FEDERAL COURT OF AUSTRALIA Barrick (Australia Pacific Exploration) Pty Limited v Barrick (PD) Australia Pty Limited, in the matter of Barrick (Australia Pacific Exploration) Pty Limited [2017] FCA 998 File number: WAD 379 of 2017 Judge: BARKER J Date of judgment: 16 August 2017 Catchwords: CORPORATIONS – schemes of arrangement – first court hearing – application for orders that companies convene meetings pursuant to s 411(1) of the Corporations Act 2001 (Cth) Legislation: Corporations Act 2001 (Cth) ss 9, 231, 314(1), 319(1), 411, 411(1), 411(2)(a), 411(2)(b), 411(3), 411(3)(b), 411(6), 412(1)(a)(i), 412(1)(a)(ii), 412(6), 413, 413(1)(a), 413(1)(d), Pt 5.1 Corporations Regulations 2001 (Cth) regs 5.1.01, 5.1.01(1)(b), Sch 8 Federal Court (Corporations) Rules 2000 (Cth) R 3.2 Mining Act 1978 (WA) s 114B Cases cited: Achieve Foundation Ltd v ACNewCo Ltd (2010) 77 ACSR 673 AGL Energy Services (Queensland) Pty Ltd v AGL Energy Services Pty Ltd (No 2) [2010] FCA 453 AGL Energy Services (Queensland) Pty Ltd v AGL Energy Services Pty Ltd (No 1) [2010] FCA 452 All Star Funds Management Ltd v Venture Investment Management Ltd [2012] FCA 527 All Star Funds Management Ltd v Venture Investment Management Ltd (No 2) [2012] FCA 564 Alstom Signalling Solutions Pty Ltd v Alstom Transport Australia Pty Limited [2016] FCA 838 Barrick (Lawlers) Pty Ltd v Barrick Mining Company (Australia) Pty Ltd [2015] FCA 1510 Equatorial Mining Pty Ltd v Antofagasta Investment Company Ltd [2013] FCA 1452 FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69 Legrand Australia Pty Ltd v HPM Industries Pty Ltd (No 2) [2009] FCA 1239 Legrand Australia Pty Ltd v HPM Industries Pty Ltd [2009] FCA 1184 Macquarie Equipment Finance Pty Ltd v Macquarie Bank Ltd [2012] FCA 1212 Re ACM Gold Ltd (1992) 107 ALR 359 Re AGL Sydney Ltd (1994) 13 ACSR 597 Re CSR Ltd (2010) 183 FCR 358; [2010] FCAFC 34 Re Dorman Long & Co Ltd [1934] Ch 635 Re Foundation Healthcare Ltd (2002) 42 ACSR 252; [2002] FCA 742 Re Hills Motorway Ltd (2002) 43 ACSR 101 Re MAC Services Group Ltd (2010) 80 ACSR 390; [2010] NSWSC 1316 Re NRMA Insurance Ltd (No 1) (2000) 156 FLR 349; [2002] NSWSC 82 Re Orica Ltd [2010] VSC 231 Re Ranger Minerals Ltd (2002) 42 ACSR 582; [2002] WASC 207 Re Seven Network Ltd [2010] FCA 220 Re Sonodyne International Ltd (1994) 15 ACSR 494 Royal Victorian Institute for the Blind Ltd v RBS.RVIB.VAF Ltd (2004) 206 ALR 581; [2004] FCA 735 SGIC Insurance Ltd v Insurance Australia Ltd (2004) 51 ACSR 470; [2004] FCA 1492 Sovereign Life Assurance Company v Dodd [1892] 2 QB 573 Stork ICM Australia Pty Ltd v Stork Food Systems Australia Pty Ltd (2007) 25 ACLC 208; [2006] FCA 1849 Date of hearing: 16 August 2017 Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 104 Counsel for the Plaintiffs: Mr A J Papamatheos Solicitor for the Plaintiffs: Lavan ORDERS WAD 379 of 2017 IN THE MATTERS OF BARRICK (AUSTRALIA PACIFIC EXPLORATION) PTY LIMITED (ACN 008 648 440), BARRICK (GSM) PTY LIMITED (ACN 002 594 881), DELTA GOLD PTY LIMITED (ACN 002 527 899), BARRICK (KALGOORLIE) PTY LIMITED (ACN 009 712 092), AURIONGOLD PTY LIMITED (ACN 008 560 978) AND BARRICK (GRANNY SMITH) PTY LIMITED (ACN 009 466 175) BETWEEN: BARRICK (AUSTRALIA PACIFIC EXPLORATION) PTY LIMITED ACN 008 648 440 First Plaintiff BARRICK (GSM) PTY LIMITED ACN 002 594 881 Second Plaintiff DELTA GOLD PTY LIMITED ACN 002 527 899 (and others named in the Schedule) Third Plaintiff AND: BARRICK (PD) AUSTRALIA PTY LIMITED ACN 050 284 967 Defendant JUDGE: BARKER J DATE OF ORDER: 16 AUGUST 2017 THE COURT ORDERS THAT: 1. Pursuant to s 411 of the Corporations Act 2001 (Cth), there be convened: (a) by the first plaintiff (Barrick (Australia Pacific Exploration) Pty Limited (ACN 008 648 440), a meeting of the holder of the fully paid ordinary shares in the capital of the first plaintiff to be held in Perth, Western Australia on Tuesday 22 August 2017 at 11:30am (WST) (or on such other date and such other time as the Court may approve) for the purpose of considering and if thought fit, approving with or without modifications, the scheme of arrangement proposed between the first plaintiff and its shareholder, being contained in the supplementary affidavit of Luke Reginald Stephenson Fleming sworn 15 August 2017 at Annexure LRSF42 pages 45 - 62. (b) by the second plaintiff (Barrick (GSM) Pty Limited (ACN 002 594 881)), a meeting of the holder of the fully paid ordinary shares in the capital of the second plaintiff to be held in Perth, Western Australia on Tuesday 22 August 2017 at 11:35am (WST) (or as soon as practicable after the meeting in order 1(a) above, or on such other date and such other time as the Court may approve) for the purpose of considering and if thought fit, approving with or without modifications, the scheme of arrangement proposed between the second plaintiff and its shareholder, being contained in the supplementary affidavit of Luke Reginald Stephenson Fleming sworn 15 August 2017 at Annexure LRSF42 pages 45 - 62. (c) by the third plaintiff (Delta Gold Pty Limited (ACN 002 527 899)), a meeting of the holder of the fully paid ordinary shares in the capital of the third plaintiff to be held in Perth, Western Australia on Tuesday 22 August 2017 at 11.40am (WST) (or as soon as practicable after the meeting in order 1(b) above, or on such other date and such other time as the Court may approve) for the purpose of considering and if thought fit, approving with or without modifications, the scheme of arrangement proposed between the third plaintiff and its shareholder, being contained in the supplementary affidavit of Luke Reginald Stephenson Fleming sworn 15 August 2017 at Annexure LRSF42 pages 45 - 62. (d) by the fourth plaintiff (Barrick (Kalgoorlie) Pty Limited (ACN 009 712 092)), a meeting of the holder of the fully paid ordinary shares in the capital of the fourth plaintiff to be held in Perth, Western Australia on Tuesday 22 August 2017 at 11.45am (WST) (or as soon as practicable after the meeting in order 1(c) above, or on such other date and such other time as the Court may approve) for the purpose of considering and if thought fit, approving with or without modifications, the scheme of arrangement proposed between the fourth plaintiff and its shareholder, being contained in the supplementary affidavit of Luke Reginald Stephenson Fleming sworn 15 August 2017 at Annexure LRSF42 pages 45 – 62, as amended to refer to an 'amalgamation' in the proposed scheme document at clause 4.4. (e) by the fifth plaintiff (AurionGold Pty Limited (ACN 008 560 978)), a meeting of the holder of the fully paid ordinary shares in the capital of the