RE MAGNETIC RESOURCES NL; EX PARTE MAGNETIC RESOURCES NL [2026] WASC 233

[2026] WASC 233 Page 1 JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS CITATION : RE MAGNETIC RESOURCES NL; EX PARTE MAGNETIC RESOURCES NL [No 2] [2026] WASC 233 CORAM : HILL J HEARD : 9 JUNE 2026 DELIVERED : 9 JUNE 2026 PUBLISHED : 10 JUNE 2026 FILE NO/S : COR 33 of 2026 MATTER : IN THE MATTER OF MAGNETIC RESOURCES NL EX PARTE MAGNETIC RESOURCES NL Plaintiff GENESIS MINERALS LTD Interested Party Catchwords: Corporations - Scheme of arrangement - Application for orders for supplementary disclosure - Whether court should order dispatch of supplementary scheme booklet - Orders made for dispatch Corporations - Scheme of arrangement - Application for orders approving scheme under s 411(4)(b) of the Corporations Act 2001 (Cth) - Orders made approving scheme -- 1 of 14 -- [2026] WASC 233 Page 2 Legislation: Corporations Act 2001 (Cth) s 411 Result: Orders made approving supplementary disclosure Orders made approving scheme Category: B Representation: Counsel: Plaintiff : J R C Sippe Interested Party : A J Papamatheos SC & E Fearis Solicitors: Plaintiff : Hamilton Locke Interested Party : Broadstream Advisory Case(s) referred to in decision(s): Re Amcom Telecommunications Ltd (No 3) [2015] FCA 596 Re International Goldfields Ltd [2004] WASC 112 Re MAC Services Group Ltd [2010] NSWSC 1474 Re Magnetic Resources NL; Ex Parte Magnetic Resources NL [2026] WASC 176 Re National Australia Bank Ltd [2016] VSC 62 Re Pensana Metals Ltd [No 2] [2020] WASC 17 Re Prime Media Group Ltd [2019] NSWSC 1888 Re Seven Network Ltd [No 3] [2010] FCA 400; (2010) 267 ALR 583 Re Wesfarmers Ltd [No 2] [2018] WASC 357 -- 2 of 14 -- [2026] WASC 233 HILL J Page 3 HILL J: 1 At the final hearing of the originating process, Magnetic Resources NL (Magnetic) sought orders for the approval of a scheme of arrangement with Genesis Minerals Limited (Genesis) for the acquisition of all shares in Magnetic. 2 The background to this matter is set out in the judgment I delivered following the first court hearing on 28 April 2026.1 At the conclusion of this hearing, I made orders for the Scheme Meeting to be convened on 3 June 2026 (First Orders). Approval of Supplementary disclosure to Shareholders 3 On 14 May 2026, the matter was relisted on the application of Magnetic for orders authorising the dispatch of a supplementary Scheme booklet to Shareholders for the Scheme Meeting. These orders were sought following the release of ASX announcements by both Magnetic and Genesis after the dispatch of the Scheme booklet, providing updates on their mineral resource projects.2 4 In support of its application, Magnetic relied on three affidavits: an affidavit of Benjamin Patrick Donovan filed 13 May 2026, an affidavit of Joanne Tracey Steer filed 13 May 2026, and an affidavit of Jeremy Isidro O'Hara filed 14 May 2026, which confirmed the application have been served on ASIC. 5 The Supplementary Scheme booklet was the subject of review and verification by both Magnetic and Genesis.3 Copies of the draft supplementary Scheme booklet were provided to ASIC on 12 and 13 May 2026,4 who did not have any comments on its terms.5 BDO confirmed that these announcements did not cause it to alter its opinion that, in the absence of a superior proposal, the Scheme was fair and reasonable.6 6 Under s 1319 of the Corporations Act 2001 (Cth) (Act), the court has power to authorise the dispatch of further explanatory materials in 1 Re Magnetic Resources NL; Ex Parte Magnetic Resources NL [2026] WASC 176 (First Reasons). I have adopted the same defined terms used in the First Reasons in these reasons. 2 Affidavit of Benjamin Patrick Donovan filed 13 May 2026, 'BPD-17' - 'BPD-20'; Affidavit of Joanne Tracey Steer filed 13 May 2026, 'JTS-7'. 3 Affidavit of Benjamin Patrick Donovan filed 13 May 2026 [20] - [24], 'BPD-24'; Affidavit of Joanne Tracey Steer filed 13 May 2026 [9] - [15], 'JTS-8', 'JTS-9'. 4 Affidavit of Benjamin Patrick Donovan filed 13 May 2026 [18] - [19], 'BPD-23'. 5 Affidavit of Benjamin Patrick Donovan filed 13 May 2026, 'BPD-22'. 