In the matter of SG Fleet Group Limited (No 2)

Jurisdiction: Equity - Corporations List

Before: Black J

Decision: Orders made approving a scheme of arrangement.

Catchwords: CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement or compromise – Application under s 411 of the Corporations Act 2001 (Cth) for orders approving scheme of arrangement – Where formal requirements satisfied – Whether scheme of arrangement should be approved.

Legislation Cited: - Corporations Act 2001 (Cth), ss 411, 1319, 1322

Cases Cited: - Re Amcor Ltd (No 2) [2019] FCA 842
- Re Bionomics Ltd (No 2) [2024] NSWSC 1666
- Re Central Pacific Minerals NL [2002] FCA 239
- Re Coca-Cola Amatil Ltd [2021] NSWSC 489
- Re Ellerston Global Investments Ltd [2020] NSWSC 1108
- Re Equinox Resources Ltd (2004) 49 ACSR 692; [2004] WASC 143
- Re Murchison Metals Ltd [2014] NSWSC 951
- Re Pendal Group Ltd (No 3) [2023] NSWSC 14
- Re Permanent Trustee Co Ltd (2002) 43 ACSR 601; [2002] NSWSC 1177
- Re Redcape Property Fund Ltd and the Trust Company (RE Services) Ltd (as the responsible entity for the Redcape Property Trust) [2012] NSWSC 486
- Re Seven Network (No 3) (2010) 267 ALR 583; [2010] FCA 400
- Re SG Fleet Group Ltd [2025] NSWSC 214
- Re Solution 6 Holdings Ltd (2004) 50 ACSR 113; [2004] FCA 1049
- Re The Trust Company Ltd [2013] NSWSC 1947

Category: Principal judgment

Parties: SG Fleet Group Limited (Plaintiff)
Westmann Bidco Pty Limited (Bidder)

Representation: Counsel:
J Hutton SC, H Atkin (Plaintiff)
N M Bender SC (Bidder)
Solicitors:
Gilbert + Tobin (Plaintiff)
Allens (Bidder)

File Number(s): 2025/38376

Judgment

1. By Originating Process filed on 30 January 2025, the Plaintiff, SG Fleet Group Ltd (“SG Fleet”) sought orders under ss 411 and 1319 of the Corporations Act 2001 (Cth) (“Act”) in relation to a proposed scheme of arrangement between SG Fleet and its shareholders, including that it convene meetings of two classes of its shareholders to consider the scheme; that an explanatory statement be approved to accompany the notices of meeting; and to address ancillary matters.

2. By way of background, SG Fleet provides fleet management solutions including vehicle leasing, salary packaging and novated lease finance services in all jurisdictions and is listed in Australian Securities Exchange. The scheme contemplates that Westmann Bidco Pty Ltd (“Bidco”) will acquire all of the issued capital of SG Fleet on terms that scheme shareholders (other than Relevant Management Shareholders) will receive cash consideration of A$3.50 per scheme share, and Relevant Management Shareholders will have the option to receive all cash consideration of the same amount; all scrip consideration in Westmann Topco Ltd (“Topco”), which is the ultimate holding company of Bidco, being 3.5 fully paid ordinary shares in that company for each scheme share; or partly cash and partly scrip consideration. The Relevant Management Shareholders include specified members of the senior management team of the SG Fleet group, and any entity or person related to those individuals. SG Fleet proposed that shareholders will vote in classes at the scheme meeting, comprising a class of Relevant Management Shareholders and a class of shareholders other than the Relevant Management Shareholders.

3. On 20 February 2025, I made the orders sought by SG Fleet for the reasons set out in an earlier judgment (Re SG Fleet Group Ltd [2025] NSWSC 214). On 28 February 2025, Nixon J made orders approving the despatch of the Constitution of Westmann Topco Limited (“Topco”) and the Securityholders’ Deed for Topco to Relevant Management Shareholders (“Supplementary Scheme Materials”).

4. On 8 April 2025, the scheme was approved by a substantial majority both of shareholders present and voting and of the votes cast at the first meeting, comprised of SG Fleet shareholders other than Relevant Management Shareholders. The Scheme was then approved unanimously by those present and voting at the second meeting comprised of Relevant Management Shareholders.

5. SG Fleet now seeks orders approving the scheme. No SG Fleet shareholder appeared to oppose the approval of the scheme and I made the orders sought by SG Fleet at the conclusion of this hearing. These are my reasons for making those orders, and I have drawn on the helpful submissions of Mr Hutton with whom Mr Atkin appears for SG Fleet in this judgment.

Affidavit evidence

6. SG Fleet reads the affidavit dated 14 April 2025 of Ms Laura McLaren, who is its Chief Legal Officer, in support of the application. That affidavit deals with the registration of the scheme booklet; the dispatch of scheme documents and supplementary scheme documents to SG Fleet shareholders, and a minor delay that occurred in respect of the despatch of supplementary documents to Relevant Management Shareholders; the conduct of a shareholder information line; the conduct of the scheme meetings; the passage of the scheme resolutions and voter turnout at the scheme meetings; the giving of notice of the second Court hearing; and the satisfaction of conditions precedent to the scheme.

7. SG Fleet also tenders a letter dated 14 April 2025 from the Australian Securities and Investments Commission confirming that it has no objection to the scheme for the purposes of s 411(17) of the Act and a certificate executed by SG Fleet and Westmann Bidco in respect of the satisfaction or waiver of the conditions precedent to the scheme.

