Chevron (TAPL) Pty Ltd v Chevron Australia Pty Ltd, in the matter of Chevron

Solicitor for the Plaintiff: King & Wood Mallesons

Counsel for the Defendant: The Defendant did not appear

ORDERS WAD 17 of 2022 IN THE MATTER OF CHEVRON (TAPL) PTY LTD BETWEEN: CHEVRON (TAPL) PTY LTD (ACN 081 647 047) Plaintiff

AND: CHEVRON AUSTRALIA PTY LTD (ACN 086 197 757) Defendant

order made by: BANKS-SMITH J DATE OF ORDER: 8 MARCH 2022

1. Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Act), there be convened by the plaintiff a meeting (Scheme Meeting) of its sole member holder (namely, Chevron Australia Holdings Pty Ltd (CAHPL)) to be held at Level 24, QV1 Building, 250 St Georges Terrace, Perth, Western Australia on 11 March 2022 commencing at 10.00 am (Perth time), for the purpose of considering and, if thought fit, approving with or without modifications, the scheme of arrangement (Scheme) proposed between CAHPL and the plaintiff which is in Annexure AAZ-1 at pages 47 to 65 of the affidavit of Anqi Angela Zhao affirmed 28 January 2022.
2. Pursuant to s 411(1) of the Act, the scheme booklet (Scheme Booklet) which is in Annexure AAZ-5 at pages 30 to 167 of the affidavit of Anqi Angela Zhao affirmed 4 March 2022, together with the amendments set out in AAZ-10 at pages 13 to 14 of the affidavit of Anqi Angela Zhao affirmed 7 March 2022, and which contains an explanatory statement required by s 412(1)(a) of the Act, be and is hereby approved subject to: (a) inclusion of all final and contemplated annexures; (b) correction of any minor typographical or grammatical errors and final typesetting and formatting; (c) any minor amendments required or approved by the Australian Securities and Investments Commission (ASIC) or registration under s 412(6) of the Act; (d) the correction or update of, or as a result of, any relevant date reference; and (e) adopting any other amendments approved by the Court.
3. Pursuant to s 1319 of the Act: (a) subject to these orders, the Scheme Meeting is to be convened, held and conducted in accordance with: (i) the provisions of Part 2G.2 of the Act that apply to members of a company and the provisions of the plaintiff's constitution that are not inconsistent therewith and that apply to meetings of members; and (ii) the notice of meeting in the form or to the effect contained in Annexure D to the Scheme Booklet, as approved; (b) subject to lodgement of the Scheme Booklet with ASIC for registration pursuant to s 412(6) of the Act, service of the Scheme Booklet and notice of the Scheme Meeting may be effected by electronic means (including by email) or by hand delivery to a person who is a director, company secretary, proxy, corporate representative appointed under s 250D of the Act (Corporate Representative), or attorney under power, of the Member, at any time before the Scheme Meeting commences; (c) dispatch of the documents referred to in paragraph 3(a) above in general accordance with its terms is to be taken to be sufficient notice of the Scheme Meeting; (d) the Scheme Meeting is to be chaired by Peter Gerard McNally, or failing him, Nigel Rodney Hunt (Chairperson); (e) one member present by Corporate Representative or by proxy or attorney under power, and entitled to vote shall constitute a quorum for the Scheme Meeting; (f) a proxy (substantially in accordance with Form 532), appointment of a Corporate Representative or power of attorney may be delivered to the Chairperson of the Scheme Meeting at any time before the commencement of the Scheme Meeting; (g) the Chairperson of the Scheme Meeting has the power to adjourn the meetings in his absolute discretion, to a time and place to be advised by the Chairperson; (h) a resolution put to the vote at the Scheme Meeting to approve the Scheme, or any modification to the Scheme, may be decided by the Member or its representative (including its proxy, Corporate Representative or attorney under a power) signing a record of the resolution; and (i) Rule 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) (Rules) shall not apply to the Scheme Meeting.
4. On or before 23 March 2022, the plaintiff is to publish a Notice of Hearing substantially in the form of Annexure A to these orders once in The Australian newspaper. The plaintiff is otherwise exempted from compliance with r 3.4 of the Rules.
5. An office copy of these orders be lodged with ASIC as soon as practicable after these orders are made.
6. The proceeding be stood over until 28 March 2022 for the hearing of the application to approve the Scheme.
7. Noting that only paragraphs 1-13, the first sentence of paragraph 14 and paragraph 19 of the affidavit of Samuel David Cutt affirmed 1 March 2022 (Cutt affidavit) together with the documents marked SDC-1, SDC-2 and SDC-12 have been read into evidence, and in any event, pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), on the ground that the order is necessary to prevent prejudice to the proper administration of justice, until further order the documents marked SDC-3 to SDC-11 in the Cutt affidavit be marked 'confidential' on the electronic court file, not to be published or accessed by any party other than the parties and their solicitors except pursuant to an order of the Court.
8. There be liberty to apply upon the giving of 48 hours' notice to ASIC.
9. These orders be entered forthwith. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. Annexure A Chevron (TAPL) Pty Ltd ACN 081 647 047 (TAPL) NOTICE OF HEARING TO APPROVE COMPROMISE OR ARRANGEMENT TO all the creditors and members of TAPL TAKE NOTICE that at 2.15 pm on 28 March 2022, the Federal Court of Australia (Western Australia District Registry) at Commonwealth Law Courts, 1 Victoria Avenue, Perth, Western Australia, will hear an application by TAPL seeking the approval of a compromise or arrangement between TAPL and its sole member as proposed by a resolution passed by the meeting of the member to be held on 11 March 2022. If you wish to oppose the approval of the compromise or arrangement, you must file and serve on TAPL a notice of appearance, in the prescribed form, together with any affidavit on which you wish to rely at the hearing. The notice of appearance and affidavit must be served on TAPL at its address for service at least 1 day before the date fixed for the hearing of the application. The address for service of TAPL is: James Wang King & Wood Mallesons Level 30, QV1 Building 250 St Georges Terrace Perth WA 6000 Ref: 608-0057374 Email: james.wang@au.kwm.com Name of TAPL's legal practitioner: James Wang

