Federal Court of Australia

Duxton Dairies (Cobram) Pty Ltd, in the matter of Duxton Dairies (Cobram) Pty Ltd [2025] FCA 1118

ORDERS

THE COURT ORDERS THAT:

1. Pursuant to section 411(1) of the Corporations Act 2001 (Cth) (Act), Duxton Dairies (Cobram) Pty Ltd (First Plaintiff) convene a meeting (a Scheme Meeting) of holders of fully paid preference shares in the First Plaintiff (P1 Shareholders) for the purpose of considering, and if thought fit, agreeing (with or without modifications or conditions) to a scheme of arrangement between the First Plaintiff and those P1 Shareholders who are Scheme Shareholders (as defined in the scheme implementation agreement dated 26 June 2025 between Duxton Farms Ltd and the First Plaintiff) (P1 Scheme), the terms of which are contained in Annexure D to the First Plaintiff’s scheme booklet, a copy of which is Exhibit 1 in the proceeding (incorporating the amendments referred to in Order 6(a) below).

2. Pursuant to section 411(1) of the Act, Duxton Dried Fruits Pty Ltd (Second Plaintiff) convene a meeting (a Scheme Meeting) of holders of fully paid preference shares in the Second Plaintiff (P2 Shareholders) for the purpose of considering, and if thought fit, agreeing (with or without modifications or conditions) to a scheme of arrangement between the Second Plaintiff and those P2 Shareholders who are Scheme Shareholders (as defined in the scheme implementation agreement dated 26 June 2025 between Duxton Farms Ltd and the Second Plaintiff, as amended by the Amending Deed dated 7 August 2025 between those parties) (P2 Scheme), the terms of which are contained in Annexure D to the Second Plaintiff’s scheme book, a copy of which is Exhibit 2 in the proceeding (incorporating the amendments referred to in Order 8(a) below).

3. Pursuant to section 411(1) of the Act, Duxton Bees Pty Ltd (Third Plaintiff) convene a meeting (a Scheme Meeting) of holders of fully paid preference shares in the Third Plaintiff (P3 Shareholders) for the purpose of considering, and if thought fit, agreeing (with or without modifications or conditions) to a scheme of arrangement between the Third Plaintiff and those P3 Shareholders who are Scheme Shareholders (as defined in the scheme implementation agreement dated 26 June 2025 between Duxton Farms Ltd and the Third Plaintiff, as amended by the Amending Deed dated 6 August 2025 between those parties) (P3 Scheme), the terms of which are contained in Annexure D to the Third Plaintiff’s scheme book, a copy of which is Exhibit 3 in the proceeding (incorporating the amendments referred to in Order 10(a) below).

4. Pursuant to section 411(1) of the Act, Duxton Orchards Pty Ltd (Fourth Plaintiff) convene a meeting (a Scheme Meeting) of holders of fully paid preference shares in the Fourth Plaintiff (P4 Shareholders) for the purpose of considering, and if thought fit, agreeing (with or without modifications or conditions) to a scheme of arrangement between the Fourth Plaintiff and those P4 Shareholders who are Scheme Shareholders (as defined in the scheme implementation agreement dated 26 June 2025 between Duxton Farms Ltd and the Fourth Plaintiff) (P4 Scheme), the terms of which are contained in Annexure D to the Fourth Plaintiff’s scheme booklet, a copy of which is Exhibit 4 in the proceeding (incorporating the amendments referred to in Order 12(a) below).

5. Pursuant to section 1319 of the Act:

(a) the Scheme Meetings of the Plaintiffs be held on 10 October 2025 in person at the Gilbert Suite, Adelaide Convention Centre, North Terrace, Adelaide, South Australia, commencing at:

(i) 9.00am (ACDT) for the Second Plaintiff’s Scheme Meeting;

(ii) 10.00am (ACDT) for the Third Plaintiff’s Scheme Meeting;

(iii) 11.00am (ACDT) for the First Plaintiff’s Scheme Meeting;

(iv) 12.00pm (ACDT) for the Fourth Plaintiff’s Scheme Meeting; and

(b) the Scheme Meetings be convened, held and conducted in accordance with the provisions of Part 2G.2 of the Act that apply to members of a company and the provisions of the Plaintiffs’ respective constitutions that are not inconsistent therewith and that apply to meetings of members.

6. The following documents be approved for distribution to P1 Shareholders:

(a) the First Plaintiff’s scheme book, substantially in the form of Exhibit 1 incorporating substantially the amendments referred to in paragraph 12 of the affidavit of Daniel Paul Harry Goldberg affirmed on 3 September 2025 and substantially the amendments contained in Exhibit 5 and Exhibit 6 (which is hereby approved as the explanatory statement for the purposes of section 412(1)(a) of the Act) (P1 Scheme Book);

(b) a notice of access and proxy form substantially in the form appearing at pages 1270-1271 in Annexure SJLS25 to the affidavit of Simon John Lawrence Stone affirmed on 29 August 2025 (P1 Proxy Form);

(c) a scheme consideration election form substantially in the form appearing at pages 1279-1281 in Annexure SJLS26 to the affidavit of Simon John Lawrence Stone affirmed on 29 August 2025 (P1 Election Form);

(d) an email notification substantially in the form appearing at pages 1267-1268 in Annexure SJLS24 to the affidavit of Simon John Lawrence Stone affirmed on 29 August 2025 (Email Notification); and

(e) a letter notification substantially in the form appearing at pages 1292-1293 in Annexure SJLS27 to the affidavit of Simon John Lawrence Stone affirmed on 29 August 2025 (Letter Notification),

(together, the P1 Scheme Materials).

