First Pacific Advisors LLC v Boart Longyear Ltd

ORDERS WAD 333 of 2018 IN THE MATTER OF EXCELSIOR GOLD LIMITED ACN 123 629 863 EXCELSIOR GOLD LIMITED ACN 123 629 863 Plaintiff

JUDGE: MCKERRACHER J DATE OF ORDER: 10 AUGUST 2018

1. Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Corporations Act), the plaintiff convene a meeting of holders of fully paid ordinary shares in the capital of the plaintiff (shareholders) to be held on 19 September 2018 at the office of BDO Audit, 38 Station Street, Subiaco, Western Australia to commence at 11.00am (AWST) or on such other date and such other time as the Court may approve (scheme meeting) for the purpose of considering and if thought fit, approving (with or without amendment) the scheme of arrangement which is Annexure B to the draft scheme booklet, being Annexure "RJ-03" to the affidavit of Robert Rowan Andrew Johnston sworn 25 July 2018 (with the amendments contemplated by Annexure "ZF-03" to the affidavit of Zachary Tyrone Friend dated 9 August 2018 and by Annexure "ZF-02" to the affidavit of Zachary Tyrone Friend sworn on 10 August 2018).
2. The scheme booklet contained in Annexure "RJ-03" to the affidavit of Robert Rowan Andrew Johnston, which contains an explanatory statement required by s 412(1)(a) of the Corporations Act be and is approved, subject to: (a) correction of any typographical or grammatical errors and final typesetting and formatting; (b) any minor amendments approved by the Australian Securities and Investments Commission (ASIC) for registration under s 412(6) of the Corporations Act; (c) correction or update of any relevant date references or last trading prices; (d) adopting as Annexure C the executed Deed Poll contained in Annexure "ZF-07" to the affidavit of Zachary Tyrone Friend sworn 9 August 2018; (e) being the amendments contemplated in Annexure "ZF-03" to the affidavit of Zachary Tyrone Friend dated 9 August 2018 and Annexure "ZF-02" to the affidavit of Zachary Tyrone Friend sworn on 10 August 2018; and (f) adopting any other amendments approved by the Court.
3. Subject to these orders, the scheme meeting is to be: (a) convened, held and conducted in accordance with the provisions of Part 2G.2 of the Corporations Act that apply to members of a company and the provisions of Plaintiff's constitution that are not inconsistent which those provisions of the Corporations Act that apply to meetings of members; (b) convened, held and conducted as if rule 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) does not apply; and (c) convened using the notice of meeting substantially in the form or to the general effect of the notice contained in Annexure D of the scheme booklet, with any necessary dates corrected.
4. Subject to registration of the scheme booklet with the ASIC, pursuant to s 412(6) of the Corporations Act, the plaintiff is to dispatch the scheme booklet, substantially in the form of the document approved in order 2 above, and any applicable proxy form (or a link to a website for any electronic proxy lodgement) to the shareholders who appear on the register of members at 5.00pm (AWST) on 10 August 2018 (being the last business day prior to the intended date for registration of the Scheme Booklet with ASIC): (a) to each shareholder who has nominated an electronic address for the purpose of receiving notices of meeting from the plaintiff, an email to such address substantially in the form annexed at Annexure "ZF-09" to the affidavit of Zachary Tyrone Friend sworn on 9 August 2018 with amendments to references being to "online proxy lodgement"; and (b) to each other shareholder: (i) by pre-paid or ordinary post, mail or courier to Shareholders with a registered address in Australia; or (ii) by pre-paid airmail or air courier to Shareholders with a registered address outside Australia.
5. Dispatch in accordance with order 4 (above) on or before 17 August 2018 is to be taken to be sufficient notice of the scheme meeting.
6. David Frank Hatch or, failing him, Robert Rowan Andrew Johnston is to be appointed to act as chairperson of the scheme meeting (Chairman) and report the result of the scheme meeting to this Court.
7. The Chairman can adjourn the scheme meeting in his absolute discretion to such time, date and place as the Chairman thinks appropriate.
8. Three Shareholders present in person or by proxy, corporate representative or attorney under power and entitled to vote shall constitute a quorum for the scheme meeting.
9. Voting on the resolution to approve the scheme for the scheme meeting is to be conducted by way of poll.
10. The matter is to be relisted on 21 September 2018 at 10.15am for such application as appropriate following the scheme meeting.
11. If the matter is relisted, the plaintiff is to give notice of the hearing of the application pursuant to s 411(4)(b) of the Corporations Act for orders approving the Scheme by publishing an advertisement in the public notices column of "The Australian" newspaper substantially in accordance with Form 6 of the Federal Court (Corporations) Rules 2000, such advertisement to be published at least five days before any date allocated for the hearing and the plaintiff is otherwise exempted from compliance with rule 3.4 of the Rules.
12. A copy of these orders be lodged with the Australian Securities and Investments Commission before 5:00pm (AWST) on 10 August 2018.
13. The plaintiff, ASIC and any interested party has liberty to apply to relist the matter on 24 hours' written notice.
14. These orders be entered forthwith. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS WAD 333 of 2018 IN THE MATTER OF EXCELSIOR GOLD LIMITED ACN 123 629 863 EXCELSIOR GOLD LIMITED ACN 123 629 863 Plaintiff

JUDGE: MCKERRACHER J DATE OF ORDER: 21 SEPTEMBER 2018

1. Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Act) the scheme of arrangement between the plaintiff (Excelsior) 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 ZF-02 to the fourth affidavit of Zachary Tyrone Friend sworn on 18 September 2018, is approved.
2. Pursuant to s 411(12) of the Act, Excelsior is exempted from compliance with s 411(11) of the Act, in relation to the scheme of arrangement referred to in order 1.
3. Excelsior 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.

