In the matters of APN Property Group Limited and APN RE Limited (No 3) [2021] VSC 490 (11 August 2021)

For Dexus Nominee Pty Ltd and Dexus Funds Management Ltd

1 The plaintiff in proceeding S ECI 2021 01961 ('APN PG') is a company which carries on business as a specialist real estate investment manager.

2 The plaintiff is proceeding S ECI 2019 01963 ('APN RE') is a company which acts as the responsible entity of the APD Trust, which is a registered managed investment scheme.

3 On 4 August 2021, I made orders in proceeding number S ECI 2021 01961 ('APN PG Scheme Proceeding'), in respect of a scheme of arrangement between APN PG and its members ('the APN PG Scheme'), agreed to by the said members at a meeting held 27 July 2021 ('the APN PG Scheme Meeting) on terms set out in an annexure to the orders, specifically:

(a) pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) ('Corporations Act') approving the APN PG Scheme;

(b) pursuant to s 411(12) of the Corporations Act, that APN PG be exempt from compliance with sub-s 411(11) of the Corporations Act in relation to the APN PG Scheme.

4 On the same day I also made orders in proceeding S ECI 2021 0193 ('Trust Scheme Proceeding') pursuant to r 54.02(2) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('the 2015 Rules') that APN RE, having regard to the results of voting at a meeting of unitholders held 27 July 2021 ('the Trust Scheme Meeting'), is justified in acting on certain resolutions[1] and giving effect to and implementing an amending deed (the terms are set out in an annexure to those orders) ('the Trust Scheme'), including by doing all things necessary and taking all necessary steps to implement and give effect to the Trust Scheme.

5 Collectively, the orders made 4 August 2021 in the APN PG Proceeding and the Trust Scheme Proceeding are referred to as the 4 August 2021 Orders.

6 Collectively, the APN PG Scheme and Trust Scheme are referred to as the Schemes; collectively, the APN PG Scheme Meeting and the Trust Scheme Meeting are referred to as the Scheme Meetings

7 I indicated that I would provide reasons for the orders in due course. These are the reasons.

8 Shares in APN PG ('the APD shares') and units in the APD Trust ('the APD Trust Units') are stapled together and admitted to the official list of the Australian Securities Exchange ('ASX') under the ticker code 'APD' (singularly 'an APD Security'; in the plural 'the APD Securities'). Accordingly, the holders of the APD Shares ('the APD Shareholders) and the holder of the APD Trust Units ('the APD Trust Unitholders') are coextensive and are referred to as the APD Security Holders.

9 APN PG and APN RE, and/or APN PG and APD Trust (as the context requires) are collectively referred to as 'APD'.

10 Established in 1996, APD is a specialist real estate manager which actively manages commercial real estate funds on behalf of institutional wholesale and retail investors. As at 30 April 2021, APD managed $3.2 billion in real estate investments.

11 APD is comprised of several entities ('the APD Group',) including APN RE and APN Funds Management Limited ('APN FM'); both APN RE and APN FM are wholly owned subsidiaries of APN PG. In its role as responsible entity, trustee and/or manager, APN FM manages APD's listed and unlisted managed investment schemes and the associated mandates. Through APN FM, APD manages 11 funds including domestic and international property securities and direct property enlisted commercial real estate funds (not including the APD Trust, which as mentioned above is managed by APN RE). APD primarily generates funds management fees from the provision of responsible entity and investment management services for the funds it manages. APD also earns income from the following revenue streams:

(a) performance and transaction fees from the provision of management, acquisition, disposal and fund establishment services;

(b) asset, leasing and project management fees from the provision of leasing, project management, development management and property management services;

(c) registry and other income from the provision of investor and advisor relation, accounting, unit pricing and custodian services; and

(d) distribution income from co-investments.

12 On 11 May 2021, APD announced to the ASX that it had entered into a Scheme Implementation Deed ('the SID') with Dexus Nominee Pty Ltd ('the Bidder') and Dexus Funds Management Ltd ('Dexus RE') pursuant to which the Bidder proposed to acquire 100% of the APD securities to be implemented by the APN PG Scheme.

