Re IDM International Ltd; [No 2]
[2025] WASC 236
•17 JUNE 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE IDM INTERNATIONAL LTD; EX PARTE IDM INTERNATIONAL LTD [No 2] [2025] WASC 236
CORAM: HILL J
HEARD: 17 JUNE 2025
DELIVERED : 17 JUNE 2025
FILE NO/S: COR 57 of 2025
MATTER: IN THE MATTER OF IDM INTERNATIONAL LTD
EX PARTE
IDM INTERNATIONAL LTD
Plaintiff
Catchwords:
Corporations - Scheme of arrangement - Application for orders approving scheme under s 411(4)(b) of the Corporations Act 2001 (Cth) - Orders made approving scheme
Legislation:
Corporations Act 2001 (Cth) s 411
Result:
Orders made approving scheme
Category: B
Representation:
Counsel:
| Plaintiff | : | A Fleming |
Solicitors:
| Plaintiff | : | Johnson Winter & Slattery - Perth |
Cases referred to in decision:
Re IDM International Ltd [2025] WASC 209
Re International Goldfields Ltd [2004] WASC 112
Re National Australia Bank Ltd [2016] VSC 62
Re Seven Network Ltd [No 3] [2010] FCA 400; (2010) 267 ALR 583
Re Wesfarmers Ltd [No 2] [2018] WASC 357
HILL J:
At the final hearing of the originating process this morning, IDM International Limited (IDM) sought orders approving a scheme of arrangement with Blackstone Minerals Limited (Blackstone) for the acquisition of all shares in IDM.
The background to this matter is set out in the judgment I delivered following the first court hearing on 6 May 2025.[1] At the conclusion of this hearing, I made orders for the Scheme Meeting to be convened on 10 June 2025 (Orders).
[1] Re IDM International Ltd [2025] WASC 209 (First Reasons). I have adopted the same defined terms used in the First Reasons in these reasons.
Scheme Meeting
The Scheme Meeting was held on 10 June 2025. At this meeting, the resolution was passed by the requisite statutory majorities.[2]
[2] Affidavit of Geoffrey Mark Gilmour filed 13 June 2025 [23].
81 shareholders were present at the Scheme Meeting in person and by proxy. 97.53% of shareholders who voted at the meeting were in favour of the resolution to approve the Scheme, with 100% of the votes cast in favour of the resolution.[3]
[3] Affidavit of Geoffrey Mark Gilmour filed 13 June 2025 [24]. Two shareholders abstained from voting on the resolution.
Should the court exercise its discretion to approve the Schemes?
The approval of the proposed Scheme pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Act), or the second court hearing, is the third stage of approval for schemes of arrangement. The second stage is the approval of the Scheme by the requisite statutory majorities, which occurred at the Scheme Meeting.
At the second court hearing, the court has two tasks:[4]
(a)to ensure that all statutory and procedural requirements have been satisfied. This includes confirming that:[5]
(a)the meetings were convened and held in accordance with the court's earlier orders;
(b)the resolutions were passed with the requisite statutory majorities;
(c)the plaintiff otherwise complied with the court's earlier orders; and
(b)to determine, in the exercise of the court's discretion, whether to approve the proposed arrangement.
[4] Re Wesfarmers Ltd [No 2] [2018] WASC 357 [12].
[5] Re International Goldfields Ltd [2004] WASC 112 [7].
The court has a discretion to approve a scheme under s 411(4)(b) of the Act and is not bound to approve a scheme just because the court made orders for the convening of the Scheme Meeting or because the statutory majorities were achieved at the Scheme Meeting.[6] That said, the court will usually approach the task on the basis that shareholders are better judges of what is in their commercial interests than the court.[7]
[6] Re Wesfarmers Ltd [No 2] [13]; Re Seven Network Ltd [No 3] [2010] FCA 400; (2010) 267 ALR 583 [31].
[7] Re Wesfarmers Ltd [No 2] [13]; Re Seven Network Ltd [No 3] [32] - [33].
The factors that inform the court's discretion whether or not to approve a scheme are:[8]
(a)whether the members have voted in good faith and not for an improper purpose;
(b)whether the proposal is fair and reasonable so that an intelligent and honest person who was a member of the relevant class, properly informed and acting alone, might approve it;
(c)whether the plaintiff has brought to the attention of the court all matters that could be considered relevant to the exercise of the court's discretion;
(d)whether there has been full and frank disclosure of all information material to the members' decision;
(e)whether minority shareholders would be oppressed by the scheme;
(f)whether the court is satisfied that the scheme has not been proposed to avoid ch 6 of the Act;
(g)whether ASIC has any objection to the scheme; and
(h)whether the scheme offends public policy.
[8] Re Seven Network Ltd [No 3] [35] - [40], [50], [52].
