CORPORATIONS - schemes of arrangement - approval for the holding of scheme meetings
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CORPORATIONS - schemes of arrangement - approval for the holding of scheme meetings
Judgment (22 paragraphs)
[1]
Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act):
(a) the plaintiff, Talison Lithium Limited (Talison) convene a meeting (Share Scheme Meeting) of the holders of ordinary shares in Talison, other than Windfield Holdings Pty Ltd (Windfield), related bodies corporate, and any other Talison Shareholder to the extent that, at any relevant time it holds ordinary shares in Talison on behalf of or for the benefit of Windfield or any of its related bodies corporate (Excluded Shareholders) (the Talison Shareholders), for the purpose of considering and, if thought fit, approving a scheme of arrangement (with or without modification) proposed to be made between Talison and Talison Shareholders (Share Scheme), the terms of which are contained at Annexure D to the scheme booklet containing the explanatory statement in relation to the Share Scheme which is annexure HFL2 to the second affidavit of Heath Ford Lewis sworn 18 December 2012 and filed in these proceedings (the Scheme Booklet);
(b) the Share Scheme Meeting be held on Wednesday, 27 February 2013 at 10.00 am (Perth time) at the Duxton Hotel, 1 St Georges Terrace, Perth, Western Australia;
(c) Peter Charles Robinson or, failing him, Peter Robert Oliver, act as chairperson of the Share Scheme Meeting and report the result of the Share Scheme Meeting to this Court;
(d) the chairperson have the power to adjourn the Share Scheme Meeting in their absolute discretion for such time that the chairperson considers appropriate; and
(e) a Talison Shareholder with a registered address otherwise than in Australia (Other Talison Shareholder) may appoint more than 2 proxies in respect of the Share Scheme Meeting. If an Other Talison Shareholder appoints more than 2 proxies, the appointment must specify the number of the Other Talison Shareholder's votes each proxy must exercise otherwise the appointment will be disregarded.
Pursuant to s 411(1) of the Act:
(a) Talison convene a meeting (Option Scheme Meeting) of the holders of options to acquire ordinary shares in Talison (the Talison Optionholders), for the purpose of considering and, if thought fit, approving a scheme of arrangement (with or without modification) proposed to be made between Talison and Talison Optionholders (Option Scheme), the terms of which are contained in Annexure F of the Scheme Booklet;
(b) the Option Scheme Meeting be held on Wednesday 27 February 2013 at 10.30 am (or, if later, immediately following the conclusion of the Share Scheme Meeting) at the Duxton Hotel, 1 St Georges Terrace, Perth, Western Australia;
(c) Peter Charles Robinson or, failing him, Peter Robert Oliver, act as chairperson of the Option Scheme Meeting;
(d) the chairperson have the power to adjourn the Option Scheme Meeting in their absolute discretion for such time that the chairperson considers appropriate.
The explanatory statement in the Scheme Booklet is approved for distribution to Talison Shareholders and Talison Optionholders.
Pursuant to s 1319 of the Act, Rule 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) shall not apply to the Scheme Meetings, except in so far as that rule applies reg 5.6.13 of the Corporations Regulations 2001 (Cth) to the Scheme Meetings. Subject to these Orders and pursuant to s 1319 of the Act, each Scheme Meeting is to be:
(a) convened, held and conducted in accordance with the provisions of Part 2G.2 of the Act that apply to members of a company (other than those replaceable rules that are replaced by Talison's constitution) and the provisions of Talison's constitution that are not inconsistent therewith and that apply to meetings of members, provided that at the Option Scheme Meeting each Talison Optionholder will have voting power commensurate with the value of their Talison Options as provided for in section 6.5 of the Scheme Booklet;
(b) convened, held and conducted on the basis that Corporations Regulations 5.6.12 and 5.6.14 to 5.6.36A do not apply to the meeting; and
(c) convened using the notices of meeting in the form or to the effect of the notices contained in Annexures H and I of the Scheme Booklet.
