RE SPARTAN RESOURCES LIMITED; EX PARTE SPARTAN RESOURCES LIMITED [2025] WASC 218 (3 June 2025)

(a) in the absence of a superior proposal, the Scheme is fair and reasonable and in the best interests of Shareholders; and

(b) in the absence of an alternative offer, the Takeover Bid is fair and reasonable to Shareholders.

1. In reaching these conclusions, BDO compared the value of the Consideration to the value of a Share prior to the announcement of the proposed transactions. BDO assessed the value of the Consideration (on a minority interest basis) to be between $1.885 and $2.128 with a preferred value of $2.007. This was within the range of their assessment of the value of a Share of between $1.75 and $2.16 per Share (on a diluted and controlling interest basis), with a preferred value of $1.95. The basis for the valuation and the methodologies used are set out in the Independent Expert Report (IER). BDO's consideration of the advantages, disadvantages, and other factors that are likely to impact shareholders are comprehensively set out in the IER.
2. The Scheme will not be implemented unless and until a number of conditions precedent are satisfied or waived. These are contained in the TID,[13] and summarised in the Transaction booklet.[14]
3. Ramelius' obligations under the Scheme are supported by a deed poll (Deed Poll).[15]

1. Pursuant to s 411 of the Act, a scheme of arrangement can be used to re‑organise a company in a manner which will be binding on its members, provided that:

(a) the arrangement is agreed by the requisite majorities as prescribed by s 411(4)(a) of the Act, namely 75% of shareholders by value and 50% by number; and

(b) the court approves the arrangement pursuant to s 411(4)(b) of the Act.

1. There are three stages to an application under s 411 of the Act. First, the court approves the convening of a scheme meeting and the draft explanatory statement to be sent to the scheme members. Second, the members vote on the proposed scheme at the scheme meeting. Third, assuming the first two stages have occurred, the court approves the proposed scheme.[16]
2. There are well‑established principles which apply to the first stage of proceedings. The court will order the convening of the scheme meeting and approve the dispatch of the scheme booklet if it is satisfied that:[17]

(a) there is a pt 5.1 body;

(b) there is a compromise or arrangement within the meaning of s 411 of the Act;

(c) the proposed scheme booklet contains the prescribed information[18] and provides proper disclosure;[19]

(d) the scheme is bona fide and properly proposed;

(e) the Australian Securities and Investments Commission (ASIC) has had at least 14 days' notice of the proposed hearing date and a reasonable opportunity to examine the terms of the scheme and the scheme booklet and make submissions;[20]

(f) the procedural requirements of the Act and the Supreme Court (Corporations) (WA) Rules 2004 (Corporations Rules) have been met; and

(g) the scheme is of such a nature that, if it receives the necessary statutory majority at the scheme meeting, the court will be likely to approve it.

1. The standard of review that is undertaken by the court at the first court hearing is whether the proposed scheme is not inappropriate and is one that sensible businesspeople might consider is of benefit to its members.[21] If the proposed arrangement is one that appears fit for consideration by a meeting of members and is a commercial proposition likely to gain the court's approval if passed by the necessary majority, leave should be given to convene the meeting.[22]

Should orders be made for the convening of the Scheme Meeting and the dispatch of the transaction booklet?

1. At the first court hearing, Spartan relied on six affidavits, being:

(a) two affidavits of Thomas David Gray, a partner of Herbert Smith Freehills, the solicitors for Spartan, filed 20 May 2025 and 30 May 2025;

(b) two affidavits of David Allan Thomas Coyne, an executive director and joint company secretary of Spartan, filed 27 May 2025 and 3 June 2025;

(c) an affidavit of Mark William Zeptner, the managing director of Ramelius, filed 28 May 2025; and

(d) an affidavit of Philip Andrew Lucas, a partner of Allion Partners Pty Ltd, the solicitors for Ramelius, filed 28 May 2025.

