Re Pacific Energy Limited

[2019] WASC 443

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   PACIFIC ENERGY LTD [2019] WASC 443

CORAM:   HILL J

HEARD:   1 OCTOBER & 15 NOVEMBER 2019

DELIVERED          :   2 OCTOBER & 15 NOVEMBER 2019

PUBLISHED           :   6 DECEMBER 2019

FILE NO/S:   COR 173 of 2019

BETWEEN:   PACIFIC ENERGY LTD

Plaintiff

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 - Whether directors should make a voting recommendation to members - Orders made convening meeting

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

Legislation:

Corporations Act 2001 (Cth) s 411
Supreme Court (Corporations) (WA) Rules 2004 (WA)

Result:

Orders made convening scheme meeting
Order made approving scheme

Category:    B

Representation:

Counsel:

Plaintiff	:	Mr S K Dharmananda SC
Non-party	:	Mr A J Papamatheos

Solicitors:

Plaintiff	:	DLA Piper Australia - Perth
Non-party	:	Allens

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

Re ACM Gold Limited; Re Mt Leyshon Gold Mines Ltd (1992) 34 FCR 530

Re Amcom Telecommunications Ltd [2015] FCA 341

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

Re Coles Group [No 2] [2007] VSC 523; (2007) 65 ACSR 494

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

Re David Jones Ltd [No 2] [2014] FCA 753

Re Doray Minerals Ltd; Ex Parte Doray Minerals [2019] WASC 57

Re Dreamscape Networks Ltd; Ex parte Dreamscape Networks Ltd [2019] WASC 412

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 Macquarie Private Capital A Ltd [2008] NSWSC 323

Re Nzuri Copper Ltd [2019] WASC 189

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

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

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

Re SRG Limited [2018] FCA 1092

Re Wellcom Group Ltd [2019] FCA 1655

Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [2018] WASC 308

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

HILL J:

Overview

1. The plaintiff, Pacific Energy Limited (Pacific Energy), is an Australian public company listed on the official list of the Australian Securities Exchange (ASX).

2. On 24 July 2019, Pacific Energy announced that it had entered into a scheme implementation deed (SID) with QGIF Swan Bidco Pty Ltd (QIC Bidco) on 23 July 2019.  Under the SID, it was proposed that QIC Bidco would acquire 100% of the fully paid ordinary shares in Pacific Energy by way of a scheme of arrangement and that shareholders would receive cash consideration of $0.96 (less any fully‑franked dividend that may be declared) for each Pacific Energy share.[1]

   [1] Affidavit of Mark Clifford Lawrenson filed 28 August 2019, par 4.

3. By an originating process dated 28 August 2019, Pacific Energy sought orders pursuant to s 411 of the Corporations Act 2001 (Cth) (Act) in relation to the proposed scheme of arrangement (Scheme).

4. On 9 September 2019, Pacific Energy received a competing proposal from a third party consortium and entered into a deed with the consortium.[2]  On 12 September, QIC Bidco exercised its matching right under the SID and increased the consideration payable to shareholders under the Scheme to $1.07 per share (less any fully-franked dividend that may be declared).[3] On 15 September 2019, the board of Pacific Energy determined that this was a bona fide matching proposal under the SID. Accordingly, Pacific Energy and QIC Bidco entered into a deed of variation of the SID.[4] 

   [2] Affidavit of Hedley James Roost filed 24 September 2019, par 9.

   [3] Affidavit of Hedley James Roost filed 24 September 2019, par 11, 'HJR6'.

   [4] Affidavit of Hedley James Roost filed 24 September 2019, par 12 - 13, 'HJR7'.

5. The application came before me for the first court hearing on 1 October 2019. At the conclusion of this hearing, the matter was adjourned until 2 October 2019 to enable a further affidavit to be filed by QIC Bidco. On 2 October 2019, I made orders pursuant to s 411(1) of the Act to convene a meeting of Pacific Energy's members to consider and vote on the proposed Scheme. I also made ancillary orders as to the convening and conduct of the meeting pursuant to s 1319 of the Act. I said that I would publish written reasons for my orders subsequently.

6. The Scheme meeting was held on 8 November 2019. At this meeting, the Scheme was approved by the requisite statutory majority.

7. On 15 November 2019, I made orders approving the Scheme following the second court hearing. In making these orders, I stated that I would publish written reasons for my orders subsequently.

8. These are the reasons for the orders I made on 2 October 2019 and 15 November 2019.

Factual Background

Pacific Energy Energy

1. Pacific Energy is a power generation project developer, owner and operator of mine site and renewable energy power stations.  Within Pacific Energy, there are five wholly owned electricity generation businesses. Pacific Energy was incorporated on 11 August 1987 and originally listed on the ASX as Arboyne NL.

2. As at 30 September 2019, Pacific Energy had 430,578,102 shares and 11,000,000 options on issue.[5]  The options are unlisted and have various expiry dates and vesting conditions.[6]

QIC Bidco

[5] Scheme Booklet, par 6.9.

[6] Affidavit of Mark Clifford Lawrenson filed 28 August 2019, par 24.

