Federal Court of Australia

Clemenger Group Limited, in the matter of Clemenger Group Limited [2025] FCA 1161

ORDERS

Other matters

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 and a draft explanatory statement relating to that arrangement; and

(b) make submissions to the court in relation to the proposed scheme of arrangement and the draft explanatory statement.

C. The court notes the letter from ASIC to Holding Redlich (the plaintiff’s solicitors) dated 17 September 2025, notifying the plaintiff that ASIC does not propose to appear to make submissions or intervene to oppose the proposed scheme at the first court hearing under s 411(1) of the Corporations Act 2001 (Cth) (Act).

THE COURT ORDERS THAT:

1. Pursuant to s 411(1) and s 1319 of the Act, the plaintiff is to convene and hold a meeting (Scheme Meeting) of its “A Class Shareholders” and “C Class Shareholders” (as defined in the plaintiff’s constitution) (Scheme Shareholders):

(a) to consider and, if thought fit, to approve (with or without modification) the scheme of arrangement (Scheme) proposed to be made between the plaintiff and the Scheme Shareholders, the terms of which are set out in Annexure A to these orders;

(b) to be conducted at times and places in accordance with paragraph 6 of these orders; and

(c) whose chairperson will be Robert Morgan or, failing him, Adrian Ciabotti.

2. The Scheme Meeting be convened by the plaintiff distributing the following documents to the Scheme Shareholders, with distribution to occur in accordance with paragraph 3 below:

(a) the scheme booklet, which comprises the explanatory statement required by s 412(1)(a) of the Act, substantially in the form set out at pages 22 to 377 of annexure AC-1 to the affidavit of Adrian Ciabotti filed on 16 September 2025 (Scheme Booklet), with the document contained at pages 192 to 210 of annexure AC-1 amended to reflect the Scheme at Annexure A to these orders; and

(b) the proxy form in respect of the Scheme Meeting, substantially in the form set out in Annexure H to the Scheme Booklet (pages 358 to 366 of annexure AC-1 (Proxy Form).

3. Pursuant to s 1319 of the Act, the documents in paragraph 2 above are to be provided to Scheme Shareholders by sending on or before Friday, 19 September 2025:

(a) in the case of each Scheme Shareholder (Email Shareholders), an email which includes:

(i) access by an embedded link to an electronic copy of the Scheme Booklet; and

(ii) a statement which directs the Email Shareholders to the voting instructions in the Scheme Booklet; and

(b) if an email notification of a failure to deliver an email to an Email Shareholder’s nominated electronic address pursuant to paragraph 3(a) above is received (Non-Email Shareholders) and that Non-Email Shareholder’s registered address is in Australia, the following documents by pre-paid post addressed to the relevant addresses recorded in the plaintiff’s register:

(i) a letter in respect of the Scheme Meeting, which contains the address of a website which enables Non-Email Shareholders to access a copy of the Scheme Booklet (Non-Email Shareholder Letter);

(ii) a personalised Proxy Form; and

(iii) a reply-paid envelope for the return of that Scheme Shareholder’s Proxy Form; and

(c) in the case of Non-Email Shareholders whose registered address is outside Australia, the following documents by pre-paid airmail post addressed to the relevant addresses recorded in the plaintiff’s register:

(i) a Non-Email Shareholder Letter;

(ii) a personalised Proxy Form; and

(iii) a self-addressed envelope for the return of that Scheme Shareholder’s Proxy Form.

4. Subject to these orders, the Scheme Meeting is to be convened, held and conducted in accordance with the provisions of:

(a) Part 2G.2 of the Act (except for any applicable replaceable rule) that apply to a meeting of the plaintiff’s members; and

(b) the plaintiff’s constitution that apply in relation to meetings of members and that are not inconsistent with Part 2G.2 of the Act.