Subject to registration of the Scheme Booklet with the Australian Securities and Investments Commission (ASIC) pursuant to section 412(b) of the Act, Talison is to despatch to each Talison Shareholder and each Talison Optionholder with a registered address in Australia (Australian Holder):
(i) a document substantially in the form of the Scheme Booklet;
(ii) a proxy form; and
(iii) a reply-paid (for use in Australia only) envelope addressed to Computershare Investor Services Pty Limited,
by ordinary pre-paid post from Australia addressed to the relevant address set out in the Talison register of members.
Subject to registration of the Scheme Booklet with ASIC pursuant to section 412(b) of the Act, Talison is to dispatch to each Talison Shareholder and each Talison Optionholder with a registered address otherwise than in Australia (Non-Australian Holder):
(i) a document substantially in the form of the Scheme Booklet;
(ii) a proxy form; and
(iii) a reply-paid (for use in Canada only) envelope addressed to Computershare Investor Services Inc,
by:
(iv) ordinary pre-paid post to each Non-Australian Holder with a registered address in Canada; and
(v) pre-paid airmail or air courier to each Non-Australian Holder with a registered outside Canada,
in each case from Canada addressed to the relevant address set out in the Talison register of members.
Despatch of the documents referred to in paras (e)5 and (e)6 of these Orders in accordance with the delivery methods stated therein on or before 5 February 2013 is to be taken to be sufficient notice of the Scheme Meetings.
The time by which Talison Shareholders and Talison Optionholders must return their proxy forms for the Scheme Meetings be 11.00 am (Perth time) on 25 February 2013.
All voting at the Scheme Meetings be by poll declared by the chairperson.
If the matter is relisted, the plaintiff is to give notice of the hearing of the application pursuant to s 411(4) of the Act and that notice be published once in "The Australian" newspaper by an advertisement substantially in the form of "Annexure A" to these Orders, such advertisement to be published on or before 7 March 2013 and Talison be otherwise exempted from compliance with r 3.4 of the Federal Court (Corporations) Rules 2000 (Cth).
The proceeding be adjourned to 12 March 2013 at 10.15 am before the Honourable Justice Gilmour for hearing of any application to approve the Share Scheme and Option Scheme.
These Orders be entered forthwith.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
[2]
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION WAD 382 of 2012
[3]
IN THE MATTER OF TALISON LITHIUM LIMITED
(ACN 140 122 078)
TALISON LITHIUM LIMITED (ACN 140 122 078)
[4]
JUDGE: GILMOUR J
DATE: 8 March 2013
PLACE: PERTH
[5]
Relief sought
1 I made orders on 19 December 2012 which were sought by the plaintiff in its originating process dated 12 December 2012. These were subsequently varied to reflect a change of venue for the shareholders meeting. These are my reasons. They are drawn substantially from the written outline of submissions of the plaintiff which I have accepted.
2 The plaintiff, Talison Lithium Limited (Talison) seeks orders under s 411(1) and s 1319 of the Corporations Act 2001 (Cth) (the Act) to convene meetings to consider schemes of arrangement with its ordinary shareholders and optionholders and certain ancillary relief. Talison seeks orders in terms of its amended Minute of Orders. Justice Siopis made orders for a similar scheme, with a different bidder, on 25 October 2012. The difference now is the price to be paid per share and per option, the identity of the bidder and the timing of the scheme meetings. Rather than Rockwood Holdings Inc, the new bidder is Windfield Holdings Pty Ltd (the Bidder), a subsidiary of Chengdu Tianqi Industry (Group) Co Ltd (Tianqi).
[6]
Outline of Schemes
3 Talison is an Australian incorporated public company listed on the Toronto Stock Exchange (TSX) with approximately 38 registered holders (as at 14 December 2012) of an aggregate of 114,401,292 ordinary shares (Shares) and approximately 102 registered holders of an aggregate of 3,432,966 options to subscribe for Shares (Options).
4 Talison is in the business of lithium exploration, extraction and production, and operates a mining project in Western Australia.
