Re Latin Resources Limited; [No 2]

Case •

[2025] WASC 17

•

22 JANUARY 2025

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   RE LATIN RESOURCES LIMITED; EX PARTE LATIN RESOURCES LIMITED [No 2] [2025] WASC 17

CORAM:   STRK J

HEARD:   21 JANUARY 2025

DELIVERED          :   21 JANUARY 2025

PUBLISHED           :   22 JANUARY 2025

FILE NO/S:   COR 171 of 2024

EX PARTE

LATIN RESOURCES LIMITED

Plaintiff


Catchwords:

Corporations law - Scheme of arrangement - Share Scheme - Option Scheme - Second court hearing - Whether the statutory and procedural requirements had been satisfied - Discretionary considerations - Orders made approving the Share Scheme and the Option Scheme - Ancillary orders - Notation to the orders made at the conclusion of the second hearing

Legislation:

Corporations Act 2001 (Cth)
Corporations Regulations 2001 (Cth)
Supreme Court (Corporations) (WA) Rules 2004 (WA)

Result:

Application granted
Orders made approving the schemes of arrangement
Notation made to the orders

Category:    B

Representation:

Counsel:

Plaintiff :

AJ Papamatheos SC & CE Joyce
Interested Party : K Sleiman

Solicitors:

Plaintiff :

King & Wood Mallesons
Interested Party : Corrs Chambers Westgarth

Case(s) referred to in decision(s):

Allkem Limited, in the matter of Allkem Limited (No 2) [2023] FCA 1657

Amcor Limited, in the matter of Amcor Limited (No 2) [2019] FCA 842

Beadell Resources Ltd [No 2] [2019] WASC 53

Newcrest Mining Ltd, in the matter of Newcrest Mining Ltd (No 2) [2023] FCA 1251

OreCorp Limited, in the matter of OreCorp Limited [2023] FCA 1359

Piedmont Lithium Ltd; Ex Parte Piedmont Ltd [No 3] [2021] WASC 173

PR Finance Group Ltd, in the matter of PR Finance Group Limited (No 2) [2013] FCA 633

Re Coles Group (No 2) [2007] VSC 523; (2007) 215 FLR 411

Re Latin Resources Limited; Ex Parte Latin Resources Limited [2024] WASC 513

Re Metropolitan Fuel Pty Ltd [1962] VR 675

Re NRMA Ltd (2000) 34 ACSR 261

Re Nusantara Resources Ltd; Ex Parte Nusantara Resources Ltd [2021] WASC 334

Re Seven Network Ltd (No 3) [2010] FCA 400; (2010) 267 ALR 583

Re Valmec Ltd; Ex parte Valmec Ltd [2021] WASC 420

Re Vimy Resources Ltd [No 2] [2022] WASC 257

Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [No 2] [2018] WASC 357

Re Western Areas Ltd; Ex Parte Western Areas Ltd [No 2] [2022] WASC 198

SRG Limited, in the matter of SRG Limited (No 2) [2018] FCA 1424

Tawana Resources NL, in the matter of Tawana Resources NL (No 3) [2018] FCA 1952

Technology Metals Australia Ltd v Australian Vanadium Limited [2024] WASC 26

Zenyth Therapeutics Ltd v Smith (2006) 60 ACSR 548

Table of Contents

Introduction

Further evidence for the second court hearing

Affidavit of Danielle Maree Janette Petch

Third affidavit of Mr Vilensky

Fourth affidavit of Mr Vilensky

Fourth affidavit of Mr Wang

Legal principles

Disposition

Compliance with statutory and procedural requirements

Good faith and proper purpose

Fairness and reasonableness

Full and fair disclosure

Oppression of minorities

Conditions precedent

Voting intention statement

Public policy

Exemption from compliance with s 411(11) of the Corporations Act

Section 411(17) of the Corporations Act

Conclusion and orders made at the second court hearing

Schedule A - Orders made on 28 November 2024

Schedule B - Orders made on 21 January 2025

STRK J:

Introduction

  1. Latin Resources Limited and Pilbara Minerals Limited agreed to implement a scheme of arrangement under pt 5.1 of the Corporations Act 2001 (Cth) between Latin Resources and Latin Resources shareholders (Share Scheme), and Latin Resources and Latin Resources optionholders (Option Scheme) (together, the Schemes), on and subject to the terms of a scheme implementation agreement entered into on 14 August 2024. If implemented, by the proposed Schemes Pilbara Minerals would acquire 100% of the Latin Resources shares and 100% of the Latin Resources options.

  2. In conjunction with the proposed Schemes, it was contemplated that Latin Resources would demerge its wholly owned subsidiary ESG Minerals Limited, by way of a pro rata in‑specie distribution of 100% of the fully paid ordinary shares in ESG Minerals to eligible Latin Resources shareholders in satisfaction of a capital reduction in Latin Resources (Demerger).[1] Further, it was contemplated that if the Demerger was approved at a general meeting of Latin Resources shareholders (Demerger Meeting), the Demerger would be implemented prior to the implementation of the Schemes.[2]

    [1] First affidavit of DX Vilensky sworn 6 November 2024 par 33; second affidavit of DX Vilensky sworn 26 November 2024, DXV-32.

    [2] Outline of submissions par 13; first affidavit of DX Vilensky sworn 6 November 2024 pars 36 ‑ 37, DXV‑1 (pages 439 ‑ 504).

  3. On 21 January 2024 Latin Resources moved for orders approving the Schemes pursuant to s 411(4) and, if necessary, s 411(6) of the Corporations Act.

  4. Section 411 of the Corporations Act envisages three steps. First, the court approves the convening of a scheme meeting and the draft explanatory statement to be sent to the scheme members. Secondly, the members vote on the proposed scheme of arrangement at the scheme meeting. Thirdly, assuming the first two stages have occurred, a further application to the court for approval of the arrangement.

  5. At the conclusion of the first court hearing, which was heard on 28 November 2024, orders were made pursuant to s 411(1) of the Corporations Act to convene a meeting of holders of fully paid ordinary shares in the capital of Latin Resources (Share Scheme Meeting); and a meeting of the holders of options in Latin Resources (Option Scheme Meeting). Orders were also made approving distribution of a scheme booklet which comprised the explanatory statement required by s 412(1)(a) of the Corporations Act. Ancillary orders were made as to the convening and conduct of the meetings.

  6. The reasons which grounded the orders made at the first court hearing are set out in Re Latin Resources Limited; Ex Parte Latin Resources Limited [2024] WASC 513. A copy of the orders made on 28 November 2024 were reproduced at sch A to those reasons. The same orders are reproduced here at sch A to these reasons for ease of reference. I do not intend to repeat here what was said in those reasons. These reasons should be read with and as if they incorporate the earlier reasons.

  7. At the Share Scheme Meeting, which was convened after the Demerger Meeting, Latin Resources shareholders were asked to vote on the following resolution (Share Scheme Resolution):[3]

    That, pursuant to and in accordance with section 411 of the Corporations Act 2001 (Cth):

    (a)the scheme of arrangement proposed between Latin Resources Limited and the holders of its fully paid ordinary shares as contained in and more precisely described in the Scheme Booklet of which the notice convening this meeting forms part, is agreed to (with or without modification as approved by the Supreme Court of Western Australia to which Latin Resources Limited and Pilbara Minerals Limited agree); and

    (b)the directors of Latin Resources Limited are authorised to agree to such alterations or conditions as are thought fit by the Court, and subject to approval of the Share Scheme by the Court, the board of directors of Latin Resources Limited is authorised to implement the Share Scheme with any such modifications or conditions.

    [3] Fourth affidavit of DX Vilensky sworn 17 January 2025 par 9(e), DXV-43 (pages 24 - 25, 50).