1. These affidavits prove the formal matters that Spartan is required to establish.
2. On the materials before me on 3 June 2025, there was nothing to suggest the Scheme was not properly proposed.
3. There are a number of conditions precedent to the Scheme.[23] Neither Spartan and Ramelius are aware of any reason to believe that any of these will not be satisfied or waived prior to the Implementation Date.[24]

1. Prior to the first court hearing, I was provided with a copy of the draft Transaction booklet,[25] as well as an updated Transaction booklet, following conferral with ASIC.[26]
2. Ultimately, I was and am satisfied that there will be proper disclosure as to the effect of the proposed Scheme and the material considerations for Shareholders in the updated Transaction booklet.
3. There was evidence before me as to the due diligence and verification process undertaken by both Spartan and Ramelius.[27] On the basis of this evidence, I accept that Spartan and Ramelius have undertaken processes to verify the accuracy of statements attributable to each of them in the Transaction booklet and to ensure that the Transaction booklet does not omit any material information.
4. Based on the checklist provided by Spartan,[28] I was and am satisfied the Transaction booklet contained the prescribed information in accordance with s 412(1)(a)(ii) of the Act and sch 8 of the Corporations Regulations 2001 (Cth).
5. In written and oral submissions, senior counsel for Spartan addressed a number of specific matters in relation to the Scheme and the proposed transactions, as set out below.

1. Spartan proposes to send a single Transaction booklet to Shareholders addressing the requirements for both the explanatory memorandum for the Scheme and the bidder's statement and target's statement for the Takeover Bid. Senior counsel for Spartan drew to my attention a number of authorities where the dual scheme and takeover process had been considered and a single transaction booklet used.[29]
2. While I accept that there is some complexity that arises from the use of a single Transaction booklet, neither ASIC nor any other interested party has raised any issue at this stage in relation to the structure of the transaction or its disclosure. In addition, as others have noted,[30] it is important that there be consistency between the courts in relation to their approach to applications under s 411 of the Act. In my view, there is no reason to depart from the approach that has previously been adopted. To the extent that any issues of public policy, fairness, or other issues arise, these matters can be addressed at the second court hearing.

1. On the evidence before the court, I was and am satisfied that Shareholders are adequately protected against the risk they will not receive the Consideration or have the capacity to sue Ramelius to recover their Shares or damages.
2. In that respect, I have had regard to the terms of the Scheme and the Deed Poll. Pursuant to the Scheme:[31]

(a) Ramelius is required to deposit (or procure the deposit of) cleared funds of the amount equal to the total cash portion of the Consideration into an Australian dollar denominated trust account with an authorised deposit-taking institution[32] operated by Spartan as trustee for the Shareholders by no later than the business day prior to the Scheme Implementation Date;

(b) Spartan is required to pay the cash portion of the Consideration to its Shareholders on the Scheme Implementation Date;

(c) in relation to the issue of shares, Ramelius is required to issue and allot the new shares as part of the Consideration to each Shareholder (except for Ineligible Foreign Shareholders and Unmarketable Parcel Shareholders) on the Scheme Implementation Date and procure the entry of the name and address of each in its share register;

(d) transfer of the Shares to Ramelius is subject to provision of the Consideration; and

(e) beneficial title does not pass unless the Consideration has been issued.

1. The statements made in the Transaction booklet as to the funding available to Ramelius have been verified by Ramelius.
2. All of these arrangements are supported by the Deed Poll. By the Deed Poll, Ramelius covenants in favour of each Shareholder that it will perform all actions attributed to it under the Scheme and acknowledges the Deed Poll may be relied on and enforced by any Shareholder in accordance with its terms.

1. The TID contains the customary lock up devices (including, where usual, the fiduciary carve-out) which operate for a period of up to nine months (Exclusivity Period).[33] In certain circumstances, Spartan and Ramelius may be liable to pay a break fee of $23,800,000 (Break Fee).[34]
2. In considering whether the exclusivity provisions impact on completion of the transaction and the duties of the directors, the court has regard to:[35]

(a) the period of the exclusivity, which should be no more than a reasonable period and capable of precise ascertainment;

(b) whether the provisions are subject to an overriding obligation that the directors do not breach their fiduciary duties or are otherwise unlawful; and

(c) whether there is adequate prominence given to these provisions in the scheme booklet.

