NOTICE OF FILING - quintis.com.au · 1 Form 59 Rule 29.02(1) Affidavit WAD 103 of 2018 Federal Court of Australia District Registry: Western Australia Division: General IN THE MATTER

NOTICE OF FILING

This document was lodged electronically in the FEDERAL COURT OF AUSTRALIA (FCA) on

9/04/2018 10:13:33 AM AWST and has been accepted for filing under the Court’s Rules. Details of

filing follow and important additional information about these are set out below.

Details of Filing

Document Lodged: Affidavit - Form 59 - Rule 29.02(1)

File Number: WAD103/2018

File Title: IN THE MATTER OF SANDALWOOD PROPERTIES LTD

(ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS

APPOINTED) ACN 093 330 977

Registry: WESTERN AUSTRALIA REGISTRY - FEDERAL COURT OF

AUSTRALIA

Dated: 9/04/2018 10:13:37 AM AWST Registrar

Important Information

As required by the Court’s Rules, this Notice has been inserted as the first page of the document which

has been accepted for electronic filing. It is now taken to be part of that document for the purposes of

the proceeding in the Court and contains important information for all parties to that proceeding. It

must be included in the document served on each of those parties.

The date and time of lodgment also shown above are the date and time that the document was received

by the Court. Under the Court’s Rules the date of filing of the document is the day it was lodged (if

that is a business day for the Registry which accepts it and the document was received by 4.30 pm local

time at that Registry) or otherwise the next working day for that Registry.

1

Form 59 Rule 29.02(1)

Affidavit

WAD 103 of 2018

Federal Court of Australia

District Registry: Western Australia

Division: General

IN THE MATTER OF SANDALWOOD PROPERTIES LTD (ADMINISTRATORS

APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)ACN 093 330 977

Jason Preston, Shaun Robert Fraser and Robert Conry Brauer as receivers and

managers of Sandalwood Properties Ltd (Administrators Appointed) (Receivers and Managers Appointed) (ACN 093 330 977)

Plaintiffs

Affidavit of:

Address:

Occupation:

Date:

Contents

DocumentNumber

Details Paragraph Page

1. Affidavit of Shaun Robert Fraser in support of 1-19 1-6

Shaun Robert Fraser

Level 12, 20 Martin Place, Sydney in the state of New South Wales

Registered Liquidator

9 April 2018

Filed on behalf of: Jason Preston, Shaun Robert Fraser and Robert Conry Brauer as receivers and managers of Sandalwood Properties Ltd (Administrators Appointed) (Receivers and Managers Appointed), the plaintiffsPrepared by: Charles Philip BlaxillLaw firm: AllensTel: (08) 9488 3700Email: [email protected] for service:Level 37, QV.1250 St Georges TerracePerth, Western Australia 6000Email: [email protected] A0142297487v2 120741396

QlX

Fax: (08)9488 3701

2

application for directions pursuant to section 424

of the Corporations Act 2001 (Cth) affirmed on 9

April 2018

2. Annexure “SRF2” being a copy of a Western

Australian Co-operatives Extract for Sandalwood

Growers Co-op Limited dated 23 March 2018

8 7-8

3. Annexure “SRF3” being a copy of a Growers'

Update dated'29 March 2018 sent by the

Sandalwood Growers Co-op Limited to Growers

in the 2004 Project, 2004 Premium Project and

the 2005 Project

9 9-11

4. Annexure "SRF4" being a copy of a circular dated

4 April 2018 sent by the plaintiffs to all Growers in

the 2004 Project, 2004 Premium Project and 2005Project

10 12-14

5, Annexure "SRF5" being a copy of a circular dated

23 March 2018 sent by the plaintiffs to Growers in

the 2002 Project and 2003 Project

16(a) 15-17



all managed investments schemes

16(b) 18-20



the 2002 Project and 2003 Project

17(a) 21-23


4 April 2017 sent by the plaintiffs to Growers in all

managed investment schemes, all sophisticated /

high net worth investors in the Quintis Group and

institutional investors in the Quintis Group

18 24-26

I, Shaun Robert Fraser of Level 12, 20 Martin Place, Sydney in the state of New South

Wales, Registered Liquidator affirm:

1. I am a plaintiff in this matter and a partner of McGrathNicol.

kbps A0142297487v2 120741396

3

2. I refer to my affidavit affirmed on 22 March 2018 and filed in these proceedings on 23

March 2018 (March Affidavit). Capitalised terms in this affidavit adopt the same

definitions as provided in my March Affidavit.

3. I am authorised by the Receivers to make this affidavit in support of their application

for directions pursuant to section 424 of the Act.

4. The matters contained in this affidavit are based on my own knowledge and

experience, except where otherwise stated.

5. Any reference to a page number throughout this affidavit is a reference to a page in

Exhibit SRF1 referred to in my March Affidavit.

March Affidavit

6. I refer to paragraph 31 of my March Affidavit. This paragraph erroneously refers to the

meeting of the Growers in the 2002 Project and should instead refer to the meeting of

the Growers in the 2003 Project.