fifth plaintiff to be held in Perth, Western Australia on Tuesday 22 August 2017 at 11.50am (WST) (or as soon as practicable after the meeting in order 1(d) above, or on such other date and such other time as the Court may approve) for the purpose of considering and if thought fit, approving with or without modifications, the scheme of arrangement proposed between the fifth plaintiff and its shareholder, being contained in the supplementary affidavit of Luke Reginald Stephenson Fleming sworn 15 August 2017 at Annexure LRSF42 pages 45 - 62. (f) by the sixth plaintiff (Barrick (Granny Smith) Pty Limited (ACN 009 466 175)), a meeting of the holder of the fully paid ordinary shares in the capital of the sixth plaintiff to be held in Perth, Western Australia on Tuesday 22 August 2017 at 11.55am (WST) (or as soon as practicable after the meeting in order 1(e) above, or on such other date and such other time as the Court may approve) for the purpose of considering and if thought fit, approving with or without modifications, the scheme of arrangement proposed between the sixth plaintiff and its shareholder, being contained in the supplementary affidavit of Luke Reginald Stephenson Fleming sworn 15 August 2017 at Annexure LRSF42 pages 45 - 62. (together, the Scheme Meetings). 2. Pursuant to s 411(1) of the Corporations Act 2001 (Cth), the explanatory statement required by s 412(1)(a) of the Corporations Act and being contained in the supplementary affidavit of Luke Reginald Stephenson Fleming sworn 15 August 2017 at Annexure LRSF42 pages 29-88, be and is approved, subject to: (a) correction of any minor typographical or grammatical errors and the date of the Scheme Meetings (above); and (b) any minor amendments required or approved by the Australian Securities and Investments Commission (ASIC) for registration under s 412(6) of the Corporations Act. 3. Each of the Scheme Meetings shall be convened by a notice of meeting, a copy of which forms part of the approved explanatory statement in order 2 above, accompanied by a copy of the explanatory statement. 4. Subject to registration of the explanatory statement pursuant to s 412(6) of the Corporations Act, service of the notice of meeting and accompanying explanatory statement (substantially in the form of the of the document approved in order 2 above) may be effected by electronic means or by hand delivery to a person who is a director of the member or a person who is a proxy, corporate representative appointed under section 250D of the Corporations Act or attorney under power, of each member of the applicable plaintiff at any time before a relevant meeting commences. 5. Dispatch of the documents referred to in order 4 above in general accordance with its terms is to be taken to be sufficient notice of the Scheme Meetings. 6. Subject to these orders, the Scheme Meetings are to be (so far as practicable): (a) convened, held and conducted in accordance with the provisions of Part 2G.2 of the Corporations Act that apply to members of a company and the provisions of the plaintiffs' constitutions that are not inconsistent therewith and that apply to meetings of members; (b) convened, held and conducted pursuant to s 1319 of the Corporations Act, on short notice at the times set out in order 1 and on the basis that Corporations Regulations 5.6.11 to 5.6.11A and 5.6.13A to 5.6.36A do not apply to the Scheme Meetings; and (c) convened using the notices of meetings substantially in the form or to the effect of the notices to be contained in or accompanying the explanatory statement. 7. Mr Daniel David Kirk or, failing him, Mr Derek Noel La Ferla is to be appointed to act as chairperson of the Scheme Meetings (Chairperson) and report the result of the Scheme Meetings to this Court. 8. The Chairperson of each of the Scheme Meetings has the power to adjourn each such meeting, in his absolute discretion. 9. A single shareholder present in person or by proxy, corporate representative or attorney under power and entitled to vote shall constitute a quorum for each of the Scheme Meetings. 10. A proxy, appointment of corporate representative or power of attorney to act on behalf of a member of a plaintiff may be delivered to the Chairperson of the relevant scheme meeting at any time up until the vote is cast on a resolution at that meeting. 11. A resolution put to the vote at any stage of the scheme meetings to approve the proposed schemes of arrangement, or any modification to the proposed schemes of arrangement, must be recorded by the member or its representative signing a record of the resolution. 12. The matter is to be relisted on Friday 1 September 2017 for such applications as appropriate following the Scheme Meetings. 13. If the matter is relisted, the plaintiffs are to give notice of the hearing of the applications pursuant to ss 411(4)(b) and 413 of the Corporations Act for orders approving the Schemes and other orders by publishing an advertisement in the public notices column of "The Australian" and "The West Australian" newspapers substantially in accordance with "Annexure A" to these orders, such advertisement to be published at least five days before any date allocated for the hearing and the plaintiffs are otherwise exempted from compliance with rule 3.4 of the Federal Court (Corporations) Rules 2000. 14. The period of 7 days in rule 2.4(2) of the Federal Court (Corporations) Rules) be extended to 17 days pursuant to rule 1.39 of the Federal Court Rules 2011. 15. There be liberty to apply. 16. These orders be entered forthwith. 17. An office copy of these orders shall be lodged with ASIC as soon as practicable after these orders are made. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT BARKER J: 1 On 16 August 2017, I made the above orders. These are the reasons for so doing, which reflect the comprehensive submissions of counsel. 