1. QIC Limited is an alternative investment manager specialising in areas such as infrastructure, real estate and private capital.  QGIF is an unlisted, stapled investment vehicle established by QIC Limited and provides institutional investors with access to a diverse portfolio of global infrastructure assets.  QIC Bidco is a subsidiary of QGIF.[7]

   [7] Scheme Booklet, section 7; Affidavit of Mark Clifford Lawrenson filed 28 August 2019, par 27.

2. As at the date of the Scheme booklet, QIC Limited held an interest in 219,898 Pacific Energy shares in its capacity as trustee of the QIC Diversified Australian Equities Fund.  This relevant interest is managed by a third party investment manager.[8]

Proposed Scheme

[8] Scheme Booklet, par 7.5(a)(ii).

1. The purpose of the proposed Scheme between Pacific Energy and QIC Bidco is to effect a corporate merger of these entities.  If the Scheme is implemented, the plaintiff's shareholders will receive $1.07 cash for each share held, less any special dividend that is declared and paid prior to the implementation date (Scheme Consideration), as consideration for the acquisition of their shares under the Scheme.[9]

   [9] Scheme Booklet, par 1.2.

2. The special dividend is a fully-franked dividend of $0.065 per Pacific Energy share that may be declared and paid on or before the implementation date of the Scheme (Special Dividend).  If the Special Dividend is declared, the Scheme Consideration is reduced by the amount of the Special Dividend.[10]

   [10] Second affidavit of Kirsty Jayne Hall filed 1 October 2019, 'KJH-6', SID, cl 4.4.

3. If a shareholder was a Pacific Energy shareholder at 19 September 2019, they will also receive an additional fully-franked final dividend of $0.015 per share (Final Dividend) to be paid on 10 October 2019.  The Final Dividend will be paid before the Scheme meeting and is not dependent on the Scheme being implemented.[11]

   [11] Scheme Booklet, par 1.2.

4. The Scheme contains a condition that the holders of the options in Pacific Energy enter into a deed with Pacific Energy and QIC Bidco prior to the second court hearing to cancel their options in return for cash consideration.[12]

   [12] SID, cl 7.8; Affidavit of Mark Clifford Lawrenson filed 28 August 2019, par 25.

5. The directors of Pacific Energy unanimously recommended that their shareholders vote in favour of the Scheme.[13]

   [13] Scheme Booklet, p iii, 'Letter from the Chairman of Pacific Energy Energy'.

6. Pacific Energy retained an independent expert to give an opinion on the proposed Scheme.  The independent expert, Grant Thornton Corporate Finance Pty Ltd (Grant Thornton), concluded that, in the absence of a superior proposal, the Scheme is fair and reasonable and in the best interests of Pacific Energy's shareholders.[14]

   [14] Scheme Booklet, Schedule 1, p 91.

Evidence for the first court hearing

1. Pacific Energy and QIC Bidco relied on nine affidavits that were filed prior to the first court hearing.  These were:

   (a)an affidavit of Mark Clifford Lawrenson sworn 28 August 2019.  Mr Lawrenson is the non‑executive chairman of Pacific Energy.  Mr Lawrenson confirmed a number of formal matters, outlined the nature of the proposed Scheme and attested to the verification process that had been undertaken by Pacific Energy in relation to the draft Scheme booklet.  The affidavit annexed the draft Scheme booklet, the ASX announcement of the proposed Scheme, information about the plaintiff obtained from the Australian Securities and Investments Commission (ASIC), Pacific Energy's constitution, a report on the issued capital of the plaintiff and the proxy voting form proposed to be given to shareholders.

   (b)an affidavit of Hedley James Roost affirmed 24 September 2019.  Mr Roost is a solicitor employed by DLA Piper, the solicitors for the plaintiff.  Mr Roost's affidavit confirmed that the draft Scheme booklet and notice of the first court hearing had been served on ASIC, and gave evidence about the competing proposal made by OP Trust Private Markets Group (Consortium Competing Proposal), the deed of variation entered into between the plaintiff and QIC Bidco and the amendments made to the draft Scheme booklet.  His affidavit annexed evidence of these matters.

   (c)an affidavit of Michael Phillip Bowen sworn 25 September 2019. Mr Bowen is a partner of DLA Piper, and is the proposed chairperson of the Scheme meeting. By his affidavit, Mr Bowen consented to act as chairperson of the meetings and provided the necessary disclosures required by r 3.2 of the Supreme Court (Corporations) (WA) Rules 2004 (WA) (Corporations Rules). Mr Bowen gave evidence that Scott Gibson, another partner of DLA Piper, had been nominated as alternate chairperson for the Scheme meeting, that Mr Gibson consented to this nomination and provided the necessary disclosures required by r 3.2 of the Corporations Rules on behalf of Mr Gibson.

   (d)an affidavit of Kirsty Jayne Hall sworn 30 September 2019.  Ms Hall is a solicitor employed by DLA Piper.  She confirmed in her affidavit that the final draft Scheme booklet had been sent to ASIC.  Ms Hall's affidavit annexed the email correspondence between DLA Piper and ASIC on the Scheme booklet amendments, as well as the amended Scheme booklet and the Takeover Panel's announcement regarding the Consortium Competing Proposal.

