Tox Free Solutions Limited, In the matter of Tox Free Solutions Limited [2018] FCA 977

Tox Free Solutions Limited, In the matter of Tox Free Solutions Limited [2018] FCA 977 - FCA 2018 case summary — Zoe

Pursuant to section 411(1) of the Corporations Act 2001 (Cth) (Act): (a) the Plaintiff convene a meeting of the holders of its ordinary shares (Shareholders) (scheme Meeting) for the purpose of considering, and if thought fit, approving a scheme of arrangement (with or without modification) proposed to be made between the Plaintiff and the Shareholders (scheme), being the scheme in the form set out in Annexure C of the scheme booklet, containing the explanatory statement, in relation to the scheme which is annexure MAP5 of the affidavit of Mark Anthony Paganin sworn on 2 March 2018 in the proceeding (scheme Booklet); (b) the scheme Meeting be held at 10:00am (AWST) on Friday, 6 April 2018 at the Parmelia Hilton Perth (Karri Room), 14 Mill Street, Perth, WA 6000; (c) Robert John McKinnon, or failing him, Michael James Humphris, be the chairperson of the scheme Meeting and report the result of the scheme Meeting to this Court; and (d) the chairperson appointed to the scheme Meeting have the power to adjourn the scheme Meeting in their absolute discretion for such time that the chairperson considers appropriate, and to a time and place to be advised by the chairperson as necessary.
Pursuant to section 1319 of the Act, Rule 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) (Corporations Rules) shall not apply to the scheme Meeting.
Subject to these Orders and pursuant to s 1319 o the Act, the 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 and the provisions of the Plaintiff's constitution that are not inconsistent therewith and that apply to meetings of members; and (b) convened using the notice of meeting in the form or to the effect of the notice contained in Annexure E of the scheme Booklet.
Pursuant to s 411(1) of the Act, the scheme Booklet, which contains the explanatory statement required by section 412(1)(a) of the Act, is approved for distribution to the Shareholders.
Subject to registration of the scheme Booklet with the Australian Securities & Investments Commission (ASIC) pursuant to s 412(6) of the Act, the Plaintiff is to dispatch, on or before 7 March 2018, a document substantially in the form of the scheme Booklet, a proxy form, and a reply-paid envelope addressed to Computershare Investor Services Pty Limited to each Shareholder on the Plaintiff's register of members (Register) to the relevant address set out in the Register by: (a) in the case of each Shareholder who has a registered address in Australia, prepaid post; (b) in the case of each Shareholder who has a registered address outside Australia, prepaid airmail or air courier; and (c) in the case of each Shareholder who has nominated an electronic address for the purposes of receiving notifications of notices of any meeting from Computershare Investor Services Pty Ltd, by email to the email address nominated by that Shareholder, with such email to contain a link to a website at which those Shareholders can access the relevant documents, and lodge a proxy form on the proposed scheme, with such email substantially in the form of Annexure A to these Orders.
Dispatch of the documents referred to in paragraph 5 of these Orders in accordance with its terms is to be taken to be sufficient notice of the scheme Meeting.
The time by which the Shareholders must return their proxy forms for the scheme Meeting is 10am on Wednesday, 4 April 2018.
Two shareholders present in person, or by proxy, corporate representative, or attorney under power and entitled to vote shall constitute a quorum for the scheme Meeting.
All voting at the scheme Meeting be by poll declared by the chairperson.
All votes cast by: (a) a director of the Plaintiff (and their associates); (b) a director, secretary or officer of the Plaintiff (and their associates) who will receive any payment, entitlement or benefit as compensation for their retirement from office as a result of the scheme proceeding; (c) a director or officer of the Plaintiff (and their associates) who will receive cash bonus entitlements as a result of the scheme proceeding; (d) any persons (and their associates) who will receive accelerated retention payments as a result of the scheme proceeding; and (e) holders of performance rights or share appreciation rights in the Plaintiff (and their associates), (f) be "tagged" and identified by affidavit evidence filed by the section 411(4)(b) hearing.
If the matter is relisted, the Plaintiff is to give notice of the hearing of the application pursuant to section 411(4) of the Act and that notice of the hearing of an application pursuant to sub-section 411(4)(b) of the Act for orders approving the scheme be published once in 'The Australian' newspaper by an advertisement substantially in the form of Annexure B to these Orders, such advertisements to be published on or before 7 April 2018 and the Plaintiff be otherwise exempted from compliance with Rule 3.4 of the Corporations Rules.
The proceeding be adjourned to 16 April 2018 at 10:15am before Justice Banks-Smith for the hearing of an application to approve the scheme.
There be liberty to apply on 24 hours written notice. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

