FEDERAL COURT OF AUSTRALIA

Equigold NL, In the matter of Equigold NL (No 2) [2008] FCA 826 

IN THE MATTER OF EQUIGOLD NL, EQUIGOLD NL

NSD 544 OF 2008

EMMETT J

30 APRIL 2008

SYDNEY

IN THE MATTER OF EQUIGOLD NL ABN 42 060 235 145

THE COURT ORDERS THAT:

1.         Order 1(h) of the Orders made by the Court on 23 April 2008 be varied to read:

“On or before 2 May 2008 there be dispatched to each Equigold Shareholder:

(i)         a document substantially in the form of the Scheme Booklet;

(ii)        a proxy form for the Scheme Meeting; and

(iii)       a reply paid (for use in Australia only) envelope addressed to Computershare Investor Services Pty Limited for the return of the proxy form,

in the case of each Equigold Shareholder who has a registered address in Australia, by prepaid post and, in the case of each Equigold Shareholder who has a registered address outside Australia, by prepaid airmail or air courier, in each case addressed to the relevant address set out in the Equigold register of members.”

2.         These orders to be entered forthwith.

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

IN THE MATTER OF EQUIGOLD NL ABN 42 060 235 145

REASONS FOR JUDGMENT

1                          On 23 April 2008, the Court made an order pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act) that the plaintiff, Equigold NL (Equigold), convene a meeting of the holders of ordinary shares for the purposes of considering and, if thought fit, agreeing to a scheme of arrangement proposed to be made between Equigold and those shareholders (the Scheme).

2                          By order 1(h), the Court ordered that certain documents be dispatched to each Equigold shareholder in the manner set out in the order.  Rule 3.3(2) of the Federal Court (Corporations) Rules 2000 (Cth) (the Rules) provides:

Unless the Court otherwise orders, a meeting of members ordered under section 411 of [the Act] must be convened, held and conducted in accordance with:

(a)        the provisions of Part 2G.2 of [the Act] that apply to the members of a company; and

(b)        the provisions of the plaintiff's constitution that apply in relation to meetings of members and are not inconsistent with Part 2G.2 of [the Act].

The effect of that provision is that the order required that each Equigold shareholder be given 28 days notice of the meeting.  Clause 30.8 of the Constitution of Equigold has the effect that, where a notice of a meeting is given by post, the notice is to be treated as given on the second business day after it was posted.

3                          The proposed meeting is to be held on 30 May 2008 in Perth.  It was intended that the relevant documents would be dispatched to the members of Equigold today.  However, unforeseen circumstances have prevented Equigold from doing so.  The reasons are that unforeseen capacity constraints at the premises of the printer retained to prepare the material have resulted in delays in completion of the relevant documents.  In addition, further time was required to bind the documents as a result of a printing error that was identified after printing had been completed.

4                          The share registrar and mailing house responsible for the dispatch of the documents expects to be in a position to have the documents ready for mailing by no later than 5 pm on 1 May 2008.  However, at this stage no guarantee can be given that the documents will be ready for dispatch at that time. 

5                          In the circumstances, Equigold has applied to the Court for a variation of the orders made on 30 April 2008.  Section 1319 of the Act provides:

Where, under this Act, the Court orders a meeting to be convened, the Court may, subject to this Act, give such directions with respect to the convening, holding or conduct of the meeting, and such ancillary or consequential directions in relation to the meeting, as it thinks fit.

Clearly enough, the Court has jurisdiction to vary the orders made on 23 April 2008.

6                          The rationale for the requirement in the Act for 28 days notice to be given is that the period of 21 days that was previously provided in earlier legislation could be inadequate for non-resident shareholders.  A copy of the proposed documents containing the notice of the meeting was lodged with ASX today.  The number of non-resident shareholders does not constitute a substantial proportion either of the number of shareholders or number of shares held. On the other hand, it is not an insignificant number.

7                          I consider that the appropriate course is to accede to the application by Equigold.  That, of course, would not necessarily be an end of the matter.  Assuming the members pass the resolution at the meeting with the requisite majority, it will be a matter, for the Court to decide whether to approve the Scheme.  If there were opposition to the Scheme at the second hearing, the fact that less than the statutory period of notice had been given may be a matter that could be taken into account by the Court.  However, that is a matter for another day.

8                          I propose to make an order, the effect of which is that the notice of the meeting must be dispatched on or before 2 May 2008.  That will allow an extra day’s grace against the possibility that the mailing house is unable to dispatch the relevant documents by tomorrow.  That would result in notice to shareholders four days less than the period of notice required by the Act.

Associate:

Dated:         17 June 2008