In the matter of Keybridge Capital Ltd

[2020] NSWSC 1917

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Keybridge Capital Ltd [2020] NSWSC 1917

Hearing dates:

15 October 2020

Date of orders:

24 December 2020

Decision date:

24 December 2020

Jurisdiction:

Equity

Before:

Ward CJ in Eq

Decision:

1.   Dismiss Keybridge Capital Limited’s originating process filed 1 June 2020 with costs.

2. Pursuant to s 1322(4) or s 1325D of the Corporations Act 2001 (Cth), extend to 26 February 2020 the time for compliance by WAM Active Limited with s 630(3) of the Corporations Act 2001 (Cth), in respect of the giving of notice to Keybridge Capital Limited of the status of the defeating conditions of the WAM Active Offer (as defined) in accordance with s 630(5)(a) of the Corporations Act 2001 (Cth).

3.   Order Keybridge Capital Limited to pay WAM Active Limited and the Australian Securities and Investments Commission their costs of the interlocutory process filed by WAM Active Limited on 16 July 2020 and amended on 15 October 2020.

Catchwords:

CORPORATIONS — Take-over offers — Where various deficiencies and non-compliance asserted in relation to defeating conditions and otherwise

CORPORATIONS — Shares — Acquisition of shares — Operation of s 650G and remedial consequences

CIVIL PROCEDURE — Jurisdiction — Inherent jurisdiction — Abuse of process — Where earlier proceedings and processes

Legislation Cited:

Acts Interpretation Act 1901 (Cth), s 15AB

Administrative Decisions (Judicial Review) Act 1977 (Cth)

Civil Procedure Act 2005 (NSW), s 56(3)

Companies (Acquisition of Shares) Act 1980 (Cth), ss 28(9), 45(3), 48

Companies Act 1961 (Vic), s 366

Companies Act 1981 (Cth), s 539

Companies and Securities Legislation Miscellaneous Amendments Act 1985 (Cth)

Companies and Securities Legislation Miscellaneous Amendments Bill 1985 (Cth)

Corporate Law Economic Reform Program Bill 1998 (Cth)

Corporations Act 2001 (Cth), ss 9, 175, 602, 630, 633, 650D, 650F, 650G, 652C, 658B, 663, 743, 1322, 1325A(1)(a),1325D

Corporations Regulations 2001 (Cth), regs 1.0.02, 7.11.27(1)(a)

Judiciary Act 1903 (Cth), s 39B

Uniform Civil Procedure Rules 2005 (NSW), rr 12.1,12.3(1)

Cases Cited:

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41

Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia (1932) 47 CLR 1; [1932] HCA 9

Attorney General (Cth) v Alinta Limited (2008) 233 CLR 542; [2008] HCA 2

Baini v The Queen (2012) 246 CLR 469; [2012] HCA 59

Barondene Pty Ltd v Breakfree Ltd [2003] QSC 480

Baxter v British Airways plc (1988) 82 ALR 298

Blaze Asset Pty Ltd v Target Energy Ltd (2009) 72 ACSR 431

Brooks v Burn Philp Trustee Co Ltd (1969) 121 CLR 432; [1969] HCA 4

CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; [1997] HCA 2

Coverdale v West Coast Council (2016) 259 CLR 164; [2016] HCA 15

Croome v Tasmania (1997) 191 CLR 119; [1997] HCA 5

Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317; [2003] HCA 51

Eastern Express Pty Ltd v General Newspapers Pty Ltd (1992) 35 FCR 43

Flinders Diamond Ltd v Tiger International Resources Inc (2004) 88 SASR 281; [2004] SASC 119

Flinders Diamonds Ltd v Tiger International Resources Inc (No 2) [2003] SASC 182; (2003) 45 ACSR 608

G and M v Armellin [2008] ACTSC 68; (2008) 219 FLR 359

Gerrard Company of Australasia Ltd v Johns Perry Ltd (1982) 7 ACLR 699; (1983) 1 ACLC 646

