Federal Court of Australia

Envirosuite Limited, in the matter of Envirosuite Limited [2025] FCA 734

ORDERS

THE COURT NOTES THAT:

A.    The Court notes that the Australian Securities and Investments Commission (ASIC) was provided with at least 14 days’ notice of the hearing of this application.

B.    The Court is satisfied that ASIC has had a reasonable opportunity to:

a.    examine the terms of the proposed scheme of arrangement to which the application relates (Scheme) and a draft explanatory statement relating to that Scheme; and

b.    make submissions to the Court in relation to the Scheme and the draft explanatory statement.

C.    The Court notes the letter from ASIC to the directors of the Plaintiff (Envirosuite) dated 30 June 2025 produced at the hearing.

THE COURT ORDERS THAT:

1.    Pursuant to subsection 411(1) and s 1319 of the Corporations Act 2001 (Cth) (Act), Envirosuite convene and hold a meeting of its members holding fully paid ordinary shares in Envirosuite (Scheme Meeting):

(a)    for the purpose of considering and, if thought fit, agreeing (with or without modification) to the proposed Scheme between Envirosuite and its members, the terms of which are set out in Annexure A to these orders; and

(b)    to be held on 1 August 2025 commencing at 9.00 am (AEST) and to be conducted virtually via an online platform.

2.    Pursuant to subsection 411(1) and s 1319 of the Act, the Scheme Meeting be convened by sending on or before 4 July 2025 to each Envirosuite Shareholder:

(a)    in the case of Envirosuite Shareholders who have elected to receive communications electronically (Email Shareholders), an email substantially in the form which appears at page 549 of Annexure NC-1 to the affidavit of Nicola Charlston affirmed on 27 June 2025 (First Charlston Affidavit), which includes access by links to online portals or websites where Email Shareholders may:

(i)    access and download an electronic copy of a document substantially in the form which appears at pages 94 to 390 of Annexure NC-2 to the affidavit of Nicola Charlston affirmed on 30 June 2025 (Scheme Booklet);

(ii)    lodge online an electronic voting form containing a proxy appointment; and

(iii)    access an online platform to listen to and participate in the Scheme Meeting;

(b)    in the case of Envirosuite Shareholders who have elected to receive both communications and notices of meeting in hard copy (Hard Copy Shareholders), the following documents in hard copy by post:

(i)    a letter substantially in the form which appears at pages 550 to 551 of Annexure NC-1 to the First Charlston Affidavit, which provides an overview of the Scheme process, including the Scheme Meeting and Scheme Booklet (Hard Copy Shareholder Cover Letter);

(ii)    the Scheme Booklet;

(iii)    a personalised proxy form substantially in the form which appears at pages 552 to 553 of Annexure NC-1 to the First Charlston Affidavit (Proxy Form); and

(iv)    an envelope for the return of the Proxy Form; and

(c)    in the case of Envirosuite Shareholders who are not Email Shareholders or Hard Copy Shareholders, either because they have not made an election, or because they have elected to receive hard copy communications and electronic notices of meeting (Hybrid Shareholders), the following documents in hard copy by post:

(i)    the Hard Copy Shareholder Cover Letter;

(ii)    a personalised Proxy Form; and

(iii)    an envelope for the return of the Proxy Form.

3.    Mr Colby Manwaring or, failing him, Mr Jason Cooper, be chairperson of the Scheme Meeting.

4.    The chairperson appointed to the Scheme Meeting have the power to adjourn the Scheme Meeting to such time, date and at such place (including electronically) as the chairperson considers appropriate.

5.    Voting on the resolution to agree to the Scheme be conducted by way of a poll.

6.    A proxy in respect of the Scheme Meeting will be valid and effective if, and only if, it is lodged in accordance with the instructions on the proxy form or website referred to in paragraph 2 above by 9.00 am (AEST) on 30 July 2025.

7.    Pursuant to r 1.3 of the Federal Court (Corporations) Rules 2000 (Cth), compliance with rr 2.4(1), 2.15, 3.4 and Form 6 be dispensed with.

8.    By no later than 1 August 2025, Envirosuite publish an announcement via the ASX market announcements platform substantially in the form of pages 620 to 621 of Annexure NC-1 to the First Charlston Affidavit which sets 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.

9.    The further hearing of the originating process be adjourned to 10.15 am (AEST) on 8 August 2025, for the hearing of any application to approve the Scheme.