5. Pursuant to r 3.3(2) of the Federal Court (Corporations) Rules 2000 (Cth) (Rules), notwithstanding s 249Y(3) of the Act, the appointment of a proxy in respect of the Scheme Meeting shall not be revoked or suspended by the appointing Scheme Shareholder (Relevant Appointor) attending and taking part in the Scheme Meeting, but if the Relevant Appointor votes on a resolution at the Scheme Meeting, the proxy is not entitled to vote as the Relevant Appointor’s proxy on that resolution and any such vote must not be counted in the results of the relevant poll.

6. Pursuant to s 1319 of the Act, the Scheme Meeting is to be held as a physical meeting and conducted in 3 parts simultaneously on Tuesday, 14 October 2025 at the following venues:

(a) in Melbourne at the offices of Clemenger, Level 4, 280 Little Collins Street, Melbourne, Victoria at 9:00am (AEDT);

(b) in Sydney at the offices of Clemenger, Pier 9, 23 Hickson Road, Walsh Bay, New South Wales at 9:00am (AEDT); and

(c) in Auckland at the offices of Colenso BBDO, 100 College Hill, Ponsonby, Auckland, New Zealand at 11:00am (NZDT),

with an audio-visual link between the 3 physical meeting venues.

7. The chairperson of the Scheme Meeting shall have the power to adjourn the Scheme Meeting to such time, date and place as he or she considers appropriate.

8. The plaintiff may provide access to the Scheme Meeting for such other persons as it thinks fit.

9. Voting on the resolution to approve the Scheme is to be conducted by way of a poll.

10. A Proxy Form in respect of the Scheme Meeting will be valid and effective if, and only if, it is completed and received in accordance with its terms by 9:00am (AEDT) on Tuesday, 14 October 2025.

11. Pursuant to r 1.3 of the Rules, compliance with the following requirements of the Rules be dispensed with:

(a) r 2.4(1), to the extent that rule requires the affidavit filed with the originating process to state the facts in support of the process;

(b) r 2.15; and

(c) r 3.4 and Form 6.

12. Pursuant to r 1.3 of the Rules, the plaintiff shall provide:

(a) by email in the manner set out in paragraph 3 above; and

(b) by publication of a notice on its website,

the:

(c) details for the second court hearing and the process of opposing the approval of the compromise or arrangement, together with the name and address for service of the plaintiff; and

(d) email or notice stating whether the plaintiff’s board has resolved to determine the “Special Dividend” (as defined in the Scheme).

13. The further hearing of the originating process is adjourned to 10:15am (AEDT) on 21 October 2025 or as soon thereafter as the business of the court allows before Justice O’Callaghan.

14. Liberty to apply is reserved.

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

REASONS FOR JUDGMENT

O’CALLAGHAN J:

Introduction

1 I made the orders set out above yesterday.  These are my reasons.

2 By originating process filed on 29 August 2025, Clemenger Group Limited (Clemenger) sought orders pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Act) to convene a meeting (Scheme Meeting) of holders of all A Class and C Class shares in Clemenger for the purpose of considering a proposed scheme of arrangement (Scheme) by which it is intended that Portview Holdings Australia Pty Ltd (Portview), which presently holds all B Class shares in Clemenger, will acquire all the A Class and C Class shares in Clemenger such that Clemenger will become a wholly-owned subsidiary of Portview.

3 Clemenger relied on written submissions prepared by Ms R Zambelli and Mr N Marlow-Weir of counsel and the affidavits of:

(a) Mr William Khong, a partner of Holding Redlich, Clemenger’s solicitors, sworn on:

(i) 29 August 2025, which outlines the nature of the Scheme, identifies key dates and annexes a company search of Clemenger undertaken that day; and

(ii) 17 September 2025, annexing an indication of intent letter by the Australian Securities and Investments Commission (ASIC) and demonstrating compliance with s 411(2) of the Act.