7. The P1 Scheme Materials are to be despatched to P1 Shareholders (all of which previously have elected to receive shareholder communications electronically) whose name is recorded in the First Plaintiff’s register of members as being P1 Shareholders as at 5.00pm (ACST) on 3 September 2025 in the following manner:

(a) they are to be sent the Email Notification (which is to include an online link to the P1 Scheme Book) by way of email to their nominated email address, with a personalised P1 Proxy Form and a personalised P1 Election Form attached to it;

(b) if the First Plaintiff receives an automatic electronic “bounce back” notification that the Email Notification was unable to be delivered to the nominated email address of any P1 Shareholder (Undelivered P1 Email Recipient):

(i) the First Plaintiff is to contact the Undelivered P1 Email Recipient by telephone to confirm the correctness (or otherwise) of the email address used;

(ii) if the Undelivered P1 Email Recipient informs the First Plaintiff of an alternate or corrected email address that can be used, they are to be sent the materials referred to in subparagraph (a) above to such email address;

(iii) if there is no alternate or corrected email address that can be used, or if the Undelivered P1 Email Recipient cannot be contacted by telephone, then they are to be sent the materials referred to in subparagraph (c) below in the manner described in that subparagraph;

(c) for any Undelivered P1 Email Recipient that cannot be contacted by telephone or does not have an alternate or corrected email address that can be used, they are to be sent, by prepaid express post (in the case of P1 Shareholders whose postal address as shown on the register of members is within Australia) or by prepaid express airmail (in the case of P1 Shareholders whose registered postal address as shown on the register of members is outside Australia) to their postal address, a hard copy of:

(i) the Letter Notification;

(ii) the P1 Scheme Book;

(iii) a personalised P1 Proxy Form; and

(iv) a personalised P1 Election Form.

8. The following documents be approved for distribution to P2 Shareholders:

(a) the Second Plaintiff’s scheme book, substantially in the form of Exhibit 2 incorporating substantially the amendments referred to in paragraph 12 of the affidavit of Daniel Paul Harry Goldberg affirmed on 3 September 2025 and the amendments contained in Exhibit 5 and Exhibit 6 (which is hereby approved as the explanatory statement for the purposes of section 412(1)(a) of the Act) (P2 Scheme Book);

(b) a notice of access and proxy form substantially in the form appearing at pages 1272-1273 in Annexure SJLS25 to the affidavit of Simon John Lawrence Stone affirmed on 29 August 2025 (P2 Proxy Form);

(c) a scheme consideration election form substantially in the form appearing at pages 1282-1284 in Annexure SJLS26 to the affidavit of Simon John Lawrence Stone affirmed on 29 August 2025 (P2 Election Form);

(d) the Email Notification; and

(e) the Letter Notification,

(together, the P2 Scheme Materials).

9. The P2 Scheme Materials are to be despatched to P2 Shareholders (all of which previously have elected to receive shareholder communications electronically) whose name is recorded in the Second Plaintiff’s register of members as being P2 Shareholders as at 5.00pm (ACST) on 3 September 2025 in the following manner:

(a) they are to be sent the Email Notification (which is to include an online link to the P2 Scheme Book) by way of email to their nominated email address, with a personalised P2 Proxy Form and a personalised P2 Election Form attached to it;

(b) if the Second Plaintiff receives an automatic electronic “bounce back” notification that the Email Notification was unable to be delivered to the nominated email address of any P2 Shareholder (Undelivered P2 Email Recipient):

(i) the Second Plaintiff is to contact the Undelivered P2 Email Recipient by telephone to confirm the correctness (or otherwise) of the email address used;

(ii) if the Undelivered P2 Email Recipient informs the Second Plaintiff of an alternate or corrected email address that can be used, they are to be sent the materials referred to in subparagraph (a) above to such email address;

(iii) if there is no alternate or corrected email address that can be used, or if the Undelivered P2 Email Recipient cannot be contacted by telephone, then they are to be sent the materials referred to in subparagraph (c) below in the manner described in that subparagraph;

(c) for any Undelivered P2 Email Recipient that cannot be contacted by telephone or does not have an alternate or corrected email address that can be used, they are to be sent, by prepaid express post (in the case of P2 Shareholders whose postal address as shown on the register of members is within Australia) or by prepaid express airmail (in the case of P2 Shareholders whose registered postal address as shown on the register of members is outside Australia) to their postal address, a hard copy of:

(i) the Letter Notification;

(ii) the P2 Scheme Book;

(iii) a personalised P2 Proxy Form; and

(iv) a personalised P2 Election Form.

10. The following documents be approved for distribution to P3 Shareholders:

(a) the Third Plaintiff’s scheme book, substantially in the form of Exhibit 3 incorporating substantially the amendments referred to in paragraph 12 of the affidavit of Daniel Paul Harry Goldberg affirmed on 3 September 2025 and the amendments contained in Exhibit 5 and Exhibit 6 (which is hereby approved as the explanatory statement for the purposes of section 412(1)(a) of the Act) (P3 Scheme Book);

(b) a notice of access and proxy form substantially in the form appearing at pages 1274-1275 in Annexure SJLS25 to the affidavit of Simon John Lawrence Stone affirmed on 29 August 2025 (P3 Proxy Form);

(c) a scheme consideration election form substantially in the form appearing at pages 1285-1287 in Annexure SJLS26 to the affidavit of Simon John Lawrence Stone affirmed on 29 August 2025 (P3 Election Form);

(d) the Email Notification; and

(e) the Letter Notification,

(together, the P3 Scheme Materials).

11. The P3 Scheme Materials are to be despatched to P3 Shareholders (all of which previously have elected to receive shareholder communications electronically) whose name is recorded in the Third Plaintiff’s register of members as being P3 Shareholders as at 5.00pm (ACST) on 3 September 2025 in the following manner:

(a) they are to be sent the Email Notification (which is to include an online link to the P3 Scheme Book) by way of email to their nominated email address, with a personalised P3 Proxy Form and a personalised P3 Election Form attached to it;

(b) if the Third Plaintiff receives an automatic electronic “bounce back” notification that the Email Notification was unable to be delivered to the nominated email address of any P3 Shareholder (Undelivered P3 Email Recipient):

(i) the Third Plaintiff is to contact the Undelivered P3 Email Recipient by telephone to confirm the correctness (or otherwise) of the email address used;

(ii) if the Undelivered P3 Email Recipient informs the Third Plaintiff of an alternate or corrected email address that can be used, they are to be sent the materials referred to in subparagraph (a) above to such email address;

(iii) if there is no alternate or corrected email address that can be used, or if the Undelivered P3 Email Recipient cannot be contacted by telephone, then they are to be sent the materials referred to in subparagraph (c) below in the manner described in that subparagraph;

(c) for any Undelivered P3 Email Recipient that cannot be contacted by telephone or does not have an alternate or corrected email address that can be used, they are to be sent, by prepaid express post (in the case of P3 Shareholders whose postal address as shown on the register of members is within Australia) or by prepaid express airmail (in the case of P3 Shareholders whose registered postal address as shown on the register of members is outside Australia) to their postal address, a hard copy of:

(i) the Letter Notification;

(ii) the P3 Scheme Book;

(iii) a personalised P3 Proxy Form; and

(iv) a personalised P3 Election Form.

