FEDERAL COURT OF AUSTRALIA

Talent2 International Limited, in the matter of Talent2 International Limited [2012] FCA 771

THE COURT ORDERS THAT:

1.    Pursuant to subsection 411(1) and section 1319 of the Corporations Act 2001 (Cth) (Corporations Act):

(a)    the Plaintiff, Talent2 International Limited (Talent2), convene a meeting (Scheme Meeting) of the ordinary shareholders in Talent2 (other than Morgan & Banks Investments Pty Limited, Allegis Group, Inc., Perbec Pty Limited or any of their respective bodies corporate (each a Joint Bidder Group Member), or any member who holds shares in Talent2 on behalf of a Joint Bidder Group Member, Andrew Banks, Geoff Morgan or any entity controlled by either Andrew Banks and/or Geoff Morgan), for the purpose of considering and, if thought fit, agreeing to (with or without modification) a scheme of arrangement proposed to be entered into between Talent2 and those shareholders (Scheme), the terms of which are contained in the Explanatory Statement, a copy of which is behind tab 1 of Exhibit MB1 including the amendments to Schedule 1 of Annexure F to that document which are marked Exhibit A (Scheme Booklet);

(b)    Talent2 convene a meeting of the holders of options over shares in Talent2 with an exercise price equal to or greater than $0.78 (Option Scheme Meeting 1) for the purpose of considering and, if thought fit, agreeing to (with or without modification) a scheme of arrangement proposed to be entered into between Talent2 and the holders of options over shares in Talent2 (Option Scheme), the terms of which are contained in the Scheme Booklet;

(c)    Talent2 convene a meeting of the holders of options over shares in Talent2 with an exercise price less than $0.78 (Option Scheme Meeting 2) for the purpose of considering and, if thought fit, agreeing to (with or without modification) the Option Scheme;

(d)    each of the Scheme Meeting, the Option Scheme Meeting 1 and the Option Scheme Meeting 2 be held on 20 August 2012 at Level 12, 179 Elizabeth Street, Sydney, New South Wales 2000 as follows:

(i)    the Scheme Meeting to commence at 10.15 am (Australian Eastern Standard Time (AEST)), or immediately following conclusion of the extraordinary general meeting of Talent2 shareholders (which is to be held at the same venue and prior to the Scheme Meeting), whichever is later;

(ii)    the Option Scheme Meeting 1 to commence at 10.30 am AEST, or immediately following conclusion of the Scheme Meeting, whichever is later; and

(iii)    the Option Scheme Meeting 2 to commence at 10.45 am AEST, or immediately following conclusion of the Option Scheme 1 Meeting, whichever is later;

(e)    Kenneth Charles Borda or, failing him, Pamela Laidlaw, be Chairperson of the Scheme Meeting, Option Scheme Meeting 1 and Option Scheme Meeting 2;

(f)    the Chairperson of the Scheme Meeting, Option Scheme Meeting 1 and Option Scheme Meeting 2 has the power to adjourn each meeting in his or her absolute discretion;

(g)    at the Scheme Meeting, the members of Talent2, present and entitled to vote, in person or by proxy or by an attorney under power, shall constitute a quorum;

(h)    at the Option Scheme Meeting1 and the Option Scheme Meeting 2, the holders of options over Talent2 shares, present and entitled to vote, in person or by proxy or by an attorney under power, shall constitute a quorum;

(i)    at the Scheme Meeting, each Talent2 shareholder, present and entitled to vote, will be entitled to one vote for each fully paid ordinary share in the capital of Talent2 that the shareholder is registered as holding at 7.00 pm (AEST) on 18 August 2012;

(j)    at the Option Scheme Meeting 1 and Option Scheme Meeting 2, each holder of an option to acquire shares in Talent2, present and entitled to vote, will be entitled to vote the options they are registered as holding at 7.00 pm (AEST) on 18 August 2012 according to their value on 20 August 2012 (determined as described in the Scheme Booklet);

(k)    the Scheme Booklet be approved for distribution;

(l)    on or before 20 July 2012 there be dispatched by pre-paid post, or in the case of a member or optionholder whose registered address is outside Australia, by pre-paid air mail, addressed to the relevant addresses set out in the register of members and register of optionholders of Talent2:

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

(ii)    in the case of each member, a proxy form in substantially the form of the document behind tab 4 in Exhibit MB1;

(iii)    in the case of each optionholder, a proxy form in substantially the form of the document behind tab 5 in Exhibit MB1; and

(iv)    an envelope addressed to Computershare Investor Services Pty Limited; and

(m)    the time by which proxy forms must be returned be on Saturday 18 August 2012 as follows:

(i)    in the case of the Scheme Meeting, 10.15 am (AEST);

(ii)    in the case of the Option Scheme Meeting 1, 10.30 am (AEST); and

(iii)    in the case of the Option Scheme Meeting 2, 10.45 am (AEST).