Harrison v Melhem (2008) 72 NSWLR 380; [2008] NSWCA 67

Henderson v Henderson (1843) 3 Hare 100; 67 ER 313

In the matter of McMahon Holdings Ltd [2008] FCA 1079

Islington London Borough Council v Uckac [2006] EWCA Civ 340; [2006] 1 WLR 1303

Johnson v Gore Wood & Co [2002] 2 AC 1

Keybridge Capital Limited 04, 05 and 06 [2020] ATP 6

Keybridge Capital Ltd 08R, 09R and 10R [2020] ATP 9

Lacey v Attorney-General (Qld) (2011) 242 CLR 573; [2011] HCA 10

Le Meilleur Pty Ltd (subject to Deed of Company Arrangement) v Jin Heung Mutual Savings Bank Co Ltd [2011] NSWSC 1115

Metwally v University of Wollongong [1985] HCA 28; (1985) 60 ALR 58

Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566; [2006] HCA 50

New South Wales Land and Housing Corporation v Quinn [2016] NSWCA 338

Nominal Defendant v Gabriel [ (2007) 71 NSWLR 150; [2007] NSWCA 52

Novus Petroleum Limited [2004] ATP 2 (2004) 22 ACLC 436

Pinnacle VRB Pty Ltd v Reliable Power Inc [2001] VSC 262; (2001) 163 FLR 215

Pitcher v Langford (1991) 23 NSWLR 142

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45

Primelife Corporation Ltd v Aevum Ltd [2005] NSWSC 269

Re Cabcharge Australia Ltd [2007] FCA 421

Re Emerald Capital [2008] FCA 1739; (2008) 68 ACSR 579

Re Precious Metals Australia Ltd (2002) 41 ACSR 546

Re PW Saddington & Sons Pty Ltd (1990) 19 NSWLR 674

Re Taipan Resources NL (No 2) (2000) 36 ACSR 704

Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1985) 10 FCR 567

Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477

Roach v Bickle (1915) 20 CLR 663; [1915] HCA 80

Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252; [2010] HCA 23

Sasson & Partners Pty Ltd v Fahevu [1999] NSWCA 400

SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34

Taylor v Owners – Strata Plan No 11564 (2014) 253 CLR 531; [2014] HCA 9

Timbercorp Finance Pty Ltd (In Liq) v Collins [2016] VSCA 128

UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45

Victoria v Sutton (1998) 195 CLR 291; [1998] HCA 56

Weinstock v Beck (2013) 251 CLR 396; [2013] HCA 14

White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) [2009] NSWCA 194

Winpar Holdings v Goldfields Kalgoorlie Ltd (2001) 40 ACSR 221

Texts Cited:

ASX Settlement Operating Rules

Report by the Companies and Securities Advisory Committee (CASAC) in March 1994 entitled “Anomalies in the Takeovers Provisions of the Corporations Law”

J D Heydon, Cross on Evidence (online edition, LexisNexis)

Category:

Principal judgment

Parties:

Keybridge Capital Ltd (Plaintiff)
WAM Active Ltd (First Defendant)
Australian Securities & Investments Commission (Second Defendant)

Representation:

Counsel:
Mr A Broadfoot QC with Mr D Sulan (Plaintiff)
Mr D Barnett with Mr T Rogan (First Defendant)
Ms AF Garsia (Second Defendant)

Solicitors:
Baker & McKenzie (Plaintiff)
Mont Lawyers (First Defendant)
Australian Securities & Investments Commission (Second Defendant)

File Number(s):

2020/163276

Publication restriction:

Nil

Judgment

1. HER HONOUR: Before me for hearing on 15 October 2020 in the Corporations List were two applications.

2. First, an application, by originating process filed 1 June 2020, seeking declaratory and other relief concerning events that have occurred in relation to an off-market takeover bid by the first defendant, WAM Active Limited (WAM Active), for the shares in Keybridge. In essence, Keybridge contends that the processing of a number of acceptances into the conditional off-market takeover bid for Keybridge made by WAM Active contravened s 650G of the Corporations Act 2001 (Cth) (Corporations Act), such that the transfers of the shares the subject of those acceptances to WAM Active were void. In that connection, part of the relief sought by Keybridge includes an order that the Processed Shares (see as defined at [43] below) vest in the second defendant, the Australian Securities and Investments Commission (ASIC), as receiver, for sale. ASIC’s position is that it is in a position to implement such an order if made (but ASIC addressed oral submissions against a proposed variation to the relief sought by Keybridge that emerged in the course of the hearing of the application, to the effect that the Processed Shares should be vested in ASIC to be held in trust). Pausing here, I note that, after judgment was reserved, Keybridge (with the consent of the defendants) advised the Court that it considered that any rights or interests of Processed Shareholders may be able to be managed at the time of formulating final orders, from which I assume it is contemplated that the parties would formulate short minutes to reflect the reasons for judgment and that final orders would not be made until then.

3. Second, an application by WAM Active, by amended interlocutory process filed in Court that morning, for certain curative or remedial relief under s 1322(4)(d) or, alternatively, s 1325D of the Corporations Act. In essence, WAM Active seeks declaratory relief to the effect that it was validly registered as the holder of the Processed Shares or, alternatively, remedial relief curing any procedural defect which prevented it becoming the registered holder of those shares. This is said to be a defensive application. It relates to the possibility that there was a contravention by reference to the time at which the notice required by s 630 of the Corporations Act was given to Keybridge (the s 630 issue) (which I will explain in due course).

Background

4. Before turning to the respective applications, it is desirable to set out the relevant background.

Keybridge and WAM Active

5. Keybridge, a company limited by shares listed on the Australian Stock Exchange (ASX), is an investment and financial service group with a portfolio of listed and unlisted investments (see [8] of the affidavit sworn on 1 June 2020 by one of its directors, Mr Jeremy Kriewaldt – the First Kriewaldt Affidavit).

6. Meanwhile, WAM Active is an ASX listed entity that engages in investment activities on behalf of its clients (see [7] of the affidavit affirmed on 16 July 2020 by Mr Jesse Hamilton, the Chief Financial Officer of Wilson Asset Management (International Pty Limited), which is the ultimate parent company of WAM Active’s investment manager – the Hamilton Affidavit).

Lodgement of WAM Active Bidder’s Statement on 13 December 2019

7. On 13 December 2019, WAM Active announced an off-market takeover bid (the WAM Active Offer) for all the shares in Keybridge at 6.5 cents per fully paid ordinary share (see First Kriewaldt Affidavit at [15]) and lodged the bidder’s statement (the WAM Active Bidder’s Statement) with ASIC (see the Hamilton Affidavit at [25]). WAM Active had twice previously announced an intention to make an offer for Keybridge (see the Hamilton Affidavit at [11], [21], [24]).

8. The WAM Active Offer (dated 3 January 2020) made under the WAM Active Bidder’s Statement was conditional (see Section 10.7 of the WAM Active Bidder’s Statement lodged with ASIC) on WAM Active acquiring a “Relevant Interest” in at least 50.1% of the issued capital of Keybridge, as well as being conditional on certain other matters (including there being no material adverse change, no regulatory action or decision and no prescribed occurrences).

9. More specifically, Section 10.7 of the WAM Active Bidder’s Statement relevantly provided:

10.7   Defeating Conditions

This Offer and the contract that results from acceptance of this Offer are each subject to the fulfilment of the following Conditions:

[…]

(c)    No Prescribed Occurrences

None of the following happens during the period commencing on the Announcement Date and ending on the expiry of the Offer Period (each being a separate condition):

(i)   the shares of KBC [i.e., Keybridge] or any of the Controlled Entities of KBC are converted into a larger or smaller number of shares;

[…]

(iv)    KBC or a subsidiary of KBC makes an issue of or grants an option to subscribe for any of its securities or agrees to make such an issue or grant such an option;

[…].

