FEDERAL COURT OF AUSTRALIA

Eumundi Group Limited, in the matter of Eumundi Group Limited (No 2) [2025] FCA 58   
File number:	QUD 685 of 2024	
		
Judgment of:	FEUTRILL J	
		
Date of judgment:	4 February 2025	
		
Publication of reasons:	6 February 2025	
		
Catchwords:	CORPORATIONS – application for approval of scheme of arrangement under s 411(4) of the Corporations Act 2001 (Cth) – concurrent off-market takeover bid – consideration of discretion under s 411(4)(b) and s 411(17) of the Act – consideration of whether purpose of scheme is to avoid operation of any of the provisions of Ch 6  	
		
Legislation:	Corporations Act 2001 (Cth) ss 411, 411(4)(a)(ii), 411(4)(b), 411(6), 411(11), 411(17), 411(17)(a), 411(17)(b), 411(12), 602, 606(1), 606(1A), 611, 624, 636, 638, 650G, 652A, 652B; Ch 6, 6A; Ptt 5.1, 6A.1, 6A.2
Corporations Regulations 2001 (Cth) reg 5.1.02; Sch 8
Federal Court (Corporations) Rules 2000 (Cth) rr 1.3, 3.4, 3.4(3)(a) 	
		
Cases cited:	Chesser Resources Limited, in the matter of Chesser Resources Limited (No 2) [2023] FCA 1067
Eumundi Group Limited, in the matter of Eumundi Group Limited [2024] FCA 1510
Re ACM Gold Ltd; Re Mt Leyshon Gold Mines Ltd (1992) 34 FCR 530
Re Coles Group Ltd (No 2) [2007] VSC 523; 65 ASCR 494
Re Foundation Healthcare Limited [2002] FCA 973; 43 ACSR 680
Re Mincom Ltd (No 3) [2007] QSC 207; 213 FLR 364
Re Stockbridge Ltd (1993) 9 ACSR 637
Re Wesfarmers Ltd; ex parte Wesfarmers Ltd (No 2) [2018] WASC 357   	
		
Division:	General Division	
		
Registry:	Queensland	
		
National Practice Area:	Commercial and Corporations	
		
Sub-area:	Corporations and Corporate Insolvency	
		
Number of paragraphs:	40	
		
Date of hearing:	4 February 2025	
		
Counsel for the Plaintiff:	Mr DF Jardine	
		
Solicitor for the Plaintiff:	HopgoodGanim Lawyers	

ORDERS
	QUD 685 of 2024	
IN THE MATTER OF EUMUNDI GROUP LIMITED ACN 010 947 476	
	EUMUNDI GROUP LIMITED ACN 010 947 476
Plaintiff

order made by:	FEUTRILL J	
DATE OF ORDER:	4 February 2025	

THE COURT ORDERS THAT:
1.	Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the plaintiff and holders of fully paid ordinary shares in the capital of the plaintiff, in the form contained in Schedule 3 of the scheme booklet, a copy of which is part of Annexure “JMG-22” to the second affidavit of Joseph Michael Ganim sworn 31 January 2025 (Scheme) be approved.
2.	Pursuant to s 411(12) of the Act, the plaintiff is exempted from compliance with s 411(11) of the Act in relation to the Scheme.
3.	The notice published by the plaintiff in The Australian newspaper on 24 January 2025 in the form of Annexure “JMG-27” to the second affidavit of Joseph Michael Ganim sworn on 31 January 2025, be good and sufficient compliance of r 3.4 of the Federal Court (Corporations) Rules 2000 (Cth) (Rules), and pursuant to r 1.3 of the Rules, compliance with r 3.4(3)(a) of the Rules otherwise be dispensed with.
4.	The plaintiff is to lodge a copy of these orders with the Australian Securities and Investments Commission.
5.	These orders be entered forthwith.