1. In this case, the Exclusivity Period potentially extends for a period of nine months.[36] This is at the upper end of what is commonly considered to be an acceptable exclusivity period.[37] However, given the possible regulatory issues associated with the dual transaction structure, I am satisfied that the Exclusivity Period is not unreasonable, particularly given the fiduciary carve‑outs.
2. Mr Zeptner and Mr Coyne have explained the commercial justification for the Break Fee.[38] I accept their evidence that the inclusion of these provisions in the TID followed arm's-length commercial negotiations in which all parties were separately advised and represented by external legal and financial advisers.
3. The amount of the Break Fee is 1% of the equity value of Spartan based on the implied value of the Consideration as at 14 March 2025, being the last day of trading of Shares on the ASX prior to the announcement of the Scheme, which is within generally accepted commercial parameters. The Break Fee is intended to compensate the parties for their costs if the Scheme do not proceed. The Break Fee is payable by both parties in certain circumstances and is not payable if Shareholders do not vote in favour of the Scheme. In my view, the amount of the Break Fee is unlikely to influence Shareholders in their decision to vote on the Scheme.
4. Importantly, the exclusivity arrangements and Break Fee are prominently disclosed in the Transaction booklet.[39]

1. Spartan's directors have unanimously recommended that, in the absence of a superior proposal, Shareholders vote in favour of the Scheme.
2. Spartan drew my attention to the fact that each of the directors of Spartan has an interest in Shares,[40] and that one of the directors, Anna Nueling, has a beneficial interest in 369,956 Ramelius shares. All of the directors (apart from Ms Nueling) also hold Performance Rights, which will vest and be converted into Shares prior to the Scheme Record Date.
3. If the Scheme is implemented, it is contemplated that the executive positions currently occupied by the directors will be made redundant and that Mr Lawson and Ms Carpenter will be appointed as non‑executive directors of the merged group. Specifically:[41]

(a) on Mr Lawson's position as Spartan's executive chair becoming redundant, he will receive a payment of $438,269. On his appointment as a non‑executive director role in the merged company, he will receive director's fees of $135,000 per annum;

(b) on Mr Coyne's position as executive director and joint company secretary becoming redundant, he will receive a payment of $280,385; and

(c) on Ms Carpenter's appointment as a non-executive director of the merged company, she will receive director's fees of $135,000 per annum.

1. Each of the directors considered, with input from Spartan's legal advisers, whether it was appropriate for Mr Lawson and Mr Coyne to make a recommendation on the Scheme to Shareholders, given the quantum of the value of the Consideration that each will receive if the Scheme is implemented. Each believed it was appropriate to make a recommendation, given the importance of the proposed Scheme.[42]
2. For the following reasons, it was and is my view that it was not inappropriate for each of the directors to make a recommendation in respect of the Schemes.
3. First, the consideration each of the directors will receive for their Shares (and, where applicable, Performance Rights, which will convert to Shares prior to the Scheme Record Date if the Scheme is implemented) is the same consideration that every other Shareholder of Spartan will receive.
4. Second, in relation to the redundancy payments, these payments are being made in accordance with the respective director's employment contract with Spartan. The obligations to make these payments arose under arrangements which were entered into prior to the Scheme being proposed, or the TID executed.
5. Despite the quantum of these payments (particularly in relation to Mr Lawson and Mr Coyne), I do not consider that these interests should prevent any of the directors from making a recommendation to Shareholders. None of these payments are being provided as an incentive to promote the Scheme or to ensure their support of the Scheme. None of the directors are substantial shareholders of Spartan and there is no suggestion that their votes will influence the outcome of the Shareholder vote at the Scheme Meeting.
6. Third, and importantly, the transaction booklet sets out in significant detail each of the directors' interests and benefits that they will receive under the Scheme.[43] These interests are fully disclosed to Shareholders, who can assess the recommendations made by each director in the context of that disclosure.

