In the matter of Domain Holdings Australia Limited (No 2)

Catchwords: CORPORATIONS — arrangements and reconstructions — schemes of arrangement or compromise — application under s 411 of the Corporations Act 2001 (Cth) for orders approving scheme of arrangement and ancillary orders

Legislation Cited: - Corporations Act 2001 (Cth), ss 411, 1319

Cases Cited: - Re Domain Holdings Australia Ltd [2025] NSWSC 701
- Re Invocare Ltd (No 2) [2023] NSWSC 1350
- Re Prime Infrastructure Holdings Ltd [2010] NSWSC 1337
- Re Southern Cross Gold Ltd (No 2) [2025] NSWSC 2
- Re Tassal Group Ltd (No 2) [2022] NSWSC 1619

Category: Principal judgment

Parties: Domain Holdings Australia Limited (Plaintiff)
CoStar Group, Inc. and Andromeda Australia SubCo Pty Limited (Bidder)

Representation: Counsel:
M Izzo SC / Ms B Ng (Plaintiff)
P M Wood (Bidder)
Solicitors:
Gilbert & Tobin (Plaintiff)
Corrs Chambers Westgarth (Bidder)

File Number(s): 2025/216118

Judgment

1. By Originating Process filed on 5 June 2025, the Plaintiff, Domain Holdings Australia Limited (“DHAL”) applied for orders under ss 411 and 1319 of the Corporations Act 2001 (Cth) (“Act”) relating to a proposed scheme of arrangement and associated orders. I made the orders sought by DHAL to convene the scheme meeting at the conclusion of the hearing on 30 June 2025 for the reasons set out in my judgment in Re Domain Holdings Australia Ltd [2025] NSWSC 701. The scheme meeting was held on 4 August 2025 and the scheme was then approved by the requisite majorities of DHAL shareholders for the purposes of s 411(4)(a)(ii) of the Act.

2. At this second Court hearing, DHAL seeks orders approving the scheme. No DHAL shareholder or other person indicated an intention to appear at this hearing, or appeared, to oppose the approval of the scheme and I made the orders sought by DAHL at the conclusion of this hearing. These are my reasons for making those orders, and I have drawn on the helpful submissions of Mr Izzo and Ms Ng who appear for DAHL in this judgment.

Affidavit evidence

3. DHAL reads the affidavit dated 5 August 2025 of Ms Catriona McGregor, who is its Chief Legal & Transformation Officer and Company Secretary in support of the application. As Mr Izzo points out, Ms McGregor there addresses the registration and lodgement of the scheme booklet and convening orders; the despatch of the scheme materials; the conduct of a shareholder information line, which was accessed by relatively few shareholders, and outgoing calls made to a much larger number of shareholders; a presentation provided to two proxy adviser firms, which I have reviewed and which gives rise to no difficulty; the conduct of the scheme meeting and the results of the poll on the scheme resolution; voter turnout at the scheme meeting, by comparison with earlier annual general meetings of DHAL; the position as to excluded shareholders; the publication of an advertisement of the second Court hearing on Australian Securities Exchange (“ASX”); and the position as to conditions precedent to the scheme.

4. DAHL also tenders conditions precedent certificates dated 6 August 2025 executed by DAHL, CoStar Group, Inc. and Andromeda Australia SubCo Pty Limited (“Bidder Sub”) in respect of the satisfaction or waiver of the conditions precedent to the scheme and a letter dated 5 August 2025 from the Australian Securities and Investments Commission (“ASIC”) stating that ASIC has no objection to the scheme pursuant to s 411(17)(1)(b) of the Act.