   (e)an affidavit of James Donald de Barran Cullen sworn 30 September 2019.  Mr Cullen is the managing director and chief executive officer of the plaintiff.  Mr Cullen gave evidence of the beneficial interest he holds in unlisted options in Pacific Energy and the payment he will receive for the cancellation of these options.  His evidence was that he received independent legal advice prior to giving a recommendation on the proposed Scheme to shareholders.  He also attested to the verification process undertaken by Pacific Energy in respect of the amended Scheme booklet and the approval of the Scheme booklet by Pacific Energy's board of directors.  Mr Cullen's affidavit annexed an updated report on the issued capital of the plaintiff.

   (f)a second affidavit of Kirsty Jayne Hall sworn 1 October 2019.  Ms Hall annexed copies of further email exchanges between DLA Piper and ASIC in relation to some final amendments to the draft Scheme booklet and the final draft of the Scheme booklet.  She also annexed the letter from ASIC confirming that ASIC did not propose appearing at the first court hearing.

   (g)an affidavit of Charles Henry Ashton affirmed 27 September 2019.  Mr Ashton is a partner of Allens, the solicitors for QIC Bidco.  Mr Ashton confirmed the process that had been adopted in respect of the verification of the information relating to QIC Bidco in the Scheme booklet.  The affidavit annexed the Deed Poll executed by QIC Bidco in favour of Pacific Energy's shareholders.

   (h)an affidavit of Andrew Richard Jennings affirmed 2 October 2019.  Mr Jennings is a director of QIC Bidco and is employed by QIC Private Capital Pty Ltd, a subsidiary of QIC Limited.  Mr Jennings gave evidence of the Equity Commitment Deed QIC Bidco had entered into with QGIF or equity investors whereby they committed to fund the consideration payable by QIC Bidco to Pacific Energy shareholders and the verification process undertaken by QIC Bidco in respect of the amended Scheme booklet.  The affidavit annexed the verification report, the Equity Commitment Deed and the updated verification certificate.

   (i)a second affidavit of Andrew Richard Jennings affirmed 2 October 2019, correcting a typographical error made in his first affidavit affirmed earlier that day.

Nature of Proposed Scheme

1. The proposed Scheme contemplates that QIC Bidco will acquire all of the fully paid ordinary shares of Pacific Energy and that shareholders will receive up to $1.085 in cash for each Pacific Energy share held.  This comprises $1.07 cash for each share held as part of the Scheme consideration, as well as the Special and Final Dividends.[15]

   [15] Scheme Booklet, par 1.2.

2. The Pacific Energy options stand outside the proposed Scheme and are to be dealt with by entry into cancellation deeds with each of the relevant option holders.  Pacific Energy and QIC Bidco have already entered into option cancellation deeds with each of the option holders.[16]  Each option holder has agreed to cancel their options in exchange for a cash payment.  These arrangements require QIC Bidco to make an additional payment of approximately $3,675,000.[17]

   [16] Affidavit of Mark Clifford Lawrenson filed 28 August 2019, par 25 - 26; Scheme Booklet, par 9.16.

   [17] Scheme booklet, par 9.16(a).

3. If the Scheme is implemented, Pacific Energy will become a wholly owned subsidiary of QIC Bidco and will be delisted from the ASX.[18]  The Scheme will not be effective unless and until a number of conditions precedent are satisfied or waived.  The conditions precedent which are required to be satisfied are disclosed in the Scheme booklet.[19]

   [18] Scheme, cl 7.2.

   [19] Scheme booklet, par 3.1 and 9.12.

4. If the Scheme is approved by shareholders and by the court at the second court hearing, Pacific Energy will transfer all of its shares to QIC Bidco and enter QIC Bidco as the holder of all Pacific Energy shares in its share register.[20]  QIC Bidco will provide the cash consideration for the Scheme to shareholders in return for their shares in Pacific Energy.[21]

   [20] Scheme, cl 2.6.3.

   [21] Scheme, cl 2.6.2.

5. QIC Bidco is obliged to provide the Scheme consideration prior to the transfer of the shares.[22]  The obligations of QIC Bidco under the Scheme are supported by a Deed Poll dated 15 September 2019 which has been executed by QIC Bidco.[23]

   [22] Scheme, cl 4.3.

   [23] Affidavit of Charles Henry Ashton filed 1 October 2019, 'CHA-3'.

6. The directors of Pacific Energy unanimously recommended that shareholders vote in favour of the Scheme.[24]

   [24] Scheme Booklet, par 1.3.

7. An independent expert report (IER) has been prepared by Grant Thornton.  The IER expresses the opinion that, in the absence of a superior proposal, the Scheme is fair and reasonable and in the best interests of the shareholders.[25]  In reaching this conclusion, the IER determined that the range for the value of a share in Pacific Energy was between $0.90 (low) and $1.01 (high).  The Scheme consideration of $1.085 is above this valuation range.  The basis of the valuation and the methodology used are set out comprehensively in the IER.

   [25] Scheme Booklet, Schedule 1.

8. I was provided with the draft Scheme booklet which was submitted to ASIC on 27 August 2019[26] and the various amendments that have been made to the document since then.[27]

   [26] Affidavit of Mark Clifford Lawrenson filed 28 August 2019, par 48; 'MCL-1'; Affidavit of Hedley James Roost filed 24 September 2019, par 3, 'HJR-1', 'HJR-2'.

