Re Nusantara Resources Ltd

[2021] WASC 334

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   RE NUSANTARA RESOURCES LTD; EX PARTE NUSANTARA RESOURCES LTD [2021] WASC 334

CORAM:   HILL J

HEARD:   20 AUGUST & 24 SEPTEMBER 2021

DELIVERED          :   24 SEPTEMBER 2021

PUBLISHED           :   30 SEPTEMBER 2021

FILE NO/S:   COR 134 of 2021

MATTER:   IN THE MATTER OF NUSANTARA RESOURCES LTD

EX PARTE

NUSANTARA RESOURCES LTD

Plaintiff

PT INDIKA ENERGY TBK

First Interested Party

PT INDIKA MINERAL INVESTINDO

Second Interested Party

Catchwords:

Corporations law - Scheme of arrangement - Application for orders convening scheme meeting under s 411(1) of the Corporations Act 2001 (Cth) - Whether requirements to order scheme meeting are satisfied - Orders made convening scheme meeting

Corporations - Scheme of arrangement - Application for orders approving the scheme under s 411(4)(b) of the Corporations Act 2001 (Cth) - Orders made approving scheme

Legislation:

Corporations Act 2001 (Cth), s 411(1), s 411(4)(b), s 412(1)(a), s 1319
Supreme Court (Corporations) (WA) Rules 2004 (WA), r 3.2

Result:

Orders made convening scheme meeting
Orders made approving scheme

Category:    B

Representation:

Counsel:

Plaintiff	:	S K Dharmananda SC & P J Tydde
First Interested Party	:	C D Belyea
Second Interested Party	:	C D Belyea

Solicitors:

Plaintiff	:	Gilbert + Tobin
First Interested Party	:	Clayton Utz
Second Interested Party	:	Clayton Utz

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

Pacific Energy Limited [2019] WASC 443

Re Amcom Telecommunications Ltd [2015] FCA 341

Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400

Re APN Property Group Ltd and APN RE Ltd [2021] VSC 389

Re Asaleo Care Limited [2021] FCA 406

Re Asaleo Care Limited (No 2) [2021] FCA 636

Re CSG Limited (No 2) [2020] NSWSC 39

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 [2019] WASC 57

Re DUET Management Company 1 Ltd [2013] NSWSC 817; (2013) 95 ACSR 34

Re International Goldfields Ltd [2004] WASC 112

Re Investa Properties Ltd [2007] FCA 1104

Re Kangaroo Resources Ltd [2018] WASC 327

Re MAC Services Group Ltd [2010] NSWSC 1474

Re Macquarie Private Capital A Ltd [2008] NSWSC 323

Re National Australia Bank Ltd [2016] VSC 62

Re NTM Gold Ltd [2021] WASC 22

Re Nzuri Copper Ltd [2019] WASC 189

Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20

Re Piedmont Lithium Ltd [2021] WASC 76

Re Scarborough Equities Ltd [No 2] [2009] FCA 484

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

Re SRG Ltd [2018] FCA 1092

Re Wesfarmers Ltd [2018] WASC 308

Re Wesfarmers Ltd [No 2] [2018] WASC 357

HILL J:

1. The plaintiff, Nusantara Resources Limited (Nusantara) is an Australian public company listed on the official list of the Australian Securities Exchange (ASX).  On 28 June 2021, Nusantara announced to the ASX it had entered into a scheme implementation deed (SID) with PT Indika Energy Tbk (Indika Energy) (Scheme).[1]  Under the proposed Scheme, each Nusantara shareholder will receive $0.35 in cash for every fully paid ordinary share in Nusantara.[2]

   [1] Affidavit of Amanda Louise Atkins filed 5 August 2021 [7] - [8], 'ALA-3'. 

   [2] Scheme cl 5; Scheme booklet [6.1], [6.6].

2. By originating process dated 5 August 2021, Nusantara sought orders under s 411 of the Corporations Act 2001 (Cth) (Act) in relation to the proposed Scheme. The application came before me for the first court hearing on 20 August 2021. At the conclusion of the hearing, I made orders pursuant to s 411(1) of the Act to convene a meeting of Nusantara's members to consider and vote on the proposed Scheme. Orders were also made approving the distribution of a Scheme booklet to Nusantara's shareholders under s 412(1)(a) of the Act. I also made ancillary orders as to the convening and conduct of the Scheme meeting under s 1319 of the Act.

3. On 27 August 2021, I made orders varying the orders made on 20 August 2021 to reflect amendments that arose from various typesetting errors within the Scheme booklet.

4. The Scheme meeting was held on 22 September 2021.  At this meeting, the Scheme was approved by the requisite majority.

5. The matter came back before me for the second court hearing on 24 September 2021.  On that date, I made orders approving the Scheme. 

6. In making the orders on 20 August 2021 and 24 September 2021, I stated that I would subsequently publish written reasons for my orders.  These are my reasons.

Factual Background

Nusantara Resources

1. Nusantara is a gold exploration company.  Through its subsidiary, PT Masmindo DWI Area (Masmindo), it has a 75% interest in the Awak Mas gold project located in the South Sulawesi province of Indonesia (Project).[3]

   [3] Scheme booklet [7.1].

2. As at 11 August 2021, Nusantara had an issued capital of 229,273,007 fully paid ordinary shares (Shares), 22,200,000 options (Options) and 2,400,000 performance rights (Performance Rights).[4] 

Indika Energy and the Bidder Nominee

[4] Affidavit of Matthew Julian Doube affirmed 17 August 2021 [23], 'MJD-2'. 

1. Indika Energy is an Indonesian integrated and diversified company with a range of business spanning energy resources, energy services and infrastructure.  It is listed on the Indonesian Stock Exchange (IDX). 

2. On 2 August 2021, PT Indika Mineral Investindo (the Bidder Nominee), a wholly owned subsidiary of Indika Energy, executed a deed poll of accession to the SID (Accession Deed).  The Bidder Nominee was incorporated in 2018 as an investment company.  Indika Energy owns its shares in Nusantara through the Bidder Nominee.[5]

   [5] Scheme booklet [8.2.1].

3. If the Scheme is implemented, Nusantara will become a wholly owned subsidiary of the Bidder Nominee.[6]

Proposed Scheme

[6] Scheme booklet [6.1].

1. The purpose of the proposed Scheme is to provide existing shareholders with a high degree of certainty of value and to remove the risks associated with the Project, including project financing, construction and commissioning, production and jurisdiction.[7]  Indika Energy and the Bidder Nominee currently hold 27.8% of the issued shares in Nusantara.  Indika Energy and Nusantara are joint venture partners in the Project through their 25% and 75% respective interests in Masmindo. 

