Re PetroNor E&P Ltd; [No 2]
[2022] WASC 81
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE PETRONOR E&P LTD; EX PARTE PETRONOR E&P LTD [No 2] [2022] WASC 81
CORAM: HILL J
HEARD: 17 FEBRUARY 2022
DELIVERED : 17 FEBRUARY 2022
PUBLISHED : 10 MARCH 2022
FILE NO/S: COR 180 of 2021
MATTER: IN THE MATTER OF PETRONOR E&P LTD
EX PARTE
PETRONOR E&P LTD
Plaintiff
Catchwords:
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(1), s 411(6), s 412(1)(a), s 1319
Supreme Court (Corporations) (WA) Rules 2004 (WA), r 3.2
Result:
Orders made approving scheme
Category: B
Representation:
Counsel:
| Plaintiff | : | A J Papamatheos & C E McKay |
Solicitors:
| Plaintiff | : | Steinepreis Paganin |
Cases referred to in decision:
Re Auzex Resources Ltd [No 2] [2012] QSC 101
Re Avoca Resources Ltd [2011] FCA 208
Re CannPal Animal Therapeutics Ltd [No 2] [2021] WASC 83
Re Cortona Resources Ltd [No 2] [2013] FCA 302
Re Decimal Software Limited [No 2] [2018] FCA 2040
Re Foundation Healthcare Ltd [No 2] [2002] FCA 973; (2002) 43 ACSR 680
Re Galaxy Resources Ltd [No 2] [2021] WASC 314
Re Great Artesian Oil and Gas Ltd [No 2] [2008] FCA 1169
Re International Goldfields Ltd [2004] WASC 112
Re Nusantara Resources Ltd [2021] WASC 334
Re Nzuri Copper Ltd; Ex parte Nzuri Copper Ltd [No 4] [2020] WASC 10
Re Pensana Metals Limited [2020] WASC 17
Re PetroNor E&P Limited [2021] WASC 426
Re Piedmont Lithium Ltd [No 3] [2021] WASC 173
Re Rebel Sport Ltd [No 2] [2007] FCA 458
Re Saracen Mineral Holdings Ltd [No 2] [2021] WASC 32
Re Seven Network Ltd [No 3] [2010] FCA 400; (2010) 267 ALR 583
Re Straits Resources Ltd [No 2] [2011] FCA 47
Re Swick Mining Services Ltd [2022] WASC 79
Re TriAusMin Limited [No 2] [2014] FCA 833
Re Valmec Ltd [2021] WASC 420
Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd [No 2] [2018] WASC 357
Re Zenith Energy Ltd [No 3] [2020] WASC 289
HILL J:
The plaintiff, PetroNor E&P Limited (PetroNor), applies for orders approving a proposed scheme of arrangement (Scheme). The background to the matter is set out in the judgment I delivered following the first court hearing.[1] At the first court hearing on 22 October 2021, I made orders for the Scheme meeting to be convened on 29 November 2021 (Orders).
[1] Re PetroNor E&P Limited [2021] WASC 426.
Scheme Meeting
The Scheme meeting was convened and held on 29 November 2021. At the meeting, the resolution was passed by the requisite statutory majorities.
28 shareholders were present at the Scheme meeting in person and by proxy, comprising approximately 3.65% of shareholders by number.[2] 85.71% of shareholders who voted at the meeting were in favour of the resolution.[3] 99.9999905% of votes cast on the Scheme resolution were cast in favour of the resolution.[4]
[2] Third affidavit of Roger Christian Steinepreis filed 3 December 2021 [16] – [17], 'RCS-2'; Second affidavit of Rachel Marie Crane filed 3 December 2021 [11].
[3] Third affidavit of Roger Christian Steinepreis filed 3 December 2021 [17], 'RCS-2'.
[4] Third affidavit of Roger Christian Steinepreis filed 3 December 2021 [17], 'RCS-2'.
Approval of Scheme
This matter initially came back before me for the second court hearing on 9 December 2021. On that date, and on subsequent further dates, the second court hearing was adjourned for reasons which are explained in more detail below. Ultimately, the matter came on for final hearing on 17 February 2022.
