In the matter of TASK Group Holdings Limited [2024] NSWSC 821

Supreme Court New South Wales

Medium Neutral Citation: In the matter of TASK Group Holdings Limited [2024] NSWSC 821 Hearing dates: 1 July 2024 Date of orders: 1 July 2024 Decision date: 01 July 2024 Jurisdiction: Equity - Corporations List Before: Black J Decision: Orders made for supplementary disclosure in scheme of arrangement. Catchwords: CORPORATIONS — Scheme of arrangement — Application for approval of supplementary disclosure in respect of financial results and following other communications to shareholders. Legislation Cited: - Corporations Act 2001 (Cth), s 1319 Cases Cited: - Re Centro Retail Ltd [2011] NSWSC 1321 - Re Investa Listed Funds Management Ltd (as responsible entity for the Armstrong Jones Office Fund and the Prime Credit Property Trust) [2018] NSWSC 1369 - Re MyDeal.com.au [2022] NSWSC 1317 - Re Redflex Holdings Ltd (No 2) [2021] FCA 474 - Re ResApp Health Ltd [2022] NSWSC 1090 Category: Principal judgment Parties: TASK Group Holdings Limited (Plaintiff) Representation: Counsel: I Ahmed SC (Plaintiff) M A Izzo SC (Bidder)

Solicitors: King & Wood Mallesons (Plaintiff) Clayton Utz (Bidder) File Number(s): 2024/169249

Judgment – EX TEMPORE (Revised 2 July 2024)

Background and nature of the application 1. On 28 May 2024, Gleeson J made orders in these proceedings for the Plaintiff, TASK Group Holdings Ltd ("TASK") to convene a meeting of its members for the purpose of considering a proposed scheme of arrangement, and associated orders. Those orders contemplated that a scheme meeting would take place on 28 June 2024, and that meeting was adjourned for the reasons that I will note below. 2. TASK has now relisted the matter to seek orders approving a supplementary disclosure by way of an announcement to Australian Securities Exchange Limited ("ASX"). The circumstances leading to the matter being restored are addressed in the affidavit dated 29 June 2024 of Mr Anthony Boogert, a solicitor acting for TASK in respect of the scheme, and in submissions made by Mr Ahmed, who appears for TASK in the application. Mr Boogert refers to the making of orders by Gleeson J at the first Court hearing in respect of convening the scheme. He then notes that, on 31 May 2024, TASK published an Appendix 4E and annual report for the financial year ended 31 March 2024 to ASX, which it included its financial report for the financial year ended 31 March 2024. On same day, TASK published a media release on ASX, an investor presentation and held an investor conference call. Those communications generally expressed the view that the financial report result was a strong result and also referred to the recommendation made by TASK's directors in respect of the scheme. 3. As TASK fairly accepts in this application, those communications had two potential difficulties. The first is that, whatever the position would have been had they only related to TASK's financial results, they also potentially affected the information conveyed by the scheme booklet and likely required the Court's approval: Re Centro Retail Ltd [2011] NSWSC 1321 at [11] ; Re Investa Listed Funds Management Ltd (as responsible entity for the Armstrong Jones Office Fund and the Prime Credit Property Trust) [2018] NSWSC 1369; Re Redflex Holdings Ltd (No 2) [2021] FCA 474; Re ResApp Health Ltd [2022] NSWSC 1090 to make them. The second is that, while it was relevant for TASK to draw attention to the directors' recommendation in respect of the scheme, where TASK shareholders might well wonder whether the financial report and TASK's results affected that recommendation, the reference to that recommendation did not then draw attention to the fuller outline of the scheme and its advantages and disadvantages contained in the scheme booklet. 4. Mr Boogert fairly notes that TASK had provided him and solicitors working with him with information relating to the documents that were released to ASX and that he was aware of the proposed release of that information before it occurred, and he explains why the issues I have noted above were not recognised until 26 June 2024. Mr Boogert also refers, for completeness, to two further announcements published by TASK, on 12 and 26 June 2024, but they do not seem to me to be material for present purposes. 5. After the difficulties I have noted above were recognised on 26 June 2024, prior to the scheme meeting and prior to the second Court hearing, TASK then promptly prepared proposed supplementary disclosure to TASK shareholders, for which it now seeks the Court's approval; appropriately, adjourned the scheme meeting, to allow these issues to be addressed before shareholders voted upon the scheme; and, also appropriately, has drawn these matters to the attention of the Australian Securities and Investments Commission ("ASIC"). ASIC has in turn indicated, in effect, that it understands the matters which have been drawn to its attention, and it has not sought to appear on this application and has neither supported nor opposed the application. 6. Mr Boogert in turn draws attention to the proposed form of supplementary disclosure to be published on ASX, which discloses the time, date and location for the adjourned scheme meeting, which it is now proposed would take place on 4 July 2024, in three days' time; discloses that the independent expert who had expressed a view in respect of the scheme has reviewed TASK's financial results and confirmed that they do not change the opinions expressed in the independent expert's report contained in the scheme booklet; emphasises that TASK shareholders should read the information and statements recently released by TASK in the context of the disclosure in the scheme booklet; and draws attention to TASK's intention to reopen proxy voting, for a little more than a day, to allow TASK shareholders to change their vote if they wish to do so in light of the supplementary disclosure. That proposal, as I understand it, recognises the possibility that shareholders, might change their votes in response to TASK's financial results, although the independent expert has not changed its view. It is appropriate for TASK to recognise that possibility, although this perhaps is not the most likely case for that to occur.