   [7] Scheme booklet [3.2.6].

2. If the Scheme is implemented, Indika Energy will acquire all of the Nusantara Shares on issue as at the Scheme Implementation Date (other than the Shares already owned by Indika Energy or the Bidder Nominee).  Nusantara's shareholders will receive $0.35 cash for each Nusantara Share as consideration for the acquisition of their Shares under the Scheme (Scheme Consideration).[8] 

   [8] Scheme booklet [6.6].

3. The Performance Rights will be dealt with outside of the Scheme. In relation to the Performance Rights, each Performance Right will automatically vest on a one for one basis following the issue of the Scheme booklet.[9]

   [9] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [28].

4. Nusantara has 2,200,000 unlisted Options which have been issued under Nusantara's Employee Share and Option Plan Rules 2017 (Employee Options).  The holders may exercise the Employee Options prior to the earlier of the expiry date of the Employee Options and the later of 60 days after receiving written notice from Nusantara of the Scheme and the date the Scheme becomes unconditional (Employee Option Exercise Period).[10]  The holders of the Employee Options have confirmed they will not be exercising their Employee Options.  As a result, the Employee Options will lapse on the expiry of the Employee Option Exercise Period.[11]

   [10] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [26].

   [11] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [27].

5. Nusantara also has 20,000,000 unlisted Options which have been issued to Indika Energy or PT Petrosea Tbk, a 70%-owned subsidiary of Indika Energy (Petrosea) (IND-PS Options).[12]  Indika Energy and Petrosea have informed Nusantara they will not exercise the IND-PS Options prior to completion of the Scheme.[13] 

   [12] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [25].

   [13] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [30], 'MJD-3'.

Evidence for the first court hearing

1. Nusantara and Indika Energy relied on the following affidavits that were filed prior to the first hearing.  A number of affidavits were sworn or affirmed overseas or interstate (while those states are subject to stay at home orders associated with the COVID-19 pandemic).  Due to delays in couriers and postage associated with the pandemic, copies of these affidavits were annexed to solicitors' affidavits filed prior to the hearing on the basis that the original would be filed at the earliest opportunity.  The affidavits that were before the court at the first hearing were:

   (a)an affidavit of Amanda Louise Atkins filed 5 August 2021.  Ms Atkins is a lawyer employed by Gilbert + Tobin, the solicitors for Nusantara.  Her affidavit gave an overview of the proposed Scheme and a brief outline of Nusantara.  Ms Atkins' affidavit annexed copies of the SID, the ASX announcement of the Scheme, the draft Scheme booklet, the draft Independent Expert's Report (IER), as well as correspondence with the Australian Securities and Investments Commission (ASIC) confirming the lodgement of the Scheme documents;

   (b)an affidavit of Ms Danielle Jade Lukić filed 12 August 2021. Ms Lukić is a lawyer employed by Gilbert + Tobin. Her affidavit attached the affidavit of Mr Gregory Paul Foulis. Mr Foulis is the non-executive chairman of Nusantara and the proposed chairperson of the Scheme meeting. By his affidavit, Mr Foulis consented to act as chairperson of the Scheme meeting and provided the necessary disclosures required by r 3.2 of the Supreme Court (Corporations) (WA) Rules 2004 (WA) (Corporations Rules). He also deposed that Mr Rob Hogarth gave his consent to act as alternate chairperson of the Scheme meeting as required by r 3.2 of the Corporations Rules;

   (c)an affidavit of Claudia Russo filed 17 August 2021.  Ms Russo is a law graduate employed by Gilbert + Tobin.  Her affidavit attached the first affidavit of Matthew Julian Doube.  Mr Doube is the chief financial officer of Nusantara.  His affidavit gave an overview of the proposed Scheme, outlining the brief background of Nusantara, the SID, the Scheme Consideration, Indika Energy and the Bidder Nominee.  Mr Doube deposed to the verification process undertaken by Nusantara in relation to the information about Nusantara in the Scheme booklet.  His affidavit annexed, among other things, a copy of Nusantara's constitution, a copy of the Accession Deed, copies of the signed verification certificates and copies of the pro forma personalised proxy forms and pro forma email proxy emails for the Scheme meeting;

   (d)an affidavit of Azis Armand filed 18 August 2021.  Mr Armand is the vice president director and group chief executive officer of Indika Energy and is the president commissioner of the Bidder Nominee.  Mr Armand's affidavit gave an overview of the proposed Scheme and attested to the verification process undertaken by Indika Energy and the Bidder Nominee in relation to the information about Indika Energy and the Bidder Nominee in the Scheme booklet.  Mr Armand's affidavit attached, among other things, copies of the executed Deed Poll of Accession, the executed Deed Poll and the relevant verification certificates;

   (e)a second affidavit of Ms Lukić filed 18 August 2021.  Ms Lukić's second affidavit attached the affidavit of Mr Neil Clarence Pathak, a partner at Gilbert + Tobin.  Mr Pathak's affidavit confirmed the Scheme booklet had been lodged with ASIC, outlined the amendments made to the Scheme and detailed the correspondence between Nusantara and ASIC regarding the draft Scheme booklet.  His affidavit annexed, among other things, copies of the plaintiff's correspondence with ASIC, copies of the final draft Scheme booklet and IER and the letter from ASIC confirming that ASIC did not intend to appear at the first court hearing; and

   (f)a second affidavit of Ms Russo filed 19 August 2021.  Ms Russo's second affidavit confirmed the service of documents for the first court hearing on ASIC and attached the second affidavit of Mr Doube.  Mr Doube's second affidavit attested to the further verification process undertaken by Nusantara in relation to the final draft Scheme booklet.

Nature of the proposed scheme

1. Through the execution of the SID and the Accession Deed, Nusantara, Indika Energy and the Bidder Nominee have committed to propose the Scheme.[14]  The proposed Scheme contemplates that the Bidder Nominee will acquire all of the Shares in Nusantara and that Nusantara shareholders will receive $0.35 in cash for every Share held, save for the Shares already owned by Indika Energy and the Bidder Nominee.[15]  That is, the effect of the proposed Scheme is to make Nusantara a wholly owned subsidiary of the Bidder Nominee.  Nusantara will be subsequently delisted from the ASX. 

   [14] SID cl 2; Accession Deed cl 1.

   [15] Scheme cl 5; Scheme booklet [6.1], [6.6].

