FEDERAL COURT OF AUSTRALIA

White Energy Company Limited, in the matter of White Energy Company Limited (No 2) [2009] FCA 1424

CORPORATIONS – scheme of arrangement – proposed merger – parties to merger implementation agreement terminated the agreement – application for orders that proposed meetings of members and option holders to approve scheme of arrangement not be held.

Corporations Act 2001 (Cth) s 1319

Re Australian Gas Light Co (2006) 57 ACSR 67

Re North Flinders Mines Ltd (1996) 66 SASR 437

CMPS&F Pty Limited v Crooks Mitchell Limited (1997) 76 FCR 366

Re Symbion Health Limited [2007] VSC 571

Re Anzon Energy Limited (No 2) (2008) 66 ACSR 355

IN THE MATTER OF WHITE ENERGY COMPANY LIMITED (ACN 071 527 083)

WHITE ENERGY COMPANY LIMITED (ACN 071 527 083)

WAD 164 of 2009

SIOPIS J

18 NOVEMBER 2009

PERTH

IN THE MATTER OF WHITE ENERGY COMPANY LIMITED (ACN 071 527 083)

THE COURT ORDERS THAT:

1.     The meetings convened by the Plaintiff pursuant to orders number 1 and 2 of the orders made herein on 15 October 2009 not be held.

2.     On or before 19 November 2009 the Plaintiff despatch to those of its Shareholders (as defined in Orders made herein on 15 October 2009) that reside or have their registered office in Australia by pre-paid post a notice in the terms attached to these Orders and marked “A”.

3.     On or before 19 November 2009 the plaintiff despatch to those of its Optionholders (as defined in Orders made herein on 15 October 2009) that reside or have their registered office in Australia by pre-paid post a notice in the terms attached to these Orders and marked “B”.

4.     Orders 3-6, 11-13 inclusive made herein on 15 October 2009 be revoked.

5.     The proceeding is otherwise dismissed.

“A”

WHITE ENERGY COMPANY LIMITED

ACN 071 527 083

(“the Company”)

NOTICE TO MEMBERS OF THE COMPANY OF orders cancelling

meetings called to consider SCHEME OF ARRANGEMENT UNDER

SECTION 411 OF THE CORPORATIONS ACT 2001 (CTH)

TAKE NOTICE that on 18 November 2009 the Federal Court of Australia, on the application of the Company, made orders:

(a)               cancelling the meeting of shareholders that the Court had, on 15 October 2009, ordered to be convened on 23 November 2009;

(b)               dismissing the Company’s application generally in relation to the previously proposed Scheme of Arrangement with Asia Special Situation Acquisition Corp (ASSAC).

Further details in respect of the Company’s decision not to proceed with the Scheme of Arrangement with ASSAC are contained in the Company’s ASX announcement dated 11 November 2009, which can be found on the ASX Company Announcement Website.

Dated this (*) day of (*) 2009.

This notice is given by Steinepreis Paganin, solicitors for the Company.

“B”

WHITE ENERGY COMPANY LIMITED

ACN 071 527 083

(“the Company”)

NOTICE TO HOLDERS OF OPTIONS IN THE COMPANY OF orders cancelling

meetings called to consider SCHEME OF ARRANGEMENT UNDER

SECTION 411 OF THE CORPORATIONS ACT 2001 (CTH)

TAKE NOTICE that on 18 November 2009 the Federal Court of Australia, on the application of the Company, made orders:

(a)               cancelling the meeting of Optionholders that the Court had, on 15 October 2009, ordered to be convened on 23 November 2009;

(b)               dismissing the Company’s application generally in relation to the previously proposed Scheme of Arrangement with Asia Special Situation Acquisition Corp (ASSAC).

Further details in respect of the Company’s decision not to proceed with the Scheme of Arrangement with ASSAC are contained in the Company’s ASX announcement dated 11 November 2009, which can be found on the ASX Company Announcement Website.

Dated this (*) day of (*) 2009.

This notice is given by Steinepreis Paganin, solicitors for the Company.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

IN THE MATTER OF WHITE ENERGY COMPANY LIMITED (ACN 071 527 083)

REASONS FOR JUDGMENT

1                          On 15 October 2009, the Court made orders for the convening of meetings of the plaintiff’s members and option holders to be held on 23 November 2009, for them to consider resolutions proposing the approval of a scheme of arrangement between the plaintiff (White Energy) and its members and option holders respectively.  There were also orders made for the despatch of the scheme booklet and for the advertising of the meetings.  On 22 October 2009, White Energy despatched the scheme booklet.