INTRODUCTION 1 These are reasons for orders earlier made in relation to a proposed members' scheme of arrangement between the plaintiff, Excelsior Gold Limited ACN 123 629 863, and its shareholders (Excelsior Shareholders) (the Proposed Scheme). 2 Excelsior is a public company listed on the Australian Securities Exchange (the ASX) with an issued share capital of 832,677,561 fully paid ordinary fully paid shares (as at 8 August 2018). It is a gold exploration and development company with principal operations at the Kalgoorlie North Gold Project, consisting of around 68 mining tenements located near Kalgoorlie, Western Australia. 3 By the Proposed Scheme, Spitfire Materials Limited ACN 125 578 743, another ASX listed public company, would acquire all of Excelsior's shares. The consideration for the acquisition of those shares would be one new fully paid ordinary share in Spitfire (New Spitfire Share) for every 2.208 shares held at the record date under the Scheme (Record Date) (Scheme Consideration). If the Scheme were implemented, Excelsior would become a wholly owned subsidiary of Spitfire and Excelsior would be delisted from the ASX. 4 Based on the closing price of Excelsior shares and Spitfire shares on the last trading day prior to the announcement of the Scheme by Excelsior and Spitfire on the ASX, the merged group will have a pro forma market capitalisation of approximately $88.89 million. 5 It is well established, there are three stages to an application under s 411 of the Corporations Act 2001 (Cth) for approval of a scheme: (1) there is an application to the Court to approve the convening of a scheme meeting and the explanatory statement to be sent to members concerning the scheme; (2) there is a scheme meeting held at which members, or a relevant class of members, vote on the scheme; and (3) there is an application to the Court to approve the proposed scheme. See, for example, Re CSR Ltd (2010) 183 FCR 358 per Keane CJ, Finkelstein and Jacobson JJ (at [7]). 6 What follows are my reasons for the orders made on 10 August 2018 pursuant s 411(1) of the Act relating to the convening of a meeting of Excelsior Shareholders for the purpose of considering the Proposed Scheme and the orders made on 21 September 2018 pursuant to s 411(4)(b) and s 411(12) of the Act approving the Proposed Scheme.

Orders Sought 7 The orders sought at the first hearing of the application were as follows: 1. Pursuant to section 411(1) of the [Act], the plaintiff convene a meeting of holders of fully paid ordinary shares in the capital of the plaintiff (shareholders) to be held on 19 September 2018 at the office of BDO Audit, 38 Station Street, Subiaco, Western Australia to commence at 11.00am (AWST) or on such other date and such other time as the Court may approve (scheme meeting) for the purpose of considering and if thought fit, approving (with or without amendment) the scheme of arrangement which is Annexure B to the draft scheme booklet, being Annexure "RJ-03" to the affidavit of Robert Rowan Andrew Johnston sworn 25 July 2018 (with the amendments contemplated by Annexure "ZF-03" to the affidavit of Zachary Tyrone Friend dated 9 August 2018 and by Annexure "ZF-02" to the affidavit of Zachary Tyrone Friend sworn on 10 August 2018). 2. The scheme booklet contained in Annexure "RJ-03" to the affidavit of Robert Rowan Andrew Johnston, which contains an explanatory statement required by section 412(1)(a) of the [Act] be and is approved, subject to: (a) correction of any typographical or grammatical errors and final typesetting and formatting; (b) any minor amendments approved by the Australian Securities and Investments Commission (ASIC) for registration under section 412(6) of the [Act]; (c) correction or update of any relevant date references or last trading prices; (d) adopting as Annexure C the executed Deed Poll contained in Annexure "ZF-07" to the affidavit of Zachary Tyrone Friend sworn 9 August 2018; (e) being the amendments contemplated in Annexure "ZF-03" to the affidavit of Zachary Tyrone Friend dated 9 August 2018 and Annexure "ZF-02" to the affidavit of Zachary Tyrone Friend sworn on 10 August 2018; and (f) adopting any other amendments approved by the Court. 3. Subject to these orders, the scheme meeting is to be: (a) convened, held and conducted in accordance with the provisions of Part 2G.2 of the [Act] that apply to members of a company and the provisions of Plaintiff's constitution that are not inconsistent which those provisions of the [Act] that apply to meetings of members; (b) convened, held and conducted as if rule 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) does not apply; and (c) convened using the notice of meeting substantially in the form or to the general effect of the notice contained in Annexure D of the scheme booklet, with any necessary dates corrected. 4. Subject to registration of the scheme booklet with the ASIC, pursuant to section 412(6) of the [Act], the plaintiff is to dispatch the scheme booklet, substantially in the form of the document approved in order 2 above, and any applicable proxy form (or a link to a website for any electronic proxy lodgement) to the shareholders who appear on the register of members at 5.00pm (AWST) on 10 August 2018 (being the last business day prior to the intended date for registration of the Scheme Booklet with ASIC): (a) to each shareholder who has nominated an electronic address for the purpose of receiving notices of meeting from the plaintiff, an email to such address substantially in the form annexed at Annexure "ZF-09" to the affidavit of Zachary Tyrone Friend sworn on 9 August 2018; and (b) to each other shareholder: (i) by pre-paid or ordinary post, mail or courier to Shareholders with a registered address in Australia; or (ii) by pre-paid airmail or air courier to Shareholders with a registered address outside Australia. 5. Dispatch in accordance with order 4 (above) on or before 15 August 2018 is to be taken to be sufficient notice of the scheme meeting. 6. David Frank Hatch or, failing him, Robert Rowan Andrew Johnston is to be appointed to act as chairperson of the scheme meeting (Chairman) and report the result of the scheme meeting to this Court. 7. The Chairman can adjourn the scheme meeting in his absolute discretion to such time, date and place as the Chairman thinks appropriate. 8. Three Shareholders present in person or by proxy, corporate representative or attorney under power and entitled to vote shall constitute a quorum for the scheme meeting. 9. Voting on the resolution to approve the scheme for the scheme meeting is to be conducted by way of poll. 10. The matter is to be relisted on 20 September 2018 at 10.15am, or such other time as convenient, for such application as appropriate following the scheme meeting. 11. If the matter is relisted, the plaintiff is to give notice of the hearing of the application pursuant to section 411(4)(b) of the Corporations Act for orders approving the Scheme by publishing an advertisement in the public notices column of "The Australian" newspaper substantially in accordance with Form 6 of the Federal Court (Corporations) Rules 2000, such advertisement to be published at least five days before any date allocated for the hearing and the plaintiff is otherwise exempted from compliance with rule 3.4 of the Rules. 12. A copy of these orders be lodged with the Australian Securities and Investments Commission before 5:00pm (AWST) on 10 August 2018. 13. The plaintiff, ASIC and any interested party has liberty to apply to relist the matter on 24 hours' written notice. 14. These orders be entered forthwith.