  8. As the Option Scheme Meeting, which was convened after the Share Scheme Meeting, Latin Resources optionholders were asked to vote on the following resolution (Option Scheme Resolution):[4]

    That, pursuant to and in accordance with section 411 of the Corporations Act 2001 (Cth):

    (a) the scheme of arrangement proposed between Latin Resources Limited and the holders of its options as contained in and more precisely described in the Scheme Booklet of which the notice convening this meeting forms part, is agreed to (with or without modification as approved by the Supreme Court of Western Australia to which Latin Resources Limited and Pilbara Minerals Limited agree); and

    (b) the directors of Latin Resources Limited are authorised to agree to such alterations or conditions as are thought fit by the Court, and subject to approval of the Option Scheme by the Court, the board of directors of Latin Resources Limited is authorised to implement the Option Scheme with any such modifications or conditions.

    [4] Fourth affidavit of DX Vilensky sworn 17 January 2025 par 10(d), DXV-43 (pages 31, 58).

  9. At the Share Scheme Meeting, the Share Scheme Resolution was passed by the majorities required by s 411(4)(a)(ii) of the Corporations Act, as:[5]

    (a)93.16% of the number of Latin Resources shareholders present and voting (in person or by proxy) voted in favour; and

    (b)98.86% of the votes cast were cast in favour.

    [5] Fourth affidavit of DX Vilensky sworn 17 January 2025 par 15; DXV-44 (page 64), DXV-45 (page 71), DXV‑47 (pages 73, 77); second outline of submissions par 2.

  10. At the Option Scheme Meeting, the Option Scheme Resolution was passed by the majorities required by s 411(4)(a)(ii) of the Corporations Act, as:[6]

    (a)100% of the number of Latin Resources optionholders present and voting (in person or by proxy) voted in favour; and

    (b)100% of the votes cast were in favour.

    [6] Fourth affidavit of DX Vilensky sworn 17 January 2025 par 17; DXV-44 (page 67), DXV-46 (page 72) DXV-47 (pages 73 - 74); second outline of submissions par 3.

  11. The court was also informed that the Demerger was approved at the Demerger Meeting.[7]

    [7] Fourth affidavit of DX Vilensky sworn 17 January 2025 pars 24 - 25, DXV-48, DXV-49; second outline of submissions par 50.

  12. The second court hearing took place on 21 January 2025, in the course of which Latin Resources sought the court's approval of the Schemes pursuant to s 411(4)(b) of the Corporations Act. Counsel for Pilbara Minerals attended the second court hearing in support of the application. Neither the Australian Securities and Investments Commission (ASIC), any shareholder or optionholder of Latin Resources, nor any other interested person sought to be heard. The court was informed that no objection had been formally communicated to Latin Resources or its solicitors since the Scheme Meetings to approve the Schemes, and no objection had been informally communicated.[8]

    [8] Second outline of submissions par 5; fourth affidavit of JY Wang affirmed on 21 January 2025 par 9.

  13. With the benefit of counsel for Latin Resources' comprehensive outline of submissions filed in advance of the second court hearing, and after hearing counsel, I made orders in accordance with s 411(4) of the Corporations Act to approve the Schemes, with ancillary orders and notes. A copy of the orders made at the conclusion of the second court hearing are reproduced at sch B to these reasons. My reasons for approving the Schemes are set out below.

Further evidence for the second court hearing

  1. Six affidavits were filed and read in support of Latin Resources' application at the first court hearing.[9] Four further affidavits were filed on behalf of Latin Resources for the purpose of the second court hearing. All were read and relied upon.[10] The four further affidavits are summarised below.

Affidavit of Danielle Maree Janette Petch

[9] Re Latin Resources Limited; Ex Parte Latin Resources Limited [12].

[10] Second outline of submissions pars 7 - 8; ts 22 (21 January 2025).

  1. Danielle Maree Janette Petch, a project coordinator employed by Computershare Investor Services Pty Limited, affirmed on 10 January 2025 an affidavit in support of the application, to which she attached documents marked DMJP‑1 to DMJP‑6.

  2. Ms Petch deposed to the engagement of Computershare by Latin Resources to provide share registry services, and in particular to undertake the despatch of the scheme booklet dated 29 November 2024 in relation the Schemes, and election and proxy forms in accordance with the orders made by this court on 28 November 2024 for, among other things, the sending of the scheme booklet (including the Demerger materials) and other materials. As project coordinator at Computershare, Ms Petch deposed that she had direct involvement in and oversight over the process for the despatch of the final scheme booklet to Latin Resources securityholders on the Latin Resources' share register and the Latin Resources' option register.

  3. Ms Petch deposed that Computershare maintained in a computer database:

    (a)the Latin Resources' share register which recorded:

    (i)the name and address of each Latin Resources shareholder from time to time;

    (ii)the individual Shareholder Reference Number (SRN) or Holder Identification Number for each Latin Resources shareholder; and

    (iii)the number of Latin Resources shares held by, and the voting entitlement of, each Latin Resources shareholder; and

    (b)the Latin Resources' option register which recorded:

    (i)the name and address of each Latin Resources optionholder from time to time; and

    (ii)the number of Latin Resources options held by each Latin Resources optionholder and the value of those Latin Resources options.

  4. Ms Petch further deposed that on 2 December 2024, she generated the Latin Resources' share register and the Latin Resources' option register, which relevantly recorded that as at 7.00 pm (AEDT) on 28 November 2024:

    (a)3,087 Latin Resources securityholders (3,074 Latin Resources shareholders and 13 Latin Resources optionholders) had elected to receive Latin Resources' notices of meeting electronically to their nominated email address;

    (b)28 Latin Resources securityholders (27 Latin Resources shareholders and one Latin Resources optionholder) had elected to receive Latin Resources' notices of meeting in hardcopy; and

    (c)7,313 Latin Resources securityholders (7,219 Latin Resources shareholders and 94 Latin Resources optionholders) had not made either election.

  5. Ms Petch deposed to the basis for her belief that there had been proper despatch of the scheme documents to the Latin Resources securityholders who had elected to receive notices of meeting electronically in accordance with order 6(a) of the orders made on 28 November 2024; and that when the emails sent returned an electronic 'bounceback' notification, the scheme documents were despatched to impacted Latin Resources securityholders who had a registered address in Australia by standard post, and to impacted Latin Resources securityholders who had a registered address outside of Australia by international airmail.

  6. Ms Petch also deposed to the basis for her belief that there had been proper despatch of the scheme documents to the Latin Resources securityholders who had elected to receive notices of meeting in hardcopy, and to those who had not made an election. She deposed that scheme documents were despatched to the Latin Resources securityholders who had a registered address in Australia by standard post, and were despatched to those who had a registered address outside of Australia by international airmail.

  7. Ms Petch deposed to the basis for her belief that subsequent postal despatch was made in the manner described at [20] above to:

    (a)41 Latin Resources shareholders on 11 December 2024, which shareholders were entered onto the Latin Resources share register after 7.00 pm (AEDT) on 28 November 2024 and before 7.00 pm (AEDT) on 9 December 2024;

    (b)51 Latin Resources shareholders on 23 December 2024, which shareholders were entered onto the Latin Resources share register as at 7.00 pm (AEDT) on 10 December 2024 and before 7.00 pm (AEDT) on 19 December 2024; and

    (c)32 Latin Resources shareholders on 8 January 2025, which shareholders were entered onto the Latin Resources share register as at 7.00 pm (AEDT) on 20 December 2024 and before 7.00 pm (AEDT) on 6 January 2025.

  8. As to the documents attached by Ms Petch to her affidavit, they included automated emails from Computershare confirming the receipt of email communications from Computershare to Latin Resources' securityholders.

