Rusina Mining NL, in the matter of Rusina Mining (No 2) [2010] FCA 609

Federal Court of Australia|2010-06-14|Before: Barker J

With regard to the period of 5 days mentioned in order 8 of the Orders made 30 April 2010 the period be abridged to 3 days. 2. Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the plaintiff and its members, a copy of which is annexed hereto and marked "A" is approved. 3. Pursuant to s 411(12) of the Act, the plaintiff be exempted from compliance with s 411(11) of the Act, in relation to the scheme of arrangement referred to in order 1. 4. These orders be entered forthwith.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. ANNEXURE A PURSUANT TO SECTION 411 OF THE CORPORATIONS ACT

In this Scheme, unless the contrary intention appears or the context requires otherwise: AIM means the AIM Market of the London Stock Exchange plc. ASIC means the Australian Securities and Investments Commission. ASTC means ASX Settlement and Transfer Corporation Pty Ltd (ACN 008 504 532). ASX means ASX Limited (ACN 008 624 691) or, as the context requires, the financial market conducted by it. ASX Listing Rules means the official listing rules of ASX. Business Day means a business day as defined in the ASX Listing Rules. CDI means a CHESS Depositary Interest, being a unit of beneficial ownership in a European Nickel New Share registered in the name of CDN. CDN means CHESS Depositary Nominees Pty Limited (ACN 071 346 506). CHESS means the Clearing House Electronic Subregister System operated by ASTC. Close of Register means 5.00pm on the Record Date. Corporations Act means the Corporations Act 2001 (Cth). Court means the Federal Court of Australia. Deed Poll means the deed poll dated 20 April 2010 executed by European Nickel and set out in Appendix 3, pursuant to which European Nickel covenants in favour of the Scheme Participants to perform its obligations under the Scheme. Effective when used in relation to the Scheme, means the coming into effect, pursuant to sub-section 411(10) of the Corporations Act, of the order of the Court made under sub-section 411(4)(b) of the Corporations Act, but in any event at no time before an office copy of the order of the Court is lodged with ASIC. Effective Date means the date on which the Scheme becomes Effective. End Date means 2 August 2010 or any other later date agreed between the Parties. European Nickel New Shares means the new European Nickel Shares to be issued to Rusina Shareholders as Scheme Consideration. European Nickel Proposal means the proposal by European Nickel pursuant to which European Nickel has agreed to acquire all of the Rusina Shares pursuant to the Scheme. European Nickel Share means a fully paid ordinary share in the capital of European Nickel. Explanatory Statement means the explanatory statement relating to the Scheme to be sent to Scheme Participants in accordance with Section 412(1)(a) of the Corporations Act. Independent Expert means Deloitte Corporate Finance Pty Limited. Ineligible Foreign Holder has the meaning given in clause 8(a) of this Scheme and Ineligible Foreign Holders has a corresponding meaning. Merger means the proposed merger of Rusina and European Nickel pursuant to the terms of the Scheme. Merger Implementation Agreement means the agreement dated 2 February 2010 between Rusina and European Nickel, as amended and restated by the Deed of Variation dated 17 March 2010 to give effect to the Merger, a copy of which is included in Appendix 1. Merger Implementation Date means 5 Business Days immediately following the Record Date. Merger means the merger of Rusina and European Nickel through the implementation of the Scheme. Nominee means a nominee for the Ineligible Foreign Holders to be appointed by European Nickel and approved by Rusina (acting reasonably) pursuant to the Merger Implementation Agreement. Parties means Rusina and European Nickel. Record Date means 5.00pm on the fifth Business Day following the Effective Date, or such other Business Day after the Effective Date as the Parties agree before the Effective Date. Register means the share register of Rusina maintained in accordance with the Corporations Act. Rusina Optionholder means the holder of a Rusina Option. Rusina Share means a fully paid ordinary share in the capital of Rusina. Rusina Shareholder means the holder of a Rusina Share. Scheme means the proposed scheme of arrangement set out in this document in respect of the Rusina Shares, subject to any alterations or conditions made or required by the Court pursuant to Section 411(6) of the Corporations Act. Scheme Consideration means the consideration payable to European Nickel to Scheme Participants in accordance with clause 4.2 of the Merger Implementation Agreement. Scheme Meeting means the meeting of Shareholders ordered by the Court to be convened and held at 10.00am (WST) on 2 June 2010 at Citigate Perth, 707 Wellington Street, Perth, Western Australia to consider and, if thought fit, to approve the Scheme. Scheme Participant means the holder of a Rusina Share registered in the Register at the Close of Register. Second Court Date means the last day on which the Court hears the application for an order under section 411(4)(b) of the Corporations Act approving the Scheme or, if the application is adjourned or subject to appeal for any reason, the last day on which the adjourned or appealed application is heard. Share Registry means Computershare Investor Services Pty Ltd. 1.2 Interpretation