(b) Mr Adrian Ciabotti, a director of Clemenger and its chief financial officer (CFO), sworn on 16 September 2025, annexing a draft scheme booklet (Scheme Booklet) and the independent expert report, and addressing (i) relevant matters regarding Clemenger; (ii) the Scheme and the Scheme Implementation Deed; (iii) the recommendation of Clemenger’s directors that shareholders vote in favour of the Scheme; (iv) verification of the Scheme Booklet; (v) the Scheme Meeting and its proposed chairperson; and (vi) the proposed communications with Clemenger’s Class A and Class C shareholders; and

(c) Mr Louis Januzzi, the senior vice president, general counsel and secretary of Omnicom Group Inc (Omnicom) (which company is listed on the New York Stock Exchange and wholly owns Portview), sworn on 16 September 2025, annexing an executed deed poll and deposing to the verification of the “Omnicom Information”.

Background

Clemenger

4 On 3 June 1971, Clemenger was incorporated in Victoria as a public company limited by shares.  From 1972 until 2011, BBDO Worldwide Inc, a wholly-owned subsidiary of Omnicom, held a substantial minority shareholding in Clemenger until it transferred those shares to Portview in 2011.  Portview subsequently obtained further shares in Clemenger by way of two schemes of arrangement in 2011 and 2023, which increased its shareholding in Clemenger to 73.67% and 86.84%, respectively.  Since 2023, Portview has maintained its 86.84% shareholding in Clemenger.

5 Clemenger is an unlisted public company whose registered office and principal place of business are located at 280 Little Collins Street, Melbourne, Victoria.  It is the holding company for the “Clemenger Group”, a corporate group currently comprising 19 active trading companies which operate in the advertising and marketing communications industry across Australia and New Zealand.  The companies within the Clemenger Group include creative advertising agencies, customer relationship marketing companies, consulting organisations and media planning companies, as well as companies specialising in experiential marketing, market research, custom publishing, design, field marketing, sales promotion and branded information advertising.  The Clemenger Group has approximately 1,496 employees in total.

6 Clemenger has, for many years, operated the Clemenger Employee Share Assistance Scheme (CESAS) under which participating employees may acquire shares in Clemenger and, if desired, fund such acquisition by borrowing funds from a related entity of Clemenger.

7 Under Clemenger’s corporate constitution, Clemenger’s share capital (comprising 175,500,000 shares) is divided into 3 classes: A Class (18,747,000 shares), B Class (152,399,500 shares) and C Class (4,353,500 shares).  A Class shares may only be held by Australian residents and C Class shares can only be held by non-Australian residents. All of the A Class and C Class shareholders are current or former employees or directors of Clemenger (or their associates).

8 In total, there are 297 A Class and C Class shareholders.  Of those 297 shareholders, 254 have loans in respect of shares acquired under the CESAS (Share Loans).  The total amount of all Share Loans (and accrued interest thereon calculated up to 31 October 2025) is AUD$46,265,643.50.

9 All of the B Class Shares in Clemenger are held by Portview.  Following a scheme of arrangement in 2023, Portview holds 86.84% of all of the issued shares in Clemenger.

The Scheme and related documents and processes

10 On 29 August 2025, Clemenger entered into a “Scheme Implementation Deed” (SID) with Portview.  As I have explained above, Portview is a wholly-owned subsidiary of Omnicom.

11 The Scheme Booklet, which was in evidence, included the explanatory statement required by s 412 of the Act.  It provided a detailed description of the Scheme, including the reasons why holders of A Class or C Class shares in Clemenger may vote for or against the Scheme.

12 If the Scheme is implemented, Portview will acquire all the A Class and C Class shares in Clemenger, which will thereby become a wholly-owned subsidiary of Portview. Resolutions to amend Clemenger’s constitution to facilitate the transaction contemplated by the Scheme (Other Shareholder Resolutions) will be put at separate meetings of A Class shareholders, C Class shareholders and all Clemenger shareholders, to be held immediately after the Scheme Meeting.  The Other Shareholder Resolutions are conditional on the Scheme becoming effective.

