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FARRELL J: 1 These are the reasons for orders made under ss 411(4)(b) and 411(12) of the Corporations Act 2001 (Cth) approving a proposed scheme of arrangement between Palladium Group Holdings Pty Ltd (Palladium) and its shareholders in the form of Annexure C to the document which was marked Exhibit 1 in these proceedings (scheme booklet). 2 On 29 July 2020, the Court made orders that: (a) Palladium convene a meeting of its shareholders for the purpose of considering, and if thought fit, agreeing (with or without modifications) to the proposed scheme (scheme meeting); (b) The scheme meeting be held on 24 August 2020 at Level 7, 307 Queen Street, Brisbane, Queensland at 10 am (AEST); (c) The chairperson of the scheme meeting be Ann Caroline Sherry, or failing her, John Anthony Eales; (d) The resolution to approve the scheme be decided by way of a poll; (e) Palladium cause to be issued a copy of the scheme booklet and the proxy form approved for despatch to each scheme participant who has nominated an electronic address for the purpose of receiving notices of meeting by sending an email in the form of the document which is Annexure I (page 478) of the affidavit of David Peter Anthony Campbell sworn on 28 July 2020. If an email notification of a failure of delivery was received, a copy of the scheme booklet and proxy form and reply paid envelope be issued by hand, ordinary pre-paid post or courier to the relevant scheme participant at their address in Palladium's register of members. (f) Notice of the hearing of the application for orders approving the proposed scheme be published in The Australian on or before 26 August 2020 by an advertisement substantially in the form of Annexure A to the orders. 3 Due to the Border Restriction Direction (No. 11) issued by Queensland Health on 7 August 2020, which prohibited any person who had been in New South Wales in the previous 14 days from entering Queensland other than Queensland residents and those in designated "border zones", Ms Sherry and Mr Eales, as current residents of New South Wales, were not permitted to enter Queensland to act as chairperson of the scheme meeting to be held on 24 August 2020. Accordingly, the Court made the following order: Pursuant to s 1319 of the Corporations Act 2001 (Cth), the chairperson or alternate chairperson of the scheme meeting be permitted to attend and chair the meeting by Microsoft Teams or Lifesize video-conferencing technologies. 4 Palladium relied on affidavits read at the first court hearing: see Palladium Group Holdings Pty Ltd, in the matter of Palladium Group Holdings Pty Ltd [2020] FCA 1123 (Re Palladium Group Holdings Pty Ltd) at [45]. 5 Palladium also relied on the following five affidavits. 6 First, Ms Sherry's affidavit sworn on 31 August 2020. Ms Sherry gave evidence concerning the conduct of the scheme meeting, including that she acted as chairperson of the meeting held on 24 August 2020 commencing at 10 am at Level 7, 307 Queen Street, Brisbane, Queensland; that a quorum was present (being at least two natural persons in accordance with cl 15.2 of Palladium's constitution); that 130 of 158 members (or 82.3% of members) were present in person or by proxy; that those members cast votes in respect of 98.8% of all of the issued shares, being 11,042,622 of 11,174,123 shares; and no votes were cast against the scheme. 7 Second, the affidavit of Roberta Pamela Bozzoli sworn on 31 August 2020. Ms Bozzoli is a partner at Thomson Geer, Palladium's lawyers. Ms Bozzoli gave evidence in relation to: (a) Lodgement with the Australian Securities and Investments Commission (ASIC) of the registration copy of the scheme booklet and the Court's orders made on 29 July 2020 and related documents and registration of the scheme booklet by ASIC; (b) Publication in The Australian on 25 August 2020 of an advertisement of the time and place of the second court hearing generally in the form of Annexure A to the Court's orders made on 29 July 2020; (c) Minutes of the scheme meeting held at 10 am on 24 August 2020. Those minutes are consistent with the evidence given by Ms Sherry; and (d) Minutes of the general meeting held at 11 am on 24 August 2020. Those minutes indicate that: (i) No director was present at the meeting. The members present elected Christopher Hirst as chairperson of the meeting. (ii) In relation to the resolution to approve the giving of financial assistance by Palladium in the manner set out in the scheme booklet (financial assistance resolution), 121 members were present and voted in person or by proxy, corporate representative or attorney in respect of 6,620,449 shares. All votes were cast in favour of the resolution. No votes were cast in favour of the financial assistance resolution by Palladium Group Management Pty Ltd (FinCo) or its associates. (iii) In relation to the resolution to approve FinCo acquiring all of the shares in Palladium for the purpose of cl 9.10 of Palladium's constitution (constitution resolution), 130 members were present and voted in person, by proxy, corporate representative or attorney in respect of 11,042,622 shares or 98.8% of the Palladium shares on issue. All votes were cast in favour of the resolution. 