   [27] Affidavit of Hedley James Roost filed 24 September 2019, par 14 - 17, 'HJR-8', 'HJR-9'; Second Affidavit of Kirsty Jayne Hall filed 1 October 2019, 'KJH-6'; 'KJH-8'.

9. The Scheme booklet contains the following sections:

   (a)a letter from the Chairman of Pacific Energy which contains a clear statement of the directors' recommendation;

   (b)important notices giving an overview of the Scheme and advising shareholders to obtain independent financial and taxation advice;

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

   (d)an overview of the Scheme and actions for shareholders to take;

   (e)a section on reasons to vote for or against the Scheme;

   (f)a 'frequently asked questions' table, which addresses all the essential matters including the Consortium Competing Proposal and entitlements resulting from the Scheme's implementation;

   (g)information on the Scheme meeting and voting;

   (h)key considerations for shareholders, such as the Scheme consideration, the Special and Final Dividends and the options shareholders may take;

   (i)information about Pacific Energy, QIC and QIC Bidco;

   (j)a section on the key risk factors;

   (k)a section on the key terms of the SID;

   (l) a section on the taxation implications for Pacific Energy shareholders; and

   (m)a section on additional information, which included details of the relevant interests of Pacific Energy's directors and the benefits they will obtain if the Scheme is approved.

10. The Scheme booklet included a number of important annexures which will form part of the Scheme booklet.  These include the IER, the SID, the proposed Scheme, the Deed Poll and the relevant notice of meeting.

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.[28]

   [28] 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 is satisfied that:[29]

   (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[30] and provides proper disclosure;[31]

   (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;[32]

   (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.

   [29] Re SRG Limited [2018] FCA 1092 [11]; Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [2018] WASC 308 [60].

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

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

   [32] Corporations Act, s 411(2)(b).

1. Any issue about classes of members is usually determined at the first hearing.[33]  This is so that costs and court time are not wasted which would otherwise occur if this issue was left to the second hearing.[34]

   [33] Re CSR Ltd [73].

   [34] 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.[35]  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.[36]

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

   [36] Re SRG Limited [12]; Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [72] - [76].

Disposition

1. The formal matters that the plaintiff had to prove are satisfied.

2. Pacific Energy 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. Pacific Energy 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.[37]

   [37] Affidavit of Michael Phillip Bowen filed 25 September 2019.

4. By letter dated 1 October 2019, ASIC confirmed that it had been given 14 days' notice of the hearing and had a reasonable opportunity to examine the terms of the Scheme and the draft explanatory statement or Scheme booklet.[38]  ASIC also gave notice that it did not propose to appear at the first hearing to make submissions or intervene to oppose the Scheme.[39]

   [38] Second Affidavit of Kirsty Jayne Hall filed 1 October 2019, 'KJH-7'.

   [39] Second Affidavit of Kirsty Jayne Hall filed 1 October 2019, 'KJH-7'.

5. On the materials before me, there was nothing to suggest that the proposed Scheme was not properly proposed.  The constitution of Pacific Energy does not prevent the Scheme.[40] 

   [40] Affidavit of Mark Clifford Lawrenson filed 28 August 2019, 'MCL-5'.

6. No class issue arose in relation to the Scheme.  All shareholders are being treated equally and, as a result, constitute a single class. 

7. There are a number of conditions precedent to the Scheme.[41]  Mr Cullen has deposed that he is not aware of any basis to believe that any condition precedent will not be satisfied by the necessary time.[42]

   [41] Scheme, cl 3.1.

   [42] Affidavit of James Donald de Barran Cullen filed 30 September 2019, par 25 - 27.

8. I have read the initial draft of the Scheme booklet (as provided to ASIC).  I have also been provided with the communications between ASIC and Pacific Energy's solicitors in relation to ASIC's review of the draft Scheme booklet.  As a result of this conferral, the Break Fee associated with the Consortium Competing Proposal was given greater prominence and the announcement by the Takeovers Panel clearly disclosed.[43]

   [43] Affidavit of Kirsty Jayne Hall filed 30 September 2019, 'KJH-1'.

9. I was and am satisfied that there is proper disclosure as to the effect of the proposed Scheme and the material considerations for shareholders of Pacific Energy.

10. There is evidence before me as to the due diligence and verification process that was undertaken by both Pacific Energy and QIC Bidco.[44]  On the basis of this evidence, I accept that:

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

    (b)QIC Bidco undertook a similar process to verify the statements attributable to it;

    (c)appropriate steps have been taken to satisfy Pacific Energy and QIC Bidco that the Scheme booklet does not omit any material information.

    [44] Affidavit of Mark Clifford Lawrenson filed 28 August 2019, par 36 - 49; Affidavit of James Donald de Barran Cullen filed 30 September 2019, par 17 - 21; Affidavit of Charles Henry Ashton filed 1 October 2019, par 8 - 22; Affidavit of Andrew Richard Jennings filed 2 October 2019, par 6 - 9 and 16 - 20.

11. The directors of Pacific Energy have resolved to approve the Scheme booklet in its final form.[45]

    [45] Affidavit of James Donald de Barran Cullen filed 30 September 2019.

12. Based on the checklist provided by counsel for Pacific Energy,[46] 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).

    [46] Submissions, p 27.

13. In written and oral submissions, counsel for Pacific Energy and QIC Bidco drew my attention to some specific matters.  I address each of these below.