13 In the Trust Scheme Proceeding, APN RE proposed amendments to the constitution of the APD Trust ('the APD Trust Constitution') to allow the acquisition of all of the ordinary APD Trust Units by the Bidder. The terms of the Trust Scheme were contained in amendments to the APD Trust Constitution.

14 In sum, under the proposals put forward by the Bidder:

(a) all APD shares were to be acquired by the Bidder by way of the APN PG Scheme and pursuant to its terms; and

(b) all the APD Trust units were to be acquired by the Bidder through the Trust Scheme and pursuant to its terms.

15 As at 11 May 2021, there were 329,548,043 shares in APN PG and the same number APD Trust Units.

16 Upon approval, for each APD Security held on the record date (as defined in the SID)) ('the SID record date') that APD Security Holder will receive cash consideration of 91.5 cents per APD security, less the amount of an interim distribution of 1.5 cents per APD Security (which was declared by APD on 11 June 2021), paid in respect of the six months ended 30 June 2021 ('the Scheme Consideration').

17 On 11 June 2021, APD announced on the ASX the permitted distribution of 1.5 cents per APD security would be paid on 30 July 2021 to those APD Security Holders on the security register at 30 June 2021 ('the permitted distribution record date'). The permitted distribution was to be paid irrespective of whether the Schemes proceeded.

18 As a result of the payment of the permitted distribution by APD, the Scheme Consideration payable by the Bidder to the APD Security Holders under the schemes is 90 cents per APD Security, payable to all registered APD Security Holders on the SID record date, 7pm on 6 August 2021 (or such other time as APD and the Bidder agree).

19 APD Security Holders who enter the security register after the permitted distribution record date but who are registered on the security register at the SID record date will receive the Scheme Consideration of 90 cents per APD Security.

20 APD prepared an explanatory statement in connection with both Schemes, in accordance with the requirements of the Corporations Act. The explanatory statement in relation to both schemes is included in a booklet provided to all APD Security Holders ('the Scheme Booklet'). The Scheme Booklet also included an independent expert's report prepared by KPMG ('the KPMG Report') which expressed the opinion that the schemes are fair and reasonable and in the best interests of the APD Security Holders.

21 The directors of APD unanimously recommended that the APD Security Holders vote in favour of the resolutions that were to be put to the APD Security Holders at the Scheme Meetings, subject to the independent expert continuing to conclude that the Schemes are in the best interests of the APD Security Holders and there being no superior proposal (as defined in the SID).

22 The Scheme Meetings were conducted pursuant to the orders made by Riordan J on 15 June 2021 ('Convening Orders').[2] At the Scheme Meetings, the resolutions were passed by 99.51% of the votes cast with 97.36% of the APD Security Holders present and voting.

23 As required by r 16.6 of the Supreme Court (Corporations) Rules 2013 (Vic) ('the Corporations Rules'), APN PG and APN RE attended before Associate Justice Gardiner on 29 July 2021 for an inquiry as to whether the Scheme Meetings were duly convened and held in accordance with the Convening Orders, and whether the relevant resolutions were duly passed. His Honour made orders declaring that these requirements had been satisfied ('the Rule 16.6 Orders').

24 It is a condition precedent of the schemes becoming effective that:

(a) the APD Shareholders agree to the APN PG Scheme at APN PG Scheme Meeting;

(b) the Court approves the APN PG Scheme under s 411(4)(b) of the Corporations Act;

(c) the APD Trust Unitholders approve the resolutions to enable the Trust Scheme to be implemented at the Trust Scheme Meeting;

(d) the Court gives judicial advice that APN RE is justified in implementing the Trust Scheme; and

(e) both the Court's order approving the APN PG Scheme and the amendments to the APD Trust Constitution set out in the amending deed come into effect.

