Toro Energy Limited, in the matter of Toro Energy Limited [2026] FCA 643

This case came out of a proposed acquisition of Toro Energy Limited by a subsidiary of IsoEnergy Limited using a scheme of arrangement. Toro was an ASX-listed uranium development and exploration company whose main asset was the Wiluna Uranium Project in Western Australia. IsoEnergy was a Canadian uranium company with shares traded on the Toronto Stock Exchange and the New York Stock Exchange.

The commercial structure was important. Rather than using a simple share sale agreement or takeover bid, the parties chose a court-supervised scheme of arrangement under Part 5.1 of the Corporations Act. That meant the transaction had to pass through staged court oversight. The decision discussed here concerns the first of those stages.

The reasons say Toro announced the original scheme implementation deed on 13 October 2025. About six months later, on 2 April 2026, Toro announced that it had agreed with IsoEnergy to amend and restate that deed. Under the proposed scheme, all Toro shares held by participating shareholders, other than certain excluded shareholders, would be transferred to IsoEnergy Bidco. In exchange, IsoEnergy would issue 0.036 of an IsoEnergy common share for each Toro share.

Toro then applied to the Federal Court for orders under section 411 to convene a shareholder meeting and for related directions under section 1319. So this was not a hostile dispute or a damages claim. It was a supervisory application asking the Court to let the proposal go to shareholders in a legally controlled way.

Justice Vandongen adopted the standard approach used in recent scheme cases. The reasons explain that Part 5.1 involves three main steps. First, the company applies for an order convening a scheme meeting. Second, if that order is made, the meeting is held and members vote. Third, if the required majorities are achieved, the company returns to court seeking approval of the scheme. Toro’s application concerned only the first step.

At that first step, the Court had two broad tasks. The first was to decide whether the statutory prerequisites had been met. The second was to decide whether it was appropriate to exercise the Court’s discretion to make the orders sought.

The statutory questions included whether Toro was a Part 5.1 body, whether there was a proposed arrangement between Toro and its members, whether the application had been made in a summary way, whether ASIC had been given the required notice, and whether ASIC had a reasonable opportunity to examine the scheme and the draft explanatory statement and make submissions.

The discretionary questions focused on whether members would be properly informed and whether the scheme was fit for consideration by them. The Court emphasised that its role at the first hearing is supervisory. It should not take over the shareholders’ commercial decision unless the proposal is so plainly unfair or inappropriate that it should be stopped before going further.

The evidence filed by Toro is one of the most useful parts of the case for business readers because it shows what a company typically needs to put before the Court at a first-hearing scheme application.

Toro relied on affidavits from its solicitor, Roger Hawkins, its Executive Chairman, Richard Homsany, and IsoEnergy’s Chief Executive Officer and director, Philip Williams. The solicitor’s evidence included Toro’s ASIC company extract, constitution, the ASX announcement from 13 October 2025 and the original scheme documents. Mr Homsany’s affidavit dealt with the draft scheme booklet, the proposed scheme, the conditions attached to the amended and restated scheme implementation deed, the extent to which those conditions had been complied with, and the proposed treatment of unlisted options and certain performance rights.

His evidence also covered recommendations made by an independent board committee, the existence of independent expert reports annexed to the scheme booklet, obligations to pay break fees, exclusivity provisions, warranties, due diligence, verification of the scheme booklet, the intended dispatch process, the intended conduct of the scheme meeting, the existence of a bridging loan provided by IsoEnergy and the intended method of communicating with shareholders who had questions about the scheme.

Mr Williams gave evidence about IsoEnergy’s verification process for statements of fact or opinion in the scheme booklet. He also gave evidence about a deed poll executed by IsoEnergy and IsoEnergy Bidco in favour of Toro shareholders, under which they undertook to issue and allot IsoEnergy shares in accordance with the scheme if it became effective. He further said that, as at the date of his affidavit, there were no matters causing him to believe the conditions precedent in the scheme implementation deed would not be able to be satisfied as the transaction progressed.

ASIC’s position was also documented. Toro’s solicitor gave evidence of dealings with ASIC, including provision of the filed documents and an updated draft scheme booklet. ASIC then wrote on 29 April 2026 stating that it considered it had been given a reasonable opportunity to examine the scheme and the scheme booklet and to make submissions, and that it did not propose to appear at the first hearing or oppose the scheme at that stage.

The Court held that the statutory conditions for making a convening order under section 411(1) were met. Justice Vandongen was satisfied that Toro was a Part 5.1 body because it was a company registered under the Corporations Act, and that the scheme was an arrangement between Toro and its members. The Court also accepted that no class issues arose on the evidence before it.

The Court found that Toro had made the application in a summary way by originating process filed on 3 December 2025. It was also satisfied that ASIC had been notified of the hearing and had been given a reasonable opportunity to examine the terms of the scheme and the draft scheme booklet and to make submissions. The reasons note both ASIC’s letter and the Court’s own independent satisfaction on that point.

On procedural compliance, the Court was satisfied that the relevant requirements under the Federal Court (Corporations) Rules had been met. It also granted dispensation from compliance with some rules, including rules 2.4(1), 2.15 and 3.4, finding that appropriate and consistent with recent scheme practice and the Court’s practice note.

