NSX Limited, in the matter of NSX Limited (No 2) [2025] FCA 1247 (14 October 2025)

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

1. On 9 September 2025, at the conclusion of the first hearing in this matter, I made orders for the convening of a meeting of NSX Limited's shareholders to consider a proposed scheme of arrangement: NSX Limited, in the matter of NSX Limited [2025] FCA 1133. That meeting was duly held and the shareholders voted in favour of the scheme. At a hearing on 14 October 2025, NSX sought, and I made, orders pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) approving the scheme.
2. These are my reasons for doing so.

1. A description of the scheme and relevant background is set out in NSX Limited at [1]-[10].
2. In summary, the scheme provides for the acquisition of 100% of the fully paid and partly paid issued capital in NSX by CNSX Markets Inc.
3. Upon implementation of the scheme, NSX's shareholders will receive a cash price of $0.04 per fully paid NSX share and $0.0004 per partly paid NSX share.

1. In addition to the evidence relied upon at the first Court hearing, NSX read and relied upon:

(a) an affidavit of Mr Scott Evans, the company secretary of NSX, affirmed on 12 October 2025 and accompanying Exhibit SFE-1;

(b) an affidavit of Mr Timothy Hart, the chairperson and a non-executive director of NSX, affirmed on 12 October 2025 and accompanying Exhibit TJH-1;

(c) a certificate executed as a deed by NSX and CNSX dated 14 October 2025 certifying that each of the conditions precedent in clause 3.1 of the scheme implementation deed (other than Court approval) has been satisfied or, if capable of waiver, has been waived by the relevant party; and

(d) a letter from the Australian Securities and Investments Commission dated 13 October 2025 advising that, under s 411(17)(b) of the Corporations Act, it has no objection to the proposed scheme under Part 5.1 of the Corporations Act.

(a) confirming that the orders made on 9 September 2025 and a copy of the scheme booklet were lodged with ASIC;

(b) confirming registration of the scheme booklet with ASIC;

(c) confirming the final scheme booklet as dispatched to scheme shareholders;

(d) confirming that no person had given notice that they intended to appear, and that he was not otherwise aware of anyone proposing to oppose the scheme;

(e) describing the dispatch of the scheme materials to shareholders; and

(f) describing communications with shareholders.

1. Mr Hart's affidavit addressed the conduct and outcome of the scheme meeting and the voter turnout.
2. The evidence presented was consistent with the approach set out in the Federal Court's "Schemes of Arrangement Practice Note (GPN-SOA)".

1. Section 411(4) of the Corporations Act provides that a scheme of arrangement is binding on members and the plaintiff company if:

(a) at a meeting of members, it is passed by a majority of members present and voting (in person or by proxy) and by 75% of votes cast; and

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

1. On an application to approve a scheme, the Court must ensure that all statutory and procedural requirements in relation to the convening and conduct of the meeting have been observed: Quickstep Holdings Limited, in the matter of Quickstep Holdings Limited (No 2) [2025] FCA 397 at [17] (O'Callaghan J). This requires the Court to conclude that the meeting was properly convened and held in accordance with the convening orders, that the resolution to agree to the scheme was duly passed, and that all relevant requirements of the Corporations Act and the Federal Court (Corporations) Rules 2000 (Cth) have been complied with. Once these matters have been established, the Court has a discretion to approve the scheme pursuant to s 411(4)(b) of the Act.
2. In approving a scheme of arrangement, the Court is exercising a supervisory jurisdiction. The Court is not bound to approve the proposed scheme merely because it previously made orders for the convening of a meeting or because the statutory majorities were achieved: Crown Resorts Limited, in the matter of Crown Resorts Limited (No 2) [2022] FCA 710 at [11]. That said, as Beach J stated in Amcor Limited, in the matter of Amcor Limited (No 2) [2019] FCA 842 at [7]:

... shareholders voting collectively at the Scheme meeting are better judges than [the Court] of what is to their commercial advantage and in their interests and accordingly, absent good reason, [the Court] should give effect to their intentions.

1. The matters the Court takes into account on an application for approval under s 411(4) are well known and understood. They include the following (see Quickstep Holdings at [20]):

(a) whether the orders of the Court convening the scheme meeting were complied with;

(b) whether the resolution to approve the scheme was passed by the requisite majorities, and whether other statutory requirements have been satisfied;

(c) whether all conditions to which the scheme is subject (other than Court approval and lodgement of the Court's orders with ASIC) have been met or waived;

(d) whether the scheme is fair and reasonable so that an intelligent and honest shareholder, properly informed and acting alone, might approve it;

(e) whether there was full and fair disclosure to shareholders of all information material to the decision whether to vote for or against the scheme;

(f) whether 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

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

1. The following matters may also be added to the above list:

(a) the shareholders have voted in good faith and not for an improper purpose;

(b) minority shareholders would not be oppressed by the scheme; and

(c) the scheme does not offend public policy.