25 On 15 June 2021, Riordan J made the Convening Orders in each proceeding, by which it was ordered that:

(a) APN PG convene and hold the APN PG Scheme Meeting; and

(b) APN RE is justified in convening and holding the Trust Scheme Meeting.

26 In addition, the Convening Orders in each proceeding provided for the dispatch to APD Security Holders of the Scheme Booklet which contained a detailed discussion of the Schemes.

27 Finally, the Convening Orders ordered that the two proceedings be heard together and that evidence in the APN PG Scheme Proceeding be evidence in the Trust Scheme Proceeding.

28 The procedure that must be adopted for the APN PG Scheme to become binding is set out in Part 5.1 of the Corporations Act. In particular:

(a) a resolution in favour of the APN PG Scheme ('APN PG Scheme Resolution') must be passed at the APN PG Scheme Meeting by the requisite majorities of shareholders provided for in s 411(4)(a)(ii) of the Corporations Act, namely, by more than 50% of the members present and voting (either in person or by proxy) and by at least 75% of the votes cast on the resolution; and

(b) the APN PG Scheme must be approved by the Court under s 411(4)(b) of the Corporations Act.

29 This involves a two stage process whereby, in the first stage, the company obtains orders from the Court to convene a meeting of members to consider the scheme, and in the second stage, subject to members having approved the scheme, the company seeks orders from the court approving the scheme under s 411(4)(b) of the Corporations Act.

30 The first stage was completed upon the making of the Convening Orders. The second stage has two parts: the first part was completed by the making of the Rule 16.6 Orders; the second part is the present application for an order that the APN PG Scheme be approved pursuant to s 411(4)(b) of the Corporations Act. This involves an exercise of discretion by the Court in its supervisory jurisdiction.

31 The considerations relevant to the Court's decision to approve a scheme pursuant to s 411(4)(b) of the Corporations Act are well established. In deciding whether to give final approval to a scheme of arrangement, the Court will typically wish to be satisfied that:

(a) the scheme is fair and reasonable so that an intelligent and honest man or woman who was a member of the relevant class, properly informed and acting alone, might approve it;

(b) that 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

(c) there was full and fair disclosure to members of all information material to the decision whether to vote for or against the applicable scheme.[3]

32 In Re Toll Holdings Ltd (No 2), Robson J said:[4]

In order to approve the scheme, I have to be satisfied of certain matters. I discussed these in Re Coles Group Limited (No 2). There I held that the matters I must be satisfied of were set out by Fry LJ in Re Alabama, New Orleans, Texas and Pacific Junction Railway Company, where he said in relation to the approval of a scheme of arrangement by the court that:

... the Court is bound to ascertain that all the conditions required by the statute have been complied with; it is bound to be satisfied that the proposition was made in good faith; and, further, it must be satisfied that the proposal was at least so far fair and reasonable, as that an intelligent and honest man, who is a member of that class, and acting alone in respect of his interest as such a member, might approve of it.

33 In Re Tatts Group Ltd (No 2),[5] Sifris J held that, in approving a scheme of arrangement, the Court is required to be satisfied of four matters:

(a) first, that the requirements of the Corporations Act have been complied with;

(b) secondly, that the relevant scheme was proposed in good faith;

(c) thirdly, that the proposal was such that a reasonable, intelligent and honest person might approve it; and

(d) fourthly, that there has been no oppression and the arrangement is one which is capable of being accepted.

34 Where a majority of security holders have approved a scheme, the Court should be slow to conclude that a scheme is unreasonable or unfair; in particular, the Court should 'be reluctant to make decisions contrary to the views of security holders expressed at meetings', as security holders are to be regarded as 'the best judges of whether an arrangement is to their commercial advantage'.[6] As Beach J observed in Re Amcor Ltd (No 2):[7]

the Scheme shareholders' vote in favour of the Scheme is evidence of its inherent fairness. Put another way, if a majority of the Scheme shareholders have approved the Scheme, it is unlikely that the Scheme would be unreasonable.