[9]

Pursuant to s 1319 of the Corporations Act 2001 (Cth), order 1(b) of the orders made on 2 March 2018 that the meeting of the Plaintiff's shareholders be held at 10:00am (AWST) on Friday, 6 April 2018 at the Parmelia Hilton (Karri Room), 14 Mill Street, Perth, WA 6000 (scheme Meeting) to consider the proposed scheme of arrangement (with or without modification) between the Plaintiff and its shareholders (scheme), be varied so that the scheme Meeting be held at 11:00am (AWST) on Thursday, 3 May 2018 at the Parmelia Hilton (Karri Room), 14 Mill Street, Perth, WA 6000.
Orders 7, 11, and 12 made by Justice Banks-Smith on 2 March 2018 otherwise be vacated.
Valid proxy forms for the scheme Meeting that have been lodged by shareholders of the Plaintiff are deemed to still be valid unless revoked, and members who directed their proxies in favour of the scheme are deemed to have directed their proxies to vote in favour of the scheme at the postponed scheme Meeting.
The time by which shareholders of the Plaintiff must return their proxy forms for the scheme Meeting is 11:00am (AWST) on Tuesday, 1 May 2018.
The notice of meeting issued by the Plaintiff to its shareholders on 7 March 2018 is deemed to still be valid for the purposes of the meeting of members proposed to be held at 11:00am (AWST) on Thursday, 3 May 2018 at the Parmelia Hilton (Karri Room), 14 Mill Street, Perth, WA 6000.
The scheme Meeting otherwise be convened and held in accordance with these orders, and the orders of 2 March 2018.
The Plaintiff is to dispatch a notice in a form substantially equivalent to the form that is annexure SWLN3 to the affidavit of Stephen Wei Liang Neale sworn on 23 March 2018 to each shareholder on the Plaintiff's register of members (Register) to the relevant address set out in the Register by: (a) in the case of each shareholder who has a registered address in Australia, prepaid post; (b) in the case of each shareholder who has a registered address outside of Australia, prepaid airmail or air courier; and (c) in the case of each shareholder who has nominated an electronic address for the purposes of receiving notifications of notices of any meeting from Computershare Investor Services Pty Ltd by email to the email address nominated by that shareholder.
The Plaintiff is to give notice of the hearing of the application pursuant to section 411(4) of the Corporations Act 2001 (Cth) (Act) and that notice of the hearing of an application pursuant to subsection 411(4)(b) of the Act for orders approving the scheme be published once in 'The Australian' newspaper by an advertisement substantially in the form of Annexure A to this application, with such advertisement to be published on or before Friday, 4 May 2018 and the Plaintiff be otherwise exempted from compliance with Rule 3.4 of the Federal Court (Corporations) Rules 2000 (Cth).
The proceeding be adjourned to Thursday, 10 May 2018 before Justice Banks-Smith for the hearing of any application to approve the scheme.
There be liberty to apply on 24 hours written notice. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. Annexure A Tox Free Solutions Limited Notice of Hearing to Approve scheme of Arrangement pursuant to section 411 of the Corporations Act 2001 (Cth) To all members of Tox Free Solutions Limited ACN 058 596 124 ('Tox') TAKE NOTICE that at 9:00am on Thursday, 10 May 2018, the Federal Court of Australia at Peter Durack Commonwealth Law Courts Building, 1 Victoria Avenue, Perth WA 6000 will hear an application by Tox seeking the approval of the scheme of arrangement between Tox and its ordinary shareholders, as proposed by a resolution passed by the meeting of ordinary shareholders held at the Parmelia Hilton Perth, 14 Mill Street, Perth, WA 6000 at 11:00am (AWST) on Thursday, 3 May 2018. If you wish to oppose the approval of the above arrangement, you must file and serve on Tox a notice of appearance, in the prescribed form, together with any affidavit which you wish to rely on at the hearing. The notice of appearance and affidavit must be served on Tox at its address for service by no later than one business day before 10 May 2018. The address for service of Tox is c/- Clayton Utz, Level 27, QV.1 Building, 250 St Georges Terrace, Perth WA 6000 (Reference: Cameron Belyea) Facsimile: 08 9481 3095 Email: cbelyea@claytonutz.com. A copy of the scheme Booklet is available from the ASX's website at www.asx.com.au.