BANKS-SMITH J: 1 On 8 March 2022 I heard an application under s 411 of the Corporations Act 2001 (Cth) (Act) to approve the convening of a scheme and dispatch of the relevant scheme booklet, and for related directions. I made orders on that date for the following reasons.

Introduction 2 By an Implementation Agreement dated 16 December 2021, Chevron (TAPL) Pty Ltd (TAPL) and Chevron Australia Pty Ltd (CAPL) agreed that TAPL would propose and implement a Scheme between it and its sole member, Chevron Australia Holdings Pty Ltd (CAHPL). 3 Pursuant to the proposed Scheme, TAPL will transfer the entirety of its business and undertakings to CAPL, so that the business and undertakings of TAPL and CAPL will be held and conducted by a single entity, namely CAPL. This will occur with the approval of their common sole member and parent company, CAHPL. 4 It is well recognised that such a transaction can be implemented by way of a scheme of arrangement approved under s 411 of the Act. 5 The proposed transaction will result in an amalgamation or reconstruction, as those terms are understood for the purpose of s 413. It follows that the Court has broad powers to make ancillary orders in connection with such a scheme. Relevantly it is proposed that orders will be sought facilitating the transfer of the whole of TAPL's property and liabilities to CAPL pursuant to s 413(1)(a) of the Act, such that TAPL may be deregistered by the Australian Securities and Investments Commission (ASIC) without winding up, pursuant to s 413(1)(d) of the Act.

The parties 6 TAPL and CAPL are wholly owned subsidiaries of CAHPL. Together they constitute part of the Chevron Group in Australia. 7 TAPL is a proprietary company that has principal activities as a holding entity for upstream and downstream components of the Gorgon LNG Project, the Wheatstone LNG Project, the WA Oil Project (Barrow Island Oil and Thevenard Island Oil) and some exploration titles. TAPL also engages in sales of petroleum from its projects. 8 CAPL is a proprietary company which has similar principal activities as to TAPL. In addition to those activities, CAPL holds interests in upstream components in the North-West Shelf Project. CAPL is also the operator for the Gorgon LNG Project, the Wheatstone LNG Project and the WA Oil Project.