35 In the Trust Scheme Proceeding, APN RE seeks judicial advice that it is justified in implementing the Trust Scheme.

36 In relation to trust schemes such as the present, there is no specific statutory mechanism similar to s 411 of the Corporations Act that applies. However, it is well-established that a responsible entity may implement a trust scheme in which it seeks judicial advice in a two-stage process by analogy with a scheme under Part 5.1 of the Corporations Act.[8] As stated by Black J in Re Mirvac Funds Management Ltd:[9]

The responsible entity of the scheme may obtain judicial advice under s 63 of the Trustee Act[10] at the first hearing, that it is justified in propounding resolutions to implement the scheme and in proceeding on the basis that proposed amendments to the constitution of the registered managed investment scheme to implement the scheme would be within the powers of alteration conferred by that document and s 601GC of the Corporations Act. An explanatory statement is then sent to unitholders in respect of a meeting to consider the resolutions to implement the scheme, which will describe the proposed transaction, disclose that judicial advice and draw attention to unitholders' rights to appear at a second hearing and object to the trust scheme. If unitholders approve the proposed scheme, the Court may give judicial advice to the responsible entity at a second hearing that, having regard to the result of the meetings and any other relevant circumstances, it is justified in implementing the scheme.

37 In the present case, the statutory basis for the judicial advice sought is r 54.02(2) of the 2015 Rules, which provides that a proceeding may be brought for:

(a) the determination of any question which could be determined in an administration (sub-s 54.02(2)(a)); or

(b) for an order directing a trustee to do or abstain from doing any act (sub-s 54.02(2)(b)(iii)); or

(c) for an order approving any sale, purchase, compromise or other transaction by a trustee or directing any act to be done in the execution of a trust (sub-s 54.02(2)(c)).

38 Rule 54.02 of the 2015 Rules is the only statutory basis in Victoria for a trustee to seek the advice and directions of the Court.[11] Under that rule, the Court has a broad jurisdiction and power to advise and direct trustees in relation to the performance of their trusts and, where appropriate, to approve their entering into and performance of any transaction.[12]

39 As Black J adverts to in the passage quoted above from Re Mirvac Funds Management Ltd, in order for the Trust Scheme to take effect, certain provisions of the Corporations Act must be complied with:

(a) First, the APD Trust Constitution must be amended to allow for the Trust Scheme to be implemented. Section 601GC(1)(a) of the Corporations Act provides that such an amendment must be by special resolution of the members of the managed investment scheme. For this purpose, the APD Trust Unitholders met and considered the Trust Constitution Amendment Resolution, being a special resolution for the purposes of s 601GC(1) of the Corporations Act to approve amendments to the APD Trust Constitution to enable APN RE to implement the Trust Scheme.

(b) Secondly, an exception must apply to the prohibition in the Corporations Act on a bidder increasing its voting power in a target above 20%. Section 611 item 7 of the Corporations Act provides for such an exception if the members of the target approve the acquisition at a general meeting, by ordinary resolution, that is, by more than 50% of votes cast by members present and voting (either in person or by proxy). For this purpose, the APD Trust Unitholders met and considered the Trust Acquisition Resolution, being an ordinary resolution for the purposes of item 7 of s 611 of the Corporations Act to approve the acquisition by the Bidder of the APD Trust Units.

40 The Trust Constitution Amendment Resolution and the Trust Acquisition Resolution (together, the 'Trust Scheme Resolutions') were proposed at the Trust Scheme Meeting. This meeting was the first stage of the two stage process referred to above. At the first stage, APN RE obtained the opinion and advice of the Court pursuant to r 54.02(2) of the 2015 Rules that APN RE was justified in convening and holding the Trust Scheme Meeting for the purposes of the APD Trust Unitholders to consider the Trust Scheme Resolutions. APN RE now seeks judicial advice that, having regard to the result of the Trust Scheme Meeting, it is justified in implementing the Trust Scheme.