13 Clemenger has established an independent board committee, comprising of directors that are not appointed by Portview and do not have an interest in Portview, to negotiate the transaction contemplated by the Scheme and to provide a recommendation to A Class and C Class shareholders.  The committee unanimously recommended that the A Class and C Class shareholders vote in favour of the Scheme.  All of Clemenger’s directors who hold A Class or C Class shares intend to vote in favour of the Scheme.

14 An independent expert report by Grant Thornton Corporate Finance Pty Ltd was annexed to the Scheme Booklet.  It assessed the Scheme and opined that it is fair and reasonable, and concluded that it is in the best interests of A Class and C Class shareholders, in the absence of a superior proposal.

15 On 29 August 2025, the Scheme Booklet was lodged with ASIC.  Following correspondence between ASIC and Clemenger’s solicitors, the Scheme Booklet was revised, and its form finalised for dispatch to A Class and C Class shareholders.

Key aspects of the scheme

16 The Scheme is Annexure B to the Scheme Booklet.  Broadly, the Scheme is an all-cash scheme whereby all A Class and C Class shareholders on the register of Clemenger as at the “Scheme Record Date” (Participating Shareholders) will receive AUD$3.37 per share (Scheme Consideration) for each A Class or C Class share they hold as at the Scheme Record Date (Scheme Shares).  In addition, the independent board committee has recommended to Clemenger’s board that the board determine to pay a fully-franked special dividend of AUD$0.06 per share, subject to certain conditions (Special Dividend).

17 The Scheme uses the definitions of “Scheme Shareholders” and “Participating Shareholders”.  The only difference between them is timing:

(a) a “Scheme Shareholder” is an A Class or C Class shareholder on the register of Clemenger as at the date that is the business day the notice of meeting for the Scheme Meeting is issued; whereas

(b) a “Participating Shareholder” is an A Class or C Class shareholder on the register of Clemenger on the Scheme Record Date.

18 Clemenger seeks approval to convene a single meeting of A Class and C Class shareholders, as the legal rights conferred on the A Class and C Class shareholders by Clemenger’s constitution are almost identical.  The only difference between A Class and C Class shareholders under the Scheme is the latter’s exposure to up to 5 business days of exchange rate risk.  As was submitted, the proposal to convene a single meeting does not present a “class issue” as A Class and C Class shareholders are able to “come together in a single meeting and to debate the question of what is good or bad for the constituency as a whole and where the common good lies”.  See Re Hills Motorway Ltd [2002] NSWSC 897; (2002) 43 ACSR 101 at 104 [12] (Barrett J).

Conditions precedent

19 The Scheme is subject to a number of conditions precedent, which include:

(a) Portview receiving approval under the Foreign Acquisitions and Takeovers Act 1975 (Cth);

(b) Scheme Shareholders voting in favour of the Scheme at the Scheme Meeting, if convened;

(c) the Other Shareholder Resolutions being passed at the respective meetings held to consider and vote on those resolutions; and

(d) the court approving the Scheme at the second court hearing.

20 If the Scheme Shareholders vote to approve the Scheme, all conditions precedent (other than court approval) must be either satisfied or waived by the applicable time, which for most conditions precedent is 8:00am on the second court hearing date (currently listed before me on 21 October 2025), with the exception being “regulatory approvals” for Portview which must be satisfied by 5:00pm on the business day before the second court hearing date.

Payment of Scheme Consideration and transfer of Scheme Shares

21 Portview is required to pay (or procure the payment of) the Scheme Consideration of AUD$3.37 per Scheme Share.  As noted, the independent expert report opined that the Scheme Consideration of AUD$3.37 per share:

(a) is fair and reasonable to the Scheme Shareholders;

(b) is consistent with its assessment of Clemenger’s value; and

(c) has been calculated in accordance with the formula in Clemenger’s constitution.

22 The formula in the constitution requires the calculation of the “Transfer Price” of shares (which calculation has been used to determine the Scheme Consideration) at the end of the “Financial Year”, which for Clemenger is 31 December.

