MMA Offshore Limited, in the matter of MMA Offshore Limited (No 2) [2024] FCA 765

COLVIN J: 1 Orders were made for a meeting of shareholders in MMA Offshore Limited to be convened to consider a scheme of arrangement: MMA Offshore Limited, in the matter of MMA Offshore Limited [2024] FCA 731. A meeting of shareholders was held on 8 July 2024. A resolution to approve the scheme was passed by the requisite majorities. On 10 July 2024, orders were made approving the scheme. These are my reasons for making those orders. For reasons given in ordering the meeting to be convened, these reasons are in short form.

Statutory and procedural requirements 2 On the basis of the submissions advanced for MMA Offshore, I was satisfied that the evidence before the Court established: (1) the scheme booklet and the supplementary scheme booklet were registered with the Australian Securities and Investments Commission (ASIC); (2) the scheme booklet and the supplementary scheme booklet were dispatched in accordance with the Court's orders; (3) the meeting to consider the scheme had been convened and held in accordance with those orders; (4) the procedures for return and lodgement of proxies were conducted in accordance with those orders. In that regard, I explain below what occurred in consequence of orders deferring the date for convening the meeting; and (5) the resolution to approve the scheme was supported by 65.20% of shareholders present and voting and 92.30% of the votes cast (measured by value) were in favour of the scheme. 3 No party sought to appear to oppose the scheme. In particular, ASIC did not appear to object to the approval of the scheme. The scheme was supported by Cyan MMA Holdings Pty Ltd (Cyan), the other party to the agreement to implement the scheme if approved.

New shareholders 4 Although no express requirement was imposed by the orders for convening the meeting when it came to new shareholders, MMA Offshore took steps to ensure that the scheme booklet and supplementary scheme booklet were dispatched to those persons who became shareholders of MMA Offshore after 5.00 pm on 24 May 2024.

Cut-off time for proxies 5 The orders made to convene the meeting provided for voting by proxy and, in that regard, provided for a proxy lodgement cut-off time of 9.00 am on 29 June 2024. When orders were made varying the date for convening the scheme meeting, the despatch of a supplementary scheme booklet was approved. The orders then made included an order in the following terms: Valid proxy forms for the meeting of members of the plaintiff convened by the Court on 24 May 2024 (Scheme Meeting) that have been lodged by Shareholders remain valid for the purposes of the Scheme Meeting, in accordance with their terms, but any appointment pursuant to those proxy forms may be varied or revoked by the appointing Shareholder at any time up to 9.00 am AWST on 6 July 2024. 6 The contents of the booklet reflected the above order and also referred to an extended cut-off time for proxies of 9.00 am on 6 July 2024. However, there was no order expressly extending the cut-off time as expressed in the earlier orders. 7 Thereafter, ASX announcements were made referring to the cut-off time being extended to 9.00 am on 6 July 2024. 8 The extended time was applied for the purposes of determining proxies to be accepted at the meeting to consider the scheme of arrangement. 9 From the perspective of shareholders, it was the scheme booklet and supplementary scheme booklet and the ASX announcements that would have provided them with information about proxies rather than the terms of the orders themselves. 10 In the above circumstances, I was satisfied that the course of accepting proxies that had been lodged up until the extended time was appropriate and that there was no reason to conclude that there may have been any confusion amongst shareholders as to the time for lodgement of proxies given the information provided to them.

Voter turnout 11 Adopting the approach explained by Kennett J in Allogio Group Ltd, in the matter of Allogio Group Ltd (No 2) [2023] FCA 1053 at [14]-[16], with which I respectfully agree, I was satisfied that the level of voter turnout did not raise any possible concern. Of the 3,476 shareholders on the register, 546 shareholders voted in person or by proxy and 74.9% of all shares held were voted.