12. The following documents be approved for distribution to P4 Shareholders:

(a) the Fourth Plaintiff’s scheme book, substantially in the form of Exhibit 4 incorporating substantially the amendments referred to in paragraph 12 of the affidavit of Daniel Paul Harry Goldberg affirmed on 3 September 2025 and the amendments contained in Exhibit 5 and Exhibit 6 (which is hereby approved as the explanatory statement for the purposes of section 412(1)(a) of the Act) (P4 Scheme Book);

(b) a notice of access and proxy form substantially in the form appearing at pages 1276-1277 in Annexure SJLS25 to the affidavit of Simon John Lawrence Stone affirmed on 29 August 2025 (P4 Proxy Form);

(c) a scheme consideration election form substantially in the form appearing at pages 1288-1290 in Annexure SJLS26 to the affidavit of Simon John Lawrence Stone affirmed on 29 August 2025 (P4 Election Form);

(d) the Email Notification; and

(e) the Letter Notification,

(together, the P4 Scheme Materials).

13. The P4 Scheme Materials are to be despatched to P4 Shareholders (all of which previously have elected to receive shareholder communications electronically) whose name is recorded in the Fourth Plaintiff’s register of members as being P4 Shareholders as at 5.00pm (ACST) on 3 September 2025 in the following manner:

(a) they are to be sent the Email Notification (which is to include an online link to the P4 Scheme Book) by way of email to their nominated email address, with a personalised P4 Proxy Form and a personalised P4 Election Form attached to it;

(b) if the Fourth Plaintiff receives an automatic electronic “bounce back” notification that the Email Notification was unable to be delivered to the nominated email address of any P4 Shareholder (Undelivered P4 Email Recipient):

(i) the Fourth Plaintiff is to contact the Undelivered P4 Email Recipient by telephone to confirm the correctness (or otherwise) of the email address used;

(ii) if the Undelivered P4 Email Recipient informs the Fourth Plaintiff of an alternate or corrected email address that can be used, they are to be sent the materials referred to in subparagraph (a) above to such email address;

(iii) if there is no alternate or corrected email address that can be used, or if the Undelivered P4 Email Recipient cannot be contacted by telephone, then they are to be sent the materials referred to in subparagraph (c) below in the manner described in that subparagraph;

(c) for any Undelivered P4 Email Recipient that cannot be contacted by telephone or does not have an alternate or corrected email address that can be used, they are to be sent, by prepaid express post (in the case of P4 Shareholders whose postal address as shown on the register of members is within Australia) or by prepaid express airmail (in the case of P4 Shareholders whose registered postal address as shown on the register of members is outside Australia) to their postal address, a hard copy of:

(i) the Letter Notification;

(ii) the P4 Scheme Book;

(iii) a personalised P4 Proxy Form; and

(iv) a personalised P4 Election Form.

14. The Plaintiffs to cause a hard copy of their respective Scheme Books to be provided to any of their respective Shareholders if requested by a Shareholder.

15. Despatch of each of the Scheme Books be subject to the registration of the document with the Australian Securities and Investments Commission (ASIC) pursuant to section 412(6) of the Act.

16. Pursuant to section 1319 of the Act:

(a) each Plaintiff may determine that, for the purposes of its respective Scheme Meeting, all of the preference shares in that Plaintiff be taken to be held by the person, persons or bodies corporate who held them as at 6.30pm (ACDT) on 8 October 2025, in accordance with the register held and maintained by the respective Plaintiff;

(b) the First Plaintiff may determine that only the Proxy Forms in relation to its Scheme Meeting received by no later than 11.00am (ACDT) on 8 October 2025 are valid;

(c) the Second Plaintiff may determine that only the Proxy Forms in relation to its Scheme Meeting received by no later than 9.00am (ACDT) on 8 October 2025 are valid;

(d) the Third Plaintiff may determine that only the Proxy Forms in relation to its Scheme Meeting received by no later than 10.00am (ACDT) on 8 October 2025 are valid;

(e) the Fourth Plaintiff may determine that only the Proxy Forms in relation to its Scheme Meeting received by no later than 12.00pm (ACDT) on 8 October 2025 are valid;

(f) the Chairperson of the First Plaintiff’s Scheme Meeting be Derek Goullet or in his absence, Daniel Goldberg;

(g) the Chairperson of the Second Plaintiff’s Scheme Meeting be Andrew (Jamie) Bartlett or in his absence, Andrew Lord;

(h) the Chairperson of the Third Plaintiff’s Scheme Meeting be Keegan Blignaut or in his absence, Stefano Marafiote;

(i) the Chairperson of the Fourth Plaintiff’s Scheme Meeting be Brett Goodin or in his absence, Daniel Goldberg;

(j) the Chairperson of each Scheme Meeting shall have the power to adjourn the meeting in their absolute discretion to such time, date and place as they consider appropriate; and

(k) a poll must be taken to decide the resolutions put to the vote at each Scheme Meeting, except for procedural motions.

17. The Plaintiffs publish in The Advertiser a Notice of Hearing, in substantially the form that appears at Annexure A hereto not later than 5 days prior to the date fixed for the hearing of any application to approve their respective Schemes, and the Plaintiffs be relieved from compliance with rule 3.4 and Form 6 of the Federal Court (Corporations) Rules 2000 (Cth) (Rules) to the extent necessary.

18. Pursuant to rule 1.10 of the Rules, extend the time under rule 2.4(2) by which the record of a search of the records maintained by ASIC, in relation to the Plaintiffs, which must be annexed to the affidavit in support of the Originating process must be carried out to no earlier than 7 August 2025.