7. I refer to paragraph 32 of my March Affidavit. This paragraph erroneously refers to the

meeting of the Growers in the 2003 Project and should instead refer to the meeting of the Growers in the 2002 Project.

Sandalwood Growers Co-op Limited

8. Annexed to this affidavit and marked "SRF2" is a Western Australian Co-operatives

Extract for SGC dated 23 March 2018 which I caused to be obtained from the

Register of Co-operatives maintained by the Consumer Protection division of the Department of Mines, Industry Regulations and Safety (Government of Western

Australia).

SGC Growers' update

9. On about 29 March 2018, SGC caused a Growers' Update bearing that date to be

sent to Growers in the 2004 Project, 2004 Premium Project and the 2005 Project. A

copy of this Growers' Update is annexed to this affidavit and marked "SRF3".

10. On 4 April 2018,1 caused a circular to all Growers in the 2004 Project, 2004 Premium

Project and 2005 Project, a copy of which is annexed to this affidavit and marked "SRF4", to be:

(a) posted to all Growers in the 2004 Project, 2004 Premium Project and the 2005

Project;

(a) emailed to all Growers in the 2004 Project, 2004 Premium Project and the

2005 Project for whom the Quintis Group has email addresses; and

kbps A0142297487v2 120741396

4

(b) placed on the Quintis Group website and the Receivers' website.

Current status of sales process

11. I refer to paragraphs 24 and 25 of my March Affidavit.

12. Since my March Affidavit, stage one of the sale process has now been completed and

a number of parties have expressed an interest in acquiring the business or particular

plantations (which are not the subject of a managed investment scheme).

13. The Receivers are now progressing to a stage two process. During this process, short

listed parties will have the opportunity to provide final binding offers for particular

plantations. While the overall outcome remains uncertain, monies raised through the

sale of plantations would facilitate a secured creditor led recapitalisation by reducing

the additional capital required to maintain all plantations (including those the subject

of a managed investment scheme) and facilitate a return of the business to solvency

and enable it to continue as a going concern.

Notifications to Growers

14. The Quintis Group holds email details for all Growers in the 2002 and 2003 Projects,

save for the following Growers:

(a) Daniel and Betty Grima, who are joint holders of one lot in the 2003 Project, or

0.36% of the 2003 Project as a whole; and

(b) John Leopold Lieberth, who is the holder of one lot in the 2002 Project, or

0.32% of the 2002 Project as a whole.

15. lam informed by Marina de Grys, Financial Products Admin Manager at Quintis, and

verily believe that:

(a) Quintis has not held valid contact details for John Leopold Lieberth for over 10

years;

(b) Quintis has attempted to locate Mr Lieberth via electoral roll searches;

(c) a potential NSW telephone number was identified in 2009 via a NSW Electoral

Roll search but no contact could be made with anyone at that number;

(d) Ms de Grys called the NSW telephone number on 28 March 2018 and spoke

to an elderly woman who said words to the effect that "my husband, John

Leiberth, died over 5 years ago. He did once live in WA but I do not know

where". She was unable to provide any further information to confirm whether

it was the same John Lieberth.

kbps A0142297487v2 120741396

5

16. On 23 March 2018, being the date these proceedings were commenced, I caused the

following to occur:

(a) a circular dated 23 March 2018, a copy of which is annexed to this affidavit

and marked "SRF5", (23 March 2002/2003 Circular) together with copies of

the Originating Application and my March Affidavit, to be

(i) posted to all Growers in the 2002 Project and the 2003 Project; and

(ii) emailed to all Growers in the 2002 Project and the 2003 Project for

whom the Quintis Group has email details;

(b) a circular dated 23 March 2018, a copy of which is annexed to this affidavit and marked "SRF6" (23 March All Growers Circular), to be:

(i) emailed to all Growers in management investment schemes operated

by the Quintis Group for whom the Quintis Group has email details;

and

(ii) posted to any Grower in a management investment schemes operated by the Quintis Group for whom Quintis Group did not have email

details;

(c) copies of the 23 March 2002/2003 Circular, 23 March All Growers Circular,

Originating Application, my March Affidavit and the Exhibit SFR1 to be

uploaded to:

(i) the Quintis Group website; and

(ii) the Receivers' website; and

(d) a copy of the Originating Process and my March Affidavit together with Exhibit

SRF1 to be emailed to Mackay Lawyers & Advisors.

17. Immediately following the second case management hearing on 28 March 2018, I

caused the following to occur:

(a) a circular to Growers in the 2002 and 2003 Projects (containing links to the

Amended Originating Process, the orders of Justice Colvin dated 26 March

2018 and the orders of Justice Colvin dated 28 March 2018), a copy of which

is annexed to this affidavit and marked "SRF7" (28 March Circular) to be

emailed to all Growers in the 2002 Project and the 2003 Project for whom the

Quintis Group has email details;

(b) a copy of the 28 March Circular to be sent to Daniel and Betty Grima by post;

kbps A0142297487v2 120741396

6

(c) copies of the 28 March Circular, Amended Originating Process, the orders of

Justice Colvin dated 26 March 2018 and the orders of Justice Colvin dated 28

March 2018 to be uploaded to:

(i) the Quintis Group website; and

(ii) the Receivers' website.

18. On 4 April 2018, I caused a general update circular to be emailed to all growers in

management investment schemes operated by the Quintis Group, all sophisticated /

high net worth investors in the Quintis Group and institutional investors in the Quintis

Group for whom the Quintis Group had email addresses, a copy of which is annexed

to this affidavit and marked "SRF8", and for it to be placed on the Quintis Group

website and the Receivers' website.

2003 Gold Card Project

19. I refer to paragraph 25 of the affidavit of Teague Damian Czislowski affirmed on 3

April 2018 and say as follows:

(d) the 2003 Gold Card Project is not a managed investment scheme under the

Corporations Act 2001 (Cth); and

(e) the documentation in respect of that Project is different to the documentation

relevant to the 2002 and 2003 Projects the subject of this application.

Affirmed by Shaun Robert Fraser

at Sydney

in New South Wales

on 9 April 2018

Before me:

Signature of witness

Name: 'f Q\M ^LO 0

Solicitor/Justice-ofthe-peaee-

kbps A0142297487v2 120741396

Form 3 (adapted)Rule 29.02(1 )(8)

Annexure certificate


APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)

ACN 093 330 977


managers of Sandalwood Properties Ltd (Administrators Appointed) (Receivers and

Managers Appointed) (ACN 093 330 977)

Plaintiffs

This is the annexure marked "SRF2" produced and shown to Shaun Robert Fraser at the

time of affirming his affidavit this 9 April 2018.

WAD 103 of 2018



Division: General

Filed on behalf of: Jason Preston, Shaun Robert Fraser and Robert Conry Brauer as receivers and managers of Sandalwood Properties Ltd (Administrators Appointed) (Receivers and Managers Appointed), the plaintiffsPrepared by: Charles Philip BlaxillLaw firm: AliensTel: (08)9488 3700 Fax: (08)9488 3701Email: [email protected] for service:Level 37, QV.1250 St Georges TerracePerth, Western Australia 6000Email: [email protected] A0142297487v2 120741396

7

Western Australian Co-operativesDate/Time: 23-03-2018

This document contains information extracted from the register of co-operatives database pursuant to the Co-operatives Act 2009.

Co-operative Name: Sandalwood Growers Co-op Limited

Registration Number:

Status:

Date of Registration:

Date of Deregistration:

Co-operative Type:

Co-operative Purpose:

Current Registered Office

C2017002B

Registered

08 November 2017

N/a

DistributingThe promotion and development of the Sandalwood industry by the provision of goods and services to members.

15 Mann Street Cottesloe WA 6011

Current Directors: Frank Cullity Wilson, Director

. Craig Neil Duncan, Director

Teague Damian Czislowski, Director

Disclaimer:This is a true and correct extract of information from the register maintained in accordance with the Co-operatives Act 2009 (WA). The information reproduced here has been provided to the Registrar of Co-operatives by third parties and the Registrar makes no representation that the information is correct or appropriate for the purpose for which it has been obtained.

This extract is provided in good faith and in the course of performing a function: under the Co-operatives Act 2009 (WA).

W ^

Please advise the Department of Commerce - Consumer Protection Division of any error or omission which you may identify.



IN THE MATTER OF SANDALWOOD PROPERTIES LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)

ACN 093 330 977



Plaintiffs

This is the annexure marked "SRF3" produced and shown to Shaun Robert Fraser at the time of affirming his affidavit this 9 April 2018.

WAD 103 of 2018



Division: General

Filed on behalf of: Jason Preston, Shaun Robert Fraser and Robert Conry Brauer as receivers and managers of Sandalwood Properties Ltd (Administrators Appointed) (Receivers and Managers Appointed), the plaintiffsPrepared by: Charles Philip BlaxillLaw firm: AllensTel: (08)9488 3700 Fax: (08)9488 3701Email: [email protected] for service:Level 37, QV.1250 St Georges TerracePerth, Western Australia 6000Email: [email protected] A0142297487v2 120741396

9

ScYidsh joc Or: '::i: Co cpGrowers' Update- 29th March 2018

1. Growers continue landslide vote to appoint SGC as new manager in 2004, 2004 Premium and 2005 Projects.

0/.

9080706050403020100

Landslide Support for SGC as neiv manager - zero votes against

2002 2003 2004 2004 Premium 2005

B Votes for SGC % Votes Against %

• SGC would like to thank growers for their overwhelming support and vote of confidence in the SGC;• Growers in the 2002, 2003, 2004, 2004 Premium, and 2005 Projects have now comprehensively voted to dump Quintis as their manager and appoint the SGC and so far not one grower has voted against the resolutions;• This is a crushing vote of no confidence in the Receivers from McGrath Nicol and the inept Quintis management team;

• The receivers McGrath Nicol as your Responsible Entity are challenging the validity of the resolutions passed by growers in the 2002 and 2003 Projects and a court hearing is listed in the Federal Court on 13 April. The SGC has been granted leave to intervene in these proceedings and is represented by Mackay Lawyers, Mr Anthony Papamatheos, and Mr Stephen Davies SC.• Following the outcome of the court hearing grower meetings for the 2006-2016 Projects will be called in accordance with the court's directions. If there is any need to call further meetings for the 2002- 2005 Projects to confirm the growers' appointment of the SGC these will also be held;e SGC has also been appointed the manager for plantations on behalf of several wholesale growers in the TFS 2003 Gold Card Project and we are now preparing for harvest without any challenge.

Why haven't the receivers challenged this chart?

Timbercorp ,

Wilmott Forests

iGreafSouthefn::

Gunns

Quintis

Zcrcia .Y.enihs. i L;q Ydoicrs)

Korda Mentha (Receivers)

McGrath Nicol (Receivers)

Korda Mentha (Receivers)

Korda Mentha, McGrath Nicol

Poor or ni! return (pay debt),?

Poor or nil return (pay debt)*

Poor or nil return (pay debt}*

Poor or nil return (pay debt)*

?????

SGC advice from legal experts remains unchanged: Growers should do all they can to remove their interests away from the financial contagion of the Administrators, Receivers and the insolvent Quintis Group.

10

2. Will my lease and management fees change under SGC?

Currently the SGC intends to make no change to the existing lease and management fees in the agreements.

3. Is the SGC financially resourced to carry out its functions as the grower's new manager?

The SGC has committed funding that is well in excess of the financial resources necessary to manage, maintain, harvest, market and sell all the MIS projects that it has been appointed to manage.

Unlike Quintis (over $300m debt) the SGC has no debt, and is not in financial administration. The receivers of Quintis cannot even promise on going funding beyond the next 3 months.

4. Things that don't change.

Quintis management have proven how inept they are over the past 12 months and there has been no sign of any change. Matthys, Stevens, and Thompson remain as senior executives despite serious questions over their ability and suitability. McGrath Nicol have a significant conflict of interest (acting as RE and being paid by Blackrock and the other international secured creditors) and this conflict is brought into clear focus by the Receivers threatening to cut off water supply to some growers, and threatening to refuse access to SGC as the growers' new manager when they remain as the Responsible Entity for the growers.

In their recent communications the Receivers/ Quintis have made threats of termination of Grower's leases, forfeiture of trees, cutting off water supply, and refusal to provide access to their plantations if the growers' exercise their legal rights and remove Quintis as their manager, Growers note:

8 Quintis and Receivers as the Growers' Responsible Entity have legal obligations as fiduciaries to act in the best interests of Growers, this is the highest obligation at law;

• Growers have a range of legal protections to ensure their interest in the leases and trees are protected;• Threats or statements suggesting otherwise are unlawful, unfair and unconscionable; and ° SGC expect the regulators to investigate these matters and take legal action against them.

5. Avoid the Quintis Team that reduced their oil price by 33% & achieved a 40% loss for Growers:

Please remember to register with us and stay up to date by visiting www.sand3lwoodgrowers.org

The Board of SGC thanks you for your continuing support - Teague Czislowski, Frank Wilson and Craig Duncan as Growers, Members and Directors of the Sandalwood Growers Co-op Ltd (Reg. No. C2017002B) *

*the return to growers was negligible compared to the forecast returns and/or value of the underlying assets realised and/or the remaining loan balances. We are not aware of any instance where receivers have been appointed to the RE or Corporate Group which operates an MIS which has resulted, in our opinion, in a favourable outcome for investors, other than where the insolvent RE was replaced with a new RE and the MIS removed from the externally administered Group and effects of receivership.

11





ACN 093 330 977

Jason Preston, Shaun Robert Fraser and Robert Conry Brauer as receivers and managers of Sandalwood Properties Ltd (Administrators Appointed) (Receivers and


Plaintiffs



WAD 103 of 20J8

Federal Court of Australia -


Division: General

Filed on behalf of: Jason Preston, Shaun Robert Fraser and Robert Conry Brauer as receivers and managers of Sandalwood Properties Ltd (Administrators Appointed) (Receivers and Managers Appointed), the plaintiffsPrepared by: Charles Philip BlaxillLaw firm: AllensTel: (08) 9488 3700 Fax: (08)9488 3701Email: [email protected] for service:Level 37, QV.1250 St Georges TerracePerth, Western Australia 6000Email: [email protected] A0142297487v2 120741396

12

QU INTIS*SANDALWOOD ALBUM

4 April 2018

CIRCULAR TO GROWERS IN THE IPS SANDALWOOD PROJECT 2004, TFS PREMIUM SANDALWOOD PROJECT 2004 AND TPS SANDALWOOD PROJECT 2005 (THE“PROJECTS")

We refer to our recent correspondence in relation to meetings for the TFS Sandalwood Project 2002 and TFS Sandalwood Project 2003 ("2002 and 2003 MIS” and together with the Projects, the “Relevant Projects”) held on 12 March 2018 (the “2002 and 2003 Meetings”) which sought to pass a resolution to appoint Sandalwood Growers Co-operative Ltd (“SGC”) as new manager of each of the 2002 and 2003 MIS (the “2002 and 2003 MIS Resolutions”).

As you may be aware, similar meetings were purportedly called and held on 28 March 2018 in relation to the.Projects (the “Project Meetings” and together with the 2002 and 2003 Meetings, the “Relevant Meetings”). As with the 2002 and 2003 Meetings, resolutions were sought to be passed at the Project Meetings to appoint the SGC as new manager of each of the Projects (the “Project Resolutions” and together with the 2002 and 2003 MIS Resolutions, the “Relevant Resolutions”).

■ The Receivers' view is that:the lease and management agreement for the Relevant Projects do not permit growers to terminate the management arrangements only;further, a grower is unable to terminate the lease and management agreement on behalf of other growers; and

- in any event, the Relevant Meetings were invalidly convened and the resolution sought to be passed at each such meeting is not legally effective.

* The Relevant Resolutions were purportedly passed at the Relevant Meetings despite those matters.

* Asa result, we do not consider the termination notices given in relation to any of the Relevant Projects or any of the Relevant Resolutions has any effect on growers or the existing management arrangements.

* Based on the proxies Sandalwood Properties Limited (Administrators Appointed) (Receivers and Managers Appointed) (“Sandalwood Properties”) reviewed and the votes cast by growers in person at the relevant Project Meetings, the percentage of growers who voted in favour of the Project Resolutions was as follows:

TFS Sandalwood Project 2004

37.00% 37.00% 78.17%

THE OLD SWAN BREWERYLEVEL 2, 171-173 MOUNTS BAY ROAD. PERTH WA 6000 PO BOX 3040. BROADWAY, NEDLANDS, WA 6009 T -i 618 3215 3000 F + 618 9215 3090 INFOOGUINTiS.COM.AU QUiNTiS.COM.AU

QU1NT1S LTD

QUINT1S FORESTRY LTD

QUINTIS LEASING PTY LTD

QU1NTIS PRODUCTS PTY LTD ABN SS 103 368 707

SANDALWOOD PROPERTIES LTD ABN 31 OS3 330 977

ABN 97 092 200 854

ABN 83 080 139 966

All entities subject to (Administrators Appointed) (Receivers and Managers Appointed) 13

QUINTISSANDALWOOD ALBUM

TFS Premium Sandalwood Project 2004

56.77% 65.66% 76.38%

TFS Sandalwood Project 2005

61.43% 71.29% 79.34%

■ We have approached the Court to seek directions in relation to the validity of the termination notices given in relation to the 2002 and 2003 MIS, the 2002 and 2003 Meetings and the 2002 and 2003 MIS Resolutions (the “Directions Hearing”). The Directions Hearing is scheduled to be heard in the Federal Court of Australia (Western Australian registry) on 13 April 2018.

■ Documentation relating to the Directions Hearing are available in the “Administration and Receivership News” section of the Quintis website and also in the “Assignments - Quintis Group” section of the McGrathNicol website (www.mcgrathnicol.com/assignments/).

■ Whilst the Directions Hearing does not have direct application to the Projects, given the similarities between the documents governing the Relevant Projects and the identical nature of the Relevant Resolutions, the Directions Hearing will provide useful guidance on the validity of the Project Meetings and the Project Resolutions.

■ We will update growers on the outcome of the Directions Hearing in due course and advise growers to check both the “Administration and Receivership News” section of the Quintis website and also the “Assignments - Quintis Group” section of the McGrathNicol website (www.mcgrathnicol.com/assigmnents/) for the latest infonnation and regular updates.

Sandalwood Properties (a wholly owned subsidiary of Quintis) remains as the responsible entity, continues to manage your investment and is best placed to manage growers’ interests. The recapitalisation process being progressed should lead to the best chance for growers to protect and maximise the return on their investment. We expect to be in a position to make further announcements in relation to that process in the next month. Because the Sandalwood Growers Co-op does not have the assets or infrastructure of Quintis, there is a high risk that they cannot deliver the services growers require in respect of their plantations.

Should you require any infonnation, please contact Alison Wong of my staff on + 61 2 9338 2645.

Shaun FraserJoint Receiver and Manager of Sandalwood Properties Limited (Administrators Appointed) (Receivers and Managers Appointed)

14



IN THE PATTER OF SANDALWOOD PROPERTIES LTD (ADMINISTRATORS


ACN 093 330 977



Plaintiffs



WAD 103 of 2018



Division: General

Filed on behalf of: Jason Preston, Shaun Robert Fraser and Robert Conry Brauer as receivers and managers of Sandalwood Properties Ltd (Administrators Appointed) (Receivers and Managers Appointed), the plaintiffsPrepared by: Charles Philip BlaxillLaw firm: AllensTel: (08) 9488 3700 Fax: (08)9488 3701Email: [email protected] for service:Level 37, QV.1250 St Georges TerracePerth, Western Australia 6000Email: [email protected] A0142297487v2 120741396

15

McGrathNicoi

23 March 2018

Lows! 12.20 Mat tin Place Sydney NSW 2000, Australia

GPO Box 9986 Sydney NSW 2001. Australia T +6129338 2600 F+612 9338 2699mcgrathnicol.com

CIRCULAR TO GROWERS IN TFS SANDALWOOD PROJECT 2002 AND TFS SANDALWOOD PROJECT 2003 (THE "2002 AND 2003 MIS")

We refer to our previous correspondence in relation to meetings held for the TFS Sandalwood Project 2002

and the TFS Sandalwood Project 2003 (the "2002 and 2003 MIS") on 12 March 2018 (the "Meetings")

which purported to pass a resolution to appoint a new manager of the 2002 and 2003 MIS (the

"Resolutions").

We are of the view that the steps taken to replace Sandalwood Properties Limited (Administrators

Appointed) (Receivers and Managers Appointed) ("SPL") as manager were ineffective and SPL remains as the

manager of all the Quintis managed investment schemes (including the 2002 and 2003 MIS).

We have today lodged an application with the Federal Court of Australia under section 424 of the

Corporations Act 2001 (Cth) seeking directions in relation to the exercise of our powers and functions as

receivers and managers of SPL.

We enclose a copy of the originating process and supporting affidavit for your information. These

documents as well as the exhibit referred to in the affidavit are also available in the "Administration and

Receivership News" section of the Quintis website and in the "Assignments" section of our website

(www.mcgrathnicol.com/assignments) (under "Quintis Group"). Alternatively, if you would like us to email

you a copy of the exhibit, please contact Marina de Grys at Quintis ([email protected]) (cc

[email protected]).

As set out in the originating process, the directions we are seeking in relation to the Meetings and the

Resolutions are as follows:

■ a direction that the Receivers treat the notices which purported to terminate the appointment of

SPL as manager of the 2002 and 2003 MIS as having no legal effect;

* a direction that the Receivers treat the Resolutions as having no legal effect; and

■ a direction that SPL is to continue to perform the role of manager of the 2002 and 2003 MIS and

provide the services contemplated by the Lease and Management Agreements relating to the 2002

and 2003 MIS.

Receivers letter to 2002 and 2003 MIS Growers re FC directions_

AdvisoryrdrensieTiwtsacifensRestructuringinsolvency

16

Please note the following:

■ we are providing these documents to all Growers in the 2002 and 2003 MIS;

■ you are not a party to the proceeding (the-Receivers are seeking directions from the Federal Court

and have not joined any other person to the proceeding);

■ you may wish to seek legal advice in relation to whether you wish to seek leave to be heard in the

proceeding; and

■ the matter is listed at 9.15am in the Federal Court in Perth on Monday 26 March 2018. At that time

we will be asking the Federal Court to make procedural directions including listing the matter for a

final hearing (i.e. substantive orders will not be made on Monday 26 March 2018).

We have asked the Federal Court for an expedited hearing of this matter. We hope to have this matter

listed for a final hearing within the next three (3) weeks however this will depend on the availability of the

Federal Court. We will provide a further update after the initial procedural hearing on 26 March 2018.

Should you require any information, please contact Alison Wong of my team on + 61 2 9338 2645.

Shaun Fraser

Joint Receiver and Manager of Sandalwood Properties Limited (Administrators Appointed) (Receivers and

Managers Appointed)

Page 2

17





ACN 093 330 977



Plaintiffs

This is the annexure marked "SRF6" produced and shown to Shaun Robert Fraser at the time of affirming his affidavit this 9 April 2018.

WAD 103 of 2018



Division: General


18

HcGrathNicol

23 March 2018

Level 12,20Mst tin Place Sydney NSW 2000, Australia

GPO Box99S6 Sydney NSW 2001, Australia T+612 9338 2600 F+612 9338 2699 mcgratlinicol.com

CIRCULAR TO GROWERS IN QUINTIS MANAGED INVESTMENT SCHEMES (THE "QUINTIS MIS")

We refer to our previous correspondence in relation to meetings held for the TFS Sandalwood Project 2002

and the TFS Sandalwood Project 2003 (the "2002 and 2003 MIS") on 12 March 2018 (the "Meetings")

which purported to pass a resolution to appoint a new manager of the 2002 and 2003 MIS (the

"Resolutions"),

We are of the view that the steps taken to replace Sandalwood Properties Limited (Administrators

Appointed) (Receivers and Managers Appointed) ("SPL") (a wholly owned subsidiary of Quintis Ltd) as

manager have no legal effect and SPL remains as the manager of all the Quintis MIS (including the 2002

and 2003 MIS). We have today lodged an application with the Federal Court of Australia under section 424

of the Corporations Act 2001 (Cth) seeking directions in relation to the exercise of our powers and functions

as receivers and managers of SPL,

A copy of the originating process, supporting affidavit and exhibit are available for your information in the

"Administration and Receivership News" section of the Quintis website and in the "Assignments" section of

our website (www.mcgrathnicol.com/assignments) (under "Quintis Group").

As set out in the originating process, the directions we are seeking in relation to the Meetings and the

Resolutions are as follows:

• a direction that the Receivers treat the notices which purported to terminate the appointment of

SPL as manager of the 2002 and 2003 MIS as having no legal effect;

B a direction that the Receivers treat the Resolutions as having no legal effect; and

0 a direction that SPL is to continue to perform the role of manager of the 2002 and 2003 MIS and

provide the services contemplated by the Lease and Management Agreements relating to the 2002

and 2003 MIS.

Please note the following:

■ we are providing this notice to all Growers in the Quintis MIS;

Receivers letter to MIS Growers re FC directions.

AdvisoryrArertsiCTransactionsRostrocteringSrtsofcency

19

■ you are not a party to the proceeding (the Receivers are seeking directions from the Federal Court

and have not joined any other person to the proceeding);

■ you may wish to seek legal advice in relation to whether you wish to seek leave to be heard in the

proceeding; and

■ the matter is listed at 9.15am in the Federal Court in Perth on Monday 26 March 2018. At that time

we will be asking the Federal Court to make procedural directions including listing the matter for a

final hearing (i.e. substantive orders will not be made on Monday 26 March 2018).

We have asked the Federal Court for an expedited hearing of this matter. We hope to have this matter

listed for a final hearing within the next three (3) weeks however this will depend on the availability of the

Federal Court. We will provide a further update after the initial procedural hearing on 26 March 2018.

SPL remains as the responsible entity, continues to manage your investment and is best placed to manage

Growers' interests. The recapitalisation process being advanced should lead to the best chance for Growers

to protect and maximise the return on their investment. We expect to be in a position to make further

announcements in relation to that process shortly.

We urge Growers to defer any decision on proposals put to them by any third party regarding any change

to the management of their investment until the Federal Court makes a determination on our application

and after we provide Growers with further information in relation to the recapitalisation of Quintis and the

benefits of any such proposal for Quintis MIS Growers.

As Growers may know, the wet season in northern Australia has all but finished and Quintis' extensive team

of foresters and contractors are continuing work on annual plantation maintenance programs on behalf of

Quintis MIS Growers. This continued work is vital in maximising the return on Grower's investments.


Shaun Fraser


Managers Appointed)

Page 2

20



IN THE MATTER OF SANDALWOOD PROPERTIES LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)

ACN 093 330 977



Plaintiffs



WAD 103 of 20J8



Division: General


21

McGrathNicoi

McGrathMicoiPartnershipABN41945 982 761

28 March 2018

Level 12,20 Martin Place Sydney NSW 2000, Australia

GPO Box 9986 Sydney NSW 2001, Australia

T+612 9338 2600 F+612 9338 2699

mcgrathnicol.com

CIRCULAR TO GROWERS IN TFS SANDALWOOD PROJECT 2002 AND TFS SANDALWOOD PROJECT 2003 (THE "2002 AND 2003 MIS")

We refer to our circular dated 23 March 2018 enclosing our application to the Federal Court of Australia

under section 424 of the Corporations Act 2001 (Cth) seeking directions in relation to the exercise of our

powers and functions as receivers and managers of Sandalwood Properties Limited (Administrators

Appointed) (Receivers and Managers Appointed) ("SPL").

By way of update we have amended the originating process so that the directions we are now seeking are

as follows:

• a direction that the Receivers may ignore the notices purporting to terminate SPL as manager of

the 2002 and 2003 Projects;

■ a direction that the Receivers may ignore the purported resolutions of Growers appointing the

Sandalwood Growers Co-Op Ltd ("SGC") as the new manager; and

■ a direction that SPL is to continue performing the role of manager and provide the services

contemplated by the Lease and Management Agreements relating to the 2002 and 2003 MIS.

On 28 March 2018 the court made orders, including that:

■ the final hearing of the application is to be heard on 13 April 2018;

■ the SGC has leave to intervene in the proceeding; and

0 any party seeking leave to intervene must file and serve any affidavit material on which it intends

to rely by 4pm of Tuesday 3 April 2018.

In addition to the documents we provided to you with our circular of 23 March 2018, we are also required

by the court to provide you, as Growers of the 2002 and 2003 MIS, with electronic copies of the Amended

Originating Process and all other documents in relation to this proceeding by email containing a link to the

C13 -180328 - QUINSAN01 - Receivers letter to 2002 and 2003 MIS 'Growers re amended FC directions - AWv2

A A&M

Liability Nrmad byaachama approved under Profession;;; Standards Legislation

AdvisoryForensicTransactionsRestructuringinsolvency

22

materials hosted on the website of Quintis Limited (Administrators Appointed) (Receivers and Managers

Appointed). Please click on the links below to view:

Am tines nroci

a copy of the order made by his Honour Justice Colvin on 26 March 2018; and

:opv or the ore his Honour justice Colvin on Mai 201 i

These documents are also available in the "Administration and Receivership News" section on the Quintis

website and in the "Assignments" section of our website (www.mcgrathnicol.com/assignments) (under

"Quintis Group"). Other documents related to the proceedings are also available at these locations,

including McGrathNicol's request for expedition and the exhibit to the affidavit.

You will receive further emails from us providing you with links to the various documents that are filed at

the court by us, SGC and any other party who is given leave to intervene in the proceeding.

If you would like us to provide a paper copy of any of these documents, please contact Marina de Grys at

Quintis ([email protected]) (cc [email protected]).

Please note:

B we are providing these documents to all the Growers in the 2002 and 2003 MIS;

■ you are not a party to the proceeding; and

■ any interested party may seek leave to intervene in the proceeding. You may wish to seek legal

advice in relation to whether you wish to seek leave to be heard in the proceeding.


Shaun Fraser


Managers Appointed)

Page 2

23



WAD 103 of 2018



Division: General



ACN 093 330 977


managers of Sandalwood Properties Ltd (Administrators Appointed) (Receivers and


Plaintiffs



Filed on behalf of: Jason Preston, Shaun Robert Fraser and Robert Conry Brauer as receivers and managers of Sandalwood Properties Ltd (Administrators Appointed) (Receivers and Managers Appointed), the plaintiffsPrepared by: Charles Philip BlaxiliLaw firm: AllensTel: (08) 9488 3700 Fax: (08)9488 3701Email: [email protected] for service:Level 37, QV.1250 St Georges TerracePerth, Western Australia 6000Email: [email protected] A0142297487v2 120741396

24

4 April 2018

CIRCULAR TO MANAGED INVESTMENT SCHEME GROWERS, SOPHISTICATED / HIGH NET WORTH INVESTORS AND INSTITUTIONAL INVESTORS - QUlNTiS LTD AND ITS AUSTRALIAN SUBSIDIARIES (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)

Jason Preston, Shaun Fraser and Robert Brauer were appointed as Receivers and Managers of Quintis Limited

(Administrators Appointed) (Receivers and Managers Appointed) (Quintis) and a number of its Australian

subsidiaries (the Group) on 23 January 2018 (the Receivers).

This circular is provided to members of the Quintis MIS listed in Appendix A (the "Quintis MIS"), high net worth /

sophisticated investors and institutional investors who have entered into management arrangements in relation to

their Sandalwood plantations with members of the Group.

Sale update

As previously advised the Receivers commenced a process for the sale and/or recapitalisation of Quintis upon their

appointment.

Numerous non binding indicative offers were received by the nominated closing date of 23 March 2018.

The Receivers are now progressing numerous parties to a stage two process. During this process further due

diligence will be facilitated to allow short listed parties to provide final binding offers. Further information will be

provided to Quintis stakeholders as this process is progressed. The Receivers remain confident that with the support

of bondholders an acceptable solution will be found to return Quintis to solvency.

Grower update

The Receivers continue to work with the support of the bondholders to ensure plantations are maintained. The

Receivers are in negotiations with various sophisticated investors and institutional growers to restructure their lease

and maintenance arrangements to support a more sustainable Quintis capital structure going forward. These

negotiations do not relate to MIS investors, whose plantations continue to be maintained and whose arrangements

are unchanged.

Growers in a small number of Quintis managed investment schemes have sought to terminate the management

aspects of the Lease and Management Agreements (LMAs) with Quintis.

The Receivers consider that both the notices of termination and the purported resolution to appoint a new Manager

are invalid. Further, a termination of the LMAs would result in the termination of the growers' leases and a forfeiture

of the growers' trees, which would not be in growers' best interests.

On 23 March 2018, Receivers lodged an application with the Federal Court of Australia under section 424 of the

Corporations Act 2001 (Cth) seeking directions in relation to how they treat the notices and resolutions to terminate

and replace Sandalwood Properties Limited (Administrators Appointed) (Receivers and Managers Appointed) (SPL)

as manager of the schemes. An update on the proceedings will also be provided in coming weeks.

1

25

Appendix A

List of Managed Investment Schemes for which SPL is the Responsible Entity

Proiect Name ARSN

)

| TFS Sandalwood Project 2000 094 684 410

TFS Sandalwood Project 2002 099 022 170



TFS Premium Sandalwood Project 2004 108 714 736












TFS Indian Sandalwood Project 2016 - Retail Investment Offer 610 346 864

26

Documents

NOTICE OF FILING - quintis.com.au · 1 Form 59 Rule 29.02(1) Affidavit WAD 103 of 2018 Federal Court of Australia District Registry: Western Australia Division: General IN THE MATTER