See Quickstep Holdings Limited (O'Callaghan J) at [20]; Envirosuite Limited, in the matter of Envirosuite Limited (No 2) [2025] FCA 941 at [11] (Moshinsky J); QV Equities Limited, in the matter of QV Equities Limited (No 2) [2024] FCA 727 at [12]- [14] (Halley J); and Crown Resorts Limited, in the matter of Crown Resorts Limited (No 2) [2022] FCA 710 at [13]- [14] (Anderson J).

1. I had the benefit of submissions by Ms T Wong SC. Those submissions noted the following relevant matters. Mr J Giles SC appeared for CNSX and supported the making of the orders.

Registration of Scheme Booklet and lodgement of orders with ASIC

1. On 9 September 2025, the scheme booklet was registered by ASIC as required by s 412(6) of the Act and a copy of the orders dated 9 September 2025 was lodged with ASIC as required by r 3.5(b) of the Rules.

1. Mr Evans deposed that the scheme booklet, which included the Notice of Scheme Meeting, and proxy form were despatched to scheme shareholders in accordance with orders 4 to 5 of the orders I made on 9 September 2025. An outbound telephone campaign was organised and reminder to vote communications were sent to scheme shareholders who had not lodged a proxy form by 23 September 2025.
2. Inbound telephone enquiries were addressed according to scripts handed up at the first Court hearing. Three questions were asked by scheme shareholders at the scheme meeting with no further issues raised.
3. A website regarding the scheme has been active since 9 September 2025. It contained a copy of the scheme booklet for viewing and download as well as hyperlinks to the online voting platform, NSX's annual report, NSX registry contract details and a virtual meeting guide for the scheme meeting. Shareholders were also provided with a hyperlink to submit questions in advance of the scheme meeting.

1. Mr Hart deposed that the scheme meeting was convened at 12pm noon on 10 October 2025. At the meeting, scheme shareholders voted in favour of the scheme, and the scheme was passed by the requisite majorities. Mr Hart noted in particular that:

(a) 94.78% of the votes cast were in favour of the proposed scheme (excluding CNSX and other shareholders who abstained); and

(b) 87.36% of shareholders who cast votes were in favour of the proposed scheme (excluding CNSX and other shareholders who abstained).

1. The evidence showed that the total votes cast at the scheme meeting (in person or by proxy) by 87 scheme shareholders (which excludes CNSX and another abstaining NSX shareholder), represented approximately 70.88% of all votes able to be cast and approximately 12.25% of the total number of NSX shareholders eligible to vote (that is, excluding the excluded shareholder), which is higher than the voting participation rates in NSX's previous three annual general meetings which were as follows:

(a) at the 2022 annual general meeting, shareholder participation was 5.49% and total share voting participation rate was 32.52%;

(b) at the 2023 annual general meeting, shareholder participation was 4.59% and total share voting participation rate was 53.06%; and

(c) at the 2024 annual general meeting, shareholder participation was 4.7% and total share voting participation rate was 56.88%.

1. While the level of voter turnout here was low, it does not give rise to any concern that shareholders were deterred from attending the scheme meeting or did not have notice of it, because:

(a) there is nothing to suggest that there was any irregularity in the manner of despatch of material to the NSX shareholders;

(b) eligible NSX shareholders were provided with notice of the scheme meeting;

(c) there is no evidence of any issue that would have deterred NSX shareholders from voting at, or from attending, the scheme meeting;

(d) the percentage of NSX shareholders who voted at the scheme meeting was greater than the percentage of NSX shareholders who voted at each of NSX's three previous annual general meetings; and

(e) those NSX shareholders who did vote voted overwhelmingly in favour of the scheme.

1. Certainly the percentages of eligible shareholders and eligible shares that voted on the resolution are not out of line with those experienced in other schemes that have recently been approved in this and other Courts in Australia: see Re Security Matters Ltd (ACN 626 192 998) (No 3) [2023] FCA 140 at [80]; Re Amcor Ltd (No 2) at [18]-[20]. Furthermore, as Santow J observed in Re Matine Ltd (1998) 28 ACSR 268 at 295:

The apathetic shareholder who chooses not to vote upon a scheme should not be presumed to be antagonistic to the scheme or to warrant paternalistic protection.