6 Affidavit of Benjamin Patrick Donovan filed 13 May 2026, 'BPD-21'. -- 3 of 14 -- [2026] WASC 233 HILL J Page 4 relation to a scheme of arrangement.7 Where a meeting has been convened by order of the court under s 411 of the Act, only material which has been approved by the court for dispatch should be provided to shareholders.8 Shareholders should be given at least 10 days' notice of any material new information in relation to a scheme,9 although it is a matter for the court to assess whether there is sufficient time for shareholders to consider the information and understand its effect.10 7 Magnetic proposed that the supplementary Scheme booklet be the subject of an announcement to the ASX by 14 May 2026 and dispatched to Shareholders by 20 May 2026 in the manner approved by the court at the first hearing, and that Shareholders be able to submit a new election form and proxy form for the Scheme Meeting, which would then revoke any previous documents lodged by that Shareholder. 8 Counsel for Magnetic submitted, which I accept, that the information in the announcements, which was the subject of the supplementary Scheme booklet, may be material to Shareholders' consideration of the Scheme and their decision as to how to vote at the Scheme Meeting. For that reason, at the conclusion of the hearing on 14 May 2026, I made orders for supplementary disclosure to Magnetic's shareholders (Supplementary Orders). Scheme Meeting 9 The Scheme Meeting was held on 3 June 2026. At this meeting, the resolution was passed by the requisite statutory majorities.11 10 325 shareholders were present at the Scheme Meeting in person and by proxy. 96.73% of shareholders who voted at the meeting were in favour of the resolution to approve the Scheme, with 99.99% of the votes cast in favour of the resolution.12 Should the court exercise its discretion to approve the Scheme? 11 The approval of the proposed Scheme pursuant to s 411(4)(b) of the Act, or the second court hearing, is the third stage of approval for schemes of arrangement. The second stage is the approval of the 7 Re Amcom Telecommunications Ltd (No 3) [2015] FCA 596 [14] and the authorities cited therein. 8 Re Amcom Telecommunications Ltd (No 3) [15] and the authorities cited therein. 9 ASIC Regulatory Guide 60 [RG 60.92]. 10 Re Prime Media Group Ltd [2019] NSWSC 1888 [8]. 11 Affidavit of James Anthony Edward Nicholls filed 7 June 2026 [30] - [31]. 12 Affidavit of James Anthony Edward Nicholls filed 7 June 2026 [31], 'JAN-2' - 'JAN-5'. -- 4 of 14 -- [2026] WASC 233 HILL J Page 5 Scheme by the requisite statutory majorities, which occurred at the Scheme Meeting. 12 At the second court hearing, the court has two tasks:13 (a) to ensure that all statutory and procedural requirements have been satisfied. This includes confirming that:14 (i) the meetings were convened and held in accordance with the court's earlier orders; (ii) the resolutions were passed with the requisite statutory majorities; (iii) the plaintiff otherwise complied with the court's earlier orders; and (b) to determine, in the exercise of the court's discretion, whether to approve the proposed arrangement. 13 The court has a discretion to approve a scheme under s 411(4)(b) of the Act and is not bound to approve a scheme just because the court made orders for the convening of the scheme meeting or because the statutory majorities were achieved at the scheme meeting.15 That said, the court will usually approach the task on the basis that shareholders are better judges of what is in their commercial interests than the court.16 14 The factors that inform the court's discretion whether or not to approve a scheme are:17 (a) whether the members have voted in good faith and not for an improper purpose; (b) whether the proposal is fair and reasonable so that an intelligent and honest person who was a member of the relevant class, properly informed and acting alone, might approve it; 13 Re Wesfarmers Ltd [No 2] [2018] WASC 357 [12]. 14 Re International Goldfields Ltd [2004] WASC 112 [7]. 15 Re Wesfarmers Ltd [No 2] [13]; Re Seven Network Ltd [No 3] [2010] FCA 400; (2010) 267 ALR 583 [31]. 16 Re Wesfarmers Ltd [No 2] [13]; Re Seven Network Ltd [No 3] [32] - [33]. 