2. Both the Options and the Performance Rights are being dealt with outside of the Scheme.  No Scheme Consideration will be payable in respect of the Nusantara Options under the Scheme.  The holders of the Employee Options have confirmed they will not be exercising their existing options, such that the Employee Options will lapse on the expiry of the Employee Option Exercise Period.[16]  In respect of the IND-PS Options, Indika Energy and Petrosea do not intend to exercise those Options prior to the Scheme becoming effective and will continue holding those Options up to and on the implementation of the Scheme.[17]  The terms of the Performance Rights provide that, following the issue of the Scheme booklet, each Performance Right will automatically vest on a one for one basis.[18]

   [16] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [26].

   [17] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [30], 'MJD-3'.

   [18] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [28].

3. If the Scheme is implemented, Nusantara will become a wholly owned subsidiary of the Bidder Nominee 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 set out in cl 3.1 of the SID and cl 3.1 of the proposed Scheme.[19]

   [19] SID cl 3.1; Scheme cl 3.1.

4. The SID between Nusantara, Indika Energy and the Bidder Nominee sets out the procedures for the implementation of the proposed Scheme. 

5. If the Scheme is approved by shareholders and by the court at the second court hearing, on the implementation date, all the existing Shares will be transferred to the Bidder Nominee, the Bidder Nominee will be entered in the register as the holder of all Shares,[20] and Indika Energy and the Bidder Nominee will provide the Scheme Consideration to shareholders in return for their Shares.[21]

   [20] Scheme cl 4.2.

   [21] Scheme cl 5.2.

6. Indika Energy and the Bidder Nominee are obliged to provide the Scheme Consideration prior to the transfer of the Shares.[22]  The obligations of Indika Energy and the Bidder Nominee under the Scheme are supported by a Deed Poll dated 17 August 2021 which has been executed by Indika Energy and the Bidder Nominee.[23]

   [22] Scheme cl 5.2.

   [23] Scheme booklet, Appendix E; Affidavit of Azis Armand filed 18 August 2021, 'PP-4'.

7. Two of the six directors of Nusantara (Richard Ness and Kamen Palatov) are associated with the Bidder.  As a result, quite properly, they have not made a recommendation on the Scheme.  Nusantara established an independent board committee (IBC) to consider the proposed Scheme.  The IBC of Nusantara unanimously recommends that shareholders vote in favour of the Scheme.[24]

   [24] Scheme booklet [3.2.1].

8. An independent expert report (IER) has been prepared by Grant Thornton Corporate Finance Pty Ltd (Grant Thornton).  The IER expresses the opinion that, in the absence of a superior proposal, the Scheme is fair and reasonable and is in the best interests of shareholders.[25]  The IER determined that the range of a Share was between $0.28 (low) and $0.35 (high).  The basis for the valuation and the methodology used are set out in the IER.  In reaching their conclusion, the IER determined the Scheme Consideration was at the high-end of the valuation range on a control basis.  The consideration of advantages, disadvantages and other factors that are likely to impact shareholders are set out comprehensively in the IER.  

   [25] Scheme booklet, Appendix B; Affidavit of Neil Clarence Pathak sworn 18 August 2021, 'NCP-17'.

9. I was provided with the draft Scheme booklet which was submitted to ASIC on 3 August 2021 and the various amendments that have been made to the document since then.[26]

   [26] Affidavit of Amanda Louise Atkins filed 5 August 2021 [9], 'ALA-4'; Affidavit of Neil Clarence Pathak sworn 18 August 2021, 'NCP-10', 'NCP-14', 'NCP-17'. 

10. The Scheme booklet contains the following sections:

    (a)a section on important notices relating to the proposed Scheme;

    (b)a letter from the chairman of Nusantara outlining the rationale for the Scheme;

    (c)a listing of all important dates and times for the Scheme;

    (d)an outline of considerations relevant to the vote of shareholders, including reasons to vote in favour of or against the Scheme;

    (e)a 'frequently asked questions' table, which addresses all essential matters;

    (f)a section on the voting choices available to shareholders and how to vote at the Scheme meeting;

    (g)an overview of the Scheme;

    (h)information on Nusantara and Indika Energy and an overview of the combined group;

    (i)a section on the taxation implications for Nusantara shareholders;

    (j)a section on additional information, which includes relevant consents and disclosures and statements in respect of the Project.

11. The Scheme booklet includes several important annexures which will form part of the Scheme booklet.  These include the Notice of Scheme meeting, the IER, the SID, the Scheme and the Deed Poll.

Legal principles in respect of the scheme

1. 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.

2. 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.[27]

   [27] Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358 [7].

3. 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 it is satisfied that:[28]

   (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[29] and provides proper disclosure;[30]

   (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;[31]

   (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.

   [28] Re SRG Ltd [2018] FCA 1092 [11]; Re Wesfarmers Ltd [2018] WASC 308 [60].

   [29] Corporations Act 2001 (Cth), s 412(1)(a)(ii); Corporations Regulations 2001 (Cth), reg 5.1.01 and Sch 8 cl 8301 ‑ 8310.

   [30] Corporations Act, s 412(1)(a)(i).

   [31] Corporations Act 2001 (Cth), s 411(2)(b).

1. Any issue about classes of members is usually determined at the first hearing.[32]  This is so that costs and court time are not wasted which would otherwise occur if this issue was left to the second hearing.[33]

   [32] Re CSR Ltd [73].

   [33] Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20 [20].

2. 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.[34]  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.[35]

   [34] Re Amcom Telecommunications Ltd [2015] FCA 341 [10].

   [35] Re SRG Ltd [12]; Re Wesfarmers Ltd [72] - [76].

Disposition

1. The formal matters that Nusantara had to prove are satisfied. 

2. Nusantara is a company and, accordingly, is a pt 5.1 body. The proposed Scheme constitutes an 'arrangement'.  This type of share acquisition scheme has been approved by courts as an arrangement on numerous occasions.

3. Nusantara filed the affidavit 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 Scheme Meeting.[36]

   [36] Affidavit of Gregory Paul Foulis affirmed 12 August 2021 [4] - [8]. 

4. By letter dated 18 August 2021, ASIC confirmed that it had been given 14 days' notice of the hearing and a reasonable opportunity to examine the terms of the Scheme and the draft explanatory statement or Scheme booklet.[37]  ASIC also gave notice that it did not propose to appear at the first hearing to make submissions or intervene to oppose the Scheme.[38]

   [37] Affidavit of Neil Clarence Pathak sworn 18 August 2021, 'NCP-18'.   

   [38] Affidavit of Neil Clarence Pathak sworn 18 August 2021, 'NCP-18'.   

5. On the materials before me, there was nothing to suggest that the Scheme was not properly proposed.  The constitution of Nusantara does not prevent the Scheme.[39]

   [39] First affidavit of Matthew Julian Doube affirmed 17 August 2021, 'MJD-1'. 