In addition to the affidavits that were relied upon at the first court hearing, PetroNor relied on 22 additional affidavits that were filed prior to the second court hearing. These were:
(a)an affidavit of Emilia Varga filed 30 November 2021, a client support officer of Computershare Investor Services Pty Ltd (Computershare), the share registry of the plaintiff, in relation to the electronic dispatch of Scheme materials to shareholders;
(b)an affidavit of Jacinta Ann Pattison filed 30 November 2021, a client delivery manager of Computershare Communication Services Pty Ltd (CCSPL), an entity associated with Computershare. Ms Pattison deposed to the preparation of packs of personalised materials for the Scheme meeting (comprising a letter, Scheme booklet and proxy Form) (Shareholder Packs) for postal dispatch to shareholders in Australia who had not elected to receive materials electronically;
(c)an affidavit of Nicholas Carayanis filed 30 November 2021, the general manager of Precision Group (Precision), in relation to the dispatch of Shareholder Packs to shareholders of PetroNor both within Australia and overseas;
(d)an affidavit of Rachel Marie Crane filed 30 November 2021, a relationship manager of Computershare. Ms Crane deposed to the physical dispatch of Shareholder Packs to shareholders, where electronic dispatch had resulted in a bounce-back;
(e)an affidavit of Viktor Dedic filed 30 November 2021, a warehouse staff member of CCSPL. Mr Dedic deposed to the collection of Shareholder Packs by a courier from CCSPL to Precision for dispatch;
(f)an affidavit of Naser Ali Mir filed 1 December 2021, a laser operator of CCSPL, in relation to the printing and packaging of Shareholder Packs to those PetroNor shareholders who had not elected to receive materials electronically;
(g)an affidavit of Michael Milan Milivojac filed 3 December 2021, the owner of Minuteman Press store, who deposed to the printing of the Scheme booklets and their delivery to Precision;
(h)an affidavit of Christopher James Butler filed 3 December 2021, the group financial controller of PetroNor, in relation to his receipt of the Scheme meeting materials from DNB Bank Asia as a depository receipt holder of PetroNor;
(i)a second affidavit of Ms Crane filed 3 December 2021. Ms Crane was the returning officer for the Scheme meeting and deposed to the receipt and recording of proxies, registration of attendees at the Scheme meeting and the voting procedure at the Scheme meeting;
(j)a third affidavit of Roger Christian Steinepreis filed 3 December 2021, a non-executive director of PetroNor, a partner and executive chairman of Steinepreis Paganin, the solicitors for the plaintiff, and the chairperson of the Scheme meeting. Mr Steinepreis provided a report on the conduct and results of the Scheme meeting;
(k)a fourth affidavit of Benjamin John Purser filed 3 December 2021, a senior associate at Steinepreis Paganin. Mr Purser confirmed the registration of the Scheme booklet with ASIC and the instructions he gave for the mailout or dispatch of documents for the Scheme meeting, including the depository receipt holders;
(l)a second affidavit of Angeline Hicks filed 6 December 2021, the company secretary of PetroNor. Ms Hicks gave evidence of the publication of notices in The West Australian and The Australian newspapers. Copies of these notices, as well as a number of announcements made to the Oslo Euronext Expand (OEE) regarding the Scheme, were annexed to her affidavit;
(m)a fourth affidavit of Mr Steinepreis filed 8 December 2021. Mr Steinepreis deposed to the progress of the 'know your client' checks by DNB Bank ASA, the proposed registrar for PetroNor E&P ASA (PetroNor ASA) in connection with the proposed listing on the Oslo Børs exchange. Mr Steinepreis confirmed that ASIC did not oppose the proposed adjournment of the second court hearing and that no person had served or foreshadowed any objection to the approval of the proposed Scheme;
(n)a fifth affidavit of Mr Steinepreis filed 15 December 2021, providing an update on the progress of the 'know your client' checks. Mr Steinepreis confirmed that ASIC did not oppose the proposed adjournment of the second court hearing and that no person had served or foreshadowed any objection to the approval of the proposed Scheme;
(o)a fifth affidavit of Mr Purser filed 15 December 2021 confirming service of the court documents on ASIC, and annexing an announcement by PetroNor to the OEE regarding the adjournment of the second court hearing;
