RE SPARTAN RESOURCES LIMITED; EX PARTE SPARTAN RESOURCES LIMITED [No 2] [2025] WASC 299 (1 August 2025)

1. The approval of the proposed Scheme pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Act), or the second court hearing, is the third stage of approval for a scheme of arrangement. The second stage is the approval of the Scheme by the requisite statutory majorities, which occurred at the Scheme meeting.
2. At the second court hearing, the court has two tasks:[5]

(a) to ensure that all statutory and procedural requirements have been satisfied. This includes confirming that:[6]

(i) the meeting was convened and held in accordance with the court's earlier orders;

(ii) the resolution was passed with the requisite statutory majorities;

(iii) the plaintiff otherwise complied with the court's earlier orders; and

(b) to determine, in the exercise of the court's discretion, whether to approve the proposed arrangement.

1. The court has a discretion whether to approve a scheme under s 411(4)(b) of the Act and is not bound to approve a scheme just because the court made orders for the convening of the scheme meeting or because the statutory majorities were achieved at the scheme meeting.[7] That said, the court will usually approach the task on the basis that shareholders are better judges of what is in their commercial interests than the court.[8]
2. The factors that inform the court's discretion are:[9]

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

(b) whether the proposal is fair and reasonable so that an intelligent and honest person who was a member of the relevant class, properly informed and acting alone, might approve it;

(c) 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;

(d) whether there has been full and frank disclosure of all information material to the members' decision;

(e) whether minority shareholders would be oppressed by the scheme;

(f) whether the court is satisfied that the scheme has not been proposed to avoid ch 6 of the Act;

(g) whether ASIC has any objection to the scheme; and

(h) whether the scheme offends public policy.

1. In addition to the affidavits relied upon at the first court hearing, Spartan relied on an additional six affidavits, namely:

(a) two affidavits of Mark William Zeptner, the managing director of Ramelius, filed 24 June 2025 and 16 July 2025;

(b) an affidavit of Flynn Robert Orman Mitchell, a customer success manager at Automic Pty Ltd, filed 16 July 2025;

(c) two affidavits of Michael Ernest Champion Denny, a solicitor at Herbert Smith Freehills Kramer, filed 16 and 18 July 2025;[10] and

(d) an affidavit of Simon Irwin Lawson, the executive chairman of Spartan, filed 16 July 2025.

Compliance with statutory and procedural requirements

1. I was and am satisfied, on the basis of the additional affidavits that were filed by Spartan, that:

(a) a copy of the Orders was lodged with ASIC;[11]

(b) a copy of the Transaction booklet substantially in the form that was approved for distribution by the court at the first court hearing was lodged with ASIC and registered on 4 June 2025;[12]

(c) the Transaction booklet was dispatched to Shareholders in accordance with the orders of the court;[13]

(d) the Scheme meeting was convened and held on 11 July 2025 in accordance with the Orders;[14]

(e) the Scheme was approved by the requisite statutory majorities;[15]

(f) notice of the second court hearing was given by way of an announcement published on the ASX;[16] and

(g) ASIC informed Spartan, pursuant to s 411(17)(b) of the Act, that it has no objection to the proposed Scheme.[17]

1. Counsel for Spartan drew to my attention the voter turnout at the Scheme meeting. The voter turnout was approximately 48.84% of Shares and 6.15% of Shareholders by number.[18] I accept that, on the evidence before me, this was materially higher than the voter turnout at Spartan's two previous annual general meetings.[19]
2. Relatively low shareholder turnout does not prevent the court from making orders approving a scheme of arrangement.[20]
3. In this case, I was and am satisfied that there was a sufficient turnout at the Scheme meeting. I do not consider that the low voter turnout by number of Shareholders, in itself, suggested there had been an error in the dispatch of the Transaction booklet, nor that this should prevent the court from making orders under s 411(4)(b) of the Act.
4. Counsel for Spartan also drew my attention to the fact that the Scheme meeting, Mr Lawson, the chair of the Scheme meeting, advised attendees that the results of the poll would be announced to the ASX shortly after the meeting and then declared the meeting closed.[21] The poll results were the subject of an ASX announcement after the Scheme meeting was closed.[22]
5. The approach of a chairperson advising the meeting that results will be the subject of an announcement pursuant to s 251AA of the Act, following the votes being counted and after the meeting has been formally closed, has been approved by the courts on numerous occasions.[23] No issue arises in the present case concerning the manner in which the polls were conducted or announced.
6. I was and am satisfied that all statutory pre-conditions have been met and turn to the discretionary considerations.

