Federal Court of Australia

Selfwealth Ltd, in the matter of Selfwealth Ltd (No 2) [2025] FCA 416

ORDERS

THE COURT NOTES THAT:

A.    There has been produced to the Court a statement in writing by the Australian Securities and Investments Commission (ASIC) in accordance with s 411(17)(b) of the Corporations Act 2001 (Cth) (Act) that ASIC has no objection to the scheme of arrangement between the plaintiff (Selfwealth) and its members which was agreed to by the members at a meeting held on 22 April 2025, the terms of which were set out in Annexure A to the orders of the Court made on 14 March 2025 (Scheme).

THE COURT ORDERS THAT:

1.    Pursuant to s 411(4)(b) of the Act, the Scheme be and is hereby approved.

2.    Pursuant to s 411(12) of the Act, Selfwealth be exempted from compliance with s 411(11) of the Act in respect of the Scheme.

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

REASONS FOR JUDGMENT

O’BRYAN J:

Introduction

1    Following a hearing held on 14 March 2025 (the convening hearing), I made orders (the convening orders) requiring the plaintiff, Selfwealth Ltd (ACN 154 324 428) (Selfwealth), to convene and hold a meeting of its shareholders (the Scheme Meeting) to consider a proposed scheme of arrangement (Scheme). I published reasons for making those orders on 20 March 2025: Re Selfwealth Ltd [2025] FCA 214 (Selfwealth No 1).

2    The Scheme Meeting was held on 22 April 2025, and the resolution to agree to the Scheme (Scheme Resolution) was passed by 99.70% of the votes cast and by 88.46% of shareholders present and voting (in each case, in person or by proxy).

3    The Australian Securities and Investments Commission (ASIC) has provided a letter stating that, under s 411(17)(b) of the Corporations Act 2001 (Cth) (Act), it has no objection to the Scheme.

4    At the second court hearing held on 28 April 2025 (approval hearing), Selfwealth sought orders approving the Scheme pursuant to s 411(4)(b) of the Act. No shareholder or other person appeared at the hearing to object to the Scheme.

5    At the conclusion of the approval hearing, I made the orders sought by Selfwealth. These are my reasons for making those orders.

Overview of the Scheme

6    The Scheme is described in some detail in Selfwealth No 1. In overview, the Scheme provides for the transfer to Svava Pte Ltd (which I will refer to as Syfe, for the reasons explained in Selfwealth No 1, at [2]) of all the shares in Selfwealth, other than shares held by Syfe or any of its subsidiaries (Excluded Shareholders). Selfwealth shareholders other than Excluded Shareholders are referred to as Scheme Shareholders. In consideration of the transfer of their shares, Scheme Shareholders will receive a cash payment from Syfe of $0.28 per share. Syfe holds approximately 18% of Selfwealth’s shares and is an “Excluded Shareholder” for the purposes of the Scheme.

7    If the Scheme is approved by the Court, on the date on which the Scheme is implemented (which is anticipated to be 7 May 2025):

(a)    all Scheme Shareholders who were listed on the share register on the Scheme record date (anticipated to be 1 May 2025) will be paid the Scheme Consideration of $0.28 per share; and

(b)    all Selfwealth shares, other than those already held by Syfe, will be transferred to Syfe, and Selfwealth will become a wholly-owned subsidiary of Syfe and will be delisted from the Australian Securities Exchange (ASX).

Relevant principles

8    Section 411(4) of the Act provides that a scheme of arrangement is binding if, at a meeting of members, it is passed by a majority of members present and voting (in person or by proxy) and by 75% of votes cast, and it is subsequently approved by order of the Court.

9    In deciding whether to grant approval of a scheme of arrangement, the Court will ordinarily have regard to the following matters:

(a)    that the orders of the Court, and all other applicable requirements of the Act and the Federal Court (Corporations) Rules 2000 (Cth) (Rules), in relation to the convening and conduct of the scheme meeting and the second court hearing have been complied with;

(b)    that the scheme meeting so convened has approved the scheme with the requisite majorities;

(c)    that there has been full and fair disclosure to members of all information material to the decision whether to vote for or against the scheme;

(d)    that the scheme is fair and reasonable so that an intelligent and honest person who was a member of the relevant class, properly informed and acting alone, might approve it; and

(e)    that the plaintiff has brought to the attention of the Court all matters that could be considered relevant to the exercise of the Court’s discretion, and that ASIC has been given the opportunity to draw the Court’s attention to any relevant matter;

(f)    that the conditions precedent to the scheme have been satisfied or waived, save for court approval; and

(g)    that the Court is satisfied under s 411(17) that the scheme has not been proposed to avoid Ch 6 of the Act, or there is a statement from ASIC that it has no objection to the scheme.