The Court then turned to the discretionary question. It asked whether members would be properly informed and whether the scheme was fit for consideration by them. In doing so, the Court referred to established authority on disclosure standards. The explanatory statement had to provide the main facts enabling shareholders to exercise judgment on the proposed scheme. It had to present a fair picture, not an unbalanced one. The Court also recognised the practical balance that must be struck in complex transactions: too little information can leave members uninformed, while too much can make the material unintelligible.

Justice Vandongen was satisfied that section 3 of the draft scheme booklet explained the effect of the proposed scheme and that section 11 disclosed the material interests of Toro’s directors and the effect of the scheme on those interests so far as they differed from the effect on like interests of others. The Court was also satisfied that the information prescribed by the regulations was set out in the draft scheme booklet and that the booklet as a whole disclosed other information material to a shareholder’s decision whether to agree to the scheme.

The Court accepted Toro’s submission that the draft scheme booklet struck an acceptable balance between sufficiency of information and overwhelming information. It also noted evidence that appropriate verification processes had been undertaken by both Toro and IsoEnergy. In addition, a draft expert report annexed to the booklet stated that the terms of the proposed scheme were fair and reasonable and, in the absence of a superior proposal, in the best interests of Toro shareholders.

On that basis, the Court exercised its discretion in Toro’s favour and made the convening orders sought.

The orders are detailed and commercially useful because they show exactly how the Court structured the next step of the process.

The Court ordered Toro to convene and hold the scheme meeting on 9 June 2026 at 10.00 am AWST at the Country Women’s Association of WA, 1176 Hay Street, West Perth, Western Australia. The meeting was to be held for holders of Toro’s fully paid ordinary shares other than excluded shareholders.

The Court directed that, subject to the orders, the meeting be convened using the notice of scheme meeting in the scheme booklet and be conducted in accordance with Part 2G.2 of the Corporations Act, Toro’s constitution to the extent not inconsistent with that Part, and the arrangements for attending, participating and voting described in the notice of meeting.

Eligible voters were those shareholders, other than excluded shareholders, whose names were recorded in Toro’s register of members at 5.00 pm AWST on 7 June 2026. Two shareholders present and entitled to vote, in person or by proxy or power of attorney, constituted a quorum. Each eligible shareholder had one vote for each fully paid ordinary share held at the voting time, and voting on the scheme resolution was to be conducted by poll.

The Court appointed Richard Homsany as chairperson, with Michel Marier as alternate chairperson if needed, and gave the chairperson power to adjourn or postpone the meeting in their absolute discretion to an appropriate time, date and place.

The Court approved the scheme booklet, proxy form and opt-in notice for distribution, subject to typographical corrections, final formatting, updates to dates and market-based references, minor amendments requested or approved by ASIC for registration under section 412(6), and any other amendments approved by the Court.

Subject to ASIC registration of the scheme booklet, Toro was ordered to dispatch the meeting materials on or before 7 May 2026. The orders then set out different dispatch methods for email holders, electing postal holders and non-electing holders, including separate treatment for addresses inside and outside Australia. Proxy forms, appointments of corporate representatives and powers of attorney had to be completed and delivered by 10.00 am AWST on 7 June 2026.

The Court also ordered Toro to publish an ASX announcement containing the substance of the matters set out in Form 6 of the Federal Court (Corporations) Rules by no later than 9 June 2026, and to lodge an office copy of the orders with ASIC as soon as practicable.

Most businesses will never run a court-approved scheme of arrangement. But the case still offers a practical model for handling major ownership transactions. The Court’s reasoning shows that when owners are being asked to approve a significant deal, the process must be organised, documented and fair in presentation.

First, disclosure quality matters. The Court focused on whether shareholders would receive a fair picture and enough information to exercise judgment. That means approval materials should explain the effect of the transaction, disclose differing interests, and avoid becoming either too thin or too dense to be useful.

Second, verification matters. Toro and IsoEnergy both put on evidence of verification processes. For any business, that is a reminder that statements in approval documents should be checked against official source and internal records before they go out.

Third, side arrangements matter. The evidence referred to break fees, exclusivity provisions, warranties, a bridging loan, treatment of options and performance rights, and a deed poll in favour of shareholders. These are the kinds of features that can materially affect how a transaction works and how it should be explained.

Fourth, meeting mechanics matter. The Court dealt carefully with who could vote, when the register would be checked, how proxies would work, how materials would be sent and who would chair the meeting. Businesses often focus on price and strategic rationale, but approval mechanics can derail a transaction if they are not planned properly.

Finally, the case is a reminder that the Court does not replace the commercial judgment of shareholders. Its concern at the first hearing is whether the proposal is fit to be put to them. For directors and founders, that means the goal is not to produce a sales pitch. It is to produce a balanced, supportable explanation that lets owners make the decision themselves.

This page explains the Federal Court’s first-hearing decision in Toro Energy Limited, in the matter of Toro Energy Limited [2026] FCA 643. The orders were made on 30 April 2026 and the reasons were published on 25 May 2026.

The discussion here is limited to what is supported by the published orders and reasons available for that first-hearing decision. It should not be read as confirming the later shareholder vote, any second-hearing approval, or implementation of the scheme.