Aim of the Scheme 9 Senior counsel for TAPL explained that the rationale for the proposed Scheme is to simplify the Chevron Group's operating structure in Australia such that its interests in Australian operating petroleum assets can be consolidated into one entity and remain wholly owned by CAHPL. The restructure is intended to simplify and optimise the current corporate structure, to reduce corporate administration and complexity associated with the existing structure and to allow a more streamlined structure which is better aligned to current and future business requirements of the Chevron Group.

Materials relied upon 10 TAPL relies on the following affidavits: (a) affidavit of Peter McNally, a director and company secretary of TAPL and CAPL and Managing Counsel of CAPL, which relevantly provides details of the corporate structure and business, attaches draft scheme documents, addresses certain tax rulings and explains the verification process undertaken by TAPL with the assistance of its lawyers; (b) affidavit of Nigel Hunt, a partner of King & Wood Mallesons who has the care and conduct of the matter on behalf of TAPL, which relevantly addresses communications with counterparties and government departments for the purpose of providing information about the Scheme (whether or not consent was formally required under transaction documents), attaching correspondence to secured parties relating to the Personal Property Securities Register and attaching an Office of State Revenue exemption relating to transfer of land interests; (c) affidavit of Steven Callaghan, a director of TAPL and CAPL and General Manager, Finance, for CAPL, which discloses the support of the Board of CAPL for the Scheme and attaches minutes recording CAPL resolutions as to execution of the Implementation Agreement and implementation of the Scheme; (d) affidavit of Joanne Lupton, partner at KPMG, who had responsibility for preparation of the independent expert's report and verifies an attached copy; (e) affidavit of Anqi Angela Zhao, a senior associate at King & Wood Mallesons, who deposes to her communications with ASIC on behalf of TAPL and attaches copies of relevant communications; (f) second affidavit of Nigel Hunt, which provides updated information as to communications with ASIC, discloses amendments made to the proposed scheme booklet, and addresses the verification process undertaken with respect to those amended parts; (g) affidavit of Samuel Cutt (read in part only), which refers to communications with government agencies, consent obtained from certain counterparties, and attaches a deed of cross-guarantee; (h) second affidavit of Anqi Angela Zhao, which addresses further communications with ASIC, the revision of the scheme booklet to accept certain changes and to incorporate its annexures, and attaching an email from Mr McNally confirming TAPL's approval of the updated scheme booklet; (i) third affidavit of Anqi Angela Zhao attaching certain counterparty consents and disclosing further communications with ASIC as to the updated scheme booklet; and (j) fourth affidavit of Anqi Angela Zhao which annexes ASIC letters, including two waiver letters and a letter of intent with respect to the proposed Scheme and first court hearing.

