FEDERAL COURT OF AUSTRALIA Sonic Healthcare Limited [2002] FCA 1235 CORPORATIONS – scheme of arrangement – proposal to "spin-out" shares held by Australian incorporated and publicly listed holding company in Singapore incorporated company in which the former holds approximately 60 per cent shareholding – Singapore incorporated company to be independently listed on ASX – shareholders in Australian company to receive one share in Singapore company for each share held in Australian company and one option in Singapore company for each option held in Australian company – simultaneously with spin-out, optionholders in Australian company to be issued one option in Singapore company for each option held in Australian company – ASIC notified decision not to appear and oppose schemes at first hearing – orders made for convening meetings of shareholders and optionholders. Corporations Act 2001 (Cth) subs 411(1) Corporations Regulations 2001 (Cth) Sch 8 Central Pacific Minerals NL [2002] FCA 239 applied SONIC HEALTH CARE LIMITED v IN THE MATTER OF SONIC HEALTHCARE LIMITED (ABN 24 004 196 909) N 3059 of 2002 CONTI J 3 OCTOBER 2002 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 3059 OF 2002 IN THE MATTER OF SONIC HEALTHCARE LIMITED (ABN 24 004 196 909) BETWEEN: SONIC HEALTHCARE LIMITED (ABN 24 004 196 909) APPLICANT JUDGE: CONTI J DATE OF ORDER: 3 OCTOBER 2002 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. There be convened by the plaintiff the following meetings (Scheme Meetings): (a) a meeting of members of the plaintiff (Shareholder Scheme Meeting); and (b) a meeting of the holders of options to acquire ordinary shares in the plaintiff (Optionholder Scheme Meeting), for the purpose of considering and, if thought fit, agreeing to, with or without modification, the schemes of arrangement (Schemes) between the plaintiff and its members (Shareholder Scheme) and the plaintiff and its optionholders (Optionholder Scheme) for the purpose of effecting a demerger or spin‑out (Spin-out) of the majority of the plaintiff's shareholding in SciGen Limited (SciGen), a company which is incorporated in Singapore. 2. The Scheme Meetings be held on Wednesday, 13 November 2002 in Ballroom 1, Four Seasons Hotel, 199 George Street, Sydney commencing at the following times: (a) Shareholder Scheme Meeting at 11.15am, or as soon thereafter as the general meeting (General Meeting) of the plaintiff to approve a capital reduction as part of the Demerger has concluded or been adjourned; (b) Optionholder Scheme Meeting at 11.30am, or as soon thereafter as the General Meeting and Shareholder Scheme Meeting have concluded or been adjourned. 3. Barry Sydney Patterson or, in his absence, Colin Stephen Goldschmidt, is to chair each of the Scheme Meetings and any adjournments of the Scheme Meetings. 4. The Shareholder Scheme Meeting and the Optionholder Scheme Meeting may be convened using the notices of meeting in the form or to the effect of those in Tabs 10 and 11 of Exhibit CDW1. 5. Each of the Scheme Meetings can resolve to be adjourned. 6. (a) Three holders of ordinary shares in the plaintiff present in person or by proxy, corporate representative or attorney under power and entitled to vote, shall constitute a quorum for the Shareholder Scheme Meeting. (b) Three holders of options to acquire ordinary shares in the plaintiff present in person or by proxy or attorney under power and entitled to vote, shall constitute a quorum for the Optionholder Scheme Meeting. 7. Subject to these orders, the Scheme Meetings be convened and conducted so far as is practicable in accordance with: (a) such provisions of Part 2G.2 of the Corporations Act 2001 (other than a provision referred to as a replaceable rule which is not a mandatory rule for public companies) as would be applicable if the Scheme Meetings were general meetings of the plaintiff's members; and (b) such provisions of the plaintiff's constitution as would be applicable if the Scheme Meetings were general meetings of the plaintiff's members, except to the extent that those provisions are inconsistent with Part 2G.2 of the Corporations Act 2001, and that the plaintiff be dispensed from compliance with Rule 2.15 of the Federal Court (Corporations) Rules 2000 in relation to the Scheme Meetings. 8. The Scheme Meetings be advertised once in each of The Australian and Sydney Morning Herald newspapers, in the form or to the effect of the annexure hereto marked "A", such advertisement to be published not less than 14 days before the date appointed for the Scheme Meetings. 9. The second court hearing be advertised once in each of The Australian and Sydney Morning Herald newspapers, in the form or to the effect of the annexure hereto marked "B", such advertisement to be published not less than 5 days before the date appointed for the hearing. 