23 The Scheme Consideration will be paid to Participating Shareholders as follows:

(a) first, in reduction of the Participating Shareholder’s Share Loan balance (if any) to nil; and

(b) then, for any remaining Scheme Consideration, as a payment to that Participating Shareholder.

24 Subject to the conditions precedent in the SID, on the business day before the “Implementation Date”, Portview is required to pay (or procure the payment of):

(a) the aggregate amount of all outstanding Share Loans owing by Participating Shareholders under the CESAS to, or as directed by, Omnicom Finance Limited (Omnicom Finance), the lender under the “Omnicom Facility”; and

(b) the “Aggregate Net Australian Scheme Consideration” and “Aggregate Net NZ Scheme Consideration” (being the aggregate amount of Scheme Consideration less the aggregate of all outstanding Share Loan balances for A Class shares and C Class shares) into separate AUD and NZD denominated trust accounts in Clemenger’s name.

25 On the Implementation Date, the Scheme Consideration will be paid by Clemenger from these trust accounts to Participating Shareholders.  The Scheme contains provisions to ensure that Participating Shareholders receive the Scheme Consideration.

26 Once the Scheme Consideration is paid on the Implementation Date, the Scheme Shareholders authorise Clemenger to deal with the Scheme Shares and transfer the Scheme Shares to Portview.

27 The Scheme is denominated in AUD.  Payment to C Class shareholders will be converted to NZD applying the “Exchange Rate” (which is, by definition, fixed on the “Effective Date”) as between AUD and NZD.  C Class shareholders will bear the exchange rate risk between the Effective Date (when the Exchange Rate is fixed) and the Implementation Date (when the Scheme Consideration is paid to Participating Shareholders) — i.e. 5 business days, unless a longer period is agreed in writing between Clemenger and Portview.

28 At the hearing before me, counsel for the plaintiff indicated that amendments had been made to a portion of the Scheme Booklet in evidence — namely, to clause 5.1 of the document titled “Scheme of Arrangement” at pages 192 to 210 of annexure AC-1 to the affidavit of Mr Ciabotti.  In light of the process identified above for the payment of the Scheme Consideration to Participating Shareholders who either do, or do not, have an outstanding Share Loan balance, the amendments amounted to no more than (i) the deletion of redundant subclauses that had contemplated a scenario outside of this dichotomy; and (ii) consequential amendments related to that deletion.  In my view, the amendments have no material impact on the Scheme.

Deed poll and side letter

29 Under the SID, Portview was required to deliver to Clemenger an executed deed poll in favour of the Scheme Shareholders by no later than 8:00am on the first court hearing date.  As I have already mentioned, that deed poll was annexed to the affidavit of Mr Januzzi.  The deed poll is intended to provide the Participating Shareholders with recourse against Portview.

30 On 8 September 2025, Portview, Clemenger, Omnicom Finance and each “Share Loan Company” executed a side letter, to facilitate the application of the Scheme Consideration in reduction of Participating Shareholders’ Share Loans by Omnicom Finance and procure releases by each Share Loan Company of any security interests in respect of the Scheme Shares.

Amendments to Clemenger’s constitution

31 To permit the transfer effected by the Scheme (i.e. Portview becoming the holder of A Class and C Class shares), it is intended that resolutions will be put to Clemenger’s shareholders to:

(a) amend Clemenger’s constitution to include an exception to the present restrictions as to who may hold A Class or C Class shares (which requires a special majority); and

(b) convert the Scheme Shares to B Class Shares (from A Class or C Class shares, as applicable) upon transfer to Portview (which requires a majority of each class).

32 The evidence disclosed that Portview can, and intends to, vote all of its B Class shares in favour of the resolution to amend the constitution.  A Class and C Class shareholders will be asked to vote on all resolutions as they have the effect of varying the rights attaching to A Class and C Class shares.