5 Two separate schemes of arrangement are proposed; a "Share Scheme" between Talison and its ordinary shareholders (Share Scheme) and an "Option Scheme" between Talison and its optionholders (Option Scheme) (together the Schemes).
6 The Schemes involve the acquisition of all of the Shares and Options of Talison by the Bidder. Regulatory approvals have been obtained from the Foreign Investment Review Board and the National Development and Reform Commission (amongst other necessary PRC government approvals).
7 It is proposed that:
(a) the Bidder will acquire Talison by Talison shareholders transferring their Shares to the Bidder and, in respect of the Options:
(i) Talison optionholders will exercise certain of their Options by paying the exercise price (which will be funded by way of a loan from Talison), with Shares held in the Talison Long Term Incentive Plans Trust (LTIP Shares) being delivered to Talison optionholders before being immediately transferred to the Bidder; and
(ii) Talison optionholders will transfer the balance of their Options to the Bidder;
(b) Talison shareholders will receive C$7.50 for each Share and Talison optionholders, whether transferred or exercised, will receive C$7.50 less the exercise price for each Option;
(c) the Schemes will effect the acquisition of Talison by the Bidder and will result in Talison becoming a wholly owned subsidiary of the Bidder; and
(d) Talison will cease to be listed on the TSX.
[7]
Evidence
8 Talison relies on:
(a) the affidavit of Heath Ford Lewis sworn 12 December 2012 (First Lewis Affidavit);
(b) the further affidavit of Heath Ford Lewis sworn 18 December 2012 (Second Lewis Affidavit);
(c) the affidavit of Peter Robert Oliver sworn 17 December 2012 (Oliver Affidavit);
(d) the affidavit of Ken David Pendergast sworn 18 December 2012 (Pendergast Affidavit);
(e) the affidavit of Peter Charles Robinson sworn 13 December 2012 (Robinson Affidavit); and
(f) the affidavit of Wu Wei affirmed 18 December 2012 (Wei Affidavit).
9 Talison also relies on the observations of Siopis J in relation to the schemes previously put forward, in relation to the previous bidder: Talison Lithium Limited, in the matter of Talison Lithium Limited [2012] FCA 1422 (the Judgment).
[8]
Issues
10 There are three stages to an application under s 411 of the Act: (i) Court approval to convene the scheme meeting and approval of the draft explanatory statement to be sent to the members; (ii) members voting on the scheme at the scheme meeting; and (iii) Court approval of the scheme: Re CSR Ltd (2010) 183 FCR 358 at [7].
11 The principal questions relevant to the first stage are as follows:
(a) Is there a compromise or arrangement?
(b) Is there a Part 5.1 body?
(c) Are there members of a company?
(d) Are there classes of members?
(e) Should the Court make orders to convene a meeting?
[9]
Standard of Review
12 The standard of review at this stage is "whether it is reasonable to suppose that sensible business people might consider that the arrangement proposed by the company is of benefit to its members": Re Sonodyne International Ltd (1994) 15 ACSR 494 at 499 citing Bowen LJ in Re Alabama, New Orleans, Texas and Pacific Junction Railway Co [1891] 1 Ch 213 at 243.
13 If the proposed arrangement is one that seems 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 majorities, then leave should be given to convene the meeting: Re ACM Gold Limited; Re Mt Leyshon Gold Mines Limited (1992) 34 FCR 530 at 535.
14 In Re Foundation Healthcare Ltd (2002) 42 ACSR 252 at [44], French J observed that "[t]he court is not required to be satisfied either at the convening or approval stage that no better scheme could have been devised".
15 The Court should order the convening of a meeting of Talison's ordinary shareholders (that are not excluded shareholders for the purposes of the Share Scheme) and a meeting of Talison's optionholders (together the Scheme Meetings) and approve the dispatch of the scheme booklet (explanatory statement) at annexure HFL2 of the Second Lewis Affidavit (Scheme Booklet), if satisfied of the following matters:
(a) The Scheme is an arrangement in respect of which the Court may order a meeting of the members: s 411(1) of the Act. That is: (i) each of the Share Scheme and the Option Scheme is an arrangement; (ii) Talison is a Part 5.1 Body; (iii) the Scheme participants are members of Talison and option holders; and (iv) the Share Scheme and Option Scheme meetings will be convened between members and optionholders (respectively) of the same class.