[17]

Principles 13 Section 411(1) of the Act relevantly provides that, where an arrangement is proposed between a Pt 5.1 body and its members, the Court may, on the application of the body in a summary way, order a meeting of the members to be convened in such manner and to be held in such place as the Court directs. Where the Court makes such an order, the Court may approve the explanatory statement required by s 412(1)(a) to accompany the notice of such a meeting. 14 Section 412(1)(a) of the Act relevantly provides that, where a meeting is convened under s 411, the Pt 5.1 body must, with every notice convening the meeting, send a statement explaining the effect of the arrangement. That statement must state any material interests of the directors and the effect of the proposed arrangement on those interests insofar as they may differ from the effect on the like interests of other persons. The statement must also set out such information as is prescribed and any other information that is material to a member's decision to agree or not agree to the arrangement. 15 The authorities refer generally to six matters to be proved at the first stage: (1) the plaintiff is a Pt 5.1 body; (2) the proposed scheme is an 'arrangement' within the meaning of s 411 of the Act; (3) the explanatory statement will provide proper disclosure to members; (4) the scheme is bona fide and properly proposed; (5) ASIC has had reasonable opportunity to examine the proposed scheme and the explanatory statement, has had reasonable opportunity to make submissions and has had 14 days' notice of the hearing date of the first Court hearing; and (6) any other procedural requirements have been met, such as r 3.2 of the Federal Court (Corporations) Rules 2000 (Cth) (Rules) as to the nomination of a chairperson for the scheme meeting. See, for example, Amcom Telecommunications Ltd, in the matter of Amcom Telecommunications Ltd [2015] FCA 341 at [8] per McKerracher J; EcoBiotics Limited, in the matter of EcoBiotics Limited [2017] FCA 643 at [19] per Gleeson J. 16 The principles as to the nature of the review at the first Court hearing are summarised elsewhere: for recent examples, see Re Programmed Maintenance Services Ltd [2017] FCA 1265 at [11]-[14] per McKerracher J; Signature Gold Ltd, in the matter of Signature Gold Ltd [2017] FCA 1481 at [22]-[23] per Markovic J. In summary, the standard of review is whether the proposed scheme is not inappropriate and is one that sensible business people might consider is of benefit to its members. 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 majority, then leave should be given to convene the meeting.

[25]

Special Dividend 26 Tox intends to declare a fully franked 'Special Dividend' in the amount of $0.58, with payment of that Special Dividend dependant on the scheme becoming effective. Tox is entitled to declare and pay the Special Dividend pursuant to clause 5.2 of the SID. 27 Information relating to the Special Dividend is contained in the scheme booklet including statements to the effect that each Tox shareholder should seek professional advice as to whether or not they are able to obtain a benefit from the franking credits attached to the Special Dividend. 28 Under clause 5.5 of the SID, the scheme consideration payable per share to Tox shareholders by BidCo is to be reduced by the value of the Special Dividend. 29 The proposal raised various questions: (a) whether Tox would be providing financial assistance to BidCo to purchase Tox; (b) whether the arrangement creates a new class; and (c) whether the payment of the Special Dividend affects Tox's ability to pay its creditors. 30 Mr Last's evidence disclosed that neither BidCo nor Cleanaway owns any shares in Tox. Therefore, there is no issue of Tox providing financial assistance to BidCo: see In the matter of SMS Management & Technology Limited [2017] VSC 257 at [30] per Robson J. 31 Tox will determine a shareholder's eligibility to receive the Special Dividend after the scheme has become effective and after Tox's shares have been suspended from trading on the ASX. All Tox shareholders as at the day following the 'Effective Date' (as defined in the SID) will be eligible to receive the Special Dividend. All participating shareholders will receive the same benefits under the scheme, and will be entitled to the same total cash payment (comprising the scheme consideration paid by BidCo, and the Special Dividend), and have the same rights against Tox under the scheme. 32 Accordingly, Tox submitted that the Special Dividend arrangement does not create a new class. I accept that submission. This scheme proceeded appropriately on the basis of there being only one class of shareholders. 33 Mr Constable provided evidence that the Special Dividend is being paid out of the profits of the Tox consolidated group. Payment is being funded partly from Tox's available cash and cash equivalents, and partly from debt facilities provided to Tox. 34 Tox submitted that it is not unusual for dividends to be funded from borrowings, so long as the company has sufficient funds to cover the payment of the dividend as well as all other liabilities then presently due and payable: QBE Insurance Group Ltd v Australian Securities and Investments Commission [1992] FCA 697; (1992) 38 FCR 270, 288 per Lockhart J. 35 Tox relied on various matters in submitting that the payment of the Special Dividend will not materially prejudice Tox's ability to pay its creditors: (a) Mr Constable provided evidence that the chief financial officer of Tox had undertaken an analysis and had confirmed Tox's ability to pay the Special Dividend out of retained earnings; (b) Mr Constable's evidence disclosed that the Tox Board considered, amongst other things, s 254T of the Act (which deals with the circumstances in which a company may pay a dividend) when assessing whether to declare the Special Dividend; (c) Mr Constable deposes to the fact that the scheme, including the payment of the Special Dividend, will not affect the interests of Tox's creditors; (d) the independent expert valued Tox on the basis that the Special Dividend payable by Tox formed part of the 'Total Cash Payment' to be received by Tox shareholders, and this did not impact the opinion as to the scheme being fair and reasonable and in the best interests of shareholders; and (e) Mr Last's evidence and the scheme booklet disclose that Cleanaway and BidCo have total funds available under certain facilities sufficient to refinance the indebtedness of the Cleanaway and Tox groups). 36 I was satisfied on the basis of the relevant evidence that the proposed Special Dividend payment did not provide any basis for refusing to convene the scheme meeting.