(p)a sixth affidavit of Mr Steinepreis filed 16 December 2021. Mr Steinepreis deposed to events that had occurred in Oslo on 15 December 2021, namely that there had been a raid by the National Authority for Investigation and Prosecution of Economic and Environment Crime in Norway (Økokrim) on PetroNor headquarters and the chief executive officer and business development manager had been detained. Mr Steinepreis confirmed that as a result of these events, PetorNor was seeking an adjournment of the second court hearing;
(q)a seventh affidavit of Mr Steinepreis filed 27 January 2022. Mr Steinepreis confirmed the further adjournment of the second court hearing had been announced to the OEE and provided an update on the progress of the 'know your client' checks by DNB Bank ASA as well as an updated proposed timeline for the implementation of the Scheme;
(r)an eighth affidavit of Mr Steinepreis filed 10 February 2022. Mr Steinepreis confirmed the further adjournment of the second court hearing had been announced to the OEE and provided an update on the progress of the 'know your client' checks by DNB Bank ASA and the proposed timeline for the implementation of the Scheme;
(s)a sixth affidavit of Mr Purser filed 11 February 2022, confirming the 'know your client' checks by DNB Bank ASA for PetroNor ASA had been completed and the registrar agreement executed;
(t)a seventh affidavit of Mr Purser filed 15 February 2022, providing an update on the timing for the Oslo Stock Exchange (OSE) to issue a conditional listing approval letter with respect to the proposed listing on the Oslo Børs;
(u)an eighth affidavit of Mr Purser filed 17 February 2022. Mr Purser confirmed that PetroNor ASA had received conditional listing approval, that PetroNor had announced the adjournments of the second court hearing to the OEE, and the additional court documents had been served on ASIC. Mr Purser also deposed to the agreement between PetroNor and PetroNor ASA to vary the definition of 'Implementation Date' in the SIA and Scheme. His affidavit annexed copies of documents confirming all of these matters;
(v)a ninth affidavit of Mr Purser filed 17 February 2022, attaching the certificate executed by PetroNor and PetroNor ASA confirming that each of the conditions precedent had been satisfied or wavied in respect of the Scheme (apart from the orders sought at the second court hearing) and a letter from ASIC confirming ASIC had no objection to the proposed Scheme under s 411(17) of the Act.
These additional affidavits address the matters PetroNor was required to establish at the second court hearing.
Legal Principles in respect of the Scheme Approval
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.
At the second court hearing, the court has two tasks:[5]
(a)to ensure that all statutory and procedural requirements have been satisfied. This includes confirming that:[6]
(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.
[5] Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd [No 2] [2018] WASC 357 [12].
[6] Re International Goldfields Ltd [2004] WASC 112 [7].
The court has a discretion to approve a scheme under s 411(4)(b) of the Act and is not bound to approve a scheme just because the court previously made orders for the convening of a meeting or because the statutory majorities have been achieved.[7] 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.[8]
[7] Re Wesfarmers Ltd [No 2] [13]; Re Seven Network Ltd [No 3] [2010] FCA 400; (2010) 267 ALR 583 [31].
[8] Re Wesfarmers Ltd [No 2] [13]; Re Seven Network Ltd [No 3] [32] – [33].
The factors that inform the court's discretion whether or not to approve a scheme are:[9]
(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.
[9] Re Seven Network Ltd [No 3] [35] – [40], [50], [52].
Disposition
Compliance with statutory and procedural requirements
I was and am satisfied, on the basis of the additional affidavits that were filed by PetroNor, that:
(a)a copy of the Orders was lodged with ASIC on 22 October 2021;[10]
(b)a 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 27 October 2021;[11]
(c)the Scheme booklet was dispatched to shareholders in accordance with the Orders.[12] The plaintiff provided a detailed outline of this process and the tasks each relevant individual was responsible for. I am also satisfied that the plaintiff dispatched copies of the Scheme booklet to the holders of depository receipts in PetroNor;[13]
(d)the Scheme meeting was convened and held on 29 November 2021 in accordance with the Orders;[14]
(e)the Scheme was approved by the requisite statutory majorities;[15]
(f)notice of the second court hearing was given by way of advertisement in The West Australian newspaper on 29 November 2021 and The Australian newspaper on 1 December 2021;[16] and
(g)ASIC informed PetroNor on 17 February 2022, pursuant to s 411(17)(b) of the Act, that it has no objection to the proposed Scheme.[17]
[10] Fourth affidavit of Benjamin John Purser filed 3 December 2021 [8] – [9], 'BJP-2'.
