Insignia Financial Ltd, in the matter of Insignia Financial Ltd (No 2) [2026] FCA 451 (16 April 2026)

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

1. At the convening hearing of 25 February 2026, I made convening orders requiring the plaintiff, Insignia Financial Ltd, to convene and hold a meeting of its shareholders (Scheme Meeting) to consider a proposed Scheme of arrangement. I published the convening reasons the following day, on 26 February 2026: Re Insignia Financial Ltd [2026] FCA 160.
2. The Scheme Meeting was held on 13 April 2026, and Insignia Shareholders voted in favour of the Scheme, with 98.65% of the votes cast in favour of the Scheme, and by 89.96% of shareholders present and voting.
3. On 15 April 2026, the Australian Securities and Investments Commission (ASIC) provided a letter stating that, under s 411(17)(b) of the Corporations Act 2001 (Cth), it has no objection to the Scheme.
4. At the approval hearing held on 16 April 2026, Insignia sought orders approving the Scheme pursuant to s 411(4)(b) of the Corporations Act. The approval hearing initially was listed for 2 April 2026, however, at the request of Insignia, the Court amended the date for the approval hearing to facilitate maximum practicable certainty in respect of the outstanding regulatory approvals that are conditions precedent to the implementation of the Scheme.
5. No shareholder or other person appeared at the hearing to object to the Scheme. The bidder, Daintree Bidco, appeared at the approval hearing and supported the orders sought by Insignia.
6. At the conclusion of the approval hearing, I made the orders sought by Insignia. These are my reasons for making those orders. These reasons are to be read with the convening reasons_,_ which set out the details in relation to the Scheme and the convening orders. Capitalised terms in these reasons have the same meaning as in convening reasons, unless stated otherwise.

1. At the approval hearing, in addition to a comprehensive written outline of submissions, Insignia relied on:

(a) an affidavit of Mr Alan Griffiths, independent non-executive director and Chairman of Insignia, affirmed on 14 April 2026;

(b) an affidavit of Mr Peter Stirling, solicitor for Insignia, annexing conditions precedent certificates signed by Insignia and Daintree BidCo confirming that all conditions precedent to the Scheme have been satisfied (other than the conditions relating to Court approval of the Scheme) and the letter from ASIC dated 15 April 2026 confirming that it has no objection to the Scheme pursuant to s 411(17)(b).

1. As set out at [6] of the convening reasons_,_ if the Scheme is implemented:

(a) Daintree BidCo will acquire 100% of the Scheme Shares from the Scheme Participants;

(b) Scheme Participants will receive the Scheme Consideration of $4.80 cash per Scheme Share; and

(c) Insignia will become a wholly-owned subsidiary of Daintree BidCo.

1. The convening reasons describe Daintree BidCo, as well as its direct and indirect ownership: at [8] and [9].

1. Section 411(4) provides that a members' scheme of arrangement is binding if:

(a) at a meeting of members, the arrangement is passed by a majority in number of the members present and voting (either in person or by proxy) and by 75% of the votes cast on the resolution; and

(b) the arrangement is approved by order of the Court.

1. The Court's task at the approval hearing is to ensure that the statutory and procedural requirements in relation to the convening and conduct of the relevant meeting have been observed and, once that is ensured, to determine, in the exercise of the Court's discretion pursuant to s 411(4)(b) of the Corporations Act, whether to approve the Scheme.
2. In deciding whether to grant approval of a scheme of arrangement, the Court will ordinarily have regard to the following matters:

(a) that the orders of the Court in relation to the convening of the scheme meeting and the second court hearing have been complied with;

(b) that the members at the scheme meeting so convened resolved to pass the scheme resolution with the requisite majorities;

(c) that there has been full and fair disclosure to members of all information material to the decision whether to vote for or against the scheme;

(d) that 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;

(e) that 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 that ASIC has been given the opportunity to draw the Court's attention to any relevant matter;

(f) that the conditions precedent to the Scheme have been satisfied or waived, save for court approval; and

(g) that the Court is satisfied under s 411(17) that the scheme has not been proposed to avoid Ch 6 of the Corporations Act, or there is a statement from ASIC that it has no objection to the scheme,

see, for example, Re Amcor Ltd (No 2) [2019] FCA 842 at [8] (Beach J); Re Carbon Revolution Limited (No 3) [2023] FCA 1270 at [14] (Moshinsky J) and Re Selfwealth Limited (No 2) [2025] FCA 416 at [9] (O'Bryan J).