41 As with the APN PG Scheme, the first stage was completed upon the making of the Convening Orders. Similarly, the second stage has two parts: the first part was completed by the making of the Rule 16.6 Orders; the second part is the present application for judicial advice that, having regard to the result of the Trust Scheme Meeting, APN RE is justified in implementing the Trust Scheme.

42 The judicial advice procedure is intended to be summary in character, and the general function of the Court is to determine what should be done in the best interests of the trust.

43 Judicial advice given in the particular context of a second hearing in respect of a trust scheme is typically directed to the question of whether a responsible entity is justified in giving effect to and implementing a proposal approved by unitholders.[13]

44 In this context, Black J referred to the following relevant principles in Re The Trust Company (RE Services) Limited (No 4):[14]

... the role of the Court in granting judicial advice at a second Court hearing in respect of a trust scheme is of a similar nature to the Court's role in approving a scheme of arrangement under section 411(4)(b) of the Corporations Act ... an application for judicial advice that the responsible entity is justified in giving effect to and implementing the proposals approved by unitholders, which amounts to a broad judicial commendation of the course of conduct to be embarked upon, is appropriately brought before the Court once the wishes of unitholders, expressed through voting at the relevant meeting or meetings, is known and any unitholder who wishes to appear to oppose the application has been given an opportunity to do so ... the Court must be satisfied, at a second Court hearing in respect of a trust scheme, that the procedural requirements for obtaining unitholders' approval have been satisfied. The Court then gives considerable weight to the level of support by members of the proposal, and also to whether any person appears at the second Court hearing to express any opposition to it.

45 In considering whether to grant the approval sought, the focus is on the factors relevant to s 411 schemes. However, most of these factors apply equally to the exercise of discretion in relation to the Trust Scheme in line with the principles referred to above. Accordingly, the relevant factors considered below in relation to the APN PG Scheme apply equally to the Trust Scheme (unless otherwise indicated).

46 In summary, the relevant matters which the Court will ordinarily have regard to in the present context are that:[15]

(a) the Convening Orders have been complied with, and all relevant procedural requirements in relation to the convening and conduct of the meetings have been satisfied;

(b) the resolutions were approved by APD Security Holders in the requisite majorities;

(c) the conditions precedent to the Schemes have been satisfied or waived, save for Court approval and the grant of the judicial advice being sought;

(d) the schemes are fair and reasonable so that an intelligent and honest security holder, properly informed and acting alone, might approve them;

(e) there has been an accurate and comprehensive disclosure of the details of the Schemes and their effect to those voting on them;

(f) all matters that could be considered relevant to the exercise of the Court's discretion have been drawn to the Court's attention, and ASIC has been given the opportunity to draw the Court's attention any relevant matter;

(g) there is no suggestion of oppression of any minority, and no evidence that any third parties will be disproportionately adversely affected by the operation of the Schemes; and

(h) the Court is satisfied under s 411(17) of the Corporations Act that the APN PG Scheme has not been proposed to avoid Chapter 6 of the Corporations Act, or there is a statement from ASIC that it has no objection to that scheme.

47 The Rule 16.6 Orders in each proceeding establish that APD has complied with the Convening Orders and satisfied all relevant statutory and procedural requirements in relation to the convening and conduct of the Scheme Meetings.

48 One of the requirements of the Convening Orders was that APD publish a notice of the second court hearing in The Australian newspaper no later than five days prior to the date of that hearing. This was so that a person who wished to appear at the second court hearing to oppose the orders approving the APN PG Scheme may do so. That notice was duly published on 26 July 2021.27 APD did not receive notice that any person intended to appear at the hearing listed for 4 August 2021 to oppose the Schemes, or for any other reason; nor was there any such appearance.

49 Rule 16.6(4) of the Corporations Rules has the effect that the Court may not make an order approving the APN PG Scheme under s 411(4)(b) of the Corporations Act unless a copy of the Rule 16.6 Orders has been filed. The Rule 16.6 Orders have been made and a copy appears on the Court file. The precondition has been satisfied.

