Sonic Healthcare Limited [2002] FCA 1409 (14 November 2002)

Last Updated: 25 November 2002

FEDERAL COURT OF AUSTRALIA

Sonic Healthcare Limited [2002] FCA 1409

CORPORATIONS - Australian pharmaceutical and bio-pharmaceutical company - shares and options in Australian company listed on ASX - majority shareholding held by Australian company in Singapore company - divergence of operations of Australian company from Singapore company emerging - demerger or "spin-out" sought by schemes of arrangements in favour of shareholders and separately of optionholders in relation to that majority shareholding - shares and options in Australian company held by overseas as well as Australian residents - schemes of arrangement involving reduction of capital thereby involved respectively approved by shareholders and optionholders of Australian company - taxation implications of demerger relief in terms of roll-over relief - amendment to schemes of arrangement made after shareholder and optionholder approvals - orders made for approval of shareholder and optionholder schemes.

Corporations Act 2001 (Cth) subss 411(1), (4), (5), (11) and (12); s 611(10); s 619(3); subss 708(2), (5), (10), (11) and (13); s 1322

New Business Tax System (Consolidation, Value Shifting, Demergers and Other Measures) Act 2002 (Cth) (generally)

Income Tax Assessment Act 1936 (Cth) s 45B

Securities Act 1983 (US) (generally)

Re Sonic Healthcare Limited [2002] FCA 1235 cited

SONIC HEALTHCARE LIMITED

IN THE MATTER OF SONIC HEALTHCARE LIMITED

N 3059 OF 2002

CONTI J

14 NOVEMBER 2002

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 3059 OF 2002

IN THE MATTER OF SONIC HEALTHCARE LIMITED (ABN 24 004 196 909)

BETWEEN:

SONIC HEALTHCARE LIMITED (ABN 24 004 196 909) APPLICANT

JUDGE:	CONTI J
DATE OF ORDER:	14 NOVEMBER 2002
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. Pursuant to subsections (4) and (6) of section 411 of the Corporations Act 2001, the scheme of arrangement between the plaintiff and its members (Shareholder Scheme) for the purpose of effecting a spin-out of the majority of the plaintiff's shareholding in SciGen Ltd, as set out in the Shareholder Scheme document annexed to these orders and marked "A", be approved.

2. Pursuant to subsections (4) and (6) of section 411 of the Corporations Act 2001, the scheme of arrangement between the plaintiff and holders of options to acquire ordinary shares in the plaintiff (Optionholder Scheme) for the purpose of effecting a spin-out of the majority of the plaintiff's shareholding in SciGen Ltd, as set out in the Optionholder Scheme annexed to these orders and marked "B", be approved.

3. Pursuant to section 411(12) of the Corporations Act 2001, the plaintiff is exempt from compliance with section 411(11) of the Corporations Act 2001 in relation to the proposed Schemes.

4. These orders be entered forthwith.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 3059 OF 2002

IN THE MATTER OF SONIC HEALTHCARE LIMITED (ABN 24 004 196 909)

BETWEEN:

SONIC HEALTHCARE LIMITED (ABN 24 004 196 909) APPLICANT

JUDGE:	CONTI J
DATE:	14 NOVEMBER 2002
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 On 3 October 2002 I made the following orders on the application of Sonic Healthcare Limited ("Sonic"):

1. There be convened by the plaintiff the following meetings (Scheme Meetings):

(b) a meeting of members of the plaintiff (Shareholder Scheme Meeting); and

(c) a meeting of the holders of options to acquire ordinary shares in the plaintiff (Optionholder Scheme Meeting),

for the purpose of considering and, if thought fit, agreeing to, with or without modification, the schemes of arrangement (Schemes) between the plaintiff and its members (Shareholder Scheme) and the plaintiff and its optionholders (Optionholder Scheme) for the purpose of effecting a demerger or spin-out (Spin-out) of the majority of the plaintiff's shareholding in SciGen Limited (SciGen), a company which is incorporated in Singapore.

2. The Scheme Meetings be held on Wednesday, 13 November 2002 in Ballroom 1, Four Seasons Hotel, 199 George Street, Sydney commencing at the following times:

(d) Shareholder Scheme Meeting at 11.15am, or as soon thereafter as the general meeting (General Meeting) of the plaintiff to approve a capital reduction as part of the Demerger has concluded or been adjourned;

(e) Optionholder Scheme Meeting at 11.30am, or as soon thereafter as the General Meeting and Shareholder Scheme Meeting have concluded or been adjourned.