8 Third, the affidavit of David Peter Anthony Campbell sworn on 31 August 2020. Mr Campbell is the company secretary of Palladium and its general counsel. Mr Campbell gave evidence that: (a) He maintains Palladium's register of members; (b) He was responsible for undertaking the procedural matters necessary to convene the scheme meeting; (c) As at 29 July 2020, all scheme participants had nominated electronic addresses for the purpose of receiving notices. There were 158 members with the same number of unique email addresses; (d) He prepared a template email in the form of that set out at Annexure I to his affidavit sworn on 28 July 2020. He separately attached the notice of scheme meeting (including proxy form), the notice of general meeting (including proxy form), a body corporate representative form, a scheme consideration election form and a rollover election form. (e) The email was prepared in such a way as to allow him to send it to all scheme participants' addresses. Delivery receipts were added to the email and receipts were received from all scheme participants; (f) Based on advice from Ms Bozzoli, he believes the scheme booklet attached to the email was the same as Exhibit 1, save for deletion of page numbers on the Annexures. He awaited the final form of the scheme booklet and confirmation of its registration with ASIC before dispatching emails; (g) He received no complaint that any scheme participant was unable to access the email or its attachments and he received no bounce back notifications; (h) He was responsible for management of proxies received for the scheme meeting. He checked the validity of each proxy form received and entered them in a database. One appointment of attorney was received. Five proxies were invalid. Four of those proxies were incomplete and represented 33,100 shares. One proxy was late; it represented 2,200 shares. All directed voting in favour of the scheme. (i) He was appointed as the returning officer for the scheme meeting by Ms Sherry and annexed to his affidavit is a copy of the poll report that he completed; (j) The votes of mezzanine debt lenders were tagged. The mezzanine debt lenders are identified at section 9.2.2 of the scheme booklet and their relevant interests in Palladium shares are set out at section 5.7.2 of the scheme booklet. There were 18 members who were mezzanine debt lenders and they cast 7,788,155 votes on the scheme resolution. Palladium Group SST Pty Ltd as Trustee for the Palladium Group Staff Shareholders Trust held 418,773 of the 7,788,155 shares. As all shareholders voted in favour of the scheme, the votes cast by mezzanine debt lenders had no effect on the outcome of the vote; (k) Scheme participants holding 58.9% of the issued Palladium shares elected or were deemed pursuant to the scheme to have elected to receive cash consideration. Scheme participants holding 41.1% of issued Palladium shares elected to receive scrip consideration; (l) As at 5 pm on 21 August 2020, the number of ineligible foreign shareholders (as defined in the scheme booklet) was 14 and they held 1,185,515 Palladium shares representing 10.6% of all issued Palladium shares. Kim Bredhauer held 1,060,300 shares representing 9.5% of all of the issued Palladium shares. The remaining ineligible foreign shareholders held 122,515 shares, representing 1.1% of the issued Palladium shares; (m) Upon implementation of the scheme, there will be 74 shareholders of Palladium Holdings Pty Ltd (NewCo) who are current employees of Palladium and 11 non-employee shareholders; and (n) He acted as returning officer at the general meeting and the same processes were undertaken in relation to proxies and voting as at the scheme meeting. He verified the minutes of the general meeting in relation to passing the financial assistance resolution and the constitution resolution 9 Fourth, Ms Bozzoli's affidavit sworn on 2 September 2020. Annexed to Ms Bozzoli's affidavit are: (a) Certificates executed on behalf of Palladium, NewCo and FinCo confirming that as at 8 am on 2 September 2020, all conditions precedent to the Scheme Implementation Agreement dated 27 July 2020 (SIA) have been satisfied or waived. The certificates also confirm that as at that time, neither the SIA nor the Deed Poll dated 27 July 2020 had been terminated. (b) ASIC's "usual letter" dated 1 September 2020 given under s 411(17) of the Corporations Act indicating that it does not object to the scheme. 10 Fifth, the affidavit of Mitchell Robert Buckingham sworn on 2 September 2020. Mr Buckingham is a solicitor employed by Thomson Geer. He notes that the advertisement in The Australian published on 25 August 2020 advised Palladium's members and creditors who wished to oppose the scheme to serve a notice of appearance on Thomson Geer at Level 14, 60 Martin Place, Sydney at least one day before the date fixed for the second court hearing. He gives evidence that as at 8.30 am on the date of the second court hearing, no such notice has been served. 