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

ANNEXURE A

REASONS FOR JUDGMENT

MOSHINSKY J:

Introduction

1    This is an application by the plaintiff, Envirosuite Limited (Envirosuite) for orders under s 411(1) of the Corporations Act 2001 (Cth) (Act) to convene a meeting of its members (Scheme Meeting) to consider a proposed scheme of arrangement (Scheme). The Scheme involves the acquisition of all of the shares in Envirosuite by Ideagen EVS BidCo Pty Ltd (Ideagen BidCo).

2    Envirosuite is an ASX-listed Australian public company that provides environmental intelligence technology solutions to customers across the aviation, mining, industrial, waste and wastewater sectors.

3    Ideagen BidCo is an Australian private company that was recently incorporated to acquire all of the Envirosuite shares under the Scheme. Ideagen BidCo is an indirectly wholly-owned subsidiary of Ideagen Limited (Ideagen), a private limited company registered in the United Kingdom. Ideagen and Ideagen BidCo are part of a corporate group that provides ‘software as a service’ to customers in various industries including manufacturing, aviation, construction, finance, healthcare and life sciences.

4    If the Scheme is implemented:

(a)    Ideagen BidCo will acquire 100% of the issued share capital of Envirosuite by acquiring all of the Scheme Shares (see below) from Scheme Participants (see below);

(b)    Scheme Participants will receive the Scheme Consideration of $0.09 cash per Scheme Share; and

(c)    Envirosuite will become a wholly-owned subsidiary of Ideagen BidCo and an indirect wholly-owned subsidiary of Ideagen.

5    In these reasons, Scheme Share means an Envirosuite Share held by a Scheme Participant as at the Record Date; Scheme Participant means a person registered as an Envirosuite shareholder on the Record Date; and Record Date is the date for determining eligibility to participate in the Scheme, and is defined in the Scheme to be two business days following the date upon which the Scheme becomes effective.

6    The Scheme is subject to a number of conditions precedent, such as the approval of Envirosuite shareholders and the Court.

7    The parties’ obligations in relation to the Scheme are set out in a Scheme Implementation Deed (SID) between Envirosuite and Ideagen dated 12 May 2025, which annexes the form of the proposed Scheme (amongst other things).

8    The directors of Envirosuite have formed the view that the Scheme is in the best interests of Envirosuite shareholders, and they unanimously recommend that Envirosuite shareholders vote in favour of the Scheme (in the absence of a Superior Proposal (as defined in the SID) and subject to Grant Thornton Corporate Finance Pty Ltd (the Independent Expert) continuing to conclude that the Scheme is in the best interests of Envirosuite shareholders).

9    Each Envirosuite director holds a small number of Envirosuite shares, amounting (in aggregate) to approximately 0.54% of the total number of Envirosuite shares on issue. All Envirosuite directors intend to vote any Envirosuite shares owned or controlled by them in favour of the Scheme (subject to the same qualifications as the directors’ voting recommendation).

10    The directors of Envirosuite have appointed the Independent Expert to prepare a report in relation to the Scheme. In its report (the IER), the Independent Expert expresses the opinion that the Scheme is fair and reasonable and therefore is in the best interests of Envirosuite shareholders, in the absence of a superior alternative proposal. In summary, the Independent Expert has assessed the value of an Envirosuite share as being in the range of $0.0767 - $0.1009. As the value of the Scheme Consideration of $0.09 is within the range of the assessed value of an Envirosuite share, the Independent Expert considers that the Scheme is fair and, as such, is also reasonable and in the best interests of Envirosuite shareholders.

11    The following material is before the Court:

(a)    an affidavit of Mikkeli Godfree, a partner of King & Wood Mallesons (KWM), the solicitors for Envirosuite, dated 3 June 2025;

(b)    an affidavit of Benjamin Dorks, the Chief Executive Officer and a director of Ideagen, dated 25 June 2025;

(c)    an affidavit of Nicola Charlston, a partner of KWM, dated 27 June 2025; and

(d)    an affidavit of Ms Charlston, dated 30 June 2025.

12    A letter from the Australian Securities and Investments Commission (ASIC) dated 30 June 2025 is also before the Court.