Materials before the Court 8 At the first hearing on 10 August 2018, Excelsior relied on: (a) the affidavit of Robert Rowan Andrew Johnston sworn 25 July 2018 (Johnston affidavit); (b) the affidavit of David Hatch sworn 30 July 2018 (Hatch affidavit); (c) the affidavit of Zachary Tyrone Friend sworn 1 August 2018 (First Friend affidavit); (d) the affidavit of Sherif Andrawes sworn 7 August 2018 (Andrawes affidavit); (e) the affidavit of Russell Paul Hardwick sworn 8 August 2018 (Hardwick affidavit); (f) the second affidavit of Zachary Tyrone Friend sworn 9 August 2018 (Second Friend affidavit); and (g) the third affidavit of Zachary Tyrone Friend sworn 10 August 2018 (Third Friend affidavit). 9 The materials were comprehensive, addressing the relevant considerations. 10 The Johnston affidavit relevantly annexed the following essential documents: (1) the merger implementation agreement (MIA) entered into by Excelsior with Spitfire on 24 June 2018; (2) an independent expert's report dated 17 July 2018 expressing the opinion that the proposed Scheme is not fair but reasonable and, in the absence of a superior proposal, is in the best interests of Shareholders; (3) the proposed explanatory statement (Scheme Booklet); and (4) a version of the Proposed Scheme to be put to Shareholders (in an annexure to the draft Scheme Booklet and which was subject to minor amendments identified in the Second Friend affidavit). 11 The Second Friend affidavit relevantly annexed a deed poll (Deed Poll) entered into by Spitfire on 8 August 2018, undertaking in favour of Shareholders that Spitfire will fulfil obligations under the MIA and proposed Scheme. The Third Friend affidavit relevantly annexed correspondence with ASIC, including correspondence regarding its position in relation to the first court hearing. 12 Excelsior's counsel also provided a checklist identifying where in the affidavits the matters prescribed by each of s 411 of the Act, the Corporations Regulations 2001 (Cth) and the ASIC Regulatory Guide 60 are dealt with in the materials.

Review by the Court at the first court hearing 13 I have previously considered the principles as to the nature of the review by the Court at the first court hearing: Programmed Maintenance Services Limited, in the matter of [2017] FCA 1265 (at [10]-[15]) (see also Signature Gold Ltd, in the matter of Signature Gold Ltd [2017] FCA 1481 per Markovic J (at [17]-[24])). 14 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. 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. These propositions are well established: Anatolia Energy Limited, in the matter of Anatolia Energy Limited [2015] FCA 1134 per McKerracher J (at [8]) (Re Anatolia); Mantra Group Limited, in the matter of Mantra Group Limited [2018] FCA 510 per Markovic J (at [16]) (Re Mantra Group) and SRG Limited, in the matter of SRG Limited [2018] FCA 1092 per Banks-Smith J (at [12]) (Re SRG Limited). 15 While s 411(2) contains a statement of the circumstances in which a scheme meeting must not be ordered, s 411 contains no statement of the criteria that must be satisfied before a meeting is ordered: Re CSR Ltd (at [8]). 16 Nonetheless, it is relatively settled that this Court should order the convening of the Scheme Meeting and approve the dispatch of the Scheme Booklet (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: s 411(1) of the Act. That is: (i) the Scheme is an arrangement; (ii) Excelsior is a Part 5.1 Body; (iii) the Scheme participants are members or creditors of Excelsior; and (iv) the Scheme Meeting will be convened between members of the same class. (b) ASIC has had a reasonable opportunity to: (i) examine the terms of the Scheme and explanatory statement; and (ii) make submissions to the Court in relation thereto: s 411(2)(b) of the Act. (c) The explanatory statement: (i) provides adequate disclosure: s 412(1)(a)(i) of the Act; and (ii) contains the prescribed information: s 412(1)(a)(ii) of the Act, reg 5.1.01 and Sch 8 cl 8301- 8310 of the Corporations Regulations. (d) The procedural requirements of the Federal Court (Corporations) Rules 2000 (Cth) have been met. (e) There is no apparent reason why the Scheme should not, in due course, receive the Court's approval if the necessary majority of member's votes is achieved. See, for example, Re NRMA Ltd (No 1) (2000) 156 FLR 349 per Santow J (at [3] and [14]-[41]); Re CSR Ltd (at [12]); Re Anatolia (at [9]); Re Mantra Group (at [16]) and Re SRG Limited (at [11]).

Arrangement 17 The word 'arrangement' is of wide import. As was said in Re NRMA per Santow J (at [20]): Generally speaking, unless the arrangement is ultra vires the company or seeks to deal with a matter for which a special procedure is laid down by the Corporations Law or to evade a restriction imposed by the Corporations Law, almost any arrangement otherwise legal which touches or concerns the rights and obligations of the company or its members or creditors, and which is properly proposed, may come under s 411 … 18 It is not controversial that the proposal before the Court is an arrangement.

Pt 5.1 body 19 Section 411 of the Act confers jurisdiction on the Court in respect of a Pt 5.1 body. The term 'Part 5.1 body' is defined in s 9 of the Act to mean, relevantly, a company. Excelsior is a company.

Members 20 The term 'member' is defined in s 9 to mean, in relation to a company, a person who is a member under s 231. Broadly, a person is a member of a company if they are a member of the company on its registration, or agree to become a member of the company after its registration and their name is entered on the register of members. The Excelsior Shareholders are members of Excelsior.

Classes 21 An arrangement to which s 411(1) applies is one between a company and its members or creditors or any class of them. It is only such an arrangement to which the Court may grant its approval pursuant to s 411(6). 22 Section 411 does not define the term 'class'. However, in Sovereign Life Assurance Company v Dodd [1892] 2 QB 573, Bowen LJ said (at 583) that the term ought to be given such a meaning: … as will prevent the section being so worked as to result in confiscation and injustice, and that it must be confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest. See too First Pacific Advisors LLC v Boart Longyear Ltd (2017) 320 FLR 78 per Bathurst CJ (at [77]-[81]) (with whom Beazley and Leeming JA agreed). 23 In this case, all Excelsior Shareholders have the same rights in the Scheme. That is, the right to receive the Scheme Consideration and there is only a single class. 24 Excelsior has issued 23,200,000 Excelsior shares to employees of Excelsior (Plan Participants) under the Excelsior Gold Incentive Scheme approved by Excelsior Shareholders in 2014 and the Excelsior Gold Incentive Scheme approved by Excelsior Shareholders in 2017 (together, the Excelsior Loan Share Plans). 25 These arrangements were, in effect, Excelsior providing loans to employees to acquire shares as part of an employee incentive scheme. None of the persons with these Loan Share Plans are current directors of Excelsior. 26 Spitfire and Excelsior propose to carry these arrangements across to the merged entity. That is, they have entered into a deed with the Plan Participants (Loan Plan Share Transfer Deed), dated 19 July 2018. Under the proposed Loan Plan Share Transfer Deed, Plan Participants agree: (a) that all existing Excelsior shares issued to by Plan Participants under the Excelsior Loan Share Plans will be exchanged for New Spitfire Shares under the Scheme; (b) the corresponding loan made under the Excelsior Loan Share Plan will be replaced with a loan for the same amount owing to Spitfire; (c) a holding lock will be placed on the New Spitfire Shares until the applicable loan has been repaid to Spitfire; and (d) the loan will be on the same terms as the loan from Excelsior under the applicable Excelsior Loan Share Plan, including limited in recourse to the applicable New Spitfire Shares and repayable 5 years from issue of the relevant Excelsior shares under the applicable Excelsior Loan Share Plan. 27 I consider these arrangements under the Excelsior Loan Share Plans are not class-creating and carry over the same loans on materially the same terms to the employees which were otherwise in place prior to the Scheme being proposed. 28 I am satisfied they do not create a 'collateral benefit' as these Shareholders do not receive any newly-created or tangible additional benefit to incentivise their vote that other existing Shareholders do not receive.

