FEDERAL COURT OF AUSTRALIA

Challenger International Ltd [2003] FCA 911

Corporations Act 2001 (Cth) s 411

APPLICATION BY CHALLENGER INTERNATIONAL LIMITED

(IN THE MATTER OF CHALLENGER INTERNATIONAL LIMITED

ACN 002 993 302)

N 3016 OF 2003

GYLES J

27 JUNE 2003

SYDNEY

THE COURT ORDERS THAT:

1.         The Scheme of Arrangement between the plaintiff and its ordinary shareholders which is annexed hereto and marked “A” be and is hereby approved.

2.         The Scheme of Arrangement between the plaintiff and its optionholders which is annexed hereto and marked “B” be and is hereby approved.

3.         The Scheme of Arrangement between the plaintiff and its noteholders which is annexed hereto and marked “C” be and is hereby approved.

4.         The plaintiff be exempt from compliance with s 411(11) of the Corporations Act 2001 (Cth).

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     I am satisfied that the order can be made as sought, and I am satisfied that the formalities have been attended to save for the issue of service, which counsel dealt with in par 20 of the submissions.  I am satisfied that, on the evidence, there is no suggestion that the irregularity caused or may cause substantial injustice, and I do not think that it should be a barrier to the confirmation of the schemes in this case.

2                     Counsel also pointed out an error in the explanatory memorandum.  That has been extensively discussed in the course of submissions, and evidence was called which explained to my satisfaction the precise error and seemed to satisfactorily back up what was said by way of supplementary explanation.  I am satisfied that there was sufficient publication of that explanation to those affected.  I appreciate there would not have been a perfect communication of the supplementary explanation, and I do not think that the topic is irrelevant or immaterial.  However, bearing in mind the extent of the disclosure and the explanation, and given the scale of the amounts involved, which although not insubstantial are quite minor compared with the amounts at stake, I do not think the error should be a barrier to approval. I have also taken into account that the circumstance is primarily a matter for the future which may be irrelevant to parties remaining shareholders, or unit holders.  It is not a matter which fixes once and for all a particular dollar amount.

3                     The only other matter which I wish to say something about is the question as to whether or not what counsel has called a ‘transfer scheme’, of which this scheme is an example, falls within the statutory description of an arrangement between the company and its members.  I am satisfied that the line of authority referred to by counsel, which either binds me or which I ought to follow in the interests of comity, satisfactorily establishes that proposition.  I will give some short supplementary reasons for coming to that view in due course.

4                     I therefore make an order in accordance with the minute of order with which I have been provided and which I have initialled.

Associate:

Dated:              29 August 2003