In addition to the affidavits relied upon at the first court hearing, IDM relied on an additional five affidavits, namely:
(a)two affidavits of Andrew Gerard Ricciardi filed 13 June 2025 and 16 June 2025;
(b)an affidavit of Geoffrey Mark Gilmour filed 13 June 2025;
(c)an affidavit of Michael Graham Allardice, secretary of Bezant Resources PLC (Company Number 02918391), IDM's largest shareholder, filed 13 June 2025; and
(d)an affidavit of Flynn Robert Orman Mitchell, manager of IDM's share registry services provider, filed 13 June 2025.
Compliance with statutory and procedural requirements
I was and am satisfied, on the basis of the additional affidavits that were filed by IDM, that:
(a)a copy of Orders was lodged with ASIC;[9]
(b)a copy of the Scheme booklet substantially in the form that was approved for distribution by the court at the first court hearing was lodged with ASIC and registered on 6 May 2025;[10]
(c)the Scheme materials were dispatched to Shareholders in accordance with the orders of the court;[11]
(d)the Scheme Meeting was convened and held on 10 June 2025 in accordance with the Orders;[12]
(e)the Scheme was approved by the requisite statutory majorities;[13]
(f)notice of the second court hearing was given by way of an announcement published in The Australian newspaper and on IDM's website on 12 June 2025;[14] and
(g)ASIC informed IDM, pursuant to s 411(17)(b) of the Act, that it has no objection to the proposed Scheme.[15]
[9] Affidavit of Andrew Gerard Ricciardi filed 13 June 2025 [7].
[10] Affidavit of Andrew Gerard Ricciardi filed 13 June 2025 [8].
[11] Affidavit of Flynn Robert Orman Mitchell filed 13 June 2025 [21], [25], [29].
[12] Affidavit of Geoffrey Mark Gilmour filed 13 June 2025 [9].
[13] Affidavit of Geoffrey Mark Gilmour filed 13 June 2025 [23] - [24].
[14] Affidavit of Andrew Gerard Ricciardi filed 13 June 2025 [9] - [10], 'AR-9', 'AR-10'.
[15] Affidavit of Andrew Gerard Ricciardi filed 16 June 2025, 'AR-15'.
Counsel for IDM drew my attention to two matters in relation to the conduct of the Scheme Meeting. The first was the relatively low voter turnout. Approximately 8.54% of Shareholders holding 67,962,427 Shares (or approximately 73.85% of all Shares on issue) voted at the meeting in person or by proxy. There is nothing on the evidence before me which would support an inference being drawn that the lower vote turnout (by number of shareholders) was because of any error in the despatch of the Scheme booklet or an issue which deterred Shareholders from voting at or attending the Scheme Meeting. In my view, the low vote turnout should not prevent the court from making orders approving the Scheme.
The second was that at the Scheme Meeting, Mr Gilmour, the chair of the Scheme Meeting, advised attendees that the results of the poll would be announced shortly after the meeting and then declared the meetings closed. The poll results were released on IDM's website and were the subject of an ASX announcement by Blackstone Minerals after the Scheme Meeting was closed.[16]
[16] Affidavit of Geoffrey Mark Gilmour filed 13 June 2025 [21] - [22], 'GG-16' , 'GG-17'.
The approach of a chairperson advising the meeting that results will be the subject of an announcement pursuant to s 251AA of the Act, following the votes being counted and after the meeting has been formally closed, has been approved by the courts on numerous occasions.[17]
[17] See, for example, Re National Australia Bank Ltd [2016] VSC 62 [56] and Re MAC Services Group Ltd [2010] NSWSC 1474.
There is no issue that arises from the manner in which the polls were conducted or announced by IDM.
I was and am satisfied that all statutory pre-conditions have been met and turn to the discretionary considerations.
Good faith and proper purpose
I am satisfied on the evidence filed by IDM that its Shareholders voted in good faith and for a proper purpose. The proposed Scheme does not involve any novel treatment of rights. No-one appeared at the second court hearing to object to the approval of the proposed Scheme.
Fairness and reasonableness
At the first court hearing, based on the evidence before the court, I was satisfied that the Scheme was fit for consideration by Shareholders and that the proposed Scheme was of such a nature that there was no apparent reason that it should not receive approval if the requisite voting majorities were achieved at the Scheme Meeting.
Nothing has occurred since the date of the first court hearing to change these views. The shareholders of IDM who voted at the meeting overwhelmingly supported the proposed Scheme.
No Shareholder appeared at the second court hearing to oppose the orders sought by IDM. I was and am satisfied that the proposed Scheme is a Scheme that sensible businesspeople might consider to be of benefit to Shareholders.
All relevant matters brought to the court's attention
At the second court hearing, counsel drew three additional matters to my attention.