Consortium Competing Proposal

1. On 9 September 2019, Pacific Energy was presented with the Consortium Competing Proposal, which included in its terms that the plaintiff enter into a deed with the Consortium (Consortium Deed).  The Consortium Deed provided that, subject to certain qualifications, the Consortium may be entitled to receive a break fee of $2.5 million from Pacific Energy (Consortium Break Fee).

2. In response to the Consortium Competing Proposal, QIC Bidco exercised its matching right under the SID and on 13 September 2019 submitted an application to the Takeovers Panel regarding both the Consortium Competing Proposal and the Consortium Break Fee.

3. The Takeovers Panel publicly announced on 25 September 2019 that it had declined to make a declaration of unacceptable circumstances in response to QIC Bidco's application.[47]  This was as a result of:

   (a)the plaintiff facilitating a rival proposal by entry into the Consortium Deed, which led to a materially higher offer; and

   (b)the Consortium Break Fee not being anti‑competitive or coercive.

   [47] Affidavit of Charles Henry Ashton filed 1 October 2019, 'CHA-4'.

4. On 15 September 2019, Pacific Energy's Board determined that the matching right exercised by QIC Bidco constituted a bona fide matching proposal under the terms of the SID.  A deed of variation was entered into by Pacific Energy and QIC Bidco to amend the SID, such that the Scheme Consideration for Pacific Energy's shareholders and the Break Fee payable to QIC Bidco were both increased.

5. The Scheme booklet containing these amendments was supplied to ASIC for review. The IER was also amended and provided to ASIC.

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 QIC Bidco 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)QIC Bidco is required to pay $1.07 in cash for each share held prior to the transfer of shares taking place;[48]

   (b)QIC Bidco is obliged to deposit in cleared funds the amount equal to the total Scheme Consideration into a trust account operated by Pacific Energy or its registry as trustee of the shareholders by the business day prior to the Scheme implementation date;[49] 

   (c)QIC Bidco does not acquire beneficial title to the shares unless it has paid the Scheme Consideration;[50]

   (d)Pacific Energy is required to pay the cash consideration to its shareholders on the Scheme implementation date.[51]

   [48] Second Affidavit of Kirsty Jayne Hall filed 1 October 2019, cl 5, p 318; Affidavit of Charles Henry Ashton filed 1 October 2019, 'CHA-3', cl 4.2, p 17.

   [49] Second Affidavit of Kirsty Jayne Hall filed 1 October 2019, cl 4.3, p 315.

   [50] Second Affidavit of Kirsty Jayne Hall filed 1 October 2019, cl 4.2, p 315.

   [51] Second Affidavit of Kirsty Jayne Hall filed 1 October 2019, cl 4.4, p 297.

3. The resignation of the current directors and appointment of the QIC Bidco nominees to the board of Pacific Energy is subject to and conditional upon the Scheme consideration having been paid.[52]  Accordingly, there was no concern that the incoming board of QIC Bidco could interfere with the implementation of the Scheme or payment to shareholders.

   [52] SID, cl 7.

4. The arrangements under the terms of the proposed Scheme are supported by the Deed Poll.  By the Deed Poll, QIC Bidco covenants in favour of each Pacific Energy 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 and that Pacific Energy and each of its directors may act as agent and attorney to enforce the Deed Poll on behalf of the Pacific Energy shareholders.[53]  In my view, the shareholders are sufficiently identified within the deed poll to enable them to enforce the deed poll as against QIC Bidco.[54]

Exclusivity provisions and break fee

[53] Scheme, cl 8.2.

[54] Property Law Act 1969 (WA), s 11(1)

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.[55]  The 'no talk' and 'no due diligence' provisions are subject to a fiduciary carve‑out.[56]  In certain circumstances, a break fee of $4.1 million is payable by Pacific Energy to QIC Bidco.[57]

   [55] SID, cl 12.

   [56] SID, cl 12.13.

   [57] SID, cl 11.6.

2. In considering whether the exclusivity provisions impact on completion of the transaction and the duties of directors, the court has regard to:[58]

   (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.

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

3. In this case, the exclusivity period in the SID is defined and, at most, is a period of 6 months.  The no‑talk and no due diligence provisions contain appropriate fiduciary carve‑outs.[59]  The exclusivity arrangements are prominently disclosed in the Scheme booklet at sections 3, 5.5 and 9.13.[60]

   [59] SID, cl 12.4 and 12.5.

   [60] Second affidavit of Kirsty Jayne Hall sworn 1 October 2019, 'KJH-6'.

4. The Scheme booklet specifically discloses that the failure by shareholders to approve the Scheme will not trigger an obligation on the part of Pacific Energy to pay the Break Fee to QIC Bidco.[61]  I was and am satisfied that there is adequate disclosure of the Break Fee in the Scheme booklet.

   [61] Scheme Booklet, par 3.1, p 14 and par 9.15.

5. The affidavit of Mr Lawrenson of 28 August 2019 sets out the commercial justification for the exclusivity provisions and the Break Fee.[62]  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 Pacific Energy was advised and represented by external advisors including independent legal advisers.[63]

   [62] Affidavit of Mark Clifford Lawrenson filed 28 August 2019, par 55 - 64.

   [63] Affidavit of Mark Clifford Lawrenson filed 28 August 2019, par 57 - 58.