(b) ASIC has had a reasonable opportunity to: (i) examine the terms of the Schemes and explanatory statement; and (ii) make submissions to the Court in relation thereto: s 411(2)(b).
(c) The explanatory statement:
(i) provides adequate disclosure: s 412(1)(a)(i) of the Act; and
(ii) contains the prescribed information: s 412(1)(a)(ii), reg 5.1.01 and Sch 8 cl 8301-8310 of the Corporations Regulations 2001 (Cth) (Corporations Regulations).
(d) The procedural requirements of the Federal Court (Corporations) Rules 2000 (Cth) (Corporations Rules) have been met.
(e) That there is no apparent reason why the Schemes should not, in due course, receive the Court's approval if the necessary majority of members' and optionholders' votes is achieved:
See generally, Re NRMA Ltd (No 1) (2000) 156 FLR 349 at [3], [14]-[41]; Re Orica Limited [2010] VSC 231 at [7].
16 I will deal with each of the above matters in turn.
[10]
Arrangement
17 The word "arrangement" is of wide import: Re NRMA at [20] citing Re ACM Gold Ltd.
18 The Talison board unanimously recommends that, in the absence of a superior proposal, Talison shareholders and optionholders vote in favour of their respective Schemes at the proposed Share Scheme and Option Scheme meetings - amongst other places. This is significant in the context of the history of the transaction.
19 Ernst & Young Transaction Advisory Services Limited (Ernst & Young), the independent expert appointed by the Talison board to assess the Schemes, has prepared a report which is included at Annexure A of the scheme booklet (the Report). Ernst & Young has concluded that the proposals are in the best interests of Talison shareholders and optionholders.
20 In summary, the Report states:
(a) Talison has been valued in the range of A$620,834,000 to A$785,279,000, giving a value per share range of C$5.40 to $6.83.
(b) Talison shareholders are likely to be better off if the transaction proceeds than if it does not. Accordingly, the proposal is in the best interests of Talison shareholders.
(c) Based on the Option Scheme Consideration, the Report concluded that the premiums over the assessed fair value of the Options ranged from 76% to 353% (depending on the exercise price payable in respect of the Option). Accordingly, the Report concluded the Option Scheme is fair and reasonable to Talison optionholders.
21 It is for the members to decide if they should accept the terms of the Schemes, as amended. The Schemes are bona fide and are properly proposed. As Keane CJ and Jacobson J observed in Re CSR Ltd at [64]-[65], it is not the appropriate time to determine whether the schemes would be ultimately approved by the Court at the first hearing seeking an order convening a meeting of shareholders. The Schemes are properly for the consideration of members and optionholders.
22 The Schemes before the Court are each arrangements.
[11]
Part 5.1 Body
23 Section 411 of the Act confers jurisdiction on the Court in respect of a Part 5.1 body.
24 The term "Part 5.1 body" is defined in s 9 of the Act to mean, relevantly, a company. Talison is a company.
[12]
Classes of members
25 An arrangement to which s 411(1) applies is one between a company and its members or any class of them. It is only such an arrangement to which the Court may grant its approval pursuant to s 411(6).
26 Section 411 does not define the term "class". However, in the leading case of Sovereign Life Assurance Company v Dodd [1892] 2 QB 573, Bowen LJ observed at 583, that the term "class", as it applied to the Joint Stock Companies Arrangement Act 1870:
… is vague, and to find out what is meant by it we must look at the scope of the section, which is a section enabling the Court to order a meeting of a class of creditors to be called. It seems plain that we must give such a meaning to the term "class" as will prevent the section being so worked as to result in confiscation and injustice, and that it must be confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest.