The Scheme Meeting

Dispatch of the Scheme materials

10    On 14 March 2025 an office copy of the convening orders was lodged with ASIC, as required by r 3.5(b) of the Rules.

11    The convening orders required Selfwealth to convene the Scheme Meeting by providing various documents to Scheme Shareholders on or before 20 March 2025. The principal document to be provided to Scheme Shareholders was the Scheme Booklet. On 14 March 2025 and pursuant to s 412(6) of the Act, a copy of the Scheme Booklet was lodged with ASIC for registration and ASIC registered the Scheme Booklet on the same date. The Scheme Booklet was then sent or made available to Scheme Shareholders on 20 March 2025. The evidence adduced at the approval hearing demonstrates that the Scheme Booklet was in the same form as that specified in the convening orders, save for some minor amendments which were foreshadowed at the convening hearing. Having regard to the minor nature of those amendments, I accept Selfwealth’s submission that the Scheme Booklet was substantially in the form of that specified in the convening orders, and thus in compliance with those orders.

12    The convening orders also required that, in the case of Selfwealth shareholders who have elected to receive shareholder communications electronically (Email Shareholders), if it comes to the attention of Selfwealth that any email dispatched to Email Shareholders has returned an undeliverable or undelivered receipt for an Email Shareholder's nominated email address, Selfwealth is to dispatch to that Email Shareholder, within a reasonable time thereafter, a hard copy version of the relevant communication, which provides the shareholder with details for downloading an electronic copy of the Scheme Booklet. The evidence adduced at the approval hearing indicates that there was one such Email Shareholder, and that the requirements of the convening orders were complied with in relation to that shareholder.

Conduct of the meeting and voting results

13    In accordance with order 1(b) of the convening orders, the Scheme Meeting commenced at approximately 10.30 am (Melbourne time) on 22 April 2025, and was conducted at the offices of Herbert Smith Freehills at Level 24, 80 Collins Street, Melbourne, Victoria.

14    In accordance with order 6 of the convening orders, the Scheme Meeting was chaired by Christine Christian.

15    In accordance with order 7 of the convening orders, voting on the resolution to agree to the Scheme was conducted by way of a poll.

16    In accordance with s 411(4)(a)(ii) of the Act, the Scheme Resolution was passed by a majority in number of members present and voting (either in person or by proxy) at the Scheme Meeting, and by 75% of the votes cast on the Scheme Resolution. Specifically, the evidence establishes that the Scheme Resolution was passed by 99.70% of the votes cast and by 88.46% of Scheme Shareholders present and voting (in each case, in person or by proxy).

17    The number of shares voted at the Scheme Meeting as a percentage of Selfwealth’s total issued share capital eligible to vote was approximately 48.73%, and the number of shareholders who voted as a percentage of the total number of shareholders eligible to vote was 5.70% (accounting for the fact that Selfwealth shares held by Syfe were not eligible to vote). Selfwealth submitted that the level of voter turnout in the present case does not give rise to any concern that Scheme Shareholders were deterred from attending the Scheme Meeting or did not have notice of it and therefore does not provide any reason for the Court to withhold its approval of the Scheme. Relevantly, Selfwealth adduced evidence that the level of voter turnout at the Scheme Meeting was higher than the level of voter turnout at Selfwealth’s 2022, 2023 and 2024 Annual General Meetings, at which the number of votes cast respectively constituted approximately 27%, 25% and 10% of the total number of shares eligible to be voted.

18    I accept Selfwealth’s submission. The matters considered relevant to the matter of low voter turnout in Re Amcor Limited (No 2) [2019] FCA 842 (Re Amcor) (at [19]) are apposite to the present circumstances:

(a)    there is nothing to suggest that there was any irregularity in the manner of dispatch of material to the Scheme Shareholders;

(b)    Scheme Shareholders were provided with notice of the Scheme Meeting;

(c)    there is no evidence of any issue that would have deterred Scheme Shareholders from voting at or from attending the Scheme Meeting, and Selfwealth has not received any complaint from any Scheme Shareholder that they did not receive notice of the meeting; and

(d)    those Scheme Shareholders who did vote, voted overwhelmingly in favour of the Scheme.

