Aphrodite Gold Limited, in the matter of Aphrodite Gold Limited (No 2) [2017] FCA 1625

1. Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Act) the scheme of arrangement between the plaintiff (Aphrodite) and its members (other than Spitfire Materials Limited), in the form contained in Annexure C of the final scheme booklet which is part of Annexure JP-01 to the affidavit of James Lewis Pearse sworn on 24 November 2017, is approved.
2. Pursuant to s 411(12) of the Act, Aphrodite is exempted from compliance with s 411(11) of the Act, in relation to the scheme of arrangement referred to in order 1.
3. Aphrodite is to lodge an office copy of these orders with Australian Securities and Investments Commission as soon as practicable. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

SIOPIS J: 1 This is the second hearing of an application under s 411(1) of the Corporations Act 2001 (Cth) for the approval of a scheme of arrangement between the plaintiff, Aphrodite Gold Limited (Aphrodite) and its members, whereby the company, Spitfire Materials Limited (Spitfire), will acquire all the shares in Aphrodite which it does not already own, and Aphrodite will then become a wholly owned subsidiary company of Spitfire. 2 On 10 November 2017, I made orders for the convening of a meeting of the members of Aphrodite to consider and, if thought fit, approve the scheme of arrangement (Aphrodite Gold Limited, in the matter of Aphrodite Gold Limited [2017] FCA 1346). 3 At this second hearing, among the matters to which the Court has regard is whether there has been compliance with the orders which the Court has made at the first hearing, and the applicable provisions of the Corporations Act. Mr Garas in his helpful submissions has attached a checklist which identifies the applicable statutory requirements and the evidence in support of the satisfaction of those requirements. 4 One of the provisions of the Corporations Act in respect of which the Court must be satisfied is s 411(4)(a). This section sets out the statutory voting majorities which must be obtained at the meeting of shareholders before the scheme of arrangement can be approved. 5 Mr Roger Mitchell has deposed to the results of the voting at the meeting of members pursuant to the orders of the Court made on 10 November 2017. 6 There were 125 shareholders who voted and of that number 124 voted in favour of the scheme and one abstained. Accordingly, on the application of the so called "head count" test in s 411(4)(a)(ii)(A) of the Corporations Act, the vote in favour of the company entering into the scheme of arrangement was 99.20%. 7 As to the "votes cast" test in s 411(4)(a)(ii)(B) of the Corporations Act, the total number of votes cast was 353,081,854 and, of those, all, except 15,000 votes in abstention, were cast in favour of approving the scheme. So the percentage of votes in favour of the scheme was 99.99%. Accordingly, the statutory majorities have well and truly been obtained. 8 There is also evidence attached to the affidavit of Mr James Pearse of 20 December 2017, which shows that the conditions precedent in the merger implementation agreement have been satisfied or waived. There is a certificate from officers of each of Aphrodite and Spitfire to that effect. 9 As to the question of whether the scheme is fair and reasonable, as has often been said, the Court regards the shareholders as being the best arbiters of that question. It would be unusual for a Court to intervene to override the view that the shareholders have taken. In this case, the shareholders have, by the size of the majorities, made it clear that they regard the scheme as fair and reasonable and in their best interests. 10 There is nothing to suggest that the shareholders have acted in bad faith nor that the scheme is such that an intelligent, honest, independent and properly informed shareholder might not approve it. 11 In addition, there is evidence from an expert who opined that this scheme was fair and reasonable and in the best interests of the shareholders. 12 At the first hearing, Mr Garas referred to some issues in relation to the valuation of the assets of Aphrodite. Those matters were disclosed to the shareholders and the shareholders have delivered their verdict strongly in favour of the approval of the scheme. 13 As to s 411(17) of the Corporations Act, there is annexed to Mr Pearse's affidavit of 20 December 2017 a letter from the Australian Securities and Investments Commission (ASIC) which states that it has no objection under s 411(17)(b) to the proposed scheme between Aphrodite and its members. In those circumstances, s 411(17)(b) is satisfied and that is a sufficient basis upon which to proceed to approve the scheme. 14 The Court does not have to approve the scheme merely because ASIC has issued a letter under s 411(17)(b), but there are no discretionary reasons on the evidence before me why the Court would withhold its approval in light of the ASIC letter. 15 The hearing today was advertised and no person has appeared today to oppose the making of the orders approving the scheme. 16 I will also make orders under s 411(12) of the Corporations Act exempting the company from compliance with s 411(11) of the Corporations Act in light of the fact that Aphrodite will now become a wholly owned subsidiary of Spitfire. 17 I, accordingly, make orders in terms of the revised minute of orders which Mr Garas has handed up to me. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.