Third affidavit of Mr Vilensky

  1. On 15 January 2025 Mr Vilensky swore a third affidavit in support of the application, to which he attached documents marked DXV‑35 to DXV‑42.

  2. Among other things, Mr Vilensky deposed to lodgement with ASIC via the ASIC Regulatory Portal on 28 November 2024 a Form 105, a sealed copy of the orders made by this court on 28 November 2024, the version of the scheme booklet for which Latin Resources sought registration by ASIC, and copies of the draft amended Australian Securities Exchange (ASX) announcements which were tendered by Latin Resources' counsel at the first court hearing on 28 November 2024.[11] He also deposed to the same documents being sent to ASIC by email; and that the scheme booklet was registered by ASIC on 29 November 2024.

    [11] While Mr Vilensky referred in his affidavit to the first court hearing on 8 November 2024, this was understood to be a typographical error: third affidavit of DX Vilensky sworn 15 January 2025 par 5(d).

  3. As to the engagement of Georgeson Shareholder Communications Pty Ltd by Latin Resources,[12] Mr Vilensky deposed to Georgeson having conducted:

    (a)an inbound telephone information line responding to securityholders of Latin Resources who had questions about the Schemes or the Demerger (which was described by Mr Vilensky as the Inbound Information Line); and

    (b)an outbound telephone call campaign to retail Latin Resources securityholders to enquire whether the Latin Resources securityholder:

    (i)had received the scheme booklet; and

    (ii)had voted or intended to vote on the Schemes (as applicable) and if so, how that Latin Resources securityholder had voted or intended to vote,

    (which was described by Mr Vilensky as the Retail Engagement Line).

    [12] As discussed in Re Latin Resources Limited; Ex Parte Latin Resources Limited [18], [178] ‑ [179].

  4. Mr Vilensky attached to his third affidavit a copy of various scripts that had been provided to Georgeson. He deposed that Georgeson was provided with a frequently asked questions script for the Inbound Information Line (the Inbound FAQs Script), and three scripts for the Retail Engagement Line (the Retail Engagement Scripts); that the scripts were amended versions of the scripts that had been considered by the court at the first court hearing and were amended as result of the further review of King & Wood Mallesons (KWM); that upon review of the Inbound FAQs Script and the Retail Engagement Scripts, Mr Vilensky was able to confirm that no script contained any information that was inconsistent with, departed from or was materially different from that contained in the scheme booklet, and that neither the Inbound FAQs Script nor the Retail Engagement Scripts contained any information that was new, or any information that would be considered to be incorrect, misleading or deceptive. Mr Vilensky also deposed to the manner in which the Inbound Information Line and the Retail Engagement Line were conducted based on the information provided by Georgeson.

  5. Mr Vilensky deposed that while it had been intended that in addition to the Inbound Information Line and the Retail Engagement Line conducted by Georgeson, Christopher Gale, the managing director of Latin Resources, would call the top 20 Latin Resources shareholders by telephone to encourage voting, he did not do so.

  6. As to disclosure, Mr Vilensky deposed that in accordance with its disclosure obligations under ch 3 of the ASX Listing Rules, Latin Resources had made various announcements on the ASX announcements platform in respect of the Schemes and other matters relevant to the Schemes, and he described those announcements in his third affidavit.

  7. Mr Vilensky attached to his third affidavit a copy of the communication by which various documents were sent to ASIC by email following their lodgement; a copy of the Inbound FAQs Script and the Retail Engagement Scripts; a copy of the Georgeson reports for the Inbound Information Line and Retail Engagement Line; and a bundle of ASX announcements released by Latin Resources.

Fourth affidavit of Mr Vilensky

  1. On 17 January 2025 Mr Vilensky swore a third affidavit in support of the application, to which he attached documents marked DXV‑43 to DXV‑50.

  2. Among other things, Mr Vilensky deposed that prior to the commencement of the Demerger Meeting and the Scheme Meetings, Latin Resources had made an announcement on the ASX enclosing the materials proposed to be presented at those meetings, namely a copy of the script for the chairperson and PowerPoint presentation.

  3. As to the Scheme Meetings, Mr Vilensky deposed to having acted as chairperson, and that the meetings were held after the Demerger Meeting. He also deposed to the manner in which the Scheme Meetings were conducted; to his belief that the Scheme Meetings were conducted in accordance with this court's orders made on 28 November 2024; that at no point during the Scheme Meetings, or until 17 January 2025, had any Latin Resources securityholder raised with him any objection, concern or issue with respect to the conduct or outcomes of the Scheme Meetings or the Schemes; that the total number of Latin Resources securityholders as at the time and date for determining eligibility to vote at the Scheme Meetings was 10,147 Latin Resources shareholders and 108 Latin Resources optionholders; to the attendance and voting at the Scheme Meetings; that the results of the Scheme Meetings were published by Latin Resources on the ASX at approximately 3:35 pm (AWST) on 16 January 2025; to the basis for his belief that there were no Latin Resources shareholders who provided invalid proxies in respect of the Scheme Meetings; and to his belief that no alternatives to the Schemes the subject of the Share Scheme Resolution and Option Scheme Resolution were proposed to Latin Resources prior to the Scheme Meetings.

  4. As to the Demerger Meeting, Mr Vilensky deposed to having acted as chairperson and to the manner in which the Demerger Meeting was conducted; to his belief that the Demerger Meeting was held in accordance with the requirements for a general meeting as provided for in Latin Resources' constitution; and that the resolution to approve the Demerger was approved by the requisite majority of Latin Resources shareholders present and voting, which satisfied cl 3.1(o)(i) of the scheme implementation agreement. Mr Vilensky also made a correction to his third affidavit.

  5. Mr Vilensky attached to his fourth affidavit a copy of the ASX announcement dated 16 January 2025, to which was attached the script for the chairperson and PowerPoint presentation; a copy of the signed minutes of the Scheme Meetings dated 16 January 2025; a copy of the Share Scheme poll report; a copy of the Option Scheme poll report; a copy of the ASX announcement dated 16 January 2025 regarding the results of the Scheme Meetings; a copy of the signed minutes of the Demerger Meeting dated 16 January 2025; a copy of the Demerger Meeting poll report; and a copy of the ASX announcement dated 5 December 2024 regarding despatch of the scheme booklet.

Fourth affidavit of Mr Wang

  1. On 21 January 2025 James Yu‑Wen Wang affirmed a fourth affidavit in support of the application, to which he attached two documents marked JYW‑11 and JWY‑12.

  2. Mr Wang deposed to the service of various documents filed in this proceeding on ASIC, further to those that had been served on ASIC in advance of the first court hearing;[13] to the basis of his belief that when he made his fourth affidavit, ASIC had been served with all documents filed in the proceeding; and to his intention to serve on ASIC any further documents that might be filed in this proceeding before the second court hearing.

    [13] Re Latin Resources Limited; Ex Parte Latin Resources Limited [25], [102]; first affidavit of JY Wang affirmed on 28 November 2024 pars 5 - 7.

  3. Mr Wang deposed to the receipt of a letter from ASIC on 21 January 2025 in which ASIC confirmed pursuant to s 411(17)(b) of the Corporations Act that it has no objection to the Schemes; and attached to his affidavit a copy of ASIC's 'no objection' letter given in the terms of ASIC Regulatory Guide 60: Schemes of Arrangement.

  4. Mr Wang also deposed that he was not aware of any person having served a notice of appearance or having given any notice to Latin Resources indicating an intention to oppose approval of the Schemes.