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

REASONS FOR JUDGMENT
FEUTRILL J:
Introduction
1	On 4 February 2025 I made orders at the second court hearing approving the scheme of arrangement between the plaintiff (Eumundi) and its members (shareholders) under s 411(4)(b) and s 411(6) of the Corporations Act 2001 (Cth). These are my reasons for those orders.
2	The shareholders agreed to the scheme at a meeting held on 31 January 2025 by voting in favour of a resolution to approve the scheme in majorities that exceeded those prescribed in s 411(4)(a)(ii) of the Corporations Act. The meeting of shareholders was convened in accordance with orders made at the first court hearing on 19 December 2024: Eumundi Group Limited, in the matter of Eumundi Group Limited [2024] FCA 1510 (terms defined or described in those reasons are used in these reasons as so defined or described).
3	The scheme will result in SEQ Hospitality Group Pty Ltd acquiring all the issued share capital of Eumundi from its shareholders. The shareholders will receive $1.62 per share as scheme consideration.
4	The principles applicable to the approval of an arrangement at a second court hearing are well-established. In Chesser Resources Limited, in the matter of Chesser Resources Limited (No 2) [2023] FCA 1067 (at [3]) I summarised those principles as follows.
(1)	The Court should be satisfied that: (a) the meeting of members was convened and held in accordance with the Court’s orders at the first court hearing; (b) the statutory majorities (headcount and voting power) were achieved at the meeting: s 411(4)(a)(ii); (c) all conditions to which the arrangement is subject (other than Court approval and lodgement of the Court’s orders with ASIC) have been met or waived; and (d) the arrangement has not been proposed to avoid Ch 6 of the Corporations Act or a statement in writing by ASIC is produced to the Court stating that ASIC has no objection to the arrangement: s 411(17).
(2)	The Court has a discretion whether to approve a scheme. It is not bound to approve it merely because orders have been made to convene a meeting at the first court hearing and the statutory majorities have been achieved.
(3)	The Court’s jurisdiction is supervisory. It is to be satisfied that there has been an absence of oppression and that the arrangement is one capable of being accepted.
(4)	The Court will usually approach the task upon the basis that members are better judges of what is in their commercial interests than the Court. It is not the role of the Court to usurp the decision of the members by imposing its own commercial judgment on the arrangement, nor to satisfy itself that no better arrangement could have been devised.
(5)	Nonetheless, attainment of the statutory majorities is only a threshold that must be met. If the Court is satisfied that the meeting is unrepresentative, or that those voting in favour of the arrangement have done so with a special interest to promote which differs from the interests of the ordinary independent and objective members, then the vote in favour of the resolution may not be given effect by sanction of the Court.
(6)	In general, the Court will take into account six factors as informing the discretion of whether or not to approve the arrangement. First, whether the members have voted in good faith and not for an improper purpose. Second, whether the proposal 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. Third, whether 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. Fourth, and related to the third, whether there has been full and fair disclosure of all information material to the decision. Fifth, whether a minority of members would be oppressed by the arrangement. Sixth, whether the arrangement offends public policy. That includes a discretion not to approve even if the requirements of s 411(17) have been met.
5	Eumundi has filed written submissions in support of the orders it has sought for approval of the scheme. Eumundi has also made oral submissions. It relies on the affidavit material filed, read and relied upon in support of its application for orders to convene the meeting of the shareholders.
6	It has also filed, read and relied upon the following further affidavit material at the second court hearing. 
(a)	Affidavit of Murray Raymond Boyte sworn 31 January 2025. Mr Boyte was chair of the scheme meeting. His affidavit sets out the procedure followed and proceedings at the scheme meeting, including the script of the meeting he followed, an address given at the meeting by the chair of the company, the voting process and results of the poll conducted at the meeting.
(b)	Affidavit of Joseph Michael Ganim sworn 31 January 2025 (second Ganim affidavit). Mr Ganim’s second affidavit exhibits various ASX announcements of Eumundi, other communications to shareholders after the first court hearing and notices of the second court hearing published in ‘The Australian’ and through an ASX announcement.