Other securities - Options 29 Excelsior has issued 14,000,000 unlisted options to acquire shares, each exercisable at $0.05 and expiring on 24 November 2018 (Options). 30 Spitfire and Excelsior have entered into a deed with Farrah Property Securities Pty Ltd ACN 752 595 659, being the company which owns all of the Options (Optionholder), dated on or about 24 June 2018 (Option Cancellation Deed). Under the Option Cancellation Deed, the Optionholder has agreed to cancel their Options in exchange for Spitfire granting new options to acquire unissued New Spitfire Shares (New Spitfire Options) at the ratio of 1 New Spitfire Option for every 2.208 Options held. This is the same ratio used for the Scheme Consideration. 31 This will result in 6,340,580 New Spitfire Options, each exercisable at $0.1104 and expiring on 24 November 2018, being granted to the Optionholder (provided no Options are exercised before the Record Date). The New Spitfire Options have the same expiry date as the Options have. 32 I consider the fact of ownership of the Options by Excelsior Shareholders is not class creating. Excelsior Shareholders are not treated differently under the proposed Scheme on account of their holding of other securities: Re Anatolia (at [16]-[17]); Re SRG (at [18] and [29]-[33]). Such securities also do not generally create a 'collateral benefit' as no newly-created or tangible additional benefit is derived. The Options were on issue prior to execution of the MIA and cannot be considered as issued to incentivise a vote. There is no special or additional benefit to Farrah as an Optionholder, even if it is also an Excelsior Shareholder.

Other securities - Performance Rights 33 Excelsior has issued 9,829,268 unlisted performance rights to acquire shares (Performance Rights), which are to be dealt with outside of the terms of the proposed Scheme. 34 Spitfire and Excelsior have entered into a deed dated 17 July 2018 (Performance Rights Cancellation Deed) with Mr Johnston (a director of Excelsior), who is holder of all of the Performance Rights. 35 Under the Performance Rights Cancellation Deed, Mr Johnston has agreed to exercise all existing vested Performance Rights with conversion occurring prior to the record date of the Scheme so that the shares issued on exercise (being, a total of 3,329,268 shares) will be exchanged for new shares in the capital of Spitfire under the Scheme and all unvested Performance Rights will, subject to the Scheme becoming effective, be cancelled for no consideration. 36 Mr Johnston holds shares and is an Excelsior Shareholder. Accordingly, Mr Johnston is entitled to receive Scheme Consideration under the Scheme as an Excelsior Shareholder. Ownership of the Performance Rights by Excelsior Shareholders is not class creating, as Excelsior Shareholders are not treated differently under the proposed Scheme on account of their holding of other securities. I am satisfied such securities do not generally create a 'collateral benefit'.

Ineligible Foreign Holders 37 The Scheme Consideration will not be issued to Excelsior Shareholders whose address is outside Australia or New Zealand on the record date (Ineligible Foreign Holders). As at 23 July 2018, there were 32 Ineligible Foreign Holders who held approximately 5.19% of the total number of shares on issue on that date. 38 The number of New Spitfire Shares to which an Ineligible Foreign Holder would otherwise have become entitled under the Scheme will be issued to a sale agent (Sale Agent), who will sell and distribute the net proceeds from the sale to the respective Ineligible Foreign Holder. 39 In line with previous authorities of this Court, I consider such processes are not 'class-creating': see, for example, Re SRG (at [18] and [25]-[28]).

Small Shareholders 40 An Excelsior Shareholder who is entitled to receive 5,000 or less New Spitfire Shares as part of the Scheme Consideration (Small Shareholder) may elect to have the New Spitfire Shares that they would otherwise have become entitled to under the Scheme issued to the Sale Agent, who will sell and distribute the net proceeds from the sale to that Small Shareholder. If the Small Shareholder does not make such an election, they will be deemed to have made an election. This clause has been the subject of an agreed amendment to the proposed Scheme. As at 23 July 2018, there were approximately 543 Small Shareholders who held approximately .037% of the total number of shares on issue on that date. 41 Such processes are not generally considered to be 'class-creating' as the Small Shareholders will still receive the same Scheme Consideration under the Scheme and it is a procedure previously approved by this Court: see, for example, Alinta Limited (ABN 11 119 985 590), in the matter of Alinta Limited (ABN 11 119 985 590) No 3 [2007] FCA 1416. 42 In the ordinary course, such Small Shareholders should get broadly equivalent consideration (even if it is less by reason of brokerage, sales costs or other imposts) and this would not be such as to make it impossible for them to consult with other Shareholders. They are treated akin to how ineligible foreign shareholders are often treated in such transactions. 43 This position is also consistent with the commercial justifications for not burdening registers of public companies with the costs associated with ongoing dispatch of corporate documents in relation to small holdings.