  5. Finally, Mr Wang in his fourth affidavit addressed the conditions precedent to the Share Scheme and the Option Scheme.[14] Mr Wang noted that cl 5.2(s) and cl 5.3(g) of the scheme implementation agreement, cl 3.3(a) of the Share Scheme (which is Annexure C to the scheme booklet) and cl 3.3(a) of the Option Scheme (which is Annexure D to the scheme booklet), provide that on the date of the second court hearing, Latin Resources and Pilbara Minerals must each provide to the court certificates in a form agreed between the parties, confirming whether or not, in respect of matters within their respective knowledge:

    (a)the conditions precedent in cl 3.1 (a) and cl 3.1(b) of the Share Scheme had been satisfied or waived; and

    (b)the conditions precedent in cl 3.1(a) and cl 3.1(b) of the Option Scheme had been satisfied or waived.

    [14] See Re Latin Resources Limited; Ex Parte Latin Resources Limited [15], [22], [37] - [42], [46] - [48], [114] - [124].

  6. Mr Wang also attached to his fourth affidavit a bundle of true copies of the certificates duly executed by Latin Resources and Pilbara Minerals in respect of the conditions precedent.

Legal principles

  1. Approval of the proposed scheme pursuant to s 411(4)(b) of the Corporations Act at the second court hearing is the third stage of approval for a scheme of arrangement, which approval is discretionary. Justice Hill in Re Western Areas Ltd; Ex Parte Western Areas Ltd [No 2] [2022] WASC 198 summarised the legal principles relevant at the second court hearing, which I reproduce below and applied in determining Latin Resources' application:[15]

    [15] See also second outline of submissions pars 10 - 12.

    [8] At the second court hearing, the court has two tasks:

    (a) to ensure that all statutory and procedural requirements have been satisfied. This includes confirming that:

    (i)the meeting was convened and held in accordance with the court's earlier orders;

    (ii)the resolutions were passed with the requisite statutory majorities; and

    (iii)the plaintiff otherwise complied with the court's earlier orders;

    (b)to determine, in the exercise of the court's discretion, whether to approve the proposed arrangement.

    [9] The court has a discretion to approve a scheme under s 411(4)(b) of the [Corporations Act] and is not bound to approve a scheme just because the court previously made orders for the convening of a meeting or because the statutory majorities have been achieved. 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.

    [10] The factors that inform the court's discretion whether or not to approve a scheme are:

    (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 [Corporations Act];

    (g)whether ASIC has an objection to the scheme; and

    (h)whether the scheme offends public policy.

    (footnotes omitted)

Disposition

  1. There was no opposition by ASIC or otherwise to the court approving the Schemes. Of course, while the lack of opposition was informative, it was not the end of the matter. I first turned to consider whether all statutory and procedural requirements had been satisfied.

Compliance with statutory and procedural requirements

  1. By written and oral submissions, counsel for Latin Resources drew my attention to a number of matters with respect to Latin Resources' compliance with the statutory and procedural requirements. On the basis of the additional affidavits filed before the second court hearing, I was satisfied of the following.

Lodgement of orders and registration of disclosure

  1. As was required by order 17 of the orders made on 28 November 2024, a copy of the orders were lodged with ASIC as soon as reasonably practicable after they were made (they were lodged on the same day).[16]

    [16] Second outline of submissions par 13; third affidavit of DX Vilensky sworn 15 January 2025 par 5, DXV‑35 (pages 10 - 512).

  2. Further, as was required by order 6 of the orders made on 28 November 2024, the final scheme booklet was registered with ASIC on 28 November 2024.[17]

Advertisement of Scheme Meetings and disclosure

[17] Second outline of submissions par 14; third affidavit of DX Vilensky sworn 15 January 2025 par 5, DXV‑35 (pages 10 - 512).

  1. On 29 November 2024 Latin Resources announced to the ASX the release of the scheme booklet and attached a copy, which included the notices of the Scheme Meetings.[18]

    [18] Second outline of submissions par 15; third affidavit of DX Vilensky sworn 15 January 2025 par 19(b), DXV‑42 (pages 588 - 591) (annexure DXV-42 omitting the annexed scheme booklet).

  2. On 5 December 2024 Latin Resources announced to the ASX (as was the case) that the scheme booklet and covering letters had been despatched to the Latin Resources securityholders.[19]

    [19] Second outline of submissions par 16; third affidavit of DX Vilensky sworn 15 January 2025 par 19(d); fourth affidavit of DX Vilensky sworn 17 January 2025 par 28, DXV-50 (pages 85 ‑ 89).

  3. On 14 January 2025 by announcing the date of the second court hearing to the ASX, Latin Resources further announced the date, time and location of the Scheme Meetings.[20] The notice was substantially in the form of attachment 'JYW‑6' to the first affidavit made Mr Wang,[21] and I was therefore satisfied that Latin Resources had complied with order 16 of the orders made on 28 November 2024.

Despatch of scheme booklet and associated materials

[20] Second outline of submissions pars 17, 42; third affidavit of DX Vilensky sworn 15 January 2025 par 19(e), DXV-42 (pages 596 - 597).

[21] First affidavit of JY Wang affirmed on 27 November 2024.

  1. As was noted by counsel for Latin Resources, the process for despatch of the scheme booklet and other scheme documents was the subject of positive evidence (that is, the evidence of Ms Petch), and on information and belief as permitted by order 12 of the orders made on 28 November 2024 and by the Supreme Court of Western Australia's Consolidated Practice Directions PD 9.5.2.3(j).[22]

    [22] Second outline of submissions par 18.

  2. Ms Petch's evidence was helpfully summarised by counsel for Latin Resources at paragraphs 19 to 22 of the second outline of submissions, and I had regard to and was satisfied of the following:

    (a)on 5 December 2024 the scheme booklet and associated documents were despatched by email to 3,087 Latin Resources securityholders who had elected to receive notices of meeting electronically, in accordance with order 6(a) of the orders made on 28 November 2024;[23]

    (b)on 5 December 2024 the scheme booklet and associated documents were despatched by post to:[24]

    (i)28 Latin Resources securityholders who had elected to receive notices of meeting by post, in accordance with order 6(b) of the orders made on 28 November 2024; and

    (ii)7,313 Latin Resources securityholders who had not made an election to receive notices of meeting electronically or by post, in accordance with order 6(c) of the orders made on 28 November 2024;

    (c)on 11 December 2024 the scheme booklet and associated documents were despatched by post to the 57 Latin Resources securityholders in respect of whom the scheme booklet despatch emails had been undeliverable or were undelivered, in accordance with order 8 of the orders made on 28 November 2024;[25] and

    (d)while it was not required by the orders made after the first court hearing, the scheme booklet and associated documents were subsequently despatched to those shareholders of Latin Resources who came on to Latin Resources' share register after 7:00 pm on 28 November 2024.[26]

Scheme Meetings and poll results

[23] Affidavit of DMJ Petch affirmed 10 January 2025 pars 22 ‑ 23.

[24] Affidavit of DMJ Petch affirmed 10 January 2025 pars 24 ‑ 25.

[25] Affidavit of DMJ Petch affirmed 10 January 2025 par 23(b)(viii).

[26] Affidavit of DMJ Petch affirmed 10 January 2025 pars 26 - 27.

  1. In accordance with order 1 of the orders made on 28 November 2024, the Share Scheme Meeting was convened and held in person at 10:32 am (AWST) on 16 January 2025 at Trinity College, 230 Hampden Road, Crawley;[27] and the Option Scheme Meeting was convened and held in person at 11:04 am (AWST) on 16 January 2025 at the same location.[28]

    [27] Second outline of submissions par 23(a); fourth affidavit of DX Vilensky sworn 17 January 2025 par 6(a).