33 The Other Shareholder Resolutions are conditions precedent to the Scheme and become effective from the Effective Date in the constitution (being the Effective Date of the Scheme).  The amendments effected by the Other Shareholder Resolutions will be null and void in the event that the “Transfer Date” has not occurred by 15 December 2025 (which is the “End Date” for the Scheme).

Special Dividend and exempted financial assistance

34 As noted, the independent board committee has recommended to Clemenger’s board that it should determine a Special Dividend.  The Clemenger board is currently scheduled to meet on 9 October 2025.  Clemenger will, prior to the Scheme Meeting, email its shareholders stating whether the Special Dividend has been determined.

35 Given that Portview (as the sole B Class shareholder) will receive the Special Dividend (which is conditional on, among other things, the Scheme becoming effective), and Portview is the transferee under the Scheme, the question may be said to arise whether there is a possibility that the Special Dividend and the transaction contemplated by the Scheme would constitute Clemenger providing “financial assistance” to Portview to acquire shares in Clemenger.

36 The provision of financial assistance is regulated by Pt 2J.3 of the Act, and a company giving financial assistance may rely on one or more of the exemptions contained in that part of the Act.  Clemenger submitted that the payment of the Special Dividend would not constitute financial assistance because Portview can pay (or procure the payment of) the Scheme Consideration without the Special Dividend.

37 In the alternative, Clemenger submitted, and I agree, that if payment of the Special Dividend does constitute financial assistance, it will not materially prejudice the interests of the company or its shareholders or its ability to pay its creditors.  The aggregate amount of the Special Dividend is $10.5 million.  After payment of the Special Dividend from Clemenger’s profits, Clemenger’s net assets will be $226.8 million (plus any profits generated from 1 July 2025).  In those circumstances, as Clemenger submitted, the payment of the Special Dividend, if it constitutes financial assistance, is exempted financial assistance because it “does not materially prejudice the interests of [Clemenger] or its shareholders or [Clemenger’s] ability to pay its creditors”.  See s 260A(1)(a)(i)–(ii) of the Act.

38 The final condition for the payment of the Special Dividend is that Clemenger’s board must be satisfied that the requirements of s 254T of the Act are satisfied before paying the Special Dividend.

39 The Scheme Shareholders have been informed of:

(a) the conditions attached to the Special Dividend; and

(b) the requirement that those conditions remain satisfied between determination and payment of the Special Dividend,

in the Scheme Booklet, including the consequence that if the conditions do not remain satisfied, the Special Dividend will not be paid.

40 The Special Dividend will, subject to the conditions set out above, be paid on the “Special Dividend Payment Date” (being one business day after the Effective Date), and, as noted, the Scheme Consideration will be paid on the Implementation Date.  The bifurcation in timing for payment has resulted in the separate definitions of Scheme Shareholders and Participating Shareholders, viz:

(a) the Scheme Shareholders will be paid the Special Dividend on the Special Dividend Payment Date if the Special Dividend conditions are met and remain satisfied (where one of the conditions is relevantly that the Scheme becomes effective); and

(b) the Scheme Consideration will be paid to the Participating Shareholders on the Implementation Date, and while this payment is necessarily conditional on the Scheme becoming effective, it is not conditional on the Special Dividend being paid.  Consequently, the separate definitions of Scheme Shareholders and Participating Shareholders allow the Scheme Consideration to be paid even if the Special Dividend is not.

Scheme meeting

41 Clemenger proposes the following processes for dispatch of the Scheme Booklet (together with its annexures, including the independent expert report).

Dispatch of Scheme Booklet and notification of second court hearing

42 The A Class and C Class shareholders are current or former employees or directors of Clemenger (or their associates).  Consequently, Clemenger holds “staff” email addresses for Scheme Shareholders who are currently employed by or otherwise engaged in Clemenger’s business.

43 For Scheme Shareholders who no longer have an active staff email address, Clemenger has personal email addresses and mobile numbers, which were recently updated in connection with Clemenger’s annual general meeting on 30 June 2025.