In this Scheme, unless the contrary intention appears or the context requires otherwise: (a) words and phrases not otherwise defined in this Scheme have the same meaning (if any) given to them in the Merger Implementation Agreement;

(b) the singular includes the plural and vice versa;

(d) references to persons includes references to corporations, partnerships, joint ventures, associations, bodies corporate or unincorporated and any government agency;

(e) references to paragraphs or clauses are to a paragraph or clause of the Scheme;

(f) references to laws, regulations or agreements are to such laws, regulations or agreements in effect at the date the Scheme is approved by the Court; and

(g) a reference to time is a reference to time in Perth, Western Australia.

The headings and subheadings of this Scheme do not affect the interpretation of the Scheme. 2. Background

2.1 Rusina is a public company limited by shares incorporated in the State of Western Australia.

2.2 Rusina has been admitted to the official list of ASX and AIM and the Rusina Shares have been granted official quotation on ASX and AIM.

2.3 As at the date of this Scheme, the following securities were on issue in the capital of Rusina (as at the Close of Register, the issued share capital of Rusina may be different to that set out below):

Rusina Options Tranche Exercise Price Expiry Date Quantity RMLAQ $0.20 28 August 2011 4,200,000 RMLAS $0.25 26 November 2011 1,700,000 RMLAU $0.10 7 December 2011 4,900,000 RMLAI $0.60 12 January 2011 734,000 RMLAK $0.11 4 November 2011 2,888,040 Total 14,422,040

2.4 European Nickel is a public company limited by shares incorporated in the United Kingdom.

2.5 European Nickel Shares have been admitted to AIM.

2.6 Rusina and European Nickel have entered into the Merger Implementation Agreement to enable the Scheme to proceed.

2.7 If the Scheme becomes Effective, then Rusina, as attorney and agent for each Scheme Participant, will accept the European Nickel Proposal and transfer all of the Rusina Shares on issue at the Record Date to European Nickel and, in consideration for the transfer, European Nickel will issue each Scheme Participant the relevant Scheme Consideration.

2.8 European Nickel has entered into the Deed Poll pursuant to which it has, among other things, offered to acquire the Rusina Shares on issue at the Record Date in accordance with the provisions of the Scheme and has covenanted to carry out the obligations contemplated of it under the Scheme.

The Scheme is subject to and conditional upon: (a) all of the conditions precedent set out in clause 3.1 of the Merger Implementation Agreement other than clause 3.1(t), being final Court approval of the Scheme, having been satisfied or waived in accordance with the Merger Implementation Agreement;

(b) approval by the Court of the Scheme pursuant to section 411(4)(b) of the Corporations Act; and

As soon as practicable following approval of the Scheme by the Court in accordance with section 411(4)(b) of the Corporations Act, Rusina will lodge with ASIC an office copy of the Court orders approving the Scheme, at which time the Scheme will be Effective. 3.3 Transfer of Rusina Shares

Subject to the satisfaction or waiver of the conditions precedent set out in clause 3.1 on the Merger Implementation Date: (a) all of the Rusina Shares held by Scheme Participants will be transferred by Rusina (on behalf of the Scheme Participants) to European Nickel without the need for any further act by any Scheme Participant; and

effect a valid transfer or transfers of the Rusina Shares to European Nickel under Section 1074D of the Corporations Act; or

deliver to European Nickel duly completed and executed share transfer forms in respect of the Rusina Shares in accordance with Section 1071B of the Corporations Act and European Nickel will execute and deliver those share transfers forms to Rusina;

(d) European Nickel must issue the Scheme Consideration to each Scheme Participant in accordance with clause 3.4.