    [28] Second outline of submissions par 23(b); fourth affidavit of DX Vilensky sworn 17 January 2025 par 6(b).

  2. In accordance with order 4(a) of the orders made on 28 November 2024, Mr Vilensky acted as chairperson of the Scheme Meetings.[29]

    [29] Second outline of submissions par 24; fourth affidavit of DX Vilensky sworn 17 January 2025 par 5.

  3. The affidavit evidence before the court at the second court hearing included an account of what transpired at the Scheme Meetings. The second outline of submissions filed in advance of the second court hearing helpfully contained the following outline of the matters that were deposed to by Mr Vilensky in his fourth affidavit:[30]

    [30] Second outline of submissions pars 25 - 26.

    25.At the Share Scheme Meeting:

    (a)Ms Wendy Turner, Relationship Manager - Issuer Services of Latin's share registry service provider, Computershare, co-ordinated the in-person voting and registration of Latin Shareholders;

    (b)the Chairperson addressed the Share Scheme Meeting substantially in accordance with a prepared script and confirmed there were no questions in respect of the Share Scheme Resolution;

    (c)the Chairperson confirmed that the Demerger Resolution was approved at the Demerger Meeting;

    (d)the Chairperson called for a poll on the Share Scheme Resolution, and voting on the Share Scheme Resolution took place by poll;

    (e)the Chairperson voted all undirected proxies allocated to him in favour of the Share Scheme Resolution;

    (f)after confirming that all Latin Shareholders present and entitled to vote on the Share Scheme Resolution had been given the opportunity to do so, the Chairperson declared the poll closed;

    (g)the Chairperson confirmed to the Share Scheme Meeting that the results of the poll would be announced to the ASX later that day,24 consistent with the approach approved on many occasions; and

    (h)at approximately 10:45pm (AWST), the Chairperson declared the Share Scheme Meeting closed.

    26.At the Option Scheme Meeting:

    (a)Ms Turner co-ordinated the in-person voting and registration of Latin Optionholders;

    (b)the Chairperson addressed the Option Scheme Meeting substantially in accordance with a prepared script and confirmed there were no questions in respect of the Option Scheme Resolution;

    (c)the Chairperson called for a poll on the Option Scheme Resolution, and voting on the Option Scheme Resolution took place by poll;

    (d)the Chairperson voted all undirected proxies allocated to him in favour of the Option Scheme Resolution;

    (e)after confirming that all Latin Optionholders present and entitled to vote on the Option Scheme Resolution had been given the opportunity to do so, the Chairperson declared the poll closed;

    (f)the Chairperson confirmed to the Option Scheme Meeting that the results of the poll would be announced to the ASX later that day; and

    (g)at approximately 11:14am (AWST), the Chairperson declared the Option Scheme Meeting closed.

    (footnotes omitted)

  4. On 16 January 2025 at approximately 3:35 pm (AWST), the results of the Scheme Meetings were announced by Latin Resources on Latin Resources' ASX announcements platform.[31]

    [31] Second outline of submissions par 27; fourth affidavit of DX Vilensky sworn 17 January 2025 par 18, DXV‑47 (pages 73 - 78).

  5. As was also noted by counsel, evidence regarding the attendees at the Scheme Meetings, how proxies were dealt with, and the conduct and results of the poll taken at the Scheme Meetings were in evidence before the court.[32]

    [32] Second outline of submissions par 29; fourth affidavit of DX Vilensky sworn 17 January 2025 pars 5 ‑ 20.

  6. Counsel for Latin Resources submitted, and I accepted, that the evidence read established that the Scheme Meetings and the procedures for return and lodgement of proxy forms were conducted in accordance with orders 1, 3, 4 and 11 of the orders made on 28 November 2024.[33]

    [33] Second outline of submissions par 28.

  7. As noted above, the requisite majorities were achieved for the Share Scheme:[34]

    [34] Second outline of submissions par 33; fourth affidavit of DX Vilensky sworn 17 January 2025 par 15.

  8. As also noted above, the requisite majorities were achieved for the Option Scheme:[35]

Voter turnout and turnout on votes

[35] Second outline of submissions par 38; fourth affidavit of DX Vilensky sworn 17 January 2025 par 17.

  1. I also considered, and counsel addressed, voter turnout and turnout on votes.[36]

    [36] Further to Supreme Court of Western Australia, Consolidated Practice Directions, PD 9.5.2 par (3)(k).

  2. At par 19 of his fourth affidavit, Mr Vilensky deposed to the basis of his belief that the total number of Latin Resources securityholders as at the time and date for determining eligibility to vote at the Scheme Meetings (as applicable) was 10,147 Latin Resources shareholders, and 108 Latin Resources optionholders.

Share Scheme Meeting

  1. As to voter turnout at the Share Scheme Meeting, counsel noted that 380 Latin Resources shareholders (or 3.74% of Latin Resources shareholders) attended the Share Scheme Meeting either in person or by proxy or otherwise and voted on the Share Scheme Resolution.[37] Further, as to the turnout on votes at the Share Scheme meeting, counsel noted that 1,142,874,776 of 2,804,419,463 Latin Resources shares (or 40.75%), were voted on the Share Scheme Resolution.[38]

    [37] Second outline of submissions par 34; ts 23 (21 January 2025).

    [38] Second outline of submissions par 35; ts 23 (21 January 2025).

  2. For context, counsel noted that this voter turnout was greater than when compared to recent Latin Resources annual general meetings. That is, voter turnout was greater than the voter turnout at the 2023 annual general meeting when 1.64% of Latin Resources shareholders by number and 16.24% of Latin Resources shares voted;[39] and when compared to the 2024 annual general meeting when 1.74% of Latin Resources shareholders by number and 36.18% of Latin Resources shares voted.[40]

    [39] Second outline of submissions par 36; fourth affidavit of DX Vilensky sworn 17 January 2025 par 16(b); ts 23 (21 January 2025).

    [40] Second outline of submissions par 36; fourth affidavit of DX Vilensky sworn 17 January 2025 par 16(a); ts 23 (21 January 2025).

  3. I was not concerned as to the turnout at the Share Scheme Meeting. It was submitted, and in all of the circumstances I accepted, that there was no indication that shareholders of Latin Resources had been excluded or prevented from attending the Share Scheme Meeting.

Option Scheme Meeting

  1. Counsel for Latin Resources properly noted that as the Option Scheme was a creditors scheme, there was no relevant comparator for voter turnout.[41]

    [41] Second outline of submissions par 39; ts 23 - 24 (21 January 2025).

  2. I did however note that 100% of the number of Latin Resources optionholders present and voting (in person or by proxy) at the Option Scheme Meeting voted in favour of the Option Scheme; and 100% of the votes cast were in favour.

  3. As to voter turnout at the Option Scheme Meeting, eight Latin Resources optionholders (or 7.41% of Latin Resources optionholders) attended the Option Scheme Meeting either in person or by proxy or otherwise and voted on the Option Scheme.[42]

    [42] Fourth affidavit of DX Vilensky sworn 17 January 2025 par 17(b); ts 29 (21 January 2025).

  4. As was noted by counsel, there was no indication that Latin Resources optionholders were excluded or prevented from attending the Option Scheme Meeting,[43] and there was before the court ample direct evidence of despatch of the scheme booklet and related materials to Latin Resources optionholders. In all of the circumstances, I was not concerned by reason of the turnout at the Option Scheme Meeting.

Finding

[43] Second outline of submissions pars 37, 40; ts 23 - 24 (21 January 2025).

  1. Having regard to all of the matters described above, I was and am satisfied that all statutory and procedural preconditions to the court's approval were met. I then turned to consider the following discretionary considerations.