2 This is an application for orders under s 411(1) of the Corporations Act 2001 (Cth): (1) convening a meeting to consider a proposed scheme of arrangement (BAPE scheme) between the first plaintiff, Barrick (Australia Pacific Exploration) Pty Limited (ACN 008 648 440) (BAPE), and its sole shareholder (BAPE shareholder) (BAPE scheme meeting); (2) convening a meeting to consider a proposed scheme of arrangement (GSM scheme) between the second plaintiff, Barrick (GSM) Pty Limited (ACN 002 594 881), and its sole shareholder (GSM shareholder) (GSM scheme meeting); (3) convening a meeting to consider a proposed scheme of arrangement (Delta scheme) between the third plaintiff, Delta Gold Pty Limited (ACN 002 527 899), and its sole shareholder (Delta shareholder) (Delta scheme meeting); (4) convening a meeting to consider a proposed scheme of arrangement (B(Kal) scheme) between the fourth plaintiff, Barrick (Kalgoorlie) Pty Limited (ACN 009 712 092) (B(Kal)), and its sole shareholder (B(Kal) shareholder) (B(Kal) scheme meeting); (5) convening a meeting to consider a proposed scheme of arrangement (AurionGold scheme) between the fourth plaintiff, AurionGold Pty Limited (ACN 008 560 978), and its sole shareholder (AurionGold shareholder) (AurionGold scheme meeting); and (6) convening a meeting to consider a proposed scheme of arrangement (Granny Smith scheme) between the fourth plaintiff, Barrick (Granny Smith) Pty Limited (ACN 009 466 175), and its sole shareholder (Granny Smith shareholder) (Granny Smith scheme meeting); (together, the schemes for the respective scheme companies). 3 Six separate but interdependent schemes are proposed. 4 The defendant, Barrick (PD) Australia Pty Limited (ACN 050 284 967) (BPDA) owns all of the shares in AurionGold and Granny Smith. AurionGold in turn owns all the shares in B(Kal) and Delta. Delta in turn owns all the shares in BAPE and GSM. The intention is to collapse each level of subsidiaries and transfer all assets and liabilities to BPDA as the head company within this corporate tree. 5 That is, the schemes would effect arrangements for the amalgamation or reconstruction of each of BAPE, GSM, Delta, B(Kal), AurionGold and Granny Smith by the successive transfers of the whole of their assets and liabilities to BPDA, as or through their sole shareholder, such that each of BAPE, GSM, Delta, B(Kal), AurionGold and Granny Smith may be deregistered by the Australian Securities and Investments Commission (ASIC) without winding up pursuant to s 413(1)(d) of the Corporations Act. 6 BPDA is a wholly owned subsidiary of Barrick Resources (Australia) Pty Ltd (ACN 060 581 777) (BRAPL). 7 The ultimate holding company of BRAPL is Barrick Gold Corporation. 8 Barrick Gold Corporation is a Canadian company listed on the Toronto Stock Exchange (TSX) and New York Stock Exchange (NYSE) and one of the world's largest gold producers, with interests in producing gold mines in Argentina, Australia, Canada, the Dominican Republic, Papua New Guinea, Peru and the United States, and interests in copper mines in Zambia, Chile and Saudi Arabia. 9 The purpose of the schemes is to consolidate corporate structures within an Australian group. In recent years, GSM, Delta, B(Kal), AurionGold and Granny Smith, disposed of their main undertakings to third parties. Each had either owned and operated a gold mine in Western Australia, or held related joint venture, royalty or tenement rights. BAPE was a service company for those and various other group companies. 10 The six plaintiffs are now otherwise dormant entities. 11 By the terms of the schemes and additional orders made under s 413, it is proposed that there be a reconstruction or amalgamation to reduce the expense and complexity of corporate administration. 12 There are three stages to an application under s 411: (i) Court approval to convene the meetings at which the BAPE shareholder, GSM shareholder, Delta shareholder, B(Kal) shareholder, AurionGold shareholder and Granny Smith shareholder (schemes shareholders) will vote according to their respective holdings in the plaintiffs on the BAPE scheme, GSM scheme, Delta scheme, B(Kal) scheme, AurionGold scheme and the Granny Smith scheme (scheme meetings) and approval of a draft explanatory statement to be sent to the schemes shareholders; (ii) the schemes shareholders voting on the schemes at the scheme meetings; and (iii) Court approval of the schemes: Re CSR Ltd (2010) 183 FCR 358, 362 [7]; [2010] FCAFC 34 (Keane CJ, as he then was, and Jacobson J). 13 The principal questions relevant to this first stage are as follows: Are there compromises or arrangements? Is there a Pt 5.1 body? Are there members or creditors of a company? Are there classes of members or creditors? Should the Court make orders to convene meetings? 14 The standard of review at this stage is whether the schemes are not inappropriate and are one that sensible business people might consider of benefit: Re Sonodyne International Ltd (1994) 15 ACSR 494, 499 (Hayne J). 15 If the proposed arrangement is one that seems fit for consideration by a meeting of members (or creditors) and is a commercial proposition likely to gain the Court's approval if passed by the necessary majorities, then leave should be given to convene the meetings: Re ACM Gold Ltd (1992) 107 ALR 359 at 365 (O'Loughlin J). 16 The Court is not required to be satisfied either at the convening or approval stage that no better scheme or schemes could have been devised: Re Foundation Healthcare Ltd (2002) 42 ACSR 252 at 265 [44]; [2002] FCA 742 (French J, as he then was). 17 While s 411(2) contains a statement of the circumstances in which a scheme meeting must not be ordered, s 411 contains no statement of the criteria that must be satisfied before a meeting is ordered: Re CSR Ltd at 362-3 [8]. 18 Nonetheless, as mentioned above as to the principal issues, it is relatively settled that the Court should order the convening of the scheme meetings and approve the dispatch of the information booklet to the schemes shareholders in respect of the schemes (explanatory statement) if satisfied of the following matters: (1) Each of the schemes is an arrangement in respect of which the Court may order a meeting of the members or creditors: s 411(1). That is: (i) each of the schemes is an arrangement; (ii) each of the plaintiffs is a Pt 5.1 Body; (iii) each of the schemes participants are members and/or creditors of the plaintiffs; and (iv) each of the scheme meetings will be convened between members of the same class. (2) ASIC has had a reasonable opportunity to: (i) examine the terms of each of the schemes and explanatory statement; and (ii) make submissions to the Court in relation thereto: s 411(2)(b). (3) The explanatory statement: (a) provides adequate disclosure: s 412(1)(a)(i); and (b) contains the prescribed information: s 412(1)(a)(ii) of the Corporations Act, and r 5.1.01 and Sch 8 cl 8301- 8310 of the Corporations Regulations 2001 (Cth). (4) The procedural requirements of the Federal Court (Corporations) Rules 2000 (Cth) have been met. (5) That there is no apparent reason why each of the schemes should not, in due course, receive the Court's approval if the necessary majority of shareholders' votes are achieved with respect to each of the schemes. Re NRMA Insurance Ltd (No 1) (2000) 156 FLR 349 at [3], [14]-[41]; [2002] NSWSC 82 (Santow J); Re Ranger Minerals Ltd (2002) 42 ACSR 582 at [21]-[23], [31]-[36], [40] and [47]; [2002] WASC 207 (Parker J); Re Hills Motorway Ltd (2002) 43 ACSR 101 at [5] (Barrett J); Re Orica Ltd [2010] VSC 231 at [7] (Davies J); Re MAC Services Group Ltd (2010) 80 ACSR 390 at [5]; [2010] NSWSC 1316 (Barrett J). 