In consideration of the transfer of all the Rusina Shares held by Scheme Participants to European Nickel and subject to the terms of the Scheme, European Nickel will, on the Merger Implementation Date, provide or procure the provision of the relevant Scheme Consideration: (a) if the Scheme Participant is an Ineligible Foreign Holder, to the Nominee for the Rusina Shares registered in the name of that Scheme Participant in accordance with the provisions of this Scheme; and

(b) otherwise, to the Scheme Participants for each Rusina Share registered in the name of that Scheme Participant in accordance with the provisions of this Scheme.

Where the calculation of the number of European Nickel New Shares to be issued to a Scheme Participant or to the Nominee, as the case may be, pursuant to clause 3.4 would result in the issue of a fraction of a European Nickel New Share, the number of European Nickel New Shares to be issued shall be rounded down to the nearest whole number. 3.6 Exercise of rights

Notwithstanding any rule of law or equity to the contrary, Scheme Participants will be entitled to exercise all voting and other rights attached to their Rusina Shares pending their transfer to European Nickel pursuant to clause 3.3. 3.7 Agree to become member

Each Scheme Participant, other than an Ineligible Foreign Holder whose Scheme Consideration is issued to the Nominee, agrees: (a) to become a member of European Nickel;

(b) to have their name entered in the European Nickel register of members and accept the European Nickel New Shares issued by way of satisfaction of the Scheme Consideration; and

Each Scheme Participant, without the need to do any further act, irrevocably appoints and authorises Rusina to do and execute all acts, matters, things and documents on the part of each Scheme Participant necessary to implement the Scheme, including (without limitation) executing, as agent and attorney of each Scheme Participant, a transfer of their Rusina Shares in favour of European Nickel. 4. DEALINGS

For the purpose of determining the identity of Scheme Participants and their respective entitlements to receive European Nickel New Shares, dealings in Rusina Shares will be recognised by Rusina provided that:

in the case of dealings to be effected on CHESS, the transferee is registered as the holder of the Rusina Shares on or before the Close of Register; and

in all other cases, if registrable transfers or transmission applications in respect of those dealings are received at the Share Registry during business hours on or before the Close of Register.

Rusina will not accept for registration or recognise for any purpose any transfer or transmission application in respect or Rusina Shares received after the Close of Register.

If the Scheme becomes Effective, no Scheme Participant shall dispose of or purport to agree to dispose of any Rusina Shares or any interest therein after the Close of Register.

4.2 Register For the purposes of determining entitlements to participate in the Scheme, Rusina will, until the Scheme Consideration has been provided, maintain the Register in accordance with this clause 4 and the Register in this form will solely determine entitlements to the Scheme Consideration. 5. NOTICE TO SCHEME PARTICIPANTS

If the Court makes orders approving the Scheme, then Rusina will send to each Scheme Participant notice of that fact not later than 5 Business Days after the Close of Register. The notice will be sent in the manner provided in, and to the address determined in accordance with clause 9.3. 5.2 Notice if Court approval is not obtained

If the Court declines to make orders approving the Scheme, then Rusina will send to each holder of Rusina Shares notice of the fact within 5 Business Days after the date of such refusal. The notice will be sent in the manner provided in, and to the address determined in accordance with clause 9.3. 6. SCHEME OBLIGATIONS

Immediately after the Record Date, Rusina must give to European Nickel a notice specifying the names and addresses shown in the Register of all Scheme Participants and the number of Rusina Shares held by each of them as at the Close of Register. 6.2 Quotation

Application will be made for: (a) quotation of the CDI's on ASX in respect of the European Nickel New Shares to be issued pursuant to the Scheme in accordance with the Merger Implementation Agreement; and (b) admission for trading of the European Nickel New Shares to be issued pursuant to the Scheme on AIM in accordance with the Merger Implementation Agreement. 6.3 Registration

The Scheme Participants, other than Ineligible Foreign Holders, will be registered as the holders of the number of European Nickel New Shares to which they are entitled pursuant to clause 3.4 by 5.00pm within 10 Business Days after the Effective Date. 6.4 Holding statements

Holding statements for European Nickel New Shares will be issued and sent to Scheme Participants within 10 Business Days after the Effective Date. 6.5 Joint holders

In the case of joint holders of Rusina Shares, the holding statements for the European Nickel New Shares will be sent to the joint holder whose name appears first in the Register. 7. WHEN SCHEME BECOMES BINDING