17 Re Seven Network Ltd [No 3] [35] - [40], [50], [52]. -- 5 of 14 -- [2026] WASC 233 HILL J Page 6 (c) whether the plaintiff has brought to the attention of the court all matters that could be considered relevant to the exercise of the court's discretion; (d) whether there has been full and frank disclosure of all information material to the members' decision; (e) whether minority shareholders would be oppressed by the scheme; (f) whether the court is satisfied that the scheme has not been proposed to avoid ch 6 of the Act; (g) whether ASIC has any objection to the scheme; and (h) whether the scheme offends public policy. 15 In addition to the affidavits relied upon at the first court hearing and the hearing on 14 May 2026, Magnetic relied on four additional affidavits, namely: (a) an affidavit of Mr Donovan filed 5 June 2026; (b) an affidavit of James Anthony Edward Nicholls, a partner of the plaintiff's solicitors, filed 7 June 2026; (c) an affidavit of Clara Elisabeth Hagan, a legal practitioner employed by the plaintiff's solicitors, filed 9 June 2026; and (d) an affidavit of Mr O'Hara, another legal practitioner employed by the plaintiff's solicitors, filed 9 June 2026. Compliance with statutory and procedural requirements 16 I was and am satisfied, on the basis of the additional affidavits that were filed by Magnetic, that: (a) copies of the First Orders and the Supplementary Orders were lodged with ASIC;18 (b) a copy of the Scheme booklet substantially in the form that was approved for distribution by the court at the first court hearing was lodged with ASIC and registered on 29 April 2026, and a 18 Affidavit of Benjamin Patrick Donovan filed 13 May 2026 [9(a)]; Affidavit of Benjamin Patrick Donovan filed 5 June 2026 [28(a)]. -- 6 of 14 -- [2026] WASC 233 HILL J Page 7 copy of the supplementary Scheme booklet was provided to ASIC on 14 May 2026;19 (c) subject to the issue discussed at [18] - [20] below, the Scheme materials and supplementary Scheme materials were dispatched to Shareholders in accordance with the orders of the court;20 (d) the Scheme Meeting was convened and held on 3 June 2026 in accordance with the First Orders;21 (e) the Scheme has been approved by the requisite statutory majorities,22 even if the issue discussed at [18] - [20] below is taken into account; (f) notice of the second court hearing was given by way of an ASX announcement dated 29 May 2026;23 and (g) ASIC informed Magnetic, pursuant to s 411(17)(b) of the Act, that it has no objection to the proposed Scheme.24 17 Counsel for Magnetic drew my attention to three matters in relation to the conduct of the Scheme Meeting. 18 The first matter was that Magnetic could not positively confirm that the supplementary Scheme booklet had been sent to the 78 Shareholders (both within Australia and overseas) who had elected to receive materials by post. This is because Automic has been unable to locate a postal lodgement receipt for the dispatch of this material and the relevant employee of Automic is on leave. The evidence before me is that 19 of these Shareholders voted at the Scheme Meeting, although it is not clear whether these proxies were submitted before or after the dispatch of the supplementary Scheme booklet. 19 Counsel for Magnetic submitted, which I accept, that even if these Shareholders had not received copies of the supplementary Scheme materials, this did not impact the validity of the resolution passed at the Scheme Meeting. This is because any failure to provide these Shareholders with this material is a procedural irregularity under s 1322 19 Affidavit of Benjamin Patrick Donovan filed 13 May 2026 [9(b)-(c)], 'BPD-14'; Affidavit of Benjamin Patrick Donovan filed 5 June 2026 [28(b)]. 20 Affidavit of Benjamin Patrick Donovan filed 13 May 2026 [12]; Affidavit of Benjamin Patrick Donovan filed 5 June 2026 [13] - [27], [30] - [40], 'BPD-28' - 'BPD-33', 'BPD35' - 'BPD-36'. 21 Affidavit of James Anthony Edward Nicholls filed 7 June 2026 [6] - [10]. 22 Affidavit of James Anthony Edward Nicholls filed 7 June 2026 [30] - [31], 'JAN-2' - 'JAN-4'. 23 Affidavit of Benjamin Patrick Donovan filed 5 June 2026 [66], 'BPD-42'. 24 Affidavit of Jeremy Isidro O'Hara filed 9 June 2026, 'JIO-9'. -- 7 of 14 -- [2026] WASC 233 HILL J Page 8 of the Act. For the following reason, I accept that this has not caused any substantial irregularity. 