SRG Limited, in the matter of SRG Limited (No 2)

The matter before the court involved SRG Limited seeking approval for a scheme of arrangement under the Corporations Act. The primary dispute was whether the scheme should be approved despite procedural irregularities and a low voter turnout. The Federal Court was tasked with determining whether to approve the scheme. The central legal issue was whether the procedural irregularities and low voter turnout warranted disapproval of the scheme. The court had to assess whether SRG had complied with the procedural requirements and whether the scheme was fair and reasonable.

The court found that SRG had complied with the procedural requirements set out in the prior orders. This included the convening and holding of the meeting in accordance with the court's earlier orders, the passing of the resolution with the requisite statutory majorities, and adherence to other procedural mandates. The court considered the affidavits provided by SRG, which detailed the distribution of scheme documents, the maintenance of the share register, and the conduct of the scheme meeting. The court also noted that ASIC had no objections to the scheme. While acknowledging the low voter turnout, the court emphasised that the primary consideration was whether the members who did vote had done so in good faith and whether the scheme was fair and reasonable.

Given the compliance with procedural requirements and the absence of objections from ASIC, the court exercised its discretion to approve the scheme. The court held that the scheme was fair and reasonable, and that minority shareholders would not be oppressed. The court concluded that the procedural irregularities did not undermine the validity of the members' decision to approve the scheme. Consequently, the court approved the scheme of arrangement between SRG Limited and the holders of fully paid ordinary shares in the plaintiff.

The court made orders approving the scheme, exempting SRG from compliance with certain provisions of the Corporations Act, and directing the entry of these orders forthwith. This decision underscores the court's approach to balancing procedural compliance with the broader commercial considerations in approving a scheme of arrangement.