The Scheme will become binding on Rusina and each Scheme Participant only if the Court makes orders under Section 411(4)(b) of the Corporations Act approving the Scheme and those orders take effect under Section 411(10) of the Corporations Act. 7.2 Effect on dealings

Where the Scheme becomes binding as provided by clause 7.1, a holder of Rusina Shares (and any person claiming through the holder) may only assign, transfer or otherwise deal with those Rusina Shares on the basis that the rights so assigned, transferred or dealt with are limited in the manner described in clauses 4 and 7.1. 8. FOREIGN HOLDERS

(a) The right to receive Scheme Consideration pursuant to the Scheme and to be registered as the holder of European Nickel New Shares is not available to a Scheme Participant if Rusina reasonably believes, in relation to that Scheme Participant, that the issue of Scheme Consideration may be prohibited (or prohibited except after compliance with conditions that Rusina regards as unduly onerous) by the law of the place where the Scheme Participant to whom they would otherwise be issued in accordance with clause 3.4(b) has their registered address (Ineligible Foreign Holder).

(b) European Nickel will be under no obligation to procure the issue of Scheme Consideration to the Ineligible Foreign Holder and instead will procure the issue of the Scheme Consideration to which that Ineligible Foreign Holder is entitled to the Nominee who shall sell that Scheme Consideration as soon as reasonably practicable and in any event within any time limits imposed by any applicable legislation and account to the Ineligible Foreign Holder for the net proceeds of sale, after deduction of any applicable brokerage, stamp duty and other taxes and charges, at the Ineligible Foreign Holder's risk in full and final satisfaction of the Ineligible Foreign Holder's rights under clause 3.4(a).

Rusina may, by its counsel or solicitors, and with the consent of European Nickel, consent to any modification of or addition to the Scheme or to any condition which the Court may think fit to approve or impose. 9.2 Failure to give notice

The accidental omission to give notice of the Scheme Meeting to any Scheme Participant or the non-receipt of such a notice by any Scheme Participant will not, unless so ordered by the Court, invalidate the Scheme Meeting or the proceedings at the Scheme Meeting. 9.3 Interpretation

For the purpose of clauses 5.1, 6.3 and 6.4 and the expression "sent" means: (a) sending by ordinary pre-paid post to the address of a holder of Rusina Shares as appearing in the Register at the Close of Register; or

(b) delivery to that address by any other means at no cost to the recipient.

Rusina must execute all deeds and other documents and do all acts and things as may be necessary or expedient on its part to implement the Scheme in accordance with its terms. 9.5 Scheme Participant warranties

Each Scheme Participant is deemed to have warranted to European Nickel that all their Rusina Shares (including any rights attaching to those Rusina Shares) which are transferred to European Nickel under the Scheme will as at the date of their transfer, be fully paid and, to the extent permitted by law, free from all mortgages, charges, liens, encumbrances, pledges, security interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind, and that Scheme Participant has full power and capacity to sell and to transfer their Rusina Shares together with any rights attaching to those Rusina Shares. 9.6 Authority prior to registration

Pending registration in the Register by Rusina of European Nickel as the holder of all the Rusina Shares: (a) European Nickel shall be beneficially entitled to the Rusina Shares to be transferred to it under the Scheme; and

(b) each Scheme Participant is deemed to have appointed European Nickel as its sole proxy, and, where appropriate, its corporate representative, to attend shareholders meetings, exercise the votes attached to the Rusina Shares registered in such Scheme Participant's name and sign any shareholders resolution and no Scheme Participant may itself attend or vote at any such meetings or sign any resolutions, whether in person or otherwise by proxy or corporate representative.

Neither Rusina nor any of its officers will be liable for anything done or for anything omitted to be done in performance of the Scheme in good faith. 9.8 Binding

To the extent of any inconsistency between this Scheme and Rusina's constitution, the Scheme, to the extent not otherwise prevented at law, overrides Rusina's constitution and binds Rusina and the Scheme Participants. 9.9 Governing law

The Scheme is governed by the laws of Western Australia. DATED this 22nd day of April 2010. EXECUTED BY RUSINA MINING NL ACN 009 242 451 in accordance with the Corporations Act: ) ) ) )

