Clements Marshall Consolidated Limited v ENT Limited

Clements Marshall Consolidated Limited (CMC) sued ENT Limited over a takeover bid that CMC claimed contravened the Corporations Code. The dispute came before the Federal Court of Australia. The central legal issues involved whether ENT's bid for CMC shares breached the Code, specifically under sections 16(2)(b) and 16(2)(d). The first issue was whether the offer to acquire CMC shares was made under a take-over scheme as required by the Code. The second issue was whether the Part A statement, which ENT served on CMC, was accurate and complied with the Code's requirements.

The court held that ENT's offer to acquire CMC shares was indeed part of a take-over scheme, thereby falling under the Code's purview. However, because the offer was not limited to one class of shares, it constituted a contravention of section 16(2)(b) of the Code. Although the offer appeared commercially sensible and fair, the court found the contravention significant enough to not be excused. Regarding the Part A statement, the court found it materially misleading because it did not accurately reflect ENT's entitlement to CMC shares, breaching section 16(2)(d) of the Code. The court concluded that these breaches were substantial enough to warrant the application of the Code and could not be excused.