10. As is immediately apparent from the wording of the condition contained in Section 10.7(c), this was a negative condition (i.e., that none of the events there stated happened during the relevant period); a matter to which Keybridge here supports in relation to its construction of s 650G of the Corporations Act – to which I will refer in due course. Keybridge also maintains that the condition was “forward looking”.

11. Section 10.8 of the WAM Active Bidder’s Statement relevantly provided:

10.8   Nature of Conditions

(a)   Each paragraph of Section 10.7:

(i)   is a condition subsequent; and

(ii) subject to the Corporations Act, operates only for the benefit of WAM Active and any breach or non-fulfilment of such condition may be relied upon only by WAM Active which may waive (generally or in respect of a particular event) the breach or non-fulfilment of that Condition.

(b)   The Condition does not prevent a contract to sell your KBC shares resulting from your acceptance of this Offer but breach of the Condition or non-fulfilment of the Condition at the end of the Offer Period entitles WAM Active to rescind that contract by notice to you.

(c)   Where an event occurs which would mean at the time the event occurs the Condition to which this Offer or the contract resulting from your acceptance of this Offer is then subject would not be fulfilled, each paragraph of the Condition in Section 10.7 affected by that event becomes two separate Conditions on identical terms except that:

(i)   one of them relates solely to that event; and

(ii)   the other specifically excludes that event.

WAM Active may declare the Offer free under Section 10.7 from any paragraph of the Condition without declaring it free from other paragraphs and may do so at different times.

12. Section 11.1 of the WAM Active Bidder’s Statement (headed “Definitions”) provided that “Condition or Defeating Condition” means “[e]ach condition set out in Section 10.7”. It may here be noted that there is an apparent distinction between “condition” and “Condition” as used in the WAM Active Bidder’s Statement.

13. Thus, the “No Prescribed Occurrences” conditions as set out at Section 10.7(c) of the WAM Active Bidder’s Statement included the negative condition that none of the prescribed events or occurrences happens during the period commencing on the “Announcement Date” (i.e., 13 December 2019) and the expiry of the “Offer Period” (being the period for which the offer remained open as set out in Section 10); each paragraph amounting to a separate condition and there being the prospect (which in fact eventuated) that one or more of the paragraphs might bifurcate into two separate Conditions.

14. Section 10.9 of the WAM Active Bidder’s Statement provided:

10.9   Freeing the Offer from Conditions

(a) Subject to the Corporations Act, WAM Active may declare this Offer and any contract resulting from acceptance of this Offer free from:

(i)   the Condition in Section 10.7(c) by giving written notice to KBC [Keybridge] not later than 3 business days after the end of the Offer Period;

(ii)   all other Conditions, not less than 7 days before the end of the Offer Period.

(b) The date for giving notice on the status of the Condition as required by section 630(1) of the Corporations Act is [*] (subject to extension in accordance with the Corporations Act) if the Offer Period is extended.

(c)   Your acceptance or the contract resulting from your acceptance of this Offer is void if:

(i)   at the end of the Offer Period the Condition in Section 10.7 is not fulfilled; and

(ii)   WAM Active has not declared this Offer and any contract resulting from the acceptance of it free of the Condition in accordance with Section 10.9(a).

Competing bid from Aurora Funds Management Limited on 8 January 2020

15. On 8 January 2020, Aurora Funds Management Limited, as the responsible entity for the Aurora Dividend Income Trust (Aurora), announced an intention to make an off-market takeover bid for all the shares in Keybridge at 6.6 cents per share (see First Kriewaldt Affidavit at [16]).

Lodgement of Keybridge target’s statement on 17 January 2020

16. On 17 January 2020, Keybridge lodged with ASIC its target’s statement in respect of WAM Active’s bid (see First Kriewaldt Affidavit at [17]).

Extension of WAM Active Offer on 24 January 2020

17. On 24 January 2020, WAM Active extended its offer so that the closing date for acceptances was 7:00pm (Sydney time) on 17 February 2020 (unless otherwise extended or withdrawn) (see First Kriewaldt Affidavit at [18]).