6. No class issue arose in relation to the Scheme.  All Nusantara shareholders have the same rights in the Scheme, that is, the right to receive the Scheme Consideration.[40]  All Nusantara shareholders are being treated equally and, as a result, constitute a single class.

   [40] Scheme cl 5; Scheme booklet [6.1], [6.6].

7. There are a number of conditions precedent to the Scheme.[41]  Mr Doube and Mr Armand have deposed that they are not aware of any basis to believe that any condition precedent will not be satisfied or waived prior to implementation of the Scheme.[42]

Disclosure and Scheme Booklet

[41] SID cl 3.1; Scheme cl 3.1.

[42] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [93]; Affidavit of Azis Armand filed 18 August 2021 [13].

1. I have read the initial draft of the Scheme booklet (as provided to ASIC).  I have also been provided with the correspondence between ASIC and Nusantara's solicitors relating to ASIC's review of the draft Scheme booklet.[43] 

   [43] Affidavit of Neil Clarence Pathak sworn 18 August 2021, 'NCP-7' - 'NCP-10', 'NCP-12' - 'NCP-13'.

2. Clarification was sought by ASIC regarding the provision of services up to $US4 million by Indika Energy's subsidiary, Petrosea, to Masmindo under an Umbrella Services Agreement on a deferred payment basis, and whether these references may have a coercive effect on Nusantara shareholders.[44]  Senior counsel for Nusantara drew my attention to the fact that the Deferred Payment Agreement was entered into at the same time as the SID to facilitate the continuation of work on the Project prior to the implementation of the Scheme, if that occurs.[45]  As disclosed in the Scheme booklet at [3.2.6], the quantum of the Deferred Payment Agreement reflects a small portion of Masmindo's ongoing financing requirements in the event the Scheme is not approved.[46]  Senior counsel submitted that the Deferred Payment is guaranteed by Indika Energy and, as a result, does not have a coercive effect.

   [44] Affidavit of Neil Clarence Pathak sworn 18 August 2021, 'NCP-8'.

   [45] Affidavit of Neil Clarence Pathak sworn 18 August 2021, 'NCP-9'.

   [46] Scheme booklet [3.2.6].

3. The terms of the Deferred Payment Agreement are disclosed in the Scheme booklet and the IER.[47]  I was and am satisfied, on the information before me, that this agreement does not have a coercive effect and that the Scheme booklet sets out the material considerations for shareholders.

   [47] Scheme booklet [7.12]; IER [4.3].

4. Having reviewed the Scheme booklet, I was and am satisfied that there will be proper disclosure as to the effect of the proposed Scheme and the material considerations for shareholders of Nusantara.

5. There is evidence before me as to the due diligence and verification process that was undertaken by Nusantara, Indika Energy and the Bidder Nominee.[48]  On the basis of this evidence, I accept that:

   (a)Nusantara undertook a process of due diligence and verification to verify the accuracy of statements attributable to Nusantara in the Scheme booklet;

   (b)Indika Energy and the Bidder Nominee undertook a similar process to verify the statements attributable to them; and

   (c)appropriate steps have been taken to satisfy Nusantara, Indika Energy and the Bidder Nominee that the Scheme booklet does not omit any material information.

   [48] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [50] - [64]; Affidavit of Azis Armand filed 18 August 2021 [14] - [20].

6. The IBC of Nusantara has resolved to approve the Scheme booklet in its final form.[49]

   [49] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [59], 'MJD-8'.

7. Based on the checklist provided by senior counsel for Nusantara,[50] I was satisfied that the Scheme Booklet contained the prescribed information in accordance with s 412(1)(a)(ii) of the Act and sch 8 of the Corporations Regulations 2001 (Cth).

   [50] Submissions for first court hearing, Appendix C.

8. In written and oral submissions, Nusantara's senior counsel drew my attention to some specific matters.  I address each of these below. 

Performance Risk

1. I was and am satisfied that the nature and terms of the proposed Scheme are such that the shareholders are adequately protected against the risk that they will not receive the Scheme Consideration and have no capacity to sue Indika Energy and the Bidder Nominee to recover their Shares or damages.

2. In that respect I have had regard to the terms of the Scheme and the Deed Poll.  Pursuant to these documents:

   (a)the Bidder Nominee must allot and issue (or procure the allotment and issue of) $0.35 in cash to each eligible shareholder for each Share they hold on the implementation date;[51]

   (b)Indika Energy or the Bidder Nominee are required to issue the Scheme Consideration on the implementation date;[52]

   (c)transfer of the Shares is subject to provision of the Scheme Consideration;

   (d)beneficial title in Shares does not pass unless the Scheme Consideration has been issued in accordance with the Scheme;[53] and

   (e)Nusantara and each Scheme participant will have individual rights against Indika Energy and the Bidder Nominee in the event that Indika Energy or the Bidder Nominee fails to provide the Scheme Consideration.[54]

   [51] Scheme cl 2.3, cl 5.2.

   [52] Scheme cl 2.3, cl 4.2.

   [53] Scheme cl 8.3.

   [54] Deed Poll cl 2.3.

3. The arrangements under the terms of the proposed Scheme are supported by the Deed Poll.  By the Deed Poll, Indika Energy and the Bidder Nominee covenants in favour of each Nusantara shareholder that it will perform all actions attributed to it under the 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.[55]  In my view, the shareholders are sufficiently identified within the Deed Poll to enable them to enforce the Deed Poll as against Indika Energy and the Bidder Nominee.

Exclusivity provisions and break fee

[55] Deed Poll cl 1.3.

1. The SID contains the customary lock up devices in the form of 'no shop', 'no talk', 'no due diligence', 'notification obligations' and 'matching right' provisions.[56]  The 'no talk' and 'no due diligence' provisions are subject to a fiduciary carve out.[57]  In certain circumstances, a break fee of $800,000 is payable by Nusantara to Indika Energy[58] and by Indika Energy to Nusantara.[59]

   [56] SID cl 7. 

   [57] SID cl 7.6.

   [58] SID cl 8.2.

   [59] SID cl 8.3.

2. In considering whether the exclusivity provisions impact on completion of the transaction and the duties of directors, the court has regard to:[60]

   (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.

   [60] Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400 [29] - [35]; Re Kangaroo Resources Ltd [2018] WASC 327 [57] - [61]; Pacific Energy Limited [2019] WASC 443 [58].

3. In this case, the exclusivity period in the SID is defined and, at most, is a period of approximately five months.  The no‑talk and no due diligence provisions contain appropriate fiduciary carve-outs.[61]  The exclusivity arrangements are prominently disclosed in the Scheme booklet.[62] 

   [61] SID cl 7.6.

   [62] Scheme Booklet [3.4.3].