3. Barry Sydney Patterson or, in his absence, Colin Stephen Goldschmidt, is to chair each of the Scheme Meetings and any adjournments of the Scheme Meetings.

4. The Shareholder Scheme Meeting and the Optionholder Scheme Meeting may be convened using the notices of meeting in the form or to the effect of those in Tabs 10 and 11 of Exhibit CDW1.

5. Each of the Scheme Meetings can resolve to be adjourned.

6. (a) Three holders of ordinary shares in the plaintiff present in person or by proxy, corporate representative or attorney under power and entitled to vote, shall constitute a quorum for the Shareholder Scheme Meeting.

(b) Three holders of options to acquire ordinary shares in the plaintiff present in person or by proxy or attorney under power and entitled to vote, shall constitute a quorum for the Optionholder Scheme Meeting.

7. Subject to these orders, the Scheme Meetings be convened and conducted so far as is practicable in accordance with:

(a) such provisions of Part 2G.2 of the Corporations Act 2001 (other than a provision referred to as a replaceable rule which is not a mandatory rule for public companies) as would be applicable if the Scheme Meetings were general meetings of the plaintiff's members; and

(b) such provisions of the plaintiff's constitution as would be applicable if the Scheme Meetings were general meetings of the plaintiff's members, except to the extent that those provisions are inconsistent with Part 2G.2 of the Corporations Act 2001,

and that the plaintiff be dispensed from compliance with Rule 2.15 of the Federal Court (Corporations) Rules 2000 in relation to the Scheme Meetings.

8. The Scheme Meetings be advertised once in each of The Australian and Sydney Morning Herald newspapers, in the form or to the effect of the annexure hereto marked "A", such advertisement to be published not less than 14 days before the date appointed for the Scheme Meetings.

9. The second court hearing be advertised once in each of The Australian and Sydney Morning Herald newspapers, in the form or to the effect of the annexure hereto marked "B", such advertisement to be published not less than 5 days before the date appointed for the hearing.

10. No later than 15 October 2002 the plaintiff shall cause to be sent to each of its members and optionholders by prepaid post (or, in the case of shareholders or optionholders whose registered address is outside Australia, by airmail or by air courier):

(a) a copy of a document in substantially the same form as Exhibit A1 in these proceedings (the Information Memorandum); and

(b) the notices of meeting and proxy forms in substantially the same form as Tabs 10 and 11 of Exhibit CDW1 in these proceedings.

11. The explanatory statement contained in the Information Memorandum be and is hereby approved.

12. The plaintiff has liberty to apply.

13. These proceedings be stood over until Thursday 14 November 2002 at 10.15 am before Conti J for hearing of any applications to approve the Schemes.

My reasons for making those orders were set out in my earlier reasons for judgment in Sonic Healthcare Limited [2002] FCA 1235.

2 On 13 November 2002, the scheme meetings of Sonic shareholders and Sonic optionholders were respectively held for the purposes of considering the resolutions to approve the schemes of arrangement as set out in the Information Memorandum relating to both schemes dated 4 October 2002 and sent to the shareholders and optionholders of Sonic on 15 October 2002. The schemes were approved by the shareholders and optionholders of Sonic at those respective scheme meetings by the majorities stipulated by s 411(4)(a) of the Corporations Act 2001 (Cth) ("the Act").

3 In conformity with the above order 13, application has since been made for the Court's approval to the schemes of arrangement, pursuant to s 411(4)(b) of the Act.

4 I am required to consider whether the formalities required for the respective shareholder and optionholder approvals have been duly implemented in accordance with relevant statutory requirements, and whether I should, in the exercise of my discretion, approve the schemes of arrangement pursuant to s 411(6) of the Act. In that regard, whilst my present task is to ensure that the procedures, whereby the schemes of arrangement have been approved by the shareholders and optionholders, were appropriately implemented, I have the further obligation of satisfying myself that the schemes of arrangement continue to remain fair and equitable as between all Sonic shareholders and all Sonic optionholders (as the case may be), in the events which have happened, including an alteration which has been subsequently made to the Information Memorandum applicable to both schemes. Sub-section 411(6) of the Act reads as follows:

"The Court may grant its approval to a compromise or arrangement subject to such alterations or conditions as it thinks just."