(c)	Affidavit of Suzanne Jacobi sworn 31 January 2025. Ms Jacobi is the chief executive and chief financial officer of Eumundi. In her affidavit she deposes facts related to communications with a particular shareholder after the first court hearing and before the scheme meeting.
(d)	Affidavit of Elliot Stephen Wren affirmed 31 January 2025. Mr Wren is a client service associate in the employ of Computershare Limited. Computershare provided assistance to Eumundi with respect to dispatch of the scheme booklet, the receipt and collation of proxy forms in respect of the scheme meeting, assisting the chair during the scheme meeting and conducting a poll at the scheme meeting and reporting the results of the poll to the chair.
(e)	Affidavit of Duncan Patrick Cornish sworn 2 February 2025. Mr Cornish is the company secretary of Eumundi. He had responsibility for responding to shareholder enquiries on the shareholder information line referred to in the scheme booklet. He deposed facts relating to enquiries on that hotline.
(f)	Affidavits of Nicole Jane Radice sworn 31 January 2025 (fifth Radice affidavit) and 4 February 2025 (sixth Radice affidavit). Ms Radice is a partner of HopgoodGanim Lawyers who represent Eumundi in the proceeding. In the fifth Radice affidavit Ms Radice deposes facts relating to lodging the orders of 19 December 2024 and approved scheme booklet with ASIC. She also deposes facts relating to communications with Clayton Utz, the legal representatives of SEQ, regarding an agreed position concerning the meaning of Scheme Record Date in the scheme and Deed Poll which differs from the meaning of that expression in the implementation deed. The sixth Radice affidavit exhibits a letter from ASIC containing a statement in writing that it has no objection to the scheme for the purposes of s 411(17)(b) of the Corporations Act and certificates of Eumundi and SEQ confirming that all conditions precedent to performance of the scheme have been satisfied or waived except for Court approval of the scheme.
(g)	Affidavit of James Kristen Peterson affirmed 4 February 2025. Mr Peterson is a consultant in the employ of Clayton Utz. His affidavit exhibits correspondence with ASIC regarding an application SEQ has made to ASIC for consent to withdraw unaccepted offers under SEQ’s takeover bid under s 652B of the Corporations Act.
7	I was satisfied, based on Eumundi’s submissions and the affidavit material, that the scheme should be approved in accordance with the principles summarised earlier in these reasons.
Scheme meeting held and convened in accordance with the Court orders
8	I was satisfied, based on Eumundi’s submissions and the affidavit material, that the meeting of shareholders was convened and held in accordance with the orders of 19 December 2024 and there has been compliance with the other aspects of those orders.
9	On 20 December 2024 a scheme booklet substantially in the form approved at the first court hearing and a copy of the sealed orders of 19 December 2024 were provided to ASIC. On 19 December 2024 Eumundi made an announcement to the ASX to the effect that the Court had approved the convening of the scheme meeting and that it would be held on 31 January 2025. On 20 December 2024 Eumundi made an announcement to the ASX to effect that the scheme booklet had been registered with ASIC and attached a copy of the booklet to the announcement. On 30 December 2024 electronic or hardcopy communications were sent to shareholders in the manner required by the orders of 19 December 2024. On 30 December 2024 Eumundi made an announcement to the ASX to the effect that the scheme booklet had been dispatched and attached the covering letter that was sent to shareholders. On 6 January 2025 2024 hardcopy communications were sent to shareholders who were sent communications by email that were returned undelivered as required by the orders of 19 December 2024.
Statutory majorities achieved at the scheme meeting
10	The scheme meeting was held on 31 January 2025. Mr Boyte was chair of the meeting. Voting upon the resolution to approve the scheme was conducted by way of a poll in accordance with the orders of 19 December 2024. Representatives of Computershare acted as returning officers, supervised the voting procedures and reported the outcome of the poll to Mr Boyte. The report of the poll records that 99.95% of votes cast (voting power) were in favour of the resolution and 96.05% of shareholders voting (headcount) were in favour of the resolution. Therefore, the statutory majorities were easily met and exceeded.
Conditions of scheme satisfied
11	Exhibits to the sixth Radice affidavit include certificates of each of Eumundi and SEQ confirming that all conditions precedent to performance of the scheme have been satisfied or waived except for court approval of the scheme and lodgement of the orders with ASIC. 
Section 411(17) requirements satisfied
12	Section 411(17) of the Corporations Act provides:
The Court must not approve a compromise or arrangement under this section 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 Chapter 6; or 