Legal framework for the approval of a scheme 11 Section 411 envisages three steps: the calling of a meeting of, relevantly, members; a vote by members; and a further application to the court for approval of the arrangement. 12 Section 411(1) of the Act relevantly provides that, where an arrangement is proposed between a Part 5.1 body and its members, the Court may, on the application of the body in a summary way, order a meeting of the members to be convened in such manner and to be held in such place as the Court directs. 13 Section 412(1)(a) of the Act relevantly provides that where a meeting is convened under s 411, the Part 5.1 body must, with every notice convening the meeting, send a statement explaining the effect of the arrangement. The statement must set out such information as is prescribed and any other information that is material to a member's decision to agree or not agree to the arrangement. It is usual for a scheme booklet to include the explanatory statement information. 14 Where the Court makes an order convening a meeting, the Court may also approve the explanatory statement required by s 412(1)(a) to accompany the notice of such a meeting. 15 This application concerns only the convening of the first meeting and the approval of the explanatory statement. 16 However, the terms of s 413(1) and (2) are also important. TAPL anticipates seeking orders under s 413 at the second court hearing in order to implement the Scheme, and it will be obliged to satisfy the court that the Scheme falls within the ambit of a 'reconstruction or amalgamation'. It is also necessary to consider, even for the purpose of the first court hearing, whether it is likely that such s 413 orders might be made. Relevantly s 413 provides: Provisions for facilitating reconstruction and amalgamation of Part 5.1 bodies (1) Where an application is made to the Court under this Part for the approval of a compromise or arrangement and it is shown to the Court that the compromise or arrangement has been proposed for the purposes of, or in connection with, a scheme for the reconstruction of a Part 5.1 body or Part 5.1 bodies or the amalgamation of 2 or more Part 5.1 bodies and that, under the scheme, the whole or any part of the undertaking or of the property of a body concerned in the scheme (in this section called the transferor body) is to be transferred to a company (in this section called the transferee company), the Court may, either by the order approving the compromise or arrangement or by a later order, provide for all or any of the following matters: (a) the transfer to the transferee company of the whole or a part of the undertaking and of the property or liabilities of the transferor body; (b) the allotting or appropriation by the transferee company of shares, debentures, policies or other interests in that company that, under the compromise or arrangement, are to be allotted or appropriated by that company to or for any person; (c) the continuation by or against the transferee company of any legal proceedings pending by or against the transferor body; (d) if the transferor body is a company - the deregistration by ASIC, without winding up, of the transferor body; (e) the provision to be made for any persons who, within such time and in such manner as the Court directs, dissent from the compromise or arrangement; (f) the transfer or allotment of any interest in property to any person concerned in the compromise or arrangement; (g) such incidental, consequential and supplemental matters as are necessary to ensure that the reconstruction or amalgamation is fully and effectively carried out. (2) Where an order made under this section provides for the transfer of property or liabilities, then, by virtue of the order, that property is transferred to and vests in, and those liabilities are transferred to and become the liabilities of, the transferee company, free, in the case of any particular property if the order so directs, from any security interest that is, by virtue of the compromise or arrangement, to cease to have effect. …

Section 411 threshold matters 17 Section 411 does not set out the criteria that must be satisfied before a meeting is ordered. However, the authorities establish that the Court should order the convening of a scheme meeting and approve the dispatch of an explanatory statement if satisfied of the following matters: (a) the scheme is an arrangement in respect of which the Court may order a meeting of the members or creditors; (b) the explanatory statement (that is, the scheme booklet) provides adequate disclosure and contains the prescribed information; (c) the proposed scheme is bona fide and properly proposed; (d) that there is no apparent reason why the scheme should not, in due course, receive the Court's approval if the necessary majority of members' votes is achieved; and (e) any other procedural requirements have been met. 18 There are many authorities to this effect, but see in particular Amcom Telecommunications Limited, in the matter of Amcom Telecommunications Limited [2015] FCA 341 at [9] (McKerracher J); EcoBiotics Limited, in the matter of EcoBiotics Limited [2017] FCA 643 at [20] (Gleeson J); SRG Limited, in the matter of SRG Limited [2018] FCA 1092 at [11] (Banks-Smith J); Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd [2018] WASC 308 at [46]-[78] (Vaughan J); and In the matter of Ovato Print Pty Ltd [2020] NSWSC 1683 at [19] (Black J). 19 The principles as to the nature of the review at the first court hearing are also summarised elsewhere: for example, Programmed Maintenance Services Limited, in the matter of Programmed Maintenance Services Limited [2017] FCA 1265 at [11]-[14] (McKerracher J); and Signature Gold Ltd, in the matter of Signature Gold Ltd [2017] FCA 1481 at [22]-[23] (Markovic J). 20 In summary, the standard of review is whether the proposed scheme is not inappropriate and is one that sensible business people might consider is of benefit to its members. It is not necessary for the Court to descend into the commercial merits of the proposed scheme. If the proposed arrangement is one that seems 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, then leave should be given to convene the meeting.

Consideration - threshold matters 21 The following are relevant in this proceeding.

Part 5.1 body 22 A Part 5.1 body is defined by the Act to include, relevantly, a company. A review of the historical records of TAPL, as evidenced by copies of the extracts from the ASIC registry, satisfy me that TAPL is a company.