1. The Transaction booklet discloses that Spartan has received voting intention statements from three of its major shareholders who, as at 8 May 2025, collectively hold approximately 17% of the Shares on issue. These shareholders have confirmed that they intend to vote in favour of the proposed Scheme, in the absence of a superior proposal and subject to the independent expert continuing to conclude that the Scheme is in the best interests of Shareholders.[44]
2. I was satisfied these statements are appropriately disclosed in the Transaction booklet, consistent with both the Takeovers Panel Guidance Note 23: Shareholder Intention Statements, and previous authorities.[45]

1. Both the TID and Scheme specifically address the capital gains withholding tax mechanism that may apply to any substantial foreign shareholders.[46] The TID specifically permits Ramelius, if required to pay to the Australian Taxation Office (ATO) any amount in relation to the acquisition of Shares, to withhold that amount and remit it to the ATO. I accept that this provision is not class creating and is simply a mechanism to enable Ramelius to comply with Australian taxation laws.
2. Importantly, the Transaction booklet (in the taxation section) specifically addresses the foreign resident capital gains tax rules and its implications for relevant shareholders.[47]

1. Spartan drew my attention to the steps it proposes to take in terms of Shareholder communications. This will include both outbound and inbound telephone communications, as well as engagement with major proxy advisers.
2. I was provided with a draft script of the proposed telephone communications.[48] The communications are consistent with the disclosure in the transaction booklet, in respect of which approval is sought. In relation to the engagement with major proxy advisers, Spartan proposes that Sodali & Co Pty Ltd will facilitate this process and will use a question and answer script and PowerPoint presentation. It is not intended that these materials will go beyond the information contained in the Transaction booklet and will emphasise the importance of reading the Transaction booklet in full.[49] Spartan proposes that it will provide a report to the court at the second court hearing, consistent with the approach taken in respect of shareholder communication.
3. For completeness, Spartan also drew my attention to prior Shareholder communications, including investor presentations on 17 March 2025 and 10 April 2025, and the quarterly statement of 28 April 2025. These announcements refer to the proposed transaction and the TID, and the transaction booklet.[50] I accept the submission of senior counsel for Spartan that, on their face, these communications do not affect the integrity of the disclosure in the Transaction booklet or the steps to be taken in respect of the Scheme. That said, the question as to whether any communications compromise the integrity of the scheme process is a matter that will be considered in detail at the second court hearing.

1. Spartan also drew my attention to the deemed warranty provisions in the proposed Scheme. Deemed warranty clauses are not unusual and are accepted provided there is adequate disclosure that they are conditions.
2. These provisions are also drawn to the attention of Shareholders in the Transaction booklet.[51] I was and am satisfied that adequate disclosure has been given of these clauses.

1. Spartan sought orders pursuant to s 1319 of the Act for the electronic dispatch of the Transaction booklet and applicable proxy forms by email to Shareholders who have nominated to receive communications electronically (Email Shareholders). In respect of its Shareholders who have nominated to receive communications in hardcopy, hardcopy documents will be dispatched by post.
2. Shareholders who have not made any election, as well as those Email Shareholders in respect of whom notice is received that electronic delivery was ineffective, will be sent a letter with details of the website from which the Transaction booklet can be accessed, together with a copy of the applicable proxy form.
3. I was and am satisfied that the proposed orders for dispatch of the Transaction booklet are appropriate.

1. Senior counsel for Spartan informed the court that, if the proposed Scheme is approved, Spartan intends to rely on s 3(a)(10) of the Securities Act 1933 (US) (Securities Act), which provides an exemption from certain registration requirements under United States law. A condition of the exemption is the court consider the fairness of the scheme of arrangement, which occurs at the second court hearing.
2. For the purposes of the first court hearing, it is sufficient to record that I have been informed that Spartan intends to rely on the exemption provided by s 3(a)(10) of the Securities Act. Further consideration of this matter will otherwise be dealt with at the second hearing (assuming that Shareholders approve the proposed Scheme by the requisite statutory majorities).

1. At the first hearing, I was satisfied that the substantive and procedural requirements under s 411(1) and s 1319 of the Act had been satisfied and that the proposed Scheme were fit for consideration by Spartan's members.
2. For these reasons, at the conclusion of the hearing on 3 June 2025, I made orders in terms of Annexure 'A' of this judgment in respect of the Scheme.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Affidavit of Thomas David Gray filed 20 May 2025 [7] - [8], 'TDG-1'.

[2] Affidavit of Thomas David Gray filed 20 May 2025, 'TDG-2'.

[3] Affidavit of Thomas David Gray filed 20 May 2025 [9] - [10], 'TDG-2', TID cl 2.1(b), 2.3, 3.2, Sch 2 [1.8(c)].