[11] Fourth affidavit of Benjamin John Purser filed 3 December 2021 [10] – [12], 'BJP-3'.
[12] Affidavit of Emilia Varga filed 30 November 2021 [12] – [21], 'EV-1' – 'EV-5'; Affidavit of Rachel Marie Crane filed 30 November 2021 [6] – [13], 'RMC-1' – 'RMC-4'; Affidavit of Jacinta Ann Pattison filed 30 November 2021 [8] – [23], 'JAP-1' – 'JAP-7'; Affidavit of Nicholas Carayanis filed 30 November 2021 [6] ‑ [16], 'NC-1' – 'NC-6'; Affidavit of Viktor Dedic filed 30 November 2021 [4] – [6], 'VD-1'; Affidavit of Naser Ali Mir filed 1 December 2021 [7] – [16], 'NAM-1' – 'NAM-3'; Affidavit of Michael Milan Milivojac filed 3 December 2021 [5] – [15], 'MMM-1' – 'MMM-4'; Fourth affidavit of Benjamin John Purser filed 3 December 2021 [13], 'BJP-4'.
[13] Submissions for second court hearing filed 8 December 2021 'Annexure A'.
[14] Third affidavit of Roger Christian Steinepreis filed 3 December 2021 [6].
[15] Third affidavit of Roger Christian Steinepreis filed 3 December 2021 [17], 'RCS-2'.
[16] Second affidavit of Angeline Hicks filed 6 December 2021 [5] – [6], 'AH-1'.
[17] Ninth affidavit of Benjamin John Purser filed 17 February 2022 [6], 'BJP-2'.
In written and oral submissions, counsel for the plaintiff drew my attention to two matters in relation to the Scheme meeting.
First, at the first court hearing, the plaintiff raised the possibility of an issue with respect to the satisfaction of the headcount test, and that the court's dispensation may be sought under s 411(4)(a)(ii)(A) of the Act. At the second court hearing, counsel for the plaintiff informed me no issue had arisen and that the requisite statutory majorities of both headcount and votes were met at the Scheme meeting.
The second matter was the voter turnout at the Scheme meeting. Of the 1,326,991,006 total PetroNor shares on issue, 904,526,159 shares were voted at the Scheme meeting, comprising approximately 68.16% of the PetroNor shares on issue.[18] However, only 28 out of 768 eligible PetroNor shareholders voted at the Scheme meeting, representing approximately only 3.65% of eligible shareholders by number.[19]
[18] Submissions for second court hearing filed 8 December 2021 [40].
[19] Submissions for second court hearing filed 8 December 2021 [41].
As was stated by Farrell J in Re TriAusMin Limited [No 2]:[20]
It is inappropriate to assume (in the absence of complaint) that shareholders who did not vote either did not have notice of the meeting or were silent in protest of the scheme; apathy should not be presumed to be antagonism.
Nonetheless it does call for consideration to ensure that the vote [was] not unrepresentative, since the court retains the discretion to withhold its approval in that case. It is relevant to consider whether members have been deterred from attending or voting at the meeting. (footnotes omitted)
[20] Re TriAusMin Limited [No 2] [2014] FCA 833 [10] – [11].