19 The word "arrangement" is of wide import. As was said in Re NRMA Insurance Ltd (No 1) at 355-356 [20]: Generally speaking, unless the arrangement is ultra vires the company or seeks to deal with a matter for which a special procedure is laid down by the Corporations Law or to evade a restriction imposed by the Corporations Law, almost any arrangement otherwise legal which touches or concerns the rights and obligations of the company or its members or creditors, and which is properly proposed, may come under s 411. 20 The proposed schemes contain cl 5.2, by which each of the schemes' shareholders approves their relevant schemes. 21 Also by cl 5.2, each of the schemes' shareholders consent to the schemes notwithstanding any diminution in the value of its shareholding in the relevant plaintiff and any rights that it may have in connection with the proposed schemes at law (including under the plaintiffs' constitutions). Further, by cl 5.2, the schemes shareholders waive any rights they may otherwise have as against any plaintiff in connection with the schemes. 22 I accept that, so expressed, the arrangement touches and concerns rights and obligations of each schemes' shareholder as a shareholder: AGL Energy Services (Queensland) Pty Ltd v AGL Energy Services Pty Ltd (No 2) [2010] FCA 453 at [3]; All Star Funds Management Ltd v Venture Investment Management Ltd [2012] FCA 527 at [4]-[6] (Jagot J); Macquarie Equipment Finance Pty Ltd v Macquarie Bank Ltd [2012] FCA 1212 at [3] (Jagot J); Barrick (Lawlers) Pty Ltd v Barrick Mining Company (Australia) Pty Ltd [2015] FCA 1510 at [21]-[27] (Barker J). 23 Schemes that involve the transfer of the whole or part of the property and liabilities of one wholly owned subsidiary to another are to be undertaken by a members' scheme of arrangement: SGIC Insurance Ltd v Insurance Australia Ltd (2004) 51 ACSR 470, 471 [7]-[11]; [2004] FCA 1492 (Jacobson J); Stork ICM Australia Pty Ltd v Stork Food Systems Australia Pty Ltd (2007) 25 ACLC 208, 218 [69]; [2006] FCA 1849 (Lindgren J); Barrick (Lawlers) at [28] (Barker J). 24 The potential effects on creditors, by transfer of the liabilities, does not require a creditors scheme and is an issue of fairness to be dealt with at the second court hearing: SGIC Insurance Ltd at 471 [10]-[11]; Barrick (Lawlers) at [29]. 25 Consistent with the approach identified by Finkelstein J in Royal Victorian Institute for the Blind Ltd v RBS.RVIB.VAF Ltd (2004) 206 ALR 581; [2004] FCA 735, the proposed ultimate transferee of the assets and liabilities of BPDA has been joined as a defendant to these proceedings. See too SGIC Insurance Ltd at 471 [6], All Star Funds Management at [1] and Equatorial Mining Pty Ltd v Antofagasta Investment Company Ltd [2013] FCA 1452 at [14] (Yates J). 26 Section 411 of the Corporations Act confers jurisdiction on the Court in respect of a Pt 5.1 body. The term "Part 5.1 body" is defined in s 9 of the Corporations Act to mean, relevantly, a company. 27 Each of the plaintiffs is a company. 28 The term "member" is defined in s 9 to mean, in relation to a company, a person who is a member under s 231 of the Corporations Act. Broadly, a person is a member of a company if they are a member of the company on its registration, or agree to become a member of the company after its registration and their name is entered on the register of members. 29 The BAPE shareholder, GSM shareholder, Delta shareholder, B(Kal) shareholder, AurionGold shareholder and Granny Smith shareholder, are each a member of their relevant plaintiff company. 30 A court ordered meeting can be constituted by one person: SGIC Insurance at 471 [12] and 472 [14]; Alstom Signalling Solutions Pty Ltd v Alstom Transport Australia Pty Limited [2016] FCA 838 at [28(3)] (Gleeson J); Barrick (Lawlers) at [35]. 31 There are no other classes of shares in each of the plaintiffs on issue. 32 An arrangement to which s 411(1) applies is one between a company and its members or creditors or any class of them. It is only such an arrangement to which the Court may grant its approval pursuant to s 411(6). 33 Section 411 does not define the term "class". However, in the leading case of Sovereign Life Assurance Company v Dodd [1892] 2 QB 573 at 583, Bowen LJ said that the term ought to be given such a meaning: as will prevent the section being so worked as to result in confiscation and injustice, and that it must be confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest. 34 In this case, there is only one shareholder in each of the plaintiffs. As such, there can only be one class of shareholders for each of the plaintiffs. 35 No issue as to class composition arises. 36 The jurisdiction of the Court to make an order convening meetings under s 411(1) is conditional upon the matters set out in s 411(2). Section 411(2) requires that the Court be satisfied of two matters before making an order. First, that ASIC has been given 14 days' notice of the hearings, or such lesser period of notice as the Court or ASIC permits: s 411(2)(a). Secondly, that ASIC has had a reasonable opportunity to examine the terms of each of the schemes and the draft explanatory statement and to make submissions to the Court: s 411(2)(b). 37 The originating application was formally served on ASIC on 28 July 2017. Formal notice of the date and time of the hearing was given to ASIC on 31 July 2017. The first requirement was satisfied. 38 The explanatory statement was lodged with ASIC on 28 July 2017. 39 ASIC has indicated that it does not wish to be heard on the first court hearing. 40 The various schedules and annexures to the explanatory statement comprise of the following: Schedule 1, a glossary of terms used in the explanatory statement; Schedule 2, a diagram of the relevant parts of the Barrick Gold Group immediately before the Effective Time; Schedule 3, a diagram of the relevant parts of the Barrick Gold Group immediately following the implementation of the proposed schemes; Annexure A, the scheme(s) of arrangement for reconstruction of, and amalgamation of certain entities within, the Barrick Gold Group; Annexure B, the unaudited management balance sheets of each of the plaintiffs and BPDA as at 30 June 2017; and Annexure C, the notices of scheme meetings of shareholders for each of the plaintiffs and a proxy form. 41 The emphasis is on proper disclosure: Re Seven Network Ltd [2010] FCA 220 at [8]. 