44 Clemenger intends to send the Scheme Booklet via email to Scheme Shareholders. Clemenger also intends to communicate the determination of Clemenger’s board as to the Special Dividend and the details of the second court hearing by email to Scheme Shareholders.

Mode of meeting, chair and alternate chair

45 The chairman of the independent board committee, Mr Robert Morgan, will chair the Scheme Meeting and has confirmed his willingness to do so.  If Mr Morgan becomes unwilling or unable to chair the Scheme Meeting, Mr Ciabotti (Clemenger’s CFO and a member of the independent board committee) has deposed that he is willing and able to chair the Scheme Meeting.

Statutory framework

46 The statutory framework relating to schemes of arrangement is set out in Part 5.1 of the Act and involves a three-stage process:

(1) the hearing of an application to the court for orders to convene a meeting or meetings (s 411(1) of the Act);

(2) the holding of the meeting or meetings (s 411(4)(a) of the Act); and

(3) the hearing of an application to the court for an order to approve the scheme (ss 411(4)(b) and 411(6) of the Act).

47 The hearing in this matter on 18 September 2025 concerned the first stage.

48 The court’s discretion to make an order under s 411(1) is enlivened if:

(a) a compromise or arrangement is proposed between a Part 5.1 body and its members (or any class of them);

(b) an application for the order is made in a summary way by the body;

(c) 14 days’ notice of the hearing of the application has been given to ASIC (or such lesser period as the court or ASIC permits); and

(d) the court is satisfied that ASIC has had a reasonable opportunity to:

(i) examine the terms of the proposed compromise or arrangement to which the application relates and a draft explanatory statement relating to the proposed compromise or arrangement; and

(ii) make submissions to the court in relation to the proposed compromise or arrangement and the draft explanatory booklet.

See, by way of example only, Re Kidman Resources Ltd [2019] FCA 1226; (2019) 375 ALR 760 at 763–4 [22].

49 I was satisfied that the criteria set out above have been met, including that ASIC had a reasonable opportunity to examine the terms of, and make submissions in relation to, the Scheme.

50 Accordingly, the court’s discretion to make orders for the plaintiff to convene the Scheme Meeting was enlivened.

Appropriate to exercise discretion to convene meeting

51 The principles which apply to the exercise of that discretion are well understood. The court must be satisfied that:

(a) the Scheme is fit for consideration by the proposed meeting in the sense that it is of such a nature and cast in such terms that, if it achieves the statutory majority at the meeting, the court would be likely to approve it on the hearing of a petition which is unopposed; and

(b) members are to be properly informed as to the nature of the Scheme before the Scheme Meeting.

52 The role of the court at the first court hearing is supervisory.  Justice Finkelstein summarised relevant authorities in an oft-cited passage in Re CSR Ltd (2010) 183 FCR 358 at 379–80 [74]–[76], explaining that the court should generally confine itself to ensuring that certain procedural and substantive requirements are met (for example, that there will be adequate disclosure), with limited consideration of issues of fairness.  The court should only consider the merits or fairness of a proposed scheme at the convening hearing if the issue is such as would “unquestionably” lead to a refusal to approve the scheme at the approval hearing; that is, the scheme may “appear on its face so blatantly unfair or otherwise inappropriate that it should be stopped in its tracks before going any further”.

Scheme fit for consideration by Scheme Shareholders

53 Having had the benefit of detailed and carefully prepared written and oral submissions by Ms Zambelli and Mr Marlow-Weir, and having read the evidence relied on, I am comfortably satisfied that the proposed Scheme is of such a nature and cast in such terms that, if it achieves the statutory majorities at the proposed Scheme Meeting, the court would be likely to approve it at the second court hearing. And in my view, as was submitted, the following features of the Scheme indicate that there is no aspect of the Scheme that renders it unfit for consideration by the Scheme Shareholders.

54 First, the Scheme Shareholders will be provided with sufficient information (via the Scheme Booklet, and in particular, the “Chairman’s letter” and the independent expert report) to make an informed decision in their own interests.