[27]

Tox unlisted securities 42 Mr McArthur deposed to these matters. Tox has 1,406,295 unlisted 'Performance Rights' on issue, and 1,165,904 unlisted 'Share Appreciation Rights' on issue (Tox Unlisted Securities). The existence of those rights is disclosed in the scheme booklet. 43 The Performance Rights were issued under Tox's 2011 Long Term Incentive Plan, and Tox's 2016 Simplified Incentive Plan. The Share Appreciation Rights were issued under Tox's 2011 Long Term Incentive Plan. 44 In short, Tox is required to put in place arrangements so that all outstanding Tox Unlisted Securities vest or lapse prior to the 'Scheme Record Date'. 45 In respect of Tox Unlisted Securities issued under the 2011 Long Term Incentive Plan (and in summary): (a) the Tox Board is entitled to determine, in its sole and absolute discretion, the manner in which Tox Unlisted Securities issued under that plan will be dealt with; (b) at a meeting of the Tox Board on 14 February 2018, it was resolved to accelerate the vesting of all outstanding Tox Unlisted Securities issued under that plan; and (c) Tox Unlisted Securities issued under that plan will vest immediately upon the scheme becoming effective and the relevant number of fully paid ordinary shares in Tox will be issued by no later than the business day immediately prior to the 'Scheme Record Date'. 46 In accordance with the 2016 Simplified Incentive Plan (and again in summary), all Tox Unlisted Securities issued under that plan will vest immediately, and any conditions relating to those vested Tox Unlisted Securities will be waived upon the occurrence of a change of control event, which will occur once the scheme becomes effective. 47 Tox submitted that this is an orthodox manner of dealing with share performance rights issued to directors and executives of a company the subject of an acquisition scheme. I accept that is the case: see, for example, In the matter of Skilled Group Ltd (No 1) [2015] VSC 789; 113 ACSR 525 at [60] per Robson J; Amcom at [29] per McKerracher J; Programmed Maintenance Services at [26] per McKerracher J. 48 Tox submitted that: To the extent that a Tox Shareholder also holds Tox Unlisted Securities, that Tox Shareholder will receive no different consideration ultimately per share because the conversion of that member's Tox Unlisted Securities only gives an entitlement to a greater share of the scheme consideration (but no greater consideration per share). A Tox Unlisted Securities holder whose rights automatically vest on the scheme becoming 'Effective' will be treated as a member, will be recorded as a member on the record date, and will share in the scheme consideration. The receipt of such amounts does not result in a member receiving a right or benefit under the scheme that is different from other members, and the amount is received as holder of, and in exchange for, Tox Unlisted Securities (see Re Skilled Group Ltd (ACN 005 585 811) (No 1) (2015) 113 ACSR 525 per Robson J at [82]). All holders of Tox Unlisted Securities are separately and independently Tox Shareholders …. In the event that holders of Tox Unlisted Securities did not also hold shares in Tox, they would not be entitled to vote at the scheme Meeting in any capacity (see Re Skilled Group Ltd (ACN 005 585 811) (No 1) supra at [62] per Robson J ). 49 After consultation with ASIC, Tox indicated it would tag those votes cast on the scheme by the holders of Tox Unlisted Securities for the purpose of reporting to the Court at the scheme approval meeting. 50 Further, Tox noted that the Tox Unlisted Securities represent no more than 1.31% of Tox's issued capital on a fully diluted basis, and only 0.32% of Tox's registered shareholders. 51 I was satisfied on the basis of the relevant evidence that the existence and proposed treatment of the unlisted securities did not provide any basis for refusing to convene the scheme meeting.