42 The explanatory statement must provide proper disclosure as required in s 411(3) of the Corporations Act. It must essentially set out "all the main facts as will enable shareholders to exercise their judgement on the proposed scheme": Re Dorman Long & Co Ltd [1934] Ch 635 at 665-6 (Maugham J); applied in Re NRMA Insurance Ltd (No 1) at 354 [16] (Santow J) and Re Foundation Healthcare at 263 (French J). 43 Additionally, the Court should be satisfied that there is nothing apparently misleading or deceptive in the explanatory statement: The plaintiffs have undertaken a process of verifying the accuracy of the statements relating to it in the explanatory statement. The plaintiffs' sole director considers the contents of the explanatory statement to be true insofar as statements of fact relate to the plaintiffs and there is no reason to believe that statements of fact relating to the plaintiffs are misleading or deceptive or that there are material omissions. Further, to the extent that any information about the schemes shareholders or BPDA, is included in the explanatory statement, then given the corporate group structure and single common director, the sole recipient of the explanatory statement will likely know the accuracy of that information. ASIC has had an opportunity to review the explanatory statement and make further enquiries. 44 ASIC considers that its role is to assist the Court by, inter alia, reviewing the content of each of the schemes' documents, reviewing the nature and function of each of the schemes, representing the interests of investors and creditors and bringing all relevant matters to the Court's attention before it orders scheme meetings or confirms a scheme: see ASIC Regulatory Guide 60 at RG 60.4. 45 The explanatory statement prepared by the plaintiffs in relation to the schemes has been drafted to satisfy the disclosure requirements prescribed in: ASIC Regulatory Guide 60; and s 411(3) and s 412 and Sch 8 of the Regulations. 46 The plaintiffs sought and have been granted a waiver from ASIC as to the need for an independent expert's report, as permitted by ASIC Regulatory Guide 60.79-60.80, when an internal reconstruction is proposed. This has been found acceptable in other internal reconstruction schemes: Equatorial Mining Pty Ltd at [26] (Yates J). 47 The explanatory statement will be registered by ASIC before it is despatched in accordance with s 412(6). 48 Regulation 5.1.01 of the Regulations prescribes the information for the explanatory statement as required by s 411(3)(b) and s 412(1)(a)(ii). In respect of a scheme between a Pt 5.1 body and its members, or a class of its members, reg 5.1.01(1)(b) requires the explanatory statement to state the matters set out, and have annexed to it the reports and copies of documents mentioned, in Pt 3 of Sch 8 to the Regulations. 49 Part 3 of Sch 8 to the Regulations is entitled "Prescribed information relating to proposed compromise or arrangement with members or a class of members" and contains ten items, item 8301 to item 8310 inclusive. Each of these items is considered in the Checklist. 50 Rule 3.2 of the Rules requires the plaintiffs to file an affidavit stating the names of the persons who have been nominated to be the chairperson and alternate chairperson of the scheme meetings, that each person nominated is willing to act as chairperson, has had no previous relationship or dealing with the plaintiffs, or any other person interested in the schemes except as disclosed in the affidavit, and has no interest or obligation that may give rise to a conflict of interest or duty if the person were to act as chairperson of the scheme meetings, except as disclosed in the affidavit. 51 This requirement has been satisfied. 52 The Court will not ordinarily summon a meeting unless the scheme is of such a nature and cast in such terms that, if it achieves the statutory majority at the members' meeting, the Court would be likely to approve it on the hearing of the petition which is unopposed: FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69 at 72 (Street CJ). 53 However, the role of the Court at this stage of the process of a company propounding and implementing a scheme of arrangement is not to scrutinise finally whether the scheme should be approved. That decision must await the expression of the will of the members or creditors at the meeting and any argument that may be advanced on behalf of dissenting members or other interested parties at the time of the application for approval: Re Sonodyne International at 497. 54 In my view, the schemes proposed by the plaintiffs are not so obviously unfair or otherwise inappropriate that they should be stopped in their tracks before going any further: see Re Foundation Healthcare at 265. 55 Further, the sole director of the plaintiffs has considered the merits of each of the proposed schemes. 56 The sole director of each plaintiff has given evidence that he considers each proposed scheme is in the best interests of each plaintiff for the reasons of efficiency and corporate rationalisation. 57 The plaintiffs' constitutions do not prevent the proposed schemes. 58 There is nothing in the material before the Court that suggests the schemes have not been properly proposed: (1) The sole director of the plaintiffs has given evidence that the purpose of the proposed schemes is to consolidate the affairs of the plaintiffs with the defendant, so as to reduce corporate administration expense. That is, there is a corporate rationale for the proposed schemes. (2) There is no evidence that the plaintiffs propose the schemes to avoid liabilities or defeat the claims of creditors or potential creditors: (a) The internal accountants for the plaintiffs have prepared financial statements for the plaintiffs and given evidence that they represent a true picture of the plaintiffs' affairs. (b) The sole director of each of the plaintiffs has given evidence that he does not believe the position of creditors will be adversely affected. He has confirmed that having considered the proposed schemes he has determined, to the best of his knowledge and investigations that BPDA (as ultimate transferee) will be solvent and will be able to discharge all liabilities of each of the plaintiffs transferred as a result of the schemes. (c) The pre-schemes net asset position of the defendant shows a substantial amount of intercompany receivables (US$2,140,386,599.00) (of which $97,213,999 is payable by AurionGold to the defendant and $41,495 is payable by Granny Smith to the defendant). The