6. The amount of the Break Fee represents less than 1% of the equity value of Pacific Energy based on the Scheme Consideration.[64]  As such, it is within the generally accepted commercial parameters for break fees.

No collateral benefit which should prevent the approval of the Scheme

[64] Affidavit of Mark Clifford Lawrenson filed 28 August 2019, par 60.

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.[65]  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.[66]  If no net benefit is present, then, prima facie, the equality principle under s 602(c) of the Act is satisfied.

   [65] Re David Jones Ltd [No 2] [2014] FCA 753 [12] ‑ [16] (Farrell J).

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

2. Pacific Energy drew my attention to one matter which may constitute a collateral benefit, namely the payment to Mr Cullen in connection with the cancellation of his Pacific Energy options.  This is prominently disclosed in the Scheme booklet.[67]

   [67] Scheme Booklet, par 1.3, 1.10, 5.6, 9.17 and 11.1.

3. I accept that there is no collateral benefit that accrues to shareholders who also hold options.  Any additional consideration received by these shareholders is consideration for the cancellation of the options they hold; it is not a payment in connection with their shares.  The evidence is that the consideration payable for the options has been calculated on the basis of the difference between the Scheme Consideration and the exercise price of the options.[68]

Director benefits and director recommendations

[68] Scheme Booklet, IER, p 76 - 78.

1. In respect of the directors of Pacific Energy, counsel drew my attention to the fact that Mr Cullen holds options in the plaintiff.  These options will be dealt with outside the terms of the Scheme by way of deeds of cancellation.  Under the deed, Mr Cullen will receive a payment of approximately $2.3 million for the cancellation of his options.  Mr Cullen does not consider that this arrangement should prevent him from making a recommendation in relation to the Scheme.  In support of this view, counsel drew my attention to a valuation of the options that had been obtained and the affidavit filed by Mr Cullen on 30 September outlining the independent legal advice he had sought.  On the basis of this valuation, counsel contended that these payments did not provide a material benefit to the option holders, including the independent directors.

2. As I noted in Re Dreamscape Networks Ltd; Ex parte Dreamscape Networks Ltd, in a number of recent decisions, courts have considered the appropriateness of a director, who is to receive an additional financial benefit if the scheme is approved, making a recommendation to shareholders about voting in favour of the scheme.[69]  It is not necessary for me to repeat what I said there.  Those reasons for decision reflect my views on this matter. 

   [69] Re Dreamscape Networks Ltd; Ex parte Dreamscape Networks Ltd [2019] WASC 412 [78] - [80].

3. For the following reasons, this is not the occasion to address the apparently divergent views as to whether it is appropriate for the directors who will receive an additional financial benefit if the Scheme is approved to make a recommendation to shareholders.[70] 

   [70] See for example Re Wellcom Group Ltd [2019] FCA 1655 [51] - [60] and the cases referred to therein.

4. First, the additional amount payable to Mr Cullen is not out of the ordinary.  The amount payable is based on the Scheme Consideration and has been the subject of a valuation obtained from an independent expert.  Second, the payment is for the cancellation of options which were granted well before the SID was entered into. 

5. Third, the affidavit evidence confirmed that Mr Cullen took independent legal advice as to the relevant factors to be considered by him in relation to the Scheme based on recent judicial guidance regarding material personal interests and conflicts of interest.  Only on receipt of this advice did he resolve to recommend that the shareholders vote in favour of the Scheme at the Scheme meeting.[71]  Accordingly, it is not the case that Mr Cullen is joining in a unanimous resolution to recommend the Scheme without having given adequate consideration as to whether he has a material personal interest or conflict of interest which would make it inappropriate to join in a recommendation of the board of directors of Pacific Energy.   

   [71] Affidavit of James Donald de Barren Cullen filed 30 September 2019, par 12 - 13.

6. Fourth, importantly, both the amounts payable to Mr Cullen and the basis upon which he considers it appropriate to make a recommendation to shareholders are fully disclosed in the Scheme booklet.[72]

   [72] Scheme Booklet, par 11.1.

7. For these reasons, it was and is my view that the additional payments to be received by Mr Cullen for the cancellation of his options did not make it inappropriate for him to make a recommendation in respect of the Scheme.   

Other matters

1. Counsel for Pacific Energy and QIC Bidco drew my attention to the 'deemed warranty' provision in the proposed Scheme.[73]  The warranty provision is disclosed in the Scheme booklet.[74]  Deemed warranty clauses are not unusual and are acceptable provided there is adequate disclosure that it is a condition.[75]

   [73] Scheme, cl 8.4.

   [74] Scheme Booklet, 'Frequently Asked Questions'.

   [75] Re APN News and Media Ltd [57] - [63]; Re DUET Management Company 1 Ltd [2013] NSWSC 817; (2013) 95 ACSR 34 [23]; Re Nzuri Copper Ltd [2019] WASC 189 [90]; Re Macquarie Private Capital A Ltd [2008] NSWSC 323 [13] - [14]; Re Doray Minerals Ltd; Ex Parte Doray Minerals [2019] WASC 57 [71].

2. In addition, the Scheme provides that, to the extent permitted by law, the Pacific Energy shares will transfer free from encumbrances and restrictions on transfer of any kind.[76]  The terms of this clause are in standard terms and include 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.[77] 

   [76] Scheme, cl 8.3.