Relatively low shareholder turnout does not prevent the court from making orders approving a scheme of arrangement.[21]
[21] See for example Re Foundation Healthcare Ltd [No 2] [2002] FCA 973; (2002) 43 ACSR 680 [22] (44.23% of shareholders voting); Re Rebel Sport Ltd [No 2] [2007] FCA 458 [6] (24.99% of shareholders holding 83.59% of shares) Re Avoca Resources Ltd [2011] FCA 208 [25] (11.49% of shareholders holding 72.38% of shares); Re Great Artesian Oil and Gas Ltd [No 2] [2008] FCA 1169 [3] (24.6% of shareholders voting); Re Straits Resources Ltd [No 2] [2011] FCA 47 [12] (10.8% of shareholders holding 74% of shares); Re Cortona Resources Ltd [No 2] [2013] FCA 302 [12] (17.5% of shareholders holding 45.2% of shares); Re Auzex Resources Ltd [No 2] [2012] QSC 101 [18] (9.75% of shareholders representing 42.3% of votes); Re TriAusMin Limited [No 2] [9] (10.94% of shareholders holding 52.9% of shares); Re Decimal Software Limited [No 2] [2018] FCA 2040 [15] - [16] (5.21% of shareholders holding 52.85% of shares); Re Pensana Metals Limited [2020] WASC 17 [12] (6.41% of shareholders holding 37.08% of shares); Re Zenith Energy Ltd [No 3] [2020] WASC 289 [18] (39% of shareholders holding 89.25% of shares); Re Saracen Mineral Holdings Ltd [No 2] [2021] WASC 32 [47] (9.50% of shareholders holding 75.46% of shares); Re CannPal Animal Therapeutics Ltd [No 2] [2021] WASC 83 [32] (6.63% of shareholders holding 55.46% of shares); Re Piedmont Lithium Ltd [No 3] [2021] WASC 173 (8.44% of shareholders holding 26.74% of shares); Re Galaxy Resources Ltd [No 2] [2021] WASC 314 (7.31% of shareholders holding 53.87% of shares); Re Nusantara Resources Ltd [2021] WASC 334 (29.79% of shareholders holding 59.16% of shares); Re Valmec Ltd [2021] WASC 420 (17.62% of shareholders holding 74.22% of shares); Re Swick Mining Services Ltd [2022] WASC 79 (6% of shareholders holding 60.23% of shares).
I was and am satisfied that there was sufficient turnout at the Scheme meeting. I do not consider that the low voter turnout by number of shareholders suggested there had been an error in the dispatch of the Scheme booklet, nor that this should prevent the court from making orders under s 411(4)(b) of the Act. In this respect, I have had regard to the following matters:
(a)the unusual structure of the company, whereby 99.79% of shareholders in PetroNor hold their interests in PetroNor indirectly by way of depository receipts and not directly and there are only four other shareholders with more than a 0.01% shareholding in the company.[22] It is a reasonable inference that for many of PetroNor's shareholders, the Scheme was of relatively minor commercial interest;
(b)the number of shareholders who voted at the Scheme meeting, being approximately 3.65% of all eligible shareholders,[23] exceeded the number of shareholders who voted at the three preceding general meetings of PetroNor;[24]
(c)a significant majority of shareholders (by number) who voted at the Scheme meeting voted in favour of the Scheme;
(d)there was no evidence which suggested any irregularity in the dispatch of the Scheme booklet; and
(e)there was no evidence of any issue which would have deterred shareholders from voting at or attending the Scheme meeting.
[22] Second affidavit of Roger Christian Steinepreis filed 19 October 2021, 'RCS-5'.
[23] Submissions for second court hearing filed 8 December 2021 [41].
[24] Being approximately 3.14% at the 2019 annual general meeting, 3.14% at the 2020 annual general meeting, and 2.22% at the 2021 annual general meeting; Second affidavit of Angeline Hicks filed 6 December 2021 [20].
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
There is no evidence that the PetroNor shareholders voted for an improper purpose. I am satisfied on the evidence that has been filed by PetroNor 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 PetroNor ASA of all PetroNor 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
At the first court 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.
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
At the first court hearing, counsel for PetroNor drew my attention to a number of matters. These are summarised in Re PetroNor E&P Limited at [40] ‑ [72].
There were six further matters that counsel drew my attention to at the second court hearing.
First, the entry by Økokrim into PetroNor's headquarters in December 2021 and the detention of PetroNor's chief executive officer and business development manager. Since that date, PetroNor has appointed an interim CEO while the investigations by Økokrim continue. The evidence before the court is that there is no suggestion PetroNor is implicated in any alleged wrongdoing,[25] and PetroNor has continued to operate.[26]
[25] Seventh affidavit of Roger Christian Steinepreis filed 27 January 2022 [6].
[26] Seventh affidavit of Roger Christian Steinepreis filed 27 January 2022 [7].
Second, the satisfaction of the conditions precedent to the Scheme. There were a number of conditions precedent to the Scheme.[27] A certificate confirming the satisfaction or waiver of all conditions precedent (save for orders to be made at the second court hearing) was put before me.[28] In relation to the approval for listing received from the Oslo Stock Exchange, I am satisfied on the evidence before me that the approval is on 'customary conditions' as required by cl 3.1(i) of the SIA.[29]
[27] Scheme cl 3.1.