5 On 13 November 2002, the scheduled meetings of Sonic shareholders and Sonic optionholders were respectively held at the Four Seasons Hotel, Ballroom 1, 199 George Street Sydney. The poll taken in relation to voting at the respective meetings recorded the following votes as having been cast:

"Shareholder Scheme Meeting

FOR the Resolution:

165,663,837 votes representing 99.66% of votes cast.

951 Sonic Shareholders representing 95.57% of Sonic Shareholders who voted.

AGAINST the Resolution:

565,160 votes representing 0.34% of votes cast.

44 Sonic Shareholders representing 0.43% of Sonic Shareholders who voted.

Optionholder Scheme Meeting

FOR the Resolution:

4,346,942 votes representing 99.76% of the total amount of debt voted by Sonic Optionholders.

110 Sonic Optionholders representing 99.09% of Sonic Optionholders who voted.

AGAINST the Resolution:

10,352 votes representing 0.24% of the total amount of debt voted by Sonic Optionholders.

1 Sonic Optionholder representing 0.91% of Sonic Optionholders who voted."

The content of the attendance registers were duly provided to the Court.

6 Earlier on 29 October 2002, Sonic became aware that two pages had been inadvertently omitted from the report of the investigating accountants PriceWaterhouseCoopers already dispatched to Sonic shareholders and optionholders and forming part of the 176 page Information Memorandum exhibited to the affidavit of Veronica Baigorria sworn 12 November 2002. Those two separate pages should respectively have appeared between pages 141 and 142, and 147 and 148 of the Information Memorandum as originally printed and dispatched. The omission was caused by a production error made at the time when a copy of that comprehensive investigating accountants' report was being transposed into a format suitable for printing. As soon as Sonic became aware of the error, the following steps were taken to ensure that all Sonic shareholders and all Sonic optionholders were made aware of the missing information:

* On 31 October 2002, Sonic sent a letter to all Sonic shareholders and Sonic optionholders advising them of the mistake and enclosing the two relevant pages of the report which had been inadvertently omitted.

* On 1 November 2002, Sonic released an announcement to the Australian Stock Exchange ("ASX") which notified the inadvertent omission and attached the two previously omitted pages, as well as the full text of the report.

* The full text of the report was thereafter loaded onto Sonic's website together with a copy of the foregoing announcement.

* The above letter of 31 October 2002 stated that if a person had already voted by proxy and, having considered this additional information, wished to change the way that person had voted, replacement proxies would be readily available from Sonic's share registrar for that purpose.

* Replacement proxy forms were also loaded onto Sonic's website, and Sonic's share registrar was instructed to provide replacement proxy forms to any Sonic shareholder or Sonic optionholder who requested the same.

7 No Sonic shareholder or optionholder thereafter requested a replacement proxy form or changed proxies following notification of the error. One of the missing pages outlined pro forma adjustments to be made in relation to SciGen's statement of financial position as a result of the proposed demerger or spin-out. The other page comprised Appendix 2 to the investigating accountant's report, which related mainly to Sonic's subscription of the further $30 million to SciGen for additional capital in order to facilitate the demerger arrangements. Senior Counsel for Sonic submitted, in my opinion correctly, that the inadvertent omission of the two pages from the report was an unfortunate procedural irregularity within s 1322 of the Act, and that Sonic had taken all reasonable steps in a timely manner to cure this irregularity, and to bring the information to the attention of shareholders and optionholders.

8 All other relevant formalities and procedures required to be observed and implemented by Sonic for the purposes of convening the meetings of the Sonic shareholders and Sonic optionholders in sequence have been duly implemented, including those related to the advertising of and thereafter the holding of those meetings, both of which occurred on 13 November 2002, and also those relating to the advertising of the proceedings for Court approval. No person or entity has sought to intervene in the proceedings and oppose any of the relief sought by Sonic by way of approval of the shareholder and optionholder schemes of arrangement. Tendered in evidence in the proceedings was a letter dated 13 November 2002 of the ASX concerning its approval of the application for the admission of the SciGen shares and options to its official list, subject to the respective Sonic shareholder and optionholder approvals to the schemes of arrangement, and other conditions to which it is unnecessary to refer. I should add that also tendered in evidence was the notification of Australian Securities and Investments Commission of 13 November 2002 as to its absence of objection to the schemes of arrangement, subject only to conditions to which it is unnecessary to refer. However there are a number of additional matters to which I should refer, and which were the subject of submission at the final hearing of the proceedings.