1. I am satisfied on the evidence filed by Spartan that Shareholders voted in good faith and for a proper purpose. The proposed Scheme does not involve any novel treatment of rights. No one appeared at the second court hearing to object to the approval of the proposed Scheme.

1. At the first court hearing, based on the evidence before the court, I was satisfied that the Scheme was fit for consideration by Shareholders and that the proposed Scheme was of such a nature that there was no apparent reason that it should not receive approval if the requisite voting majorities were achieved at the Scheme meeting.
2. Nothing has occurred since the date of the first court hearing to change these views. The Shareholders who voted at the meeting overwhelmingly supported the proposed Scheme.
3. No Shareholder appeared at the second court hearing to oppose the orders sought by Spartan. I was and am satisfied that the proposed Scheme is a Scheme that sensible businesspeople might consider to be of benefit to Shareholders.

All relevant matters brought to the court's attention

1. At the second court hearing, senior counsel for Spartan drew three matters to my attention.
2. The first was confirmation that all remaining conditions precedent (apart from court approval at the second court hearing) had been satisfied or waived.[24]
3. Second, Spartan confirmed that it had undertaken both inbound and outbound communications with Shareholders, had engaged with proxy advisers, and also had informal engagement with some Shareholders. The scripts that were used for each of these as well as details of the information engagement were in evidence before me. I am satisfied that these communications were consistent with the information in the Transaction booklet. In these circumstances, I am satisfied that there is no evidence before the court which would support any inference being drawn that these campaigns and communications compromised the integrity of the voting process.
4. Third, prior to the Scheme meeting, one of the Shareholders who had given a shareholder intention statement sold all of its shares. I accept that the fact that this Shareholder had given a statement did not preclude it from selling its shares. This was disclosed in the Transaction booklet.

1. At the first court hearing, based on the evidence before the court, I was satisfied that the Transaction booklet would provide full and fair disclosure to Shareholders.
2. The additional affidavit evidence filed by Spartan establishes that the Transaction booklet was dispatched in the form approved for distribution by the court. Nothing has arisen to suggest that there was not full and fair disclosure of all information that was material to the decision of Shareholders prior to them voting on the Scheme.

Satisfaction of s 411(17) of the Act and ASIC's view

1. ASIC has provided a written statement to the effect that it does not object to the Scheme pursuant to s 411(17)(b) of the Act.[25] This satisfies the requirements of s 411(17). Having regard to the nature of the proposed transaction, it cannot be said the Scheme was proposed to avoid the operation of ch 6 of the Act.

1. There is no evidence before the court that the proposed Scheme offends any aspect of public policy. Given the nature of the proposed Scheme, it could not be sensibly suggested that the Scheme offends public policy.

Should Spartan be exempt from compliance with s 411(11) of the Act?

1. The final matter was that Spartan sought an exemption from s 411(11) of the Act. In my view, there is no utility in requiring the court's orders approving the Scheme to be annexed to Spartan's constitution as the orders do not affect any change to the constitution. I considered it was and is appropriate in the circumstances of this case to make the orders sought under s 411(11) of the Act.[26]

1. At the first court hearing, senior counsel for Spartan drew my attention to the fact that, if the proposed Scheme was approved, Ramelius intended to rely on that approval to qualify for exemption under s 3(a)(10) of the Securities Act 1933 (USA).[27] This was necessary as one of the requirements for the operation of s 3(a)(10) in practice is that the proposed issuer of the securities must inform the court, whose order is to be relied on, that the issuer will rely on the court's approval in seeking the exemption.
2. This has become common practice in schemes of arrangement.[28]
3. In these circumstances, it is appropriate that I record the following:

(a) I was informed of the shares which are to be offered as Scheme consideration, and an independent expert report has valued these shares and concluded that the Scheme is in the best interests of Shareholders.

(b) The court has held a hearing to determine whether the terms of the proposed Scheme are fair to Spartan's Shareholders so as to determine whether to approve the terms of the Scheme. On an application for approval under s 411(4)(b) of the Act, it is necessary for the court to consider the fairness and reasonableness of the proposed Scheme. In this case, I have determined that the proposed Scheme is fair and reasonable.

(c) The hearing for approval of the proposed Scheme was heard in open court. It was open to all Shareholders of Spartan to attend. Notice of the hearing was provided to all Shareholders in accordance with the orders of the court made on 3 June 2025. Notice of the date of the hearing was included in the Transaction booklet, and the subject of an announcement lodged with the Australian Securities Exchange.

(d) No shareholder of Spartan, or ASIC, gave notice of any intention to appear at the second court hearing and no Shareholder sought leave to appear at the second court hearing to oppose the approval of the Scheme.