[32]

Distribution of scheme booklet 61 Tox retained Computershare Investor Services Pty Ltd (Computershare) to manage notification processes with members. 62 Tox sought an order pursuant to s 1319 of the Act for the despatch of the scheme booklet and proxy form by electronic means to those members who have nominated an electronic address for the purpose of receiving notices of meetings from Tox. 63 As at 28 February 2017, of the 4,879 registered shareholders some 2,481 shareholders were nominated to receive notices of meetings by electronic means. 64 As to those 2,481 shareholders, Tox (via Computershare) proposed to send an email to each nominated electronic address, to inform the member concerned of the convening of the scheme meeting. The email would include a link to the scheme booklet. The email would also include instructions on voting procedure, including on how to appoint a proxy. 65 In this regard, I expressed some concern during the hearing that the Computershare proxy form as drafted suggested that members can 'vote online'. This was intended to be a reference to appointing a proxy online. This issue also arose in Fairfax Media, in the matter of Fairfax Media Ltd [2017] FCA 1149. As Yates J noted in that case (at [36]): The description "vote online" is inapposite. It may confuse members into thinking that, by following the instructions, votes in favour of or against the scheme can be cast online. The plaintiff's Constitution does not provide for this means of voting and certainly s 411(4) of the Act does not contemplate such voting. 66 The position is the same in this case. A revised proxy form was provided by Tox to reflect the intended position. 67 Tox proposed that in the case of 'bounce back emails', Computershare would send by prepaid post the scheme booklet and annexures to the relevant members. 68 The Court may make orders that provide for the electronic dispatch of a scheme booklet: MDA National Ltd v Medical Defence Australia Ltd [2014] FCA 954 at [105] per Yates J; Amcom at [45]. 69 Members who did not elect to receive notices of meetings by electronic means were to be sent a copy of the scheme booklet, a proxy form and a reply-paid envelope addressed to Computershare by pre-paid post or courier to their addresses recorded in the register of members.

[36]

The POSTPONEMENT application 74 On 27 March 2018 on short notice, Tox applied for supplementary orders under s 1319 of the Act. In particular, it sought orders facilitating the postponement of the scheme meeting from 6 April 2018 to 3 May 2018. There is no power under the Tox Constitution to allow the directors to postpone the scheme meeting. 75 The affidavit evidence filed in support of the application explained that the basis for the postponement was that on 23 March 2018, the ACCC updated its public register to note that it had delayed the proposed date for announcement of its decision or statement of issues as to BidCo's acquisition of Tox from 29 March 2018 to 26 April 2018, in order to consider additional information. 76 Tox submitted that it was desirable for the ACCC's decision to be released prior to Tox shareholders voting on the scheme, and that was clearly an appropriate submission. 77 Tox therefore wished to provide supplementary information to the shareholders. However, where a meeting has been convened under s 411 of the Act, only information approved by the Court for dispatch to creditors should be provided to members: Coates Hire Limited (No 2), in the matter of Coates Hire Limited [2007] FCA 2105 at [6]. 78 Tox prepared a draft letter to shareholders notifying them of the proposed postponement (Postponement Letter) and ASIC indicated that it had no comments on the Postponement Letter and did not wish to be heard on the application. 79 The power under s 1319 has been used by the Court to: (a) postpone a scheme meeting: Associated Advisory Practices Ltd, in the matter of Associated Advisory Practices Ltd (No 2) [2013] FCA 979 at [8] per Farrell J; and (b) give leave to dispatch supplementary information in relation to the scheme: Cape Alumina Ltd, in the matter of Cape Alumina Ltd (No 2) [2013] FCA 1238. 80 Having considered the materials, I was of the view that it was appropriate to make orders as to the postponement of the meeting and dispatch of the Postponement Letter to shareholders. 81 However, it was therefore necessary to consider ancillary matters, such as the effect on the programming orders previously made, the validity of the notice of meeting and the validity of proxy forms.