2                          Mr John Atkinson, a director of White Energy, in his affidavit of 16 November 2009, deposed to certain developments which have occurred since the making of the orders.  The developments have a dramatic effect upon the implementation of the proposed scheme.

3                          The major agreement which underpins the implementation of the proposed scheme is the merger implementation agreement between White Energy Company Limited and Asia Special Situation Acquisition Corp (ASSAC), the company which would, pursuant to the scheme, effectively “merge” with White Energy.  Mr Atkinson deposed that he had attended meetings in Canada in October 2009 where it emerged that representatives of the banks advising ASSAC made it clear that it was unlikely that ASSAC would be able to raise sufficient funds to satisfy the requirements of cl 3.1(d) of the merger implementation agreement unless White Energy made significant financial concessions regarding the merger consideration.  Those concessions, said Mr Atkinson, were not able to be made.  There were also other issues which arose in relation to the satisfaction of conditions precedent in the merger implementation agreement.  As a consequence, said Mr Atkinson, an agreement has been entered into between ASSAC and White Energy terminating the merger implementation agreement and releasing each other from any obligations and liabilities arising under that agreement.  The consequence is, therefore, that the condition which underpins the whole of the proposed scheme has ceased to exist.

4                          The application before me today is for orders that the meetings, which are due to be held on 23 November 2009, to consider the resolutions for the approval of the schemes, not be held.  Mr Pendlebury has submitted that there would be no utility in holding the meetings in light of the fact that there is no further intention or obligation on behalf of ASSAC to proceed with the merger which was contemplated in the scheme.

5                          Mr Pendlebury has referred me to a number of authorities which deal with the power of the Court to order that the orders for the convening of the meetings which were made on 15 October 2009, be revoked.

6                          One of the cases which Mr Pendlebury referred me to is Re Australian Gas Light Co (2006) 57 ACSR 67 (Australian Gas Light) where Emmett J considered the power of the Court to make orders of the kind sought today.  In that case Emmett J referred to the case of Re North Flinders Mines Ltd (1996) 66 SASR 437, where Debelle J held that the court did not have the power to make orders to the effect sought by White Energy today.  However, Emmett J also referred to another case CMPS&F Pty Limited v Crooks Mitchell Limited (1997) 76 FCR 366 (CMPS&F) where Burchett J held that s 1319 of the Corporations Law which is the equivalent of s 1319 of the Corporations Act 2001 (Cth) did provide the Court with the power to cancel the holding of the meetings.  Emmett J relied upon CMPS&F to make orders terminating the holding of meetings which had not yet been held in order to consider resolutions for the approval of schemes.

7                          Since then the Australian Gas Light decision has been followed by Robson J in Re Symbion Health Limited [2007] VSC 571 (Symbion) and by Lindgren J in Re Anzon Energy Limited (No 2) (2008) 66 ACSR 355 (Anzon Energy).  There is a similarity between the facts in Anzon Energy and the facts in this case because in that case, Anzon Energy and Nexus, which had intended to proceed under a merger implementation agreement, agreed not to proceed with the agreement.  Lindgren J found that, in those circumstances, there was no utility in reconvening the meetings to approve the scheme, which, at that time, stood adjourned.  Lindgren J determined that the meetings be dissolved and not be resumed.

8                          I would follow the decisions in Australian Gas Light, Symbion and Anzon Energy.  Accordingly, I am content that the Court does have the power to make the orders which are sought here today.

9                          As I have said, there is a similarity between the facts in this case and those in Anzon Energy - the main difference being that the meetings in this case have not yet been held.  However, in Australian Gas Light, the meetings had not yet been held and the Court order, in effect, revoked the orders for holding the meetings.  Accordingly, I am quite satisfied that the Court has the power to make the orders sought and that it should exercise the power on the basis that there would be no utility in proceeding with the meetings.

10                        In those circumstances, I will make the orders which have been handed to me in the proposed minute of orders by Mr Pendlebury.

Associate:

Dated:         3 December 2009