GENERAL DIVISION WAD 79 of 2010

IN THE MATTER OF RUSINA MINING NL ACN 009 242 451 Rusina Mining Nl Acn 009 242 451

application for approval of scheme of arrangement 1 On 30 April 2010, I made orders convening a meeting of shareholders to consider the approval of a scheme of arrangement: see Rusina Mining NL, In the Matter of Rusina Mining NL [2010] FCA 517 (Rusina Mining (No 1)). 2 On 14 June 2010 I approved the scheme of arrangement under s 411(4)(b) of the Corporations Act 2001 (Cth) (the Act) following the meeting of shareholders. 3 These are the reasons for the granting of such approval. 4 In these reasons I use, as far as possible, the same abbreviated terms as were employed in Rusina Mining (No 1).

criteria for approval 5 It is well understood that a scheme of arrangement will only be approved under the Act if the Court is satisfied that all procedural matters have been complied with and that the scheme is fair and reasonable to the members in a general sense. In this the jurisdiction of the Court is supervisory in nature, in the sense that the Court is concerned to be satisfied that there has been an absence of oppression and that the arrangement is one that is capable of being accepted: Re Central Pacific Minerals NL [2002] FCA 239; Re Solution 6 Holdings Ltd (2004) 50 ACSR 113.

procedural matters 6 The Court must be satisfied that the meeting of shareholders was convened and held in accordance with the orders made on 30 April 2010 and as required by the Federal Court (Corporations) Rules 2000 (Cth) (the Rules), the Act and the Corporations Regulations 2001 (Cth) (the Regulations). 7 In this regard, the plaintiff was required to convene and hold the meeting in accordance with Pt 2G of the Act and the plaintiff's constitution: see order 2 of 30 April 2010. 8 Under the provisions of Pt 2G.2, the plaintiff was required to give the shareholders 28 days written notice of the scheme meeting: s 249HA(1) and s 249J(1) of the Act. 9 Notice of the meeting may be given by any means that is permitted by the plaintiff's constitution: s 249J(3)(d). 10 In this case the constitution of the company provides as follows: · A notice may be served by sending it by post to the addressed shown in the register of shareholders or by airmail where the address is outside Australia: cl 26.1. · Service by post is deemed to be effected the day after the letter containing the notice is properly addressed, prepaid and posted, and in any other case, service is deemed to be effected at the time at which the letter would be delivered in the ordinary course of post: cl 26.2. · The non‑receipt of a notice to a member does not invalidate the proceedings at a meeting: cl 11.2. · A meeting must have two members present in person or by proxy, attorney or representative and entitled to vote for there to be quorum: cl 12.1. 11 By virtue of the orders made, the scheme booklet was required to be sent to the shareholders with a notice of the shareholder meeting (under s 412(1) which was required to be registered by the Australian Securities and Investments Commission (ASIC) before it was sent: s 412(6)). 12 Subject to registration of the scheme booklet by ASIC it was to be sent to shareholders by 3 May 2010 by ordinary prepaid post, or by airmail to shareholders whose registered address was outside Australia: order 5 of 30 April 2010. 13 Assuming two days for delivery by airmail, the last day on which the notices convening the shareholders' meeting ought to have been posted was 3 May 2010: see s 105 and s 249J(3)(d) of the Act; see also Re Mirvac Ltd (1999) 32 ACSR 107, at [24] - [31] as to the application of the provisions of the constitution in this regard. 14 However, if more than two days was required to deliver a notice by airmail this would not constitute a procedural irregularity that invalidates the scheme meeting having regard to s 1322(1) and s 1322(2) of the Act. In this case, when order 2, order 4 and order 5 of 30 April 2010 are read together, the notice period for shareholders outside Australia was modified to be the number of days between the day upon which they would ordinarily receive a letter by airmail on 3 May 2010 and 2 June 2010. The scheme booklet was approved to be included in the notice of the scheme meeting. 15 An office copy of the orders of 30 April 2010 were served on ASIC on 3 May 2010. 16 The scheme booklet was registered on 3 May 2010. It was in the form approved by the Court on 30 April 2010. It was sent to the registered addresses of the shareholders by ordinary prepaid post and, in the case of overseas shareholders, by airmail on 3 May 2010. 17 The scheme meeting was convened in accordance with the meeting orders, the Rules, the Act and the Regulations. 18 In accordance with the orders made 30 April 2010, a meeting of the members was held on 2 June 2010. There was a quorum present. The resolution to enter into the scheme was put to the shareholders and passed by a majority in number of the shareholders present and voting (in person and by proxy) and by 75% of the votes cast on the resolution. 19 The scheme meeting was therefore held in accordance with the orders of 30 April 2010 and the Rules, and the statutory majority of members voted in favour of the scheme as required by s 411(4)(a)(ii) of the Act. 20 The shareholders meeting was advertised in The West Australian newspaper and The Australian newspapers on 24 May 2010 and 25 May 2010, respectively. 21 The hearing for approval of the scheme was advertised in The West Australian and The Australian on 9 June 2010. 22 Apart from the requirements of s 411(17) of the Act, dealt with below, the balance of the procedural requirements of the Act and Regulations were dealt with on the application before the orders that were made on 30 April 2010. 23 At the hearing of this application, counsel moved however to remedy a minor deficiency in that the orders made 30 April 2010 provided for a five day period of notice, whereas, not taking into account non‑business days, the actual period was only three (having regard to O 1, r 3(2) of the Federal Court Rules 1979 (Cth)). In these circumstances, it is appropriate to abridge the relevant period to three working days.