Disclosure and verification of the Scheme Booklet 44 The draft Scheme Booklet containing the draft explanatory statement was in evidence. 45 The various annexures to the draft Scheme Booklet comprise of the following: (a) the Independent Expert's Report incorporating the Independent Technical Expert's Report; (b) the Scheme; (c) the Deed Poll; and (d) the Excelsior Notice of Scheme Meeting. 46 The explanatory statement provided to shareholders must provide proper disclosure as required by s 411(3) of the Act. With the assistance of the checklist from counsel, the Court has reviewed the affidavit evidence to ensure that the matters which must be disclosed have been properly disclosed. From the evidence put before the Court, it is shown: (a) Excelsior has undertaken a process of verifying the accuracy of the statements relating to it in the draft Scheme Booklet; (b) Spitfire has undertaken a similar process for the purpose of verifying the accuracy of its statements in the draft Scheme Booklet; (c) directors consider the contents of the draft Scheme Booklet to be accurate insofar as statements of fact relate to Excelsior and there is no reason to believe that statements of fact relating to Excelsior are inaccurate. They have each individually signed consents that, subject to this Court's approval and any changes, it is correct and may be registered with ASIC; and (d) the Company Secretary of Spitfire has confirmed he is not aware of any statement in the draft Scheme Booklet that is or is likely to be false or misleading and that there are no material omissions from the draft Scheme Booklet. 47 I consider that proper disclosure has been made.

ORDER CONVENING MEETINGS - THE COURT'S DISCRETION 48 The Court will not ordinarily summon a meeting unless the scheme is of such a nature and cast in such terms that, if it achieves the statutory majority at the members' meeting, the Court would be likely to approve it on the hearing of the petition which is unopposed: FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69 per Street J (at 72). 49 However, the role of the Court at the first court hearing is not to scrutinise finally whether the scheme should be approved. That decision must await the consideration of the members at the meeting and any argument that may be advanced on behalf of dissenting members or other interested parties at the time of the application for approval: Re Anatolia (at [28]). 50 The Scheme proposed by Excelsior is not so obviously unfair or otherwise inappropriate that it should be stopped in its tracks before going any further: Re Anatolia (at [29]). 51 Further, the conclusion of the independent expert that the Scheme is in the best interests of the members in the absence of a superior proposal, confirms that the Scheme is such that sensible business people would consider it to be of benefit to the Excelsior Shareholders. 52 In light of the ex-parte nature of the application, Excelsior drew the Court's attention to the following matters relevant to its assessment of the appropriateness of the Scheme.

Deemed warranty provision 53 The Scheme contains a 'deemed warranty' provision in which the Excelsior Shareholders warrant that their shares are fully paid and unencumbered. This is drawn to the attention of the Excelsior Shareholders in the draft Scheme Booklet. 54 Deemed warranties in these terms have been considered acceptable: Re APN News & Media (at [57]-[63]) and Re Macquarie Private Capital A Ltd [2008] NSWSC 323 (at [13]-[14]). I consider it appropriate in these circumstances.

Performance Risk 55 Performance risk concerns the risk that after transferring their shares, shareholders in a target will be left with: (a) no scheme consideration; and (b) no capacity to sue the acquirer to get back their shares or damages. 56 Pursuant to terms in the Deed Poll, Scheme and MIA, the transfer of Excelsior shares occurs concurrently at implementation with Spitfire on that date issuing to each Shareholder the New Spitfire Shares that are due as Scheme Consideration. 57 Further, Excelsior and each Scheme Participant would appear to have separate rights against Spitfire in the event of its failure to provide Scheme Consideration under the Deed Poll. 58 By reason of s 11 of the Property Law Act 1969 (WA) and the terms of the Deed Poll, each Shareholder will have a direct right of action against Spitfire, which Excelsior is appointed agent to pursue. 59 It follows that any performance or credit risk in this case is minimal: see Re APN News & Media Ltd (2007) 62 ACSR 400 per Lindgren J (at [23]) and Re Anatolia (at [34]).

Protection clauses 60 Under the Scheme, Excelsior and Spitfire have agreed to a number of deal protection mechanisms. I have considered each of these mechanisms and I am satisfied for the purpose of these orders that it does not appear that such arrangements operate against the interests of the Shareholders. I address each separately.

Reimbursement fee provision 61 The MIA contains 'reimbursement of costs' or break fee provisions. The Court examines break fee provisions to ensure that they do not operate unfairly or unduly fetter competition. 62 Under these provisions Excelsior may become liable to pay Spitfire a break fee of $300,000 (Break Fee) in certain circumstances. Spitfire may also become liable to pay Excelsior the Break Fee in certain circumstances. 63 The following characteristics of the Scheme are relevant to the conclusion that potential liability of Excelsior to pay the Break Fee does not provide a basis for refusing to allow the Excelsior Shareholders to vote on the merits of the Scheme: (1) The Break Fee is payable by both Excelsior and Spitfire in particular circumstances as set out in the MIA, summarised in the draft Scheme Booklet and given due prominence; (2) The Break Fee is not payable by either Excelsior or Spitfire if the Scheme is not approved by Excelsior Shareholders or if the Court or a regulatory authority prohibits the scheme; (3) The Break Fee is not payable by either Excelsior or Spitfire if the Scheme becomes effective; (4) The Break Fee is not payable by Excelsior if the Excelsior board of directors withdraws its support or recommendation of the Scheme as a result of the Independent Expert opining that the Scheme is not in the best interests of the Shareholders; (5) The Break Fee does not represent an amount greater than 1% of both the total equity value of Excelsior and the value of the implied Scheme Consideration; (6) The Break Fee was negotiated at arm's length with the benefit of legal advice; (7) Excelsior and Spitfire have agreed that neither of them would have entered into the MIA without the Break Fee agreed; and (8) Excelsior and Spitfire have acknowledged that the Break Fee is a reasonable amount having regard to advisory costs, costs of management and directors' time, out of pocket expenses and reasonable opportunity costs. Hence, the Break Fee provisions affecting Excelsior can be regarded as the price for securing a valuable commercial opportunity, namely, the Scheme. See, for example, Re APN News & Media (at [49]-[55]); and Re SRG (at [38]-[42] and the cases therein cited). 64 In light of these characteristics, I accept Excelsior's submission that the Break Fee is not excessive and will not operate coercively.

Exclusivity provisions 65 The MIA contains the customary 'no shop', 'no talk' and 'competing proposal disclosure' provisions. 66 Exclusivity provisions should satisfy the Court that there are no concerns relating to the impact of these provisions on competition and directors' duties, with the factors relevant to making this assessment being discussed in Re APN News & Media (at [29]-[35] and [55]). 67 The exclusivity provisions provide for an exclusivity period which is defined and of an appropriate length. The provisions will operate until the earlier of six months from the date of the MIA (or such later date agreed by Excelsior and Spitfire) or termination of the MIA. The MIA is dated 24 June 2018 and, accordingly, the exclusivity period will cease on or around 24 December 2018. Exclusivity periods of a similar or greater length have been regarded as reasonable: see, for example, Talent2 International Limited, in the matter of Talent2 International Limited [2012] FCA 771 (at [41] and the cases therein cited). The exclusivity provisions also contain directors' fiduciary and statutory duty qualifications and they are given prominence in the Scheme Booklet. 68 The directors consider these provisions of the Scheme operate in the interests of the Excelsior Shareholders; the provisions were negotiated at arm's length and included as commercial terms, after receipt of independent legal advice.

Conditions precedent 69 The Scheme is subject to a number of conditions precedent set out in the Scheme and in the MIA. As at the date of the first court hearing, there is no evidence before the Court that a condition precedent cannot or will not be satisfied.

Procedural matters 70 Rule 3.2 of the Corporations Rules relevantly requires Excelsior to file an affidavit stating the names of the persons who have been nominated to be the chairman and alternate chairman of the Scheme Meeting, that each person nominated is willing to act as chairman, has had no previous relationship or dealing with Excelsior, or any other person interested in the Scheme except as disclosed in the affidavit, and has no interest or obligation that may give rise to a conflict of interest or duty if the person were to act as chairman of the Scheme Meeting, except as disclosed in the affidavit. This requirement was satisfied.

Electronic dispatch of the Scheme Booklet and proxy form 71 Excelsior is seeking an order, pursuant to s 1319 of the Act, for the dispatch of the Scheme Booklet and proxy form by electronic means to those Scheme Shareholders who have nominated an electronic address for the purposes of receiving notices of meeting and proxy forms from Excelsior. This is to be done by an email notice to the Shareholders containing links to the Scheme Booklet and proxy form. The proposed email was put into evidence before the Court. 72 Otherwise, it is intended that the relevant documents will be dispatched by mail, including where attempted electronic delivery to a Shareholder results in a notification that delivery has been ineffective. 73 The electronic dispatch of scheme booklets, notices of meeting and proxy forms is now common. The Court may approve this approach: Re SRG (at [48] and the cases therein cited). The proposed manner of electronic dispatch is permissible.

ASIC consideration 74 The jurisdiction of the Court to make an order convening meetings under s 411(1) is conditional upon the matters set out in s 411(2). Section 411(2) requires that the Court be satisfied that ASIC has been given notice of the hearing and that ASIC has had a reasonable opportunity to examine the terms of the scheme and the draft explanatory statement and to make submissions to the Court. 75 I am satisfied on the evidence before the Court that ASIC has received proper notice and had the opportunity to review the material. Indeed, ASIC and Excelsior's solicitors have communicated with respect to certain matters, including in relation to three minor amendments to the Scheme Booklet to correct typographical errors and clarify a particular sentence. This email also brought ASIC's attention to the added clause concerning elections by Small Shareholders. Further, ASIC indicated its intention was not to appear or intervene at the first court hearing.

Oral submissions at the first court hearing 76 At the first court hearing, in addition to drawing the Court's attention to the deeming provision in relation to Small Shareholders and shareholdings by Foreign Shareholders, counsel for Excelsior drew the Court's attention to an issue as to email dispatch. It was noted that recent decisions of this Court (see, for example, Re SRG Limited (at [44]-[50])) have drawn important distinctions between online voting and electronic proxy lodgement. Therefore, an amendment was sought to the minute of proposed orders (see above at [8]) so that order 4(a) referred to 'online proxy lodgement'. 77 Otherwise, the only amendments sought to the proposed orders concerned relisting the matter for a subsequent hearing and a small amendment to the dispatch date, which still preserves sufficient time for notification.

Conclusion 78 In light of these considerations, I was satisfied that each of the matters relevant to an order convening a scheme meeting under s 411 was addressed and that it was appropriate to make the orders on 10 August 2018 sought by Excelsior (subject to the amendments identified above), including those relating to the convening of the meeting, approving the Scheme Booklet for distribution and the conduct of the scheme meeting.

THE SCHEME MEETING 79 Following the Court's orders on 10 August 2018, relevantly providing for Excelsior to convene a meeting of members to consider and, if thought fit, agree to the Scheme, the Scheme Meeting was held and the Scheme was passed. At the Scheme Meeting on 19 September 2018, the requisite majorities for the purposes of s 411(4)(a)(ii) of the Act were satisfied, namely: (a) 97.69% of Shareholders present and voting (in person or proxy) voted in favour of the Scheme; and (b) 99.65% of the votes cast on the resolution at the Scheme Meeting were cast in favour of the Scheme.

SECOND APPLICATION TO THE COURT 80 At the second court hearing on 21 September 2018, an application under s 411(4)(b) of the Act was made for orders that the Scheme between Excelsior and its members be approved. Specifically, Excelsior sought orders in the following terms: 1. Pursuant to s 411(4)(b) of the [Act] the scheme of arrangement between the plaintiff (Excelsior) 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 ZF-02 to the fourth affidavit of Zachary Tyrone Friend sworn on 18 September 2018, is approved. 2. Pursuant to s 411(12) of the Act, Excelsior is exempted from compliance with s 411(11) of the Act, in relation to the scheme of arrangement referred to in order 1. 3. Excelsior is to lodge an office copy of these orders with Australian Securities and Investments Commission as soon as practicable. 81 At the second court hearing I made the orders sought for the reasons that now follow.

Materials before the Court 82 In addition to the affidavits relied upon at the first court hearing, the following material was relied upon by Excelsior at the second court hearing: (a) the affidavit of Suzanne Thelma Zollo affirmed 13 September 2018 (Zollo Affidavit) explaining the printing, collation and dispatch procedure for Scheme Booklets and proxy forms; (b) the affidavit of Jarrod Michael Egan sworn 14 September 2018 (Egan Affidavit) as to printing of the Scheme Booklet; (c) a further affidavit of Zachary Tyrone Friend, a solicitor of Steinepreis Paganin sworn 18 September 2018 (Fourth Friend Affidavit) which confirms that a copy of the extracted Meeting Orders and the Scheme Booklet approved by the Court on 10 August 2018 were lodged with ASIC; (d) the affidavit of Amanda Grace Sparks, the Company Secretary of Excelsior, sworn 19 September 2018 (Sparks Affidavit) that provides evidence of the receipt of proxy forms from Excelsior Shareholders prior to the Scheme Meeting and that Excelsior has placed an advertisement in The Australian newspaper of the second court hearing; (e) the affidavit of Chantell Anne Randall of Computershare Investor Services Pty Limited sworn 19 September 2018 (Randall Affidavit) which gives evidence as to the maintenance of the share register and arranging printing and dispatch of the Scheme Booklet; (f) the affidavit of Nicole Brooke Lewis of Computershare Investor Services Pty Limited sworn 19 September 2018 (Lewis Affidavit) which gives evidence as to the receipt of proxy forms and the conduct of the Scheme Meeting in her capacity as returning officer; (g) a further affidavit of David Frank Hatch, the Non-Executive Chairman of Excelsior and the Scheme Meeting Chairman, sworn 19 September 2018 (Second Hatch Affidavit), which demonstrates that the Scheme Meeting was held in accordance with the Act, Meeting Orders and constitution of Excelsior and that statutory majorities on the resolution to approve the Scheme were obtained; and (h) a final affidavit of Zachary Tyrone Friend (Fifth Friend Affidavit), sworn on 21 September 2018 and filed shortly prior to the second hearing, which confirmed that all conditions precedent have been waived or satisfied, that ASIC has given a statement in writing pursuant to section 411(17)(b) of the Act and that no objections to the scheme have been raised.

