Dexus Capital Investment Services Pty Ltd atf Dexus Diversified Infrastructure Trust A, Australia Pacific Airport Funds & Australia Pacific Airports Fund No.4 v Australia Pacific Airports Corporation Limited

[2025] NSWSC 519

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Dexus Capital Investment Services Pty Ltd atf Dexus Diversified Infrastructure Trust A, Australia Pacific Airport Funds & Australia Pacific Airports Fund No.4 v Australia Pacific Airports Corporation Limited [2025] NSWSC 519
Hearing dates:	21 May 2025
Date of orders:	21 May 2025
Decision date:	22 May 2025
Jurisdiction:	Equity - Commercial List
Before:	Stevenson J
Decision:	Interlocutory injunction granted
Catchwords:	EQUITY – equitable remedies – injunctions – shareholder dispute – where first defendant issued default notice to plaintiffs and commenced process for compulsory sale of plaintiffs’ shares – where plaintiffs seeks to restrain first defendant from acting on default notice – serious consequences for plaintiffs – whether plaintiffs committed a material irremediable breach of the shareholders deed by disclosing confidential information to parties that signed confidentiality deeds poll where draft deeds not first offered to the remaining shareholders for comment – whether breach was “material” – whether serious question to be tried – whether balance of convenience favours making of injunction
Category:	Procedural rulings
Parties:	Dexus Capital Investment Services Pty Ltd atf Dexus Diversified Infrastructure Trust A, Australia Pacific Airport Funds & Australia Pacific Airports Fund No.4 (First Plaintiff) Dexus Capital Investors Limited atf Australia Pacific Airports Fund 3 & Infrastructure Trust No. 1 (Second Plaintiff) InfraBridge (GIF Cayman Holdco) 4, L.P. (Third Plaintiff) Australian Pacific Airports Corporation Limited (First Defendant) J.P. Morgan Nominees Australia Ltd acting as nominee for JPMorgan Chase Bank, N.A. (Sydney Branch) in its capacity as custodian for SAS Trustee Corporation (Second Defendant) Utilities of Australia Pty Ltd atf Utilities Trust of Aystralia (Third Defendant) IFM Investors (Nominees) Limited atf DAF Private Capital Sub-Trust APAC (Fourth Defendant) The Northern Trust Company as custodian of the Future Fund Board of Guardians (Fifth Defendant) REST Nominees No.2 Pty Ltd atf REST Infrastructure Trust (Sixth Defendant) Dexus Capital Investment Services Pty Limited atf Australia Pacific Airports Fund No. 2 & Dexus Wholesale Airport Fund (Seventh Defendant)
Representation:	Counsel: J Arnott SC / D Wong (Plaintiff) J Giles SC / C Winnett (First Defendant) J Burnett (Third Defendant) A Darville (Fifth Defendant) C Colquhoun SC / M Gvozdenovic (Sixth Defendant) L Livingston SC / R Mansted (Seventh Defendant) Solicitors: Arnold Bloch Leibler (Plaintiff) Norton Rose Fullbright Australia (First Defendant) Ashurst Australia (Third Defendant) Baker McKenzie (Fifth Defendant) Jones Day (Sixth Defendant) Gadens Lawyers (Seventh Defendant)
File Number(s):	2025/192969

JUDGMENT

1. After Court hours last night, and sitting as Commercial List Duty Judge, I made the following order:

“Upon the first to third plaintiffs (by their counsel) giving to the Court (1) the usual undertaking as to damages and (2) an undertaking not to sell, transfer or otherwise dispose of their shares in the first defendant (APAC) until the final determination of these proceedings, APAC be restrained from taking the following steps foreshadowed in or contemplated by the “Australian Pacific Airports Corporation Limited Default Notice” dated 15 May 2025 (Default Notice):

(a)   any action to suspend or take away any of the rights that the directors of APAC who were appointed by the plaintiffs would otherwise have if the Default Notice had not been issued, including any steps to prevent those directors from participating in and voting at meetings of APAC’s board and its committees and receiving the board papers for such meetings and receiving and voting on any circular resolutions;

(b)   any action to suspend or take away any of the rights that the plaintiffs and sixth and seventh defendants have to vote in respect of the APAC shares that they hold;

(c)   any action to suspend or take away the rights that the plaintiffs and sixth and seventh defendants would have to information under clause 6.6 of the “Shareholders’ Deed in relation to the operation of Australia Pacific Airports Corporation Limited” (Shareholders’ Deed) if the Default Notice had not been issued;

(d)    instructing APAC’s auditor (Deloitte) to complete a determination of Fair Market Value as contemplated by clause 12.3(b) of the Shareholders’ Deed (the Determination) but on the basis that APAC is permitted to instruct Deloitte to commence and continue the process of Determination provided that Deloitte is given an instruction by APAC not to complete or finalise its Determination until five business days after the final determination of these proceedings”. (Emphasis in original.)