Applicable principles and submissions

5. Mr Izzo, who appears for DHAL, submits that the principles that apply to the role of the Court in approving a scheme of arrangement under s 411(4)(b) of the Act are well established and he refers to the summary of those principles in Re Invocare Ltd (No 2) [2023] NSWSC 1350 at [8]–[9] and Re Southern Cross Gold Ltd (No 2) [2025] NSWSC 2 at [8], where I observed that:

“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 Permanent Trustee Co Ltd (2002) 43 ACSR 601; [2002] NSWSC 1177 at [8]-[10]; Re Central Pacific Minerals NL [2002] FCA 239 (“Central Pacific Minerals”) at [8]-[14]; Re Seven Network (No 3) (2010) 267 ALR 583; [2010] FCA 400 … at [35]-[39]; Re Solution 6 Holdings Ltd (2004) 50 ACSR 113; [2004] FCA 1049 at [18]-[24]; Re Redcape Property Fund Ltd and the Trust Company (RE Services) Ltd (as the responsible entity for the Redcape Property Trust) [2012] NSWSC 486 at [7]; Re Amcor Ltd (No 2) [2019] FCA 842 at [7]-[11]; Re Ellerston Global Investments Ltd [2020] NSWSC 1108 (“Ellerston”) at [10]-[12]; Re Coca-Cola Amatil Ltd [2021] NSWSC 489 at [9]; Re Pendal Group Ltd (No 3) [2023] NSWSC 14 at [9]. 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].”

6. Mr Izzo here addresses several uncontroversial matters in submissions, including the lodgement of the scheme booklet and convening orders with ASIC; the despatch of the scheme materials to DHAL shareholders, as described in Ms McGregor’s affidavit; shareholder engagement, including the conduct of the shareholder information line, the outbound calls to which I referred above and the information provided to proxy advisers; and the conduct of the scheme meeting. He points to the passage of the scheme resolution by the statutory majorities, and to an error in the ASX announcement of the result of the scheme meeting, in respect of the indicative implementation date for the scheme, which was promptly corrected. He points out that the 484,630,412 votes cast at the scheme meeting (in person or by proxy) by 740 DHAL shareholders (other than Excluded Shareholders), represents approximately 92.39% of all votes able to be cast and approximately 6.5% of the total number of DHAL Shareholders eligible to vote, which is higher than the voting participation rates in DHAL’s 2022, 2023, and 2024 annual general meetings. Mr Izzo also points to an error in the ASX announcement of the second Court hearing, as to the day but not the date of that meeting, which was also promptly corrected.

Determination

7. I am satisfied that DHAL complied with the Court’s orders in respect of the distribution of scheme documents to its shareholders. DAHL shareholders voted in favour of the scheme by the requisite statutory majorities. There was a higher voting participation rate at the scheme meeting than at DAHL’s recent annual general meetings, and there is no reason to think there was any defect in the notice of the scheme given to DHAL shareholders. The other statutory requirements for the scheme have been satisfied.

8. The scheme was recommended by DHAL’s directors and the independent expert whose report was included in the scheme booklet had expressed the view that the scheme was in the best interests of DHAL shareholders in the absence of a superior proposal. There is no reason to doubt that the scheme is fair and reasonable so that an intelligent and honest DHAL shareholder, properly informed and acting alone, might approve it. There is otherwise no reason to doubt that DHAL 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 shareholders of all information material to the decision whether to vote for or against the scheme. I am therefore satisfied that the scheme is appropriate for the Court’s approval.

9. Mr Izzo also points to Ms McGregor’s evidence that the only Excluded Shareholder is Bidder Sub and, on that basis, I will make the order sought by DHAL under s 411(6) of the Act to amend the scheme to identify Bidder Sub as the Excluded Shareholder, consistent with the usual approach of identifying excluded shareholders by name: Re Prime Infrastructure Holdings Ltd [2010] NSWSC 1337 at [6]–[7]; Re Tassal Group Ltd (No 2) [2022] NSWSC 1619 (“Tassal (No 2)”) at [12]. DHAL also seeks an order exempting it from compliance with s 411(11) of the Act. I am satisfied that there is here no utility in having the Court order annexed to DHAL’s constitution, where the scheme will not involve any modification of any rights of DHAL shareholders or of creditors or persons dealing with DHAL, and there is no need to require compliance with s 411(11) of the Ac**t: Tassal (No 2) at [14].

Determination and orders

10. For these reasons, I made the orders sought by DHAL at the conclusion of the second Court hearing on 6 August 2025.

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