10. No later than 15 October 2002 the plaintiff shall cause to be sent to each of its members and optionholders by prepaid post (or, in the case of shareholders or optionholders whose registered address is outside Australia, by airmail or by air courier): (a) a copy of a document in substantially the same form as Exhibit A1 in these proceedings (the Information Memorandum); and (b) the notices of meeting and proxy forms in substantially the same form as Tabs 10 and 11 of Exhibit CDW1 in these proceedings. 11. The explanatory statement contained in the Information Memorandum be and is hereby approved. 12. The plaintiff has liberty to apply. 13. These proceedings be stood over until Thursday 14 November 2002 at 10.15 am before Conti J for hearing of any applications to approve the Schemes. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. Annexure A SONIC HEALTHCARE LIMITED (ABN 24 004 196 909) MEETINGS TO CONSIDER SCHEMES OF ARRANGEMENT Notice is given that the Federal Court of Australia has ordered that a meeting of members of the company (Shareholder Scheme Meeting) be held in Ballroom 1, The Four Seasons Hotel, Sydney on Wednesday, 13 November 2002 at 11.15am, or as soon thereafter as the general meeting (General Meeting) of the company held to consider a capital reduction has concluded or been adjourned. The purpose of the meeting is to consider and if thought fit agree (with or without modification) to a scheme of arrangement proposed between the company and its members. Notice is also given that the Federal Court of Australia has ordered that a meeting of holders of options to acquire shares of the company (Optionholders) be held in Ballroom 1, The Four Seasons Hotel, Sydney on Wednesday, 13 November 2002 at 11.30am, or as soon thereafter as the General Meeting and the Shareholder Scheme Meeting have concluded or been adjourned. The purpose of the meeting is to consider and if thought fit agree (with or without modification) to a scheme of arrangement proposed between the company and its Optionholders. Members and Optionholders may obtain copies of the Information Memorandum (which includes the scheme documents and the explanatory statement under section 412 of the Corporations Act 2001) by collecting the same personally at the registered office of the company at 95 Epping Road, North Ryde, NSW 2113, between the hours of 9:00am and 5:00pm on each week day excluding public holidays until and including the date of the meetings. By order of the Board ……………………….. Company Secretary Sonic Healthcare Limited Annexure B TO all the creditors and members of SONIC HEALTHCARE LIMITED (ABN 24 004 196 909). TAKE NOTICE that at 10:15am on Thursday 14 November 2002, the Federal Court of Australia at the Law Courts Building, Queens Square, Sydney NSW 2000 will hear an application by Sonic Healthcare Limited seeking the approval of a compromise or arrangement between the above-named company and its members and the above-named company and its optionholders as proposed by resolutions passed by the meetings of the members and optionholders of the company held on Wednesday, 13 November 2002. If you wish to oppose the approval of the compromises or arrangements, you must file and serve on the plaintiff a notice of appearance, in the prescribed form, together with any affidavit on which you wish to rely at the hearing. The notice of appearance and affidavit must be served on the plaintiff at its address for service at least 1 day before the date fixed for the hearing of the application. The address for service for the plaintiff is Allens Arthur Robinson, The Chifley Tower, 2 Chifley Square, Sydney NSW 2000. Name of person giving notice or of person's legal practitioner: David Arthur Robb. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 3059 OF 2002 IN THE MATTER OF SONIC HEALTHCARE LIMITED (ABN 24 004 196 909) BETWEEN: SONIC HEALTHCARE LIMITED (ABN 24 004 196 909) APPLICANT JUDGE: CONTI J DATE: 3 OCTOBER 2002 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application made pursuant to s 411 of the Corporations Act 2001 (Cth) for orders that Sonic Health Care Limited ("Sonic") convene meetings respectively of members of Sonic and of holders of options to acquire ordinary shares in Sonic, to consider and if thought fit, to approve a scheme of arrangement made first, between Sonic and its members and secondly, between Sonic and its option holders, and for that purpose to give directions as to the manner in which the meetings are to be convened and the place at which the meetings are to be held. 2 The principles that should guide me in my consideration of the present application are summarised by Emmett J in Central Pacific Minerals NL [2002] FCA 239. In summary, I must consider: (i) the likelihood or otherwise that the Court will approve of the arrangement, if the statutory majority is achieved in each case; (ii) whether there has been compliance with such preliminary matters as are relevant to the holding of the meeting; (iii) whether there will be sufficient disclosure, to those who will be affected by the arrangement, of its detail and effect; and (iv) whether there has been reasonable opportunity for the Commission to examine the terms of the arrangement. 