19. Compliance with the following requirements of the Rules is dispensed with:

(a) rule 2.4(1), to the extent that rule requires the affidavit filed with the Originating process to state the facts in support of the process; and

(b) rule 2.15 of the Rules shall not apply to the Scheme Meetings.

20. The proceedings be adjourned to 10.15am (AEDT) on 21 October 2025 before Justice Owens for the hearing of any application to approve the Schemes.

21. The Plaintiffs have liberty to apply.

22. These orders be entered forthwith.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Annexure A

Notice of hearing to approve scheme of arrangement

TO all the preference shareholders of [Duxton Dried Fruits Pty Ltd / Duxton Bees Pty Ltd / Duxton Dairies (Cobram) Pty Ltd / Duxton Orchards Pty Ltd] [insert applicable ACN] [(Duxton Dried Fruits / Duxton Bees / Duxton Walnuts / Duxton Orchards)].

TAKE NOTICE that at 10.15am (Sydney time) on Tuesday, 21 October 2025, the Federal Court of Australia (New South Wales Registry) at Law Courts Building, 184 Phillip Street, Queens Square, Sydney, New South Wales 2000, will hear an application by [Duxton Dried Fruits / Duxton Bees / Duxton Walnuts / Duxton Orchards] seeking the approval of a scheme of arrangement between [Duxton Dried Fruits / Duxton Bees / Duxton Walnuts / Duxton Orchards] and its preference shareholders as proposed by a resolution passed by the meeting of the preference shareholders of [Duxton Dried Fruits / Duxton Bees / Duxton Walnuts / Duxton Orchards] to be held on Friday, 10 October 2025.

If you wish to oppose the approval of the scheme of arrangement, you must file and serve on [Duxton Dried Fruits / Duxton Bees / Duxton Walnuts / Duxton Orchards] a notice of appearance, in the prescribed form, together with any affidavit on which you wish to rely at the hearing.  The notice of appearance and affidavit must be served on [Duxton Dried Fruits / Duxton Bees / Duxton Walnuts / Duxton Orchards] at its address for service at least 1 day before the date fixed for the hearing of the application.

The address for service of [Duxton Dried Fruits / Duxton Bees / Duxton Walnuts / Duxton Orchards] is:

Attention: Daniel Goldberg

c/- Addisons

Level 10, 2 Park Street

SYDNEY  NSW 2000

Service via email will be accepted: daniel.goldberg@addisons.com

Name of legal practitioner of person giving notice: Daniel Goldberg

REASONS FOR JUDGMENT

OWENS J:

1 Each plaintiff applies for orders under s 411, and directions pursuant to s 1319, of the Corporations Act 2001 (Cth) for the convening of a meeting of its preference shareholders to consider a proposed scheme of arrangement which, if implemented, would see all of the company’s preference shares acquired by Duxton Farms Ltd. On 3 September 2025 I made the orders and directions sought. These are my reasons for doing so.

2 Duxton Farms is an ASX-listed Australian integrated mixed farming enterprise that invests in and operates a portfolio of agricultural assets. Duxton Capital (Australia) Pty Ltd manages Duxton Farms’ portfolio of agricultural assets. Currently, Duxton Farms operates eight owned and leased properties in five locations. Duxton Farms’ principal business activities consist of the acquisition, development and divestment of Australian agricultural land and water assets and primary production and direct sale of agricultural commodities.

3 The first plaintiff, Duxton Dairies (Cobram) Pty Ltd, but which the parties referred to as Duxton Walnuts, operates a developing walnut orchard in the Southern Riverina areas of New South Wales.

4 The second plaintiff, Duxton Dried Fruits Pty Ltd, is one of Australia’s largest producers of dried fruits, with vineyard plantings in the Sunraysia region of New South Wales and Victoria.

5 The third plaintiff, Duxton Bees Pty Ltd, is one of the largest apiary businesses in Australia, with primary operations in honey production and sales, pollination services, and varroa mite management.

6 The fourth plaintiff, Duxton Orchards Pty Ltd, produces, stores and sells apples to packing and distribution businesses, being the second-largest producer of apples in South-Australia.

7 All of the ordinary shares in each of the four plaintiffs are owned by Duxton Capital, which acts as the company’s investment manager pursuant to an investment management agreement with each plaintiff. Under each such agreement, Duxton Capital is entitled to receive dividends declared on the ordinary shares in lieu of a traditional management fee. Duxton Farms will acquire all the ordinary shares in the four plaintiffs by share purchase agreements.

8 Investors in the business of each plaintiff participate through the acquisition of preference shares. In addition to all of the ordinary shares in each plaintiff, Duxton Capital also holds some of the preference shares issued by two of the plaintiff companies.

9 There are four proposed schemes, pursuant to which it is proposed that Duxton Farms will acquire:

(a) all preference shares in Duxton Walnuts, with each preference share being exchanged for 1.471 shares in Duxton Farms. The scheme attributes a value of $1.25 per Duxton Farms share, with the consequence that the implied value for each preference share is $1.84. The scheme permits, however, Duxton Walnuts preference shareholders to elect to receive up to 20% of this consideration in cash;

(b) all preference shares (not already owned) in Duxton Dried Fruits, with each preference share being exchanged for 0.729 shares in Duxton Farms. This scheme also attributes a value of $1.25 per Duxton Farms share, with the consequence that the implied value for each preference share is $0.91. This scheme also permits Duxton Dried Fruits preference shareholders to elect to receive up to 20% of this consideration in cash;

(c) all preference shares (not already owned) in Duxton Bees, with each preference share being exchanged for 0.839 shares in Duxton Farms. This scheme also attributes a value of $1.25 per Duxton Farms share, with the consequence that the implied value for each preference share is $1.05. This scheme also permits Duxton Bees preference shareholders to elect to receive up to 20% of this consideration in cash; and

(d) all preference shares in Duxton Orchards, with each preference share being exchanged for 0.043 shares in Duxton Farms. This scheme also attributes a value of $1.25 per Duxton Farms share, with the consequence that the implied value for each preference share is $0.05. This scheme also permits Duxton Orchards shareholders to elect to receive up to 20% of this consideration in cash.