50 The Rule 16.6 Orders in each proceeding establish that the resolutions (as described below) at the Scheme Meetings were duly passed, and that there was overwhelming support for the Schemes.

51 The evidence relied upon in obtaining the Rule 16.6 Orders established that the results of the Scheme Meetings were as follows:

(a) at the APN PG Scheme Meeting, the APN PG Scheme Resolution was passed by 99.51% of the votes cast and with 97.36% of the APD Shareholders present and voting (in each case, in person or by proxy);

(b) at the Trust Scheme Meeting:

(i) the Trust Acquisition Resolution was passed by 99.51% of the votes cast by the APD Trust Unitholders present and voting (either in person or by proxy); and

(ii) the Trust Constitution Amendment Resolution was passed by 99.51% of the votes cast by the APD Trust Unitholders present and voting on the resolution (either in person or by proxy).

52 Before approving a scheme, the Court will ordinarily require that all conditions precedent to the scheme (other than the Court's approval of the scheme and the scheme coming into effect) have been satisfied or waived.

53 In accordance with clauses 4.1(n) and 4.2(i) of the SID, the Court was provided with certificates from APD and the Bidder immediately prior to the making of the order on 4 August 2021 stating that the conditions precedent have been satisfied or waived.

54 APD submits that the Schemes are fair and reasonable in the sense that an intelligent and honest security holder, properly informed and acting alone, might approve the schemes. I accept APD's submissions for the following reasons:

(a) The overwhelming support of the APD Security Holders is reflected in the voting results of the Scheme Meetings. In this respect, proof of the relevant statutory majorities is sufficient to establish that prima facie the schemes are fair. This is because, as noted earlier, the Court generally takes the view that security holders are in the best position to judge whether an arrangement is in their commercial interests and will be reluctant to make a decision contrary to the views expressed at the meeting.[16]

(b) There is a recommendation from all directors of APD that APD Security Holders vote in favour of all resolutions proposed at the Scheme Meetings, for the reasons given in the Scheme Booklet. Further, the directors stated their intention to vote all of the APD Securities held or controlled by them in favour of the Schemes.

(c) It is the opinion of the independent expert as expressed in the KPMG Report that the Schemes are fair and reasonable and in the best interests of APD Security Holders.

(d) The Scheme Booklet has disclosed the potential benefits and disadvantages of the Schemes.

(e) There is nothing to suggest that the Schemes have been proposed other than in good faith or that the APD Security Holders voted other than in good faith or that any APD Security Holder was oppressed.

(f) There is no application to oppose the orders approving the APN PG Scheme or the orders sought in relation to the Trust Scheme, and no evidence as to any oppression in the conduct of the Scheme Meetings.

(g) The Schemes contain measures to protect security holders against performance risk.

55 The content of the Scheme Booklet provided to APD Security Holders was considered at the first court hearing, and the Court indicated that it was satisfied to the necessary level that, by the Scheme Booklet, there would be proper disclosure as to the effect of the proposed Schemes and the material considerations to which security holders ought to have regard.

56 Further, as required by s 412(6) of the Corporations Act, the Scheme Booklet was registered by ASIC prior to dispatch to APD Security Holders. Registration of the Scheme Booklet by ASIC is evidence of compliance with the disclosure obligations imposed by s 412 of the Corporations Act. In particular, before registering the Scheme Booklet, ASIC must conclude that it appears to comply with the requirements of the Corporations Act, and must form the opinion that the booklet does not contain any matter that is false in a material particular or materially misleading in the form and context where it appears. Accordingly, in light of ASIC's registration of the Scheme Booklet, ASIC can be taken to have been satisfied that the requirements of sub-s 412(1) of the Corporations Act were met.

57 In light of these matters, through the Scheme Booklet and further consideration given to the Schemes at the Scheme Meetings, in my opinion there has been full and fair disclosure to members of all information material to their decision whether to vote for or against the Schemes.