13    Envirosuite’s counsel have prepared and provided a detailed and helpful outline of submissions dated 27 June 2025 (Outline of Submissions) in support of the orders sought today. These reasons for judgment are substantially drawn from those submissions.

14    At the hearing today, Envirosuite’s counsel made oral submissions in support of the application.

15    Ideagen and Ideagen BidCo were represented at the hearing today and supported the orders sought by Envirosuite.

16    For the reasons that follow, I consider that it is appropriate to make orders convening the Scheme Meeting, as well as the related orders sought by Envirosuite.

The Scheme

17    The terms of the Scheme are contained in the proposed Scheme of Arrangement, a copy of which is Annexure C to the scheme booklet prepared by Envirosuite (Scheme Booklet).

18    The Scheme is described in section 3 of the Scheme Booklet and in the Outline of Submissions.

19    The key steps in the Scheme are as follows:

(a)    Envirosuite shareholders will vote on whether to approve the Scheme at the Scheme Meeting (assuming that the Court makes orders that Envirosuite is to convene the Scheme Meeting);

(b)    if the Scheme is to proceed, all conditions precedent (other than Court approval) must be either satisfied or waived by the applicable time, which for most conditions precedent is 8.00 am on the date of the second court hearing;

(c)    if the Scheme is agreed to by the requisite majorities at the Scheme Meeting and approved by the Court, it becomes effective on the lodging of an office copy of the Court’s approval orders with ASIC; and

(d)    if the Scheme becomes effective, it will be implemented on the Implementation Date (which, on the current timetable, is 20 August 2025).

20    If the Scheme becomes effective, implementation will occur as follows:

(a) first, the Scheme Consideration will be provided to Scheme Participants as follows:

(i)    by no later than 2.00 pm on the Business Day before the Implementation Date, Ideagen or Ideagen BidCo must deposit or procure the deposit of an amount equal to the aggregate amount of the Scheme Consideration into a trust account operated by Envirosuite as trustee for the Scheme Participants (Trust Account) (cl 6.2 of the Scheme);

(ii)    on the Implementation Date, subject to receipt of the aggregate amount of the Scheme Consideration from Ideagen or Ideagen BidCo, Envirosuite must pay from the Trust Account the Scheme Consideration to each Scheme Participant in respect of that Scheme Participant’s Scheme Shares (cl 6.3(a) of the Scheme); and

(b) secondly, on the Implementation Date, subject to the deposit of the aggregate amount of the Scheme Consideration into the Trust Account by Ideagen or Ideagen BidCo in accordance with clause 6.2 of the Scheme, the Scheme Shares must be transferred to Ideagen BidCo (cl 5.2(a) of the Scheme).

21    Ideagen and Ideagen BidCo have executed a deed poll in the form required by the SID (Deed Poll).

22    Pursuant to the Deed Poll, Ideagen and Ideagen BidCo:

(a) covenant in favour of each Scheme Participant that they will be bound by the terms of the Scheme as if they were party to the Scheme; and

(b) undertake in favour of the Scheme Participants to perform all obligations and other actions attributed to them under the Scheme, including in relation to the payment of the Scheme Consideration.

Applicable principles

23    The applicable principles have been set out in numerous cases. For present purposes, it is sufficient to refer to my judgment in Re Carbon Revolution Ltd [2023] FCA 1081 at [21]-[23], where I stated:

21    The principles that apply upon an application to convene a scheme meeting are well-known and have been referred to in a number of recent decisions in this Court: see, for example, Re Verdant Minerals [2019] FCA 556 at [20]-[30]; Re Japara Healthcare Limited [2021] FCA 1150; 156 ACSR 695 at [23]-[34]; Re 5G Networks Limited [2021] FCA 1189 at [22]-[25]; Re RXP Services Limited [2021] FCA 38 at [16]-[19]; Re Citadel Group Limited [2020] FCA 1580; 148 ACSR 598 at [24]-[27]; Re DWS Limited [2020] FCA 1590; 148 ACSR 616 at [14]-[17]; Re Healthscope Limited [2019] FCA 542; 139 ACSR 608 at [43]ff; Re Amcor Ltd [2019] FCA 346 at [45]ff. The principles were summarised by Davies J in Re Cytopia Ltd [2009] VSC 560 at [3]:

The authorities make it clear that the Court’s role at this stage is not to express a view on whether the proposed scheme should be approved. It is also clear that it is not the Court’s role to usurp the shareholders’ decision, by attempting to intrude its own commercial judgment. The Court is to be concerned with whether there is adequate disclosure to the shareholders in the Scheme Booklet (or explanatory memorandum), whether the legal requirements otherwise have been complied with and whether the scheme, on its face, is one that is sufficiently “fair and reasonable” to be capable of being put to shareholders for their approval or rejection.