3 Sonic is a substantial Australian listed public company engaged in the pharmaceutical and bio-pharmaceutical industries. As at 30 June 2002, the value of its current assets was $147,264,000 (comprising cash, receivables and inventories) and the value of its non-current assets was $1,451,445,000.00 (comprising receivables, investments, property plant and equipment, intangibles and deferred tax assets). In relation to the financial year ended 30 June 2002, Sonic's revenue (excluding interest income) was $858,100,000.00. In relation to the financial year ended 30 June 2002, Sonic's revenue (excluding interest income) was $858,100,000, its profit before tax was $65,785,000 and its profit after tax was $32,207,000. 4 Sonic currently holds 59.5% of the issued capital of SciGen Pte Ltd ("SciGen"), a Singapore incorporated and based company which is involved in the development, marketing and sales of a portfolio of bio-pharmaceutical products. In Sonic's 2001 Annual Report, it was reported that Sonic's investment in SciGen no longer dovetailed with Sonic's strategic plan to focus on medial diagnostics, and that the directors believed that the underlying value of SciGen's business and its growth potential could best be achieved by a so-called "spin-out" of the majority of Sonic's shareholding in SciGen, and the independent stock exchange listing of SciGen on the Australian Stock Exchange ("ASX"). Subject to approval of the spin-out by Sonic shareholders and Sonic optionholders, and to satisfaction of certain other conditions as set out in a certain Implementation Agreement, immediately prior to the spin-out, Sonic would subscribe $30 million for additional SciGen shares, thereby taking Sonic's interest in SciGen to 74% of SciGen total shareholding. Pursuant to the spin-out, Sonic would then transfer SciGen shares to shareholders in Sonic and certain vendor interest holders representing 62.5% of SciGen shares on issue, and SciGen would issue new SciGen options to Sonic optionholders. Sonic would retain approximately 11.5% of SciGen shares, and would hold those shares subject to escrow arrangements. SciGen would be simultaneously listed on the ASX. 5 Thus, involved in the implementation of the proposal, and in order to give effect to the spin-out, there would be a capital reduction, together with a shareholder scheme, and an optionholder scheme. Under the capital reduction and shareholder scheme, Sonic shareholders would be entitled to receive one SciGen share, in the form of a so-called CUFS, for each Sonic share held, which would involve a capital reduction of approximately $0.12 for each Sonic share on issue. Simultaneously with the transfer of SciGen shares to Sonic shareholders, Sonic option holders would be issued one SciGen option for each Sonic option held. The exercise price of the Sonic options would be "spread across" the Sonic option and the SciGen options, and the aggregate of those exercise prices would equal the exercise price of the relevant class of Sonic options prior to the spin-out. A CUFS is a form of security offered by ASX to allow trading of foreign companies on the ASX. Sonic shareholders would not be required to pay any money for the SciGen CUFS, because their entitlement under the capital reduction would be automatically applied as consideration for the transfer of interests in SciGen shares and the issue to them of SciGen CUFS. Through the CUFS facility, Sonic shareholders would be the beneficial owners of SciGen shares and have all the rights attaching to those SciGen shares. Simultaneously with the spin-out, SciGen would become a separately listed public company on the ASX. 6 Under the optionholder scheme, the reduction in the exercise price of the Sonic options that would otherwise apply on the implementation of the capital reduction would be ignored. Each Sonic optionholder would be entitled to receive one SciGen option for each Sonic option held by that Sonic optionholder at the close of registers. The existing exercise price of each Sonic option would be allocated across the existing Sonic option and the new SciGen option in the relative proportion that the market capitalisation of Sonic after completion of the spin-out bears to the value of the SciGen shares transferred to Sonic shareholders and vendor interest holders under the spin-out (being a value of 20 cents per share). 7 Sonic's directors have reported to the Sonic shareholders and the option holders their belief that the spin-out is in the best interests of Sonic, Sonic shareholders and Sonic option holders, and have unanimously recommended that they vote in favour of the resolutions required to implement the spin-out; they have also indicated that they intend to vote in favour of the spin-out in respect of any shares and/or options that they own or control. 