27 In this case, all members have the same rights in the Share Scheme. That is, the right to receive the "Share Scheme Consideration".
28 The Share Scheme does not include shares held by the Bidder or its related bodies corporate, or by any person on behalf of or for the benefit of the Bidder or its related bodies corporate.
29 The optionholders are able to be dealt with in one class.
30 A number of aspects of the transaction were considered appropriate to be brought to the Court's attention. I will now turn to these.
[13]
Deal protection clauses
31 Under cl 11 of the Scheme Implementation Agreement (SIA), Talison has agreed to pay a break fee of C$8.4 million if the Share Scheme does not proceed in the circumstances contemplated in cl 11.2.
32 The "no shop", "no talk", "no due diligence" and notification obligations are contained in cl 10 of the SIA, with a "fiduciary carve out" in cl 10.2 of the SIA which operates in respect of the "no talk" and "no due diligence" provisions.
33 The break fee, no shop, no talk, no due diligence and notification obligations are all disclosed in s 11.10 of the Scheme Booklet.
34 The break fee payable by Talison is less than 1% of the equity value of Talison.
35 As the break fee payable by Talison is less than 1% of the equity value of Talison, this is not a matter calling for further comment, particularly given the observations of the Takeovers Panel in Guidance Note 7 - Lock-up devices: see also, In the matter of Coles Group Limited (2007) 25 ACLC 1380 at [69].
36 The following points emerge in relation to the break fee, no shop, no talk, no due diligence and notification obligations:
(a) the break fee payable by Talison is within the Takeovers Panel Guidelines;
(b) the break fee payable by Talison is not payable if, in the absence of other triggering circumstances, the shareholders vote down the scheme;
(c) the circumstances in which the break fee is payable by Talison are set out in cl 11.2 of the SIA;
(d) there is a break fee payable by the Bidder in certain circumstances: see cl 12 of the SIA;
(e) each party warrants that the break fee each has to pay is a genuine and reasonable pre-estimate of the cost and loss that would actually be suffered by the other of them: see cll 11.1 and 12.1 of the SIA (respectively);
(f) the exclusivity obligations run for the "Exclusivity Period" which is defined in cl 1.1 of the SIA as being the period commencing on the date of the SIA, being 6 December 2012, to the earlier of the "Implementation Date", which occurs after Court approval of the Schemes, termination of the SIA, or the "End Date" (being 1 June 2013);
(g) there is a "fiduciary carve-out" in cl 10.2 of the SIA; and
(h) both Talison and the Bidder are represented by legal firms recognised as practising in the mergers and acquisitions area.
37 In Re APN News & Media Ltd (2007) 62 ACSR 400 at [55], Lindgren J suggested that certain evidence might be led in relation to exclusivity provisions and break fee provisions. Such evidence has been adduced including that the break fee is less than 1% of the equity value of Talison.
[14]
Valuation of Options for voting purposes
38 The Options need to be valued for the purpose of ascertaining their voting weight at the Option Scheme meeting: see s 411(4)(a)(i) of the Act. The valuation methodology is set out in s 6.5 of the Scheme Booklet.
[15]
Voting in Canada - appointing proxies
39 Talison seeks orders that, Talison shareholders with a registered address otherwise than in Australia, may appoint more than two proxies in respect of the Share Scheme meeting on the basis that a substantial proportion of the Shares are held by a depository in Canada that requires the ability to convey the voting intentions of more than 2 subscribing shareholders in respect of that shareholding. Justice Jagot made orders to this effect in Andean Resources Limited, in the matter of Andean Resources Limited [2010] FCA 1190.
[16]
Financial assistance
40 Section 260A(1) of the Act provides that a company may financially assist a person to acquire shares in the company or a holding company only if, relevantly, the giving of financial assistance does not materially prejudice: (a) the interests of the company or its shareholders; or (b) the company's ability to pay its creditors.
41 The words "financial assistance" are not defined in the Act. The task is to examine the commercial realities of the transaction to determine whether it can be described as the giving of financial assistance.