2. I also set this matter down for final hearing for two days commencing on 11 August 2025.

3. These are my reasons for making those orders.

4. The plaintiffs (together, “Dexus”) are shareholders in the first defendant, Australia Pacific Airports Corporation Limited (“APAC”).

5. The other defendants are the remaining shareholders in APAC (“Remaining Shareholders”).

6. APAC is the parent company of companies that own and manage Melbourne Airport and Launceston Airport.

7. Dexus, APAC, and the Remaining Shareholders are parties to a Shareholders’ Deed dated 13 June 1997 (“Deed”).

8. Clause 12.1 of the Deed provides that a shareholder is in breach of the Deed if it commits a “material Irremediable Breach” of the Deed.

9. “Irremediable Breach” is defined as “a breach of obligation under [the Deed] that cannot be remedied”.

10. Causes 12.2 and 12.3 of the Deed provide, relevantly:

“12.2    Default Notice

If a Shareholder (“Defaulting Shareholder”) is in default of its obligations under this document as described in clause 12.1 as confirmed by a Special Resolution of a Board Meeting … then the Board may give a notice in writing setting out the default (“Default Notice”) to the Defaulting Shareholder, and a copy of the Default Notice to the other Shareholders. From the date of receipt of a Default Notice:

(a)   a Defaulting Shareholder shall not be entitled to exercise any rights to vote in respect of any Shares held by the Defaulting Shareholder;

(b)    the rights of any Director appointed by a Defaulting Shareholder are suspended and;

(c)    to the extent permitted by law, the rights of a Defaulting Shareholder to information under clause 6.6 are suspended.

12.3   Receipt of Default Notice

If a Default Notice is given to the Defaulting Shareholder under clause 12.2:

(a)    the Defaulting Shareholder is to be taken as wishing to Dispose of all of its Shares in accordance with clause 11 and for the purpose of such Disposal the price per Share is to be equal to the Fair Market Value;

(b)    within 5 Business Days after the date of the Default Notice, the Board shall instruct the Auditor to determine the Fair Market Value;

(c)    within 5 Business Days after the date of determination of the Fair Market Value, the Board shall make to each Shareholder other than the Defaulting Shareholder an offer in writing to sell to that Shareholder as nearly [sic] as possible to its Relevant Proportion … of the Shares of the Defaulting Shareholder at the Fair Market Value…” (Emphasis in original.)

11. On 15 May 2025, the APAC Board resolved to issue a Default Notice to Dexus of the kind referred to in those provisions.

12. The consequences for Dexus are serious. As set out in cll 12.2 and 12.3 of the Deed, they include that:

1. Dexus cannot exercise any rights to vote;

2. the rights of Dexus’s nominated directors are suspended;

3. Dexus’s access to information is suspended; and

4. a process will commence whereby Dexus’s shares will be compulsorily divested to the Remaining Shareholders.

13. The process of divestiture has already commenced, in that Deloitte has been appointed to value Dexus’s shares.

14. The sole, but critical, issue in these proceedings is whether Dexus has committed a material Irremediable Breach of the Deed.

What has happened

15. Clause 15.4 of the Deed provide, relevantly:

“15.4    Confidentiality

All information in relation to any other party’s business including, without limitation, any trade secrets, operations know-how, or any information concerning the organisation, management and finance of the other party … which is exchanged between them under this document … is confidential and shall not be disclosed, divulged or otherwise placed at the disposal of any person not being a party to this document except:

…

(g)    to any prospective purchaser/assignee of a Share who is a Qualified Buyer provided that any such prospective purchaser/assignee has entered into a deed of confidentiality with the other Shareholders in a form to their reasonable satisfaction and enforceable by any of them.” (Emphasis in original.)

16. In October 2024, Dexus commenced a process to sell some of their shares in APAC. Dexus made APAC aware of the process. The sale process was reported in the media.

17. As part of the sale process, Dexus provided information relating to APAC to 18 bidders or prospective purchasers. Each bidder and prospective purchaser executed a confidentiality deed poll before it was provided access to that information.