All necessary matters have been brought to the attention of the Court

58 At the first court hearing, APD notified the Court of several matters warranting the Court's attention. None of those matters present as an impediment to the orders sought approving the APN PG Scheme or the orders sought in relation to the Trust Scheme.

59 There is no suggestion of oppression of any minority, and no evidence that any third parties will be disproportionately adversely affected by the operation of the schemes.

60 In the above circumstances I was satisfied that it is appropriate to:

(a) make orders approving the APN PG Scheme in the APN PG Scheme Proceeding; and

(b) give the judicial advice that is sought with respect to the implementation of the Trust Scheme in the Trust Scheme Proceeding.

Section 411(17)

61 The Court's power to approve a scheme as set out in s 411 of the Corporations Act is restricted by s 411(17) of the Corporations Act. At the approval stage, the Court must be satisfied there is no proscribed purpose as described in s 411(17)(a), or there must be provided to the Court a statement in writing by ASIC that it has no objection to the arrangement (see s 411(17)(b)).[17]

62 A 'no objection' statement was provided by ASIC prior to the hearing on 4 August 2021. The provision of the letter satisfies the requirements of s 411(17)(b) and consequently the bar under s 411(17) of the Corporations Act to approval of the APN PG Scheme no longer applies.[18]

63 It is otherwise well established that the Court should not refuse approval of a scheme of arrangement merely because it could have been effected under Chapter 6.[19]

64 Moreover and in any event, APD submits and I accept that there was no specific intention to avoid the operation of a specific provision of Ch 6 of the Corporations Act, and such a specific intention cannot be inferred from the general preference for the procedure under Pt 5.1 of the Corporations Act; notwithstanding that Pt 5.1 delivers a legal outcome that cannot be achieved under Ch 6; namely the transfer of 100% ownership of the APD Shares (subject to achieving the requisite statutory majorities for the APN PG Scheme resolution and PN PG Scheme approval).[20]

Exemption from section 411(11)

65 Section 411(11) of the Corporations Act requires, subject to s 411(12), that a copy of the Court's order approving a scheme of arrangement be annexed to every copy of the company's constitution issued after the order is made. Section 411(12) allows the Court to exempt a body from compliance with this provision or to determine the period during which it shall comply.

66 In Re Equinox Resources Ltd,[21] EM Heenan J indicated that the purpose of s 411(11) was:[22]

... to ensure that any modification of the rights of shareholders of the company which is the subject of the scheme or any other provision in the scheme which may affect the interests of persons dealing with the company, such as prospective creditors or purchasers of shares, will be sure to have the opportunity of seeing what the exact rights of shareholders in the company or of its creditors are, as modified, if at all, by the scheme which has been approved.

67 The above passage has been quoted with approval in a number of subsequent decisions.[23]

68 APN PG and APN RE submit that exemption from compliance with s 411(11) of the Corporations Act is appropriate in relation to the APN PG Scheme given that:[24]

(a) the APN PG Scheme will not alter the constitution of APN PG or the rights of the APD Shareholders, creditors or other persons dealing with the company. Further, no ongoing purpose will be served by requiring the orders approving the APN PG Scheme to be annexed to APN PG's constitution;

(b) The APD Shareholders are fully informed of the APN PG Scheme and will be informed in the event that the Court approves the APN PG Scheme, and an order under s 411(12) is regularly made on this basis; and

(c) the orders will be irrelevant once the APN PG Scheme is implemented and APN PG becomes a wholly owned subsidiary of the Bidder.

69 I accept the submission and made orders accordingly.

[1] Defined in a document entitled 'Scheme Booklet' that was provided to investors.

[2] The reasons given by Riordan J in respect of the making of the order are to be found at [2021] VSC 389

[3] See, eg, Re Vocus Group Limited [2021] NSWSC 843, [9] (Black J) and the authorities cited therein.

[4] [2015] VSC 236, [9].

[5] [2017] VSC 770, [38].