9 At the time the proceedings were first listed before me on 2 October 2002 for the purpose of convening the shareholders' and optionholders' meetings of Sonic, I requested information on the progress of the draft income tax demerger legislation which had been the subject of the taxation report of PriceWaterhouseCoopers set out in the information memorandum proposed to be sent to the Sonic shareholders and optionholders. Provided to me at the second Court hearing of the proceedings was the New Business Tax System (Consolidation, Value Shifting, Demergers and Other Measures) Act 2002 (Cth), which had been enacted by the Federal Parliament on 24 October 2002. Sonic has since applied for a ruling from the Commonwealth of Taxation for confirmation in writing that the subject "spin-out" arrangements comply with the conditions for the new demerger tax relief. Earlier on 26 July 2002 and 24 September 2002, PriceWaterhouseCoopers had sought "administratively binding advice" from the ASX as to the taxation consequences of the proposed demerger of SciGen. By letter dated 13 November 2002, being one day prior to the present hearing, the Deputy Commissioner of Taxation responded to the effect that a "Class Ruling" will issue to Sonic in due course. PriceWaterhouseCoopers have provided to Sonic observations in relation to that new legislation, and the impact thereof upon the scheme or arrangement, by letter dated 13 November 2002:

"We understand that the Court hearing to address the Scigen spin-out proposal is due to take place on 14 November 2002. For your reference, we outline below a summary of the status of the income tax issues associated with the demerger.

As a general comment, we refer you to Section 6 of the Information Memorandum which contains PWC Securities Limited's independent taxation report for Sonic Healthcare Limited which, in summary, states that in our opinion:

1. Capital gains tax demerger rollover relief will apply to the distribution of the shares of Scigen Limited to Sonic Healthcare Limited's shareholders; and

2. It is unlikely that the Commissioner would exercise his discretion under section 45B of the Income Tax Assessment Act 1936 (as amended) which could otherwise treat the disposition of shares as a dividend.

We confirm that the final demerger legislation has been passed by Parliament and is reflected in our tax opinion.

It is best practice in transactions involving shareholders of public companies that a binding Class Ruling is obtained from the Australian Taxation Office ("ATO") to obtain final tax sign off for shareholders.

We note that the ATO has not as yet issued a Class Ruling, however, based on our meetings, correspondence and discussions with various ATO officers, there is nothing to indicate that a positive ruling would not be issued. The ATO has not expressed any concerns about the transaction and all documentation from the ATO at this stage relates to further information requests and clarification.

The delay in issue of the ATO ruling in our opinion reflects the fact that the final legislation was only passed on 21 October 2002 and it is evident the ATO has deferred starting some of its final, detailed review until this date."

The legislation is complex and extends over 298 pages. It suffices to say that although it cannot of course be predicted whether the Australian Tax Office will ultimately accede to the request for a Class Ruling, the schemes of arrangement contain the kind of framework which might reasonably be expected to attract in principle the income tax notion of roll-over relief, as that statutory principle elsewhere provided in the Income Tax Assessment Act 1936 (Cth) has exemplified, in accordance with the anticipation of PriceWaterhouseCoopers set out in the above letter.

10 A further issue which arose in the course of the proceedings before the Court on 2 October 2002 related to the position of Sonic shareholders and optionholders whose addresses on the Sonic registers are recorded at places outside of Australia, New Zealand, the United Kingdom, Singapore and Hong Kong, and to persons who hold shares or options in Sonic on behalf of other persons who reside outside of those jurisdictions (see in that regard [5] of my earlier reasons for judgment of 3 October 2002 in the proceedings). I had requested further information as to the identity of those foreign shareholders and optionholders on Sonic's register, and clarification as to what appears in the report of Deloitte Touche Tohmatsu summarised in [8-9] of those reasons for judgment, to the effect that the reason for selling the entitlements of so-called "Ineligible Overseas Shareholders" on the ASX was due to "regulatory reasons". The evidence tendered in the subsequent proceedings today is to the effect that as at 31 October 2002, Sonic shareholders with addresses outside of the abovementioned countries are 35 in number, holding between them 335,436 shares, being a number to be compared to the total number of Sonic shareholders at that time of 8348, who held between them 259,631,661 shares. That minimal ratio of 0.13% must nevertheless take into account, as Sonic pointed out, that other overseas persons would reasonably be expected to hold beneficially shares in Sonic through nominees having registered addresses in Australia, though of course the increased percentage shareholding thereby involved would be unknown.