2.    On or before 18 August 2012, the Plaintiff publish a Notice of Hearing substantially in the form of Annexure “A” hereto in The Australian newspaper and the Plaintiff be relieved from compliance with Rule 3.4 of the Federal Court (Corporations) Rules 2000 (Cth) to the extent necessary.

3.    Regulations 5.6.11, 5.6.11A, 5.6.12 and 5.6.13A to 5.6.36A (inclusive) of the Corporations Regulations 2001 (Cth) shall not apply to the Scheme Meeting, the Option Scheme Meeting 1 or the Option Scheme Meeting 2.

4.    The proceedings be stood over to 10.15 am on 23 August 2012 before Justice Yates for the hearing of any application to approve the Scheme and the Option Scheme.

5.    There be liberty to apply on one day’s notice.

6.    These orders be entered forthwith.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    On 17 July 2012 I made orders pursuant to ss 411(1) and 1319 of the Corporations Act 2001 (Cth) (the Act) providing for the convening of meetings for the purpose of considering and, if thought fit, agreeing to certain proposed schemes of arrangement (with or without modification), the terms of which are set out in a scheme booklet which will stand as the explanatory statement required by s 412(1)(a) of the Act.

2    These are my reasons for making those orders.

Background

3     The plaintiff, Talent2 International Limited (Talent2), is a public company limited by shares. It is listed on the Australian Securities Exchange (ASX). Its principal activities include the development, sale and support of human resource advisory, payroll, recruitment and learning services.

4    On 25 May 2012 Talent2 entered into a scheme implementation deed (the SID) with Morgan & Banks Investments Pty Ltd (MBI), Allegis Group, Inc (Allegis) and Perbec Pty Limited (Perbec) which provided for the acquisition by Perbec of the ordinary shares of Talent2 (other than the shares held by certain excluded shareholders) by a scheme of arrangement under Pt 5.1 of the Act. The SID was subsequently amended on 29 June 2012. As at 2 July 2012 Talent2 had 147,403,701 fully paid ordinary shares on issue, with no other classes of shares on issue.

5    The proposed acquisition of the Talent2 shares represents a joint bid by MBI and Allegis using Perbec as the bid vehicle. Perbec is a wholly owned subsidiary of Pergal Pty Ltd (Pergal). Pergal, in turn, is a wholly owned subsidiary of MBI. Perbec and Pergal were incorporated for the purposes of the acquisition.

6    MBI currently owns 21.8% (32,105,226) of the fully paid ordinary shares of Talent2. MBI is “owned” by Andrew Banks and Geoff Morgan. They each have a relevant interest in 50% of the shares in MBI. Mr Banks is the chairman and managing director of Talent2. Mr Morgan is a director of Talent2.

7    Allegis is a private company incorporated in Maryland, in the United States of America. It is the parent company of a group of companies that provide staffing and recruitment services to various sectors of industry. It is the largest recruitment company in North America. Allegis Group Australia Pty Limited (Allegis Australia) is a wholly owned subsidiary of Allegis.

8    Under the joint bid arrangements it is proposed that, upon the scheme of arrangement becoming effective, Perbec will also acquire MBI’s shareholding in Talent2, and MBI and Allegis Australia will acquire an equal shareholding in Pergal. Thus Perbec will own the issued ordinary shares of Talent2 and Perbec itself will be 50% indirectly owned by MBI and 50% indirectly owned by Allegis. Talent2 will then be de-listed from the ASX.

9    A second and separate scheme of arrangement is proposed between Talent2 and eligible Talent2 optionholders (the option scheme of arrangement). As at 13 July 2012 Talent2 had 9,374,850 options on issue. These options confer the right on the holder to acquire one fully paid ordinary share in Talent2. The options have been issued in different tranches. If the option scheme of arrangement is implemented, cash will be paid to the relevant holder for the cancellation of that person’s options.

