Background
Nova Minerals Limited, an Australian-listed mining company, sought to redomicile its operations to the United States by having Nova Minerals Corp acquire all of its issued ordinary shares and certain listed warrants through two parallel schemes of arrangement under s 411 of the Corporations Act 2001 (Cth). The Court had earlier, on 20 April 2026, ordered scheme meetings to be convened. Those meetings were held on 29 May 2026 and the company then sought final approval at a second hearing on 2 June 2026, with reasons delivered on 16 June 2026.
The share scheme attracted overwhelming support: 98.88% of votes cast and 87.29% of participating shareholders voted in favour. The warrant scheme also enjoyed near-unanimous backing from beneficial warrant holders — 81.8% by number and 99.89% by value — but a structural complication arose because all warrants were registered in the name of a single nominee, Cede & Co, which held them as bare trustee for the Depository Trust & Clearing Co. Cede & Co appointed underlying beneficial owners as proxies, producing a split vote that created a statutory compliance problem.
Minor procedural non-compliances also occurred: 22 shareholders with bounced email addresses received a hard-copy letter linking to the scheme booklet rather than the booklet itself, one shareholder (Vanguard Marketing Corporation, holding 0.001% of total capital) received materials a few days late, and ASX announcements were published in forms that differed from those approved by the Court after an officer unilaterally edited them believing the changes improved clarity. Nova apologised for each non-compliance.
The Court’s Holding
Brereton J approved both schemes on 2 June 2026. The non-compliances were characterised as regrettable but immaterial: the affected shareholders still received adequate notice, and the changes to the ASX announcements did not withhold material information or reflect any intent to influence the outcome. The overwhelming support for the share scheme meant that even universal opposition from the affected 22 shareholders would not have altered the result.
The principal legal issue concerned the warrant scheme. Because warrants are held by contingent creditors, the applicable statutory majority test is that in s 411(4)(a)(i) — a majority in number of creditors present and voting, whose debts amount to at least 75% of total debt of voters. Applying Spark Infrastructure Holdings No 1 Ltd (2010) 79 NSWLR 756, a creditor cannot split its vote; Cede & Co’s split vote would therefore have been disregarded in its entirety, leaving no valid votes and preventing approval. Brereton J declined to follow the Equitable Life approach (treating the nominee as having voted once for and once against), which would have rendered 100% of the debt neutral and produced the same blocking result in this case.
Instead, drawing on Snowden J’s reasoning in In the matter of GW Pharmaceuticals PLC [2021] EWHC 716 (Ch) and invoking s 1319 of the Corporations Act and the Court’s inherent power, Brereton J made a “headcount direction” operating nunc pro tunc: Cede & Co, having cast more votes in favour than against the warrant scheme, was treated as having voted in favour for the purposes of the headcount test. With Cede & Co counted as the single creditor voting in favour, it held 100% of the relevant debt, satisfying both the majority in number and the 75% value tests. The Court found that ordering a further meeting would be wasteful given that the outcome was a foregone conclusion, and that making the direction retrospectively gave effect to the clearly expressed wishes of those with the real economic interest in the warrants.
Key Takeaways
- Under s 411(4)(a)(i), a single creditor cannot split its vote in a creditors’ scheme; following Spark Infrastructure, any split vote must be entirely disregarded — a rule that can frustrate schemes where securities are consolidated in a single nominee.
- Australian courts can issue a GW Pharmaceuticals-style headcount direction — treating a nominee that casts more votes in favour than against as a single “for” voter — under s 1319 of the Corporations Act and/or the Court’s inherent power, and may do so retrospectively (nunc pro tunc) at the sanction hearing where a fresh meeting would be a futile exercise.
- Such a direction does not depart from the statutory voting requirements of s 411(4); it facilitates the section operating by reference to economic reality rather than mere legal form, consistently with modern practice of ensuring that voting reflects the views of those with the underlying economic interest.
- The headcount direction is best sought at the first Court hearing when scheme meetings are convened; raising it only after an irregularity has occurred at the meeting complicates the approval process and risks requiring a second meeting.
- Minor, unintentional procedural non-compliances with Court-ordered scheme steps will not automatically doom a scheme where they cause no material prejudice and the substantive majorities are overwhelming.
Why It Matters
This is the first reported Australian decision to adopt the GW Pharmaceuticals headcount direction mechanism, extending to Australian corporate law a practice already well-established in English scheme jurisprudence. The decision provides direct guidance for any scheme involving securities held through US-style depositary structures (such as Cede & Co / DTC), which are increasingly common as Australian companies seek dual listings or US investor bases. Practitioners structuring such schemes should now anticipate the nominee-vote problem at the convening stage and seek a headcount direction as a matter of course.
More broadly, the case reaffirms that Australian courts will look through formal legal structures to the economic substance of voting interests, and that the s 411 approval process retains a practical flexibility — through both statutory and inherent powers — to avoid technical outcomes that would frustrate the clearly expressed will of those with genuine economic stakes in the transaction.