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

1. [1]

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

2. [2]

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

3. [3]

   These are my reasons for making those orders.

4. [4]

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

5. [5]

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

6. [6]

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

7. [7]

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

8. [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. [9]

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

10. [10]

    Causes 12.2 and 12.3 of the Deed provide, relevantly:

11. [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. [12]

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

    1. (1)

       Dexus cannot exercise any rights to vote;

    2. (2)

       the rights of Dexus’s nominated directors are suspended;

    3. (3)

       Dexus’s access to information is suspended; and

    4. (4)

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

13. [13]

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

14. [14]

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

What has happened

1. [15]

   Clause 15.4 of the Deed provide, relevantly:

2. [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.

3. [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.

4. [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.

5. [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?

1. [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.

2. [21]

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

   1. (1)

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

   2. (2)

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

   3. (3)

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

3. [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.

4. [23]

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

5. [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.

6. [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.

7. [26]

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

8. [27]

   In that regard, the following factors are at play:

   1. (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]

   2. (2)

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

   3. (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. (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. (5)

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

   6. (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. (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”.

9. [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

1. [29]

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

Balance of convenience

1. [30]

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

   1. (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. (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. (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. (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.

2. [31]

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

3. [32]

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