Applicable principles and submissions

8. The Court must be satisfied of several matters in order to approve a scheme of arrangement at the second Court hearing, namely that the plaintiff has complied with the orders of the Court convening the meeting of members; the meeting of members so convened has approved the scheme with the requisite majorities; all other statutory requirements have been satisfied; the scheme 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; 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; and there was full and fair disclosure to members of all information material to the decision whether to vote for or against the applicable scheme: Re Permanent Trustee Co Ltd (2002) 43 ACSR 601; [2002] NSWSC 1177 at [8]-[10]; Re Central Pacific Minerals NL [2002] FCA 239 (“Central Pacific Minerals”) at [8]-[14]; Re Seven Network (No 3) (2010) 267 ALR 583; [2010] FCA 400 (“Seven Network”) at [35]-[39]; Re Solution 6 Holdings Ltd (2004) 50 ACSR 113; [2004] FCA 1049 at [18]-[24]; Re Redcape Property Fund Ltd and the Trust Company (RE Services) Ltd (as the responsible entity for the Redcape Property Trust) [2012] NSWSC 486 at [7]; Re Amcor Ltd (No 2) [2019] FCA 842 at [7]-[11]; Re Ellerston Global Investments Ltd [2020] NSWSC 1108 (“Ellerston”) at [10]-[12]; Re Coca-Cola Amatil Ltd [2021] NSWSC 489 at [9]; Re Pendal Group Ltd (No 3) [2023] NSWSC 14 at [9]. The Court will also have regard to shareholders’ assessment of their interests as manifested in the voting results on the scheme resolution in recognising that shareholders are “the best judges of whether an arrangement is to their commercial advantage”: Central Pacific Minerals at [13]; Ellerston at [10]. I have drawn on my judgment in Re Bionomics Ltd (No 2) [2024] NSWSC 1666 at [7] for this summary.

Submissions and determination

9. There is evidence that SG Fleet substantially complied with the Court’s orders in respect of the distribution of initial scheme documents to its shareholders. Mr Hutton notes that there was a disconformity, which he rightly characterises as “inconsequential”, with the order that required the Scheme Materials to be despatched to SG Fleet shareholders recorded in the register as at 7pm on 21 February 2025. I accept that there is no reason for the Court to consider that that matter caused or may cause substantial injustice for the purposes of s 1322(2) of the Act and it is validated without the need for any order of the Court on that basis.

10. Mr Hutton also notes that there was a delay in distribution of supplementary information to Relevant Management Shareholders as approved by Nixon J, which was sent 27 clear days before the date of the Relevant Management Shareholders Scheme Meeting on 8 April 2025. Mr Hutton submits that:

“… the despatch of the Supplementary Scheme Materials 27 days before the Relevant Management Shareholder Scheme Meeting does not constitute an irregularity, given that Relevant Management Shareholders had received more than 28 days’ notice of the meeting, and the Scheme Booklet had described key features of the Topco Securityholders’ Deed and the Constitution of Topco.

If, contrary to the above, the despatch of the Supplementary Scheme Materials did constitute an irregularity, it is one to which s 1322(2) would apply (or which could be cured under s 1322(4)): see Re Vimy Resources Ltd (No 2) [2022] WASC 257 at [34]-[37] per Strk J; Re Bolnisi Gold NL (No 2) (2007) 165 FCR 45 at [40]-[43] per Lindgren J; Re Coalspur Mines Ltd (No 2) [2015] FCA 591 at [7] per Siopis J.”

11. I accept that this delay was not material, for the reasons noted by Mr Hutton, and is in any event within the scope of validation under s 1322(2) of the Act.

12. As I noted above, the schemes were approved at the scheme meetings by the requisite statutory majority of SG Fleet shareholders (other than Relevant Management Shareholders) and unanimously by Relevant Management Shareholders. Shareholder turnout at the former meeting was 10.3% of the SG Fleet shareholders eligible to vote and 79.7% of the votes capable of being cast at that meeting, and this was higher that the turnout at SG Fleet’s two most recent AGMs. The turnout at the meeting of Relevant Management Shareholders was 43.6% of the Relevant Management Shareholders. There is no suggestion that the shareholder turnout indicates any defect in the notice of the scheme given to SG Fleet shareholders.

13. The scheme was recommended by SG Fleet’s directors and the independent expert whose report was included in the scheme booklet and expressed the view that the scheme was fair and reasonable and therefore in the best interests of SG Fleet shareholders in the absence of a superior proposal. No SG Fleet shareholder appeared at the second Court hearing to oppose the scheme. There is no reason to doubt that the scheme is fair and reasonable so that an intelligent and honest SG Fleet shareholder, properly informed and acting alone, might approve it. There is otherwise no reason to doubt that SG Fleet has brought to the Court’s attention all matters that could be considered relevant to the exercise of the Court’s discretion or that there was full and fair disclosure to shareholders of all information material to the decision whether to vote for or against the scheme. I am therefore satisfied that the scheme is appropriate for the Court’s approval.

14. SG Fleet also seeks an exemption pursuant to s 411(12) of the Act from compliance with s 411(11) so that a copy of the Court order approving the scheme does not need to be annexed to any copy of SG Fleet’s constitution that may be issued in the future. I accept that an order of this kind is properly made where, as here, the rights of shareholders in SG Fleet are not modified in any way: Re Equinox Resources Ltd (2004) 49 ACSR 692; [2004] WASC 143 at [22]-[23]; Re Murchison Metals Ltd [2014] NSWSC 951 at [10]-[11]; Re The Trust Company Ltd [2013] NSWSC 1947 at [19].

Determination and orders

15. For these reasons, I made the orders sought by SG Fleet at the conclusion of the second Court hearing on 15 April 2025.

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