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

3. Additionally, the plaintiff sought orders pursuant to s 1319 of the Act for electronic dispatch of the Scheme booklet.  I note that these orders are now common.[78]  Details were provided as to the terms of the proposed electronic notification.[79]  I was satisfied, having read the terms of the proposed email communication to shareholders, that an order for electronic dispatch of the Scheme booklet was appropriate.

   [78] See, for example, Re SRG Ltd [48]; Re Doray Minerals; Ex parte Doray Minerals [72].

   [79] Affidavit of Evan George Cross filed 13 August 2019, par 73; 'EGC-7'.

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

2. For these reasons, on 2 October 2019, I made orders in terms of Annexure 'A' to this judgment in respect of the Scheme.

Meetings

1. The Scheme meeting was convened and held on 8 November 2019.  At this meeting the resolution was passed by the requisite statutory majority.

2. At the Scheme meeting, two shareholders were present in person and 420 shareholders were represented by proxy.  This met the quorum set out in my orders made 2 October 2019.  96.68% of shareholders who voted at the Scheme meeting voted in favour of the resolution, which by number of votes was 99.85% in favour.[80]  297,620,261 of the 430,578,102 Pacific Energy voting shares on issue were cast in favour of the resolution, which is approximately 69.13% of the total number of voting shares of Pacific Energy.[81]

   [80] Second Affidavit of Michael Phillip Bowen filed 11 November 2019, par 14, 'MPB-2'; Affidavit of Vanessa McAuley filed 11 November 2019, par 20 - 21.

   [81] Second Affidavit of Michael Phillip Bowen filed 11 November 2019, par 12; Affidavit of Vanessa McAuley filed 11 November 2019, par 18.

1. Although it was not the subject of orders by me at the first court hearing, a number of shareholders (including the directors and their related entities)[82] had their votes tagged at the Scheme meeting.  These shareholders represented approximately 53.2% of the total number of shareholders of Pacific Energy.[83]  If these votes were excluded from the resolution, 96.62% of shareholders who voted at the meeting were in favour of the resolution, which by number of votes was 99.37% in favour.[84]

   [82] Affidavit of Vanessa McAuley filed 11 November 2019, par 25.

   [83] Second Affidavit of Michael Phillip Bowen filed 11 November 2019, par 17.

   [84] Second Affidavit of Michael Phillip Bowen filed 11 November 2019, par 20.

Approval of Scheme

1. These matters came back before me for the second court hearing on 15 November 2019.

2. In addition to the affidavits that were relied upon at the first hearing, Pacific Energy and QIC Bidco relied on the following additional affidavits:

   (a)an affidavit of Nicole Brooke Lewis sworn 1 November 2019, a Relationship Manager of Computershare Investor Services Pty Limited (Computershare), the share registry of the plaintiff.  Ms Lewis' affidavit confirmed the total number of shareholders of the plaintiff, the sending of an 'email broadcast' to those shareholders who had elected to receive the Scheme information electronically, the tallying of the votes for the meeting either by shareholder or by proxy and the creation of a poll report for the plaintiff's solicitors.  The affidavit annexed the final Scheme booklet, the proxy form, the cover sheet sent to each shareholder, the receipt of lodgement from Australia Post and the email broadcast sent to shareholders.

   (b)a third affidavit of Kirsty Jayne Hall sworn 11 November 2019 in relation to the lodgement with ASIC of the orders from the first court hearing, the registration of the Scheme booklet and publication of notices of the second court hearing.

   (c)a second affidavit of James Donald de Barran Cullen sworn 11 November 2019 confirming that the Consortium Break Fee was paid by the plaintiff, the Final Dividend had been paid to Pacific Energy's shareholders and that the directors of Pacific Energy had determined to pay the Special Dividend.  Mr Cullen's affidavit annexed the ASX announcement made by the plaintiff regarding the Special Dividend.

   (d)an affidavit of Vanessa McAuley affirmed 11 November 2019, a Relationship Manager of Computershare.  Ms McAuley's affidavit set out the proxy forms received and the votes tallied in respect of the Scheme meeting.  The affidavit annexed the proxy form, the voting card and the poll reports.

   (e)a second affidavit of Michael Phillip Bowen sworn 11 November 2019, the chairperson of the Scheme meeting, providing a report on the meeting.  The affidavit annexed the minutes of the Scheme meeting and the poll reports prepared by Computershare.

   (f)a fourth affidavit of Kirsty Jayne Hall sworn 15 November 2019, annexing correspondence received from ASIC confirming that ASIC had no objection to the proposed Scheme under s 411(17)(b) of the Act, the certificates issued by Pacific Energy and QIC Bidco confirming that all conditions precedent (apart from the orders sought at the second court hearing) had been satisfied and a letter from Grant Thornton confirming that nothing had come to their attention that would lead them to change their independent expert opinion on the Scheme.

3. These additional affidavits addressed the matters that Pacific Energy was required to establish at the second hearing.

Legal Principles in respect of the Scheme Approval

1. The approval of the proposed Scheme pursuant to s 411(4)(b) of the Act, or the second court hearing, is the third stage of the process of the approval of a scheme of arrangement. As noted above, 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:[85]

   (a)to ensure that all statutory and procedural requirements have been satisfied.  This includes confirming that:[86]

   i.the meeting was convened and held in accordance with the Court's earlier orders,

   ii.the resolution was 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.

