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[2025] NSWSC 809
General information, not legal advice.
Supreme Court of NSW
2025-07-24
Nixon J
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: In the matter of AVJennings Ltd (No 2) [2025] NSWSC 809
Hearing dates: 23 July 2025
Date of orders: 23 July 2025
Decision date: 24 July 2025
Jurisdiction: Equity - Corporations List
Before: Nixon J
Decision: Orders made approving scheme of arrangement.
Catchwords: CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement or compromise – Application under s 411 of the Corporations Act 2001 (Cth) for order approving shareholders’ scheme of arrangement – Where formal requirements satisfied – Whether scheme of arrangement should be approved
Legislation Cited: Corporations Act 2001 (Cth) ss 411, s 412, 1322
Supreme Court (Corporations) Rules 1999 (NSW) r 3.5
Cases Cited: In the matter of Ansarada Group Ltd [2024] NSWSC 1121
In the matter of AV Jennings Limited [2025] NSWSC 500
In the matter of InvoCare Limited (No 2) [2023] NSWSC 1350
In the matter of SG Fleet Group Ltd (No 2) [2025] NSWSC 376
In the matter of Mason Stevens Group Limited (No 2) [2025] NSWSC 255
Re Central Pacific Minerals NL [2002] FCA 239
Re Ellerston Global Investments Ltd [2020] NSWSC 1108
Re Great Southern Managers Australia Ltd (in liq) [2016] VSC 38
Re Murchison Metals Ltd [2014] NSWSC 951
Re Permanent Trustee Co Ltd [2002] NSWSC 1177
Re The Trust Company Ltd [2013] NSWSC 1947
Category: Principal judgment
Parties: AVJennings Limited (Plaintiff)
PM Nominees C Pty Ltd (Bidder)
Representation: Counsel:
Mr S A Lawrance SC (Plaintiff)
Mr M Izzo SC / Mr A P F Ryan (Bidder)
Solicitors:
Allens (Plaintiff)
Clayton Utz (Bidder)
File Number(s): 2025/147065
Publication restriction: Nil
By Originating Process filed on 15 April 2025, the Plaintiff, AVJennings Limited (AVJ), applies for an order under s 411(4)(b) of the Corporations Act 2001 (Cth) (the Act) approving a scheme of arrangement and other associated relief.
AVJ is an Australian public company limited by shares which is listed on the Australian Securities Exchange Limited (ASX). Shares in AVJ are also quoted for trading on the securities exchange conducted by Singapore Exchange Limited (SGX) through SGX GlobalQuote. The principal activity of AVJ is residential property development.
On 1 April 2025, AVJ announced to the ASX that it had entered into a Scheme Implementation Deed (SID) with PM Nominees C Pty Ltd (Bidder), an investment vehicle of Proprium Capital Partners (Australia) Pty Ltd and AVID Property Group, dated 31 March 2025 (the S****cheme). The proposed Scheme provides for the Bidder to acquire all of the ordinary shares in AVJ for cash consideration of $0.655 per share, less the cash amount of any Special Dividend on a per AVJ share basis. (As noted below, a Special Dividend of $0.167 per AVJ Share was subsequently declared on 21 July 2025.) The effect of implementation of the Scheme would be to make AVJ a wholly owned subsidiary of the Bidder and to remove AVJ from the ASX and SGX GlobalQuote.
At the first Court hearing on 8 May 2025, Black J made orders convening a meeting of AVJ shareholders for the purpose of considering and, if thought fit, agreeing (with or without any modification) to the Scheme (the Scheme Meeting): In the matter of AV Jennings Limited [2025] NSWSC 500. This judgment assumes familiarity with, and adopts defined terms from, his Honour’s judgment.
The Scheme Meeting was held on 11 July 2025 at 3pm and the Scheme was approved by the requisite majority of shareholders for the purposes of s 411(4)(a)(ii) of the Act, as follows:
| | No of Votes | % of votes | No of holders | % of holders | | For | 436,957,490 | 99.93% | 284 | 96.93% | | Against | 310,988 | 0.07% | 9 | 3.07% |
At the second Court hearing on 23 July 2025, AVJ sought orders approving the Scheme.
No shareholder or any other person indicated an intention to appear, or did appear, at this hearing to oppose the approval of the Scheme.
At the conclusion of the second Court hearing, I made the orders sought by AVJ. These are my reasons for making those orders.
In addition to the evidence filed at the first hearing, which is set out in paragraphs [13]-[18] of Black J’s reasons, AVJ relied at the second Court hearing on an affidavit of its Company Secretary and General Counsel, Mr Carl Thompson, sworn 21 July 2025, and an affidavit of the Group General Counsel of AVID, Mr Richard Amos, affirmed 21 July 2025.