The Scheme is an arrangement 23 I am satisfied on the basis of the Implementation Agreement and the proposed scheme booklet that the Scheme is an arrangement between TAPL and its sole member, CAHPL. In substance the Scheme involves a transfer of the whole of the property and liabilities of one wholly owned subsidiary of CAHPL to another wholly owned subsidiary of CAHPL. CAHPL's rights in its capacity as a member of TAPL are thereby affected. CAHPL consents to the diminution in values of its interest in TAPL. Such transactions have long been recognised as within the broad ambit of the meaning of 'arrangement' for the purpose of s 411. 24 In AGL Energy Services (Queensland) Pty Limited v AGL Energy Services Pty Limited [2010] FCA 452, Emmett J said [12] If what has been propounded is not a compromise or an arrangement within s 411, there must be a real question as to whether the Court has jurisdiction to make orders under s 413. … [15] The element of compromise or arrangement that is necessary to satisfy s 411 need not be of any great magnitude or significance, so long as what is proposed can fairly be characterised as a compromise or arrangement between a company, on the one hand, and its members, on the other. That will suffice to enliven the Court's powers under s 413, so long as the compromise or arrangement is proposed for the purposes of, or in connection with, a scheme for the reconstruction or amalgamation. 25 The Scheme in this case is consistent with the requirement that there be an element of compromise or arrangement between the scheme company and its member such as to satisfy s 411 and thereby enliven the Court's powers under s 413. 26 Other examples of such arrangements include those discussed in In the matter of Stork ICM Australia Pty Ltd; Stork ICM Australia Pty Ltd v Stork Food Systems Australasia Pty Ltd [2006] FCA 1849 at [68] (Lindgren J); All Star Funds Management Limited v Ventura Investment Management Ltd [2012] FCA 527 at [4]-[6] (Jagot J); In the matter of Anglo-Gaelic Investments Pty Ltd and others [2019] NSWSC 441 at [17] (Black J); and Mercedes-Benz Financial Services Australia Pty Limited v Daimler Truck Financial Services Australia Pty Limited, in the matter of Mercedes-Benz Financial Services Australia Pty Limited [2021] FCA 1279 at [22] (McKerracher J).

Single-member class 27 An arrangement for the purpose of s 411(1) is one between a company and its members or creditors, or any class of them. Because there is only a single member of TAPL, being CAHPL, no question of class arises. 28 In the context of reconstruction or amalgamation schemes, a court ordered meeting can be constituted by one person: SGIC Insurance Limited v Insurance Australia Limited [2004] FCA 1492 at [12], [14] (Jacobson J); and Alstom Signalling Solutions Pty Ltd, in the matter of Alstom Signalling Solutions Pty Ltd v Alstom Transport Australia Pty Limited [2016] FCA 838 at [28(3)] (Gleeson J).

Explanatory statement - the scheme booklet 29 It is necessary that the scheme booklet satisfy the disclosure requirements prescribed in: (a) ASIC Regulatory Guides 60, 111 and 112; (b) s 441(3) and s 412 of the Act; and (c) Part 3 of Schedule 8 of the Corporations Regulations 2001 (Cth). 30 I have considered the draft scheme booklet in the form in which it was provided to ASIC on 6 March 2022, a version which followed earlier iterations provided to ASIC. It is a detailed document which includes sections dealing with important dates and notices; an overview of the Scheme; additional key information including the directors' recommendations; information as to any effect on creditors and other regulatory matters; a summary of the conclusion of the expert reflected in the independent expert's report (KPMG); and additional information that might be considered material to the decision of CAHPL as member as to how it votes. 31 The draft scheme booklet also has a number of schedules and annexures, including the proposed Scheme, the Implementation Agreement, the independent expert's report and the proposed notice of scheme meeting. 32 I have reviewed the affidavit evidence to ensure that the matters which must be disclosed have been properly disclosed. 33 In particular, in respect of a scheme between a Part 5.1 body and its members, reg 5.1.01(1)(b) requires the explanatory statement to state the matters set out in Part 3, and annex the reports and copies of documents mentioned in that Part. 34 Part 3 is entitled 'Prescribed information relating to proposed compromise or arrangement with members or a class of members' and contains ten categories of information, referred to in paras 8301 to 8310 inclusive. 35 I am satisfied that each of the relevant matters has been appropriately addressed. I had the assistance of a compliance checklist that was provided with TAPL's written submissions. 36 Further, TAPL has sought and received two waivers from ASIC as to the requirements. 37 As to an independent expert's report, reg 5.1.01 and para 8303 of Part 3 require a report as to whether the proposed Scheme is in the best interests of the members. ASIC Regulatory Guide 60 at RG 60.81 states that this requirement is generally waived when, as in this case, there is only a single member and an internal reconstruction is proposed. In similar circumstances this Court has had had no issue with such waiver: for example, Equatorial Mining Pty Limited v Antofagasta Investment Company Limited [2013] FCA 1452 at [26] (Yates J). 38 As to changes in financial position, reg 5.1.01 and para 8302(h) of Part 3 require the explanatory statement to set out whether, to the knowledge of the directors of the scheme company, the financial position has materially changed since the date of the last balance sheet laid before a general meeting or sent to shareholders in accordance with s 314 or s 317 of the Act and, if so, full particulars of any change. ASIC Regulatory Guide 60 at 60.91 provides that this requirement may be waived if the scheme company provides an update of its financial position. ASIC's waiver in this case was granted on the basis that the explanatory statement relevantly set out whether there had been material changes in the financial position of TAPL since 31 December 2021. 39 Further, TAPL has provided by way of the affidavit evidence a record of the processes it undertook (including by its director and by internal and external lawyers) with respect to verification of the relevant parts of the draft scheme booklet. 40 I am satisfied, having regard to the above matters, that there will be proper disclosure by the dispatch of the draft scheme booklet.