   [85] Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd [No 2] [2018] WASC 357 [12].

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

3. The court has a discretion to approve a scheme under s 411(4)(b) 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.[87]  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.[88]

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

   [88] Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [No 2] [13]; Re Seven Network Ltd [No 3] [32] - [33].

4. The factors that are commonly taken into account in informing the court's discretion whether or not to approve the scheme are:[89]

   (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 no objection to the scheme; and

   (h)whether the scheme offends public policy.

   [89] Re Seven Network Ltd [No 3] [35] - [40].

Disposition

Compliance with statutory and procedural requirements

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

   (a)a copy of the court's orders made on 2 October 2019 were lodged with ASIC that day;[90]

   (b)a copy of the Scheme booklet that was approved for distribution by the court was lodged with ASIC and registered on 2 October 2018;[91]

   (c)the Scheme booklet was dispatched to shareholders in accordance with my orders of 2 October 2019;[92]

   (d)the Scheme meeting was convened and held on 8 November 2019 in accordance with my orders of 2 October 2019;[93]

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

   (f)notice of the second court hearing was given by way of advertisement in The West Australian and The Australian newspapers on 8 November 2019;[94] and

   (g)ASIC informed DLA Piper on 14 November 2019 that, pursuant to s 411(17)(b) of the Act, it had no objection to the proposed scheme.[95]

   [90] Third Affidavit of Kirsty Jayne Hall filed 11 November 2019, par 3, 'KJH-9'.

   [91] Third Affidavit of Kirsty Jayne Hall filed 11 November 2019, par 5, 'KJH-10'.

   [92] Affidavit of Nicole Brooke Lewis filed 1 November 2019, par 10 - 31.

   [93] Second affidavit of Michael Phillip Bowen filed 11 November 2019, par 5 - 8.

   [94] Third Affidavit of Kirsty Jayne Hall filed 11 November 2019, par 7 - 8, 'KJH-11'; 'KJH-12'.

   [95] Fourth Affidavit of Kirsty Jayne Hall filed 15 November 2019, par 2, 'KJH-13'.

2. 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 Pacific Energy 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 QIC Bidco of all of Pacific Energy's issued fully paid shares, such that Pacific Energy will become a wholly owned subsidiary of QIC Bidco.  Transactions such as this are of a kind ordinarily approved by the courts and one that sensible business people might consider of benefit to members;

   (b)the independent expert opined that in the absence of a superior proposal (and none has emerged), the Scheme is fair and reasonable and 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 majority was achieved at the Scheme meeting. 

2. Nothing has occurred since the date of the first hearing to change this view.  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. 

3. Since the date of the first hearing, two matters have occurred that support this view.  First, the majority of shareholders who voted at the meeting supported the proposed Scheme, and second, no shareholder appeared to oppose the orders sought at the second court hearing.

All relevant matters brought to the court's attention

1. At the first court hearing, counsel for Pacific Energy and QIC Bidco drew my attention to a number of matters.  These are summarised in these reasons at paragraphs 48 to 76.

2. There were two further matters that counsel drew my attention to at the second court hearing. First, Pacific Energy 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 Pacific Energy's constitution. As counsel for the plaintiff noted, this exemption has become ordinary practice for transactions of this kind.[96] 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 Pacific Energy and QIC Bidco put before me.[97]

Full and fair disclosure

[96] Submissions for second court hearing, par 47 - 48.

[97] Fourth Affidavit of Kirsty Jayne Hall filed 15 November 2019, par 4 - 6, 'KJH-14'; 'KJH-15'.

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

2. The additional affidavit evidence filed by Pacific Energy established that the Scheme booklet dispatched to shareholders was in the form approved for distribution by the court.  Nothing has arisen to suggest that there has not been full and fair disclosure of all information that 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) and ASIC's view

1. ASIC has provided a written statement to the effect that it did not object to the Scheme pursuant to s 411(17)(b) of the Act. As a result, the requirements of s 411(17) have been satisfied.

2. Production of this written statement does not, of course, bring to an end the court's discretion whether to approve the Scheme.[98]  However, the court should take a liberal and practical approach, not an excessively rigid view, in considering the matter.[99]  Where the Scheme provides certainty of outcome by way of a single process, this is a commercially rational reason to choose a scheme of arrangement over a takeover.

   [98] Re Macquarie Private Capital A Ltd [2008] NSWSC 323 [29]; Re Coles Group [No 2] [2007] VSC 523; (2007) 65 ACSR 494 [75] - [80].

   [99] Re ACM Gold Limited; Re Mt Leyshon Gold Mines Ltd (1992) 34 FCR 530, 538.

3. In this case, I was and am satisfied that it was commercially rational for Pacific Energy to proceed in the manner it chose.

Public Policy

1. There was no evidence before the court that the proposed Scheme offends any aspect of public policy.   

Conclusion and Orders

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

2. For these reasons, at the conclusion of the hearing on 15 November 2019, I made orders in terms of Annexure 'B' to this judgement 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.

MG

Research Orderly to the Honourable Justice Hill

6 DECEMBER 2019