Matters of fairness 24 It is generally accepted that the Court is bound to ascertain that all the conditions required by the statute have been complied with and that the proposition was made in good faith. Further, the Court must consider that the proposal was at least so far as fair and reasonable as that an intelligent and honest man, who is a member of that class, and acting alone in respect of his interest as such a member, might approve it: see Re Alabama, New Orleans and Pacific Junction Railway Co [1891] 1 Ch 213, at 257, per Fry LJ. 25 The propriety and fairness of the scheme was considered in a preliminary way in the course of the hearing that led to the orders of 30 April 2010. The Court was then satisfied that the scheme was capable of approval if the statutory majorities were achieved and an application for approval was made unopposed. 26 The scheme meeting resulted in shareholders entitled to vote passing a resolution in favour of the scheme by the majorities required by the Act. There was a high participation rate (a little less than 50% of shares being exercised) and the resolutions were passed by those voting at the meeting by a very large majority (99.56%). 27 The application now before the Court for approval is unopposed. 28 To the extent that there were concerns expressed in Rusina Mining (No 1) concerning the possible payment of break fees, the strong shareholder support for the proposal causes me to discount any potential concerns then mentioned. 29 In this regard, I also note that ASIC has registered the scheme booklet, pursuant to s 412(6) of the Act, a step that one would assume ASIC would not have taken if it had any concern that a material particular was false or misleading in the context provided. 30 As far as implementation of the scheme is concerned, there is nothing before the Court to suggest that it will not be implemented and carried into effect in a fair manner. 31 A number of conditions precedent, mentioned at the time the orders convening the meeting were made, have now been satisfied. · Regulatory consents have been obtained and there is no prohibitive action being taken against the implementation of the scheme: see cl 3.1(a) - (c) of the MIA. · No takeover offer has been made for the plaintiff or European Nickel: see cl 3.1(d) and cl 3.1(h) of the MIA. · There is no evidence of any European Nickel prescribed occurrences or material adverse changes: cl 3.1(i) and cl 3.1(j) of the MIA. · The Australian Stock Exchange (ASX) has given approval to the listing of European Nickel's CDIs on the ASX and the London Stock Exchange has given conditional approval for the listing of new European Nickel shares on the (Alternative Investment Market: cl 3.1(n) and cl 3.1(o) of the MIA. · European Nickel has executed the deed poll and obtained its shareholder approval to issue the new European Nickel shares: cl 3.1(q) and cl 3.1(r) of the MIA. · All the option holders have entered into the agreements contemplated by cl 4.3 of the MIA: cl 3.1(s) of the MIA. 32 Additionally, the remaining conditions precedent, which affect the interests of the pre‑scheme members of European Nickel, have been satisfied or waived.

