In the matter of Windlab Limited [2020] NSWSC 936

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Windlab Limited [2020] NSWSC 936 Hearing dates: 12 June 2020 Date of orders: 12 June 2020 Decision date: 22 July 2020 Jurisdiction: Equity - Corporations List Before: Black J Decision: Orders made approving the scheme of arrangement. Catchwords: CORPORATIONS – arrangements and reconstructions – schemes of arrangement or compromise – application under s 411 of the Corporations Act 2001 (Cth) for orders approving scheme of arrangement – where formal requirements satisfied – whether scheme of arrangement should be approved. Cases Cited: - Re Alabama, New Orleans, Texas and Pacific Junction Railway Co [1891] 1 Ch 213 - Re Amcor Limited (No 2) [2019] FCA 842 - Re Central Pacific Minerals NL [2002] FCA 239 - Re Medical Australia Ltd (No 2) [2017] FCA 1429 \ - Re Permanent Trustee Co Limited (2002) 43 ACSR 601 - Re Seven Network Ltd (No 3) (2010) 77 ACSR 701 - Re Signature Capital Investments Limited (No 2) [2016] FCA 385 - Re Solution 6 Holdings Ltd (2004) 50 ACSR 113 - Re Wesfarmers Ltd (No 2) [2018] WASC 357 Category: Principal judgment Parties: Windlab Limited (Plaintiff) Representation: Counsel: M Oakes SC (Plaintiff) J Williams (Acquirer)

Solicitors: Dentons Australia (Plaintiff) File Number(s): 2020/101207

Judgment

Background and affidavit evidence read at the second Court hearing 1. The Plaintiff, Windlab Limited ("Windlab"), seeks orders under s 411(4)(b) of the Corporations Act 2001 (Cth) approving a scheme of arrangement between Windlab and its shareholders, other than any Excluded Shareholder (as defined ("Scheme Shareholders"). That scheme provides for the acquisition of shares of Windlab by Wind Acquisition 2 Pty Ltd ("WA2") and the subsequent delisting of Windlab from the Australian Securities Exchange ("ASX"). Under the terms of the scheme, WA2 will acquire all of the Scheme Shares on the Implementation Date (as defined) and Scheme Shareholders will receive cash consideration payable by WA2 of $1.00 per Scheme Share. A resolution in favour of the scheme was passed at a meeting of Scheme Shareholders held on 5 June 2020 by 99.61% votes cast and 91.77% of the Scheme Shareholders voting at that meeting. 2. In support of its application to approve the scheme, Windlab reads the affidavit dated 29 May 2020 of Mr Cairns, a solicitor acting for Windlab, which deals with the steps taken to finalise the scheme booklet, with registration of the scheme booklet with the Australian Securities and Investments Commission ("ASIC"), with the despatch of the scheme booklet to shareholders and with identification of a minor typographical error in the scheme booklet, which was drawn to the Court's and ASIC's attention and was corrected by an announcement made by Windlab on the ASX Announcement Platform. 3. An affidavit of Mr Breznik dated 3 June 2020 proves publication of notice of the hearing in the Australian newspaper and the Canberra Times. An affidavit dated 4 June 2020 of Mr Cooke, the Company Secretary of Windlab, refers to the historical turnout of shareholders at general meetings of Windlab, which is relatively low in respect of the number of shareholders attending in person or by proxy, and provides context for the somewhat larger percentage of shareholders who attended the scheme meeting. Mr Cooke also addresses the release of information concerning the scheme on Windlab's website and the receipt of proxy forms for the scheme. 4. An affidavit dated 5 June 2020 of Mr Macek, a director of Windlab who acted as chair of the virtual scheme meeting, deals with the conduct of that meeting and gives evidence of the results of the scheme resolution, to which I have referred above. The number of Windlab shareholders present and voting and the percentage of votes cast in favour of the scheme resolution comfortably satisfied the statutory requirements. Mr Macek's evidence is also that no competing proposal had been received at the time of his affidavit. 5. An affidavit dated 9 June 2020 of Mr Powell, an Account Director employed by Computershare Investor Services Pty Ltd, deals with the process adopted to despatch documents to shareholders who did not receive them by email, and by email to shareholders who had elected to receive communications by email, with the receipt of proxy forms and the conduct of the scheme meeting, and with the preparation of a scheme meeting poll report. His evidence confirms that an excluded shareholder, Equity Trustees Limited, which held shares on behalf of WA2, did not vote at the scheme meeting. An affidavit dated 9 June 2020 of Mr Bampfield, who is the Managing Director for Lumi Technologies Pty Ltd, which provided services in respect of a virtual scheme meeting, dealt with the conduct of the scheme meeting and of the poll at that meeting. Mr Bampfield confirmed that no technical issues arose in respect of the conduct of that meeting. 6. A further affidavit dated 12 June 2020 of Mr Cairns noted that one shareholder had indicated an intention to attend the second Court hearing, and had been provided with dial-in information in order to do so, although he ultimately did not attend at that hearing. Mr Cairns also addressed the position in respect of the excluded shareholder and led evidence as to the satisfaction of conditions precedent to the scheme, other than conditions precedent relating to the Court's approval of the scheme. Mr Cairns also referred to a letter dated 11 June 2020 received from ASIC, in common form, which advised that ASIC had no objection to the proposed scheme of arrangement between Windlab and its members for the purposes of s 411(17)(b) of the Corporations Act. An affidavit dated 12 June 2020 of Ms Hodgman indicated that Windlab's solicitors had not received any other advice of persons attending the second Court hearing, and there was no such attendance when the matter was called.