4. The first affidavit of Mr Doube sets out the commercial justification for the exclusivity provisions and the Break Fee.[63]  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 all parties were separately advised and represented by external legal advisers.[64]

   [63] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [69] - [84].

   [64] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [73], [83].

5. The amount of the Break Fee is $800,000, which is approximately 1% of the equity value of Nusantara as at the date of entering into the SID, being approximately $80 million based on the Scheme Consideration for the Scheme shares.[65]  As such, it is within generally accepted commercial parameters for break fees.  The Break Fee is intended to compensate the parties for the costs (both costs incurred and opportunity costs) if the Scheme does not proceed.  The Break Fee is not payable if shareholders do not vote in favour of the Scheme.[66]  Accordingly, I consider that the amount of the Break Fee is unlikely to influence shareholders in their decision to vote on the Scheme.

Director benefits and director recommendations

[65] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [70].

[66] SID cl 8. 

1. Senior counsel drew my attention to the fact that Mr Richard Ness, a non-executive director of Nusantara, the vice president commissioner of Indika Energy and the president commissioner of Petrosea, holds shares in Indika Energy.  Mr Karmen Palatov, a non-executive director of Nusantara, is also a director of Indika and a commissioner of Petrosea.

2. Given Mr Ness and Mr Palatov's associations with Indika Energy, Nusantara formed the IBC, consisting of the remaining members of Nusantara's board of directors, to consider and make a recommendation to Nusantara shareholders in respect of the Scheme.[67]

   [67] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [39] - [40].

3. The terms of the SID require Nusantara to state that the IBC recommends that shareholders vote in favour of the Scheme resolution in the absence of a Superior Proposal and provided that the IER continued to confirm the Scheme is in the best interests of shareholders.[68]

   [68] SID cl 2.4.

4. Senior counsel drew to my attention the fact that no member of Nusantara's IBC has any relevant interest which is material to the Scheme, other than in respect of any Shares or Options held in Nusantara.  These matters are prominently displayed in the Scheme booklet.[69]

   [69] Scheme booklet [6.3], [7.15] - [7.16].

5. It was and is my view that it was not inappropriate for the IBC to make a recommendation in respect of the Scheme.

No collateral benefit which should prevent approval of the Scheme

1. The court must examine whether a benefit exists for one shareholder in particular, so as to bring into question the overall fairness of the Scheme.[70]  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.[71]  If no net benefit is present, then, prima facie, the equality principle under s 602(c) of the Act is satisfied.

   [70] Re David Jones Ltd [No 2] [2014] FCA 720; (2014) 101 ACSR 381 [16] - [21] (Farrell J).

   [71] Takeovers Panel, Guidance Note 21: Collateral Benefits [15].

2. On the evidence before me, no issue of collateral benefit arises in this Scheme application. 

No liability when acting in good faith

1. Senior counsel for Nusantara drew to my attention the inclusion of cl 9.5 in the Scheme which provides Nusantara, Indika Energy and the Bidder Nominee with an exclusion from liability for acts or omissions done in good faith in performance of the Scheme or Deed Poll. 

2. On its proper construction, it is my view that this clause will not exclude liability for acts or omissions in breach of the Scheme or the Deed Poll.  Any such acts or omissions could not be in performance of the Scheme or Deed Poll.  For this reason, I do not consider that this clause will deprive members of their intended benefits under the Scheme.  I note that this is consistent with the conclusion of Vaughan J in Re Wesfarmers Ltd [No 2] in relation to a similar clause.[72] 

Electronic dispatch of the Scheme booklet and proxy form

[72] Re Wesfarmers Ltd [No 2] [2018] WASC 357 [49].

1. Nusantara sought orders pursuant to s 1319 of the Act for electronic despatch of the Scheme booklet, applicable proxy form and Opt-in Notice by email to those Nusantara shareholders who have nominated an electronic address for the purpose of receiving Shareholder communications from Nusantara (Email Shareholders). These orders are now common.[73]  Details were provided as to the terms of the proposed electronic notification, namely that email notices would be sent to Nusantara shareholders containing links to the Scheme booklet and proxy form.[74]

   [73] See, for example, Re SRG Ltd [48]; Re Doray Minerals Ltd [2019] WASC 57[72].

   [74] Submissions [99]; First Affidavit of Matthew Julian Doube affirmed 17 August 2021 [87], 'MJD-11'.

2. I was and am satisfied, having read the terms of the proposed email communication to shareholders, that an order for electronic despatch of the Scheme booklet was appropriate. 

3. In respect of the remaining Nusantara shareholders (who were not Email Shareholders and those Email Shareholders in respect of whom electronic delivery has been notified as being ineffective), Nusantara proposed the despatch of hardcopy documents by mail (Postal Shareholders).[75]

Electronic Scheme Meeting

[75] Submissions [100].

1. In light of the COVID-19 pandemic, Nusantara proposed that the Scheme meeting scheduled to take place at 12.00pm on Wednesday, 22 September 2021 be held electronically.  Nusantara has disclosed in several places throughout the Scheme booklet that the Scheme meeting will be held electronically and how the electronic meeting will be convened and conducted.[76]  I accept that this arrangement is consistent with the conduct of previous recent scheme meetings[77] and appropriate given the current pandemic.

   [76] First affidavit of Matthew Julian Doube affirmed 17 August 2021 [95]; Scheme booklet, Important Notices, [1], [4] - [5], [6.7], Appendix A.

   [77] Re NTM Gold Ltd [2021] WASC 22; Re Piedmont Lithium Ltd [2021] WASC 76; Re APN Property Group Ltd and APN RE Ltd [2021] VSC 389 [35]; Re Asaleo Care Limited [2021] FCA 406 [77].

Other Matters

1. Senior counsel for Nusantara drew my attention to the 'deemed warranty' provision in the proposed Scheme.[78]  The warranty provision is disclosed in the Scheme booklet.[79]  Deemed warranty clauses are not unusual and are acceptable provided there is adequate disclosure that it is a condition.[80]

   [78] Scheme cl 8.2(b).  

   [79] Scheme booklet [6.9].

   [80] 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 [71].

2. In addition, the Scheme provides that, to the extent permitted by law, the Nusantara Shares will transfer free from encumbrances and restrictions on transfer of any kind.[81]  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 addresses the concern that has previously been expressed as to whether third parties may otherwise gain the impression that their rights have been extinguished.[82]

   [81] Scheme, cl 8.3.

   [82] Re Investa Properties Ltd [2007] FCA 1104 [25] - [30]; Re Scarborough Equities Ltd [No 2] [2009] FCA 484 [9] - [10].

3. Taking into account all of these matters, I considered that there was no apparent reason why the Scheme should not, if the necessary special resolution of shareholders is passed, receive the court's approval.