Good faith and proper purpose

  1. There was no evidence that the Latin Resources' securityholders had voted at the Scheme Meetings for an improper purpose. I was and am satisfied on the evidence that the securityholders voted in good faith and not for an improper purpose as:[44]

    (a)the proposed Schemes were for an acquisition transaction of a kind ordinarily approved by courts, did not involve any novel or exotic treatment of rights and, as such, voting in favour was unlikely to be motivated by some improper purpose;

    (b)the independent expert had opined that in the absence of any other relevant information or superior proposal (and none was on offer), the Schemes were in the best interests of the Latin Resources securityholders; and

    (c)neither ASIC nor any Latin Resources securityholder appeared at the second court hearing. In an application such as this, the court relies on ASIC, as it is not for the court to fulfil the role of contradictor.[45]

Fairness and reasonableness

[44] Second outline of submissions par 44.

[45] Re Seven Network Ltd (No 3) [2010] FCA 400; (2010) 267 ALR 583 [43].

  1. I also considered whether the Schemes were 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.

  2. As was noted by counsel, the court generally takes the view that the members or creditors (as applicable) are the best judges of whether an arrangement is to their commercial advantage, and will be reluctant to make a decision contrary to the views expressed at a meeting. Further, the court's approach has been not to assess the commerciality of the scheme overall or whether it is the best outcome, but rather to check whether it is one that sensible business people might consider to benefit members and creditors (as applicable).[46]

    [46] Second outline of submissions pars 45 - 46, citing SRG Limited, in the matter of SRG Limited (No 2) [2018] FCA 1424 [23] ‑ [24]; Amcor Limited, in the matter of Amcor Limited (No 2) [2019] FCA 842 [7] ‑ [11]; Newcrest Mining Ltd, in the matter of Newcrest Mining Ltd (No 2) [2023] FCA 1251 [49].

  3. Based on the evidence before the court at the first court hearing, I was satisfied that the proposed Schemes were of such a nature that there was no apparent reason that the Schemes should not receive approval if the requisite voting majorities were achieved at the Scheme Meetings. Nothing had occurred since the date of the first court hearing to change this view.

  4. At the first court hearing, counsel drew the court's attention to the proposed Demerger, and for the reasons then given, I was satisfied that the Demerger was appropriate and was not inconsistent with the requirements of the Corporations Act; that the Demerger did not undermine the statutory objects of the Corporations Act; and was not a basis to refuse to convene the Scheme Meetings.[47]

    [47] Re Latin Resources Limited; Ex Parte Latin Resources Limited [136].

  5. The Demerger resolution was passed by the Latin Resources shareholders in the Demerger Meeting which immediately preceded the Share Scheme Meeting.[48] Included in the evidence read at the second court hearing was evidence as to the conduct of the Demerger Meeting, particularly that it had been conducted in accordance with Latin Resources' constitution.[49]

    [48] Second outline of submissions par 50; fourth affidavit of DX Vilensky sworn 17 January 2025 par 25.

    [49] Second outline of submissions par 50; fourth affidavit of DX Vilensky sworn 17 January 2025 pars 21- 26.

  6. As to the Demerger, counsel submitted and I accepted that in circumstances where the Demerger had been addressed at the first court hearing, and where no objection was raised by ASIC or otherwise in relation to the Demerger, the court could be satisfied that the Demerger as a capital reduction was fair and in accordance with the Corporations Act.[50] In all of the circumstances, I did not consider the Demerger to be a matter which brought into question the fairness and reasonableness of the Schemes.

    [50] Second outline of submissions par 51.

  7. Further, I was cognisant that the independent expert had opined that in the absence of a superior proposal, the Schemes were in the best interests of Latin Resources' securityholders and no superior proposal had emerged; the Schemes contemplated measures to protect Latin Resources securityholders from performance risk;[51] the majority of the shareholders of Latin Resources who voted at the Share Scheme Meeting supported the proposed Share Scheme; all of the optionholders of Latin Resources who voted at the Option Scheme Meeting supported the proposed Option Scheme; proof of the statutory majorities is prima facie evidence of the fairness and reasonableness of the proposed Schemes;[52] no shareholder or optionholder appeared to oppose the orders sought at the second court hearing; ASIC did not appear to be heard in opposition or in relation to the Schemes at the second court hearing; and the Schemes were intended to yield commercial benefits for shareholders and optionholders, making the Schemes fair and reasonable from the viewpoint of an intelligent and honest person.[53]

    [51] Second outline of submissions par 47(d); Re Latin Resources Limited; Ex Parte Latin Resources Limited [125] - [129].

    [52] Second outline of submissions par 47(a), citing SRG Limited, in the matter of SRG Limited (No 2) [23] ‑ [24]; Amcor Limited, in the matter of Amcor Limited (No 2) [7] ‑ [11]; Newcrest Mining Ltd, in the matter of Newcrest Mining Ltd (No 2) [49]. See also Tawana Resources NL, in the matter of Tawana Resources NL (No 3) [2018] FCA 1952 [37]; Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [No 2] [2018] WASC 357 [41].

    [53] Second outline of submissions par 47(e), citing Re Seven Network Ltd (No 3) [36], and Beadell Resources Ltd [No 2] [2019] WASC 53 [37] (notwithstanding an expert report that it is 'not fair but reasonable': [61]).

  8. I was satisfied at the first court hearing that the proposed Schemes were fit for consideration by Latin Resources' members. My conclusion had not altered and at the second court hearing, I was satisfied that the proposed Schemes were fair and reasonable, and on terms that sensible businesspeople might consider to be of benefit to the shareholders and optionholders of Latin Resources.

Full and fair disclosure

  1. In determining whether to exercise discretion to approve the Schemes, I also considered whether there had been full and fair disclosure. Despite the requisite statutory majority having been achieved, a scheme may be rejected on fairness grounds including by reason of there having been disclosure deficiencies.[54]

Scheme booklet

[54] Re Metropolitan Fuel Pty Ltd [1962] VR 675; Zenyth Therapeutics Ltd v Smith (2006) 60 ACSR 548; Re HIH Casualty and General Insurance Ltd (2006) 57 ACSR 791; (2006) 200 FLR 243; PR Finance Group Ltd, in the matter of PR Finance Group Limited (No 2) [2013] FCA 633; Re NRMA Ltd (2000) 34 ACSR 261, as discussed in Damian T & Rich A, Schemes, Takeovers and Himalayan Peaks (2021, 4th edition) (pages 344 ‑ 347, 359).

  1. Based on the evidence before the court at the first court hearing, I was satisfied the proposed scheme booklet contained the prescribed information and provided proper disclosure to Latin Resources securityholders.

  2. The additional affidavit evidence read by counsel for Latin Resources at the second court hearing established that the scheme booklet that was despatched was in the form approved for distribution by the court. It was also made publicly available on Latin Resources' announcement platform, and its website.[55] Counsel submitted that this allowed Latin Resources securityholders time to read those documents and to seek advice before the Scheme Meetings.[56] Further, there was no evidence to suggest that any errors in the scheme booklet were subsequently identified following registration of the scheme booklet with ASIC and despatch.

Announcements to the ASX

[55] Second outline of submissions par 57; third affidavit of DX Vilensky sworn 15 January 2025 pars 19(b) and 19(d), DXV-42 (pages 588 - 591) (annexure DXV-42 omitting the annexed Scheme Booklet); fourth affidavit of DX Vilensky sworn 17 January 2025 pars 28 - 29, DXV-50 (pages 85 - 89).

[56] Second outline of submissions par 57.