Advertisement of the approval hearing

19    By orders 11 and 12 of the convening orders, the requirements of r 3.4 of the Rules were dispensed with and Selfwealth was required to publish an announcement via the ASX Market Announcements Platform setting out the details for the second court hearing and the process for any person wishing to appear at that hearing to oppose the approval of the Scheme. Selfwealth has satisfied these requirements. Selfwealth gave evidence that it had not received any notice from any person indicating an intention to oppose the approval of the Scheme or indicating an intention to appear at the approval hearing. No person appeared at the approval hearing to object to the Scheme.

Full and fair disclosure to members

20    On the basis of the evidence adduced at the convening hearing, I was satisfied that the Scheme Booklet met the disclosure obligations imposed by s 412 of the Act and that appropriate verification processes had been implemented to ensure the accuracy of the statements made in the Scheme Booklet. On the basis of this evidence, I am satisfied that there has been full and fair disclosure to members of all material information.

Is the Scheme fair and reasonable

21    Selfwealth submitted that, for the following reasons, the Court can be satisfied that the Scheme is fair and reasonable in the sense that an intelligent and honest shareholder, properly informed and acting alone, might approve the Scheme:

(a)    that the Scheme received the overwhelming support of the Scheme Shareholders as reflected in the voting results of the Scheme Meeting;

(b)    that all Selfwealth directors recommended that Scheme Shareholders vote in favour of the Scheme, for the reasons given in the Scheme Booklet, and the fact that each Selfwealth director stated their intention to vote the Selfwealth shares held or controlled by them in favour of the Scheme;

(c)    that the independent expert formed the opinion that the Scheme is fair and reasonable and therefore in the best interests of Selfwealth shareholders;

(d)    that the Scheme Booklet set out a detailed description of the Scheme, including its potential benefits and disadvantages;

(e)    that there was no application to oppose the orders approving the Scheme, and no evidence suggesting any oppression in the conduct of the Scheme Meeting; and

(f)    that there are measures in the Scheme to protect shareholders against performance risk.

22    I accept that submission.

Conditions precedent

23    Before approving a scheme, the Court will ordinarily require that all conditions precedent to the scheme (other than the Court’s approval of the scheme and the scheme coming into effect) have been satisfied or waived. On 28 April 2025, Selfwealth and Syfe executed a certificate certifying (in respect of matters within their respective knowledge) that each of the conditions precedent had been satisfied.

Section 411(17)

24    Section 411(17) of the Act provides that the Court must not approve a compromise or arrangement unless:

(a)    it is satisfied that the compromise or arrangement has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Ch 6; or

(b)    there is produced to the Court a statement in writing by ASIC to the effect that ASIC has no objection to the compromise or arrangement,

but the Court need not approve a compromise or arrangement merely because a statement by ASIC that it has no objection to the compromise or arrangement has been produced to the Court as mentioned in s 411(17)(b).

25    A “no objection statement”, dated 24 April 2025, has been provided by ASIC, satisfying the requirement of s 411(17)(b). Accordingly, the pre-requisite in s 411(17) is satisfied and the Court is not aware of any reason why the Scheme should not be approved.

Exemption from s 411(11)

26    Selfwealth sought an order under s 411(12) exempting it from compliance with s 411(11), which requires a copy of the Court’s order under s 411(4)(b) to be annexed to the company’s constitution.

27    In Re Equinox Resources Ltd [2004] WASC 143; 49 ACSR 692 the Court indicated that the purpose of s 411(11) is (at [22]):

... to ensure that any modification of the rights of shareholders of the company which is the subject of the scheme or any other provision in the scheme which may affect the interests of persons dealing with the company, such as prospective creditors or purchasers of shares, will be sure to have the opportunity of seeing what the exact rights of shareholders in the company or of its creditors are, as modified, if at all, by the scheme which has been approved.

28    This passage has been cited with approval in several subsequent decisions: see for example Re Amcor at [40]; Re iSelect Ltd (No 2) [2022] FCA 1528; 166 ACSR 41 at [52]-[53]; Re Clemenger Group Limited (No 2) [2023] FCA 974 at [31] and Re Costa Group Holdings Limited [2024] FCA 59 at [33].

29    Exemption from compliance with s 411(11) is appropriate in circumstances where:

(a)    the Scheme will not alter the Constitution of Selfwealth or the rights of Selfwealth’s members, creditors or other persons dealing with the company; and

(b)    no ongoing purpose will be served by requiring the orders approving the Scheme to be annexed to Selfwealth’s Constitution in circumstances where Selfwealth will become a wholly-owned subsidiary of Syfe following implementation of the Scheme.

Conclusion

30    For the reasons given, I made the orders sought by Selfwealth approving the Scheme pursuant to s 411(4)(b) of the Act.

Associate:

Dated:    29 April 2025