ASIC's position 41 In accordance with ASIC Regulatory Guide 60 at RG 60.3, the draft scheme booklet was provided to ASIC for its comments on the proposed disclosure. Email communications between TAPL's solicitors and ASIC were in evidence. 42 By letter dated 8 March 2022 ASIC confirmed that, in accordance with s 411(2) of the Act, it had been given proper notice of the hearing of this application and that it had received a reasonable opportunity to consider the Scheme and draft explanatory statement. ASIC said that its policy is that it will not provide a statement under s 411(17)(b) of the Act until the second court hearing. This policy is consistent with the wording of s 411(17)(b) of the Act which relates ASIC's statement to the court's approval of the scheme. ASIC stated that it had examined the terms of the Scheme and the draft explanatory statement in accordance with its policy, but that it did not propose to appear to make submissions or intervene to oppose the Scheme at the first court hearing.

Proposed meeting procedures - chairperson 43 I am satisfied by the relevant affidavits that the requisite consents to act as chairperson and alternate chairperson have been provided.

Proper purpose and bona fides 44 I am also satisfied for the purpose of the first hearing that the scheme is bona fide and properly proposed. It has a sensible commercial purpose of simplifying the corporate structure of the Chevron Group. The directors of TAPL have recommended that CAHPL vote in favour of the Scheme. It is the type of restructure that the courts have recognised may be facilitated by way of a scheme of arrangement under s 411.

Consideration - particular matters relevant to the proposed scheme 45 As is frequently the case with a first hearing of this nature, it proceeded ex parte and without any true contradictor. In those circumstances senior counsel properly drew the Court's attention to a number of matters of significance.