  1. It was also brought to the court's attention that following the first court hearing, Latin Resources made seven announcements to the ASX:

    (a)ASX announcement dated 28 November 2024 announcing the approval by the court of the convening of the Scheme Meetings and distribution of the scheme booklet, which announcement was substantially the same form of the document tendered by Latin Resources during the first court hearing;[57]

    (b)ASX announcement dated 29 November 2024 announcing the registration of the scheme booklet with ASIC, which announcement was substantially the same form of the document tendered by Latin Resources during the first court hearing;[58]

    (c)ASX announcement dated 5 December 2024 announcing the satisfaction of the regulatory authority condition precedent;[59]

    (d)ASX announcement dated 5 December 2024 announcing despatch of the scheme booklet, which announcement was substantially the same form of the document tendered by Latin Resources during the first court hearing, save that it also attached the notices of meetings and access letters;[60]

    (e)ASX announcement dated 14 January 2025 announcing notice of the second court hearing, which announcement was substantially the same form of the document tendered by Latin Resources during the first court hearing;[61]

    (f)ASX announcement dated 16 January 2025 announcing the details of the Demerger Meeting, the Share Scheme Meeting and the Option Scheme Meeting, which announcement attached the documents to be presented at the same meetings;[62] and

    (g)ASX announcement dated 16 January 2025 announcing the results of the Demerger Meeting, the Share Scheme Meeting and the Option Scheme Meeting.[63]

    [57] Third affidavit of DX Vilensky sworn 15 January 2025 par 19(a), DXV-42 (pages 586 - 587); exhibit A.

    [58] Third affidavit of DX Vilensky sworn 15 January 2025 par 19(b), DXV-42 (pages 588 - 591); exhibit B.

    [59] Third affidavit of DX Vilensky sworn 15 January 2025 par 19(c), DXV-42 (pages 592 - 593); which condition precedent was discussed in Re Latin Resources Limited; Ex Parte Latin Resources Limited [37] ‑ [42].

    [60] Third affidavit of DX Vilensky sworn 15 January 2025 par 19(d), fourth affidavit of DX Vilensky sworn 17 January 2025 pars 28 - 29, DXV-50 (pages 80 - 89); exhibit C.

    [61] Third affidavit of DX Vilensky sworn 15 January 2025 par 19(e), DXV-42 (pages 596 - 597); first affidavit of JY Wang affirmed on 27 November 2024, JYW-6.

    [62] Fourth affidavit of DX Vilensky sworn 17 January 2025 par 7, DXV-43 (pages 12 - 61).

    [63] Fourth affidavit of DX Vilensky sworn 17 January 2025 par 18, DXV-47 (pages 73 - 78).

  2. These announcements served to promote full and fair disclosure.

Engagement of Georgeson

  1. As noted above, Latin Resources engaged Georgeson to conduct an Inbound Information Line and a Retail Engagement Line.[64] A copy of the proposed scripts for use by Georgeson had been provided to the court at the first court hearing.[65]

    [64] Third affidavit of DX Vilensky sworn 15 January 2025 pars 8 - 15.

    [65] Re Latin Resources Limited; Ex Parte Latin Resources Limited [18], [20], [25] - [26], [179].

  2. As is also noted above, Mr Vilensky attached to his third affidavit a copy of various scripts that had been provided to Georgeson, which were amended versions of the scripts that had been considered by ASIC and by the court at the first court hearing,[66] which amendments had come about as result of KWM's further review.[67]

    [66] [26].

    [67] Third affidavit of DX Vilensky sworn 15 January 2025 pars 9 - 10, DXV-36 - DXV-39.

  3. As Mr Vilensky deposed in his third affidavit, no script that had been provided to Georgeson contained any information that was inconsistent with, departed from or that was materially different from that contained in the scheme booklet, and no script contained any information that was new, or any information that would be considered to be incorrect, misleading or deceptive.[68]

    [68] Third affidavit of DX Vilensky sworn 15 January 2025 par 12.

  4. Mr Vilensky also deposed to the manner in which the Inbound Information Line and the Retail Engagement Line were conducted based on the information provided by Georgeson.[69] I considered the reports provided by Georgeson for the Inbound Information Line and the Retail Engagement Line, based on information and data collected during the process undertaken by Georgeson as at 10 January 2025.[70]

    [69] Third affidavit of DX Vilensky sworn 15 January 2025 pars 13 - 14.

    [70] Third affidavit of DX Vilensky sworn 15 January 2025 par 14, DXV-41.

  5. In the circumstances deposed to, I was satisfied that the process by which the engagement campaign had been conducted was fair, and there was no aspect of the engagement campaign that gave rise to a reason to refuse to approve the Schemes.

  6. The court is concerned at the second court hearing with whether the content of any shareholder communications undermined or compromised the integrity of the scheme process.[71]

    [71] Second outline of submissions par 63, citing OreCorp Limited, in the matter of OreCorp Limited [2023] FCA 1359 [21] ‑ [22].

  7. Counsel submitted and I accepted that there was no evidence of any material deviation from the scheme booklet during the course of communications with Latin Resources securityholders since the first court hearing, and nothing which could be said to undermine the integrity of the scheme process; and that the court may be satisfied that the Latin Resources securityholders had full and fair disclosure before the voting on the proposed Schemes at the Scheme Meetings. I accepted that proper disclosure of all relevant matters was made and properly signposted in the ASX announcements and scheme booklet.[72]

    [72] Second outline of submissions pars 64 - 65.

  8. Nothing had arisen to suggest there had not been proper disclosure of all information which was material to the decision of Latin Group securityholders prior to voting on the Schemes.

Oppression of minorities

  1. As counsel noted in the written submissions, there was no evidence before the court that any minority has been oppressed. Counsel further submitted and I accepted that there was unlikely to be oppression in circumstances where shareholders and creditors were provided with the scheme booklet on which they made an informed decision; were afforded ordinary procedural rights in a democratic meeting process, subject to a commonly undertaken change of corporate control procedure; and were intended to take the benefit of the transaction which the independent expert had concluded was in their best interests absent a superior proposal.[73]

Conditions precedent

[73] Second outline of submissions pars 66 - 67.

  1. Counsel noted that the Schemes were subject to the satisfaction or waiver of various conditions precedent which had to be satisfied or waived before the Schemes would become effective in accordance with their respective terms. By the provision of conditions precedent certificates executed by both Latin Resources and Pilbara Minerals,[74] and by the grant of court approval I was and am satisfied all conditions precedent had been met.

Voting intention statement

[74] Fourth affidavit of JY Wang affirmed on 21 January 2024 pars 10 - 11, JYW-12.

  1. At the first court hearing, it was noted that the scheme booklet contained a voting intention statement (to vote in favour of the proposed Scheme) given by Jose Lui Manzano, who held 7.2% of Latin Resources shares as at the 'Last Practicable Date'.[75] At the first court hearing, I was satisfied that the voting intention statement met the requirements of disclosure as to the identity of the holder, the holding, and the qualifications of the statement. Further, I had noted that there had been no evidence of any inducement or benefit having been offered to obtain it.[76]

    [75] Second affidavit of JY Wang affirmed on 28 November 2024, JYW-7 (pages 17, 31 and 179).

    [76] Re Latin Resources Limited; Ex Parte Latin Resources Limited [155].

  2. In any event, in all of the circumstances, the voting intention expressed by Mr Manzano was not a reason to exercise the court's discretion to not approve the proposed Share Scheme.

Public policy

  1. The Schemes did not give rise to public policy grounds that weighed against the exercise of the court's discretion.

  2. For completeness I record here (as was noted by counsel), that the voting intention statement had been addressed at the first court hearing, was within the guiding principles, and did not create any ch 6 public policy issue.[77] Further, the Demerger had also been considered and addressed, including as to the capital reduction, and no statutory policy issues arose.[78]

Exemption from compliance with s 411(11) of the Corporations Act

[77] Second outline of submissions par 78; Re Latin Resources Limited; Ex Parte Latin Resources Limited [71], [154] - [155].