55 Secondly, the independent expert report states that the Scheme (including the amount of Scheme Consideration) is fair and reasonable and in the best interests of the Scheme Shareholders.  The Participating Shareholders are receiving an amount of cash per Scheme Share which reflects the value of Clemenger and the Transfer Price applicable to the “Clemenger annual share offer”.  In addition, the Participating Shareholders will benefit from:

(a) no longer being exposed to the economic risks faced by Clemenger and the consequent fluctuation in its value or profitability;

(b) realising the value of their Scheme Shares immediately in an otherwise illiquid market (or, more accurately, a market that is restricted by Clemenger’s constitution to trading once per year); and

(c) if they have a Share Loan, having this debt extinguished.

56 Thirdly, the Scheme’s structure is such that the Participating Shareholders will receive both the Special Dividend and the Scheme Consideration prior to the Scheme Shares being transferred to Portview.  Thus any performance risk in respect of Portview has been mitigated such that Scheme Shareholders will, at worst, retain their Scheme Shares.

57 Fourthly, the Scheme Shareholders will know whether the Special Dividend has been determined prior to voting on the Scheme.

58 Fifthly, the proposed Scheme will be effective (if approved) — i.e. it does not have any mechanical defects.  It is conditional on the Other Shareholder Resolutions being passed, such that the transaction will not result in any contravention of Clemenger’s constitution.

Scheme Shareholders properly informed

59 The Scheme Booklet contains:

(a) a recommendation from the independent board committee directors that Scheme Shareholders vote in favour of the Scheme;

(b) a statement that all directors intend to vote their Scheme Shares in favour of the Scheme; and

(c) the independent expert report which states that the Scheme is fair and reasonable and in the best interests of the Scheme Shareholders.

60 Further, as was submitted, each of the matters required by the Act is contained in the Scheme Booklet, viz:

(a) in the case of the Clemenger directors comprising the independent board committee, a statement that each director recommends the acceptance of the Scheme and, in the case of the other Clemenger directors, the reasons for not making a recommendation;

(b) the number of Scheme Shares held by each director;

(c) a statement that each director who holds Scheme Shares intends to vote in favour of the Scheme;

(d) the Portview or Omnicom shares held by each director;

(e) the information available to Clemenger regarding trading in Scheme Shares in the past 6 months (and noting that there was no trading in Scheme Shares in the last 6 months);

(f) a statement as to whether the financial position of Clemenger has materially changed since the date of the last balance sheet laid before a general meeting or sent to shareholders (and noting that it has not); and

(g) a statement from the directors of Clemenger regarding their intentions as to the continuation of Clemenger’s business, any major changes to Clemenger’s business and the future employment of Clemenger’s present employees.

Section 411(3A)

61 Section 411(3A) of the Act provides as follows:

In considering whether to make an order under subsection (1) or (1A) for a meeting to be held outside this jurisdiction, the Court must have regard to where the creditors or members, or the creditors or members included in the class concerned, as the case requires, reside.

62 The provenance of the provision is not altogether clear.  The explanatory memorandum is of no assistance.  See Explanatory Memorandum, Corporations Legislation Amendment Bill 1990 (Cth) at [700].

63 A nice question might be said to arise here about whether a meeting is “held outside this jurisdiction” where it is held simultaneously in this jurisdiction and in another jurisdiction (namely, New Zealand).  But it is not necessary to resolve that issue, if it be one, here.

64 It seems to me that counsel for the plaintiff was correct in their contention that one likely reason for the inclusion of such a provision would be to protect shareholders from being shut out from participating in a meeting by reason of it taking place inconveniently in another jurisdiction.

65 Here, the meeting is taking place simultaneously in three places, including in New Zealand, in order better to accommodate the shareholders who live in that country.

Disposition

66 For those reasons, I made the orders set out above.

Associate:

Dated:    19 September 2025