, where a proposed capital reduction under s 256B of the Act is part of a proposed demerger by way of scheme of arrangement, whether the proposed capital reduction 'amply conforms with the requirements of s 256B'.[96]
[96] Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358 [15].
Section 256B(1) relevantly provides that:
A company may reduce its share capital in a way that is not otherwise authorised by law if the reduction:
(a)is fair and reasonable to the company's shareholders as a whole; and
(b)does not materially prejudice the company's ability to pay its creditors; and
(c)is approved by shareholders under section 256C.
A cancellation of a share for no consideration is a reduction of share capital, but paragraph (b) does not apply to this kind of reduction.
In this case, for the following reasons, I am satisfied that the proposed capital reduction is fair and reasonable to shareholders and does not materially prejudice its ability to pay its creditors. First, there is nothing in Cassini's constitution that would prevent the reduction of capital in the manner proposed. Second, the IER has concluded that the proposed Demerger Scheme, which includes the reduction of capital, is in the best interests of shareholders and is fair and reasonable. Third, the proposed transaction does not remove all assets of Cassini and leave it only with liabilities. Fourth, the directors of Cassini have stated that the proposed demerger will not materially prejudice Cassini's ability to pay its creditors.
In relation to the position of Ineligible Foreign Shareholders, who will receive cash after shares are sold, rather than shares in Caspin, this differing treatment does not mean that the proposed reduction in capital is a selective one as opposed to an equal one. For both the Ineligible Foreign Shareholders and the other shareholders, the terms of the reduction are the same.[97]
[97] Re Alchemia Ltd [2012] FCA 927 [36]; Re Wesfarmers Ltd [106].
Accordingly, I do not consider that nothing in the proposed capital reduction prevents me from exercising my discretion under s 411(1) of the Act.
Other matters
Counsel for Cassini drew my attention to the 'deemed warranty' provision in the proposed Acquisition Scheme.[98] The warranty provision is disclosed in the Scheme booklet.[99] Deemed warranty clauses are not unusual and are acceptable provided there is adequate disclosure that it is a condition.[100]
[98] Acquisition Scheme, cl 10.2.
[99] Acquisition Scheme booklet, 'Frequently Asked Questions', page 22.
[100] Re APN News and Media Ltd [57] - [63]; Re DUET Management Company 1 Ltd [2013] NSWSC 817; (2013) 95 ACSR 34 [23]; Re Nzuri Copper Ltd [2019] WASC 189 [90]; Re Macquarie Private Capital A Ltd [2008] NSWSC 323 [13] - [14]; Re Doray Minerals Ltd; Ex Parte Doray Minerals [2019] WASC 57 [71].
In addition, the Acquisition Scheme provides that, to the extent permitted by law, the Cassini shares will transfer free from encumbrances and restrictions on transfer of any kind.[101] The terms of this clause is in standard terms and includes the opening words 'To the extent permitted by law'. The inclusion of these words address the concern that has previously been expressed as to whether third parties may otherwise gain the impression that their rights have been extinguished.[102]
[101] Acquisition Scheme, cl 10.3.
[102] Re Investa Properties Ltd [2007] FCA 1104 [25] - [30]; Re Scarborough Equities Ltd [No 2] [2009] FCA 484 [9] - [10].
Additionally, the plaintiff sought orders pursuant to s 1319 of the Act for electronic dispatch of the Scheme booklets. I note that these orders are now common.[103] Details were provided as to the terms of the proposed electronic notification.[104] I was satisfied, having read the terms of the proposed email communication to security holders, that an order for electronic dispatch of the Scheme booklets was appropriate.
[103] See, for example, Re SRG Ltd, [48]; Re Doray Minerals; Ex parte Doray Minerals [72].
[104] Submissions, [155] - [157].
In response to the current COVID-19 pandemic, Commonwealth, State and Territory governments have passed legislation, made regulations and issued directives which prevent interstate and overseas shareholders of Cassini from physically attending meetings held in Western Australia, where Cassini is based. As a result of the restrictions, Cassini sought directions pursuant to s 1319 of the Act that the Scheme meetings be conducted as virtual meetings.[105] The use of this technology is something this court has previously considered and approved.[106] In my view, it was appropriate to make the directions sought to facilitate the attendance of all shareholders.
[105] Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 96 of 2020), 'RGB-1', Notice of Acquisition Meeting; Affidavit of Richard Gwynn Bevan filed 27 July 2020 (COR 97 of 2020), 'RGB-1', Notice of Demerger Meeting.
[106] Re Zenith Energy Ltd; Ex parte Zenith Energy Ltd [2020] WASC 266 [91] - [94].
Taking into account all of these matters, I considered that there was no apparent reason why the Schemes should not, if the necessary special resolutions of shareholders are passed, receive the Court's approval.
Conclusion on First Hearing
At the hearing before me, I was satisfied that the substantive and procedural requirements under s 411(1) of the Act had been satisfied and that the proposed Schemes were fit for consideration by Cassini's members.
For these reasons, at the conclusion of the hearing on 12 August 2020, I made orders in terms of Annexure 'A' to this judgment in respect of the Schemes.
Annexure A
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MG
Research Orderly to the Honourable Justice Hill
7 SEPTEMBER 2020
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