In the matter of Locate Technology Limited (No 2)

By Originating Process filed on 21 October 2025, the Plaintiff, Locate Technologies Limited (“Locate AU”) sought orders under ss 411 and 1319 of the Corporations Act 2001 (Cth) (“Act”) in respect of a proposed scheme of arrangement between Locate AU and its shareholders. The proposed scheme provides for the acquirer, Locate Technologies Limited (a company incorporated in New Zealand) (“Locate NZ”), to acquire all of the issued shares in Locate AU in exchange for scrip in Locate NZ on a one-for-one basis. The effect of the scheme is to enable the Locate group to shift its listing to the New Zealand securities exchange (“NZX”) in order to avoid potential constraints on its strategy to allocate surplus capital into Bitcoin as a long-term reserve asset, which arise under policies of Australian Securities Exchange (“ASX”) relating to cashbox companies. Locate AU’s Australian business will otherwise remain unchanged after implementation of the scheme. I made the orders sought by Locate AU at the first Court hearing on 31 October 2025 for the reasons set out in my judgment in Re Locate Technologies Ltd [2025] NSWSC 1317.

Locate AU now seeks orders, including orders under s 411(4)(b) of the Act, approving the scheme. I made the orders sought at the conclusion of the second Court hearing on 10 December 2025. These are my reasons for making those orders, and I have drawn on the helpful submissions of Mr Jameson who appeared for Locate AU in this judgment.

Locate AU reads an affidavit dated 9 December 2025 of Stephen Orenstein, its Managing Director and Chief Executive Officer, which refers to the registration of the scheme booklet with the Australian Securities and Investments Commission; the dispatch of the scheme booklet, which gave rise to three issues which I note below; the completion of a capital raising by Locate NZ and other associated steps in respect of the scheme; an announcement made to ASX regarding the second Court hearing; and the conduct of the scheme meeting at which the scheme resolution was passed by a substantial majority of votes cast and by the requisite majority by number of shareholders.

Locate AU also reads the affidavit dated 9 December 2025 of Mr Mathew Hunter, who is a Senior Customer Success Manager at Automic Group Pty Ltd (“Automic”), which addresses the process adopted by Automic in respect of the dispatch of the scheme booklet by email and post and the issues which arose in that regard, a single inbound call to the shareholder information line and the conduct of the scheme meeting. Mr Hunter also addressed voter turnout at the scheme meeting, which was about 57% of shares and a relatively small number of shareholders.

By a second affidavit dated 9 December 2025, Mr Orenstein acknowledged that he had not provided Automic with a copy of the Court’s sealed orders made after the first Court hearing, which likely contributed to the errors in the dispatch of scheme documents to shareholders.

Locate AU also tendered a conditions precedent certificate from Locate NZ evidencing satisfaction of the conditions precedent to the scheme, other than the condition relating to Court approval of the scheme, and a letter from ASIC indicating that it has no objection to the scheme for the purposes of s 411(17) of the Act.

The Court must be satisfied of several matters in order to approve a scheme of arrangement at the second court hearing, namely that the plaintiff has complied with the orders of the Court convening the meeting of members; the meeting of members so convened has approved the scheme with the requisite majorities; all other statutory requirements have been satisfied; the scheme 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; 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; and there was full and fair disclosure to members of all information material to the decision whether to vote for or against the applicable scheme: Re InvoCare Ltd (No 2) [2023] NSWSC 1350 at [8]–[9]; Re Bionomics Ltd (No 2) [2024] NSWSC 1666 at [6]; Re Southern Cross Gold Ltd (No 2) [2025] NSWSC 2 at [8]. In exercising its power of approval, the Court has a residual discretion whether to approve a scheme and is not bound to approve it merely because it has made orders for the convening of meetings or because the statutory majorities have been achieved. In exercising that residual discretion, the matters the Court will take into account include whether the scheme is fair and reasonable, so that an intelligent and honest member of the relevant class, properly informed and acting alone, might approve it; whether there was full and fair disclosure to members of all information material to the decision whether to vote for or against the scheme; and 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.

