Soul Pattinson and Brickworks have been awarded costs after the Federal Court dismissed institutional fund manager Perpetual’s long-running legal bid to prove the conglomerate’s cross-owned structure lost value and behaved oppressively.
In rejecting Perpetual’s decade-long claim that Millner family companies Washington H. Soul Pattinson and Brickworks engaged in oppressive conduct and reduced value for shareholders, through a cross-shareholding structure, Justice Jayne Jagot found that “reasonable directors” would not consider the cross-shareholding to be “unfair or oppressive”.
Billionaire chairman Rob Millner said the boards Soul Patts and Brickworks had always “done the right thing”. Photo: Peter Braig
“Accordingly, Perpetual’s claim must be rejected,” Justice Jagot wrote in her judgment, released on Monday.
Perpetual has been ordered to pay costs.
WSPH managing director Todd Barlow called the epic legal bid by Perpetual, which owns 6.3 per cent of Brickworks, to label 40 years of Soul Pattinson and Brickworks cross-shareholding oppressive as “just absurd”.
Soul Pattinson owns 44 per cent of Brickworks and Brickworks owns 42.7 per cent of Soul Patts, with members of the Millner family central to Perpetual’s case that this cross-shareholding structure entrenched control in the hands of the respective boards and billionaire chairman Rob Millner.
Perpetual, having several director nominees for Brickworks rejected, had argued that the Millner family enjoyed both undue influence and control over both companies.
Mr Barlow said both Soul Pattinson and Brickworks had very strong and independent boards that worked hard for stakeholders and acted in the best interest of all shareholders.
“There was so much work done by the respective boards to ensure performance that it was a totally baseless accusation,” Mr Barlow said.
Mr Millner added that the boards of the two companies had always “done the right thing” in terms of protecting all shareholders from fallout from the legal tussle and guaranteeing success.
“We’ve always taken the high ground over a very long period, concentrating instead on looking after shareholders and their interests,” Mr Millner said.
In giving her reasons for her judgment, Justice Jagot noted that while Perpetual remained in a strong financial position in relation to its stake in Brickworks, a beneficiary of the current strength of both companies, it had remained isolated among shareholders in its claim.
“Perpetual has been selling its shares in both companies and cannot suggest it is unable to continue to do so given the recent increases in share prices for both companies; there is no evidence that any shareholder in either company other than Perpetual wishes orders to be made to the effect Perpetual seeks,” Justice Jagot wrote.
The only question now is how much Perpetual will have to pay in legal costs for a claim that was many years in the making.
“Exactly how much we don’t know, but Perpetual will be paying costs, or their shareholders will be,” Mr Barlow said.
“Well. Someone will have to pay for this,” Mr Millner added.
The full judgment is set to be delivered on Wednesday.
Perpetual has not responded to requests for comment.