Shunfu High Court Written Decision

Okay, it is out - the written decision to the Originating Summons No 1014 of 2016

I think this decision might be overturned at the Court of Appeal; it has the feel of a square peg in a round hole about it.

Important dates:

The Decision

28          The LTSA only requires that the requisite consent for the original collective sale agreement be obtained within 12 months of the date of the first signature to that agreement. Variation of that agreement can permissibly take place in the run up to the application to the STB, which is given an additional 12 months. There is in effect a 24 month period for the collective sale process as a whole to be played out. Accordingly, there was in the present case compliance with the provisions of the LTSA in respect of the statutory timelines and thresholds. 

Limits on Variation

47             I would note, however, that there may be limits as to what can be varied or amended, and what details may be specified in the variation. The ability to vary does not mean that there is carte blanche for matters to be left vague or indefinite, and postponed for specification later.   
51     It may be that there are other limitations or controls on the variation of a collective sale agreement, and some of these may need to be considered on a case by case basis.  

(1) Private Treaty Sale

58               I disagreed with the Defendants that there was anything procedurally improper or unfair about the fact that the eventual sale of the Property was conducted by private treaty. In particular, there was no requirement that, subsequent to a failed public tender, another public tender must be sought at a lower price before a private treaty sale could be concluded at that lower price. In the circumstances of this case, given the two failed public tenders preceding the private treaty sale, and the fact that requisite approval of the subsidiary proprietors had been obtained for the private treaty price (i.e. execution of the 2nd SA providing for $638 million), I do not agree that the Sale Committee failed to explore its sale options and seek the best possible sale price.

I respectfully disagree with this Judgement in part for the following reasons:

This decision hasn't broken any new ground, it just rubber-stamps a loophole in the 80% timeline.

The SC can now legitimately spend up to 24 months securing the 80% to their desired RP. The initial 80% on a dream RP  serves as a springboard to a second 12 months of signature procurement on a lower RP. This procurement can continue right up until the last minute before application to STB , even after failed public tenders and conditional sales agreements have been entered into, I presume.  

So much for LTSA limits - they are so poorly defined that they may as well be eLasTicSA .  

I would argue that the original intention of LTSA was to limit the 80% to12 months, not 24. 

Depending on the terms on the CSA, the owners may or may not lock themselves into subsequent RPs without further authorisation. 

So, I see it like this:- public tenders on the back of a dream RP are like throwing a weighted dice that are guaranteed to turn up snake-eyes.  The SC can use that initial 80% to continually prove the dream RPs worthlessness, comply with the annoying public tender requirement  and feign 'good faith' into the bargain. 

At the end of the day, 80% of owners still must agree to the 'whatever' RP. 

When you put the cart (public tenders / private deals) before the horse (Final RP) then shenanigans rule the day.

No wonder our MA is back on board - probably banking on a Shunfuvillesque scenario.