10    Talent2 has established an independent board committee (IBC) to consider the acquisition. The IBC consists of the other three directors of Talent2, all of whom are non-executive directors. These directors are: Kenneth Borda, Pamela Laidlaw and Hans Neilson.

The scheme of arrangement

11    If the scheme of arrangement becomes effective, Perbec will acquire the issued shares of Talent2 held by Talent2 shareholders as at a defined date, other than those shares held by excluded shareholders, in return for a cash payment of $0.78 per scheme share, less the cash amount of any special dividend declared by the IBC and paid by Talent2. I will refer to the shares to be acquired as the scheme shares and to the present holders of those shares as the scheme shareholders. I will refer to the cash amount to be paid to each scheme shareholder for the acquisition of that scheme shareholder’s shares as the scheme consideration.

12    The excluded shareholders are defined as MBI, Allegis, Perbec and any of their respective related bodies corporate (each called a Joint Bidder Group Member) and any Talent2 shareholder who holds a Talent2 share on behalf of a Joint Bidder Group Member, Andrew Banks, Geoff Morgan or any entity controlled by Andrew Banks and/or Geoff Morgan. In fact, the only defined excluded shareholder holding any shares in Talent2 at the present time is MBI.

13    Clause 4.9 of the SID provides that the IBC may in its absolute and sole discretion declare a fully franked special dividend, subject to certain conditions being satisfied or waived. The special dividend will be paid to all Talent2 shareholders (including the excluded shareholders) who hold a Talent2 share on a defined date. The scheme consideration will be reduced by the per share cash amount of any special dividend. However, the scheme shareholders would still be entitled to an aggregate cash amount of $0.78 for each scheme share, consisting of the scheme consideration and the special dividend.

14    In the event that the IBC makes a determination to declare the special dividend, the aggregate amount of the special dividend will not exceed $15 million (approximately $0.10 per Talent2 share), which is the amount that Perbec has agreed to lend to Talent2 under a loan agreement to enable the special dividend to be funded.

15    The scheme shares will only be transferred after the scheme consideration has been provided by MBI, Allegis and Perbec in cleared funds deposited in an Australian dollar denominated trust account operated by Talent2 as trustee for the scheme shareholders. MBI, Allegis and Perbec have entered into a Deed Poll by which they have provided covenants to the scheme shareholders in respect of the performance of their obligations under SID and the scheme of arrangement, including in particular the payment of the scheme consideration. The scheme of arrangement therefore addresses the performance risk of scheme shareholders in the manner discussed in Corporations Act, in the matter of KAZ Group Limited [2004] FCA 738; Re Tempo Services Ltd (2005) 53 ACSR 523 at 524; and Re APN News & Media Ltd (2007) 62 ACSR 400 at [23].

16    Under the scheme of arrangement, each scheme shareholder will be taken to have provided certain warranties to Talent2 and Perbec, including a warranty that the scheme shares in respect of that scheme shareholder will be transferred free from all mortgages, charges, liens, encumbrances, pledges, security interests, interests of third parties of any kind and restrictions on transfer of any kind, and that the scheme shareholder has full power and capacity to transfer the scheme shares. I accept that the prevailing view is that such provisions are not objectionable provided the attention of scheme shareholders has been drawn to them: see, for example, APN at [57]-[63]; Re Sino Gold Mining Ltd (2009) 74 ACSR 647 at [29]-[31]. I am satisfied that these provisions have been satisfactorily disclosed in the scheme booklet.

17    Furthermore, the scheme of arrangement provides that, to the extent permitted by law, the scheme shares will be transferred to Perbec free from all mortgages, charges, liens, encumbrances, pledges, security interests, interests of third parties of any kind and restrictions on transfer of any kind. I note that provisions of this kind have been found to be acceptable in other schemes of arrangement: see, for example, the discussion in Investa Properties Limited, in the matter of Investa Properties Limited [2007] FCA 1104 at [22]-[30].

18    The scheme of arrangement is not conditional on the option scheme of arrangement (next discussed) becoming effective.

The option scheme of arrangement

19    If the option scheme of arrangement becomes effective, the Talent2 options held by the eligible Talent2 optionholders as at a defined date will be cancelled in return for a cash payment. I will refer to the options to be cancelled as the scheme options and to the present holders of those options as the scheme optionholders. I will refer to the cash amount to be paid to each scheme optionholder as the option scheme consideration.