Variation to the deed poll 12 Pursuant to the agreed terms for implementation of the scheme, Cyan agreed to execute a deed poll. The deed poll stated (in cl 7.1(b)) that a provision of the deed may not be varied, altered or otherwise amended after the court date convening the meeting to consider the scheme of arrangement unless there was written agreement between MMA Offshore and Cyan 'and the Court indicates that the amendment would not of itself preclude approval of the Scheme'. In my view, a provision of that kind does not require the parties to obtain some formal indication or ruling or order from the Court for the purposes of the provision. 13 At the time that orders were sought adjourning the meeting and for the dispatch of a supplementary booklet, certain minor amendments to the deed poll were brought to the Court's attention, as were the terms of cl 7.1(b). Those matters having been brought to the attention of the Court, orders were made. However, there was no express reference made to those events in the Court's reasons as to the making of those orders. 14 In the circumstances, out of an abundance of caution, I formally noted the position at the time of making orders approving the scheme of arrangement. Although formal orders have been made in similar circumstances (see Independent Practitioner Network Ltd, in the matter of Independent Practitioner Network Ltd (No 2) [2008] FCA 1593 at [9] (Lindgren J); and Mosaic Oil NL, in the matter of Mosaic Oil NL (No 2) [2010] FCA 1186 (Jacobson J)), I was not persuaded that it was necessary or appropriate for orders of that kind to be made. The Court cannot be required by the terms of an agreement to undertake some form of assessment for the purposes of the agreement. Rather, by a clause like cl 7.1(b), the parties are ensuring that particular events which may have consequences for whether there might be some challenge to the making of an order if not brought to the attention of the Court are indeed communicated to the Court so that it may be concluded that those events were considered by the Court to not preclude the making of the order.

Call scripts 15 In my earlier reasons I observed at [10] that: … it is proposed [by MMA Offshore] that there be steps taken in relation to shareholder engagement. A third party has been engaged to provide services. Scripts in relation to communications with shareholders as part of that process are to be provided to ASIC for review. 16 Scripts had been communicated to ASIC. No matters were raised by counsel arising out of those communications save to make clear that it was not being suggested that by such communications ASIC was in some way approving the scripts. Rather, it was a process by which ASIC might raise concerns. 17 In my earlier reasons I explained the expectation that counsel would raise any possible issues that may arise from those communications. Consistently with the approach outlined in my earlier reasons, there being no issue identified in relation to shareholder communications, I did not consider the fact that they had occurred to be a reason why the order sought should not be made.

Supervisory discretion 18 The Court has a discretion whether to approve the scheme. The nature of the discretion and the matters to be taken into account were explained by Vaughan J in Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd (No 2) [2018] WASC 357 at [13]-[16] and Banks-Smith J in Opus Group Limited, in the matter of Opus Group Limited (No 2) [2018] FCA 1413 at [6]‑[7]. As to those discretionary matters, I was satisfied that: (1) there was no indication that the shareholders had acted otherwise than in good faith; (2) the scheme was for an acquisition transaction of a kind ordinarily approved, it was a simple proposal for cash to be paid for each share in respect of a company without a complex shareholding structure; (3) the characteristics of the scheme were explained in the explanatory material in terms that enabled shareholders to make their own assessment of the commerciality of the scheme and the risks; (4) the scheme was supported by an independent expert report that in the absence of a superior proposal the scheme is in the best interests of shareholders; (5) the scheme consideration had been increased in circumstances explained in my earlier reasons; (6) the extent of voter support for the scheme supports its fairness; (7) the information provided in the explanatory material was the subject of a detailed verification process and was approved by the board for release on the basis that on the available evidence its contents were true and correct in all material respects; (8) there have been ASX announcements concerning the scheme; (9) there is no evidence to indicate or suggest oppression of a minority; (10) evidence was provided that the various conditions precedent to the scheme have been satisfied; and (11) as has been explained, matters relevant to the exercise of the Court's discretion had been drawn to the Court's attention. 19 Further, there was no matter that I identified that might raise practical or legal difficulty for the implementation of the scheme and rational commercial reasons had been advanced to support the scheme.

Satisfaction of s 411(17) and public policy 20 There was produced to the Court a statement in writing by ASIC that it had no objection to the scheme. Production of the letter deals with those aspects of s 411(17) of the Corporations Act 2001 (Cth) which may stand in the way of approval, but the Court retains discretion as to whether to approve: Re Wesfarmers at [18]. There was no indication that the scheme was proposed for the purpose of avoiding Chapter 6 of the Corporations Act nor any indicated aspects that might give rise to public policy concerns.

Exemption from s 411(11) 21 An exemption was sought from the requirement in s 411(11) of the Corporations Act that a copy of the Court's order be annexed to every copy of the constitution of MMA Offshore issued after the order was made. In circumstances where the scheme did not effect any change to the constitution of MMA Offshore I was satisfied that it was appropriate to exercise the power conferred by s 411(12) to exempt MMA Offshore from compliance with that requirement.

Conclusion 22 The orders sought were in standard terms and those orders were made. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin.