First Pacific Advisors LLC v Boart Longyear Ltd

First Pacific Advisors LLC v Boart Longyear Ltd - [2018] FCA 2064 - FCA 2018 case summary — Zoe

[6]

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).
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.
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.
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.
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.
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.
The Chairman can adjourn the scheme meeting in his absolute discretion to such time, date and place as the Chairman thinks appropriate.
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.
Voting on the resolution to approve the scheme for the scheme meeting is to be conducted by way of poll.
The matter is to be relisted on 21 September 2018 at 10.15am for such application as appropriate following the scheme meeting.
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.
A copy of these orders be lodged with the Australian Securities and Investments Commission before 5:00pm (AWST) on 10 August 2018.
The plaintiff, ASIC and any interested party has liberty to apply to relist the matter on 24 hours' written notice.
These orders be entered forthwith. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

[10]

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.

[11]

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.

[12]

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.

[13]

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]).

[17]

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.

[27]

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.

[37]

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.

[43]

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).

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