[28] Ninth affidavit of Benjamin John Purser filed 17 February 2022, 'BJP-1'.
[29] Eighth affidavit of Benjamin John Purser filed 17 February 2022, 'BJP-4'.
Third, counsel for PetroNor again drew to my attention cl 5.2(h) of the Scheme. Counsel submitted that this clause did not permit alteration of the terms of the Scheme as approved or provide a mechanism for 'self-amendment' of the term of the Scheme. Rather, the purpose of cl 5.2(h) was to address a possible situation where the Scheme could not operate in accordance with cl 5. I did not consider it was necessary to reach a final conclusion on the effectiveness of this clause to address the situation contended for and did not require the Scheme to be amended to remove this clause. It is sufficient to note that counsel for PetroNor, in their written submissions, identified possible sources of jurisdiction or power for a potential application as contemplated by the clause.[30] If a situation arises where it is necessary to consider the effect of this clause, I will address the matter at that stage.
[30] Submissions for second court hearing filed 8 December 2021 [74] – [78].
Fourth, counsel drew to my attention the proposed implementation of Regulation (EU) 909/2014 of the European Parliament and of the Council and its potential impact on the shareholders of PetroNor. Counsel drew my attention to the fact that if the Scheme was not implemented prior to 1 March 2022, there was a risk that PetroNor's securities could be suspended from trading or deregistered. PetroNor disclosed this as a risk factor in the Scheme booklet.[31] However, in the event the court approved the Scheme at the second court hearing on 17 February 2022, PetroNor E&P ASA would commence trading on 28 February 2022 and any suspension from trading or deregistration would not occur.
[31] Scheme booklet [12.3(b)].
Fifth, while there had been a delay in seeking the court's approval to the Scheme, the delay was not substantial and, if approved at the second court hearing, the Scheme will become effective prior to the sunset date of 31 March 2022 in the SIA and Scheme.[32] In any event, counsel submitted that any delay in the implementation of the proposed Scheme, namely a redomiciling of the company from Australia to Norway, did not have a substantial impact on shareholders and the rationale of the Scheme remained.[33]
[32] SIA cl 1.1, 3.1(d), 3.2(a); Scheme cl 1.1, 3.1(e), 3.4.
[33] Plaintiff's outline of submissions filed 16 February 2022 [14] – [17].
Finally, counsel drew my attention to the amendment to the SIA to vary the definition of the term 'Implementation Date'. In effect, the variation shortens the time period between the record date and the implementation date by one business day. In considering whether it is just to approve the scheme in an amended form, it is relevant to consider whether the proposed amendment represented a substantial departure from the terms of the scheme that had been approved by shareholders.[34] In my view, the shortening of the implementation date of the Scheme by one business day is not a substantial departure from the terms of the Scheme that was approved by shareholders. This amendment was reflected in my orders at the second court hearing.
Full and fair disclosure
[34] Re Nzuri Copper Ltd; Ex parte Nzuri Copper Ltd [No 4] [2020] WASC 10 [7].
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.
The additional affidavit evidence filed by PetroNor establishes that the Scheme booklet dispatched to shareholders was in the form approved for distribution by the court. 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
There was no evidence that any minority has been oppressed.
Satisfaction of s 411(17) of the Act and ASIC's view
ASIC has provided a written statement to the effect that it does not object to the Scheme pursuant to s 411(17)(b) of the Act.[35] As a result, the requirements of s 411(17) have been satisfied. In any event, having regard to the nature of the proposed transaction, namely a redomiciling of the company to Norway, it cannot be said the Scheme was proposed to avoid the operation of ch 6 of the Act.
Public policy
[35] Ninth affidavit of Benjamin John Purser filed 17 February 2022 [6], 'BJP-2'.
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.
Exemption from s 411(11) of the Act
PetroNor seeks 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 PetroNor's constitution as the orders do not effect any change to the constitution. This exemption has become ordinary practice for transactions of this kind.
Conclusion and orders
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, subject to the amendment to the definition of 'Implementation Date'.
For these reasons, at the conclusion of the hearing on 17 February 2022, I made orders in terms of Annexure A in respect of the Scheme.
Annexure A
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
FD
Associate to the Honourable Justice Hill
10 MARCH 2022
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