18. At the time, Dexus did not give the Remaining Shareholders an opportunity to comment on the form of the confidentiality deeds poll. That is said by APAC to be a breach of the Deed.

19. From February 2025, Dexus provided APAC with details of the parties to whom confidential information had been provided and copies of the confidentiality deeds poll those parties had entered. Dexus explained that disclosed documents had been returned or destroyed. Dexus sought comment from APAC on the deeds of confidentiality at that time. None was given.

Has Dexus committed a material Irremediable Breach?

20. As I have said, the alleged breach of the Deed is that Dexus disclosed, divulged, or otherwise placed at the disposal of non-parties, confidential information otherwise than in the circumstances permitted by cl 15.4(g) of the Deed.

21. Under cl 15.4(g) Dexus was only permitted to do so:

1. to a Qualified Buyer: there is no dispute that this was so;

2. if such a person had entered into a deed of confidentiality: there is no dispute that this was done; and

3. if that deed was in a form “to [the] reasonable satisfaction” of the Remaining Shareholders.

22. The latter requirement appears to bespeak the parties’ intention that the Remaining Shareholders have an opportunity to achieve such reasonable satisfaction before any confidential information is disclosed.

23. I doubt that the disclosure made by Dexus in February 2025 was sufficient for this purpose.

24. For that reason, I do not see Dexus’s case that there has been no breach at all of the Deed to be strong.

25. Assuming there has been a breach, it appears to be irremediable. It is hard to see how what has been done can now be undone.

26. The real issue is whether the breach was “material”.

27. In that regard, the following factors are at play:

1. the breach is said by Dexus to have been “inadvertent”, in that Dexus contends that it “operated on the basis that a template confidentiality deed poll had been agreed between the shareholders for use in sales processes sometime between 2009 and 2014”; ^[1]

   1. See Affidavit of Michael Faulkner, Head of Asset Management of one of the Dexus companies.

2. the recipients of the disclosed information were required to, and did, enter confidentiality deeds poll;

3. Mr Giles SC, who appeared with Ms Winnett for APAC, drew attention to what he submitted were shortcomings in the form of the confidentiality deeds poll and their ambit;

4. however, as Mr Arnott SC, who appeared with Mr Wong for Dexus, pointed out, APAC did not in February 2025, nor in the process whereby it issued the Default Notice, assert that the form of the confidentiality deeds poll was inadequate or would not have been to the reasonable satisfaction of the Remaining Shareholders had they timeously been made aware of their form;

5. extensive confidential financial information was disclosed by the Dexus to the bidders and prospective purchasers;

6. that information was disclosed to a wide range of people, including a larger number of persons connected to one prospective bidder, who did not themselves execute a deed of confidentiality in circumstances where the Deed does not require that those individuals do so; and

7. the terms of the assurances given by some of the parties to whom information was provided, being that any disclosed documents had been returned or destroyed, appear to be problematic; including one who simply stated that they “assumed” the advisers to whom the information was given “had not forwarded [the information] to anyone outside of their organisations”.

28. It is also relevant, when considering whether the breach was material, to consider the impact on Dexus of the Default Notice, assuming it to be valid. That impact is immediate, serious and permanent.

There is a serious question to be tried

29. Overall, I was satisfied that there is a serious question to be tried.

Balance of convenience

30. As to the balance of convenience, I took into account the following factors:

1. a meeting of APAC’s Audit, Risk and Finance Committee was scheduled to be held at 10:00am this morning, which was to address a significant issue in respect of which Dexus’s nominated directors wished to be heard;

2. an APAC board meeting is scheduled to be held on 5 June 2025 concerning the approval of a different and significant matter in respect of which Dexus’s nominated directors would wish to be heard;

3. further board meetings are scheduled over the coming months, at which, it is reasonable to infer, matters of concern to Dexus will be discussed and decided, and at which Dexus wishes their nominated directors to attend and vote; and

4. the form of order sought by Dexus, and made by me, does not interfere with the process, already commenced, whereby APAC’s Auditor, Deloitte, values Dexus’s shares as part of the compulsory sale process in 12.3 of the Deed.

31. I concluded that the balance of convenience favours the making of the orders.

32. The parties are now conferring and agreeing as to the directions necessary to ready the matter for hearing on 11 August 2025.

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Endnote

Amendments

22 May 2025 - Coversheet - appearance for Seventh Defendant corrected.

Decision last updated: 22 May 2025