10 A particular feature of the proposed schemes is that shareholders who receive, across all of the schemes, more than 200,000 Duxton Farms shares, as well as shares in which a director of the plaintiff companies has an interest, will be subject to escrow restrictions, and deemed to have agreed to the terms and conditions in an escrow deed contained in Schedule 2 of the schemes. These restrictions will prevent such shareholders from dealing with portions of their shares for specified periods of time, being:

(a) for one third of their escrowed shares, until after the earlier of 4:15pm on the day Duxton Farms announces its financial results for the half year ending 31 December 2025 or 6 months after the shares are issued;

(b) for another one third of their escrowed shares, until after the earlier of 4:15pm on the day Duxton Farms announces its financial results for the year ending 30 June 2026 or 12 months after the shares are issued; and

(c) for the final one third of their escrowed shares, until after the earlier of 4:15pm on the day Duxton Farms announces its financial results for the half year ending 31 December 2026 or 18 months after the shares are issued.

11 The proposed schemes are interconnected in that they are each conditional upon all of the other schemes being approved, save that the first three schemes may proceed even if the Duxton Orchards scheme does not.

12 The parties’ obligations are set out in a scheme implementation agreement in respect of each scheme (each dated 26 June 2025), as amended in the case of the Duxton Dried Fruits scheme and the Duxton Bees scheme (on 7 and 6 August, respectively). Each such agreement annexes the relevant proposed scheme, and other documents.

13 A scheme book has been prepared for each scheme. They set out a description of the relevant scheme, its advantages and disadvantages, and annex a range of relevant documents. One of those documents is a report of an independent expert appointed in relation to the schemes, Leadenhall Corporate Advisory Pty Ltd, expressing the view that each of the proposed schemes is fair and reasonable and in the best interests of the plaintiffs’ preference shareholders.

14 A sub-committee of each of the boards of the plaintiffs has unanimously recommended that that company’s preference shareholders vote in favour of the schemes, absent a superior proposal and subject to the independent expert continuing to conclude that the schemes are in the best interests of shareholders. Those sub-committees were formed by all directors of each plaintiff who were not also a director of another plaintiff or Duxton Farms. For what it is worth, all directors of the plaintiffs who were not members of the sub-committees just referred to have also recommended that shareholders vote in favour of the schemes: see, e.g., Re Pendal Group Ltd (No 2) [2022] NSWSC 1648 at [25].

Evidence

15 The evidence in support of the application was contained in the following affidavits:

(a) Three affidavits of Daniel Paul Harry Goldberg (affirmed on 7 August 2025, 1 September 2025, and 3 September 2025, respectively) who is a partner at Addisons, the solicitors for the plaintiffs. His affidavits annexed company searches for the plaintiffs, the scheme implementation agreements between each of the plaintiffs and Duxton Farms, communications with ASIC, consents of proposed chairpersons of the scheme meetings, and other such matters. Annexed to the third affidavit of Mr Goldberg was a letter from ASIC stating that it did not propose to appear at the hearing.

(b) An affidavit of Simon John Lawrence Stone affirmed on 29 August 2025. Mr Stone is a director of Duxton Walnuts and Duxton Bees. He is also the chief operating officer of Duxton Capital. Mr Stone gave evidence of the relationship between the plaintiffs and Duxton Farms and the conflicts management policy which was implemented as part of the transaction. He also gave evidence of: (i) the directors’ recommendations concerning the schemes; (ii) verification of the scheme books; (iii) the exclusivity provisions and break fees in the scheme implementation agreements; (iv) proposed despatch of the scheme books; (v) an information line to be established; and (vi) the directors’ interests in the schemes.

(c) An affidavit of Stuart Byrne affirmed on 1 September 2025. Mr Byrne is a partner at Clayton Utz, the solicitors for Duxton Farms. His affidavit addresses: (i) verification of the Duxton Farms information in the scheme books; (ii) funding of the scheme consideration; (iii) negotiation of the break fees; and (iv) execution of the deeds poll by Duxton Farms concerning each of the schemes.

governing PRINCIPLES

16 In Xplore Wealth Limited, in the matter of Xplore Wealth Limited [2020] FCA 1868 at [23]-[24], Markovic J summarised the principles that apply when considering whether the Court should order the convening of a meeting of a company’s members (or creditors) under s 411(1) of the Corporations Act as follows (see also, e.g., Amcom Telecommunications Limited, in the matter of Amcom Telecommunications Limited [2015] FCA 341 at [12]):

At the first court hearing, the Court will order the convening of a scheme meeting and approve a draft explanatory statement to be sent to scheme members if it is satisfied of the following matters:

(1) the plaintiff is a Pt 5.1 body;

(2) the proposed scheme is a compromise or (relevantly) an arrangement within the meaning of s 411(1) of the Act;

(3) the scheme booklet will provide proper disclosure to shareholders;

(4) the scheme is bona fide and properly proposed;

(5) the Australian Securities and Investments Commission (ASIC) has had a reasonable opportunity to examine the terms of the scheme and the scheme booklet and make submissions to the Court, and has had 14 days’ notice of the date of the first court hearing; and

(6) the procedural requirements of the Federal Court (Corporations) Rules 2000 (Cth) (Corporations Rules) have been met,

see Orion Telecommunications Ltd, re Orion Telecommunications Ltd [2007] FCA 1389 at [5].

In addition, “the court will not ordinarily summon a meeting unless the scheme is of such a nature and case in such terms that, if it receives the statutory majority at the … meeting the court would be likely to approve it on the hearing of a petition which is unopposed”: F T Eastment & Sons Pty Ltd v Metal Rood Decking Supplies Pty Ltd (1977) 3 ACLR 69 at 72.

17 Insofar as the Court’s discretion to exercise the power under s 411(1) of the Corporations Act once those necessary preconditions have been met is concerned, in SILK Laser Australia Limited, in the matter of SILK Laser Australia Limited [2023] FCA 1191 at [24], Halley J said:

In MOQ [Limited, in the matter of MOQ Limited [2022] FCA 1160] at [12]-[17], I explained that the following principles guided the exercise of the Court’s discretion:

…

(b) At the first court hearing, the Court exercises its supervisory jurisdiction in order to review the scheme and to raise any queries that it might have with the plaintiff: Alstom Signalling Solutions Pty Ltd, in the matter of Alstom Signalling Solutions Pty Ltd v Alstom Transport Australia Pty Limited [2016] FCA 838 at [21] (Gleeson J). The Court needs to be satisfied that there are no obvious flaws in the scheme and that there is an adequate explanation provided to persons who have a financial interest in the proposed scheme: In the matter of Coca-Cola Amatil Limited [2021] NSWSC 270 at [13] (Black J).