(e) A notation was included on the orders made on 21 July 2025 noting that Spartan and Ramelius would rely on this court's approval of the Scheme for the purpose of qualifying for exemption from the registration requirements under s 3(a)(10) of the Securities Act 1933 (USA). The notation was included to facilitate Ramelius qualifying for exemption prior to the publication of these written reasons.

1. For these reasons, at the conclusion of the hearing on 21 July 2025, I found that the substantive and procedural requirements under s 411(4) of the Act had been satisfied and that I should exercise my discretion to make orders approving the proposed Scheme in terms of Annexure 'A' to this judgment.

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

[1] Re Spartan Resources Ltd; ex parte Spartan Resources Ltd [2025] WASC 218 (First Reasons). I have adopted the same defined terms used in the First Reasons in these reasons.

[2] On 6 June 2025, I made further administrative orders permitting affidavit evidence concerning the dispatch of the Transaction booklet to be made on information and belief. This order was not included in the initial Orders as a matter of oversight.

[3] Affidavit of Simon Irwin Lawson filed 16 July 2025 [32].

[4] Affidavit of Simon Irwin Lawson filed 16 July 2025 [31]; Affidavit of Flynn Robert Orman Mitchell filed 16 July 2025 [71], 'FROM-24'.

[5] Re Wesfarmers Ltd [No 2] [2018] WASC 357 [12].

[6] Re International Goldfields Ltd [2004] WASC 112 [7].

[7] Re Wesfarmers Ltd [No 2] [13]; Re Seven Network Ltd [No 3] [2010] FCA 400; (2010) 267 ALR 583 [31].

[8] Re Wesfarmers Ltd [No 2] [13]; Re Seven Network Ltd [No 3] [32] - [33].

[9] Re Seven Network Ltd [No 3] [35] - [40], [50], [52].

[10] At the time of the First Reasons, the solicitors for Spartan were Herbert Smith Freehills. As a result of a merger, this firm is now Herbert Smith Freehills Kramer. A relevant notice was filed with the court to reflect this change.

[11] Affidavit of Michael Ernest Champion Denny filed 16 July 2025 [7].

[12] Affidavit of Michael Ernest Champion Denny filed 16 July 2025 [9].

[13] Affidavit of Simon Irwin Lawson filed 16 July 2025 [13], 'SIL-4' - 'SIL-5'; Affidavit of Flynn Robert Orman Mitchell filed 16 July 2025 [33] - [35], 'FROM-17' - 'FROM-18'; Affidavit of Flynn Robert Orman Mitchell filed 16 July 2025 [28] - [30], [41] - [42]. Copies of the Transaction booklet were also provided to certain shareholders in accordance with requests made during outbound telephone communications conducted by Sodali & Co Pty Ltd.

[14] Affidavit of Simon Irwin Lawson filed 16 July 2025 [15]; Affidavit of Flynn Robert Orman Mitchell filed 16 July 2025 [49] - [50].

[15] Affidavit of Simon Irwin Lawson filed 16 July 2025 [32].

[16] Affidavit of Michael Ernest Champion Denny filed 16 July 2025 [11], 'MECD-3'.

[17] Affidavit of Michael Ernest Champion Denny filed 18 July 2025, 'MECD-7'.

[18] Spartan's submissions for second court hearing [30] - [31].

[19] Affidavit of Flynn Robert Orman Mitchell filed 16 July 2025 [72].

[20] Re Pensana Metals Ltd [No 2] [2020] WASC 17 [12] - [15] and the cases referred to.

[21] Second affidavit of Pia Melanie Drummond filed 22 May 2025 [19] - [23], 'PD-3' - 'PD-4'.

[22] Seventh affidavit of James Patrick McAuliffe filed 26 May 2025, 'JM-41', p 443 ‑ 449.

[23] Re Kingwest Resources Ltd [2023] WASC 190 [117] ‑ [118], citing with approval Re National Australia Bank Ltd [2016] VSC 62 [56] and Re MAC Services Group Ltd [2010] NSWSC 1474.

[24] Affidavit of Michael Ernest Champion Denny filed 18 July 2025, 'MECD-6'.

[25] Affidavit of Michael Ernest Champion Denny filed 18 July 2025, 'MECD-7'.

[26] Plaintiff's submissions filed 16 July 2025 [57] - [58].

[27] Re Oklo Resources Ltd [2022] WASC 289 [89].

[28] See, for example, Re Amcor Ltd [No 2] [2019] FCA 842 [33]; Re Beadell Resources Ltd [No 2] [2019] WASC 53 [62] - [64]; Re Piedmont Lithium Ltd [No 3] [2021] WASC 173 [35] - [37]; Re Vimy Resources Ltd [No 2] [2022] WASC 257 [102] ‑ [103].