20    The scheme options have been issued in different tranches. The option scheme consideration for the scheme options differs depending on the terms, exercise price, the vesting status and, in some cases, the expiry date of the options. The option scheme consideration is identified in the option scheme of arrangement as falling into one of two categories:

(i)    “Out of the money” consideration, which is payable in respect of scheme options with an exercise price equal to or greater than $0.78; and

(ii)    “In the money” consideration, which is payable in respect of scheme options with an exercise price less than $0.78.

21    The option scheme consideration for each scheme option that is “out of the money” has been calculated using the Black-Scholes option valuation model. The option scheme consideration for each scheme option that is “in the money” has been calculated on the basis of intrinsic value.

22    It is proposed that there be separate meetings of scheme optionholders: one for those entitled to “out of the money” consideration and the other for those entitled to “in the money” consideration. Talent2 submits that the scheme optionholders fall into two classes for the purpose of considering the option scheme of arrangement by reason of the manner in which their options have been valued for the purpose of determining the consideration to which they will be entitled if the option scheme of arrangement is approved. Talent2 submits that the decision to hold separate meetings of scheme optionholders is supported by the observations of Lindgren J in Sino Gold at [57]. In that case the same division between “out of the money” and “in the money” consideration, involving the same valuation methods, was used.

23    The options will only be cancelled after the option scheme consideration has been provided by MBI, Allegis and Perbec in cleared funds deposited in an Australian dollar denominated trust account operated by Talent2 as trustee for the scheme optionholders. MBI, Allegis and Perbec have also entered into a Deed Poll by which they have provided covenants to the scheme optionholders in respect of the performance of their obligations under SID and the option scheme of arrangement, including the payment of the option scheme consideration. Once again, the performance risk of scheme optionholders has been addressed.

24    Under the option scheme of arrangement, each scheme optionholder will be taken to have provided certain warranties to Talent2 and Perbec, including a warranty that the scheme options in respect of the scheme optionholder will be transferred free from mortgages, charges, liens, encumbrances, pledges, security interests, interests of third parties of any kind and restrictions on cancellation of any kind, and that the scheme optionholder has full power and capacity to agree to the cancellation of the options. I repeat the observations I have made above concerning the similar provision in relation to the scheme shares. Once again, I am satisfied that this provision has been satisfactorily disclosed in the scheme booklet.

25    The option scheme of arrangement is conditional on the scheme of arrangement (discussed above) being effective.

Valuation

26    An independent valuation has been provided by Lonergan Edwards & Associates Limited (Lonergan Edwards). The opinion underlying the valuation has been verified by Philip Martin Holt, a director of Lonergan Edwards who prepared the valuation report with another of its authorised representatives.

27    By way of summary, Lonergan Edwards assessed the value of Talent2 shares on a 100% controlling interest basis at $0.68 to $0.85 per share. As the scheme consideration ($0.78 per share) lies within that range, Lonergan Edwards determined that it is fair, and expressed the opinion that the proposed scheme of arrangement, as a whole, is fair and reasonable and in the best interests of shareholders, in the absence of a superior proposal.

28    Lonergan Edwards also expressed the opinion that the proposed option scheme of arrangement is fair and reasonable and in the best interests of the scheme optionholders. The option scheme consideration payable exceeds the value of the options as assessed by Lonergan Edwards for all series of options that had been issued.

29    I should record that Talent2’s last financial year ended on 30 June 2012. Its financial statements for that year will not be available by the time the scheme booklet is released. On 21 June 2012 Talent2 announced to the ASX that, based on its results for the 11 months to 31 May 2012 and its forecast for the month of June 2012, it estimated that for the 12 month period ending 30 June 2012 its consolidated revenue will be in the range of $315 to $325 million and that its consolidated EBITDA will be in the range of $9 to $10 million. These matters are disclosed in the scheme booklet.

30    The scheme booklet also discloses that Talent2 currently expects to release its preliminary (unaudited) financial statements for the year ended 30 June 2012 on or around 7 August 2012. These statements will be released to the ASX. Following that, the IBC will confirm with Lonergan Edwards that the financial results do not change its opinion that the scheme is fair and reasonable and in the best interests of the scheme shareholders, in the absence of a superior proposal. The IBC will also seek to confirm with Lonergan Edwards that the financial results do not change its opinion that the option scheme of arrangement is fair and reasonable and in the best interests of scheme optionholders. These confirmations will be announced to the ASX in advance of the various meetings to be held in relation to the scheme of arrangement and the option scheme of arrangement, as well as an extraordinary general meeting to which I will refer below.