(b)	there is produced to the Court a statement in writing by ASIC stating 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 stating that ASIC has no objection to the compromise or arrangement has been produced to the Court as mentioned in paragraph (b). 
13	As explained in Eumundi (No 1) (at [8]-[11]), the implementation deed contemplates that SEQ will make a takeover offer in parallel to Eumundi proposing the scheme. A condition of the takeover offer is that at 7.00pm (AEDT) on 4 March 2025 SEQ has acquired a relevant interest in at least 90% of the scheme shares and is entitled to proceed to compulsory acquisition of the remaining shares under Pt 6A.1 and Pt 6A.2 (or both) of the Corporations Act. If the 90% minimum acceptance condition had been met before the scheme meeting Eumundi intended to apply to the Court to have the meeting vacated. As that has not taken place, I infer that the 90% minimum acceptance condition was not met before 31 January 2025. It is also a condition of the takeover offer that either the scheme members do not vote in favour of the proposed scheme by the statutory majorities at the scheme meeting or the Court does not approve the proposed scheme at the second court hearing. That is, if the proposed scheme is approved, the takeover will not proceed. 
14	The dual or hybrid nature of the transaction engages both Pt 5.1 and Ch 6 of the Corporations Act, but if the 90% minimum acceptance condition is not met, then the scheme will proceed in preference to the takeover bid. As the scheme members have voted in favour of the scheme by the statutory majorities and orders have been made approving the scheme, the conditions of the takeover offer cannot be satisfied. 
15	ASIC has provided a statement in writing conforming with s 411(17)(b) of the Corporations Act. Therefore, that limb of s 411(17) has been satisfied. However, as also mentioned in Eumundi (No 1) (at [61]), notwithstanding the production of a statement in writing of ASIC conforming with s 411(17)(b), the Court retains a discretion to approve (or not approve) the scheme under s 411(4)(b) and s 411(6) of the Corporations Act. Therefore, if the Court remains unsatisfied that the scheme has not been proposed for the purpose of avoiding any provisions of Ch 6, it may refuse to approve the scheme even though s 411(17)(b) is satisfied. See, e.g., Re Wesfarmers Ltd; ex parte Wesfarmers Ltd (No 2) [2018] WASC 357 at [18] (Vaughan J); Re Coles Group Ltd (No 2) [2007] VSC 523; 65 ASCR 494 at [75]-[78] (Robson J). While, broadly, it could be said that all provisions of Ch 6 are avoided by proposing a scheme of arrangement under Pt 5.1, the relevant question for the purposes of the exercise of the discretion is whether the avoidance of any particular provision of Ch 6 would operate to the disadvantage of scheme members or otherwise defeat the purpose of Ch 6.
16	The purpose of Ch 6 of the Corporations Act is, relevantly, to ensure that the acquisition and control over the voting shares in a listed company takes place in an efficient, competitive and informed market. The holders of the shares and the directors of the company know the identity of the person who proposes to acquire a substantial interest in the company, have a reasonable time to consider the proposal, and are given enough information to enable them to assess the merits of the proposal. As far as practicable, the holders of the shares all have a reasonable opportunity to participate in any benefits accruing to the holders of the shares through any proposal to acquire a substantial interest in the company. Chapter 6 also ensures that an appropriate procedure is followed as a preliminary to compulsory acquisition of voting shares under Pt 6A.1: s 602 of the Corporations Act.
17	Relevantly, a person must not acquire a relevant interest in issued voting shares in a listed company through a transaction by which that person’s, or some other person’s, voting power increases from less than 20% to more than 20%, unless the acquisition falls within certain exceptions: s 606(1), s 606(1A) of the Corporations Act. The exceptions include acceptance of an offer under a takeover bid and certain on-market purchases during a bid period and an acquisition that results from an arrangement or compromise approved by the Court under Pt 5.1: s 611. Therefore, the Corporations Act provides two mechanisms by which a person may acquire a relevant interest in more than 20% of the voting power in a listed company. There is no preference in the Corporations Act for a transaction to take place under Ch 6 rather than Pt 5.1: see, e.g., Re ACM Gold Ltd; Re Mt Leyshon Gold Mines Ltd (1992) 34 FCR 530 at 538-539 (O’Loughlin J); Re Stockbridge Ltd (1993) 9 ACSR 637 at 652-653 (Murray J); Re Foundation Healthcare Limited [2002] FCA 973; 43 ACSR 680 at [29] (French J). The conduct proscribed by s 411(17)(a) is that a compromise or arrangement is proposed for the purpose of enabling a person to avoid the operation of any of the provisions of Ch 6 of the Corporations Act. That directs attention to the specific provisions of Ch 6 that could or would be avoided where a transaction to acquire more than 20% is proposed under s 411 of the Corporations Act: e.g., Re Mincom Ltd (No 3) [2007] QSC 207; 213 FLR 364 at [45], [65] (Fryberg J).
