Onslow Salt Pty Ltd (ACN 050 159 558) [2003] FCA 429

FEDERAL COURT OF AUSTRALIA

Onslow Salt Pty Ltd (ACN 050 159 558) [2003] FCA 429

CORPORATIONS – validation of issue of shares – redeemable preference shares – issued in absence of requisite provision in company constitution – proprietary company – two shareholders only involved – application not contentious – no prejudice to any other party – possible prejudice if issue not validated – no countervailing public policy considerations – carelessness in issue process – no blatant or reckless disregard – no unworthy purpose – criteria generally applicable to exercise of discretion – issue of shares validated

Corporations Act 2001 (Cth) s 254E

Millheim v Barewa Oil and Mining NL (1971) WAR 65 cited Re Monitronix Ltd (1987) 5 ACLC 1063 cited Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285 cited Re Farnell Electronic Components Pty Ltd (1997) 15 ACLC 1676 cited Re Carpenter Pacific Resources NL (1997) 15 ACLC 1766 cited Re Hatfield Enterprises Pty Ltd (1982) 1 ACLC 208 cited Re The Swan Brewery Co Ltd (No 2) (1976) 3 ACLR 168 cited Alpha Resources Ltd v Corporate Affairs Commission (1987) 5 ACLC 844 cited Ford, Principles of Corporations Law at 17181 ONSLOW SALT PTY LTD (ACN 050 159 558) W3010 of 2003 FRENCH J 28 APRIL 2003 PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY W3010 OF 2003

IN THE MATTER OF ONSLOW SALT PTY LTD

ACN 050 159 558

APPLICANT

(Plaintiff)

JUDGE: FRENCH J

DATE OF ORDER: 28 APRIL 2003

WHERE MADE: PERTH

THE COURT: 1. Orders that pursuant to section 254E of the Corporations Act 2001, the issues of redeemable preference shares (Preference Shares) by the plaintiff pursuant to a resolution of the board of directors made on 15 July 1997 as follows: (a) 7,000,000 shares (share numbers 1-7,000,000) to Salt Asia Holdings Pty Ltd on 1 October 1997; (b) 4,675,000 shares (share numbers 7,000,001-11,675,000) to Salt Asia Holdings Pty Ltd on 19 January 1998; and (c) 8,050,000 shares (share numbers 11,675,001-19,725,000) (previously incorrectly numbered 11,675,000-19,725,000) to Salt Asia Holdings Pty Ltd on 30 April 1999, each be validated and confirmed on the following terms (Terms): (i) The Preference Shares do not confer any voting rights, nor dividend rights, nor rights to receive notices, reports, profit and loss accounts or balance sheets; (ii) The Preference Shares are liable to be redeemed only at the Company's option. Upon redemption the Company must pay the holder of the Preference Shares a sum equal to the Issue Price; (iii) If there is a return of capital, the holder of the Preference Shares will be entitled to receive a sum equal to the Issue Price before any return of money is made to holders of ordinary shares or other classes of shares ranking behind the Preference Shares. In this respect, the Preference Shares rank equally with all other preference shares; (iv) The Preference Shares confer on their holders no further right to participate in any surpluses and/or profits of the Company; (v) The issue of any further preference shares shall not be deemed to have varied the rights of the Preference Shares. 2. Declares that the plaintiff having passed the appropriate resolutions pursuant to section 249A of the Corporations Act 2001, upon lodgement of a copy of these orders with the Australian Securities and Investment Commission: (a) the Terms shall be validly contained in the Constitution of the plaintiff; and (b) the Preference shares shall be validly converted into fully paid ordinary non-voting shares in the plaintiff. 3. Orders that copies of the relevant resolutions of the plaintiff signed by the shareholders together with signed copies of the relevant resolutions of the directors of Salt Asia Holdings Pty Ltd referred to in paragraph 7 of the supplementary affidavit of Colin David Grundy sworn 23 April 2003 be exhibited to an affidavit to be filed in Court on or before 1 May 2003. 4. Orders further that a copy of these orders be lodged with the Australian Securities and Investments Commission.