20 Of these 78 Shareholders, 77 remained Shareholders as at the cut-off time for voting eligibility at the Scheme Meeting. Collectively these Shareholders own a total of 5,005,098 Shares. Even if an assumption were made that all of these Shareholders would have voted against the resolution if they had received the supplementary Scheme booklet, this would not change the conclusion that the Scheme was approved by the requisite statutory majority.25 21 The second matter was the voter turnout, which was 77.48% of Shares, but only 9.08% of Shareholders by number.26 On the evidence before me, I accept the voter turnout at the Scheme Meeting was materially higher than the voter turnout in Magnetic's two previous annual general meetings.27 22 Relatively low voter turnout does not prevent the court from making orders approving a scheme of arrangement.28 23 On the evidence before me, I am satisfied there was a sufficient turnout at the Scheme Meeting. I do not consider that the low voter turnout by number of Shareholders, in itself, suggested there had been an error in the dispatch of the Scheme booklet, nor that this should prevent the court from making the orders sought under s 411(4)(b) of the Act. 24 The third matter was that at the Scheme Meeting, Mr Nicholls, the chair of the Scheme Meeting, advised attendees that the results of the poll would be announced shortly after the meeting and then declared the meetings closed. The poll results were released on Magnetic's website and were the subject of an ASX announcement after the Scheme Meeting was closed.29 25 The approach of a chairperson advising the meeting that results will be the subject of an announcement pursuant to s 251AA of the Act, following the votes being counted and after the meeting has been 25 If this assumption is made, the resolution would have been passed by 97.95% of shareholders by vote and 78% by number. 26 Affidavit of James Anthony Edward Nicholls filed 7 June 2026 [33]. 27 Affidavit of James Anthony Edward Nicholls filed 7 June 2026 [34]. 28 Re Pensana Metals Ltd [No 2] [2020] WASC 17 [12] - [15] and the cases referred to. 29 Affidavit of James Anthony Edward Nicholls filed 7 June 2026 [18], [21]. -- 8 of 14 -- [2026] WASC 233 HILL J Page 9 formally closed, has been approved by the courts on numerous occasions.30 26 In my view, no issue arises from the manner in which the polls were conducted or announced by Magnetic. 27 I was and am satisfied that all statutory pre-conditions have been met and turn to the discretionary considerations. Good faith and proper purpose 28 I am satisfied on the evidence filed by Magnetic that its Shareholders voted in good faith and for a proper purpose. The proposed Scheme does not involve any novel treatment of rights. No-one appeared at the second court hearing to object to the approval of the proposed Scheme. Fairness and reasonableness 29 At the first court hearing, based on the evidence before the court, I was satisfied that the Scheme was fit for consideration by Shareholders and that the proposed Scheme was of such a nature that there was no apparent reason that it should not receive approval if the requisite voting majorities were achieved at the Scheme Meeting. 30 Nothing has occurred since the date of the first court hearing to change these views. The shareholders of Magnetic who voted at the meeting overwhelmingly supported the proposed Scheme. 31 No Shareholder appeared at the second court hearing to oppose the orders sought by Magnetic. I was and am satisfied that the proposed Scheme is a Scheme that sensible businesspeople might consider to be of benefit to Shareholders. All relevant matters brought to the court's attention 32 At the second court hearing, counsel drew three additional matters to my attention. 33 The first was to confirm that, at the request of ASIC, it had 'tagged' the votes of Contributing Shareholders and provided the requested information to ASIC.31 The evidence before the court is that 30 See, for example, Re National Australia Bank Ltd [2016] VSC 62 [56] and Re MAC Services Group Ltd [2010] NSWSC 1474. 