Conclusion on First Hearing

1. At the first hearing before me, I was satisfied that the substantive and procedural requirements under s 411(1) and s 1319 of the Act had been satisfied and that the proposed Scheme was fit for consideration by Nusantara's members.

2. For these reasons, at the conclusion of the hearing on 20 August 2021, I made orders in terms of 'Annexure A' to this judgment in respect of the Scheme.

Scheme Meeting

1. The Scheme meeting was convened and held on 22 September 2021 electronically.  At the meeting, the resolution was passed by the requisite statutory majorities.

2. 258 shareholders were present at the electronic Scheme meeting in person and by proxy (virtually), comprising approximately 29.79% of shareholders by number.[83]  96.12% of shareholders who voted at the meeting were in favour of the resolution.[84]  97.63% of votes cast on the Scheme resolution were cast in favour of the resolution.[85]  137,052,456  of the 231,673,007 Nusantara Shares on issue were voted on the Scheme resolution, representing approximately 59.16% of the total number of voting shares.[86]

   [83] Second affidavit of Gregory Paul Foulis affirmed 22 September 2021, 'GPF-2'; Affidavit of Vanessa McAuley filed 22 September 2021 [7], 'VM-1'.

   [84] Second affidavit of Gregory Paul Foulis affirmed 22 September 2021, 'GPF-2'.

   [85] Second affidavit of Gregory Paul Foulis affirmed 22 September 2021, 'GPF-2'.

   [86] Second affidavit of Gregory Paul Foulis affirmed 22 September 2021, 'GPF-2'.

Approval of Scheme

1. This matter came back before me for the second court hearing on 24 September 2021.

2. In addition to the affidavits that were relied upon at the first court hearing, Nusantara and Indika Energy filed several additional affidavits prior to the second court hearing.  Again, a number of these affidavits were sworn or affirmed overseas or interstate (while those states continued to be subject to stay at home orders associated with the COVID-19 pandemic).  Due to delays in couriers and postage associated with the pandemic, copies of these affidavits were annexed to solicitors' affidavits filed prior to the hearing on the basis that the original would be filed at the earliest opportunity.  The following affidavits were relied upon by Nusantara and Indika Energy:

   (a)a third affidavit of Danielle Jade Lukić filed 17 September 2021, attaching the affidavit of Oliver James Bampfield.  Mr Bampfield is the managing director of Lumi Technologies Pty Ltd (Lumi), who provided the online platform for the Scheme meeting.  His affidavit gave an overview of the conduct of the meeting on the online platform;

   (b)an affidavit of Jacinta Ann Pattison filed 20 September 2021, a client delivery manager employed by Computershare Communications Services Pty Ltd (Computershare), the share registry for the plaintiff, in relation to the preparation of Shareholder Packs (comprising personalised materials for the Scheme meeting and a reply prepaid envelope) for postal despatch to shareholders;

   (c)an affidavit of Danielle Maree Janette Petch filed 21 September 2021, a project coordinator at Computershare, in relation to the electronic and hardcopy despatch of Scheme materials to shareholders.  Ms Petch also gave evidence regarding the appointment of proxies and the processing of proxy forms by Computershare;

   (d)a fourth affidavit of Ms Lukić filed 21 September 2021, attaching the second affidavit of Neil Clarence Pathak, a partner at Gilbert + Tobin.  Mr Pathak's second affidavit confirmed the registration of the Scheme booklet and service of court documents with ASIC and annexed the advertisements of the second court hearing published in The Australian and The West Australian newspapers;

   (e)a fifth affidavit of Ms Lukić filed 22 September 2021, attaching the affidavit of Michael Milan Milivojac, the managing director of Minuteman Press.  Mr Milivojac's affidavit gave an overview of the printing of the Scheme booklet;

   (f)a sixth affidavit of Ms Lukić filed 22 September 2021, attaching the affidavit of Alexander Joseph Dixon Hughes, the operations manager for Lumi.  Mr Hughes' affidavit outlined the use of the Lumi platform at the electronic Scheme meeting;

   (g)a seventh affidavit of Ms Lukić filed 22 September 2021, attaching the second affidavit of Gregory Paul Foulis, the non‑executive chairman of Nusantara, in relation to the conduct of the electronic Scheme Meeting in his capacity as chairperson;

   (h)an affidavit of Emilia Varga filed 22 September 2021, a client support officer employed by Computershare, in relation to the electronic and hardcopy despatch of Scheme materials to shareholders and the reports generated by Computershare in relation to shareholders where electronic despatch resulted in a bounce-back and shareholders who purchased shares in Nusantara after Shareholder packs were despatched.  Ms Varga also gave evidence regarding the appointment of proxies, the processing of proxy forms by Computershare and corporate representative appointments; 

   (i)an affidavit of Vanessa McAuley filed 22 September 2021, a relationship manager at Computershare, in relation to the conduct of the Scheme meeting in her capacity as returning officer and outlining the results of the meeting;

   (j)a second affidavit of Mr Armand filed 22 September 2021, on behalf of Indika Energy and the Bidder Nominee.  Mr Armand's second affidavit confirmed that the conditions precedent relevant to Indika Energy and the Bidder Nominee under cl 3.1 of the SID (other than court approval at the second court hearing) have been satisfied, that Indika Energy and/or the Bidder Nominee will pay the Scheme consideration in accordance with the SID and that the Deed Poll and SID were duly executed by Indika Energy and the Bidder Nominee in accordance with Indonesian law.  To that effect, Mr Armand's second affidavit attached a legal opinion obtained from Indonesian legal counsel;

   (k)an eighth affidavit of Ms Lukić filed 23 September 2021, attaching an affidavit of Claire Newstead-Sinclair, the company secretary of Nusantara, in relation to the printing of the Scheme booklet, the operation of the shareholder information line for the Scheme and the investor portal on Nusantara's website;

   (l)a third affidavit of Jamie Matthew Ammendolea filed 24 September 2021. Mr Ammendolea's third affidavit attached correspondence between ASIC and Gilbert + Tobin, a letter from ASIC confirming ASIC had no objection to the proposed Scheme under s 411(17)(b) of the Act and the certificates executed by Nusantara, Indika Energy and the Bidder Nominee respectively confirming each of the conditions precedent had been satisfied or waived in respect of the Scheme (apart from the orders sought at the second court hearing).

1. These additional affidavits address the matters Nusantara was required to establish at the second court hearing.

Legal Principles in respect of the Scheme Approval

1. 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 a scheme of arrangement. The second stage is the approval of the Scheme by the requisite statutory majorities, which occurred at the Scheme meeting.