42 The terms of the Option Scheme may, on one view, technically constitute financial assistance for the purposes of s 260A of the Act. However, no material prejudice to the interests of Talison nor to its shareholders or creditors is evident.
43 The financial assistance may be said to arise by reason of the exercise of some of the Options on the implementation date in return for LTIP Shares involving a loan of the exercise price from Talison to optionholders (the Loans).
44 "Material prejudice" in this context requires an impoverishment of the company's assets which is materially prejudicial to the interests of the company, or its shareholders, or to its ability to pay its creditors.
45 Talison submits, and I accept, that the Loans do not impoverish Talison's assets so as to materially prejudice the interests of Talison or its shareholders, or the ability of Talison to pay its creditor's, given the evidence that:
(a) the directors of Talison have resolved that the transaction will not materially prejudice the interests of Talison or its shareholders;
(b) Ernst & Young has provided a statement of opinion that the transaction does not materially prejudice the interests of Talison or its shareholders, or Talison's ability to pay its creditors;
(c) the Loans will create only a receivable and will not require an actual outlay of cash by Talison given that the Loans are immediately applied to the payment of the exercise price to Talison;
(d) Talison's financial statements as at 30 June 2012 indicate that it will be able to continue to pay its debts as they fall due; and
(e) the shareholders will have an opportunity to vote on the scheme having had full disclosure of the Loans.
[17]
No related party financial benefits
46 Pursuant to s 208 of the Act, member approval is required to give a financial benefit to a related party. Section 228 of the Act provides that a related party includes directors of a public company, and s 229(3)(a) of the Act provides that a financial benefit includes giving a related party finance.
47 Section 210 of the Act provides that an exception to the requirement for member approval under section 208 of the Act arises where the financial benefit was provided, relevantly, in relation to dealings that were entered into at arm's length.
48 The terms of the Option Scheme may, on one view, constitute a related party benefit for the purposes of Ch 2E of the Act given that several directors of Talison hold Options and will therefore receive a Loan pursuant to the terms of the Option Scheme. Further, ss 216 and 260C(5)(c) of the Act speak about financial assistance and financial benefits, respectively, given under a court order. If the relevant approvals are obtained at the scheme meeting, then the manner in which the whole process operates will be pursuant to the Court's order in relation to the approval of the scheme. The approval of the scheme is a matter for the second hearing.
49 Justice Siopis considered these issues of financial assistance and financial benefit in relation to the previous schemes proposed by Talison. At [16] and [17] of the Judgment, Siopis J was satisfied on the evidence disclosed, being an opinion from an independent expert, that the arrangements would not be prejudicial to Talison and were negotiated at arm's length, and that the provisions of s 260A(1) and Ch 2E of the Act did not preclude approval of the schemes in the event that the requisite majorities were to be obtained.
[18]
Arm's length dealing
50 The arm's length test requires that the terms of the transaction be assessed against objective standards. The subjective views of the parties to the transaction are relevant, but not decisive.
51 The Court will consider whether:
(a) the parties were unrelated;
(b) the parties were free from any undue influence or pressure;
(c) through their decision makers, each party was sufficiently knowledgeable about the circumstances of the transaction, sufficiently experienced in business and sufficiently well advised to be able to form a sound judgment as to what is in its interests; and
(d) each party was concerned only to achieve the best available commercial result for itself in all the circumstances.
52 The Court may have regard to expert evidence to determine whether the transaction is within the range of reasonable outcomes of the transaction for a public company, but is not bound to rely on such expert evidence and blind itself to common sense and obvious commercial prudence.
53 Talison submits, and I accept, that the Option Scheme was entered into at arm's length on the basis that:
(a) those directors provided with a Loan will participate in the Option Scheme on the same terms as all optionholders and was negotiated free from undue influence, control or pressure;
(b) Ernst & Young has provided an independent expert report which states that the transaction was entered into at arm's length;
(c) the board of Talison is sufficiently knowledgeable about the circumstances of the transaction and has resolved that the directors consider the Loans were entered on an arm's length basis; and
(d) the shareholders and optionholders will be able to vote on the Share Scheme and Option Scheme having had full disclosure of the Loans.