Lodgement of Aurora Bidder’s Statement on 7 February 2020

18. On 7 February 2020, Aurora lodged with ASIC its bidder’s statement (the Aurora Bidder’s Statement) (see First Kriewaldt Affidavit at [19]).

Further extension of WAM Active offer on 10 February 2020

19. On 10 February 2020, the WAM Active Offer was further extended to 7:00pm (Sydney time) on 3 March 2020 (see First Kriewaldt Affidavit at [20]).

Placement on 17 February 2020

20. On 12 February 2020, Keybridge announced that it had agreed to place 22 million shares to sophisticated investors at an issue price of 6.9 cents per Keybridge share to raise $1,518,000 (the Placement).

21. On 17 February 2020, Keybridge completed the Placement (see the Hamilton Affidavit at [58]-[59]). The Placement triggered the condition in Section 10.7(c)(iv) of the WAM Active Bidder’s Statement (which related to Keybridge issuing securities).

WAM Active’s application to Takeovers Panel on 18 February 2020

22. On 18 February 2020, WAM Active lodged an application (the Keybridge Capital Limited 04 application) with the Australian Takeovers Panel (the Takeovers Panel), seeking a declaration of unacceptable circumstances.

23. As I understand it, WAM Active submitted, inter alia, that the Placement was a frustrating action denying Keybridge’s shareholders their right to consider and choose between competing control transactions and alleging that there were material disclosure deficiencies in both Keybridge’s target statement (including in relation to the Keybridge directors’ recommendations and the value of Keybridge) and in the Aurora Bidder’s Statement (as will be recalled, a rival bidder for Keybridge), including in relation to funding (see Keybridge Capital Limited 04, 05 and 06 [2020] ATP 6 at [17]; [39] (Reasons of the Takeovers Panel)).

Lodgement on 19 February 2020 of notice of initial substantial holder by Catalano Super Investments Pty Ltd

24. On 19 February 2020, Catalano Super Investments Pty Ltd (Catalano) as trustee for the Catalano Superannuation Find and its associates lodged a notice of initial substantial holder disclosing that entities controlled by Mr Antony Catalano received 19.275 million shares in the Placement (see Reasons of the Takeovers Panel at [19]).

Lodgement on 19 February 2020 of supplementary target’s statement

25. Also on 19 February 2020, Keybridge lodged with ASIC a supplementary target’s statement in respect of WAM Active’s bid dated 18 February 2020, in which it stated that WAM Active’s notice of 10 February 2020 did not comply with s 650D(1)(a)(ii) of the Corporations Act and called upon WAM Active to correct its notice and confirm that those shareholders that had accepted into WAM Active’s bid might now withdraw that acceptance (see Reasons of the Takeovers Panel at [20]).

Increase in WAM Active Offer price on 24 February 2020

26. On 24 February 2020 (one day prior to the s 630 notice date), WAM Active announced an increase in its offer price from 6.5 cents to 6.9 cents per Keybridge share and announced that it had elected to waive the majority of the defeating conditions to its bid, and that the WAM Active Offer was now only subject to the “No Prescribed Occurrences” condition set out in Section 10.7(c) of the WAM Active Bidder’s Statement (see the Hamilton Affidavit at [79]-[73]; Reasons of the Takeovers Panel at [21]).

Section 630(3) notice issued on 25 February 2020

27. As a result of inter alia the extension of the WAM Active Offer on 10 February 2020, the date by which WAM Active was required to give notice of the status of conditions to its bid was 25 February 2020 (see the Hamilton Affidavit at [31]; [73]).

28. On 25 February 2020, WAM Active issued a notice (the 25 February 2020 Notice) under s 630(3) of the Corporations Act to the effect that the WAM Active Offer remained subject to the condition in Section 10.7(c) (again, the “No Prescribed Occurrences” condition) but had been freed of all other conditions set out in Section 10.7 of the WAM Active Bidder’s Statement. More specifically, the 25 February 2020 Notice stated:

(a)   the Offer remains subject to the condition in section 10.7(c) (No Prescribed Occurrences) but has been freed of all other conditions set out in section 10.7 of the Bidder’s Statement;

(b)   as far as WAM Active is aware, the No Prescribed Occurrences condition has not been fulfilled; and

(c)   as at the date of this notice, WAM Active’s voting power in Keybridge is 21.88%.