post-schemes unaudited net asset position of the defendant, upon receiving the assets (and liabilities) of the plaintiffs, will be US$1,114,086,902.00. This amount is comprised of: (i) "Cash and Cash Equivalents" (being cash at bank – of US$7,287,506.00); (ii) "Trade Receivables" (being an amount owing to the defendant from a joint venture partner of Barrick (Niugini) Limited – being US$12,782,776.00); (iii) "Intercompany Receivables" (being amounts owing to the defendant from other Barrick group companies); (iv) "Investments (NCA)" (being the investment value of Barrick (Niugini) Limited, a direct subsidiary of the defendant – being US$67,719,092.00); (v) "Trade Payables" (being miscellaneous payables which, although presented in the liabilities section of the balance sheet, are amounts payable to the defendant by other Barrick group members); (vi) "Other Payables" (being amounts payable by the defendant to other Barrick Group companies); and (vii) "Current Tax Liabilities" (being withholding tax on interest income which, although presented in the liabilities section of the balance sheet, can be utilised to offset the income tax liability of the Australian tax group). (d) The sole director has confirmed that a deed of cross-guarantee is also in place for creditors of BPDA. The effect of the cross-guarantee, which is in the format of the pro forma required by the ASIC Class Order, is to give creditors of BPDA access to other Barrick Group assets held by Group Entities (as defined in the cross-guarantee), if BPDA fails to meet debts or claims. See cll 3.1, 3.2 and 6.1 of the cross-guarantee. (e) The audited financial statements for the year ended 31 December 2016 (and published 28 April 2017) of the ultimate Australian parent, BRAPL, reveals a net attributable profit to members of the BRAPL of $122,324,000.00. On those audited figures, that entity had cash and cash equivalents of $79,762,000 as at 31 December 2016. It has been confirmed that BRAPL (on a consolidated basis) has approximately $40,218,265.00, at bank or in cash equivalents as at 31 July 2017. 59 I am satisfied, prima facie, that there has been proper disclosure with nothing misleading or deceptive in any material sense: Re NRMA Insurance Ltd (No 1) at [3]. 60 As noted above, the explanatory statement meets the disclosure requirements of s 411(3) and s 412 of the Corporations Act, ASIC Regulatory Guide 60 and Sch 8 of the Regulations. 61 Additionally, I am satisfied there is nothing apparently misleading or deceptive in the explanatory statement, as a verification procedure has been completed by the management of the plaintiffs, with assistance of their solicitors. 62 The balance sheets prepared for the plaintiffs and defendant have been prepared internally by an accountant within the corporate group and have not been audited by any external firm of accountants. 63 In the present circumstances, I accept this approach to the unaudited balance sheets, as: (1) Mr Giltay, the accountant who prepared the statements, has been employed within the Barrick group since May 2010, being over 7 years. (2) Mr Giltay has given sworn evidence as to the manner of preparation of the unaudited balance sheets. (3) Mr Giltay's evidence confirms that he has had assistance from Ms Sherly Handoko (Senior Accountant) and Mr Luke Fleming (the sole director of the plaintiffs with the role group role of Senior Manager of Taxation). As to the BPDA unaudited statement post-schemes, each of Mr Fleming and Ms Handoko assisted. (4) Mr Giltay's evidence confirms that the director of each of the plaintiffs and defendant have reviewed the draft unaudited statements and made any changes to address material errors or omissions. (5) The assets of the plaintiffs in the unaudited balance sheets consist largely of intercompany receivables, or the equity is retained earnings. The assets of the defendant in the unaudited balance sheets consist of: (a) "Cash and Cash Equivalents" (being cash at bank); (b) "Trade Receivables" (being a amount owing to the defendant from a joint venture partner of Barrick (Niugini) Limited); (c) "Intercompany Receivables" (being amounts owing to the defendant from other Barrick group companies); (d) "Investments (NCA)" (being the investment value of Barrick (Niugini) Limited, a direct subsidiary of the defendant); (e) "Trade Payables" (being miscellaneous payables which, although presented in the liabilities section of the balance sheet, are amounts payable to the defendant by other Barrick group members); (f) "Current Tax Liabilities" (being withholding tax on interest income which, although presented in the liabilities section of the balance sheet, can be utilised to offset the income tax liability of the Australian tax group). (6) There are no liabilities of BAPE, Delta or B(Kal) in the unaudited balance sheets, so as to require a more comprehensive breakdown as to what those liabilities are. The only liabilities of the GSM, AurionGold and Granny Smith in the unaudited balance sheets are intra-group payables. The liabilities of the defendant in the unaudited balance sheets are "Other Payables" (being amounts payable by the defendant to (amongst others) Barrick (PD) Australia Finance Pty Limited (circa $1,032,000,000), a direct subsidiary of the defendant), Barrick (Australia Pacific) Pty Limited (circa $3,000,000), a Barrick Group company not party to these proceedings together with the third plaintiff (circa $77,000,000), fourth plaintiff (circa $37,000,000) and sixth plaintiff (circa $996,000,000). 64 Further, in All Star Funds Management at [11], Jagot J accepted evidence of the "unaudited net position". Further, at the second court hearing, her Honour approved the schemes based on an update from the chief financial officer and company secretary that there had been no material change to the financial position disclosed in the unaudited balance sheets for the scheme companies: All Star Funds Management Ltd v Venture Investment Management Ltd (No 2) [2012] FCA 564 at [3]. Similarly, unaudited figures provided on affidavit, with the procedure for their preparation set out, were accepted by me in Barrick (Lawlers) at [77]. 65 By reason of the plaintiffs and defendant all forming part of the same corporate group, short notice of the scheme meetings has been proposed. The schemes shareholders have provided consent to this. 66 This has been found acceptable in other cases by reason of the "essentially in house nature of the proposed reconstruction": SGIC Insurance Ltd at 472 [16] (Jacobson J) and Equatorial Mining Pty Ltd at [33] (Yates J). 