Federal Court of Australia

Palladium Holdings Pty Limited, in the matter of Palladium Holdings Pty Limited (No 2) [2022] FCA 563

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (the Act), the scheme of arrangement between the plaintiff and its members set out in Annexure C of Exhibit A in the proceeding (the Scheme) be approved.

2.    Pursuant to s 411(12) of the Act, the plaintiff be exempt from compliance with s 411(11) of the 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

YATES J:

1    On 6 April 2022, at a first court hearing, I made orders requiring the plaintiff to convene and hold a meeting of its members for the purpose of considering and, if thought fit, agreeing to, a scheme of arrangement: Palladium Holdings Pty Limited, in the matter of Palladium Holdings Pty Limited [2022] FCA 526 (Reasons 1).

2    The meeting has been held, and the members have agreed to the scheme. The plaintiff now seeks an order pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (the Act) that the scheme be approved. I am prepared to make that order, as well as an order pursuant to s 411(12) of the Act relieving the plaintiff of the requirement to annex a copy of the approval order to its constitution: see s 411(11) of the Act.

3    On the evidence before me, I am satisfied that:

(a)    prior to its dispatch to members, the explanatory statement, represented by the scheme booklet, was registered by the Australian Securities and Investments Commission (ASIC), as required by s 412(6) of the Act, on 7 April 2022;

(b)    the scheme booklet was dispatched to each member as ordered (including by personal delivery to the two members referred to in Order 4 made on 6 April 2022);

(c)    the scheme meeting was convened and held in accordance with the orders made on 6 April 2022;

(d)    at the scheme meeting, the scheme resolution was passed by the requisite majorities specified in s 411(4)(a)(ii) of the Act; and

(e)    the present hearing, the second court hearing, was advertised, as required by Order 7 made on 6 April 2022.

4    As to dispatch of the scheme booklet, seven members experienced technical difficulties accessing the booklet using the SharePoint link provided. Each of these members was one of 12 shareholders of the plaintiff who did not have a Palladium email address. It appears that they were not able to access the scheme booklet through the SharePoint link because the link was not compatible with non-Palladium email accounts. Between 8 April 2022 and 19 April 2022, these shareholders were provided with a soft copy of the scheme booklet, a scheme meeting proxy form, and a body corporate representative form, by email.

5    Although technical difficulties accessing the scheme booklet were not reported by the other five members who did not have a Palladium email address, the plaintiff also sent an email to these members, on 20 April 2020, attaching a soft copy of the scheme booklet, a scheme meeting proxy form, and a body corporate representative form.

6    The evidence is that none of the email notifications, to which I have referred, produced a “bounce back” report.

7    As to the members’ agreement, the evidence is that, at the scheme meeting:

(a)    73 members were present and voted either in person or by proxy, body corporate representative or attorney, on the poll;

(b)    these members, who held 4,333,708 shares, voted in favour of the scheme resolution;

(c)    no members voted against the scheme resolution; and

(d)    no members abstained from voting on the scheme resolution.

8    The evidence shows that this voting represents the wishes of 84% of the plaintiff’s members holding 98.89% of the total shares on issue.

9    The evidence is that all conditions precedent that were required to be satisfied before the second court hearing, have been satisfied.

10    There is also evidence that, on 10 May 2022, the plaintiff established a trust account, in US dollars, with HSBC Bank Australia Limited, for the purpose of facilitating payment of the Cash Consideration to Scheme Shareholders, in accordance with clause 6.1 of the Scheme.

11    ASIC has not appeared at the present hearing. However, correspondence has been adduced in which ASIC has stated that, under s 411(17)(b) of the Act, it has no objection to the scheme.

12    No person has come forward to oppose the scheme being approved by the Court. No matter has been brought to the Court’s attention that would stand as a reason for not approving the scheme.

13    Taking into account:

(a)    the provisional view I expressed as to the likelihood that the scheme would be approved on an unopposed application: see Reasons 1 at [56];

(b)    the recommendation of the directors;

(c)    the opinion of the independent expert;

(d)    the members’ overwhelming support for the scheme, expressed through their voting at the scheme meeting;

(e)    the fact that all conditions precedent to the scheme coming into effect that are relevant to the Court’s approval have been satisfied;

(f)    the lack of any opposition to the scheme; and

(g)    the plaintiff’s substantial compliance with the Court’s orders made on 6 April 2022,

I am satisfied that the scheme should be approved by the Court.

14    Orders will be made accordingly.

Associate:

Dated:    16 May 2022