(c) The Court should consider at the first court hearing whether the proposed scheme is not inappropriate and whether it is one that sensible business people might consider is of benefit to its members: Australian Leaders Fund Ltd v Equity Trustees Ltd, in the matter of Australian Leaders Fund Ltd [2021] FCA 88 at [15] (Stewart J), citing Re Sonodyne International Ltd (1994) 15 ACSR 494 at 499 (Hayne J); Integra Mining Limited, in the matter of Integra Mining Limited [2012] FCA 1414 at [11] (McKerracher J); and Amcom at [10].

(d) The Court does not need to be satisfied that no better scheme could have been proposed and ultimately, that is a question for the members themselves to determine at the scheme meeting: Associated Advisory Practices Limited, in the matter of Associated Advisory Practices Limited {2013] FCA 761 at [22] (Farrell J); Coca-Cola Amatil at [13]; and Leaders Fund at [15].

(e) Although the second court hearing is when the Court makes its final determination, in practice, the first court hearing is where the Court will typically intervene if it has concerns. A reason advanced for this, is that the market views the approval by the Court of the convening of scheme meetings as providing assurance that the scheme, at least in form and substance, has received a preliminary clearance by the Court and that trading in the company’s securities thereafter will proceed on that basis: Re Archaean Gold NL (1997) 23 ACSR 143 at 147 (Santow J); Leaders Fund at [15].

18 It is well established that the question of whether or not to accept particular consideration for shares is quintessentially a commercial matter for the members to assess, and they ought not be prevented from having the opportunity to do so, provided that the Court can be satisfied that they are acting on sufficient information and with time to consider what they are voting on: see, e.g., Re AWA Mutual Limited [2023] FCA 1551 at [54]; Re Newcrest Mining Limited [2023] FCA 1080 at [30]; Re Oz Minerals Limited [2023] FCA 197 at [15]; Re Carbon Revolution Limited [2023] FCA 1081 at [22].

FORMAL REQUIREMENTS MET

19 I am satisfied that each of the necessary preconditions to the Court’s exercise of power under s 411(1) was established by the evidence upon which the plaintiffs relied; namely:

(a) Each of the plaintiffs is a corporation, and thus is a “Part 5.1 body”.

(b) The proposed schemes are each an “arrangement” within the meaning of s 411, which contemplates a wide class of arrangements that are within the company’s power, not contrary to law and that touch or concern the company’s rights: see, e.g., Re Orion Telecommunications Ltd [2007] FCA 1389 at [5]; Re Staging Connections Group Ltd [2015] FCA 1012 at [19]; Re Silver Lake Resources Limited [2024] NSWSC 631 at [9]. A proposal for the acquisition of the shares in a company in return for consideration being paid to shareholders is plainly such an arrangement.

(c) There will be proper disclosure of relevant matters to shareholders by the scheme books, which contain the prescribed information. Various revisions to the scheme book were agreed to be made by the plaintiffs arising out of issues raised in the course of argument, in order to more clearly and accurately convey the necessary information to members. The information to be provided to members is regulated by s 412 of the Corporations Act, and reg 5.1.01 and Schedule 8 of the Corporations Regulations 2001 (Cth). There are three essential requirements: see the summary in Viridian Financial Group Ltd, in the matter of Viridian Financial Group Ltd [2025] FCA 997 at [40] (Anderson J). Those requirements are satisfied here.

(d) The schemes are bona fide and properly proposed. By the scheme implementation agreements, the plaintiffs have committed themselves to propounding the schemes which provides prima facie evidence of this fact: Re ELMO Software Pty Ltd [2023] NSWSC 12 at [18].

(e) ASIC has been given more than 14 days’ notice of this hearing as required under s 411(2) of the Corporations Act. It has also had a reasonable opportunity to consider the terms of the schemes and the draft scheme books, having been provided with drafts on 11 August 2025.

(f) ASIC company searches for each of the plaintiffs were conducted on 7 August 2025, being no earlier than seven days before the originating process was lodged (on 7 August 2025). For reasons that do not presently matter, that originating process was not accepted for filing until 19 August 2025. For that reason, it is arguable that there has been a technical non-compliance with r 2.4(2) of the Federal Court (Corporations) Rules 2000 (Cth). In those circumstances it is plainly appropriate to exercise the power under r 1.10 of Rules to extend the period of time fixed in r 2.4(2) to 7 August 2025.

(g) The chairpersons and the alternate chairpersons nominated for the proposed scheme meetings have each confirmed the matters required by r 3.2(b) of the Corporations Rules.

(h) The proposed draft orders for the convening of the scheme meetings identify the schemes as required by r 3.3(1) of the Corporations Rules.

20 In addition, there is no apparent reason why the schemes should not, in due course, receive the Court’s approval, if the necessary majority of votes are achieved. In that regard, I note that the independent expert was engaged to assess the schemes and has opined that the schemes are both fair and reasonable and in the interests of shareholders in the absence of a superior proposal. In particular, the independent expert considered that the value of the scheme consideration equalled or exceeded the market value of the preference shares (with the value of the scheme consideration calculated on the basis that each Duxton Farms share was worth $1.25):

Discretion

21 Given the ex parte nature of an application of this kind, the following matters were specifically drawn to my attention by counsel, in the course of oral and written submissions. For the reasons outlined below, I am satisfied that none of these matters provide a reason to decline to order the convening of the meetings in relation to the schemes the subject of this application.

Performance Risk and Funding

22 Duxton Farms is an ASX-listed company and not a special purpose vehicle, so strictly evidence of funding is not necessary. Nevertheless, the plaintiffs adduced evidence of Duxton Farms’ ability to fund the maximum cash component of the scheme consideration (insofar as the scheme consideration is scrip, Duxton Farms will simply issue this new capital). Assuming that every preference shareholder elects to receive the maximum 20% proportion of their consideration in cash, the total cash consideration payable would $16,975,270.17. Duxton Farms proposes to pay such cash consideration from existing cash reserves, existing debt facilities, and from the net funds to be raised by a share placement. The affidavit evidence disclosed Duxton Farms’ means to pay.