8 Deloitte Touche Tohmatsu ("Deloitte") have issued a "Final Draft" report on the scheme of arrangement now placed before the Court. They have set out five advantages of this demerger proposal, in summary as follows: (i) The spin-out of SciGen from Sonic may create additional value, in that an independent focus on the separate businesses of Sonic and SciGen may enable those two companies to develop and implement strategies which are the most appropriate for their core businesses, thereby maximising shareholder value; at the present time there appear to be insufficient synergies between Sonic and SciGen to justify continued common ownership; (ii) The separate listing of SciGen would provide shareholders with increased investment choice and flexibility, in that they would have the choice to retain both SciGen shares and Sonic shares, or they can adjust their portfolio weightings in either or both Sonic and SciGen in the proportion that suits their risk/return profile; (iii) There is potential for a positive re-rating of Sonic; for a number of reasons stated, it is considered likely that the aggregate market value of a Sonic share and a SciGen CUFS immediately after the Proposal is implemented will exceed the market value of a Sonic share prior to such implementation; (iv) The availability of additional information about SciGen and an increase in the depth with which the information is analysed has the potential to create increased investor interest; and (v) SciGen would be able to directly access capital markets, pursue acquisitions, enter into joint ventures and alliances, and fund internal growth that might not otherwise have been possible under the ownership of Sonic. 9 The disadvantages of the proposal perceived by Deloitte are fourfold as follows: (i) The share price of SciGen may be discounted by the market for lack of negotiability, because of the smaller market capitalisation of SciGen relative to Sonic; also shareholders with small Sonic shareholdings may receive an allocation of SciGen shares which is smaller than a marketable parcel. (ii) Since the market capitalisation of SciGen will be significantly less than that of Sonic, SciGen shares may not meet the liquidity of some of Sonic's existing institutional investors; moreover SciGen shares may not meet the investment profile of a range of Sonic shareholders, resulting in short to medium term selling pressure on SciGen shares. (iii) There would be additional corporate etc costs and fees necessarily associated with the operation of two publicly listed companies rather than one. (iv) For foreign regulatory reasons, certain overseas shareholders would not be able to take up their share entitlements in SciGen. 10 Deloitte's opinion is that the likely advantages to shareholders and option holders, if the proposal is approved, outweigh the likely disadvantages. 11 PricewaterhouseCoopers Securities Ltd have prepared an Investigating Accountant's Report On Historical Financial Information, bearing date 27 September 2002, relating to the spin-out proposal for SciGen Limited. Their conclusion is as follows: "Review statement on historical information Based on our review, which is not an audit, nothing has come to our attention which causes us to believe that: · the pro forma statement of financial position has not been properly prepared on the basis of the pro forma transactions · the pro forma transactions do not form a reasonable basis for the pro forma financial information · the Historical Financial Information, as set out in Appendix 1, does not present fairly: (a) the adjusted historical consolidated statement of financial performance of the Company and its controlled entities for the years ended 30 June 2000, 30 June 2001, and the ten month period ended 30 April 2002; (b) the historical consolidated and pro forma statement of financial position of the Company and its controlled entitles as at 30 April 2002; in accordance with the recognition and measurement principles prescribed in Accounting Standards and other mandatory professional reporting requirements in Australia, and accounting policies adopted by the Company disclosed in Appendix 1. Subsequent events Apart from the matters dealt with in this report, and having regard to the scope of our report, to the best of our knowledge and belief no material transactions or events outside the ordinary business of the Company and its controlled entitles have come to our attention that would require comment on, or adjustment to, the information referred to in our report or that would cause such information to be misleading or deceptive." 