Mr Jameson draws attention to three issues arose in respect of the dispatch of scheme documents to shareholders. The first is that three shareholders who were sent emails in respect of scheme documents, and as to whom an email bounceback was received, were not sent hard copies of the scheme documents, because Automic’s standard process did not require that to occur and Automic was not provided with the Court’s orders which required that to be done. I recognise that those documents were then publicly available, where they had been made available in an announcement made to the ASX and published on Locate AU’s website. Locate AU fairly acknowledges that this failure was unsatisfactory, although the number of shares involved was relatively small and it plainly did not have had a significant impact on the votes cast in respect of the scheme. I accept that this failure was a procedural irregularity for the purposes of s 1322(2) of the Act which did not invalidate the scheme meeting or the scheme resolution passed at that meeting, consistent with the approach taken in Re Fairfax Media Ltd (No 2) [2018] FCA 1930 and Re Damstra Holdings Ltd [2024] NSWSC 425.

Second, Mr Jameson recognises that pre-paid envelopes were not included with hard copy documents sent to Australian shareholders and an envelope addressed to Locate AU’s share registry was not included with hard copy documents sent to shareholders with an address outside Australia. Again, this appears to have occurred because Automic were not provided with the Court’s orders and did not recognise that this was required by those orders. I recognise, however, that proxy forms could be lodged by a shareholder accessing a personalised link and barcode, or in person, or by email or by facsimile, and the proxy form also identified the mailing address to which it could be sent. Some proxy forms were lodged by mail despite this matter, and a larger number of proxy forms were lodged by the other lodgement mechanisms, exceeding the number of proxy forms lodged at recent annual general meetings and extraordinary general meetings of Locate AU. I am satisfied that this matter also did not invalidate the scheme meeting and the scheme resolution by reason of s 1322(2) of the Act.

Third, eight shareholders who elected to receive investor communications in physical form were sent a full copy of the scheme booklet rather than a cover letter with a link to the scheme booklet. I am satisfied that this error involved no substantive difference in the content of the material provided to those shareholders and that this error was also within the scope of s 1322(2) of the Act and does not invalidate the scheme meeting or scheme resolution.

The statutory requirements for the scheme have been satisfied. There is here no reason to doubt that Locate AU’s shareholders were provided with full and fair disclosure in the scheme booklet dispatched to them. There is no suggestion that the scheme was proposed other than in good faith and for a proper purpose. The scheme was recommended by Locate AU’s directors and the independent expert expressed the view that the scheme was in the best interests of Locate AU shareholders in the absence of a superior proposal.

I noted, in my judgment in respect of the first Court hearing that it is not a matter for the Court to assess the merit of Locate AU’s strategy of shifting its listing to NZX in order to avoid potential constraints on its strategy to allocate surplus capital into Bitcoin, provided that adequate disclosure of its risks was made, where that was a matter for Locate AU’s shareholders to consider at the scheme meeting. There is otherwise no reason to doubt that the scheme is fair and reasonable so that an intelligent and honest Locate AU shareholder, properly informed and acting alone, might approve it, if it supported the strategy to which the scheme was directed.

As I noted above, the resolution to approve the scheme was passed at the scheme meeting by the requisite statutory majorities. Although a relatively small number of shareholders voted in person or by proxy at the scheme meeting, the number of shareholders voting was larger than the number of shareholders voting at recent AGMs and EGMs of Locate AU, and that does not raise any suggestion that the dispatch of scheme documents failed, other than for the three non-material errors to which I have referred above. There is also no reason to doubt that Locate AU has brought to the Court’s attention all matters that could be considered relevant to the exercise of the Court’s discretion. No shareholder notified Locate AU that they intended to object to the approval of the scheme or appear at the second Court hearing and no shareholder appeared to contest the approval of the scheme. For all these reasons, I was satisfied that the scheme was appropriate for the Court’s approval.

At the first court hearing, Locate AU foreshadowed that it would rely on the exemption under s 3(a)(10) exemption of the Securities Act 1933 (US) and Locate AU shareholders were notified of this in the scheme booklet. As to the requisite conditions of the exemption, I record that the Court was advised before the commencement of the approval hearing that reliance would be placed on the s 3(a)(10) exemption on the basis of the Court’s approval of the scheme, and Locate AU shareholders were also informed of this in the scheme booklet. Second, the Court was informed of the securities to be offered as scheme consideration, and an independent expert report concluded that the proposal was in the best interests of shareholders. Third, the Court has held a hearing to consider the fairness and reasonableness of the proposed scheme. Fourth, that hearing was open to the public, any person to whom Locate AU shares are to be issued had standing to appear and notice of the time and date of the approval hearing was given. I accordingly note that Locate AU and Locate NZ intend to rely on the Court’s approval of the scheme and s 3(a)(10) of the Securities Act of 1933 (US) in connection with the issue of the relevant shares.

For these reasons, I made the orders sought by Locate AU at the conclusion of the second Court hearing on 10 December 2025.