18	Chapter 6 sets out the formal and substantive requirements for off-market and on-market takeover bids. In general, these requirements are directed towards achieving the purposes of Ch 6 as set out in s 602. Amongst other things, the takeover procedure requires a bidder statement containing certain information relating to the takeover offer and intentions regarding the target company and a target response containing all the information that holders of the bid class or their professional advisers would reasonably require to make an informed assessment whether to accept the offer under the bid: s 636, s 638.
19	ASIC Regulatory Guide 60 explains ASIC’s role under Pt 5.1 of the Corporations Act, the matters it will consider when reviewing scheme documents and how it will determine whether to provide a ‘no objection’ statement under s 411(17)(b) of the Corporations Act. RG 60.10 provides that ASIC will consider the disclosure principles in s 602 and the disclosure obligations in s 636 when determining whether shareholders are adequately informed and protected. RG 60.17 and RG 60.105 provide that the primary question ASIC will consider under s 411(17)(b) is whether, having regard to the principles in s 602, shareholders are adversely affected by the ‘takeover’ being implemented by way of scheme of arrangement rather than a takeover bid. ASIC will not consider whether the purpose of the scheme is to avoid making the acquisition under Ch 6 for reasons that do not adversely affect offerees. RG 60.19 provides that shareholders should receive equivalent (although not necessarily identical) treatment and protection whether an acquisition is made under a scheme of arrangement or by takeover. RG 60.22 – 60.31 set out the approach of ASIC to ‘takeover’ schemes. Broadly, these relate to the principles in s 602 and the disclosure requirements of s 636 of the Corporations Act and reg 5.1.01 and Sch 8 of the Corporations Regulations 2001 (Cth) and address equality between classes of securities, collateral benefits and unequal consideration, consistency of the timetable for completion with Ch 6, notice of the scheme meeting and information provided in the explanatory statement is of the same type and standard as information that would have been provided under s 636, notice of voting power of interested parties, information about script offers and the terms of agreements between the bidder and other interested parties. Regulatory Guide 60 otherwise sets out the approach of ASIC to the review of scheme documents, disclosure obligations, voting on the scheme and the second court hearing and the circumstances in which it will issue a ‘no objection’ statement and appear or not appear at the second court hearing.
20	Having regard to the important role and function that ASIC performs in applications of this nature and that ASIC has not appeared or made submissions in opposition to the approval of the scheme nor has it brought any matter to the attention of the Court and, in the absence of any other information to the contrary, I am satisfied that scheme members are not disadvantaged in any material way as a consequence of this change of control transaction taking place through an arrangement under s 411 rather than by way of a takeover under Ch 6 of the Corporations Act. Therefore, even if a purpose of proposing the scheme was to enable a person to avoid the operation of a particular provision of Ch 6, I am satisfied that purpose has not operated to disadvantage scheme members in any material way and, therefore, any avoidance of Ch 6 is not a reason to not approve the scheme: see, e.g., Re Coles Group Ltd (No 2) at [75]-[78] (Robson J); Re Mincom Ltd (No 3) at [80] (Fryberg J). Further, for the reasons that follow, I am also satisfied that the scheme was not proposed for the purpose of enabling any person to avoid the operation of any provision of Ch 6.
21	Although made in the context of considering whether to exercise the Court’s discretion to convene the scheme meetings, in Eumundi (No 1) I made the following observations that are equally relevant to the exercise of the Court’s discretion to approve (or not) the scheme:
62	… the implementation deed, as varied, requires the plaintiff and Bidder to attempt implementing the transaction through an off-market takeover bid under Ch 6 at the same time as proposing a scheme of arrangement under Pt 5.1 of the Corporations Act. The commercial rationale for this dual or hybrid process is explained in the affidavits of Mr Ward and Mr Ganim. In substance, it was devised to maximise the possibility of the Bidder acquiring 100% of the issued fully paid ordinary shares in the plaintiff in circumstances in which there was at least one large shareholder who may not be in favour of selling for the scheme consideration or takeover offer of $1.55 or $1.62 per share. Due to the size of that shareholding, it makes the prospect of satisfaction of 90% minimum acceptance condition somewhat doubtful. However, it remains possible to reach the statutory majorities in s 411(4)(b) which require a majority in number of members at the meeting (headcount) and 75% of the votes cast at the scheme meeting (voting power). Therefore, with a majority of 75% of the voting power at the scheme meeting, the Bidder may acquire 100% of the shares in the plaintiff. 
63	It is generally accepted that, although the distinction may be subtle, where an arrangement is proposed under Pt 5.1 to deliver a legal outcome that cannot be achieved under Ch 6, such as 100% ownership in one procedure, the purpose may not be to avoid Ch 6 but to prefer Pt 5.1. A preference for Pt 5.1 is a legitimate choice for which the Corporations Act makes provision: e.g., Re Rusina Mining NL (No 2) [2010] FCA 609; 78 ACSR 615 at [38] (Barker J); Re Healthscope Ltd (No 2) [2019] FCA 759; 136 ACSR 259 at [36] (Beach J). 
22	The existence of a commercial rationale or advantage for proposing a scheme of arrangement rather than making a takeover bid does not necessarily mean that the purpose of the scheme is not to enable any person to avoid the operation of any of the provisions of Ch 6. A commercial rationale may also be or involve a purpose of enabling a person to avoid the operation of a particular provision of Ch 6: Re Mincom Ltd (No 3) at [45], [57], [65] (Fryberg J). Nonetheless, Eumundi submits, and I accept, that the commercial rationale for the dual or hybrid nature of the transaction does not suggest that Eumundi had a purpose of enabling itself, SEQ, or another  person, to avoid the operation of any provisions of Ch 6 of the Corporations Act. In point of detail, neither Eumundi nor SEQ has avoided the operation of any provision of Ch 6 because a takeover bid was made in parallel under Ch 6. In those circumstances, I do not infer from the evidence of the commercial rationale or the hybrid or dual nature of the transaction that the scheme was proposed to enable the avoidance of the operation of any provision of Ch 6. In substance, the purpose of the scheme is to provide an alternative pathway to obtaining 100% of the scheme shares in the event that the 90% minimum acceptance condition is not met under the takeover bid. In effect, the scheme is subordinate to the takeover bid under Ch 6 and was intended to be utilised if SEQ was not able to take advantage of the provisions of Ch 6A to compulsorily acquire any remaining scheme shares at the end of the offer period.
Other factors informing the exercise of the Court’s discretion
Good faith, proper purpose, oppression and public policy
23	There is nothing in the materials before the Court to suggest that the scheme members have voted other than in good faith and for a proper purpose. Nor is there anything to suggest oppression of a minority or an arrangement that offends public policy.
Fair and reasonable scheme
24	The number of votes cast was 48,489,393. That represents 97.43% of the 49,767,770 scheme shares Eumundi has issued. There were 79 shareholders present in person or by proxy. That represents 18.54% of shareholders. Of the shareholders present, 76 voted (73 in favour, three against) and three abstained.
25	As a percentage of all shareholders 18.54% is a relatively low turnout. There was no evidence of historical voter turnout at other meetings of Eumundi shareholders from which to draw any conclusions about whether the turnout for the scheme meetings was out of line with typical shareholder meetings of Eumundi. While low voter turnout can be indicative of a flaw in the process of convening the meetings or that the statutory majorities are not truly representative of the views of the scheme class members, I do not consider the turnout in this case to be a discretionary factor that weighs against approval of the scheme. Having regard to the percentage of total possible votes cast at the scheme meeting and that those votes were cast by a not insignificant proportion of shareholders together with the various means by which shareholders were given notice of the scheme meeting, I am satisfied that the votes cast and shareholders present at the meeting held on 31 January 2025 is representative of the views of the shareholders, as a whole, as to the commercial merit of the scheme.
26	There is also evidence, in terms of the independent expert report, that the scheme is in the best interests of the shareholders in the absence of a superior proposal. There is otherwise no information before the Court to suggest that the scheme is other than one that is fair and reasonable such that an intelligent and honest shareholder, properly informed and acting alone, would approve. There is no evidence of any superior proposal.
Matters brought to the Court’s attention