12 Tendered in evidence in the proceedings is the Spin-out Implementation Agreement bearing date 26 September 2002 made between the following parties: (i) Sonic Healthcare Limited ("Sonic") (incorporated in Australia); (ii) SciTech Genetics Pte Ltd ("SciTech") (incorporated in Singapore); (iii) SciGen Ltd ("Company") (incorporated in Singapore); (iv) Messrs Mashaal of Singapore and Kenneth Gross of the United States ("Principals"); and (v) SkiTech Medical Products Pte Limited ("SMP") of Singapore. Because of their significance and uniqueness in concept, I set out below what I think to be the key provisions of the Agreement: "2. Reconstruction of Company prior to Spin-out (a) The Company will propose the following resolutions to the SciGen Shareholders at a meeting to be held on a date to be agreed between the parties, such date to be no later than 1 Business Day before the Scheme Meetings: (i) an ordinary resolution to increase the Company's authorised share capital from S$400,000 to S$600,000; (ii) an ordinary resolution to sub-divide the Company's authorised and issued share capital on the basis of 7.6141250751 Shares for every one Share; (iii) a special resolution adopting the New Memorandum and Articles of Association with effect from the Effective Date; (iv) an ordinary resolution to delete the legend endorsed on all share certificates of the Company pursuant to clause A22 of the Articles of Association with effect from the Effective Date; and (v) an ordinary resolution to convert all Class A Ordinary Shares and Class B Ordinary Shares into a single class of ordinary shares ranking equally with effect from the Effective Date, (together the Reconstruction Resolutions). (b) Each of the SciGen Shareholders agrees to vote their respective Shares in favour of the Reconstruction Resolutions. 4. Subscription 4.1 Subscription Sonic will subscribe for 150,000,000 Shares (Additional Shares) in accordance with the provisions of this clause 4. The amount payable for each Additional Share is A$0.20 (Price). 4.2 Application and payment (a) On the Capital Investment Date Sonic will: (i) deliver a duly executed application in respect of the Additional Shares; and (ii) pay to the Company the Subscription Monies in cleared funds as payment for the Additional Shares. (b) The Application delivered and Subscription Monies paid to the Company by Sonic pursuant to paragraph (a) above will be held by the Company in escrow until the Effective Date. 4.3 Issue If the Company has received from Sonic a duly executed application in respect of the Additional Shares and the Subscription Monies in cleared funds for those Additional Shares, the Company will immediately upon the Spin-out becoming Effective: (a) allot and issue the Additional Shares to Sonic; and (b) register Sonic as the holder of those Additional Shares. If the Court fails to approve the Schemes as approved by Sonic Shareholders and Sonic Optionholders, the Company shall immediately return to Sonic any Subscription Monies held by it in escrow. 4.4 Ranking Any Additional Shares issued by the Company to Sonic pursuant to this clause 4 will rank equally with all other Shares. 5.3 Implementation of Shareholder Scheme (a) (Obligations of Sonic) Sonic will: (i) at a duly convened general meeting, propose that a capital reduction be approved, under which Sonic will undertake a capital reduction of an equal amount per Sonic Share representing, in aggregate, Sonic's cost of the aggregate number of Shares to be transferred to Sonic Shareholders under the Shareholder Scheme (Capital Reduction); and (ii) at a duly convened Scheme Meeting, propose the Shareholder Scheme under which the Capital Reduction amount will be applied as consideration for the transfer by Sonic to Sonic Shareholders of interests in Shares on the basis that each Sonic Shareholder will be entitled or otherwise entitled to one Share for each Sonic Share held at the Close of Registers (Share Entitlement). (b) (Obligations of the Company) On the Spin-out Date, the Company will procure, through CDN, and in accordance with the Shareholder Scheme: (i) (issue of CUFS) the issue to each Sonic Shareholder, other than a Prescribed Overseas Holder, of that number of SciGen CUFS which is equal to that persons Share Entitlement; and (ii) (Prescribed Overseas Holders) the issue to the Nominee of the number of SciGen CUFS as would otherwise have been issued to Sonic Shareholders who are Prescribed overseas Holders equal to each such Sonic Shareholders' Share Entitlement. 5.4 Implementation of Optionholder Scheme (a) (Obligations of Sonic) Sonic will, at a duly convened Scheme Meeting, propose the Optionholder Scheme under which: (i) the reduction in the exercise price of the Sonic Options that would otherwise be made to reflect the Capital Reduction will be ignored; (ii) each Sonic Optionholder will be entitled to one SciGen Option for each Sonic Option held by that Sonic Optionholder at the Close of Registers (Option Entitlement); and (iii) the existing exercise price of each Sonic Option will be allocated across the existing Sonic Option and the new SciGen Option in the relative proportion that the market capitalisation of Sonic after completion of the Spin-out (based on the closing price of Sonic Shares on the ASX of the Spin-out Date) bears to the value of the Shares transferred to Sonic Shareholders and Vendor Interest Holders under the Spin-out (based on a value of $0.20 per Share). (b) (Obligations of the Company) On the Spin-out Date, the Company will grant to each Sonic Optionholder that number of SciGen Options which is equal to that Sonic Optionholder's Option Entitlement. (c) (Terms of SciGen Options) Each SciGen Option granted to a Sonic Optionholder will have an exercise price as determined in accordance with clause 5.4(a)(iii) and will otherwise be granted on materially the same terms as the existing Sonic Option to which each particular SciGen Option relates. 