29. Relevantly, insofar as the s 630 issue is concerned, although the 25 February 2020 Notice was given to ASX on 25 February 2020 (and ASX forwarded it to various email accounts at Keybridge on that date), WAM Active (inadvertently, as I explain below) did not directly give the notice to Keybridge until 26 February 2020. Keybridge accepts that it was given the notice on 25 February 2020, albeit that it was not given notice directly from WAM Active on that date.

30. Mr Tun Lian Yeo, by affidavit affirmed on 16 July 2020 (the Yeo Affidavit), has deposed that he drafted the notice required by s 633 (see Yeo Affidavit at [5]); he emailed it to Mr Hamilton and Mr Martyn McCathie of WAM Active, noting that the notice was to be released on the ASX once it was signed; and that he asked that they give him a copy of the signed notice once it had been announced on the ASX (see Yeo Affidavit at [7]). Mr Yeo has deposed that the announcement was made on 25 February 2020 (at [10]); and that his understanding was that the ASX would cross‑release the announcement (see Yeo Affidavit at [11]; and see the reference at [13] to an email to Keybridge on 25 February 2020).

31. Mr Yeo has deposed (see Yeo Affidavit at [15]-[17]) that he forgot to “follow up” Mr McCathie; that he received the email from Mr McCathie at 10:12am the next day, and that he sent it straight away to the directors of Keybridge (such that the email was received directly by Keybridge on 26 February 2020).

32. Consistently with Mr Yeo’s evidence, Mr McCathie has confirmed, in his affidavit affirmed 17 July 2020 (the McCathie Affidavit) (at [7]), that he received the 25 February 2020 email from Mr Yeo; and that, at around 5:20pm, WAM Active submitted the notice for release on the ASX (see McCathie Affidavit at [8]). Mr McCathie has deposed (see McCathie Affidavit at [10]) that the notice was released on the ASX announcement platform at 5:44pm; and he has annexed a copy of the announcement. Mr McCathie has also deposed (see McCathie Affidavit at [11]) that he omitted to send it to Mr Yeo (the explanation for this being that his normal practice is to leave by 5:00pm in order to go home to help with the case of his children – see at [12]). He has deposed (see McCathie Affidavit at [14]) that at 10:12am the following day he sent the email.

33. Mr Hamilton similarly gives evidence as to what occurred. Mr Hamilton deposes (see Hamilton Affidavit at [73]) that WAM Active gave that notice, and that (see Hamilton Affidavit at [74]) the notice was given by WAM Active to the ASX on 25 February 2020 (Mr Hamilton exhibiting the lodgement notice). Mr Hamilton has deposed (see Hamilton Affidavit at [75]) that WAM Active gave the notice to Keybridge on 26 February 2020, and (see Hamilton Affidavit at [77]) that the ASX records indicate that Keybridge received it on 25 February 2020 (see p 466 of the exhibit). There is an email from the ASX attaching the 25 February 2020 Notice which discloses that a number of the recipients were Keybridge email accounts.

34. Pausing here, as adverted to, WAM Active seeks a declaration that it did not contravene s 630 of the Corporations Act. It notes that s 630(6) makes a contravention of s 630(2), (3) or (4) an offence of strict liability; and seeks relief on the basis that it is at potential jeopardy of having committed an offence (see, for example, Croome v Tasmania (1997) 191 CLR 119; [1997] HCA 5 for the proposition that the threat or jeopardy of breach of law is a sufficient basis for the grant of declaratory relief) (and, in the alternative, it seeks remedial relief to cure any such breach).