The first was that in May 2025, after the dispatchment of the Scheme booklet to Shareholders, IDM appointed Peloton Shareholder Services (Peloton) to conduct a Shareholder outreach campaign on behalf of IDM in relation to the Scheme Meeting.[18]
[18] Affidavit of Geoffrey Mark Gilmour filed 13 June 2025 [31].
Peloton's campaign involved the dispatch of two identical emails to Shareholders and a telephone call campaign. These emails and the telephone script contained several statements that IDM later considered required clarification.[19] IDM took immediate steps to clarify these statements by issuing an email on 7 June 2025 to Shareholders correcting these statements (Clarification Email). IDM also addressed these matters in the chairperson's script and presentation delivered at the Scheme Meeting, both of which were also released on IDM's website prior to the commencement of the Scheme Meeting.[20]
[19] Affidavit of Geoffrey Mark Gilmour filed 13 June 2025 [32], [33], 'GG-18', 'GG-19'.
[20] Affidavit of Geoffrey Mark Gilmour filed 13 June 2025 [11], [34], 'GG-13', 'GG-20'.
Counsel for IDM submitted that this issue did not have any material impact on the Scheme Meeting given the relatively low percentages of Shareholders that opened the emails sent by Peloton and answered Peloton's telephone calls, which were materially similar to the percentages of Shareholders who opened the Clarification Email. IDM also noted that there was a short period of three days' time between the identification of the issue and steps being taken to correct the inaccuracies, and this process occurred before the Scheme Meeting was held.[21] This issue was the subject of correspondence with ASIC who did not identify any issue in relation to the steps taken by IDM.[22]
[21] Plaintiff's submissions filed 13 June 2025 [47].
[22] Affidavit of Andrew Gerard Ricciardi filed 16 June 2025 'AR-12' - 'AR-14'.
IDM accepted that it had not drawn to the attention of the court at the first court hearing its intention to conduct an outbound Shareholder campaign. Counsel for IDM explained that, at that time, IDM had not intended to conduct a campaign and only decided to do so when the receipt of proxies for the Scheme Meeting was slower than had been anticipated.
I accept that the IDM took appropriate steps to address the issues that were identified. On the evidence before me, I am satisfied that this matter did not cause substantial injustice to Shareholders or have a material impact on the outcome of the Scheme Meeting.
For the purposes of the second court hearing, the relevant consideration was whether there has been full and fair disclosure to Shareholders as to all matters relevant to their decision. In my view, there was nothing to suggest that any information provided to Shareholders was misleading or inaccurate or that there has not been proper disclosure of all information which was material to the decision of Shareholders prior to their vote on the Scheme.
The second matter was confirmation that all remaining conditions precedent (apart from court approval at the second court hearing) have been satisfied or waived.[23]
[23] Affidavit of Andrew Gerard Ricciardi filed 16 June 2025, 'AR-16', 'AR-17'.
The final matter was that IDM sought an exemption from s 411(11) of the Act. In my view, there is no utility in requiring the court's orders approving the Scheme to be annexed to IDM's constitution as the orders do not affect any change to the constitution. I considered it was and is appropriate in the circumstances of this case to make the orders sought under s 411(12) of the Act.
Full and fair disclosure
At the first court hearing, based on the evidence before the court, I was satisfied that the Scheme booklet would provide full and fair disclosure to Shareholders.
The additional affidavit evidence filed by IDM establishes that the Scheme booklet was dispatched in the form approved for distribution by the court. Nothing has arisen to suggest that there was not full and fair disclosure of all information that was material to the decision of Shareholders prior to them voting on the Scheme.
Satisfaction of s 411(17) of the Act and ASIC's view
ASIC has provided a written statement to the effect that it does not object to the Scheme pursuant to s 411(17)(b) of the Act.[24] This satisfies the requirements of s 411(17). Having regard to the nature of the proposed transaction, it cannot be said the Scheme was proposed to avoid the operation of ch 6 of the Act.
Public policy and oppression of minorities
[24] Affidavit of Andrew Gerard Ricciardi filed 16 June 2025, 'AR-15'.
There is no evidence before the court that the proposed Scheme offends any aspect of public policy. Given the nature of the proposed Scheme, it could not be sensibly suggested that the Scheme offends public policy.
Amendment to Scheme
IDM sought orders under s 411(6) of the Act to enable certain dates which are missing from defined terms to be inserted.
I accept that each of the proposed amendments are minor and do not affect or call into question the validity of the resolution passed by Shareholders at the Scheme Meeting.
Conclusion and orders
For these reasons, at the conclusion of the hearing on 17 June 2025, I found that the substantive and procedural requirements under s 411(4) of the Act had been satisfied and that I should exercise my discretion to make orders approving the proposed Scheme in terms of Annexure 'A' to this judgment.
Annexure 'A'
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KS
Associate to the Honourable Justice Hill
17 JUNE 2025
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