[19]
Risk and Title
54 The Share Scheme is annexed as Annexure D of the scheme booklet, and the Option Scheme is annexed as Annexure F of the scheme booklet.
55 "Performance risk" is dealt with by timing the provision of the scheme consideration such that it must be provided before the transfer of Shares or Options from Talison to the Bidder takes place.
56 Clause 7.5(a) of each of the Share Scheme and the Option Scheme provides for a transfer of the Shares, Options or LTIP Shares (as the case may be) with clear title. A clause to this effect was approved by Lindgren J in Investa Properties Limited, in the matter of Investa Properties Limited [2007] FCA 1104 at [22]-[30].
57 Clause 7.5(b) of each of the Share Scheme and the Option Scheme provides for a shareholder or optionholder warranty that the Shares, Options or LTIP Shares (as the case may be) are transferred free of encumbrances. Specific disclosure of this in the explanatory statement has been standard practice since 2007. The disclosure appears in s 5.9, as regards the Shares, and s 6.12, as regards the Options and LTIP Shares, of the Scheme Booklet.
58 Clause 7.7 of the Share Scheme and cl 7.8 of the Option Scheme provide that the proxy right does not arise until the scheme consideration is paid.
[20]
ASIC Consideration
59 The jurisdiction of the Court to make an order convening meetings under s 411(1) is conditional upon the matters set out in s 411(2). Section 411(2) requires that the Court be satisfied of two matters before making an order. First, that the Australian Securities and Investments Commission (ASIC) has been given 14 days' notice of the hearing, or such lesser period of notice as the Court or ASIC permits: s 411(2)(a). Second, that ASIC has had a reasonable opportunity to examine the terms of the scheme and the draft explanatory statement, and to make submissions to the Court: s 411(2)(b).
60 The Scheme Booklet was originally lodged with ASIC on 12 December 2012 and the Scheme Booklet was updated. Notice of the date and time of the hearing was given to ASIC on 12 December 2012.
61 ASIC has indicated that it did not intend on attending or making submissions at the first court hearing. This follows a period of consultation and review of the documents since the date of first lodgement. There has not been strict compliance with these requirements. ASIC has not raised any concerns with timing.
[21]
Section 411(17)
62 Section 411(17) is not considered at the first court hearing. Justice Barrett comprehensively considered the s 411(17) issue in Macquarie Private Capital A Limited [2008] NSWSC 323 at [23]-[31], coming to the conclusion at [31], that the issue was a second hearing issue.
63 I am satisfied that the statutory requirements have been met. There has also been compliance with Federal Court Practice Note Corp 3. This appears in the "Important Notices" immediately behind the front cover of the Scheme Booklet.
64 ASIC has given or will give certain regulatory waivers.
[22]
Orders
65 The principal orders are addressed below:
(a) Talison is directed to convene meetings for each of the Share Scheme and Option Scheme. This will ensure that Talison can determine the date under reg 7.11.37 of the Corporations Regulations;
(b) given r 3.3(2) of the Corporations Rules, no orders were sought for despatch of the notice of meeting and associated documents relating to the proposed Share Scheme and Option Scheme meetings. This occurs in accordance with Pt 2G.2 of the Act (excluding replaceable rules), the rules of the TSX and Talison's Constitution insofar as they are not inconsistent with Pt 2G.2 of the Act (excluding replaceable rules);
(c) an order granting power to the meeting chairman of the Share Scheme and Option Scheme meetings to adjourn the meetings;
(d) the operation of r 2.15 of the Corporations Rules is excluded, except for reg 5.6.13 of the Corporations Regulations; and
(e) the period of time for notice of the second hearing to be published in the newspaper be reduced to 5 days.
66 Accordingly, I will make the orders sought in the amended Minute of Orders.
I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.