[6] Re Central Pacific Minerals NL [2002] FCA 239, [13] (Emmett J); See also Re NRMA Ltd (No 2) [2000] NSWSC 408; (2000) 156 FLR 412, 420 [22] (Santow J); Re Seven Network Ltd (No 3) [2010] FCA 400; (2010) 267 ALR 583, 588-9 [31]-[40] (Jacobson J); Re Atlas Iron Ltd (No 2) [2016] FCA 481, [5] (Gleeson J); Re Vocus Group Limited (n 3) [9] (Black J).

[7] [2019] FCA 842, [7]-[11].

[8] Re Mirvac Funds Management Ltd [2014] NSWSC 1569, [3] (Black J) and the authorities cited therein.

[10] Here, r 54.02(2)(c) of the 2015 Rules.

[11] See Williams, Civil Procedure Victoria ('Williams'), [I 54.02.0]. Cf s 63 of the Trustee Act 1963 (NSW), which has been applied in a number of trust scheme cases, such as Re Mirvac Funds Management Ltd [2014] NSWSC 1669 and Re Duet Management Company 1 Ltd (2018) 395 ACSR 34.

[12] Hornsby v Playoust (No 2) [2005] VSC 125, [9] - [10] (Mandie J), referred to in Williams at [I 54.02.0].

[13] Re Walsh & Company Investments Ltd [2020] NSWSC 1746, [44], and see also [41]-[4] where the relevant principles are discussed in more detail (Black J). See also Re The Trust Company (RE Services) Ltd (No 4) [2021] NSWSC 838, [9] (Black J).

[14] [2021] NSWSC 838, [9].

[15] Re Tox Free Solutions Ltd [2018] FCA 977, [99] (Banks-Smith J); Re Amcor Ltd (No 2) (n 7) [8]-[9] (Beach J). See also Re Seven Network Ltd (No 3) [2010] FCA 400; (2010) 267 ALR 583, 588-9 [35] - [40] (Jacobson J); Re Wesfarmers (No 2) [2018] WASC 357, [14] (Vaughan J). Similar statements were made in Re Tatts Group Ltd (No 2) (n 5) and in Re Westfield Corporation Ltd (No 2) [2018] NSWSC 921, [7] (Black J).

[16] See, eg, Re Tox Free Solutions Ltd (n 15) [108] (Banks-Smith J).

[17] See Re Coles Group Ltd (No 2) [2007] VSC 523; (2007) 65 ACSR 494, 497 [16] (Robson J).

[18] Re Tatts Group Ltd (No 2) (n 5) [75] (Sifris J); Re Toll Holdings Limited (No 2) (n 4) (Robson J); Re Coles (No 2) (n 17) 498-9 [19]-[24] (Robson J).

[19] Re ACM Gold Ltd & Mt Leyshon Gold Mines Ltd (1992) 34 FCR 530, 543 (O'Loughlin J); Re Stockbridge Ltd (1993) 9 ACSR 637, 652-3 (Murray J); Re Foundation Healthcare Ltd [2002] FCA 742; (2002) 42 ACSR 252, 265 (French J); Re Lion Selection Ltd [2009] VSC 546, [21] (Judd J).

[20] See, eg, Re Amcor Ltd (No 2) (n 7) [21] (Beach J).

[23] See, eg, Re Amcor Ltd (No 2) (n 7) [40] (Beach J); Re Hostworks Group Ltd (No 2) [2008] FCA 248, [36] (Mansfield J) and Re AXA Asia Pacific Holdings Ltd (No 2) [2011] VSC 102, [36] (Croft J).

[24] See Re Amcor Ltd (No 2) [2019] (n 7) [41] (Beach J). See also Healthscope Limited (No 2) [2019] FCA 759, [41] (Beach J); Re Lion Selection Limited [2009] VSC 456, [24] (Vickery J), cited with approval in Re Tatts Group Ltd (No 2) (n 5) [57] (Sifris J); Re Transcomm Credit Co-Operative Ltd [2016] VSC 835, [33] (Robson J); Re Skilled Group Ltd (No 2) [2015] VSC 805 (Robson J).