Further application to Takeovers Panel on 28 February 2020

35. Returning to the chronology of events, WAM Active then sought to vary the terms of the Keybridge Capital 04 application in order to submit that Mr Catalano and Aurora were acting in concert with others (including Mr Bolton a director of Keybridge) in respect of the control of Keybridge and that Keybridge had misled shareholders in its supplementary target’s statement by suggesting that accepting shareholders had acquired withdrawal rights (see Reasons of the Takeovers Panel at [40]).

36. The Takeovers Panel refused to vary the terms of the Keybridge Capital 04 application (on the basis that it did not accept that the variation related to new circumstances – see at [41]).

37. On 28 February 2020, WAM Active then submitted a new application containing those allegations (see Reasons of the Takeovers Panel at [41]) (the Keybridge Capital Limited 05 application), which again sought a declaration of unacceptable circumstances but this time including the terms indicated above (see Reasons of the Takeovers Panel at [40]).

Issue of s 650F notice on 2 March 2020

38. On 2 March 2020, WAM Active issued a notice stating that its bid was free of the “No Prescribed Occurrences” condition and declaring its bid unconditional (see Reasons of the Takeovers Panel at [24]) (this being the notice asserted by Keybridge and found by the Takeovers Panel not to have been validly issued); and, on that date, WAM Active announced that its bid was extended to 7:00pm (Sydney time) on 3 April 2020 (the 2 March 2020 Notice) (see Reasons of the Takeovers Panel at [25]).

39. More specifically, the 2 March 2020 Notice stated (see Hamilton Affidavit at [80]):

Pursuant to section 650F of the Corporations Act 2001 (Cth), [WAM Active] gives notice that:

(a)   The Offer is free of the Condition set out in section 10.7(c) (No Prescribed Occurrences) of the Bidder’s Statement; and

(b)   as at the date of this Notice, [WAM Active]’s voting power in [Keybridge] is approximately 50.06%

Accordingly, the Offer is now unconditional.

Notice pursuant to s 650D on 2 March 2020

40. By a separate ASX announcement and notice pursuant to s 650D of the Corporations Act, issued on 2 March 2020, WAM Active announced that the WAM Active Offer period had been extended to 3 April 2020 and that it declared the WAM Active Offer unconditional. The notice stated that WAM Active intended to pay Keybridge shareholders who had accepted into its bid before 2 March 2020 on or around 6 March 2020; and that, if it received valid acceptance forms by shareholders by 4:00pm each Thursday during the (extended) offer period, it intended to pay the WAM Active Offer consideration to those shareholders the following day (see the Hamilton Affidavit at [82]).

41. Pausing here, it may be noted that s 650F of the Corporations Act provides for two separate periods in which an offeror may free bids from conditions: first, if the relevant condition relates to the occurrence of an event or circumstance referred to in s 652C(1) or (2) in relation to the target, then the offer may be freed from the condition “not later than [three] business days after the end of the offer period”; and, second, in any other case, s 650F requires that the condition must be freed “not less than [seven] days before the end of the offer period”.

42. Keybridge says that the conditions set out in Section 10.7(c)(i) and (c)(iv) did not comply with s 652C(1) or (2) of the Corporations Act, such that those conditions were required to be freed “not less than [seven] days before the end of the offer period” (namely, by no later than 25 February 2020) and that they were not purportedly freed until 2 March 2020 (which, it says, was prohibited under s 650F of the Corporations Act). Hence, it says (and the Takeovers Panel subsequently accepted), that the WAM Active Offer had closed subject to defeating conditions (and hence all takeover contracts, and all acceptances that have not resulted in binding takeover contracts, were void pursuant to s 650G of the Corporations Act).

Processing of transfers from 2 March 2020

43. From 2 March 2020, WAM Active instructed Boardroom (its share registry) to process transfers of those Keybridge shareholders that had accepted the WAM Active offer (referred to above and throughout as, the Processed Shares).

