Essential Metals Limited, in the matter of Essential Metals Limited (No 2) [2023] FCA 1306

Essential Metals Limited, in the matter of Essential Metals Limited (No 2) [2023] FCA 1306

The Court approved the scheme of arrangement under s 411(4)(b) of the Corporations Act 2001 (Cth), determining that minor procedural irregularities (truncated notice period, delayed dispatch after email bouncebacks, and printing errors) did not amount to substantial injustice or invalidate the shareholder meeting or resolution, that full and fair disclosure was made, that the scheme was reasonable and not oppressive, and that ASIC raised no objection. The independent expert's opinion that the scheme was not fair but reasonable was not a bar to approval, in light of overwhelming shareholder support and adequate information provided.

Jurisdiction
Australia
Judgment Date
24 October 2023
Procedural Posture
Scheme of Arrangement Approval / Final Approval Hearing
Outcome
Scheme of arrangement approved; procedural irregularity declared not to invalidate resolution.
Legal Topics
['scheme of Arrangement' 'acquisition of Shares' 'shareholder Meeting' 'procedural Irregularity' 'disclosure' 'independent Expert Opinion' 'voter Turnout']
['corporations Law'] ['scheme of Arrangement' 'acquisition of Shares' 'shareholder Meeting' 'procedural Irregularity' 'disclosure' 'independent Expert Opinion' 'voter Turnout']

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Procedural Posture

Scheme of Arrangement Approval / Final Approval Hearing

Legal Issues

  1. 1 ['Whether procedural irregularity affected validity of scheme meeting or resolution' 'Whether short notice of meeting is permissible under the Corporations Act and Court orders' 'Whether approval should be granted despite printing error in scheme booklet' 'Whether scheme is fair and reasonable for shareholders' 'Effect of independent expert opinion that scheme is not fair but reasonable']

Ratio Decidendi

The Court approved the scheme of arrangement under s 411(4)(b) of the Corporations Act 2001 (Cth), determining that minor procedural irregularities (truncated notice period, delayed dispatch after email bouncebacks, and printing errors) did not amount to substantial injustice or invalidate the shareholder meeting or resolution, that full and fair disclosure was made, that the scheme was reasonable and not oppressive, and that ASIC raised no objection. The independent expert's opinion that the scheme was not fair but reasonable was not a bar to approval, in light of overwhelming shareholder support and adequate information provided.

Court Disposition

Scheme of arrangement approved; procedural irregularity declared not to invalidate resolution.

Orders

  • ['Scheme of arrangement between Essential Metals Limited and holders of fully paid ordinary shares approved under s 411(4)(b) Corporations Act 2001 (Cth).' 'Essential Metals Limited exempted from compliance with s 411(11) Corporations Act in relation to the Scheme.' 'Court declares scheme meeting and resolution...