22    It has consistently been held that the question whether or not to accept particular consideration for shares is quintessentially a commercial matter for the members to assess, and they ought not be prevented from having the opportunity to do so, provided that the Court can be satisfied that they are acting on sufficient information and with time to consider what they are voting on. Therefore, if the arrangement is one that seems fit for consideration by the meeting of members, and is a commercial proposition likely to gain the Court’s approval if passed by the necessary majorities, then orders should be made to convene the meeting.

23    The Court’s task at the first court hearing is to assess, first, whether the statutory prerequisites to the making of orders convening a meeting have been met and, second, whether it is appropriate for the Court to exercise its discretion in favour of making those orders. Each of these matters will be considered in turn.

Statutory prerequisites

24    At paragraphs 29 to 42 of the Outline of Submissions, Envirosuite addresses each of the statutory prerequisites. On the basis of those submissions (which are substantially drawn on in the paragraphs that follow) and the affidavit evidence, I am satisfied that each of the statutory prerequisites is satisfied.

25    First, as required by s 411(1), Envirosuite has made an application in relation to a compromise or arrangement that is proposed between a Part 5.1 body and its members. In particular:

(a)    this application was made by originating process filed on 4 June 2025;

(b)    a “Part 5.1 body” is defined in s 9 of the Act to include a company registered under the Act, which Envirosuite is; and

(c)    the proposed Scheme is an “arrangement” within the meaning of s 411(1).

26    Secondly, s 411(2)(a) requires that 14 days’ notice of the hearing of this application must be given to ASIC, or such lesser period of notice as the Court or ASIC permits. This requirement has been satisfied.

27    Thirdly, s 411(2)(b) requires that ASIC be given a reasonable opportunity to examine the terms of the proposed Scheme and the draft explanatory statement, and to make submissions to the Court. These requirements have been satisfied.

28    Fourthly, r 2.4(1) of Federal Court (Corporations) Rules 2000 (Cth) (Rules) requires that, unless the Court otherwise directs, an originating process must be supported by an affidavit stating the facts in support of the process. Paragraph 3(b) of the Court’s Schemes of Arrangement Practice Note (GPN-SOA) (Practice Note) states that:

the Court will generally be prepared to dispense with the requirement under rule 2.4(1) of [the Rules] for the initial affidavit filed in support of the application to state the facts in support of the Originating Process, where that will be addressed by later evidence. It is ordinarily sufficient for that affidavit to identify, in brief terms, the nature of the scheme and key dates, and annex a company search.

29    Mr Godfree’s Affidavit has been prepared in accordance with the Practice Note, and the proposed orders sought by Envirosuite include an order dispensing with the additional requirements of r 2.4(1) of the Rules.

30    Fifthly, as required by r 2.4(2) of the Rules, the evidence includes an ASIC company extract in relation to Envirosuite carried out no earlier than seven days before the originating process was filed.

31    Sixthly, as required by rr 3.2(a) and (b) of the Rules, the necessary evidence about the willingness of the proposed chairperson and alternate chairperson to chair the Scheme Meeting has been provided, as has evidence of any prior dealings of those persons with Envirosuite and any conflicts of interest.

32    Seventhly, as required by r 3.3(1) of the Rules, the orders (if made) will annex a copy of the Scheme.

33    Eighthly, the disclosure requirements in relation to the explanatory statement (which in this case is in the form of the Scheme Booklet) set out in s 412 of the Act and clause 5.1.01 and Schedule 8 (Part 3) of the Regulations have been satisfied. There are three aspects to the requirements of s 412(1):

(a)    first, the explanatory statement must explain the effect of the compromise or arrangement, and in particular state any material interest of the directors, and the effect on those interests of the compromise or arrangement so far as it is different from the effect on the like interests of other persons. The effect of the Scheme is addressed in the letter from the Chair of Envirosuite in the Scheme Booklet, and it is also addressed in section 3 of the Scheme Booklet, and the required information in relation to the material interests of directors is addressed in section 7.3 of the Scheme Booklet;