Communications with scheme members
27	As mentioned in Eumundi (No 1) at [59], in accordance with the scheme proponent’s duty of candour, the Court expects oral or informal communications with shareholders made after the first court hearing to be disclosed at the second court hearing if these may be inconsistent with the information contained in the explanatory statement approved by the Court or contain inaccurate or misleading information that could or would undermine the integrity of the Scheme meeting process. The affidavits upon which Eumundi relies disclose a number of communications with shareholders after 19 December 2024. Ms Jacobi deposes to communications with a particular large shareholder. These relate to ensuring that Eumundi had the bank account details for one entity through which shares were held and providing proxy forms for the scheme meeting directly to the shareholder. Self-evidently, these communications were not of a character that could or would undermine the integrity of the scheme meeting process. Mr Cornish deposed to two enquiries on the Eumundi shareholder information line. The call logs were tendered in evidence. Neither call log discloses communications inconsistent with the scheme booklet or inaccurate or misleading information that could undermine the integrity of the scheme meeting process.
28	As already mentioned, the implementation deed contemplated that SEQ would also make an off-market takeover offer for the scheme shares in Eumundi under the provisions of Ch 6 of the Corporations Act. That took place in parallel with the process of convening the scheme meetings and dispatching the scheme booklet. Shareholders received communications from Eumundi concerning the takeover offer in the form of bidder statements and target statements that contained similar information to the scheme booklet.
29	On 24 December 2024 Eumundi announced to the ASX that it was declaring an interim dividend of 2.4 cents per share fully franked and indicated that the interim dividend would be paid in addition to the $1.62 per share offered under the takeover bid and the scheme. The announcement indicated that the Eumundi board unanimously recommended that shareholders accept the takeover bid and vote in favour of the scheme in the absence of a superior proposal and subject to the independent expert report concluding and continuing to conclude that the takeover bid is fair and reasonable and the scheme is in the best interests of shareholders.
30	On 10 January 2025 Eumundi announced to the ASX a second supplementary target’s statement. The purpose of that document was to ensure that disclosures in the target statement were consistent with disclosures in the scheme booklet.
31	I am satisfied that neither the announcement of 24 December 2024 nor the announcement of 10 January 2025 contain information that is inconsistent with the scheme booklet or that is inaccurate or misleading that could undermine the integrity of the scheme meeting process.
Scheme Record Date
32	The second deed of variation amended the definition of ‘Scheme Record Date’ in the scheme and Deed Poll but not in the implementation deed. The amended definition referred to the ‘fifth Business Day after the Effective Date (or such other time and date required by the ASX Listing Rules or agreed to in writing between [Eumundi and SEQ] subject to the written approval of the ASX.’ The definition in other scheme documents referred to the ‘second Business Day after the Effective Date.’ Appendix 7A of the ASX Listing R	ules provides that ‘Record Date’ must be two business days after the effective date of the scheme. Through an exchange of emails between the legal representatives of Eumundi and SEQ it was accepted that the ASX Listing Rules requirement of two business days prevailed over the five business days referred to in the scheme and Deed Poll. I accept that the inconsistency in the definitions of Scheme Record Date will not operate inconsistently in accordance with the agreed position between the legal representatives of Eumundi and SEQ. Nor does it render any information in the scheme booklet inaccurate or misleading.
Termination of takeover bid
33	As already mentioned, court approval of the scheme means that a condition of the takeover offer cannot be satisfied. As a consequence, the conditions of takeover offers that have been accepted will not be satisfied. Section 650G of the Corporations Act provides that contracts and all acceptances that have not resulted in binding takeover contracts for an off-market takeover bid are void if offers are subject to a defeating condition, and the bidder has not declared the offers to be free from the condition within the period before the date specified for the defeating condition (here, that date is 24 February 2025), and the offer period has expired (here, that date is 4 March 2025). Section 624 provides that the offer must remain open for the period of the offer. Sections 652A and 652B provide that unaccepted offers may be withdrawn with the consent of ASIC. Eumundi submits that the effect of ASIC’s consent will be to bring forward the end of the offer period. I infer that is because ‘offer period’ is defined to mean the ‘period for which offers under the bid remain open’ (s 9 of the Corporations Act) and accepted offers are not ‘open’ and unaccepted offers that are withdrawn are not ‘open’.