Section 413 to be invoked 46 TAPL intends to seek a range of orders under s 413 at the second court hearing, assuming the Scheme is approved by the member. Therefore, it is appropriate to provisionally identify that the orders proposed under s 413 are capable of being made at or after the second court hearing to approve the Scheme under s 411(4)(b): Equatorial Mining Pty Ltd at [29] (Yates J); and Barrick (Australia Pacific Exploration) Pty Limited v Barrick (PD) Australia Pty Limited, in the matter of Barrick (Australia Pacific Exploration) Pty Limited [2017] FCA 998 at [82] (Barker J). 47 Orders under s 413(1) may be made if the pre-conditions set out in that section are met, namely: that there is a compromise or arrangement; the compromise or arrangement must be proposed 'for the purposes of, or in connection with a scheme for the reconstruction of a Part 5.1 body or Part 5.1 bodies or the amalgamation of 2 or more Part 5.1 bodies'; and under the scheme 'the whole or any part of the undertaking or of the property of a body concerned in the scheme … is to be transferred to a company'. Each of those requirements are met by the proposed Scheme, but the second element deserves some discussion. 48 The terms 'reconstruction' and 'amalgamation' have the meaning given in commerce and a restrictive interpretation is not placed upon them: Stork at [76] (Lindgren J); In the matter of Anglo-Gaelic Investments at [26] (Black J); and Woolworths Group Limited v Pinnacle Liquor Group Pty Limited, in the matter of Woolworths Group Limited [2019] FCA 1810 at [20(1)] (Farrell J). 49 A reconstruction occurs where, after transfer, substantially the same undertaking is carried on by the same members or, if in an intragroup situation, the ultimate holding company remains the same: Woolworths Group Limited at [20(2)]; and Mercedes-Benz Financial Services at [23]. An amalgamation involves the combination of two separate share capital structures into one and it does not matter if the structure of the new capital (that is, classes and numbers of shares) does not reflect the structures of the predecessors: Woolworths Group Limited at [20(3)]; and Mercedes-Benz Financial Services at [23]. 50 It is apparent in this case that the proposed Scheme may fall within either or both concepts, and that therefore s 413 may operate. 51 The orders that TAPL intends to seek under s 413 include orders that relate to the transfer of all assets to CAPL without the need for further acts; the transfer of all TAPL liabilities to CAPL without the need for any further act; facilitation of all legal proceedings pending by or against TAPL being continued by or against CAPL; and the deregistration of TAPL by ASIC without any winding up. The proposed orders also provide for consequential matters such as any reference to TAPL in contracts, licences or titles that form part of TAPL's assets being read as references to CAPL upon the Scheme being given effect. 52 The definitions of liabilities and property in s 413(4) are wide. In this case, of particular relevance are creditors and whether their interests are protected despite the transfer of assets; whether there are impediments to the transfer of material contracts; whether there are impediments to the transfer of Commonwealth and State petroleum interests; and whether property the subject of secured interests can sensibly be transferred.

Creditors 53 In a members' scheme, the position of creditors 'is appropriately addressed on the second court hearing as a consideration relevant to the discretion whether to approve the Scheme': Stork at [69]; and All Star Funds Management at [8]-[9]. It is not necessary to put the proposed Scheme to creditors as they have the right to attend the second court hearing. However, it is apparent on the materials before me that that the Scheme is not proposed to defeat the interests of creditors of either TAPL or CAPL. Relevantly, TAPL submits that the mechanisms of the transaction, even acknowledging the proposed transfer of assets and liabilities, are such that the liabilities of TAPL will not be separated from assets of the substantial oil and gas operations of CAPL and the Chevron Group and that in any event, the unaudited accounts of each entity substantially exceed the net liabilities for each entity. The evidence supports that submission. There are also cross-guarantees in place, so that creditors can continue to have recourse through the deed of cross-guarantee as a creditor of a transferee if the Scheme is implemented. 54 Further, although an independent expert report is not strictly required for a restructure scheme such as this (see, for example, Mercedes-Benz Financial Services at [31]), TAPL obtained such a report and it forms part of the scheme booklet. The expert concludes that 'the Scheme will not materially prejudice the creditors of TAPL or CAPL'.

Material contracts 55 TAPL has sought the consent or confirmation of 'no objection' from its commercial counterparties. Evidence of communications with the counterparties discloses this course. 56 Regardless, expressed generally, s 413(1) enables the court to make an order which has the effect of transferring a contract even if it contains a provision to the effect that it cannot be assigned without a party's consent: Stork at [96]-[99]; J.P. Morgan Operations Australia Limited v J.P. Morgan Australia Group Pty Limited, in the matter of J.P. Morgan Operations Australia Limited [2018] FCA 1131 at [28]. 57 The rationale, as explained in Stork, is that if the court makes such orders, then any transfer that occurs, regardless of any contractual restrictions, occurs by operation of law under s 413(2). 58 It is anticipated that this issue will be dealt with more fully for the purpose of the second court hearing.

Commonwealth and State approvals - condition precedent 59 One of the conditions precedent to the Scheme's implementation is the obtaining of all government agency approvals. This is reflected in both the Implementation Agreement and the proposed Scheme. Such approvals must be obtained prior to the morning of the proposed second court hearing.