31    Talent2 submits that it would be appropriate for it to make this disclosure to the ASX without first bringing the matter back to the Court, provided that Lonergan Edwards maintains the opinions it has currently expressed. A similar indulgence was sought and granted in Andean Resources Limited, in the matter of Andean Resources Limited [2010] FCA 1190 (see at [26]). I am content with that approach. If following the release of Talent2’s preliminary (unaudited) financial statements there is a change in the opinions expressed by Lonergan Edwards then the matter can be relisted by Talent2 invoking the liberty to apply that has been granted.

The recommendation by independent directors

32    The independent directors unanimously recommend that the scheme shareholders vote in favour of the scheme of arrangement and that the scheme optionholders vote in favour of the option scheme of arrangement. Furthermore, each independent director intends to vote in favour of the scheme of arrangement in relation to the scheme shares held by him or her, in the absence of a superior proposal. None of the independent directors holds any scheme options.

The extraordinary general meeting

33    Talent2 proposes to convene an extraordinary general meeting immediately before the scheme meetings. The business of this meeting will be to consider and, if thought fit, pass:

(a)    an ordinary resolution approving the acquisition by Perbec, Pergal and Allegis of a relevant interest in the 32,105,226 ordinary shares of Talent2 in which MBI has a relevant interest; and

(b)    a special resolution pursuant to s 260B of the Act approving the financial assistance to be given by Talent2 to Perbec (as the proposed acquirer of the scheme shares) as a result of Talent2 paying any special dividend.

34    The first of these resolutions, if passed, will be subject to the scheme shareholders agreeing to the scheme of arrangement. This resolution is necessary having regard to the prohibition in s 606(1) of the Act which will apply to the acquisition of this parcel of shares. Section 611 of the Act provides for certain exemptions from that prohibition. One of those exemptions (Item 7) is the approval by members of the target corporation (in this case, Talent2) of the acquisition, provided certain voting and information requirements are established.

35    The second resolution, if passed, will provide the means by which the requirements of s 260A of the Act (permitting a company to provide financial assistance to a person to acquire its shares) are satisfied.

36    The Court’s approval is not required for the holding of the proposed extraordinary general meeting. Nevertheless, the approvals that will be sought are integral to the overall transaction in which Perbec seeks to acquire the scheme shares. It is therefore a relevant matter to be taken into account when considering whether an order should be made pursuant to s 411(1) of the Act for the convening of the scheme meetings.

ASIC’s position

37    Section 411(2)(a) of the Act requires the Australian Securities & Investments Commission (ASIC) to be given at least 14 days notice of the hearing of an application under s 411(1) of the Act unless ASIC or the Court permits a shorter period. The requisite period of notice has been satisfied in the present case.

38    Section 411(2)(b) of the Act requires the Court to be satisfied that ASIC has also had a reasonable opportunity to examine the terms of the scheme of arrangement and the draft explanatory statement, and to make submissions to the Court in relation to the scheme and the draft explanatory statement. ASIC is of the view that is has had a reasonable opportunity to examine the terms of the scheme of arrangement and the option scheme of arrangement, and the draft explanatory statement.

39    Regulation 5.1.01 of the Corporations Regulations 2001 (the Regulations) identifies, by reference to relevant parts of Sch 8 to the Regulations, the information that is prescribed for an explanatory statement. ASIC may waive these requirements. In the present case ASIC has waived the requirements of paragraphs 8201(a), (b), (c), (d) and (e) and 8203(a) and (b) of Pt 2 of Sch 8 and paragraph 8302(h) of Pt 3 of Sch 8. ASIC has raised no objection to the draft explanatory statement.

Other matters

40    A number of further matters have been brought to the Court’s attention, which should be noted.

41    First, the SID contains “no talk” and “no shop” provisions. The exclusivity period in relation to these provisions is seven months from 25 May 2012 (if the SID is not terminated earlier) or such other date that is agreed in writing. I am satisfied that this period is comparable to the exclusivity period in respect of the same kinds of provisions in other schemes of arrangement: Sino Gold at [20] and [23]-[25]; Straits Resources Limited, in the matter of Straits Resources Limited [2010] FCA 1467 at [22]; In the matter of Axa Asia Pacific Holdings Limited [2011] VSC 4 at [30]; In the matter of Strategic Energy Resources Limited [2011] VSC 645 at [15]; Tower Australia Group Limited, in the matter of Tower Australia Group Limited [2011] FCA 224 at [22]-[23]. I note that the “no talk” provision is subject to an overriding obligation not to breach the fiduciary or statutory duties of the directors. I am satisfied that the “no talk” and “no shop” provisions are clearly disclosed in the scheme booklet. I am satisfied that the requirements referred to by Santow J in Re Arthur Yates & Co Ltd (2001) 36 ACSR 758 at [9] have been met.

42    Secondly, the SID requires Talent2 to pay Allegis (but not MBI) a reimbursement fee if a competing proposal is announced by a third party during the exclusivity period and, within one year of such announcement, the competing proposal results in the third party gaining control of Talent2 or a relevant interest in more than 50% of its ordinary shares. I note that the reimbursement fee will not be triggered if the scheme shareholders do not vote in favour of the scheme of arrangement or if the scheme optionholders do not vote in favour of the option scheme of arrangement. Thus the contingent obligation to pay the reimbursement fee will not be a disincentive to the scheme shareholders or the scheme optionholders in their consideration of the proposed schemes: see the observations of Lander J in Adelaide Bank Limited, in the matter of Adelaide Bank Limited ACN 061 461 550 [2007] FCA 1582 at [31].

43    I also note that the reimbursement fee will be the lesser of $1,149,000 and the aggregate amount of Allegis’s actual external adviser costs and out-of-pocket expenses in connection with the transaction. This amount is below the Takeovers Panel’s “1% of the equity value of the target” guideline: see Takeovers Panel’s Guidance Note 7, 4th Issue, 11 February 2010 at [9].

44    I note that Allegis requested that provision be made for the reimbursement fee, without which it would not have entered into the SID. The board of directors of each of Allegis and MBI, and the IBC, believe that it was reasonable and appropriate for the parties to the SID to agree to the reimbursement fee to secure Allegis’s entry into the SID and the benefits to scheme shareholders from participation in the transaction.

45    Thirdly, Talent2 has drawn attention to the fact that, in the absence of the scheme of arrangement proposal, it was likely to have undertaken a capital raising to reduce its debt levels and to fund future growth. Since the announcement of the scheme of arrangement, Talent2 has entered into an agreement with its bank under which the bank will refrain from accelerating Talent2’s obligations and taking any other enforcement action under the various facilities it has with Talent2, pending the outcome of the scheme of arrangement proposal. In the event that the scheme of arrangement does not become effective, Talent2 will be required to repay $10 million to the bank within 60 days of the scheme not proceeding. In this event, or in the absence of a superior proposal, Talent2 expects that it will be required to undertake a significant equity capital raising under which it would seek to raise approximately $20 million. If this occurs, it is likely that the value of Talent2’s ordinary shares currently on issue will be diluted.

46    Fourthly, the information in the scheme booklet has been verified.

47    Finally, I note that Mr Borda has consented to act as chair of the scheme meetings. Ms Laidlaw has consented to act as chair of any of the meetings if, for any reason, Mr Borda is unable to act.

Consideration

48    I am satisfied that Talent2 is a Pt 5.1 body and that each of the scheme of arrangement and the option scheme of arrangement is an “arrangement” for the purposes of s 411(1) of the Act: Re Foundation Healthcare Ltd (2002) 42 ACSR 252 at [39]; Re MIA Group Ltd (2004) 50 ACSR 29 at [2]-[9]; Sino Gold at [4].

49    The nature of the Court’s discretion under s 411(1) has been described in many cases: see, for example, FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69 at 72; Re Permanent Trustee Co Ltd (2002) 43 ACSR 601 at [8]-[10]. It is not necessary to dwell on the matters discussed in those cases. The matter was put succinctly by Emmett J in Centrebet International Limited, in the matter of Centrebet International Limited [2011] FCA 870 at [29]:

In determining whether it is appropriate to summon a meeting under s 411, the Court would generally need to be satisfied that the proposed scheme is of such a nature and cast in such terms that, if it receives the requisite statutory majority, the Court would be likely to approve it on the hearing of an unopposed application. The Court is not required to be satisfied that no better scheme could have been proposed. The question is whether it is reasonable to suppose that sensible business people might consider the arrangement proposed is of benefit to members. …

50    In light of the various matters that I have noted and discussed above, I am satisfied that the proposed scheme of arrangement and the proposed option scheme of arrangement are of that nature and that it is appropriate in all the circumstances that the orders, as sought, be made.

Associate:

Dated:    20 July 2012