Vulcan Resources Ltd (ACN 100 072 624), in the matter of Vulcan Resources Ltd (ACN 100 072 624) (No 2) [2010] FCA 46

REASONS FOR JUDGMENT 1 On 16 and 17 December 2009, I made orders pursuant to s 411 of the Corporations Act 2001 (Cth) (CA) permitting the summoning of a scheme meeting and granting further leave to make an application for orders (following the meeting) for approval of a proposed scheme of arrangement (Vulcan Resources Ltd (ACN 100 072 624), In the matter of Vulcan Resources Ltd (ACN 100 072 624) [2009] FCA 1599). 2 The plaintiff (Vulcan) now applies for orders that the proposed scheme of arrangement between Vulcan and its shareholders (the Scheme) agreed to by a resolution of shareholders of Vulcan at a shareholders' meeting be approved, and for consequential orders. 3 Vulcan applies for the Scheme to be amended by inserting in cl 3(a)(1) of the Scheme the following words (in bold): all the conditions in clause 3.1of the Merger Implementation Agreement, other than clause 3.1(c), having been satisfied or waived in accordance with the terms of the Merger Implementation Agreement by 5.00pm on the day before the Second Court Date. A very similar amendment was approved by Gyles J in Re Investorinfo Ltd (2005) 24 ACLC 44 for reasons there stated at [6]-[8]. I will allow this amendment for the same reasons. 4 Vulcan's application was supported by affidavits confirming the details of the results of the Scheme meeting and confirming compliance with the provisions of Div 3 of the Federal Court (Corporations) Rules 2000 (the Rules) including the provisions relating to the advertising of notice of the final court hearing and to the service of documents on the Australian Securities and Investments Commission (ASIC). 5 It has been observed, and I agree, that ASIC has a significant role in schemes in the interest of investor and creditor protection. ASIC, having been requested to do so, has given a s 411(17)(b) CA statement of no objection in respect of the Scheme. 6 The Court is required by s 411(17) CA to not approve any scheme unless para (a) or para (b) of the section is satisfied. The subsection reads as follows: 411 Administration of compromises etc. … (17) 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). 7 The written statement of no objection by ASIC, while not binding the Court, may remove the requirement that the Court be satisfied that the arrangement has not been proposed for the proscribed purpose. I do rely on the statement but also observe there is no evidence of any indication that the purpose of the Scheme is to enable any person to avoid the operation of the provisions of Ch 6 CA setting out the takeover regime by which compulsory acquisition would otherwise be effected. 8 On the face of the materials considered in both the first application and the second application and in the absence of objection from ASIC and on the approval by the majority of the members who have had adequate time and adequate information to consider the Scheme, I am satisfied that this Scheme is not being proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Ch 6 CA. 9 I am satisfied that the evidence discloses that the special statutory majority required pursuant to s 411(4)(a)(ii) CA was achieved at the Scheme meeting. 10 I am also satisfied that the Scheme complies with Pt 5.1 CA and the applicable regulations. It has had all necessary approval on the basis of full and fair disclosure and adequate information to members. It is fair and reasonable. It is unconditional and binding on all members subject only to the Court's approval. I am also satisfied that the proposed Scheme was advanced in good faith and that on its face it is sufficiently fair and reasonable so that an intelligent and honest person able to vote for it, might approve it. 11 It appears to me that there has been statutory compliance in all necessary respects, that the Scheme is not promoted in pursuit of any illegitimate purpose and that the proposal advanced is fair and reasonable. 12 Accordingly I make the following orders: 1. Pursuant to s 411(4)(b) and s 411(6) of the Corporations Act 2001 (Cth) ('Act'): (a) the Scheme of Arrangement between the Plaintiff and its members being Annexure 2 to the Scheme Booklet which was registered by the Australian Securities and Investments Commission on 17 December 2009 and was assigned document number 024428643 be amended ('Amended Scheme') by inserting in cl 3(a)(1) of the Scheme the following words (in bold): "all the conditions in clause 3.1of the Merger Implementation Agreement, other than clause 3.1(c), having been satisfied or waived in accordance with the terms of the Merger Implementation Agreement by 5.00pm on the day before the Second Court Date"; and (b) the Amended Scheme is approved. 2. In accordance with s 411(12) of the Act, the Plaintiff is exempt from compliance with s 411(11) of the Act. 3. An office copy of these orders be lodged with the Australian Securities and Investments Commission within 10 business days after the date of these orders. 4. Liberty to apply. 5. These orders to be entered forthwith. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.