11 The Court notes that the second court hearing was conducted on an electronic platform so that calling the matter outside the courtroom served no useful purpose. The Court's listing of this matter gave details of how to attend the hearing electronically. The Court asked anyone in attendance who wished to oppose the Court making orders approving the scheme to make themselves known. No one did so. 12 The matters the Court must take into account in deciding whether to approve the scheme are well-established: see Solution 6 Holdings Limited ACN 003 264 006, in the matter of Solution 6 Holdings Limited ACN 003 264 006 [2004] FCA 1049; (2004) 50 ACSR 113 at [18]-[24] (Jacobson J); Permanent Trustee Company Limited [2002] NSWSC 1177; (2002) 43 ACSR 601 at [8]-[10] (Barrett J); Central Pacific Minerals NL [2002] FCA 239 at [8]-[14] (Emmett J); Seven Network Limited (ACN 052 816 789), in the matter of Seven Network Limited (No 3) [2010] FCA 400; (2010) 77 ACSR 701 at [35]-[39] (Jacobson J). 13 The evidence referred to above discloses that: (a) The orders made by the Court on 29 July 2020 convening the scheme meeting have been complied with. (b) The resolution to approve the scheme was passed by majorities well exceeding the requisite majorities under s 411(4)(a)(ii) of the Corporations Act and ASIC has issued its usual letter under s 411(17). The scheme booklet was registered by ASIC and all other applicable procedural requirements under the Corporations Regulations 2001 (Cth) and the Federal Court (Corporations) Rules 2000 (Cth) have been met. (c) 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) There appears to have been full and fair disclosure to Palladium's shareholders of all information material to the decision whether to vote for or against the scheme; (e) The scheme is fair and reasonable so that an intelligent and honest Palladium shareholder, properly informed and acting alone, might approve it. The Court notes that, in considering whether to approve the scheme, it is not its role to usurp the decision of shareholders by imposing its own commercial judgement on the scheme or to consider whether a better scheme might have been proposed. In this case, the independent expert formed the view that the scheme is fair and reasonable and in the best interests of Palladium shareholders and there is no evidence that the expert has withdrawn that opinion, Palladium's Independent Board Committee recommended that shareholders vote in favour of the scheme and shareholders have voted in favour of approving the scheme by a very significant majority of shareholders. Those who attended the meeting voted unanimously in favour of approving the scheme so that the resolution would have passed even if the votes of the mezzanine debt lenders were not counted; (f) There is nothing to suggest that the scheme has been proposed other than in good faith or that the shareholders voted other than in good faith or that any shareholder was oppressed; (g) Palladium has brought to the Court's attention all matters that could be considered relevant to the exercise of the Court's discretion; (h) The scheme contains the usual measures to protect shareholders against performance risk; and (i) The Court is satisfied that no useful purpose would be served by requiring orders approving the scheme to be annexed to Palladium's constitution so that it is appropriate to make an order under s 411(12) exempting Palladium from compliance with s 411(11) of the Corporations Act. 14 The Court notes that, upon implementation of the scheme, s 113 of the Corporations Act (in relation to the maximum number of non-employee shareholders) will be complied with having regard to Mr Campbell's evidence that there will be 74 shareholders of NewCo who are current employees of Palladium and there will be less than 50 other shareholders. 15 Last: (a) As noted in Re Palladium Group Holdings Pty Ltd at [43], the Court was advised before the first court hearing that Palladium intended to rely on the Court's approval of the scheme at the second court hearing for the purposes of the exemption under s 3(a)(10) of the Securities Act 1933 (US) in relation to the issue of NewCo shares to US shareholders as scheme consideration. (b) As noted above, the independent expert's report concludes that the scheme is in the best interests of Palladium shareholders. (c) At the second court hearing, the Court considered whether the scheme is fair and reasonable. (d) The hearing was open to everyone to whom securities would be issued under the scheme and notice of the hearing in appropriate terms was provided in a timely manner so that those to whom the new securities are to be issued will have an opportunity to oppose or otherwise raise any objection to the scheme. No shareholder has given notice of any intention to appear at the second court hearing to oppose approval of the scheme and no shareholder appeared at the hearing for that purpose. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Farrell.