31 Affidavit of James Anthony Edward Nicholls filed 7 June 2026 [36] - [42], 'JAN-5'. -- 9 of 14 -- [2026] WASC 233 HILL J Page 10 even if separate meetings had been held for Shareholders and Contributing Shareholders, this would not have had any impact on the outcome of the Scheme Meeting as the resolution would have been passed by a significant majority of both. 34 The second matter was the confirmation that Magnetic had undertaken both an inbound and outbound communications campaign with Shareholders. The process by which the scripts used for this communications campaign were prepared, reviewed and amended was in evidence before me.32 These communications were consistent with the information in the Scheme booklet and supplementary Scheme booklet, and there were no deviations or other issues with these communications.33 35 Counsel for Magnetic drew to my attention a series of communications received by Magnetic from an individual who did not claim to be a Shareholder, and who Magnetic does not believe, from a search of the register, is a Shareholder.34 Notwithstanding this, Magnetic responded to these communications and provided information that addressed the matters raised. 36 I am satisfied that there is no evidence before the court which would support any inference being drawn that these communications compromised the integrity of the voting process. 37 The third matter was the confirmation that all remaining conditions precedent (apart from court approval at the second court hearing) have been satisfied or waived.35 Full and fair disclosure 38 At the first court hearing, based on the evidence before the court, I was satisfied that the Scheme booklet would provide full and fair disclosure to Shareholders. 39 The additional affidavit evidence filed by Magnetic established that, subject to the issue discussed at [18] - [20] above, the Scheme booklet and supplementary Scheme booklet were dispatched in the form approved for distribution by the court. 32 Affidavit of Benjamin Patrick Donovan filed 5 June 2026 [41] - [42]. 33 Affidavit of Benjamin Patrick Donovan filed 5 June 2026 [43(c)-(e)]. 34 Affidavit of Benjamin Patrick Donovan filed 5 June 2026 [68], 'BPD-43'. 35 Affidavit of Jeremy Isidro O'Hara filed 9 June 2026, 'JIO-10', 'JIO-11'. -- 10 of 14 -- [2026] WASC 233 HILL J Page 11 40 On 27 May 2026, prior to the Scheme Meeting, Magnetic announced that, based on the indicative outcome of the Elections it had received, the Aggregate Maximum Cash Consideration would exceed the Available Cash Consideration (as those terms are defined in the Scheme booklet) and that scaleback arrangements would apply to those Shareholders who had elected to receive the Maximum Cash Consideration.36 41 Nothing has arisen to suggest that there was not full and fair disclosure of all information that was material to the decision of Shareholders prior to them voting on the Scheme. Satisfaction of s 411(17) of the Act and ASIC's view 42 ASIC has provided a written statement to the effect that it does not object to the Scheme pursuant to s 411(17)(b) of the Act.37 This satisfies the requirements of s 411(17). Having regard to the nature of the proposed transaction, it cannot be said the Scheme was proposed to avoid the operation of ch 6 of the Act. Public policy and oppression of minorities 43 There is no evidence before the court that the proposed Scheme offends any aspect of public policy. Given the nature of the proposed Scheme, it could not be sensibly suggested that the Scheme offends public policy. Should an exemption be granted from compliance with s 411(11) of the Act? 44 Magnetic sought an order which would exempt it from compliance with s 411(11) of the Act. In my view, there is no utility in requiring the court's orders approving the Scheme to be annexed to Magnetic's constitution as the orders do not affect any change to the constitution. In my view, it was and is appropriate in the circumstances of this case to make the orders sought under s 411(12) of the Act. Conclusion and orders 45 For these reasons, at the conclusion of the hearing on 9 June 2026, I found that the substantive and procedural requirements under s 411(4) of the Act had been satisfied and that I should exercise my discretion to 36 Affidavit of Benjamin Patrick Donovan filed 5 June 2026, 'BPD-37'. 37 Affidavit of Jeremy Isidro O'Hara filed 9 June 2026, 'JIO-9'. -- 11 of 14 -- [2026] WASC 233 HILL J Page 12 make orders approving the proposed Scheme in terms of Annexure 'A' to this judgment. -- 12 of 14 -- [2026] WASC 233 HILL J Page 13 Annexure 'A' -- 13 of 14 -- [2026] WASC 233 HILL J Page 14 I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia. VA Associate to the Hon Justice Hill 10 JUNE 2026 -- 14 of 14 --