[4] Affidavit of David Allan Thomas Coyne filed 27 May 2025 [10].

[5] Affidavit of David Allan Thomas Coyne filed 27 May 2025 [10].

[6] Affidavit of Mark William Zeptner filed 28 May 2025 [8] - [9].

[7] TID cl 5.3, Sch 1 (definition of 'Scheme Consideration'); Scheme cl 5.1, Sch 1 (definition of 'Scheme Consideration').

[12] Affidavit of David Allan Thomas Coyne filed 27 May 2025, 'DATC-17'.

[15] Transaction booklet, Annexure 3 (affidavit of Thomas David Gray filed 30 May 2025, 'TDG-8', page 768).

[16] Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358 [7].

[17] Re SRG Ltd [2018] FCA 1092 [11]; Re Wesfarmers Ltd [2018] WASC 308 [60].

[18] Corporations Act 2001 (Cth) s 412(1)(a)(ii); Corporations Regulations 2001 (Cth) reg 5.1.01, sch 8 cl 8301 ‑ cl 8310.

[19] Corporations Act 2001 (Cth) s 412(1)(a)(i).

[20] Corporations Act 2001 (Cth) s 411(2)(b).

[21] Re Amcom Telecommunications Ltd [2015] FCA 341 [10].

[22] Re SRG Ltd [12]; Re Wesfarmers Ltd [72] - [76].

[23] TID cl 3.1; Transaction booklet [4.4].

[24] Affidavit of David Allan Thomas Coyne filed 27 May 2025 [46] - [49].

[25] Affidavit of Thomas David Gray filed 20 May 2025, 'TDG-3'.

[26] Affidavit of Thomas David Gray filed 30 May 2025, 'TDG-8'.

[27] Affidavit of David Allan Thomas Coyne filed 27 May 2025 [60] - [73]; Affidavit of Mark William Zeptner filed 28 May 2025 [21] - [31], 'MZ-2' - 'MZ-7'.

[28] Plaintiff's submissions filed 28 May 2025, pages 18 - 20.

[29] See, for example, Re Azure Minerals Ltd [2024] WASC 58 [50] ‑ [53]; Re Genex Power Ltd [2024] NSWSC 752 [14]; Re Eumundi Group Limited [2024] FCA 1510 [13] ‑ [14], [63] ‑ [65].

[30] See, for example, Re Genex Power Ltd [14]; Re Eumundi Group Limited [66].

[32] As defined by the Banking Act 1959 (Cth). See Scheme, Sch 1 (definition of 'ADI').

[35] Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400 [29] ‑ [35]; Re Kangaroo Resources Ltd [2018] WASC 327 [57] ‑ [61]; Re Pacific Energy Ltd [2019] WASC 443 [58].

[36] TID cl 12, cl 1 (definition of 'Exclusivity Period').

[37] See, for example, Re Tawana Resources NL [2018] FCA 1456 [33] ‑ [36] (nine months); Re Kangaroo Resources Ltd [63] ‑ [65] (nine and a half months).

[38] Affidavit of David Allan Thomas Coyne filed 27 May 2025 [50] - [54]; Affidavit of Mark William Zeptner filed 28 May 2025 [37] - [42].

[40] Transaction booklet [2.2], [6.9].

[41] Transaction booklet [6.9.5], [8.6]. These figures are inclusive of superannuation and less any applicable tax.

[42] Affidavit of David Allan Thomas Coyne filed 27 May 2025 [91] - [93].

[43] Transaction booklet [6.9.5], [8.6].

[44] Affidavit of David Allan Thomas Coyne filed 27 May 2025 [88] - [89]; Transaction booklet, page 8.

[48] Affidavit of Thomas David Gray filed 30 May 2025, 'TDG-13' - 'TDG-14'.

[49] Second affidavit of David Allan Thomas Coyne filed 3 June 2025 [7].

[50] Affidavit of Thomas David Gray filed 20 May 2025, 'TDG-2' (page 138); Affidavit of David Allan Thomas Coyne filed 27 May 2025, 'DATC-10' (page 309).

[51] Transaction booklet [3], [4.7].