Blackgold International Holdings Limited, in the matter of Blackgold International Holdings Limited [2017] FCA 601

FEDERAL COURT OF AUSTRALIA

Blackgold International Holdings Limited, in the matter of Blackgold International Holdings Limited [2017] FCA 601 File number(s): WAD 19 of 2017

Judge(s): SIOPIS J

Date of judgment: 24 May 2017

Catchwords: CORPORATIONS – application for the convening of a meeting of members to approve a scheme of arrangement under s 411(1) of the Corporations Act 2011 (Cth) – expert report states the scheme of arrangement is not fair but reasonable.

Legislation: Corporations Act 2001 (Cth) ss 411(1), 411(2)

Cases cited: Re Foundation Healthcare (2002) 42 ACSR 252

Date of hearing: 24 May 2017

Registry: Western Australia

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: Corporations and Corporate Insolvency

Category: Catchwords

Number of paragraphs: 23

Counsel for the Plaintiff: Mr JM Healy

Solicitor for the Plaintiff: Mills Oakley

ORDERS WAD 19 of 2017 IN THE MATTER OF BLACKGOLD INTERNATIONAL HOLDINGS LIMITED (ACN 145 095 478) BLACKGOLD INTERNATIONAL HOLDINGS LIMITED (ACN 145 095 478) Plaintiff

JUDGE: SIOPIS J DATE OF ORDER: 24 MAY 2017

THE COURT ORDERS THAT:

1. Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Act), the plaintiff be given leave to convene a meeting of holders of fully paid ordinary shares in the capital of the plaintiff (Shareholders) to be held at 38 Station Street, Subiaco, in Perth, Western Australia on 26 June 2017 at 11 am (Perth time) or on such other date and such other time as the Court may approve (Scheme Meeting) for the purpose of considering and, if thought fit, approving with or without modifications, the scheme of arrangement proposed between the plaintiff and the Shareholders (Scheme), being the document at Annexure B of the scheme booklet and explanatory statement, annexed at Exhibit RGM-3 to the Second Affidavit of Richard McMullan sworn on 13 May 2017 and filed herein, subject to the following: (a) as detailed in the Third Affidavit of Richard McMullan sworn on 19 May 2017: (i) amendment to Section 7.4 of the Scheme Booklet from "602,509,395" shares, to "601,499,495" shares; (b) as detailed in the Fourth Affidavit of Richard McMullan sworn on 23 May 2017: (i) amendment to page 31 of the Scheme Booklet, by amending the statutory reserve for 31 October 2016 from "4,154" to "4,368"; (ii) amendment to page 32 of the Scheme Booklet, by amending the share of loss in an associate using equity method for 31.10.2015 from "(39)" to "39"; (iii) amendment to page 32 of the Scheme Booklet, by amending "Share of loss in an associate using equity method" to "Share of profit and loss in an associate using equity method"; (iv) correcting formatting issues in the Al Maynard & Associates Report, at page 27 and 28 (page 231 and 232 of Richard McMullan's Second Affidavit); (v) correcting table cross-referencing numbering issues in the Resource & Reserve Update Report as follows:- (A) at the Executive Summary page 2 being page 245 of Richard McMullan's Second Affidavit; (B) page 252 of Richard McMullan's Second Affidavit; and (C) page 288 of Richard McMullan's Second Affidavit; (vi) deleting the first-appearing Table 27 in the Al Maynard & Associates Resource & Reserve Update report (page 284 of Richard McMullan's Second Affidavit); and (c) the addition of a proxy form being Exhibit RGM-1 to the Third Affidavit of Richard McMullan sworn on 19 May 2017, (with those amendments being the Scheme Booklet). 2. The Scheme Booklet, which contains an explanatory statement required by s 412(1)(a) of the Act and includes the notice of Scheme Meeting, being the document at Annexure D of the Scheme Booklet, be and is approved, subject to: (a) correction of any minor typographical or grammatical errors; (b) insertion of the date of the second court hearing as provided in paragraph 10 below of these orders; (c) any minor amendments required or approved by the Australian Securities and Investments Commission (ASIC) for registration under s 412(6) of the Act; and (d) adopting the oral amendments, if any, made by the plaintiff's counsel, together with such other documents as are required to be provided to Shareholders under section 412 and 1319 of the Act. 3. Subject to registration of the Scheme Booklet with the ASIC pursuant to s 412(6) of the Act, the plaintiff is to dispatch, on or about 26 May 2017 or such other date as directed by the Court, a document substantially in the form of the Scheme Booklet (as amended in order 2 above) to the Shareholders who appear on the register of members as at 5:00 pm (Perth time) on 26 May 2017 by ordinary post (or by airmail to overseas holders) or by fax or e-mail (provided a fax number or e-mail address has been nominated by the holder). 4. Despatch of the documents referred to in paragraph 3 of these orders in accordance with its terms is taken to be sufficient notice of the Scheme Meeting. 5. Pursuant to section 1319 of the Act, rule 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) shall not apply to the Scheme Meeting, except insofar as that rule applied regulation 5.16.13 (without the form 530 stipulated therein). Subject to these orders, the Scheme Meeting is to be (so far as practicable): (a) convened, held and conducted in accordance with the provisions of Part 2G.2 of the Act that apply to members of a company and the provisions of the plaintiff's constitution that are not inconsistent therewith and that apply to meetings of members; (b) convened, held and conducted pursuant to s 1319 of the Act, on the basis that Rule 2.15 of the Federal Court (Corporations) Rules 2000 and Regulations 5.6.11 to 5.6.12 and 5.6.13A to 5.6.36A of the Corporations Regulations 2001 (Cth) do not apply to the scheme meeting; (c) convened using the notice of meeting substantially in the form or to the effect of the notice contained in Annexure D of the Scheme Booklet annexed as Exhibit RGM-3 to the Second Affidavit of Richard McMullan sworn on 13 May 2017 and filed herein; and (d) with such other modifications to the Federal Court (Corporations) Rules 2000, the Act and the Corporations Regulations 2001 (Cth) as the Court deems fit. 6. Dr Chi Ho Tong or, failing him, Mr It Phong Tin is to be appointed to act as chairperson of the Scheme Meeting and report the result of the Scheme Meeting to this Court. 7. The chairperson can adjourn the Scheme Meeting in his absolute discretion. 8. Two Shareholders present in person or by proxy, corporate representative or attorney under power and entitled to vote shall constitute a quorum for the Scheme Meeting. 9. Voting on the resolution to approve the Scheme at the Scheme Meeting is to be conducted by way of poll. 10. The matter be relisted on 28 June 2017 at 2.15pm (Perth time) or such other time as directed by the Court for such application as appropriate following the Scheme Meeting. 11. If the matter is relisted, then the plaintiff is to give notice of the hearing of the application pursuant to s 411(4)(b) of the Act for orders approving the Scheme by publishing an advertisement in the public notices column of "The Australian" and "The West Australian" newspapers in the form of Schedule 1 (being substantially in accordance with Form 6 of the Federal Court (Corporations) Rules 2000), such advertisement to be published at least five days before any date allocated for the hearing and the plaintiff otherwise be exempted from compliance with rule 3.4 of the Federal Court (Corporations) Rules 2000. 12. The plaintiff is to lodge an office copy of these orders with ASIC as soon as is practicable after these orders have been made. 13. The plaintiff, the ASIC and any interested party has liberty to apply to relist the matter on 24 hours' written notice. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. Schedule 1 Notice of hearing to approve compromise or arrangement TO all the creditors and members of Blackgold International Holdings Limited ACN 145 095 478 (Blackgold). TAKE NOTICE that at [ ] (Perth time) on [ ] the Federal Court of Australia at [insert court room] (situated at the Commonwealth Law Courts Building, 1 Victoria Avenue, Perth) will hear an application by Blackgold seeking the approval of an arrangement between Blackgold and its members, if agreed to by resolution to be considered by the members of Blackgold at a meeting of such members to be held on [ ] at [ ] at [ ] (Perth time). If you wish to oppose the approval of the arrangement, you must file at Court and serve on Blackgold 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 Blackgold at its address for service at least 1 day before the date fixed for the hearing of the application. The address for service on Blackgold is c/- Mills Oakley, Level 2, 225 St Georges Terrace, Perth, Western Australia, 6000, Australia. Chi Ho Tong Director Blackgold International Holdings Limited Blackgold International Holdings Limited (ACN 145 095 478)