The requirements of s 411(17) 33 Finally, I turn to the requirements of s 411(17) of the Act, which provides that: The Court must not approve a compromise or arrangement under this section unless: (a) it is satisfied that the compromise or arrangement has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6; or (b) there is produced to the Court a statement in writing by ASIC stating that ASIC has no objection to the compromise or arrangement; but the Court need not approve a compromise or arrangement merely because a statement by ASIC stating that ASIC has no objection to the compromise or arrangement has been produced to the Court as mentioned in paragraph (b). 34 In Re Coles Group Ltd (No 2) [2007] VSC 523; 65 ACSR 494 (Re Coles (No 2)), Robson J discussed the nature of the Court's discretion under this provision in circumstances where ASIC has, as here, produced to the Court a statement in writing stating that ASIC has no objection to the compromise or arrangement. 35 This is a case where, as the plaintiff directly acknowledges, its objectives could be achieved directly by a takeover under Ch 6 of the Act. However, this is also a case where ASIC has provided a letter dated 10 June 2010, advising that it has "no objection to the scheme of arrangement". That advice is given "having regard to ASIC's criteria for providing a statement in writing that it has no objection, as set out in Regulatory Guide 60 Scheme of Arrangement - s 411(17) and Regulatory Guide 142 Scheme of Arrangement and ASIC Review". 36 With respect, I agree with what Robson J, following a careful review of the authorities, stated in Re Coles (No 2), at [75]-[78]: [75] In my view, in normal circumstances the existence of the no objection statement would carry with it the implication that ASIC is of the view that members have received all material information that they need for their decision, members have received reasonable and equal opportunity to share in the benefits provided under the scheme and that members are not being adversely affected by the takeover proceeding by a scheme of arrangement rather than by a takeover under Ch 6. If the court accepted that was the case then the no objection statement may well effectively counter any adverse inference that might have been drawn from the existence of the proscribed purpose. [76] If, on the other hand, the court found that members had been disadvantageously affected by the takeover proceeding under a scheme rather than under Ch 6, then different considerations may apply. [77] Accordingly, I agree with Fryberg J and French J to the extent that the existence of the proscribed purpose may be a factor to be taken into account in the court exercising its discretion to approve a scheme under s 411(4)(b), but would add that the existence of the no objection statement which allows the scheme to be considered for approval likewise may be a factor of equal or similar weight and would tend to establish that the existence of the proscribed intention is not of particular significance in relation to the court's exercise of the discretion under s 411(4). [78] I accept, however, that the court's discretion is left at large. I would not accept any inference in Mincom Ltd (No 2), if such an inference is open, that the existence of the proscribed purpose would necessarily be an adverse factor against approval of the scheme or be of particular significance in relation to the court's exercise of the discretion under s 411(4) for the reasons I have given. 37 There is no evidence in this case to support an inference that the scheme has been proposed for the purpose of enabling any person to avoid the operation of any provision of Ch 6 of the Act. 38 The specific intention to avoid the operation of a specific provision of Ch 6, in my view, cannot be inferred from the general intention to prefer the procedure under Pt 5.1 where Pt 5.1 delivers a legal outcome that cannot be achieved under the provision of Ch 6 - here, 100% ownership determined in one procedure - or a legitimate, commercial outcome - for example, the timely and cost effective implementation of a merger. In the latter case, while the distinction may be subtle the purpose is not to avoid Ch 6 (or the operation of a particular provision of it) but to prefer Pt 5.1 generally. 39 In my view, as stated by Robson J in Re Coles (No 2) at [22], the Act provides a choice as to whether transactions might be carried out under Ch 6 or under Ch 5 and is generally "neutral as to the choice which is made". 40 In circumstances where there is no particular reason for the Court to divine a specific intention on behalf of the plaintiff to avoid the operation of Ch 6 or a specific provision of it and ASIC has registered the scheme of arrangement and provided an advice that it has no objection to the scheme of arrangement for the purposes of s 411(17)(b), there is no basis in this case upon which the Court should investigate the purposes of the plaintiff further. 41 In this case, the plaintiff in any event has given shareholders a similar disclosure to that which would have been afforded them had the merger been implemented by a takeover under Ch 6. Shareholders have not, in my estimation, been disadvantaged by the procedure chosen and, indeed, have been provided with the same or very similar information upon which to base their decision‑making to vote in favour or against the merger. 42 Accordingly, in my view, there is no s 411(17) impediment to approval of the scheme and approval should be granted.

conclusion and orders 43 For these reasons, I am satisfied that all procedural and substantive requirements of the orders made 30 April 2010, the Rules, the Act and the Regulations have been satisfied, that there are no grounds for suspecting that the scheme of arrangement is oppressive or unfair or has been proposed for any improper purpose, and that the scheme should be approved on the basis proposed. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker.

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