In the matter of Challenger International [2003] FCA 553

There be convened by the plaintiff a meeting of its optionholders to be held at or about 10.15am (or as soon thereafter as the Share Scheme Meeting is concluded or adjourned) on Monday 16 June 2003 for the purposes of considering and, if thought fit, agreeing (with or without modification) to the Scheme of Arrangement proposed to be made between the plaintiff and its optionholders and in the form set out in Appendix I of Exhibit "RM1" Tab 2 to the Affidavit of Robert Molinari sworn 8 May 2002, ("Options Scheme Meeting").

There be convened by the plaintiff a meeting of its noteholders to be held at or about 10.30am (or as soon thereafter as the Share Scheme Meeting is concluded or adjourned) on Monday 16 June 2003 for the purposes of considering and, if thought fit, agreeing (with or without modification) to the Scheme of Arrangement proposed to be made between the plaintiff and its noteholders and in the form set out in Appendix I of Exhibit "RM1 Tab 3 to the Affidavit of Robert Molinari sworn 8 May 2002.

The meetings referred to in Orders 1 to 3 above be held at the City Recital Hall, Angel Place, Sydney in New South Wales.

The explanatory statement entitled "Scheme Booklet" incorporating appendices I to VII, being Exhibit "G" in these proceedings, be distributed to the ordinary shareholders, optionholders and noteholders of the plaintiff.

The explanatory statement entitled "Explanatory Statement (Options)" incorporating appendices I to III, being Exhibit "RM1" Tab 2 to the Affidavit of Robert Molinari sworn 8 May 2003, be distributed to the optionholders of the plaintiff.

The explanatory statement entitled "Explanatory Statement (Notes)" incorporating appendices I to V, being Exhibit "RM1" Tab 3 to the Affidavit of Robert Molinari sworn 8 May 2003, be distributed to the noteholders of the plaintiff.

Gilbert Michael Joseph Hoskins or, failing him, James Glen Service, be authorised to act as chairperson for the meetings referred to in Orders 1 to 3 above and report to the Court on the outcome of the meeting.

Subject to s 411(4) of the Corporations Act 2001 ("the Corporations Act"), the meeting referred to in Order 1 above shall in all respects be convened, held and conducted in accordance with:

(a) such provisions of Pt 2G.2 of the Corporations Act that apply to members of a company; and

(b) subject to such provisions of the plaintiff's constitution as apply to and in respect of meetings of members,

to the exclusion of every other provision which, but for this direction, would relate to the convening, holding or conducting of the meeting.

Subject to s 411(4) of the Corporations Act, the meting referred to in Order 2 above shall in all respects be convened, held and conducted in accordance with:

(a) Part 2G.2 of the Corporations Act as if it were a meeting of a separate class of members; and

(b) subject to such provisions of the plaintiff's constitution as apply to and in respect of meetings of members,

to the exclusion of every other provision which, but for this direction, would relate to the convening, holding or conducting of the meeting.

Subject to s 411(4) of the Corporations Act, the Meeting referred to in Order 3 above shall in all respects be convened, held and conducted in accordance with cl 21 of the Unsecured Note Trust Deed (in respect of Challenger Convertible Notes) dated 6 December 2002.

Other than reg 5.6.13 of the Corporations Regulations 2001, r 2.15 of the Federal Court (Corporations) Rules 2000 shall not apply to the meetings referred to in Orders 1 to 3 above.

The proceedings be stood over until Friday 27 June 2003 at 9.30am before His Honour Justice Gyles, or as he directs, for consideration of orders approving the Schemes of Arrangement.

15. These Orders be entered forthwith. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT 1 I am content to make the Orders in the form of the short minutes which I have initialled which contain some amendments which have been made during the course of submissions. I am satisfied that, in accordance with the now well hallowed path, the conditions laid down in s 411 and Pt 5 of the Corporations Act 2001 (Cth) are satisfied and generally make it appropriate that these Orders be made. I wish, however, to mention briefly two matters. 2 The first is that I will expressly keep open for further discussions, if need be, the position which might pertain if either or both of the classes of note holders and option holders vote against the proposal. That seems to me to give rise to a somewhat unusual situation which may need some closer examination than I have done at the moment. The second is that although, as I have indicated in the course of argument, I am satisfied at an appropriate level that there are no separate classes within the class of ordinary shareholders, that is a matter which may require further examination. 3 I have also indicated in the course of argument to counsel an issue as to the practical consequences of permitting what might be called the "Consolidated Press" shares to be voted at the scheme meeting. I do not propose to go into detail now as to the reservation which I have expressed about that, nor to indicate that I think, prima facie, it would prevent approval of the scheme. 4 I merely mention these matters so that they will not be overlooked when the proceeding comes back, if, in a practical sense, they call for further consideration.

I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Solicitor for the Applicant: Mallesons Stephen Jaques