(b)    secondly, the explanatory statement must set out the prescribed information, being the information set out in clause 5.1.01 and Schedule 8 of the Regulations. The evidence as to verification of the information in the Scheme Booklet demonstrates that this requirement has been satisfied; and

(c)    thirdly, the explanatory statement must set out any other information that is material to the making of a decision whether or not to agree to the compromise or arrangement. In this respect, it is submitted that the Scheme Booklet is clear and comprehensive, and (along with the IER annexed to the Scheme Booklet) contains a detailed evaluation of the Scheme, presented in a way that enables an Envirosuite shareholder to form his or her own view of the merits of the Scheme.

34    Moreover, as the Scheme is solely a members’ scheme, it is necessary that the explanatory statement be registered by ASIC before being sent to shareholders. Before registering the statement, ASIC must conclude that it appears to comply with the requirements of the Act, and must form the opinion that the Scheme Booklet does not contain any matter that is false in a material particular or materially misleading in the form and context in which it appears. Assuming the Scheme Booklet is registered by ASIC following the first court hearing, this will provide further assurance as to the satisfaction of the relevant disclosure requirements.

35    Ninthly and finally, the notice required by paragraph 6 of the Practice Note is included in the “Important Notices” section in the Scheme Booklet.

36    In light of the procedural requirements having been satisfied, the Court’s discretion to make the convening orders is enlivened.

Discretion

37    The relevant discretionary considerations involve two main questions: first, whether the Scheme is fit for consideration by the members; and second, whether the members are to be properly informed as to the nature of the Scheme.

Scheme is fit for consideration

38    Envirosuite submits that the Scheme is fit for consideration by the Envirosuite shareholders, in that:

(a)    the Scheme is of such a nature and cast in such terms that, if agreed to at the Scheme Meeting, the Court would be likely to approve the Scheme at the second court hearing;

(b)    there is no issue arising from the Scheme which would unquestionably lead to a refusal by the Court to approve the Scheme at the second court hearing; and

(c)    it cannot be said that the Scheme is on its face “so blatantly unfair or otherwise inappropriate that it should be stopped in its tracks before going any further”: Re Foundation Healthcare Ltd [2002] FCA 742; 42 ACSR 252 at [44].

39    I accept those submissions.

40    The following particular matters are addressed in the Outline of Submissions:

(a)    performance risk (at paragraphs 49 to 50);

(b)    voting by substantial shareholders (at paragraphs 51 to 53);

(c)    call option deeds (at paragraphs 54 to 59);

(d)    options and performance rights (at paragraphs 60 to 62);

(e)    director interests and benefits (at paragraphs 63 to 70); and

(f)    break free and exclusivity (at paragraph 71).

41    I am satisfied, for the reasons set out in those submissions, that those matters do not provide a cause for concern in making the orders sought and that it is appropriate to make the orders sought.

Members are to be properly informed

42    The second principal aspect relevant to the exercise of the Court’s discretion is the adequacy of the information to be provided to shareholders.

43    For the reasons set out in paragraphs 73 to 75 of the Outline of Submissions, I am satisfied that members of Envirosuite will be properly informed.

Section 411(7)

44    The Court’s power to approve a scheme is restricted by s 411(7) of the Act. For the reasons set out at paragraphs 77 to 80 of the Outline of Submissions, I do not consider this to be a matter that renders it inappropriate to make the orders sought today.

Conclusion on exercise of discretion

45    For these reasons, I am satisfied that the Scheme is of such a nature and cast in such terms that, if it achieves the statutory majorities at the Scheme Meeting, the Court would be likely to approve the Scheme. Accordingly, it is appropriate for the Court to make the orders sought convening the Scheme Meeting.

Other matters

46    The Outline of Submissions, at paragraphs 85 to 86, deals with the proposed process for dispatch of the Scheme Booklet. I am satisfied that the proposed arrangements are appropriate.

47    The Outline of Submissions, at paragraph 88, deals with notice of the second court hearing (which is due to take place at 10.15 am on 8 August 2025). For the reasons set out in the submissions, and in accordance with the Practice Note, it is appropriate to make an order dispensing with compliance with r 3.4 of the Rules.

Conclusion

48    I will therefore make orders substantially in the terms sought by Envirosuite.

Associate:

Dated:    3 July 2025