1. The method of dispatch of the Scheme Booklet required by the convening orders was as follows (as these terms are defined in the convening orders):

(a) in the case of Email Shareholders, by sending an email substantially in the form of the email which appears at page 621 of Exhibit PS-1 to the Stirling Affidavit, which included links to access online portals or websites where Email Shareholders may download the Scheme Booklet, lodge online an electronic voting form containing a proxy appointment, and access an online platform to listen to and participate in the Scheme Meeting; and

(b) in the case of Hard Copy Shareholders and No Election Shareholders, by sending hard copy documents by post, including the Scheme Booklet, a personalised proxy form and an envelope for the return of the proxy form.

1. In his affidavit affirmed 14 April 2026, Mr Griffiths deposed to the method of dispatch of the Scheme Booklet. He observed that following the convening hearing, the Scheme Booklet was amended in minor or technical respects. On the basis of that evidence, I am satisfied that the Scheme materials, including the Scheme Booklet, were effectively dispatched to Insignia Shareholders in accordance with the convening orders and there were no instances of non-compliance with those orders. Further, that the Scheme Booklet, including the modifications made subsequent to the convening hearing, was registered with ASIC on 27 February 2026 and that an office copy of the convening orders was lodged with ASIC on the same day.

1. In compliance with order 1 the convening orders, the Scheme Meeting was held on 13 April 2026 at the offices of Mallesons, Level 27, 447 Collins Street, Melbourne and virtually via an online platform.
2. In compliance with order 3 of the convening orders, Mr Allan Griffiths was the Chairperson of the Scheme Meeting. Mr Griffiths deposed to questions he received prior to the Scheme Meeting concerning the fact that Insignia had not declared any dividends in 2025 and the impact this had on the offer price, which he addressed at the Scheme Meeting. Mr Griffiths also received other questions during the Scheme Meeting, which he also addressed at the meeting. He provided a detailed summary of the questions and his responses.
3. In compliance with order 5 of the convening orders, voting on the resolution to agree to the Scheme was conducted by way of poll, the results of which are discussed below at paragraphs 21-25.
4. As required by order 6 of the convening orders, Insignia Shareholders whose names were recorded in the register of Insignia at 10.00am on 11 April 2026 were eligible to vote at the Scheme Meeting.
5. As outlined in the convening reasons, at [2], Insignia's share capital on issue included 4,658,236 Insignia Treasury Shares (as defined), representing 0.69% of the total number of Insignia ordinary shares. Insignia Treasury Shares exist to discharge Insignia's obligations in relation to certain arrangements with eligible employees and are shares for which no employee has a present beneficial entitlement.
6. The understanding of Insignia at the convening hearing, as reflected in the convening reasons, was that the Insignia Treasury Shares are ordinary shares and would participate in the Scheme, but would not be voted at the Scheme Meeting. Mr Griffiths stated, however, that between the convening hearing and the Scheme Meeting, it became apparent that the Trustee with legal ownership of the Insignia Treasury Shares would in fact be entitled to provide a proxy to Mr Griffiths, as chairperson of the Scheme Meeting, to vote in his discretion. The Trustee did so and Mr Griffiths voted all of these shares in favour of the Scheme resolution. As counsel for Insignia submitted, the Insignia Treasury Shares represent a small fraction of the total number of Insignia ordinary shares and were not material to the outcome of the Scheme Meeting.

Outcome of the Scheme Meeting and voter turnout

1. In accordance with s 411(4)(a)(ii) of the Corporations Act, the Scheme resolution was passed by a majority in number of members present and voting (either in person or by proxy) at the Scheme Meeting, and by at least 75% of the votes cast on the Scheme resolution. Specifically, the evidence establishes that the Scheme resolution was passed by 98.65% of the votes cast on the poll and by 89.96% of Insignia Shareholders present and voting.
2. The number of Insignia Shareholders present and voting (including by proxy) constituted 7.40% of the total number of Insignia Shareholders. The number of votes cast (including by proxy) constituted 61.66% of the total number of shares eligible to be voted.
3. Mr Griffiths' evidence was that voter participation at the 2023, 2024 and 2025 Insignia annual general meetings tended to be around 3.30% of the total number of Insignia shareholders eligible to vote at those meeting and ranged between 44.90% and 63.81% of the total number of shares eligible to be voted.
4. Although the level of shareholder turnout may be considered relatively low, Insignia submitted, and I accept, that this does not give rise to any concern that shareholders were deterred from attending the Scheme Meeting or did not have notice of it. In relation to low voter turnout, I refer to Re Carbon Revolution at [26] and [27] and the cases discussed in Re Japara Healthcare Ltd (No 2) [2021] FCA 1317 (Moshinsky J) at [27] and [28]. In the present case:

(a) there is nothing to suggest any irregularity in dispatch of material to the shareholders;

(b) shareholders were provided with notice of the Scheme Meeting;

(c) there is no evidence of any issue that would have deterred shareholders from voting at or from attending the Scheme Meeting; and

(d) those shareholders who did vote voted overwhelmingly in favour of the Scheme.