1. Pursuant to clause 3.1 of the scheme implementation deed, the proposed scheme is subject to the satisfaction (or waiver) of a number of conditions precedent for which NSX and CNSX were variously responsible (in addition to shareholder approval of the scheme by the requisite majorities under the Corporations Act and Court approval).
2. At the hearing on 14 October 2025, NSX tendered a certificate executed as a deed by NSX and CNSX dated 14 October 2025 certifying that each of the conditions precedent to the scheme becoming effective had been satisfied or waived.

Notice of the second Court hearing ASIC's position and no notice of objections

1. In accordance with order 8(c) of the orders I made on 9 September 2025, NSX released an ASX announcement on 9 October 2025 substantially in the form exhibited at page 406 of Exhibit MC-2. The announcement contained the details of the second Court hearing on 14 October 2025 and how a shareholder could object to the scheme being approved.

SECTION 411(17)

1. The Court's power to approve a scheme is restricted by s 411(17) of the Corporations Act. At the approval stage, the Court must be satisfied the scheme is not being proposed for the purpose of avoiding the operation of any of the provisions of Chapter 6 (s 411(17)(a)), or there must be provided to the Court a statement in writing by ASIC that it has no objection to the arrangement (s 411(17)(b)).
2. The letter from ASIC to the directors of NSX dated 13 October 2025 described above satisfies the requirements of s 411(17)(b), and consequently, the bar under s 411(17) to approval of the scheme was removed.

1. For the following reasons, I am satisfied that it is appropriate to approve the scheme pursuant to s 411(4)(b) of the Corporations Act.

(a) I am satisfied that the evidence relied upon by NSX establishes all of the procedural matters that are necessary to permit me to approve the scheme.

(b) The majorities required by s 411 have been obtained (and substantially exceeded) in respect of the scheme.

(c) As certified by NSX and CNSX, all conditions precedent to which the proposed scheme is subject (excluding Court approval and lodgement of the Court's approval orders with ASIC) have been satisfied or waived.

(d) I am satisfied that the proposed scheme is fair and reasonable having regard to the following:

(i) the independent expert concluded that the proposed scheme is fair and reasonable and in the best interests of the NSX shareholders, and there has been no change in that opinion since the independent expert report was prepared for inclusion in the scheme booklet;

(ii) no competing proposal has been received; and

(iii) the NSX board unanimously recommended that NSX shareholders vote in favour of the scheme in the absence of a superior proposal and subject to the independent expert continuing to conclude that the scheme is in the best interest of NSX shareholders.

(e) there has been full and fair disclosure to the NSX shareholders of all information that is material to their decision about whether to vote for or against the proposed scheme, and the NSX shareholders were given adequate time to consider properly the materials regarding the proposed scheme prior to the scheme meeting held on 10 October 2025.

(f) NSX did not receive a notice that any NSX shareholder intended to oppose the application for approval of the proposed scheme at the second Court hearing.

(g) ASIC has provided a statement pursuant to s 411(17)(b) of the Act stating that it has no objections to the scheme.

(h) All matters of potential relevance to the approval of the proposed scheme have been disclosed to the Court.

(i) There is nothing before me to suggest that the NSX shareholders voted other than in good faith, that they cast their votes for an improper purpose or that any member had been treated in a way that may be characterised as oppressive. Nor is there anything that casts doubt on the procedural integrity of the processes followed for the scheme meeting.

(j) No public policy concerns have been raised and there is nothing before me to suggest that there should be any such concern.

EXEMPTION FROM S 411(11)

1. NSX sought an exemption pursuant to s 411(12) of the Corporations 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 NSX's constitution that may be issued in the future. NSX submitted that an order of this kind is orthodox where, as here, the rights of shareholders in NSX are not modified in any way.
2. I am satisfied that the exemption is appropriate in circumstances where the scheme does not modify any constitutional rights, nor does it affect the interests of shareholders, creditors or other persons in a way that necessitates the annexure. The current NSX shareholders are fully informed of the proposed scheme and will be informed of the Court's approval of the proposed scheme. In any case, upon implementation of the proposed scheme, NSX will be delisted from the ASX and will become a wholly owned subsidiary of 1001290557 Ontario Inc. (BidCo). There is no utility in requiring compliance with s 411(11).

1. For the foregoing reasons, I made the orders set out above.

I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Owens.