34	SEQ has sought ASIC’s consent under s 652B to withdraw unaccepted offers. ASIC has made an ‘in principle’ decision to grant that consent subject to certain conditions. ASIC has indicated that it will be in a position to give the consent after the Court has approved the scheme.
35	After hearing from Eumundi, I remained unclear on the effect, if any, that ASIC’s consent under s 652B or ending the offer period of the takeover bid would have on the scheme. The scheme appears to operate independently of the takeover bid in that approval of the scheme is a defeating condition of the takeover bid, but the existence of a takeover bid is not a defeating condition of the scheme and does not appear to prevent transfer of shares or payment of the scheme consideration upon approval of the scheme. Accordingly, while it was brought to the Court’s attention in accordance with Eumundi’s duty of candour, it appears to be a neutral factor in the exercise of the Court’s discretion under s 411(4)(b) of the Corporations Act.
Full and fair disclosure of all information material to the decision
36	I am satisfied that there has been full and fair disclosure to shareholders of all information material to the decision whether or not to vote in favour of the scheme, as set out in the scheme booklet (including the explanatory statement).
Other matters
37	I am also satisfied that Eumundi should be exempted from compliance with s 411(11) (annexing a copy of the orders under s 411(4)(b) to the company’s constitution) in accordance with s 411(12) of the Corporations Act. The scheme will not alter the rights of the members, creditors or other persons dealing with Eumundi.
38	Eumundi published a notice of the second court hearing in ‘The Australian’ newspaper and through an announcement on the ASX. These notices were substantially in the form required by the orders of 19 December 2024. However, certain modifications were made to the standard form to reflect that the notice was published before the scheme meeting was held. The notices also indicated that the Court would hear any application to approve the scheme at 12.15pm (AEST) at ‘Harry Gibbs Commonwealth Law Courts Building Level 6, 119 North Quay, Brisbane’ whereas, as a matter of fact, the application was heard at that time at the Western Australian registry and counsel for the Eumundi appeared via video link. A court room at the Queensland registry was not open to the public with a web link and counsel for Eumundi appeared remotely from another location. Consequently, I reserved my decision and requested Eumundi, through its counsel, to make enquiries of the Queensland registry to ascertain if any person had unsuccessfully sought to appear at the Queensland registry on the hearing of the application.
39	After the hearing, Eumundi filed an affidavit of Darrell Frederick Jardine sworn 4 February 2025. Mr Jardine’s affidavit deposes that he made enquiries of the Queensland registry and staff at the Queensland registry were not aware of any person attending and attempting to appear on the matter at the Queensland registry. Further, the notices published in ‘The Australian’ and through the ASX announcement indicate that any person wishing to oppose approval of the scheme by the Court at the second court hearing must file and serve on Eumundi a notice of appearance together with any affidavit on which that person wished to rely. No notice of appearance has been filed in the Court. The affidavit material Eumundi filed deposes facts to the effect that no person gave Eumundi notice of an intention to oppose the approval or appear on the hearing. I also take into account that the daily court list published on the Court website also indicated that the hearing would take place at the Western Australian registry and noted: ‘Queensland Registry: By Web Conference’.
40	In the circumstances, notwithstanding that the notices identify the incorrect location of the registry where the second court hearing was to be and was held, I am satisfied that the form in which Eumundi published the notices substantially complies with the orders made on 19 December 2024 and Federal Court (Corporations) Rules 2000 (Cth). Therefore, I also made an order to the effect that the notices actually published be good and sufficient compliance with r 3.4 of the Corporations Rules and, pursuant to r 1.3, compliance with r 3.4(3)(a) be dispensed with. Otherwise, orders were be made in terms of the short minute of orders Eumundi proposed and filed before the second court hearing.

I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Feutrill.	

Associate: 

Dated:	6 February 2025