5.5 Implementation of arrangements for Vendor Interest Holders (a) (Obligations of Sonic) Sonic will enter into, and use its best endeavours to procure that each of the Vendor Interest Holders enters into a Vendor Interest Agreement pursuant to which: (i) each of the Vendor Interest Holders will approve the transfer to it of interests in Shares (in the form of SciGen CUFS) under the terms of the Spin-out; and (ii) each Vendor Interest Holder will be entitled to one SciGen CUFS for each Vendor interest held by that Vendor Interest Holder at the Close of Registers (Vendor Interest Entitlement). (b) (Obligations of the Company) On the Spin-out Date, the Company will procure, through CDN and in accordance with the provisions of the Vendor Interest Agreements, the issue to each Vendor Interest Holding of that number of SciGen CUFS which is equal to that Vendor Interest Holder's Vendor Interest Entitlement. 5.6 Grant of SciGen Options to SciTech (a) On the Spin-out Date, the company will grant to SciTech a number of SciGen Options equal to the number of SciGen Options of each class granted to Sonic Optionholders under the Optionholder Scheme multiplied by 26 and divided by 74. (b) The SciGen Options to be granted to SciTech will be granted on materially the same terms as the equivalent class of SciGen Options granted to Sonic Optionholders. (c) The reference to a class of SciGen Options in this clause is a reference to those SciGen Options having the same exercise price and expiry date." 13 I should add that the Spin-out Implementation Agreement also stipulates for the Company (ie SciGen Ltd) to apply for listing of its shares on the ASX. 14 On 12 September 2002, Sonic's solicitors wrote to Australian Securities and Investments Commission ("ASIC") as follows, inter alia: "5. Court hearing It is proposed to apply to the Federal Court of Australia (New South Wales) (Court) on Friday 27 September 2002 for orders to convene separate meetings of Sonic shareholders and Sonic optionholders to consider the Shareholder Scheme and the Optionholder Scheme respectively. We should be grateful if you would respond with any comments that ASIC may have on the Information Memorandum or the notices of meetings by the close of business on 26 September 2002. Please note that although the Information Memorandum and experts reports are in almost final form, there may be one or two non-material amendments arising from the verification which is currently being conducted. We will provide ASIC with a mark-up showing any additional changes made. Would you kindly arrange to provide us, prior to the date of the first Court hearing, with written confirmation that ASIC has had a reasonable opportunity to examine the terms of the proposed Shareholder Scheme and Optionholder Scheme and does not propose to attend or make submissions at the Court hearing for orders under section 411(1) of the Corporations Act. We also require a statement under section 411(17) of the Corporations Act that ASIC has no objection to the Shareholder Scheme or the Optionholder Scheme, although we understand that this will not be given until prior to the second Court hearing to approve the Shareholder Scheme and the Optionholder Scheme." 15 ASIC has responded positively to the solicitors for Sonic by two communications of 1 October 2002. One of those letters refers to three instances of non-compliance with Schedule 8 to the Corporations Regulations 2001 (Cth) in relation to the explanatory statement the subject of the scheme, but in each case has allowed the explanatory statement to stand intact for the reasons ASIC has thereafter duly explained. The other letter contains the following, inter alia: "… Therefore ASIC confirms that it has had a reasonable opportunity to examine the terms of the Proposed Schemes of Arrangement and the draft explanatory statement and that ASIC does not currently propose to appear to make submissions, or intervene to oppose the Proposed Schemes of Arrangement at the first hearing, which it understands is to take place on 2 October 2002. …" 16 In my opinion, this well structured scheme of arrangement, albeit somewhat unique in totality of concept, should be made the subject of the orders sought as to holding of meetings of shareholders and optionholders of Sonic. I am satisfied that the principles set out in [2] above are duly satisfied, and I am also satisfied as to the steps which will be taken in consequence of the orders, as set out in para 50 of the comprehensive affidavit of Christopher David Wilks sworn 26 September 2002 herein. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: 3 October 2002 Solicitor for the Applicant: Allens Arthur Robinson Date of Hearing: 2 October 2002 Date of Judgment: 3 October 2002