Mr Thompson’s affidavit establishes the following matters:
following the first Court hearing, the Scheme Booklet was amended as directed by Black J at that hearing;
on 9 May 2025, the Scheme Booklet was registered and a copy of the orders made by Black J on 8 May 2025 (the Convening Orders) was lodged with the Australian Securities and Investments Commission (ASIC);
on 15 May 2025, the Scheme Materials were dispatched to shareholders, in accordance with the Convening Orders (save in one respect, which is addressed below);
on 15 July 2025, notice of the second Court hearing was published by way of an ASX announcement, in accordance with the Convening Orders; and
on 11 July 2025, the Scheme Meeting was held, and the resolution approving the Scheme was passed at that meeting.
Order 4 of the Convening Orders required that, for the purposes of despatch of the Scheme materials, the mailing list be fixed by reference to the register as at 7.00pm on 8 May 2025. However, the mailing list was instead fixed by reference to the register as at 9.38am on that day. In the recent decision of In the matter of SG Fleet Group Ltd (No 2) [2025] NSWSC 376 at [9], Black J accepted that a similar issue regarding the timing for the fixing of the mailing list should be characterised as an “inconsequential” disconformity. The same is true of the disconformity in this case, particularly since the Scheme Booklet was released to the ASX on 9 May 2025 and the Scheme Meeting was not held until 11 July 2025 (with a cut-off date of 9 July 2025), such that AVJ shareholders had adequate notice of the Scheme materials prior to the meeting. Having regard to those matters, I accept that there is no reason for the Court to consider that this matter caused or may cause any substantial injustice for the purposes of s 1322(2) of the Act, and it is validated without the need for any order of the Court on that basis.
Mr Thompson gave evidence that communications with AVJ shareholders were conducted in accordance with the inbound call script which was in evidence at the first Court hearing and which broadly reflects the frequently asked questions section of the Scheme Booklet.
Mr Thompson also gave evidence of the voter turnout at the Scheme Meeting compared to turnout at the annual general meetings of AVJ in 2023 and 2024. At the Scheme Meeting, 437,268,478 AVJ shares held by 298 AVJ Shareholders were voted on which represents a voting participation rate of approximately 17.61% by number of AVJ shareholders and 78.33% by number of AVJ Shares on issue. By way of comparison, the participation rates at the annual general meetings of AVJ in 2023 and 2024 were, respectively, as follows:
| | By shares | By shareholders | | 2023 AGM | 70.46% | 7.10% | | 2024 AGM | 77.24% | 10.21% |
The level of voter turnout at the Scheme Meeting is not such as to give rise to any concern that there may have been some issue in respect of the convening procedure which warrants further consideration (cf Re Great Southern Managers Australia Ltd (in liq) [2016] VSC 38 at [37] (Croft J)).
Finally, Mr Thompson confirmed that AVJ's solicitors, Allens, did not receive any notices of appearance from any person in response to the advertisement of the second Court hearing.
Mr Amos gave evidence in relation to a proxy solicitation campaign which was undertaken by Proxy Advice Pty Ltd (trading as PGS Advisers), on the instructions of the Bidder, between the period of 30 June 2025 and 8 July 2025. During that period, calls were made to 695 AVJ shareholders. The Bidder provided PGS advisors with an outbound call script and a script setting out answers to frequently asked questions of AVJ Shareholders (Q&A Script).
AVJ tendered an announcement which it had released on 21 July 2025, stating that the board of AVJ had declared a fully franked special dividend of $0.167 per share, conditional on the Scheme becoming Effective, which is expected to be paid on 6 August 2025. Consistently with the terms of the Scheme, it follows that the consideration to be paid by the Bidder will be $0.488 per AVJ Share.
In addition, AVJ tendered the following documents:
a bundle of correspondence with ASIC regarding the proxy solicitation campaign and the outbound call script which was proposed to be used for the purposes of that campaign;
a letter from ASIC dated 22 July 2025 confirming, under s 411(17)(b) of the Act, that ASIC has no objection to the Scheme; and
two certificates which were executed by, respectively, AVJ and the Bidder, in respect of the satisfaction or waiver of the conditions precedent to the Scheme.