2. At the second court hearing, the court has two tasks:[87]

   (a)to ensure that all statutory and procedural requirements have been satisfied.  This includes confirming that:[88]

   (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.

   [87] Re Wesfarmers Ltd (No 2) [12].

   [88] Re International Goldfields Ltd [2004] WASC 112 [7].

3. 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 previously made orders for the convening of a meeting or because the statutory majorities have been achieved.[89]  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.[90]

   [89] Re Wesfarmers Ltd (No 2) [13]; Re Seven Network Ltd [No 3] [2010] FCA 400; (2010) 267 ALR 583 [31].

   [90] Re Wesfarmers Ltd (No 2) [13]; Re Seven Network Ltd [No 3] [32] - [33].

4. The factors that inform the court's discretion whether or not to approve a scheme are:[91]

   (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 an objection to the scheme; and

   (h)whether the scheme offends public policy.

   [91] Re Seven Network Ltd [No 3] [35] - [40], [50], [52].

Disposition

Compliance with statutory and procedural requirements

1. I was and am satisfied, on the basis of the additional affidavits that were filed by Nusantara and Indika Energy, that:

   (a)a copy of the court's orders made on 20 August 2021 (Orders) were lodged with ASIC that day;[92]

   (b)a marked-up copy of the Scheme booklet that was approved for distribution by the court at the first court hearing was lodged with ASIC and registered on 20 August 2021[93] and a clean copy was lodged with ASIC and registered on 23 August 2021; [94]

   (c)save for the matters set out at [92] - [93] below, the Scheme booklet was despatched to shareholders in accordance with the Orders;[95]

   (d)the Scheme meeting was convened and held on 22 September 2021 in accordance with the Orders;[96]

   (e)the Scheme was approved by the requisite statutory majorities;[97]

   (f)notice of the second court hearing was given by way of advertisement in The West Australian newspaper on 15 September 2021 and in The Australian newspaper on 16 September 2021;[98] and

   (g)ASIC informed Nusantara on 23 September 2021, pursuant to s 411(17)(b) of the Act, that it has no objection to the proposed Scheme.[99]

   [92] Second affidavit of Neil Clarence Pathak sworn 21 September 2021 [5] - [6], 'NCP-21'.   

   [93] Second affidavit of Neil Clarence Pathak sworn 21 September 2021 [5] - [6], 'NCP-21'.   

   [94] Second affidavit of Neil Clarence Pathak sworn 21 September 2021 [8].

   [95] Affidavit of Michael Milan Milivojac affirmed 22 September 2021; Affidavit of Jacinta Ann Pattison filed 20 September 2021; Affidavit of Emilia Varga filed 22 September 2021; Affidavit of Danielle Maree Janette Petch filed 21 September 2021. 

   [96] Second affidavit of Gregory Paul Foulis affirmed 22 September 2021 [7].

   [97] Second affidavit of Gregory Paul Foulis affirmed 22 September 2021, 'GPF-2'; Affidavit of Vanessa McAuley filed 22 September 2021, 'VM-1'.

   [98] Second affidavit of Neil Clarence Pathak sworn 21 September 2021 [16] - [21], 'NCP-25' - 'NCP-26'.

   [99] Third affidavit of Jamie Matthew Ammendolea filed 24 September 2021 [8] - [11], 'JMA-9'.

2. Senior counsel for the plaintiff drew my attention to four matters in relation to the Scheme meeting.

3. First, shareholders could only attend the Scheme virtually.  The online component of the meeting was hosted through the 'Lumi Online AGM System'.  Mr Bampfield, the managing director of Lumi, gave evidence regarding the operation of the Lumi Online AGM System and how the system allowed shareholders to attend the Scheme meeting virtually and vote.[100]

   [100] Affidavit of Oliver James Bampfield affirmed 17 September 2021.

4. 258 shareholders attended virtually through the Lumi Online AGM System.[101]  The Lumi and Computershare systems were utilised to tabulate the votes and manage the poll requirements for the Scheme meeting.  No issues arose in relation to the Scheme meeting on the Lumi platform.

   [101] Second affidavit of Gregory Paul Foulis affirmed 22 September 2021, 'GPF-2'; Affidavit of Vanessa McAuley filed 22 September 2021 [7], 'VM-1'.

5. The second matter was the voter turnout at the Scheme meeting.  Of the total 231,673,007 Nusantara shares on issue, 137,052,456 shares were voted at the Scheme meeting, comprising approximately 59.16% of the Nusantara shares on issue.[102]  258 shareholders were present at the electronic Scheme meeting in person and by proxy (virtually), comprising approximately 29.79% of shareholders by number.[103] 

   [102] Second affidavit of Gregory Paul Foulis affirmed 22 September 2021, 'GPF-2'; Affidavit of Vanessa McAuley filed 22 September 2021 [7], 'VM-1'.

   [103] Second affidavit of Gregory Paul Foulis affirmed 22 September 2021, 'GPF-2'; Affidavit of Vanessa McAuley filed 22 September 2021 [7], 'VM-1'.

6. I was and am satisfied that there was sufficient turnout at the Scheme meeting.  In this respect, I have had regard to the following matters:

   (a)the shareholders who voted at the Scheme meeting overwhelmingly voted in favour of the Scheme;

   (b)there was no evidence which suggested any irregularity in the despatch of the Scheme booklet; and

   (c)there was no evidence of any issue which would have deterred shareholders from voting at or attending the Scheme meeting. 

7. Third, senior counsel drew to my attention the results of the poll conducted at the Scheme meeting, specifically that the results were announced after the meeting was closed.  Mr Foulis was the Chairperson of the Scheme meeting.  The minutes of the meeting reflect that at the meeting, Mr Foulis advised that the results of the poll would be made available on the ASX once the votes were counted after the meeting.[104]  He then declared the meeting closed (at approximately 12.21 pm).[105]

   [104] Second affidavit of Gregory Paul Foulis affirmed 22 September 2021 'GPF1'.

   [105] Second affidavit of Gregory Paul Foulis affirmed 22 September 2021 'GPF1'.

8. The approach of the Chairperson advising the meeting that results will be the subject of an announcement pursuant to s 251AA of the Act, following completion of counting of the poll and after the meeting has formally been closed, has been approved by the courts on numerous occasions.[106]  

   [106] Re Asaleo Care Limited (No 2) [2021] FCA 636 [26] - [28]; Re CSG Limited (No 2) [2020] NSWSC 39 [6] - [8]; Re National Australia Bank Ltd [2016] VSC 62 [56]; Re MAC Services Group Ltd [2010] NSWSC 1474.