Exclusivity

23 The scheme implementation agreements contain various common deal protection mechanisms, including “no shop”, “no talk”, and “no due diligence” obligations.

24 The “no talk” and “no due diligence” obligations are subject to a carve out enabling the directors to comply with their fiduciary obligations. Furthermore, all of these obligations only apply in a period commencing on the date of the scheme implementation agreements (being 26 June 2025) and ending on the earlier of: (a) the “End Date” (being 31 December 2025 unless otherwise agreed); (b) the date the agreements are terminated; or (c) the scheme implementation date.

25 I am satisfied that the terms of the exclusivity provisions in the scheme implementation agreements in this case are in a conventional form and do not contain anything which would prevent the Court from making the orders convening the scheme meetings. I am also satisfied that the exclusivity provisions are adequately disclosed in the scheme books so as to ensure that shareholders are able to make an informed decision about the proposed scheme.

Break Fees

26 Under clause 9 of the scheme implementation agreements, the respective plaintiffs must pay Duxton Farms certain break fees if the schemes do not proceed for various reasons as follows:

(a) for Duxton Walnuts, $647,220 (being 3% of the agreed equity value of Duxton Walnuts);

(b) for Duxton Dried Fruits, $482,100 (being 1% of the agreed equity value of Duxton Dried Fruits);

(c) Duxton Bees, $960,810 (being 3% of the agreed equity value of Duxton Bees); and

(d) Duxton Orchards, $32,520 (being 3% of the agreed equity value of Duxton Orchards).

27 To be clear: the break fee in relation to any particular scheme is not payable if the reason the scheme does not proceed is because either another scheme did not proceed, or because the preference shareholders voted down the particular scheme in question.

28 The fees and the circumstances in which they are payable are fairly disclosed in the scheme books.

29 Three of these break fees exceed the 1% guideline set out in the Takeover Panel’s Guidance Note 7: Lock Up Devices. That guideline is not, of course, determinative: Re Cytopia [2009] VSC 560 at [12]-[18]; Re Toll Holdings Ltd [2015] VSC 123 at [27]-[30]; Re DuluxGroup Ltd [2019] FCA 961 at [31]; Re Isentia Group Ltd [2021] NSWSC 910 at [20]-[22]. But the fact that it is exceeded supports the need for a careful consideration of the justification advanced in support of the fees in question.

30 The fundamental basis upon which it was contended that the fees were appropriate was that they represented the outcome of an arms-length negotiation initiated by Duxton Farms, who wished to receive some protection in respect of the significant costs it had incurred in pursuing the acquisition of the plaintiffs.

31 The evidence was that Duxton Farms had incurred costs of approximately $4,191,376 to date (those costs including all third-party advisor costs such as legal, financial, commercial, media and investor relations, joint lead managers and independent expert costs). It was properly noted that those costs were incurred in relation to the totality of the related party transactions through which the proposed merger of the plaintiffs and Duxton Farms is proposed to be effected. In other words, not all of those costs relate to the schemes, and of the costs that do relate to the schemes, they may also relate to other transactions. Nevertheless, it was submitted that it was not possible to perform any meaningful dissection of the total amount.

32 In Re APN News Media Ltd [2007] FCA 770 (at [44]), Lindgren J identified the general justifications for the imposition of a break fee; namely, the costs incurred by the offeror company, the benefit that that company confers on the members of the target company by increasing its value, and the desirability, from the viewpoint of those members, that takeover offers be made to them.

33 The evidence showed that the break fees here had been negotiated. Indeed, the original position of Duxton Farms was that it should be entitled to break fees totalling $5 million. Following negotiation, the total amount of all of the break fees was significantly less than that (and significantly less than the total amount of costs incurred by Duxton Farms in relation to the transactions). The issue, it was submitted, was that because of the relatively modest value of the plaintiffs, the costs which justified the break fees were, although not excessive in absolute terms, large as a proportion of the deal.

34 I am satisfied that the negotiations which led to the agreements to pay the break fees were genuine negotiations conducted at arms length. That is an important consideration.

35 I also accept that the relatively modest equity value of the plaintiffs may justify break fees that exceed the 1% guideline. As Black J explained in Re Isentia at [21]:

I also recognise that, the lower the equity value of the scheme company, the greater the chance that the 1% guideline might be exceeded where many of the transaction costs incurred by acquirers have a fixed character.

36 In Re ISPT Pty Ltd [2024] FCA 1305, Beach J indicated that a break fee of $500,000 was not an impediment to convening the scheme meeting despite it well exceeding 1% of the equity value of the target. The parties drew my attention to various other instances where Courts have ordered a meeting to consider a scheme which included a break fee exceeding the 1% limit: see Re Cytopia at [12]-[18] (which involved a 4.57% break fee); Re Isentia at [20]-[22] (which involved a 1.35% break fee); Re Facilitate Digital Holdings Limited [2013] QSC 301 (which involved a 3.9% break fee); Re Webcentral Group Limited [2020] NSWSC 1279 (which involved a 4.09% break fee).

37 The real issue, of course, is not the appropriateness of a particular percentage in the abstract, but whether the break fee is likely to operate coercively when shareholders consider and vote on the scheme, or otherwise to deter alternative bidders from making a competing offer: see, e.g., Re APN News at [43], [52].

38 I am satisfied that the fees in the present case are not likely to have such an effect. They are justified by reference to the actual amount of costs incurred, and are the outcome of arms-length negotiations. They are fully and fairly disclosed in the scheme books, such that preference shareholders will be able to take them into account when making their decision.