67 In Legrand Australia Pty Ltd v HPM Industries Pty Ltd [2009] FCA 1184 and Legrand Australia Pty Ltd v HPM Industries Pty Ltd (No 2) [2009] FCA 1239 (Lindgren J): Legrand (1st plaintiff) and Nelson (2nd plaintiff) were scheme companies. They proposed to transfer businesses and assets to HPM (the defendant), other than some excluded assets. All three parties were subsidiaries directly or indirectly of Legrand France. Legrand was a wholly owned subsidiary of Legrand France and HPM was a wholly owned subsidiary of Legrand. Nelson was trustee of a trust, which would be terminated so it could obtain its assets. After that, Nelson transferred assets to HPM and was deregistered without winding up. In short, a chain of companies in a corporate structure would collapse to a smaller structure. It would leave Legrand the non-operating holding company of Australian subsidiaries of Legrand France. 68 The essential features of the present schemes are as follows. 69 The general effect of the schemes is stated at the Recitals as the collapsing of a series of subsidiaries to transfer all of their assets and liabilities to a parent company. 70 At cl 2, each scheme Company is identified and the structure of the group prior to and after the implementation of the schemes is referred to in the corporate trees in the Annexure. 71 At cl 3, the Ultimate Transferee Company, being BPDA is described. 72 At cl 4, the transfers of assets and liabilities are provided for. This clause notes that this takes effect by reason of s 413. The reason such a clause is included in the scheme itself is to bind the shareholder of each of the scheme companies. That is, that the shareholder is content that the assets (and liabilities) of the company it holds shares in have been transferred by the order under s 413. 73 Each of those sub-clauses in cl 4 deals with each of the six schemes. As can be seen from the prefatory words of clauses 4.4, 4.5, 4.6 and 4.7, the assets and liabilities transferred by the earlier in time operating schemes from entities lower in the corporate chain transfer in succession. That is, there is use of wording which sets up the order of transfers: "[f]rom the time immediately following the time at which all of the steps in clauses … take effect … each of the following steps will occur in the following order …". 74 Clause 5.1 confirms that each scheme binds the company and its member – being the schemes shareholders for each respective scheme Company and, ultimately, the defendant, BPDA, for AurionGold and Granny Smith. 75 Clause 5.2 confirms that each schemes shareholder waives any rights as a shareholder. These are what make for the "arrangement" for the purposes of s 411, as explained above. 76 Clause 5.3 provides a broad authority and consent from each schemes shareholder so the sole director in each case may give effect to the schemes and s 413 orders, as the case may be. 77 Clause 7 appears common place in such reconstruction and amalgamation schemes. The effect of the clause appears to be to explain the rationale for the schemes (so as to inform of the purpose for interpretation). 78 The scheme companies' salient details are usually contained in tables in the Annexure, with Australian Company Numbers, the amounts of shares or securities on issue, and the fully paid up capital. The rationale for this appears to be that it operates as an identifier, so that if the schemes become effective and are implemented and the scheme companies are deregistered without winding up, then after the registration of the schemes instrument with ASIC any interested persons can later search for the scheme companies and know the effect of the transactions. 79 The proposed schemes are reliant upon orders sought under s 413 of the Corporations Act, which provision relates to schemes of arrangement that propose an amalgamation or reconstruction between two Pt 5.1 bodies. 80 The interrelationship between s 411 and s 413 is explained in AGL Energy Services (Queensland) Pty Ltd v AGL Energy Services Pty Ltd (No 1) [2010] FCA 452 at [14]-[15] by Lindgren J as follows: [14] A scheme for reconstruction or amalgamation within s 413 is not, of itself, a compromise or arrangement between a Part 5.1 body and its creditors within s 411. However, before the jurisdiction under s 413 can be exercised, there must be such a compromise or arrangement. As a practical matter, it may be that the compromise or arrangement is one that does not need to rely on s 411(4), because it is something that could be effected privately between a company and its members, as in this case, between the Company and the Company Member. However, there is nothing untoward, in invoking the powers conferred on the Court by s 411 as a prerequisite to enlivening the further provisions of s 413 (see, for example, Re Clydesdale Bank Limited (1950) SC 30 at 36 ff, where a clear distinction was drawn between a compromise or arrangement and a scheme of reconstruction or amalgamation under s 206 and s 208 of the Companies Act 1948 (United Kingdom), which correspond with ss 411 and 413 of the Act). [15] The element of compromise or arrangement that is necessary to satisfy s 411 need not be of any great magnitude or significance, so long as what is proposed can fairly be characterised as a compromise or arrangement between a company, on the one hand, and its members, on the other. That will suffice to enliven the Court's powers under s 413, so long as the compromise or arrangement is proposed for the purposes of, or in connection with, a scheme for the reconstruction or amalgamation. Clearly enough, what is being proposed is for the purposes of, and in connection with, such a scheme. 81 Section 413 confers jurisdiction on the Court to make orders if three conditions precedent are met: there must be a compromise or arrangement; the compromise or arrangement must have been proposed "for the purposes of or in connection with a scheme for a reconstruction of any Part 5.1 body or bodies or the amalgamation of any two or more Part 5.1 bodies"; and under the scheme, "the whole or any part of the undertaking or of the property of a body concerned in the scheme is to be transferred to a company". 82 It has been said that a provisional view at this stage need only be made that there is no jurisdictional impediment to the Court making the foreshadowed orders under s 413: Equatorial Mining Pty Ltd at [29] (Yates J). 83 I accept that, at this stage, it can be demonstrated that s 413 will likely support the orders required to give effect to the proposed schemes. The relevant matters are dealt with, in turn, below. 