The Court's jurisdiction 83 Pursuant to s 411(4)(b) of the Act an arrangement is binding upon members of a company if it is approved by order of the Court. Whether to approve a scheme is an exercise of the Court's discretion. 84 The Court is not bound to approve a scheme merely because the Court has previously made orders for the convening of a meeting or because the statutory majorities have been achieved: Seven Network Limited, in the matter of Seven Network Limited (No 3) (2010) 267 ALR 583 per Jacobson J (at [31]) (Re Seven Network (No 3)). 85 As to procedural matters, the Court is to be satisfied that: (1) the meeting was convened and held in accordance with the Court's earlier orders; (2) the resolution was passed with the requisite statutory majorities (under s 411(4)(a)); and (3) Excelsior otherwise complied with the Court's earlier orders: Re International Goldfields Ltd [2004] WASC 112 per Barker J (at [7]); EcoBiotics Limited, in the matter of EcoBiotics Limited (No 2) [2017] FCA 1031 per Gleeson J (at [11]) (Re EcoBiotics). 86 As to the factors that inform the Court's discretion more generally, these were set out in Re Seven Network (No 3) by Jacobson J (at [35]-[40]): (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; and (e) whether minority shareholders would be oppressed by the scheme. See also Re EcoBiotics (at [26]-[28]).

Compliance with procedural requirements 87 Other than in two minor respects discussed below, Excelsior has complied with the orders made by the Court on 10 August 2018.

Voting majorities obtained 88 An arrangement is only binding if there is satisfaction of the requirements of the two types of majority votes at the court ordered meeting of members and the court approves the arrangement specified in s 411(4) of the Act. 89 The two types of majorities required are: (a) a majority in number of the members present and voting (either in person or by proxy): s 411(4)(a)(ii)(A) (Headcount Test); and (b) 75% of the votes cast on the resolution: s 411(4)(a)(ii)(B) (Votes Test). 90 Evidence before the Court demonstrates the requisite majorities were achieved: Number of votes (Votes Test) Number of Shareholders Percentage of Shareholders Percentage of votes (Headcount Test) Votes cast 'for' the resolution 565,491,456 99.65% 211 97.69% Votes cast 'against' the resolution 2,010,560 0.35% 5 2.31% Total 567,502,016 100.00% 216 100.00%

91 I note there were three 'Abstain' votes recorded on the resolution. However, both the Headcount Test (more than 50% of shareholders voting voted in favour) and the Votes Test (more than 75% of shares voted were in favour) were satisfied. The shares voted were 567,502,016 of the 836,006,829 shares on issue, which signifies that approximately 67.88%. 92 I particularly had regard to the number of Shareholders voting. There were 216 of 1488 Shareholders on the register as at 19 September 2018, therefore, approximately 14.52% of Shareholders voted. While this may not seem to be a significant turnout, on these figures, I do not consider that the seemingly low voter turnout should prevent the Court from making orders under s 411(4)(b) given: (a) the high number in percentage terms of Small Shareholders on the register, with likely attendant voter apathy for a transaction of relatively minor commercial significance to each such Small Shareholder; and (b) the consistency with 'low' turnout at an earlier annual general meeting of Excelsior, as a cross-check. See by comparison (in terms of analysis) in TriAusMin Limited, in the matter of TriAusMin Limited (No 2) [2014] FCA 833 per Farrell J (at [9]-[12]) and Re EcoBiotics (at [17]).

Other procedural requirements 93 The materials filed confirm that the plaintiff has satisfied the following requirements: (a) the Scheme Booklet was registered with ASIC; (b) the Meeting Orders were lodged with ASIC; (c) the Scheme Meeting was convened and held in accordance with orders 1, 3 and 6 to 8 of the Meeting Orders; (d) the statutory majorities were obtained at the Scheme Meeting; and (e) notice of the second court hearing was given in accordance with order 11 of the Meeting Orders.