[78] Second outline of submissions par 78; Re Latin Resources Limited; Ex Parte Latin Resources Limited [135] - [136].

  1. The draft orders proposed by Latin Resources provided for an exemption from compliance with s 411(11) of the Corporations Act. This exemption has become ordinary practice for transactions of this kind.[79]

    [79] Re Nusantara Resources Ltd; Ex Parte Nusantara Resources Ltd [2021] WASC 334 [103]; Re Valmec Ltd; Ex parte Valmec Ltd [2021] WASC 420 [115]; Re Vimy Resources Ltd [No 2] [2022] WASC 257 [104].

  2. I was and am satisfied there is no utility in requiring the court's orders approving the Schemes to be annexed to Latin Resources' constitution, as the orders did not affect any change to the constitution. It was appropriate in the circumstances to make an order as sought pursuant to s 411(12) of the Corporations Act.

Section 411(17) of the Corporations Act

  1. Section 411(17) of the Corporations Act makes the court's approval conditional on satisfaction of one of two alternative conditions. Section 411(17) provides as follows:

    (17)The Court must not approve a compromise or arrangement under this section unless:

    (a) it is satisfied that the compromise or arrangement has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6; or

    (b) there is produced to the Court a statement in writing by ASIC stating that ASIC has no objection to the compromise or arrangement;

    but the Court need not approve a compromise or arrangement merely because a statement by ASIC stating that ASIC has no objection to the compromise or arrangement has been produced to the Court as mentioned in paragraph (b).

  1. As noted by counsel, it was observed by Vaughan J in Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [No 2] that production of a 'no objection' letter from ASIC pursuant to s 411(17)(b) is usually the end of the issue; the court then does not need to consider the s 411(17)(a) issue. However, a 'no objection' letter does not bring to the end the court's discretion.[80]

    [80] Second outline of submissions par 73, citing Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [No 2] [18].

  2. As to the court's discretion, his Honour observed that if for example the court were to find that a scheme had been proposed for the purpose of avoiding the operation of provisions within ch 6 of the Corporations Act, that might be considered in the exercise of the discretion to approve the scheme under s 411(4)(b).[81]

    [81] Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [No 2] [18], citing Re Coles Group (No 2) [2007] VSC 523; (2007) 215 FLR 411 [75] ‑ [78].

  3. I also noted that it was well accepted that significance ought to be attached to the ASIC 'no objection' letter given in the terms of ASIC Regulatory Guide 60: Schemes of Arrangement. The Regulatory Guide confirms that a primary consideration for ASIC is whether, having regard to the principles in s 602 of the Corporations Act, shareholders are adversely affected by the takeover being implemented by a scheme of arrangement rather than a takeover bid.[82] ASIC will only issue a 'no objection' letter if satisfied as to the disclosure and that there are no other reasons to oppose the scheme.[83]

    [82] ASIC, Regulatory Guide 60: Schemes of Arrangement [60.17]; as noted in Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [No 2] [19].

    [83] ASIC, Regulatory Guide 60: Schemes of Arrangement [60.106]; as noted in Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [No 2] [19].

  4. ASIC provided a written statement on 21 January 2025 that it did not object to the Schemes pursuant to s 411(17)(b) of the Corporations Act. A copy of ASIC's communication was before the court.[84] As a result, the requirements of s 411(17) were satisfied. ASIC did not appear at the second court hearing.

    [84] Fourth affidavit of JY Wang affirmed on 21 January 2024, JYW-11.

  5. In any event, for the reasons outlined by counsel in written submissions, I was satisfied that there was no residual concern.[85] Having regard to the nature of the proposed transaction, I was satisfied that it could not be said the Schemes were proposed for the purpose of enabling any person to avoid the operation of ch 6 of the Corporations Act.

    [85] Second outline of submissions pars 74 - 76.

Conclusion and orders made at the second court hearing

  1. I was satisfied that all statutory and procedural preconditions to the court's approval had been satisfied.

  2. The court was also assured that all matters relevant to the exercise of its discretion had been brought to the court's attention.[86]

    [86] Second outline of submissions par 68.

  3. Upon considering the additional affidavit evidence filed and read in support of the application, the outline of submissions filed on behalf of Latin Resources prior to the second court hearing, the submissions made by counsel at the second court hearing and the matters already addressed at the first court hearing, I was satisfied that I should approve the proposed Schemes and make orders in the form proposed. The orders made at the conclusion of the second court hearing are reproduced at sch B to these reasons.

  4. As to the notation to the orders made at the conclusion of the second court hearing, I note that by order 19 of Latin Resources' originating process, Latin Resources had applied for an order that a notation be included in the orders made at the second court hearing noting that Pilbara Minerals will rely on the court's approval of the scheme for the purpose of qualifying for the exemption from the registration requirements of the US Securities Act in s 3(a)(10) of the US Securities Act, in connection with the implementation of, and provision of consideration under, the Share Scheme. That is, before the second court hearing the court understood that Pilbara Minerals intended to rely upon this court's approval of the Share Scheme, among other things, to qualify for that exemption, in relation to Latin Resources shareholders with registered addresses in the United States of America.

  5. As was observed by counsel for Latin Resources, courts will often provide an analysis in approval hearing reasons to allow a scheme proponent to comply, which involves noting that the court had to consider the fairness of the scheme and that the court was advised before the approval hearing that it would be asked to consider the fairness issue.[87] Counsel further observed that sometimes extensive notation is included in the court's orders for the proponents to rely upon immediately in advance of receiving subsequently published reasons,[88] or, a shorter notation to the orders is provided,[89] if reasons are promptly forthcoming.

    [87] Second outline of submissions par 80, citing Beadell Resources Ltd [No 2] [62] ‑ [64]; Amcor Limited, in the matter of Amcor Limited (No 2) [34] - [37].

    [88] Second outline of submissions par 80, citing Piedmont Lithium Ltd; Ex Parte Piedmont Ltd [No 3] [2021] WASC 173 [37(e)] and Appendix.

    [89] Second outline of submissions par 80, citing Allkem Limited, in the matter of Allkem Limited (No 2) [2023] FCA 1657 [38] and Orders; Amcor Limited, in the matter of Amcor Limited (No 2), Orders.

  6. At the second court hearing, counsel moved for a notation to be included in the orders in the form promoted in Latin Resources' amended minute of proposed orders for the second court hearing dated 21 January 2025. Counsel further explained that the proposed notation had been amended to reflect that Pilbara Minerals intended to rely on the court's approval of the Schemes for the purpose of qualifying for the exemption from the registration requirements of the US Securities Act in s 3(a)(10) of the US Securities Act, in connection with the implementation of, and provision of consideration under, the Share Scheme and the Option Scheme, which intention had been disclosed in the scheme booklet.[90]

    [90] ts 25 - 27 (21 January 2025); second affidavit of JY Wang affirmed on 28 November 2024, JYW-7 (pages 9, 170).

  7. In this matter, counsel used as a framework the notation issued most recently in this court by Lundberg J in Technology Metals Australia Ltd v Australian Vanadium Limited [2024] WASC 26. I saw no difficulty in including a notation in the amended form promoted.

Schedule A - Orders made on 28 November 2024

Schedule B - Orders made on 21 January 2025

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

KO

Associate to the Honourable Justice Strk

22 JANUARY 2025


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Cases Citing This Decision

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Cases Cited

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Statutory Material Cited

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Re Latin Resources Limited [2024] WASC 513
Re Western Areas Ltd [No 2] [2022] WASC 198
SRG Limited, in the matter of SRG Limited (No 2) [2018] FCA 1424