Commonwealth and State petroleum interests 60 The evidence discloses that TAPL has a number of interests in petroleum titles and petroleum title renewal applications under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth). TAPL also has a number of interests in petroleum titles under the Petroleum and Geothermal Energy Resources Act 1967 (WA), Petroleum (Submerged Lands) Act 1982 (WA) and Petroleum Pipelines Act 1969 (WA). 61 Such interests are disclosed in the Scheme as assets that are to be transferred. 62 Whether s 413(1) can be used to transfer a statutory licence may depend upon the terms of the particular statutory provision and any prescribed restrictions, but may also be affected by the principles discussed in Stork: see also Warrnambool Cheese and Butter Factory Company Limited v Warrnambool Cheese and Butter Factory Company Holdings Limited, in the matter of Warrnambool Cheese and Butter Factory Company Limited [2017] FCA 302 at [9] (Yates J). 63 TAPL by its solicitors has engaged with the National Offshore Petroleum Titles Administrator with respect to the Commonwealth legislation and interests, and with the Department of Mines, Industry Regulation and Safety of Western Australia, with respect to the State petroleum legislation, to ensure that the transfer of the Commonwealth and State petroleum interests under the proposed Scheme satisfies the relevant statutory requirements. There has been extensive discussion between those respective parties and it will be necessary for the position to be addressed further at the proposed second court hearing.

Secured creditors 64 A number of entities have registered financing statements under the Personal Property Securities Act 2009 (Cth) (PPSA) for security interests set out in those statements against collateral (the assets) of TAPL. Section 413(2) enables orders to be made that permit a transfer of assets subject to any security interest. 65 Again, it will be necessary to address such matters in more detail at the second court hearing, but the provisions of the PPSA accord protection to a secured party where a transfer proceeds, provided it takes certain steps. In summary: (a) the PPSA permits a transfer of the collateral the subject of a security interest regulated by the PPSA; (b) a security interest in collateral is perfected if a financing statement is registered: s 21(1)(a); (c) registration is regulated by Part 5.3 of the PPSA; (d) s 162 provides that a financial statement may be registered to reflect a transfer of collateral before or after the transfer; (e) if there is a transfer, s 34(1) accords temporary protection to the secured party who at the time of the transfer held a perfected security interest in the collateral, in that they have perfection for a prescribed period of time; (f) s 66 and s 67 then deal relevantly with priorities of securities in transferred collateral; and (g) if registration is effected by the secured party against the new grantor within the specified time, priority with respect to the collateral is maintained. 66 TAPL has given notice to each person who has registered a financing statement against collateral of TAPL under the PPSA informing them that the transfer of collateral from TAPL to CAPL may occur without loss of their priority if they take advice and take appropriate steps to effect registration. 67 TAPL has given further notice to each person who has registered a financing statement against collateral of TAPL under the PPSA informing them of the first and second Court dates in these proceedings and of the proposed implementation date for the Scheme. 68 Therefore, the secured parties may protect their priority positions following any transfer of the relevant collateral, provided they take steps to comply with the provisions of the PPSA. TAPL has given them notice of that obligation on their part and suggested that they obtain legal advice.

Conclusion as to particular matters addressed 69 Having considered each of the matters addressed by senior counsel, it is apparent to me that they do not provide a basis for refusing to convene the scheme meeting. Although the issues will be revisited for the purpose of the second court hearing, each matter may potentially be addressed within the framework of s 413, and in a manner that will give effect to the Scheme without prejudicing the position of contracting parties, government agencies and licensees, secured parties or creditors generally. The matters addressed do not disclose any reason to find the proposed Scheme unfair or inappropriate.

Conclusion 70 For the above reasons, I was satisfied that each of the matters relevant to an order convening a scheme meeting under s 411 was addressed by the evidence and that it was appropriate to make the orders sought by TAPL, including those relating to the convening of the meeting, approving the scheme booklet for distribution and the conduct of the scheme meeting. 71 There is no reason why the scheme, if considered and adopted by the member, is not of such a nature as would be likely to be approved at the second court hearing. 72 Orders were made on 8 March 2022 accordingly. I certify that the preceding seventy-two (72) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Banks-Smith.