Escrow Arrangements

39 Deemed agreements to certain conditions are not unprecedented in schemes: see, e.g., Re Capilano Honey Ltd [2018] FCA 1568; Re BINGO Industries Ltd [2021] NSWSC 798 at [18]-[19]. In Re Capilano Honey Ltd (No 2) [2018] FCA 1925 at [74], Farrell J noted that concerns which may arise from such arrangements do not apply to sophisticated investors (both in the sense recognised by the Corporations Act and in fact). Here, the escrow arrangements will only apply to shareholders holding over 200,000 Duxton Farm Shares (equating to $250,000 worth of shares assuming a value of $1.25 per share in Duxton Farms). That fact alone does not make such shareholders sophisticated investors within the meaning of the Corporations Act, and there is no evidence about the actual characteristics of such shareholders (other than the size of this particular investment). Nevertheless, I accept the general point made by the plaintiffs that the escrow arrangements apply only to large shareholders, and furthermore that there is a rational basis for seeking to impose a restriction of this kind on such shareholders.

40 The escrow arrangements are properly disclosed in the scheme books, and I do not think that they provide a reason for refusing to convene the meetings. These types of provisions are not unprecedented. For example, Associated Advisory Practices Limited, in the matter of Associated Advisory Practices Limited (No 2) [2013] FCA 979 involved an all-scrip scheme with escrow arrangements comparable to the arrangements at issue here.

41 One issue, of course, is whether the escrow arrangements are class-creating. Whether it does depends upon three questions (see First Pacific Advisors LLC v Boart Longyear Ltd [2017] NSWCA 116 at [80] (Bathurst CJ; Beazley P and Leeming JA agreeing)):

(a) what are the rights that existing members have against the company and to what extent are they different?

(b) to what extent are those rights differently affected by the scheme?

(c) does the difference in rights or different treatment of rights make it impossible for the members in question to consider the scheme as one class?

42 The test is not one of identical treatment but of commonality of interest: Re Hills Motorway Ltd [2002] NSWSC 897 at [12]; Re Wellcom Group Ltd [2019] FCA 1655; Re Sylvastate Ltd [2011] FCA 211 at [21]; Boart at [92]-[94], [99]. Courts have typically taken a cautious approach to fracturing classes: Re Opes Prime Stockbroking Ltd (2009) 179 FCR 20; [2009] FCA 813 at [66].

43 While there are differences between general scheme shareholders and those affected by the escrow restrictions, the escrow restrictions do not create differences of a kind which would render it impossible for scheme shareholders on whom such a restriction will be imposed to consider the scheme as one class along with other shareholders who will not be subject to such a restriction. Those shareholders will still have in common the main question for determination: whether the proposed merger should proceed or not, albeit that some shareholders will not be able to deal in their shares for a period of time. I note, too, that in Associated Advisory Practices Ltd (No 2) Farrell J evidently did not consider that escrow arrangements of this kind were class-creating.

Ineligible Shareholders

44 So-called “Ineligible Foreign Shareholders” will have their Duxton Farms shares issued to a sale agent for sale with the net proceeds to be distributed to them. That accords with common practice adopted in schemes of arrangement where scrip comprises (or is a component of) the proposed scheme consideration. It does not give rise to the need for those shareholders to meet as a separate class, or provide any other reason not to convene the scheme meetings: Diverger Limited, in the matter of Diverger Limited [2023] FCA 1614 at [29] (Markovic J); In the matter of Cirrus Networks Holdings Ltd [2023] NSWSC 1298 at [22]-[23] (Black J).

Deemed Warranty

45 By clause 7.2 of each of the schemes, the scheme preference shareholders will be deemed to give a warranty to the effect their shares are fully paid, free from all security interests of third parties and that the shareholder has full power to sell and transfer their shares. The deemed warranty is properly disclosed in the scheme books, and the legitimacy of these sorts of provisions has been recognised, provided they are appropriately disclosed: see Re Intega Group Limited [2021] NSWSC 1434 at [24] and the cases cited therein.

Shareholder Communication

46 Scheme materials will be despatched by Duxton Capital, which provides corporate secretarial functions to the plaintiffs. Each plaintiff proposes to distribute materials to their respective shareholders as follows:

(a) an email that will:

(i) contain a link to an online portal or sharefile in which the shareholders can view and download the relevant scheme book and the notice of meeting contained in Annexure F to the scheme book;

(ii) attach the shareholders' personalised proxy form; and

(iii) attach the shareholders' personalised election form in respect of the scheme consideration in respect of the relevant scheme.

(b) each plaintiff will record the details of any email notifications that have “bounced back” once the email notifications have been transmitted. If a bounce back is received, the relevant plaintiff will contact the intended recipient by telephone to confirm the correctness (or otherwise) of the email address used. If there is no alternate or corrected email address that can be used, or if the intended recipient cannot be contacted by telephone, then that recipient will be sent the relevant materials in the way described in subparagraph (c) below;

(c) for any shareholder that requests a hard copy of the relevant scheme book following receipt of the email notification, or in respect of which a plaintiff receives an email “bounce back” after sending them the email notification and cannot be contacted by telephone as described in subparagraph (b) above, the relevant plaintiff proposes to despatch the following hard copy documents to the address of each such shareholder as specified in that plaintiff's register of members, by express post (or by express airmail if the shareholder’s registered address is outside Australia):

(i) a letter substantially in the form of a pro forma document in evidence;

(ii) the relevant scheme book, which includes the notice of meeting;

(iii) a personalised proxy form; and

(iv) a personalised election form in respect of the scheme consideration in respect of the relevant scheme.

47 The plaintiffs will also provide a telephone hotline and email information address. The personnel monitoring the information line and email address will be provided with guidelines, FAQs and appropriate suggested responses. Each of those documents were tendered in evidence, however, the plaintiffs made plain that while they were disclosing those proposed communications with shareholders to the Court, they were not seeking approval of them.

48 Nonetheless, a proponent of a scheme should proceed on the basis that, at the time of seeking an order for approval of a scheme, the Court will need to be informed about any relevant matters that have arisen from the way communications have occurred in the period leading up to the meeting: Diverger at [22].

49 Overall, I was satisfied that shareholders would be provided with adequate information, and that appropriate arrangements had been made to dispatch the scheme materials, and to deal with follow up communications.

CONCLUSION

50 For the foregoing reasons I was satisfied that the proposed schemes of arrangement are of such a nature, and cast in such terms, that, if they achieve the statutory majorities at the scheme meetings, the Court would be likely to approve them. Accordingly, I will make the orders sought by the plaintiffs to convene the scheme meetings.

Associate:

Dated:    10 September 2025

SCHEDULE OF PARTIES