At the second Court hearing, in order to approve a scheme of arrangement, the Court must be satisfied of the following matters:
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 has been full and fair disclosure to members of all information material to the decision whether to vote for or against the applicable scheme: Re Permanent Trustee Co Ltd [2002] NSWSC 1177 at [8]-[10] (Barrett J); Re Central Pacific Minerals NL [2002] FCA 239 [8]-[14] (Emmett J); Re Ellerston Global Investments Ltd [2020] NSWSC 1108 at [10]-[12]; In the matter of Mason Stevens Group Limited (No 2) [2025] NSWSC 255 at [5] (Black J).
The Court will also have regard to shareholders’ assessment of their interests as manifested in the voting results on the scheme resolution in recognising that shareholders are “the best judges of whether an arrangement is to their commercial advantage”: Central Pacific Minerals at [13]; Ellerston at [10]; Mason Stevens at [5].
These principles were summarised by Black J in In the matter of InvoCare Limited (No 2) [2023] NSWSC 1350 at [8]-[9]:
“The general principles which guide the Court’s discretion to approve a scheme at a second Court hearing are well established. The matters of which the Court must be satisfied in approving the scheme at the second Court hearing are whether there was compliance with the orders of the Court convening the scheme meeting or meetings; whether the resolution to approve the scheme was passed by the requisite majority and whether other statutory requirements have been satisfied; and whether all conditions to which the scheme is subject (other than Court approval and lodgement of the Court’s orders with ASIC) have been met or waived: Re ELMO Software Ltd (No 2) [2023] NSWSC 81 (‘ELMO’) at [7].
The Court also has, in exercising its power of approval, 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: Re Seven Network Ltd (No 3) (2010) 267 ALR 583 (‘Seven Network’) at [31]; Re Staging Connections Group Ltd (No 2) [2015] FCA 1102 at [12]. In exercising that residual discretion, the (non-exhaustive) 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: Re Permanent Trustee Co Ltd (2002) 43 ACSR 601 at [8]; Seven Network at [35]-[40]; Re Pendal Group Ltd (No 3) [2023] NSWSC 14 at [10]; ELMO at [8].”
The evidence establishes that there has been compliance with the Convening Orders (other than in the minor respect which has been addressed at paragraph [11] above).
The Scheme was approved by the requisite majorities at the Scheme Meeting.
There has been compliance with all other statutory requirements. In particular:
a copy of the Convening Orders was lodged with ASIC in accordance with rule 3.5 of the Supreme Court (Corporations) Rules 1999 (NSW);
the Scheme Booklet was registered with ASIC prior to its being sent out to AVJ Shareholders in accordance with s 412(6) of the Act;
the tender of the no objection letter from ASIC satisfies the requirement in s 411(17)(b) of the Act; and
other relevant requirements were dispensed with by order 7 of the Convening Orders.
There is no reason to doubt that the Scheme is fair and reasonable so that an intelligent and honest AVJ shareholder, properly informed and acting alone, might approve it. The Independent Expert has concluded that the Scheme is fair and reasonable, and therefore in the best interests of AVJ shareholders, in the absence of a superior proposal. The directors of AVJ have unanimously recommended that AVJ shareholders vote in favour of the Scheme.
There is otherwise no reason to doubt that AVJ has brought to the Court’s attention all matters that could be considered relevant to the exercise of the Court’s discretion or that there was full and fair disclosure to AVJ shareholders of all information material to the decision whether to vote for or against the Scheme.
Mr Lawrance drew the Court’s attention to the evidence concerning the proxy solicitation campaign. The Court’s role at the second Court hearing involves an assessment as to whether any such communications compromised the integrity of the voting process at the scheme meeting or the adequacy of the disclosure in respect of the scheme: In the matter of Ansarada Group Ltd [2024] NSWSC 1121 at [17] (Black J). A degree of advocacy in respect of a scheme is permissible so long as it is fair and honest: ibid.
ASIC was informed that this campaign was to be undertaken and was provided with the script in advance of the campaign being undertaken and confirmed that it did not have any objections to the proposed course. Mr Amos confirms that communications with shareholders were conducted in accordance with the outbound call scripts. I am satisfied that the outbound call script broadly reflects the disclosures made in the Scheme Booklet. Additionally, I am satisfied the Q&A Script broadly reflects the frequently asked questions section of the Scheme Booklet. Accordingly, I do not consider that the conduct of this campaign gives rise to any concern regarding the integrity of the voting process, or the adequacy of the disclosure made to AVJ shareholders.
Finally, it is necessary to have regard to the AVJ shareholders’ assessment of their own interests, as manifested in the voting results on the Scheme resolution, which were overwhelmingly in favour of the Scheme’s approval.
Having regard to those matters, I am satisfied that the Court should approve the Scheme under s 411(4)(b) of the Act.
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(2010) 267 ALR 583