84 It may be seen that all of the six proposed schemes appear to meet the requirements of a "reconstruction" or amalgamation within the authorities. 85 By cll 4.2.1, 4.3.1, 4.4.1, 4.5.1, 4.6.1 and 4.7.1 of the proposed schemes, the whole or part of the property of the plaintiffs is to be transferred to the relevant schemes shareholder and then ultimately to BPDA. This requirement will likely be satisfied. 86 The plaintiffs intend to provide more detailed submissions at the second court hearing in seeking orders pursuant to s 413(1)(a). 87 For present purposes, it may be said that the assets of the plaintiffs will be transferred to the relevant schemes shareholder and then ultimately to the defendant, the schemes provide for this and there is apparent power in s 413 under which such orders can be made. 88 The protection of creditors is to be considered at the second court hearing and by the orders to be made at the second court hearing under s 413: Re AGL Sydney Ltd (1994) 13 ACSR 597 at 598 (Young J). 89 Pursuant to cll 4.2.2, 4.3.2, 4.4.2, 4.5.2, 4.6.2 and 4.7.2 of the proposed schemes, "all liabilities" of the plaintiffs will transfer to the relevant schemes shareholder in succession to ultimately reach BPDA, if orders under s 413 are made by the Court at the second court hearing. 90 The definition of "liabilities" contained in the proposed schemes at cl 1.1 is very broad: means all liabilities howsoever arising and whether present, unascertained, immediate, future or contingent, including (without limitation): a) any liabilities within the meaning of sub-section 413(4) of the Corporations Act; and b) any liability subject to a Security Interest (as that term is defined in the Personal Property Securities Act 2009 (Cth)); c) any liability under potential future proceedings (whether civil, regulatory or otherwise). 91 The latter may be specifically noted, as it is wider than the definition utilised in Barrick (Lawlers). 92 As such, all liabilities of the plaintiffs will transfer. 93 As BPDA is a party to these proceedings and it is a party to the proposed schemes, BPDA will be bound to the terms of the schemes once effective and the orders made by the Court pursuant to s 413 of the Corporations Act. Further, as each of the scheme companies are plaintiffs, to the extent that some of them are transferees for intermediate transfers (Delta and AurionGold), they are each similarly bound by the Court's orders. 94 Further, s 413(1)(a) is cast in broad terms so as to cover future or contingent liabilities of the scheme company: Stork ICM Australia Pty Ltd at 222 [91]-[92] (Lindgren J); Achieve Foundation Ltd v ACNewCo Ltd (2010) 77 ACSR 673 at 682 [58]-[61] (Foster J); Barrick (Lawlers) at [103]. 95 At this first court hearing stage, it can be said that no "long tail liabilities" or known or foreshadowed contingent liabilities have been identified by the director of the plaintiffs, other than those specifically disclosed. See All Star Funds Management Ltd at [12]. 96 As to those specifically disclosed, each has been specifically addressed at the first court hearing (and, in any event, will be specifically addressed at the second court hearing when those orders are sought to be made). They include: The District Court proceedings against Granny Smith. The two workers compensation claims that Granny Smith has pending. The potential ASIC fines under s 314(1) and s 319(1) of the Corporations Act for historical potential non-compliance with group reporting requirements. As to B(Kal), incorrectly declared fringe benefits tax in pay-roll tax returns lodged in 2012/2013 and 2013/2014, for which an underpayment has been identified, but for which no assessment notice or other payment requirement has been issued, and no interest liability or penalty has been calculated or issued by the Office of State Revenue. 97 Each of the above are specifically identified and explained in the explanatory statement at sections [4.5] to [4.11]. 98 By reason of the activities of the plaintiffs (conducting mining operations), I accept it is not impossible that some future liability, currently unknown, may arise. The explanatory statement specifically notes at sections [4.5] to [4.11] some types of such liabilities: potential liability under environmental legislation; potential liability under s 114B of the Mining Act 1978 (WA) in respect of which one of the plaintiffs may have been liable as a tenement holder prior to the disposal of those tenements to third parties; and potential contractual or tortious liability. 99 By reason of the orders to be sought pursuant to s 413(1)(a) and cll 4.2.2, 4.3.2, 4.4.2, 4.5.2, 4.6.2 and 4.7.2 of the proposed schemes, contingent environmental, statutory, contractual or tortious liabilities of the plaintiffs that could arise in the future, including worker's compensation claims, will ultimately be liabilities of BPDA. 100 Further, it is proposed that the proposed advertisement for the second court hearing will be drafted in a manner to reveal that assets and liabilities will be transferred to BPDA, such that creditors can be aware of the proposed schemes. This is consistent with the specific advertisements approved in AGL Energy Services (Queensland) Pty Ltd v AGPL Energy Services Pty Ltd (No 1) [2010] FCA 452 at [18] (Lindgren J); All Star Funds Management Ltd at [4]-[6] (Jagot J). 101 Again, for present purposes, it may be said that the liabilities of the plaintiffs will be transferred to the relevant schemes shareholder and then ultimately to the defendant, the schemes provide for this and there is apparent power in s 413 under which such orders can be made. 102 The District Court proceedings against Granny Smith will continue as against BPDA: scheme, cl 4.7.3. The solicitors for the plaintiff in those proceedings have been informed of the proposed scheme: Giltay affidavit at [66] and TJG6. 103 By s 413(1)(d), the Court may make orders for the deregistration by ASIC of the scheme Companies, as the transferor bodies, without winding up. This course is proposed in the schemes and the Court has the power to make such orders. Further submissions will be made on this aspect at the second court hearing. 104 As each of the matters now relevant to an order convening meetings under s 411 are satisfied, I consider the orders proposed, with amendments, should now be made. I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. Associate: Dated: 24 August 2017 SCHEDULE OF PARTIES WAD 379 of 2017 Plaintiffs Fourth Plaintiff: BARRICK (KALGOORLIE) PTY LIMITED ACN 009 712 092 Fifth Plaintiff: AURIONGOLD PTY LIMITED ACN 008 560 978 Sixth Plaintiff: BARRICK (GRANNY SMITH) PTY LIMITED ACN 009 466 175