1. In compliance with order 9 of the convening orders, on 9 April 2026, being a sufficient time before the approval hearing, Insignia published an announcement via the ASX market announcements platform setting out the details for the second Court hearing and the process for any person to appear at that hearing to oppose the approval of the Scheme. That announcement was in substantially the same form as the draft notice provided at the convening hearing.
2. Insignia was not served with any notices of appearance from shareholders wishing to appear to oppose approval of the Scheme.

1. On the basis of the evidence adduced at the convening hearing, I was satisfied that the Scheme Booklet met the disclosure obligations imposed by s 412 of the Corporations Act and that appropriate verification processes had been implemented to ensure the accuracy of the statements made in the Scheme Booklets: convening reasons at [56] and [57]. On the basis of that finding and the evidence concerning dispatch of the Scheme materials, I am satisfied that there has been full and fair disclosure to members of all material information.

1. As already mentioned, implementation of the Scheme is subject to a number of conditions precedent: see convening reasons at [7]. In advance of the approval hearing, certificates on behalf of Insignia and Daintree BidCo in relation to the conditions precedent were provided as an exhibit to Mr Stirling's affidavit sworn on 16 April 2026. The certificates attested that all conditions precedent to the implementation of the Scheme had been satisfied (other than conditions relating to Court approval of the Scheme).

1. Once satisfied that all statutory and procedural requirements in relation to the convening and conduct of the meetings have been met, the Court has a discretion to approve the Scheme pursuant to s 411(4)(b): Re Probiotec Limited (No 2) [2024] FCA 593 at [31] (Button J).
2. I set out the principles relevant to the exercise of this discretion in Re RPMGlobal Holdings Limited (No 2) [2026] FCA 44 at [33] and [34], which may be summarised as follows:

(a) members are better judges of what is in their own commercial interest than the Court;

(b) where there is no opposition at the approval hearing, that commercial judgment is particularly relevant; and

(c) where a scheme is proposed and attracts the requisite statutory majorities, that stands as evidence of a scheme's apparent fairness and reasonableness.

1. Insignia submitted, and I accept, that the Court can be satisfied that the Scheme is fair and reasonable in the sense that an intelligent and honest shareholder, properly informed and acting alone, might agree to the Scheme, for the following reasons:

(a) the Scheme received the overwhelming support of the Insignia Shareholders as reflected in the voting results of the Scheme Meeting;

(b) all Insignia directors recommended that Insignia Shareholders vote in favour of the Scheme, for the reasons given in the Scheme Booklet, and the fact that each Insignia director stated their intention to vote in favour of the Scheme for the Insignia shares held or controlled by them;

(c) the independent expert formed the opinion that the Scheme is fair and reasonable and therefore in the best interests of Insignia Shareholders;

(d) the Scheme Booklets set out a detailed description of the Scheme, including its potential benefits and disadvantages;

(e) there was no application to oppose the orders approving the Scheme, and no evidence suggesting any oppression in the conduct of the Scheme Meeting; and

(f) there are measures in the Scheme to protect shareholders against performance risk.

Whether all necessary matters have been brought to the attention of the Court

1. There is no indication that there are any additional matters relevant to the exercise of the Court's discretion that ought to have been, but were not, brought to the attention of the Court by Insignia.

Section 411(17)

1. Section 411(17) of the Corporations Act provides that the Court must not approve a compromise or arrangement unless:

(a) it is satisfied that the compromise or arrangement has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Ch 6; or

(b) there is produced to the Court a statement in writing by ASIC to the effect that ASIC has no objection to the compromise or arrangement,

but the Court need not approve a compromise or arrangement merely because a statement by ASIC that it has no objection to the compromise or arrangement has been produced to the Court as mentioned in s 411(17)(b).

1. A "no objection statement", dated 15 April 2026, has been provided by ASIC, satisfying the requirement of s 411(17)(b). Accordingly, the pre-requisite in s 411(17) is satisfied and the Court is not aware of any reason why the Scheme should not be approved.

Exemption from s 411(11)

1. Section 411(11) requires, subject to s 411(12), that a copy of the Court's order approving a scheme be annexed to every copy of the company's constitution issued after the order is made. Section 411(12) allows the Court to exempt a body from compliance with this provision.
2. Insignia sought exemption from that requirement. I accept that it is appropriate in the circumstances to make such an order. There is no need for the Court order approving the Scheme to be annexed to every copy of the Insignia Constitution because there is no alteration to the Constitution and Insignia shareholders are fully informed of the Scheme. An order under s 411(12) is regularly made on this basis.

1. For the foregoing reasons, I was satisfied that the Court should exercise its discretion in favour of approving the Scheme pursuant to s 411(4)(b) and that Insignia should be exempted from compliance with s 411(11), pursuant to s 411(12) of the Corporations Act.

I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Neskovcin.