Lithium Power International Ltd, in the matter of Lithium Power International Ltd (No 2) [2024] FCA 186

1. Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the plaintiff and holders of ordinary shares in the plaintiff, the terms of which are in Annexure B to Exhibit 1 (Scheme), be approved.
2. The plaintiff lodge a copy of these orders with the Australian Securities and Investments Commission pursuant to s 411(10) of the Act.
3. Pursuant to s 411(12) of the Act, the plaintiff is exempt from compliance with s 411(11) of the Act in relation to the Scheme.
4. These orders be entered forthwith. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

STEWART J: 1 By originating process filed on 7 November 2023, the plaintiff, Lithium Power International Ltd (LPI) seeks orders that a scheme of arrangement be approved pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) and, if necessary, s 411(6) of the Act. The scheme meeting was convened pursuant to orders made by me on 18 December 2023 (see Lithium Power International Ltd, in the matter of Lithium Power International Ltd [2023] FCA 1637). It was held on 23 January 2024. 2 The scheme was approved by a majority in number of LPI shareholders present and voting at the scheme meeting and by LPI shareholders whose LPI shares amount in aggregate to at least 75 per cent of the total shareholding of those present and voting. 3 The effect of the scheme will be that the nominee of Corporación Nacional del Cobre de Chile (Codelco), being Salar de Maricunga SpA, or the bidder/nominee as defined in the scheme will acquire all LPI shares in exchange for the scheme consideration. 4 The applicable principles for a second court hearing have been well traversed and identified in the cases over the years and were helpfully summarised in Re Amcor Ltd (No 2) [2019] FCA 842 at [7]-[11] by Beach J. The court is not bound to approve a scheme merely because it has made orders for the convening of the scheme, nor because the requisite statutory majorities have been achieved. The court does, however, pay due regard to the assessment by members of the target company of their interests, as manifested in the voting of the scheme meeting. In Re Central Pacific Minerals NL [2002] FCA 239, Emmett J observed at [13]: The Court will, of course, generally take the view that the shareholders are the best judges of whether an arrangement is to their commercial advantage and will be reluctant to make decisions contrary to the views of security holders expressed at meetings. 5 A sealed copy of the orders and a copy of the scheme booklet substantially in the form approved at the first court hearing were lodged with ASIC on 18 December 2023 in satisfaction of s 411(10) of the Act. On 19 December 2023 the scheme booklet was registered by ASIC. The scheme booklet and the other materials referred to in the orders were dispatched on 21 December 2023 to LPI shareholders, whose names were recorded in LPI's register of members as at 5 pm Sydney time on 17 December 2023 in accordance with order 3 of the first orders. At that time there were 1,844 email shareholders (ie LPI shareholders who have elected to receive shareholder communications electronically), 28 postal shareholders (ie LPI shareholders who have elected to receive hard copy communications) and 4,777 other shareholders (ie LPI shareholders who have not elected to receive electronic or hard copy communications). 6 There was an irregularity with the formatting, but not the substantive written content, of the email received by certain email shareholders, being those who had given a Gmail address for the purpose of communications. There is no need to go into the details of the irregularity and how it was rectified, save to say that I am satisfied that it was a procedural irregularity which does not constitute non-compliance with order 3(a) of the first orders, or otherwise invalidate voting on the resolution of the scheme meeting to approve the scheme. 7 On 22 December 2023, Boardroom, which maintains LPI's share registry and was retained to dispatch the scheme booklet to LPI shareholders, sent all 672 Gmail shareholders a follow-up email concerning the formatting issue. The steps which Boardroom took to correct the problem seem to me to be adequate. Also, as I will get to, the rate of voter turnout for Gmail shareholders at the scheme meeting compared to overall LPI shareholder participation does not suggest any difficulty in that regard. 8 At the scheme meeting, the resolution was passed by the requisite majority stipulated in ss 411(4)(a)(ii)(A) and 411(4)(a)(ii)(B) of the Act. Of the 638 LPI shareholders who voted at the scheme meeting in person or by proxy, 603, which is to say 94.51 per cent of shareholders present and voting, voted in favour of the resolution and 35, which is to say, 5.49 per cent of shareholders present and voting, voted against the resolution. 9 Of the LPI shares represented by votes cast at the scheme meeting in person or by proxy, 391,718,101, which is to say 99.54 per cent of the total number of shares voting, voted in favour of the resolution and 1,799,146, which is to say 0.46 per cent of the total number of shares voting, voted against the resolution. 10 The voter turnout at the scheme meeting was 10.1 per cent of eligible LPI shareholders and 61.44 per cent of eligible LPI shares. In comparison, voter participation at LPI's last annual general meeting held in November 2023 represented 2.8 per cent of LPI shareholders and 46.28 per cent of LPI shares. 11 The percentages of eligible LPI shareholders and eligible LPI shares that voted on the resolution are directly comparable to the percentages in other schemes that have recently been approved in this jurisdiction and in other courts in Australia. That is to say, they are within the range that has been considered and approved in other cases. See Re Security Matters Ltd (No 3) [2023] FCA 140; 167 ACSR 294 at [80] and Re Amcor Ltd (No 2) [2019] FCA 842 at [18]-[20]. I am not concerned that the apparently low voter turnout reflects some deeper problem with the notification of the scheme meeting or its conduct. 12 In accordance with order 11 of the first orders, LPI published a notice of the second court hearing, as it was then listed, for approval of the scheme via the ASX Announcements platform on 23 January 2024. The second hearing was subsequently adjourned on two occasions. On each occasion new announcements were published notifying of the revised second court hearing dates. 13 No notice of appearance has been filed or served on LPI by any person intending to appear at the hearing today. On the matter being called, no one has appeared, other than Codelco, which appears in support of the relief that is sought. 14 On the evidence before me, I am satisfied that the scheme is fair and reasonable. In that regard, I take account of the following. 15 First, LPI's board of directors unanimously recommended that LPI shareholders vote in favour of the scheme in the absence of a superior proposal and subject to the independent expert concluding and continuing to conclude that the scheme is in the best interests of LPI shareholders. 16 Secondly, no superior proposal has been proposed to LPI by any party. 17 Thirdly, the independent expert concluded, and has not withdrawn or qualified that conclusion, that the scheme is fair and reasonable and is therefore in the best interests of LPI shareholders in the absence of a superior proposal. 18 Fourthly, the scheme was agreed to by the requisite statutory majorities of LPI shareholders, as dealt with above. 19 Fifthly, no notice of appearance has been filed or served and no one has appeared to oppose. 20 Sixthly, all material information has been provided to LPI shareholders. 21 Evidence has been tendered that satisfies me that all conditions precedent to the scheme, other than, of course, the Court's approval and the lodgement of the Court's approval with ASIC, have been fulfilled. 22 Section 411(11) of the Act requires, subject to s 411(12), that a copy of the Court's order approving a scheme of arrangement 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 or to determine the period during which it shall apply. 23 In the context of this scheme of arrangement there is no utility in having the Court order annexed to the constitution of LPI as the Court orders sought do not effect any change to LPI's constitution. In that regard, I refer to Re Anaconda Nickel Holdings Pty Ltd [2003] WASC 19; 44 ACSR 229 at [65] and Re GBST Holdings Ltd [2019] NSWSC 1503 at [15]. Accordingly, as the scheme will not involve a modification of any rights of security holders or of creditors or persons dealing with LPI, there is no need to insist on compliance with section 411(11) of the Act. 24 To conclude, I am satisfied that the scheme as proposed and voted on should be approved. I make orders accordingly. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart.