FEDERAL COURT OF AUSTRALIA

Wameja Limited, in the matter of Wameja Limited (No 2) [2021] FCA 1130

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Corporations Act), the scheme of arrangement (Scheme) between Wameja Limited and the holders of fully paid ordinary shares in Wameja Limited, in the form of Annexure A of the document which has been tendered and marked Exhibit 1 in this proceeding, is approved.

2.    Wameja Limited lodge with the Australian Securities and Investments Commission a copy of the approved Scheme at the time of lodging a copy of these orders.

3.    Pursuant to s 411(12) of the Corporations Act, Wameja Limited be exempted from compliance with s 411(11) of the Corporations Act in relation to the Scheme.

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

REASONS FOR JUDGMENT

FARRELL J:

INTRODUCTION

1    Unless otherwise indicated, terms used in these reasons bear the same meaning as in my reasons for making orders on 27 July 2021 under ss 411(1) and 1319 of the Corporations Act 2001 (Cth) in relation to convening and holding a meeting of the shareholders of Wameja Limited at 3 pm (AEST) on Thursday, 2 September 2021 for the purpose of considering a proposed scheme of arrangement between Wameja and its shareholders: see Wameja Limited, in the matter of Wameja Limited [2021] FCA 878 (Wameja (No 1)).

2    The application now before the Court is for an order under s 411(4)(b) of the Corporations Act approving the scheme. Wameja also seeks an order under s 411(12) exempting it from complying with s 411(11) (the requirement to attach a copy of the order approving the scheme to every copy of Wameja’s constitution issued after the order approving the scheme is made). An order under s 411(12) is customarily made where an order under s 411(4)(b) has been made in relation to a scheme designed to effect a takeover which involves no change to the constitution of the scheme company, as in this case.

3    The second court hearing was held on a digital platform. Wameja appeared by counsel (David Smith) and Burst Acquisition Co. Pty Ltd ACN 644 142 834 (Bidder) appeared with leave by counsel (Michael Izzo SC and Shelley Scott).

4    At the commencement of the hearing, I invited any person who was observing the proceedings who wished to be heard in relation to Wameja’s application to make themselves known but there was no response. Accordingly, no shareholder or creditor appeared to oppose orders being made under ss 411(4)(b) and 411(12).

PRINCIPLES

5    The matters that the Court must take into account in deciding whether to approve a scheme are well-established. They include:

(a)    Whether the orders of the Court convening the scheme have been complied with;

(b)    Whether the resolution to approve the scheme was passed by the majorities required by s 411(4)(a)(ii) and other statutory requirements have been satisfied;

(c)    Whether all conditions to which the scheme is subject (other than Court approval and lodgement of the Court’s orders with ASIC) have been satisfied or waived;

(d)    Whether the scheme is fair and reasonable so that an intelligent and honest Wameja shareholder, properly informed and acting alone, might approve it. In considering this question, it is not the role of the Court to usurp the decision of shareholders by imposing its own commercial judgement on the scheme or to consider whether a better scheme might have been proposed;

(e)    Whether Wameja has brought to the attention of the Court all matters that could be considered relevant to the exercise of the Court’s discretion; and

(f)    Whether there was full and fair disclosure to Wameja shareholders of all information material to the decision whether to vote for or against the scheme.

See Solution 6 Holdings Limited ACN 003 264 006, in the matter of Solution 6 Holdings Limited ACN 003 264 006 [2004] FCA 1049; (2004) 50 ACSR 113 at [18]-[24] (Jacobson J); Permanent Trustee Company Limited [2002] NSWSC 1177; (2002) 43 ACSR 601 at [8]-[10] (Barrett J); Central Pacific Minerals NL [2002] FCA 239 at [12]-[14] (Emmett J); Seven Network Limited (ACN 052 816 789), in the matter of Seven Network Limited (No 3) [2010] FCA 400; (2010) 77 ACSR 701 at [35]-[39] (Jacobson J); Fowler v Lindholm [2009] FCAFC 125; (2009) 178 FCR 563 at [79] (Emmett, Gordon and Jagot JJ); Re Application of NRMA Ltd (No 2) [2000] NSWSC 408; (2000) 34 ACSR 261 at [5] (Santow J).

EVIDENCE

6    On 9 September 2021, Wameja filed a Court Book comprising the following evidence.

7    First, an affidavit affirmed by Thomas David Germain Rowe on 7 September 2021. Mr Rowe is a non-executive director of Wameja and Wameja’s company secretary. He is also the solicitor for Wameja in these proceedings. He deposed as follows:

(a)    A copy of the orders made on 27 July 2021, a relevant ASIC form and a registration copy of the scheme booklet were filed with ASIC at approximately 9.13 pm on 27 July 2021. The scheme booklet had qualifications to the directors’ recommendation on pages 4, 14, 16, 17, 26 and 27 to the same effect as the qualification that appears on the cover of the scheme booklet and the Chairman’s letter. On 28 July 2021, Mr Rowe received an email from an officer of ASIC attaching a copy of the scheme booklet which bears a stamp on the cover page indicating its receipt and registration. Mr Rowe detected a minor error in the scheme booklet and advised ASIC of it but an officer of ASIC indicated that the error was immaterial and its correction did not require re-registration. I am satisfied that the correction was appropriate and nothing arises which would cause the Court to refuse to approve the scheme for that reason. Mr Rowe approved for despatch to Wameja shareholders a copy of the corrected scheme booklet provided by Computershare Investor Services Pty Ltd.

(b)    Wameja established two telephone information lines for investor queries regarding the scheme which were operated by Georgeson, a subsidiary of Computershare. One line operated on Sydney time and one line operated on London time. Annexure TDGR-7 indicates that three enquiries were made on the line operated on Sydney time. There were no calls to the line operated on London time.

(c)    Mr Rowe attended the scheme meeting by logging on to the digital platform provided by Lumi. He held a proxy for a Wameja shareholder who did not attend the meeting. He was present for the entirety of the meeting and in his observations it ran smoothly on the Lumi platform. He had an opportunity to submit questions to the Chairperson in writing using the chat function of the Lumi platform (Lumi chat), although he did not do so. He could not speak at the meeting. He voted the Wameja shares for which he held a proxy in accordance with directions he was given when the poll was taken and did not encounter technical difficulties at any point.

(d)    An advertisement concerning the second court hearing substantially in the form of annexure B to the orders made on 27 July 2021 advising of the time and place of the second court hearing was published in The Australian on Monday, 6 September 2021 in accordance with those orders.

8    Second, the affidavit of Richard Victor Powell affirmed on 7 September 2021. Mr Powell is an account director at Computershare. He deposed as follows:

(a)    Computershare maintains Wameja’s register of members (Register). Computershare Investor Services PLC (Depository) maintains the register of holders of Wameja DIs (DI Register). Both Registers are updated daily. On 28 July 2021, Mr Powell caused to be generated two reports, one from the Register containing Wameja shareholder information as at 7 pm on 27 July 2021 (shareholder report) and another from the DI Register containing Wameja DI holder information as at that time (DI report);

(b)    Copies of the scheme booklet, proxy form and instruction form pursuant to which Wameja DI holders direct the Custodian how to vote were provided by Mr Rowe to Mr Powell or members of Computershare’s staff;

(c)    In relation to Wameja shareholders who had not nominated an email address for receipt of communications from Wameja, envelopes addressed to individual shareholders (or joint holders where applicable) containing a scheme booklet, personalised proxy form and reply paid envelope (hardcopy shareholder documents) were packaged and lodged by Computershare Communication Services Pty Ltd with Australia Post for despatch on 2 August 2021. Australia Post confirmed their despatch on 3 August 2021 (annexure RVP-3). Based on the shareholder report, hardcopy shareholder documents were sent:

(i)    By pre-paid post individually addressed to 304 shareholders with registered addresses in Australia; and

(ii)    By pre-paid air mail individually addressed to 111 shareholders with registered addresses outside Australia;

(d)    Based on the shareholder report, on 2 August 2021, emails providing hyperlinks to the scheme booklet and a proxy form for electronic voting were provided to 344 shareholders who had provided email addresses to Wameja for receipt of communications. This is verified by a campaign statistics snapshot for the email set out in annexure RVP-9. Those emails were not received by three shareholders and those shareholders were sent hardcopy shareholder documents by pre-paid post (to addresses in Australia) or pre-paid air mail (to addresses outside Australia);

(e)    The DI report was used to identify 128 Wameja DI holders at 7 pm on 27 July 2021. Envelopes addressed to those DI holders containing the scheme booklet, personalised instruction form and reply envelope addressed to the Depository Nominee (hardcopy DI documents) were packaged and lodged with the Royal Mail by Computershare Communication Services UK Limited. Annexure RVP-6 is a copy of the Royal Mail’s confirmation of despatch of 128 envelopes on 2 August 2021;

(f)    Computershare conducted three reviews of the Register between the time the scheme booklets were despatched and 31 August 2021. Nineteen new shareholders were identified on the Register. Hardcopy shareholder documents were sent to 12 new shareholders, five new shareholders and two new shareholders on 6, 13 and 20 August 2021 respectively. Mr Powell is not aware of any review of the DI Register conducted to identify new DI holders;

(g)    As at 31 August 2021, there were 748 Wameja shareholders on the Register who were eligible to vote at the scheme meeting. As at 27 August 2021, there were 129 DI holders on the DI Register who were eligible to submit voting instructions to the Custodian by sending the instruction form to the Depository Nominee;

(h)    Mr Powell had overall responsibility for the management of proxy forms received by Wameja’s registry and the Depository was responsible for receipt and recording of instruction forms. In relation to the scheme meeting:

(i)    53 valid proxy forms were received by 3 pm on 31 August 2021 (the last time for receipt of proxies specified in the scheme booklet). Three shareholders who had submitted valid proxy forms sold their Wameja shares before that time and their voting entitlement was reduced to nil. One invalid proxy form was received by that time. No proxy forms were received after that time and before 3 pm on 2 September 2021, being the time set for the scheme meeting to commence. Valid proxies represented 722,021,446 Wameja shares; and

(ii)    The Depository Nominee compiled a list of instruction forms received. Fourteen Wameja DI holders submitted instruction forms for 602,043,812 Wameja DIs. Thirteen Wameja DI holders instructed the Custodian to vote 601,716,193 Wameja shares in favour of the scheme and one gave instructions to vote 327,619 Wameja shares against it;

(i)    Mr Powell was appointed returning officer for the scheme meeting. Computershare staff determined whether votes cast were valid or invalid and counted the results of the poll taken at the scheme meeting. On the basis of the processes adopted by Computershare, his understanding of the processes of the Lumi platform and his observation of the scheme meeting, Mr Powell is satisfied that the registration and voting processes were properly followed in the relation to the scheme meeting;

(j)    As returning officer, Mr Powell certified that at the scheme meeting held on 2 September 2021:

(i)    There were 722,021,446 votes cast of which 717,336,161 (or 99.35%) were in favour of approving the scheme and 4,685,285 (or 0.65%) were against approving the scheme.

(ii)    Of the shareholders who were present in person or by proxy, 43 (or 89.58%) voted for the resolution and 5 (or 10.42%) voted against it. No voters abstained. One shareholder voted both for and against the resolution and was not included in the head count.

(k)    As there were 1,210,850,662 Wameja shares on issue on 31 August 2021, Mr Powell calculates that the voting participation rate was 59.63% of Wameja shares on issue; and

(l)    At the annual general meeting of shareholders of Wameja held on 28 May 2021, the voting participation rate was 53.83%.

9    Third, an affidavit sworn by Stephen Baldwin on 7 September 2021. Mr Baldwin deposed that:

(a)    On 20 August 2021, Wameja released an announcement to the ASX advising as follows:

Wameja (LSE: WJA.L & ASX: WJA.AX), a joint venture partner with Mastercard in the HomeSend global payment hub, refers to the Notice of Scheme Meeting contained within the Scheme Booklet dated 27 July 2021 and advises that due to the New South Wales government’s extension of the public health orders preventing all non-essential physical gatherings of people in Sydney until the end of September 2021, the Scheme Meeting will now be held solely as a virtual meeting.

The Scheme Meeting of Wameja shareholders scheduled to commence at 3.00pm (Sydney time) on 2 September 2021 will be held online (internet) only through the https://web.lumiagm.com website or the Lumi AGM App.

Instructions on how to attend the virtual meeting are contained within the Scheme Booklet.

(b)    Mr Baldwin attended and chaired the scheme meeting held on the Lumi platform;

(c)    Mr Baldwin opened the meeting at approximately 3 pm and was advised by Mr Rowe that there were two people present as proxies (being Messrs Rowe and Baldwin) and the quorum requirement was satisfied. I note that, under cl 1.1 of Wameja’s constitution, an “Eligible Voter” includes a proxy of an Eligible Member, who is a defined as a registered holder of a share at the time prescribed under cl 12.4(f) (which relates to the time specified in a notice of meeting at which voting rights will be fixed). Under cl 13.3(a), two Eligible Voters constitute a quorum;

(d)    Mr Baldwin said that, although he is a shareholder, he had appointed the chair of the meeting as his proxy. A shareholder, John Ryan, viewed the meeting as a guest. He did not (and as a guest, could not) participate in voting as a shareholder. There were 49 shareholders present by proxy;

(e)    Although Mr Baldwin invited them, no questions were asked at the meeting. Questions could be asked by shareholders and guests but questions could only be submitted in writing using Lumi chat. He advised the meeting that voting on the resolution to approve the scheme would be conducted by a poll (as foreshadowed in the scheme booklet) and that is what occurred. He advised the meeting that, as Chairperson, he would vote undirected proxies in favour of the scheme;

(f)    Copies of the script of the meeting, the power point presentation for the meeting and the minutes of the meeting are annexed to the affidavit as “SB-2”, “SB-3” and “SB-4”. Mr Baldwin observed that the power point presentation was displayed on a screen available to all attendees on the Lumi platform;

(g)    At the end of the meeting, he was advised by a representative of Lumi that there were no technical difficulties during the scheme meeting. Mr Baldwin is satisfied that all persons registered for the scheme meeting via the Lumi platform had a reasonable opportunity to participate in the meeting; and

(h)    The “split” vote that was not counted in the headcount (see [8(j)(ii)] above) was cast by the Custodian. Votes which the Custodian cast pursuant to instruction forms were included in the total number of votes cast. 57.43% of the possible number of votes which could be cast in respect of Wameja DIs were cast in accordance with instructions from approximately 10.93% of the holders of Wameja DIs.

10    Prior to the hearing, a further affidavit affirmed by Mr Rowe on 9 September 2021 was provided to chambers and filed. Mr Rowe deposed that:

(a)    The notice published in The Australian on Monday, 6 September 2021 gave notice that any person wishing to oppose the scheme must file and serve on Wameja a notice of appearance and supporting affidavit at least one day before the date fixed for the second court hearing at its address for service, being the offices of Simpsons Solicitors at a specified address. Mr Rowe is named as the point of contact for service. As at 9 am Sydney time on 9 September 2021, the day of the second court hearing, no formal or informal notice of any person’s intention to appear had been received;

(b)    Certificates evidencing satisfaction or waiver of conditions precedent (other than conditions relating to Court approval of the scheme or events which will occur subsequent to such approval being obtained) had been released by both Wameja and the Bidder at 8 am on 9 September 2021. Those certificates and a certificate signed by both parties are Exhibits “TDGR-11”, “TDGR-12” and “TDGR-13”;

(c)    For the purposes of s 411(17)(b) of the Corporations Act, ASIC had issued a “no objection” letter dated 8 September 2021, being annexure TDGR-15; and

(d)    There was a “John Ryan” who attended the 2020 annual general meeting as a guest. He believes that he is the “John Ryan” who attended the scheme meeting also as a guest. John Ryan had appointed the Chairperson as his proxy and directed him to vote “against” the scheme in respect of his entire holding of 2,593,059 Wameja shares.

CONSIDERATON

11    Having regard to the evidence and the content of the scheme booklet as described in Wameja (No 1), the factors customarily considered (as described at [5] above) have been addressed satisfactorily in all material respects.

12    There were a few matters addressed in Wameja’s submissions which require particular attention.

Voter turnout

13    The first issue is the level of voter turnout at the scheme meeting.

14    As noted above, the resolution to approve the scheme was approved by 89.58% of Wameja shareholders who attended the scheme meeting by proxy (without counting the Custodian) and by 99.35% of the votes cast by those shareholders. Accordingly, the statutory majorities set out in s 411(4)(a)(ii) of the Corporations Act were comfortably exceeded.

15    However:

(a)    Only 49 of a possible 748 shareholders (or 6.55% of all shareholders) representing 59.63% of all Wameja shares on issue attended the meeting by proxy; and

(b)    Only 14 out of 128 (or possibly, on the evidence, 129) Wameja DI holders (or 10.93% of all DI holders) representing 57.43% of the total value of Wameja DIs gave instructions to the Custodian.

16    As noted in submissions, although s 411(4)(a)(ii) has been satisfied, it is the usual practice at the second court hearing to consider the number of shareholders who attended the scheme meeting in person or by proxy. That is because low shareholder turnout may be an indication that some procedural irregularity has occurred. However, it is inappropriate to assume (in the absence of complaint) that shareholders who did not vote either did not have notice of the meeting or that they were engaging in silent protest of the scheme or that they were otherwise deterred from voting. Apathy should not be presumed to be antagonism. Nonetheless, it does call for consideration to ensure that the vote was not unrepresentative, since the Court retains the discretion to withhold approval of the scheme. There are many examples where the Court has approved schemes where there has been a low voter turnout: see TriAusMin Limited, in the matter of TriAusMin Limited (No 2) [2014] FCA 833 at [9]-[12] (Farrell J) citing Professional Investment Holdings Limited, in the matter of Professional Investment Holdings Limited (No 2) [2010] FCA 1336 at [7] (Jacobson J); Seven Network at [61] (Jacobson J); Re Cape plc [2006] EWHC 1446 at [25] (David Richards J) and Re Matine Ltd (1998) 28 ACSR 268 at 295 (Santow J). The reasoning in TriAusMin has been followed, including in SRG Limited, in the matter of SRG Limited (No 2) [2018] FCA 1424 at [16] (Banks-Smith J), Gindalbie Metals Limited, in the matter of Gindalbie Metals Limited (No 2) [2019] FCA 1066 at [5] (Colvin J) and Avita Medical Limited, in the matter of Avita Medical Limited (No 3) [2020] FCA 896 at [10]-[11] (Jagot J).

17    Relatively low voter turnout is not, in this case, a reason to withhold approval of the scheme having regard to the following:

(a)    The evidence is that the scheme meeting was convened in accordance with the Court’s orders made on 27 July 2021 and that it was conducted regularly and in accordance with those orders. There is no evidence of any technical difficulty arising from the fact that it was conducted on a digital platform rather than in person;

(b)    There is no evidence of complaint based on procedural irregularities or any issue which might have deterred, hindered or prevented Wameja shareholders from participating in the scheme meeting or any Wameja DI holder from being in a position to provide instructions to the Custodian;

(c)    Wameja’s only asset is a minority holding in HomeSend. As discussed in Wameja (No 1), the evidence is that the consideration exceeds the net asset value of HomeSend and that HomeSend’s future activities will require further capital contributions so that it is a commercially rational transaction which has been recommended both by the independent expert and Wameja’s directors in the absence of a superior offer;

(d)    No superior offer has been announced or made notwithstanding that the proposed scheme was announced on 10 September 2020; and

(e)    The participation rate at the scheme meeting is higher than that achieved at the annual general meeting held in May 2021.

Conduct of the scheme meeting using electronic meeting technology

18    Wameja correctly observes that:

(a)    Clause 12.10 of Wameja’s constitution permits general meetings to be held in two or more places using online attendance;

(b)    During the current pandemic relating to COVID-19, many scheme meetings have been held without physical attendance. Wameja relies on the following passage from the judgment of Black J in In the matter of Isentia Group Limited [2021] NSWSC 910 at [26]:

It is proposed that the scheme meeting be held as a virtual meeting, having regard to the uncertainty and potential health risks associated with large gatherings during the COVID-19 pandemic. A virtual meeting is permitted by clause 32.4 of Isentia’s constitution, which allows for the holding of meetings at two or more venues by using technology in terms similar to section 249S of the Act. As Mr Williams point out, ASIC has publicly outlined its “no action” position in relation to the convening and holding of virtual meetings, as reflected in ASIC’s Guidelines for investor meetings using technology; and Courts have continued to make orders for virtual meetings, notwithstanding the expiration of the Corporations (Coronavirus Economic Response) Determination (No.4) 2020 (Cth): Re Redflex Holdings Limited [2021] FCA 417 at [41]-[46]; Re Asaleo Care Limited [2021] FCA 406 at [74]-[78]; Re Coca Cola Amatil Ltd [2021] NSWSC 270 at [28]; Re Vocus Group Limited [2021] NSWSC 630 at [20]-[21]; Re BINGO Industries Limited [2021] NSWSC 798 at [29]. I am satisfied that the meeting is properly conducted in that way, and the proposed manner of dispatch of scheme materials to shareholders is appropriate and consistent with that adopted in recent case law.

(c)    When I made orders on 27 July 2021, the Corporations (Coronavirus Economic Response) Determination (No. 3) 2020 (Cth), which made specific provision for the conduct of meetings online, had lapsed (on 21 March 2021). In response, ASIC had adopted a “no-action” position in relation to meetings held using virtual meeting technology until the earlier of 31 October 2021 or legislation being enacted in relation to such meetings: ASIC media release 21-061MR; and

(d)    Such legislation has since been enacted: Treasury Laws Amendment (2021 Measures No. 1) Act 2021 (Cth) (Treasury Laws Amendment Act). Schedule 1 to that Act introduced amendments to the Corporations Act which arise for consideration on this application. Section 2 of the Treasury Laws Amendment Act provides that Sch 1 takes effect on the day after the Treasury Laws Amendment Act received Royal Assent. It received Royal Assent on 13 August 2021, meaning that Sch 1 took effect from 14 August 2021.

19    Wameja’s submissions drew attention to a number of features of Sch 1 of the Treasury Laws Amendment Act.

20    Sch 1 of the Treasury Laws Amendment Act is headed “Virtual meetings and electronic communication of documents”. Item 34 of Sch 1 of the Treasury Laws Amendment Act inserted a new Part 10.52 into the Corporations Act. Part 10.52 sets out application and transitional provisions relating to Sch 1 of the Treasury Laws Amendment Act. Relevantly, ss 1679 and 1679A inserted into the Corporations Act provide as follows:

1679 Definitions

In this Part:

Chapter 2G meeting has the meaning given by section 253P.

commencement day means the day on which Schedule 1 to the Treasury Laws Amendment (2021 Measures No. 1) Act 2021 commences.

1679A Application—virtual meetings and electronic communications

(1)    The amendments made by Schedule 1 to the Treasury Laws Amendment (2021 Measures No. 1) Act 2021 apply in relation to:

(a)    a Chapter 2G meeting; and

(b)    a document that relates to a Chapter 2G meeting that is required or permitted to be given to a person under this Act;

if:

(c)    the meeting is held on or after the commencement day; and

(d)    the document is given on or after the commencement day.

21    Item 14 of Sch 1 of the Treasury Laws Amendment Act relevantly provides as follows:

14 Paragraph 249L(1)(a)

Repeal the paragraph, substitute:

(a)    set out:

…

(iii)    if virtual meeting technology is to be used in holding the meeting—sufficient information to allow the members to participate in the meeting by means of the technology; and

22    Item 15 of Sch 1 of the Treasury Laws Amendment Act relevantly provides as follows:

15 Section 249R

Repeal the section, substitute:

249R Accessibility of meetings of members

(1)    A meeting of a company’s members must be held:

   (a)    at a reasonable time; and

   (b)    … ; and

(c)    if virtual meeting technology is used in holding the meeting—in accordance with section 253Q.

(2)    For the purposes of paragraph (1)(a), a meeting is taken to be held at a reasonable time if any of the following applies:

…

(c)    if the meeting is held using virtual meeting technology—the meeting is held at a time that is reasonable at the place where the meeting is taken to be held under section 253QA.

23    Items 18, 19 and 21 of Sch 1 of the Treasury Laws Amendment Act provide as follows:

18 Subsection 250B(3)

Repeal the subsection (not including the heading), substitute:

(3)    A company receives a document referred to in subsection (1):

(a)    if the document is given by means of an electronic communication in accordance with section 253RA—when the document is received by the company; and

  (b)    otherwise—when the document is received at:

(i)    the company’s registered office; or

(ii)    a place specified for the purpose in the notice of meeting.

19 Subsection 250BA(1)

Repeal the subsection, substitute:

(1)    In a notice of meeting for a meeting of the members of the company, the company must specify at least one of the following:

(a)    a place for the purposes of receipt of proxy appointments and proxy appointment authorities;

(b)    sufficient information to allow members to comply with section 250B by means of an electronic communication.

…

21 Subsection 250J(1)

Repeal the subsection, substitute:

(1)    A resolution put to the vote at a meeting of a company’s members must be decided:

(a)    on a poll, if:

(i)     virtual meeting technology is used in holding the meeting; or

(ii)    a poll is demanded; or

(b)    otherwise—on a show of hands.

24    Item 31 of Sch 1 of the Treasury Laws Amendment Act inserts a new Part 2G.5 entitled “Virtual meetings, electronic communication of documents, and recording and keeping of minute books” after Part 2G.4 of the Corporations Act. Relevant provisions of Part 2G.5 provide as follows:

Division 1—Interpretation

253P References to Chapter 2G meetings

In this Part:

Chapter 2G meeting means:

  (a)    a meeting of a company’s members; or

(b)    a meeting of the directors of a company (including meetings of a committee of directors); or

(c)    a meeting of a registered scheme’s members.

Division 2—Virtual meetings

253Q Virtual meetings

(1)    Virtual meeting technology may be used in holding a Chapter 2G meeting, provided the technology gives the persons entitled to attend the meeting, as a whole, a reasonable opportunity to participate without being physically present in the same place.

(2)    To avoid doubt:

(a)    a reasonable opportunity to participate includes a reasonable opportunity to exercise a right to speak; and

(b)    a person may elect to exercise a right to speak (including a right to ask questions) orally rather than in writing.

(3)    All persons so participating in the meeting are taken for all purposes to be present in person at the meeting while so participating.

(4)    All persons so participating in the meeting who are entitled to vote at the meeting:

(a)    must be given the opportunity to participate in the vote in real time; and

(b)    may be given the opportunity to record a vote in advance of the meeting at the election of the voter.

    …

253QA Place and time of virtual meetings

(1)    This section applies in relation to a Chapter 2G meeting if virtual meeting technology is used in holding the meeting.

(2)    If any of the persons entitled to attend the meeting is entitled to physically attend the meeting:

(a)    the place for the meeting is taken to be:

(i)    if there are 2 or more locations at which persons who are entitled to physically attend the meeting may do so—the main location for the meeting as set out in the notice of the meeting; and

(ii)    otherwise—the location where the persons may physically attend the meeting; and

(b)    the time for the meeting is taken to be the time at the place for the meeting.

(3)    If none of the persons entitled to attend the meeting is entitled to physically attend the meeting:

(a)    the place for the meeting is taken to be the address of:

(i)    if the meeting is a meeting of a company’s members or of the directors of a company—the registered office of the company; or

(ii)    if the meeting is a meeting of a registered scheme’s members—the registered office of the responsible entity for the registered scheme; and

(b)    the time for the meeting is taken to be the time at the place for the meeting.

25    Item 33 of Sch 1 of the Treasury Laws Amendment Act provides as follows:

33 Subsection 1322(3A)

Repeal the subsection, substitute:

(3A)    If:

(a)    a meeting of members is held at 2 or more locations, or virtual meeting technology is used in holding the meeting; and

(b)    a member does not have a reasonable opportunity to participate in the meeting or a proceeding at the meeting;

the meeting or proceeding will only be invalid on that ground if:

  (c)    the Court is of the opinion that:

(i)    a substantial injustice has been caused or may be caused; and

(ii)    the injustice cannot be remedied by any order of the Court; and

  (d)    the Court declares the meeting or proceeding invalid.

26    Although Wameja’s written submissions noted that the term “virtual meeting technology” is not defined in the Treasury Laws Amendment Act, as from 16 December 2020, pursuant to item 1 of Sch 4 of the Corporations Amendment (Corporate Insolvency Reforms) Act 2020 (Cth), s 9 of the Corporations Act has contained the following definition:

virtual meeting technology means any technology that allows a person to participate in a meeting without being physically present at the meeting.

27    Wameja made the following submissions by reference to amendments to the Corporations Act effected by the Treasury Laws Amendment Act:

(a)    The scheme meeting was a meeting of Wameja’s members. It was therefore a “Chapter 2G meeting” having regard to ss 1679 and 253P of the Corporations Act and the terms of r 3.3 of the Federal Court (Corporations) Rules 2000 (Cth). Rule 3.3(2) relevantly provides as follows:

3.3 Order for meetings to identify proposed scheme

…

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

(a)    the provisions of Part 2G.2 of the Corporations 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 Corporations Act.

…

(b)    By reason of s 1679A, the amendments to the Corporations Act contained in Sch 1 of the Treasury Laws Amendment Act relating to virtual meetings and electronic communications applied in relation to the scheme meeting and documents despatched to shareholders after 14 August 2021;

(c)    Insofar as the scheme booklet and proxy forms were sent to new members after 14 August 2021, they relevantly complied with the requirements of new ss 249L(1)(a) and 250BA(1) because:

(i)    The notice of meeting included in the scheme booklet provides Lumi’s website address and login details and it includes a link to the virtual meeting guide which provides further details about participating in the meeting through the Lumi platform. Mr Rowe explained the process for conduct of the meeting by reference to the virtual meeting guide (annexure TDGR-24) in his affidavit affirmed on 23 July 2021; and

(ii)    The notice of meeting provided a postal address for proxies and a fax number for the receipt of proxy appointments;

(d)    In relation to the conduct of the scheme meeting:

(i)    As regards new s 253Q(1), (2), (3) and (4) of the Corporations Act, the Lumi platform provided members entitled to vote with a reasonable opportunity to participate in the meeting save that it did not afford them an opportunity to speak. Mr Rowe has deposed to his ability to participate in the meeting (other than verbally) and the Chairperson (Mr Baldwin) has reported that there were no technical difficulties. The minutes record that that there was a reasonable opportunity for shareholders to ask questions but none were asked. The vote was conducted in real time. Accordingly, there was, in fact, a reasonable opportunity for shareholders to participate in the meeting. However, it is not clear if there is no reasonable opportunity to participate if there is no right to speak (as opposed to writing questions);

(ii)    In regard to the relevance of the fact that shareholders were not able to speak at the scheme meeting, Wameja referred to cl 1.37 of the Explanatory Memorandum to the Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 (Cth). It is useful to set out cll 1.37 and 1.38:

1.37    Members also need to be given a reasonable opportunity to speak and verbally ask questions in situations where they have a right to speak and ask questions. [Schedule 1, item 31, subsection 253Q(2) of the Corporations Act]

1.38    If the members as a whole are not given a reasonable opportunity to participate, speak or ask questions, the members may apply to the court to have the meeting invalidated. The Court will only invalidate the meeting if it is of the opinion that a substantial injustice has been caused and that injustice cannot be remedied in any other way. This mirrors the circumstances where an irregularity invalidates a physical meeting under the existing law. [Schedule 1, item 32 and 33, note to subsection 1322(3AA) and subsection 1322(3A) of the Corporations Act]

(iii)    The fact that shareholders could not speak at the scheme meeting (as opposed to ask questions in writing by Lumi chat) would only lead to invalidity if the Court so declared under new s 1322(3A), but the Court should not so declare because:

(A)    No Wameja shareholder seeks such an order;

(B)    The requirement that Wameja shareholders have an opportunity to speak at the meeting was only enacted after the arrangements for the scheme meeting had been approved by the Court; and

(C)    No Wameja shareholder attended the scheme meeting other than Mr Ryan who registered as a guest and did not ask any questions;

(iv)    By reason of new s 253QA(3)(a)(i), the place of the meeting was Wameja’s registered office because it was a meeting held by virtual meeting technology;

(v)    The meeting took place at 3 pm (AEST) and that was a reasonable time for the purposes of s 249R(1)(a) and (2)(c); and

(vi)    New s 250J(1) of the Corporations Act was complied with because the resolution to approve the scheme was decided on a poll.

28    These matters were properly raised by Wameja in the context of a second court hearing held shortly after the introduction of the Treasury Laws Amendment Act on an application where there was no contradictor.

29    However, I do not accept that a meeting convened under s 411(1) (which falls in Part 5.1 of the Corporations Act dealing with compromises and arrangements) is a “Chapter 2G meeting”, even though r 3.3(2) of the Federal Court (Corporations) Rules provides that, unless the Court otherwise orders, the provisions of Part 2G.2 and the company’s constitution apply in relation to the convening and conduct of the scheme meeting. This view is consistent with Yates J’s comments made in Redflex Holdings Limited, in the matter of Redflex Holdings Limited [2021] FCA 417 at [44] that it has to be borne in mind that a meeting convened for the purposes of s 411(1) is convened by the Court which has broad powers under s 1319 of the Corporations Act to direct how such a meeting is to be conducted.

30    Further, in this case, the Court did “otherwise order” on 27 July 2021. Order 1 as entered provides as follows:

Pursuant to ss 411(1) and 1319 of the Corporations Act 2001 (Cth) (Act):

(a)    the plaintiff convene a meeting (Scheme Meeting) of the holders of its fully paid ordinary shares (Shareholders) for the purpose of considering, and if thought fit, agreeing (with or without modification) to the proposed scheme of arrangement to be made between the plaintiff and Shareholders (Scheme), the terms of which are contained in Annexure A to the explanatory statement which is Exhibit 1 in these proceedings (Scheme Booklet);

(b)    the Scheme Meeting be held at 3.00 pm (AEST) on Thursday, 2 September 2021 at Computershare, Level 3, 60 Carrington Street, Sydney, New South Wales 2000;

(c)    subject to any public health restrictions, Scheme Shareholders be permitted to attend and vote at the Scheme Meeting:

   (i)    in person; or

(ii)    by way of online (internet) attendance through the https://web.lumiagm.com website or the Lumi AGM App (Online Attendance), and the plaintiff do all things necessary or convenient to facilitate the Online Attendance;

(d)    if public health restrictions prevent the holding of a physical meeting:

(i)    Shareholders are to be notified that the Scheme Meeting will be proceeding virtually with Online Attendance only by an announcement on the Australian Securities Exchange substantially in the form of Annexure “A” as soon as practicable;

(ii)    the chairperson appointed to the Scheme Meeting be permitted to attend and chair the meeting through Online Attendance;

(e)    provisions of the plaintiff’s Constitution as to quorum be taken to be satisfied provided that there is Online Attendance by two or more Eligible Voters (as that term is defined in the plaintiff’s Constitution);

(f)    the time for determining eligibility to vote at the Scheme Meeting be fixed at 7.00 pm (AEST) on Tuesday, 31 August 2021;

(g)    the chairperson of the Scheme Meeting be Stephen Baldwin or failing him, Tom Rowe;

(h)    the chairperson appointed to the Scheme Meeting has the power to adjourn or postpone the Scheme Meeting in his absolute discretion for such time and to such date as the chairperson considers appropriate;

(i)    at the Scheme Meeting, the resolution to approve the Scheme be decided by way of a poll.

31    In this regard, I note that the fact that shareholders would participate in the scheme meeting by providing written questions was drawn to my attention at the first court hearing: see Wameja (No 1) at [22(n)] and [33].

32    Having said that, even if the specific provisions of the Corporations Act introduced by the Treasury Laws Amendment Act did apply, I accept Wameja’s submissions that they have generally been complied with. If, as it appears to be the case, it is a requirement of s 253Q that a shareholder be able to speak at a Chapter 2G meeting conducted by virtual meeting technology, I am satisfied for the reasons submitted by Wameja that no invalidating order should be made under s 1322(3A) because the requirement in s 253Q(2) has not been satisfied.

DSPOSITION

33    Having regard to all of the above, I was satisfied that it was appropriate to make the orders sought by Wameja and I made orders accordingly.

Associate:

Dated:    17 September 2021