9. The question of whether a scheme resolution is passed at a meeting of shareholders when the result of the poll is not announced at the meeting but the meeting is told the result will be the subject of an ASX announcement, which subsequently occurs, was considered by Barrett J in Re MAC Services Group Ltd.  Barrett J concluded at [22]:[107]

   … Rather, it should be accepted that the process of a poll, of its nature, may extend beyond the time at which the persons making up the meeting at which it is demanded and directed cease to be together and, if the poll has been directed in such a way that the result can only crystallise after that time, the meeting is to be regarded as continuing until the result does crystallise. In using the word 'crystallise', I deliberately avoid the choice between ascertainment of the result and formal declaration of the result (see, as to this distinction in the case of election of officers, R v Coaks (1854) 3 El & Bl 249; 118 ER 1133; Lynch v McGrane (1965) 7 FLR 188). Ascertainment will always precede declaration but the important factor is, to my mind, completion of the process, as directed, so that the result is manifested in a way appropriate to the circumstances. Romer LJ, in his concurring judgment in Holmes v Keyes, said (at 217) that the tenure of the directors elected did not begin 'until the result of the poll has been made known', this being the form of words also preferred by Holland J in Ryan v South Sydney Junior Rugby League Club Ltd (1974) 3 ACLR 486 at 490.

   [107] Re MAC Services Group Ltd [22].

10. I agree with his Honour's reasoning.  No issue arises in the present case concerning the manner in which the poll was conducted or announced.

11. Fourth, senior counsel drew my attention to a further matter regarding compliance with the Orders.  The Scheme booklet approved for despatch to shareholders was in colour.[108]  In fact, a black and white copy of the Scheme booklet was despatched to Postal Shareholders who had elected to receive the Scheme materials by post.[109]

    [108] Affidavit of Neil Clarence Pathak sworn 18 August 2021, 'NCP-17'.

    [109] Affidavit of Claire Newstead-Sinclair affirmed 23 September 2021 [5] - [6]; Affidavit of Michael Milan Milivojac affirmed 22 September 2021 [14], 'MMM-1'; Affidavit of Jacinta Ann Pattison filed 20 September 2021 [18] - [25]; Affidavit of Emilia Varga filed 22 September 2021 [16] - [17], [21], [25]. 

12. I was and am satisfied that there was substantial compliance with the Orders as varied on 27 August 2021.  There is no critical or effective difference between the colour and black and white versions of the Scheme booklet.[110]  The interpretation of text and images within the Scheme booklet are the same in both instances.  For this reason, it is my view that any deficiency was a procedural irregularity.

    [110] Submissions for second court hearing [52].

13. Out of an abundance of caution, Nusantara sought relief pursuant to s 1322 of the Act resulting from any non-compliance with the Orders as varied on 27 August 2021.  Counsel submitted that this was a procedural irregularity which, due to a lack of substantial injustice, would be automatically cured unless the court orders otherwise pursuant to s 1322(2) of the Act.[111]

    [111] Re Wesfarmers Ltd (No 2) [31].

14. I accept that the despatch of a black and white copy of the Scheme booklet was inadvertent and did not cause any substantial injustice to the plaintiff's shareholders.  In relation to the exercise of discretion, it was and is my view that the order was appropriate to remove any doubt as to the effectiveness of the Scheme meeting and to provide commercial certainty to all those concerned.  For this reason, it was and remains my view that it was appropriate to make the orders sought by Nusantara.

15. Accordingly, I was and am satisfied that all statutory pre‑conditions have been met. I now turn to consider the discretionary considerations.

Good faith and proper purpose

1. There is no evidence that the shareholders voted for an improper purpose.  I am satisfied on the evidence that has been filed by Nusantara, Indika Energy and the Bidder Nominee that the members voted in good faith and for a proper purpose as:

   (a)the purpose of the proposed Scheme is to effect the acquisition by Indika Energy and the Bidder Nominee of all Nusantara Shares on issue, a transaction of a kind ordinarily approved by the court.  It does not involve any novel treatment of rights;

   (b)the independent expert opined that in the absence of an alternate proposal (and none has since emerged), the Scheme is in the best interests of shareholders; and

   (c)neither ASIC nor any shareholder appeared at the second court hearing to object to approval of the proposed Scheme.

Fairness and reasonableness

1. At the first hearing, based on the evidence before the court, I was satisfied 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. 

2. Nothing has occurred since the date of the first hearing to change this view.  The shareholders who voted at the meeting overwhelmingly supported the proposed Scheme.  No shareholder appeared to oppose the orders sought at the second court hearing.  I was and am satisfied that the proposed Scheme is fair and reasonable and is a Scheme that sensible business people might consider to be of benefit to shareholders. 

All relevant matters brought to the court's attention

1. At the first court hearing, counsel for Nusantara drew my attention to a number of matters.  These are summarised above at [32] - [72] of these reasons.

2. There were two further matters that senior counsel drew my attention to at the second court hearing. First, Nusantara 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 Nusantara's constitution. As senior counsel for the plaintiff noted, this exemption has become ordinary practice for transactions of this kind.[112] 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. Second, the conditions precedent to the Scheme were satisfied or waived, as evidenced by the certificates from Nusantara, Indika Energy and the Bidder Nominee put before me.[113]

Full and fair disclosure

[112] Submissions for second court hearing [57].

[113] Third affidavit of Jamie Matthew Ammendolea filed 24 September 2021, 'JMA-10' - 'JMA-11'.

1. At the first court hearing, based on the evidence before the court, I was satisfied the draft Scheme booklet would provide full and fair disclosure to shareholders.

2. The additional affidavit evidence filed by Nusantara establishes that the Scheme booklet despatched to shareholders was in the form approved for distribution by the court, save for the discrepancy noted above.  Nothing has arisen to suggest there has not been full and fair disclosure of all information which was material to the decision of shareholders prior to them voting on the Scheme.

Oppression of minorities

1. There was no evidence that any minority has been oppressed.

Satisfaction of s 411(17) of the Act and ASIC's view

1. 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.[114] As a result, the requirements of s 411(17) have been satisfied. In any event, 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

[114] Third affidavit of Jamie Matthew Ammendolea filed 24 September 2021, 'JMA-9'.

1. 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 is my view that it could not be sensibly suggested that the Scheme offends public policy. 

Conclusion and orders

1. At the second court hearing before me, I was satisfied that the substantive and procedural requirements under s 411(4) of the Act had been satisfied and that I should approve the proposed Scheme.

2. For these reasons, at the conclusion of the hearing on 24 September 2021, I made orders in terms of 'Annexure B' to this judgment in respect of the Scheme.

'Annexure A'

'Annexure B'

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

ME

Associate to the Honourable Justice Hill

30 SEPTEMBER 2021