11 I agree with the submission advanced on behalf of Sonic that it would not have been practical, nor justifiable, both in terms of cost and of compliance, for Sonic to have investigated, and attempted to implement, the requirements of the foreign jurisdictions in which the abovementioned 35 shareholders are located, particularly given the small number of persons in each jurisdiction (for instance there is only a single shareholder having an address in each of the countries of United Arab Emirates, Japan, Thailand, Taiwan, Canada, China, Philippines, Malaysia and Turkey). I have been informed on behalf of Sonic that it is common practice for listed companies in Australia to seek to exclude at least certain of their foreign shareholders from any offering of securities in circumstances such as those here prevailing. I was referred in that regard to the provisions of s 611(10) and s 619(3) of the Act.

12 A further aspect of the scheme of arrangement to which Sonic rightly drew attention was the modification of the escrow arrangements which the ASX put in place in relation to that aspect of the schemes which relate to the "unlocking" of the shareholdings and optionholdings of Sonic in relation to SciGen. ASX Listing Rule 9.1 contains provisions relating to the "lock-up" of securities involved in the formation and promotion of a listed company for certain periods of time following stock exchange listing, in order to protect the integrity of the market which the ASX conducts, and hence the delays in the time in which a shareholder (or optionholder) can realise the value of securities. Escrow arrangements are thus normally imposed in order to allow the value of assets which have been sold to an entity prior to listing to become more apparent to the market place, and thus for the market price of an entity's securities to adjust before a vendor thereof can realise the full consideration that may have been stipulated. Hence prima facie, the majority shareholding held by Sonic in SciGen would have been required to be held in escrow, with restrictions on disposal for a period of 24 months commencing from the date on which the SciGen shares would have been listed on the ASX. Of course if those restrictions were to apply, Sonic would not be able to transfer the SciGen shares to Sonic shareholders pursuant to the shareholders scheme, and the essence of the scheme of arrangement in relation to Sonic shareholders and its benefits and advantages, would be adversely affected. For that reason, I record that the ASX has granted an "in principle" waiver of ASX Listing Rule 9.1.3 by letter dated 24 September 2002 addressed to Sonic's solicitors, so that the SciGen shares held by Sonic can be transferred as contemplated by virtue of the spin-out to the Sonic shareholders free from escrow restrictions.

13 Plainly in the somewhat unusual circumstances contemplated by and associated with these schemes of arrangement, the course proposed is a sensible and practical one. The fact that the waiver is in effect only "in principle" is of no practical moment, and has been occasioned by the circumstance that it is intended to operate in favour of SciGen, and not Sonic, and as at the date of the application originally filed in the proceedings, SciGen shares were not of course listed on the ASX. There is no good reason why the waiver will not be duly formalised in the context of the ASX approval to the listing of SciGen. I formally record that the waiver will not extend to SciGen shares receivable by parties whom the ASX has described in its letter of 24 September 2002 to Sonic's solicitors as "related parties and promoters of the Company (ie SciGen) and Sonic". Moreover Sonic has not sought a waiver from ASX Listing Rule 9.1.3, to the extent that the escrow provisions should duly apply to the remaining SciGen shares which it will hold after the spin-out.

14 The remaining matter which I should specifically address concerns the definition of "Ineligible Overseas Shareholder" contained in the Information Memorandum, which means "... a Sonic shareholder whose registered address on the Sonic Share Register... is in a jurisdiction other than Australia, New Zealand, the United Kingdom, Singapore or Hong Kong or a Sonic Shareholder to the extent that he/she holds Sonic Shares on behalf of persons resident in any of those other jurisdictions". Several of Sonic's institutional nominee shareholders have notified Sonic, following upon the dispatch of the Information Memorandum to Sonic shareholders, and Sonic optionholders, that they held shares in Sonic on behalf of United States residents, and have queried whether SciGen CUFS (as to which see [5] of my reasons for judgment of 3 October 2002) could be issued to them on behalf of those persons or entities.

