Background
Peel Mining Limited, an ASX-listed company, sought court approval for a scheme of arrangement under s 411 of the Corporations Act 2001 (Cth) by which Aeris Resources Limited would acquire all shares in Peel following a related Restructure, Demerger and Capital Reduction. The first court hearing was held on 5 May 2026, at which Brereton J made orders convening the scheme meeting and approving the dispatch of the Scheme Booklet to shareholders (reported at In the matter of Peel Mining Limited [2026] NSWSC 477).
On 15 June 2026, Peel shareholders first voted to approve the Demerger by simple majority at a separate meeting, and then immediately convened the Scheme Meeting. Voting on the scheme resolution was conducted by poll. Of the 2,052 eligible Scheme Shareholders, 195 (approximately 9.50% by number) participated, casting votes representing 65.63% of scheme shares. The result was overwhelmingly in favour: 574,033,887 votes (99.99%) in favour against 45,000 votes (0.01%) against, with 194 of 195 voting shareholders supporting the scheme — satisfying the dual statutory thresholds of a majority in number and at least 75% by value under s 411(4)(a)(ii).
At the second court hearing on 19 June 2026, Peel tendered a certificate from both Peel and Aeris confirming that all conditions precedent had been satisfied or waived, a letter from ASIC confirming no objection to the scheme under s 411(17), and evidence that no superior proposal had been received since the scheme was announced. No shareholder objections were raised.
The Court’s Holding
Brereton J approved the scheme of arrangement on 19 June 2026 pursuant to s 411(4)(b) of the Corporations Act. His Honour was satisfied on all three mandatory inquiries at the second court hearing: Peel had complied with the orders made at the first court hearing regarding dispatch of materials and convening of the meeting; the requisite statutory majorities under s 411(4)(a)(ii) had been achieved; and all conditions precedent to the scheme had been satisfied or waived.
In the exercise of the court’s residual discretion, Brereton J was satisfied that the scheme was fair and reasonable, noting that the Independent Expert had concluded it was in the best interests of shareholders, the resolution attracted 99.99% of votes cast, no superior proposal had emerged, and there was no opposition. His Honour was also satisfied that full and fair disclosure had been made to members and that all matters relevant to the court’s discretion had been brought to its attention.
The court additionally granted Peel an exemption from compliance with s 411(11) of the Corporations Act — which would otherwise require the court’s orders to be annexed to the company’s constitution — on the basis that the scheme effected no change to that constitution, following the approach in In the matter of Tassal Group Limited (No 2) [2022] NSWSC 1619.
Key Takeaways
- A scheme of arrangement will be approved at the second court hearing where the company demonstrates compliance with convening orders, achievement of the dual statutory majorities (majority in number and 75% by value), and satisfaction or waiver of all conditions precedent.
- Voting participation rates that compare favourably to the company’s own prior general meetings support an inference that the convening process was adequate, even where absolute participation is modest in percentage terms.
- The court retains a residual discretion to refuse approval even after statutory thresholds are met, but will generally approve where the scheme is fair and reasonable, disclosure was adequate, and no superior proposal or objection has emerged.
- Courts will grant an exemption from the s 411(11) constitutional annexure requirement under s 411(12) where the scheme does not alter the company’s constitution, as there is no utility in that step.
Why It Matters
This decision is a routine but instructive application of the well-established two-hearing process for court-approved schemes of arrangement in Australia. It confirms the procedural checklist that corporate lawyers must satisfy at the approval stage, including compliance with dispatch orders, achievement of dual majorities, satisfaction of conditions precedent, and ASIC non-objection. The judgment reinforces that near-unanimous shareholder support combined with an Independent Expert’s endorsement and the absence of a competing bid will readily satisfy the court’s residual fairness discretion.
The exemption from s 411(11) also serves as a useful reminder that where a scheme is purely a share acquisition vehicle with no constitutional amendment component, practitioners should routinely seek this exemption to avoid the administrative burden of annexing court orders to the target’s constitution.