[48]

Other matters 112 Tox properly raised an issue with respect to shareholders it referred to as 'new shareholders'. 113 The new shareholders acquired shares in Tox after the register was reviewed on 6 March 2018 for the purpose of dispatch of the scheme documents. On 8 March 2018 the scheme documents were dispatched to those shareholders on the register as at 6 March 2018. Between 6 March 2018 and 26 April 2018 a total of 1,322 shareholders holding 19,692,742 shares (being approximately 10.1% of the issued share capital in Tox) became shareholders. 114 It is the standard practice of both Computershare and Tox to not issue meeting materials to shareholders who become shareholders following the initial dispatch of material. 115 However, in this case, Tox and Computershare took steps to both directly and indirectly bring the scheme documents to the attention of new shareholders prior to the scheme meeting. 116 Tox released a copy of the scheme booklet attached to an announcement to the ASX, and also provided a copy of the postponement letter to the ASX, both of which could be accessed via Tox's website. 117 On 26 April 2018 Tox determined to dispatch a copy of the scheme booklet, the proxy form and the postponement letter to the new shareholders (either electronically or by pre-paid courier, depending on the shareholder instructions). That process was undertaken by Computershare on 27 April 2018. Tox also determined to conduct an out-bound calling campaign via Georgeson Shareholder Communications Australia Pty Ltd (Georgeson) to inform the new shareholders of the cut-off date for lodging proxies (being 1 May 2018). 118 The evidence disclosed that: (a) a total of 721 of the 1322 new shareholders lodged a proxy in favour of the resolution (more than half); (b) no new shareholders voted against the resolution; (c) Georgeson was unable to contact some 103 new shareholders; (d) some 41 new shareholders accessed the scheme booklet via Computershare's online platform but did not lodge a proxy; and (e) even if the remaining 601 new shareholders who did not vote had voted against the resolution, the scheme would still have been approved by the requisite majority. 119 Tox submitted that because the scheme booklet and Postponement Letter had been dispatched to all shareholders including the new shareholders either electronically or by courier to their identified physical addresses, the terms of the orders of 2 March 2018 and 28 March 2018 as to the dispatch of scheme documents to shareholders had been met. It submitted that the orders made on 2 March 2018 cover dispatch to new shareholders as they do not distinguish between the positon of existing and new shareholders. Tox submitted that the evidence suggests that those new shareholders who wished to lodge proxies had the opportunity to do so, based on the high proportionate number who in fact appointed proxies. 120 It seems to me that there has been technical compliance with the orders as to the dispatch of the scheme documents. To the extent that the new shareholders have been provided with only short notice of the date for the lodgement of proxies, any prejudice would appear to have been limited in that a large number of the relevant shareholders in fact proceeded to lodge proxies. 121 Counsel for Tox drew the Court's attention to two cases where the position of new shareholders has been addressed. In both Consolidated Media Holdings Ltd, in the matter of Consolidated Media Holdings Ltd (No 2) [2012] FCA 1224 and Afterpay Holdings Limited, in the matter of Afterpay Holdings Ltd (No 2) [2017] FCA 737, the Constitution of the respective companies provided that (to paraphrase) a new shareholder would be bound by any notice provided to the shareholder from whom the new shareholder has acquired the shares. There is no such provision in Tox's Constitution. However, as already noted, Tox did in fact attempt to dispatch the scheme documents to the new shareholders in any event. Further, in both Consolidated Media and in Afterpay, the Court considered that deficiencies in service comprised a procedural irregularity which did not impact on the outcome of the meeting. I concur with that approach in the circumstances of this case. To the extent the manner of dispatch to the new shareholders was deficient, such deficiencies were of a procedural nature within the meaning of s 1322(2) of the Act, did not affect the outcome and in my view do not invalidate the convening or holding of the scheme meeting, or any resolution passed at the meeting.

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