In the matter of The Trust Company (Re Services) Limited as responsible entity of the VitalHarvest Freehold Trust (No 3)

[2021] NSWSC 479

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of The Trust Company (Re Services) Limited as responsible entity of the VitalHarvest Freehold Trust (No 3) [2021] NSWSC 479

Hearing dates:

4 May 2021

Date of orders:

4 May 2021

Decision date:

06 May 2021

Jurisdiction:

Equity - Corporations List

Before:

Black J

Decision:

Orders made approving further supplementary disclosure for distribution and postponing trust scheme meeting to specified date.

Catchwords:

CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement or compromise – Approval of supplementary disclosure and postponing trust scheme meeting to specified date.

Cases Cited:

- Re Investa Listed Funds Management Ltd as responsible entity for the Armstrong Jones Office Fund and the Prime Credit Property Trust [2018] NSWSC 1432

- Re The Trust Company (Re Services) Ltd as Responsible Entity of the VitalHarvest Freehold Trust (No 2) [2021] NSWSC 397

Category:

Procedural rulings

Parties:

The Trust Company (Re Services) Limited as Responsible Entity of the VitalHarvest Freehold Trust (Plaintiff)

Representation:

Counsel:
J Williams SC (Plaintiff)
D Thomas SC (Acquirer)

Solicitors:
Herbert Smith Freehills (Plaintiff)
King & Wood Mallesons (Acquirer)

File Number(s):

2020/364467

Judgment

1. By an application heard on 4 May 2021, the Trust Company (Re Services) Limited (“VTH RE”) as responsible entity of the VitalHarvest Freehold Trust (“VTH”) applied for an order that it would be justified in postponing, for the second time, a meeting in respect of a trust scheme to 12 May 2021 and in distributing a second supplementary explanatory statement in a specified form to unitholders in VTH, and also sought ancillary orders.

2. VTH RE relied on the affidavit dated 3 May 2021 of Ms Moodley, who is the General Manager, Legal of Perpetual Limited, which is the ultimate parent company of VTH RE. Ms Moodley referred to developments since the first Court hearing in respect of this trust scheme and since a subsequent hearing in respect of an initial adjournment of the proposed meeting, including VTH RE’s receipt of successive further proposals from two potential acquirers of all the units in VTH, or alternatively the assets of VTH, which have further increased the price at which those units would be acquired from the price contemplated by the initial scheme proposal. Ms Moodley also referred to amendments to the Scheme Implementation Deed (“SID”), which has now been amended four times as a result of VTH’s receipt of competing proposals, and noted that the proposed purchase price in the Fourth Amended SID represented an increase of $48.1 million over the purchase price agreed in the initial SID and an increase of $33.3 million over the purchase price agreed in an amended SID. Plainly, as Mr Williams who appears for VTH points out, these are happy developments from the perspective of unitholders in VTH. Ms Moodley also referred to amendments to the terms of the SID in respect of provisions dealing with public announcements and any asset sale, to which I have had regard.

3. Ms Moodley also refers to the consideration by VTH RE’s board of the latest proposal, made by Macquarie Agricultural Funds Management Limited as trustee of Macquarie Agriculture Fund – Crop Australia 2 (“MAFM”). She notes that VTH RE now proposes that the trust scheme meeting, which was previously to be held on 16 April 2021, be held on 12 May 2021. She also refers to a second supplementary independent expert’s report which concludes, perhaps not surprisingly, that the now more favourable terms of the proposed trust scheme and alternative asset sale are each fair and reasonable to, and in the best interests of, VTH unitholders in the absence of a superior proposal emerging. Ms Moodley also outlines the process which was adopted for verification of the second supplementary scheme booklet.

4. VTH RE also relies on the affidavit dated 2 May 2021 of its solicitor, Ms Maslen-Stannage, who refers to correspondence with the Australian Securities and Investments Commission (“ASIC”) in respect of the second supplementary scheme booklet and ASIC’s confirmation that it has no further comments on that booklet. Ms Maslen-Stannage also refers to the approval of that booklet by VTH RE’s board and to the proposed advertisement of the second Court hearing, presently scheduled for 18 May 2021.

5. By an affidavit dated 30 April 2021, Ms Dzopalic, who is a Senior Relationship Manager employed by Computershare Investor Services Pty Ltd, refers to the proposed arrangements for the dispatch of supplementary materials in electronic and hard copy form, which correspond to the arrangements by which scheme documents and supplementary documents have previously been dispatched to VTH unitholders. An affidavit dated 30 April 2021 of Mr De Cian, a partner of Grant Thornton Australia Limited and a director of Grant Thornton Corporate Finance Pty Ltd, confirms that he holds the opinions in the second supplementary independent expert’s report, to which I have referred above. An affidavit dated 3 May 2021 of Mr Natale, a solicitor acting for MAFM in relation to the proposal, refers to developments in respect of the amended SID and to the verification process adopted for information concerning MAFM in the supplementary scheme booklet. Mr Natale also notes that, notwithstanding the increase in the consideration now proposed under the trust scheme or for the acquisition of VTH’s assets, the amount of the “reimbursement fee” provided in the Amended SID has not increased.

6. I addressed the principles applicable to an application for the Court’s approval for supplementary disclosure in Re The Trust Company (Re Services) Ltd as Responsible Entity of the VitalHarvest Freehold Trust (No 2) [2021] NSWSC 397 (“Re VTH No 2”), addressing supplementary disclosure previously made by VTH RE in respect of this trust scheme, and I need not repeat that outline of those principles. I am satisfied that the supplementary disclosure that is now to be provided to VTH unitholders provides adequate disclosure of further events, and that the amended terms of the scheme are now more favourable to unitholders than the original terms reflected by the Trust Scheme considered at the first Court hearing. I am satisfied that the proposed arrangements for the dispatch of the further supplementary scheme booklet are consistent with those which have previously been approved by the Court in respect of this scheme.

7. I recognise that less than 10 days will be available to unitholders to consider the proposed supplementary documentation and that this is less than the time that ASIC considers would generally be appropriate. However, I am satisfied that the lesser period does not give rise to any difficulty in these circumstances, where the amendments are not complex and appear to be favourable to VTH unitholders; the relevant developments have previously been announced to ASX; and it is likely that VTH unitholders will have no particular difficulty in absorbing the new information within a shorter time period: compare Re Investa Listed Funds Management Ltd as responsible entity for the Armstrong Jones Office Fund and the Prime Credit Property Trust [2018] NSWSC 1432 at [13]-[14]. I also recognise that it is proposed that the valid proxy forms which have already been submitted by VTH unitholders will remain valid unless revoked, and it seems to me that that approach is a proper one, having regard to the principles which I reviewed in Re VTH (No 2) above at [15].

8. For these reasons, I made the orders sought by VTH RE at the hearing on 4 May 2021.

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Decision last updated: 09 May 2021