The judgment provides a thorough consolidation of the principles applicable to first-stage hearings under s 411(1) of the Corporations Act in the context of a demerger scheme of arrangement. The differential treatment of overseas shareholders and small shareholders in a demerger scheme does not create separate classes where the intrinsic value of the scheme is the same for all members. An equal capital reduction integral to a demerger scheme should be assessed on a prima facie basis at the first-stage hearing for compliance with s 256B, including fairness, reasonableness and absence of material prejudice to creditors. A deed poll from a subsidiary holding shares to be transferred under a demerger scheme is desirable but not required as a condition of s 411(1) orders where the risk of non-performance is sufficiently low.
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