15 I have been informed that Sonic's US legal advisers have confirmed that while no general exemption was available to permit the offer of SciGen CUFS to US residents without having to comply with additional US disclosure requirements, and without SciGen being also required to become subjected to ongoing US reporting requirements, it is possible to offer SciGen CUFS to US shareholders who are so-called "qualified institutional buyers", notwithstanding that SciGen shares would not be listed under the Securities Act 1983 (US). Those US legal advisers have further informed Sonic's lawyers in Australia that US law permits the issue of securities to "qualified institutional buyers", without the need to comply with US laws relating to the offering of securities, on the basis that those buyers are taken to have such a measure of knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks involved in the acquisition and holding of securities (cf s 708 of the Act, and subsections (2), (5), (10), (11) and (13) thereof by way of specific illustration).

16 Since Sonic understandably would seek to ensure that as many holders of its shares as possible can legally, as well as practically, receive SciGen CUFS, Sonic sought at the final hearing of the proceedings to amend the Shareholder scheme of arrangement by amending the definition of "Ineligible Overseas Shareholder", in order to allow the issue of SciGen CUFS to shareholders falling within that definition, in circumstances where Sonic would reasonably believe that such a course would not be prohibited, or where it would not be unduly onerous or impractical to resort to such a course. That amendment appears from the bold lettering of what would become a new definition of "Ineligible Overseas Shareholder" to read as follows:

"... means a Scheme Shareholder whose registered address on the Sonic Share Register at the Close of Registers is in a jurisdiction other than Australia, New Zealand, the United Kingdom, Singapore or Hong Kong or a Scheme Shareholder to the extent that he/she holds Sonic Shares on behalf of persons resident in any of those other jurisdictions (unless Sonic reasonably believes that it is not prohibited or it is not unduly onerous or impractical to implement the Scheme and for SciGen CUFS to be issued to a Scheme shareholder on behalf of those persons under the Scheme).

SciGen CUFS could then be issued to United States qualified institutional buyers, provided that they were to give written warranties to Sonic as to their status and understanding for the purposes of the Securities Act 1983 (US) regarding securities being offered.

17 I would acknowledge the efficacy of a resolution of Sonic designed to produce an amendment to the Information Memorandum to the foregoing effect within s 411(6) of the Act, which has been already extracted in [4] above. In the context in which the alteration would be made, the same would not merely be of a minor and technical nature, but would be justifiable in the legitimate interests of US resident "qualified institutional buyers" to which reference has already been made. I agree with the contention of Sonic that by implementing the amendment proposed to the definition of "Ineligible Overseas Shareholder", persons who would ordinarily receive SciGen CUFS, but for the operation of the securities laws operating in the jurisdiction of their residence, could thereafter participate in the holding of SciGen CUFS, and moreover the amendment would not adversely affect other Sonic shareholders, or otherwise alter the terms of the shareholder scheme. On the contrary, the only practical effect or consequences would be to reduce the number of SciGen CUFS that would otherwise need to be transferred to a nominee in order to be sold on the ASX, and would enable more holders of shares in Sonic to participate fully in the spin-out than previously envisaged. To the extent that any such participation would have any effect at all in relation to Sonic shareholders generally, the same would tend to be merely a reduction in any selling pressures which might be placed upon SciGen shares immediately following the listing thereof.

18 I have therefore made the orders in final form sought by Sonic at the conclusion of the proceedings. I merely add for completeness that in the course of certain discussion in these reasons for judgment, I have referred to Sonic shares and shareholders, in circumstances where reference could relevantly have been made also to Sonic options and optionholders, bearing in mind that the shareholders scheme of arrangement and the optionholders scheme of arrangement have in effect proceeded in tandem.

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti.

Associate:

Dated: 18 November 2002

Counsel for the applicant:	I Jackman SC
Solicitor for the applicant:	Allens Arthur Robinson
Date of Hearing:	14 November 2002
Date of Judgment:	14 November 2002