Dispatch of Scheme Booklet 94 The procedures for both the physical and electronic dispatch of the Scheme Booklet and proxy materials were set out in the evidence. 95 On 17 August 2018, an email in the form required by Order 4(a) was sent to those Shareholders who had nominated an electronic address for the purposes of receiving notices of meeting and proxy forms online. On this date, as required by Order 4(b), copies of the Scheme Booklet, a personalised proxy form and a reply paid envelope addressed to Computershare Investor Services Pty Limited (Shareholder Documents) were dispatched to Shareholders who had not nominated an electronic mailing address for the purposes of receiving notices of meeting and proxy forms online. 96 There were two respects in which the dispatch was not in accordance with the Court's orders. 97 First, there were 15 Shareholders who were sent Shareholder Documents after the date of 17 August 2018 provided in Order 5. 98 This occurred because: (a) electronic dispatch for 13 Shareholders returned 'bounced' emails (a Delivery Event) and hardcopies were subsequently dispatched after 17 August 2018; and (b) Computershare used the 8 August 2018 register, rather than the 10 August 2018 register, and this meant two Shareholders who came onto the register in the intervening period were missed for the initial dispatch and copies were sent after 17 August 2018. 99 Thirteen of the 157 emails sent to the Shareholders resulted in a 'Delivery Event' indicating that the emails may not have reached the intended recipient. As to these, the scheme documentation was subsequently sent by mail four days later on 21 August 2018 to these 13 Shareholders. 100 Originally, and in error, Shareholder Documents were dispatched to shareholders who appeared on the Register as at 8 August 2018. It was recognised on 12 September 2018 that further versions had to be sent, once a solicitor for Excelsior informed Computershare of this. 101 Shareholder Documents were then prepared that day for the two additional Shareholders, who joined the Register between 8 August 2018 and 10 August 2018. The Company Secretary arranged a courier by overnight registered delivery to each of these two Shareholders. 102 One of the Shareholders, for whom Excelsior had an email address, was emailed to inform them urgently of the Shareholder Documents on their way and the need for them to lodge a proxy by 17 September 2017 at 11am, if they wished to vote. 103 The procedural irregularities of these late dispatches of documents were brought to the Court's attention both in written and oral submissions made on behalf of Excelsior. 104 Each procedural irregularity is a 'deficiency of notice' within s 1322(1)(b)(ii) and will be validated or cured 'automatically' under s 1322(2) of the Act, unless the Court orders otherwise: Mosaic Oil NL, in the matter of Mosaic Oil NL (No 2) [2010] FCA 1186 (at [14]); G8 Communications Ltd, in the matter of G8 Communications Ltd [2016] FCA 297 (at [58]); Opus Group Limited, in the matter of Opus Group Limited (No 2) [2018] FCA 1413 (at [15]). 105 For the purpose of s 1322(2), the Court was satisfied that no 'substantial injustice' had been caused which could not be remedied in relation to the late dispatch: (a) the Shareholder Documents for the 13 Shareholders with email bounces were sent on 21 August 2018. The Shareholder Documents for the two Shareholders that entered the register between 8 and 10 August 2018 were sent on 12 September 2018 by overnight registered courier. All of these should have arrived in sufficient time prior to the Scheme Meeting on 19 September 2018; (b) the dispatch for these two Shareholders was up to 26 days late, but the Scheme Booklet was publically available on the ASX platform from 17 August 2018 and these Shareholders may have read the disclosure online; (c) those Shareholders represented only small numbers of Shareholders eligible to vote on the Scheme and held minor parcels of the shares on issue as at 10 August 2018; (d) those Shareholders do not miss out on any of the benefits of the proposed Scheme. Even if they lost the opportunity to vote, they still obtain scheme consideration; and (e) the independent expert opined that the proposed Scheme is in the best interests of the Shareholders, subject to a superior proposal. Accordingly, the transaction which will bind these Shareholders, even if they did not vote, is still considered to be in their best interests. 106 Importantly, the number of Shareholders and the number of shares these Shareholders represent were inconsequential to the outcome of the Scheme Meeting. 107 The Scheme was passed on a resolution approved overwhelmingly by Shareholders, even if all these Shareholders (15 of them) and their votes (828,766 shares) had been included and voted against the Scheme. The requisite majorities (with those adjustments) would still have been met. 108 In the circumstances, I am satisfied that the procedural irregularity does not give rise to substantial injustice so as to necessitate orders under s 1322(2).

Good faith and proper purpose 109 There is no evidence that the Shareholders have voted for an improper purpose. The Scheme is for a merger transaction of a kind ordinarily approved by Courts and, as such, voting in favour is unlikely to be motivated by some improper purpose. Further, neither ASIC or any Shareholder appeared to object to approval at the second court hearing.

Fair and reasonable scheme 110 The Court generally takes the view that the members are the best judges of whether an arrangement is to their commercial advantage and will be reluctant to make a decision contrary to the views expressed at meetings. 111 The Court may withhold its approval in the following instances: (a) where a majority is shown to be acting in bad faith; (b) where a majority's acceptance is in the nature of a fraud on the minority; or (c) where there is an objection to the scheme such that a reasonable person might not approve it. 112 None of those circumstances is present in this case. 113 On the evidence, the Scheme appears fair and reasonable: (a) proof of the relevant statutory majorities is prima facie evidence of the fairness and reasonableness of the proposed Scheme; (b) the independent expert (BDO Corporate Finance) had earlier opined that the proposed Scheme was in the best interests of Shareholders, absent a superior proposal; (c) the Board of Directors also publicly committed themselves to a position. In the Scheme Booklet, they unanimously recommended that Shareholders vote in favour of the Scheme in the absence of a superior proposal and while the independent expert maintained their opinion; (d) no superior proposal emerged since the announcement of the Scheme Implementation Deed on the ASX on 25 June 2018 (there being sufficient time in over two months for any competing bidder to have been aware from a public process that it could make a competing proposal); (e) the proposed Scheme is also fair and reasonable because it will yield commercial benefits for Shareholders. It is of a kind, being a merger of equals of two entities in the construction industry, that commercial synergies and greater commercial outcomes are intended. As such, it is fair and reasonable from the viewpoint of an intelligent an honest person: Re Seven Network (No 3) (at [36]); and (f) ASIC nor any other objector appeared at the second court hearing.

All relevant matters brought to the Court's attention

Conditions precedent to the Scheme 114 In order for the Scheme to be completed, it is necessary for the conditions precedent set out in the Scheme of Arrangement either to be satisfied or waived. 115 At the second court hearing for the Scheme, certificates were tendered by counsel, one executed by Excelsior on 21 September 2018 and the other executed by Spitfire on 20 September 2018, confirming that the conditions precedent had been satisfied or waived.

Section 411(17) is satisfied 116 ASIC provided a letter advising that it has no objection to the Scheme in accordance with s 411(17)(b) of the Act.

Section 411(11) exemption 117 Section 411(11) of the Act requires a copy of every order of the Court made for the purposes of s 411(4)(b) of the Act to be annexed to every copy of the relevant company's constitution issued after the order was made. An exemption was sought from this requirement under s 411(12) of the Act. I considered such an order appropriate.

Full and frank disclosure 118 At the first court hearing, Excelsior put evidence before the Court as to: (a) the various materials and disclosures in the Scheme Booklet; (b) the verification processes of Excelsior and Spitfire for information in the Scheme Booklet; (c) the benefits to directors and officers of Excelsior, as explained in the Scheme Booklet, if the Scheme is implemented; and (d) the ASIC releases otherwise obtained in relation to accounting information of Excelsior. 119 The explanatory statement in the Scheme Booklet was approved by the Court. ASIC accepted it for registration and it was dispatched to Shareholders in ample time prior to the Scheme Meeting. I consider there has been full and frank disclosure to Shareholders.

Conclusion and proposed orders 120 I was satisfied that the Scheme should be approved by the Court and accordingly I made orders to that effect at the hearing. I certify that the preceding one hundred and twenty (120) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.