Aurora announcement on 3 March 2020

44. On 3 March 2020, Aurora announced that it would increase the cash consideration for its bid from 6.6. cents to 7.0 cents cash for each fully paid ordinary share on the condition that Keybridge shareholders are able to withdraw their acceptances from the WAM Active Offer dated 3 January 2020 (see the Hamilton Affidavit at [92]).

Bentley Capital Limited announcement on 3 March 2020

45. Also on 3 March 2020, Bentley Capital Limited (Bentley) announced that it had accepted into WAM Active’s bid on the basis that the bid was now unconditional (see the Hamilton Affidavit at [91]).

Aurora supplementary bidder’s statement on 4 March 2020

46. On 4 March 2020, Aurora lodged with ASIC (see Reasons of the Takeovers Panel at [27]) an announcement of intention to increase the consideration under its bid and confirmed that, in relation to the Placement, it had waived any prescribed condition that would otherwise have been triggered in relation to the issuance of such new shares.

47. Pausing here, WAM Active says the Supplementary Bidder’s Statement dated 5 March 2020 by Aurora indicates that Aurora understood that WAM Active had validly waived defeating conditions to its bid (see the Hamilton Affidavit at [93]). Nothing, here turns on whether Aurora had such an understanding at the time – it seems to be raised by WAM Active in the context of its submission that no one had raised any issue about the validity of the 2 March 2020 Notice prior to the Takeovers Panel hearing (in response to criticism made by Keybridge, and at least implicitly by the Takeovers Panel, as to delay or dilatory conduct by WAM Active in not raising this issue or seeking any remedial relief at an earlier time – see below).

Submissions in Keybridge Capital 04 and Keybridge Capital 05 applications

48. Between 28 February 2020 and 11 March 2020, the Takeovers Panel proceedings on foot concerning the affairs of Keybridge were the Keybridge Capital 04 application and Keybridge Capital 05 application (in both of which, as will be recalled, WAM Active sought declarations of unacceptable circumstances).

49. Mr Hamilton has deposed that, on 4 March 2020 (in submissions apparently received by the Takeovers Panel on 5 March 2020), Keybridge first raised (in response to the Takeovers Panel brief in the Keybridge Capital 04 and Keybridge Capital 05 proceedings) concerns as to the inclusions of the “Controlled Entities of KBC” in Section 10.7(i) of the Bidder’s Statement (see the Hamilton Affidavit at [106]); and he says that, at no time prior to 5 March 2020, did Keybridge raise any concerns regarding the defeating condition with respect to the Placement with WAM Active (see the Hamilton Affidavit at [109]). (The submissions made to the Takeovers Panel were not in evidence but some of their content can be gleaned from the Takeovers Panel’s reasons.)

Processing of acceptances by WAM Active

50. Meanwhile, on or about 6 March 2020 (in line, it says, with its announcement to the market of 2 March 2020), WAM Active commenced processing acceptances (see Reasons of the Takeovers Panel at [28]; the Hamilton Affidavit at [113]ff) and acquired a substantial interest in Keybridge (in circumstances, Keybridge maintains, where its bid had closed subject to the defeating conditions). CHESS acceptances, in respect of 16,057,929 Keybridge shares, were immediately paid for and processed (see the McCathie Affidavit at [32]).

51. Relevantly, these were the only acceptances into the WAM Active Offer that were processed (there is some reference in the submissions to this being the 16 million basket of shares, in contrast to the 10 million basket of shares to which I will refer shortly – those being shares in respect of which holders exercised reversal rights following the Takeovers Panel decision and then sought to accept into a new WAM Active bi, with; the so-called 10 million shares issue being one that WAM Active says cannot properly be dealt with here, not least because all necessary parties have not been joined to the present proceedings – see, for example, White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd (No 2) [2009] NSWCA 194). A master transfer form was prepared in respect of Keybridge shares accepted into the WAM Active Offer that were held on SRNs (see the McCathie Affidavit at [31]ff). Mr McCathie has deposed that this master transfer form was never processed and that all associated acceptances were cancelled.

52. WAM Active says that, as at 6 March 2020, when WAM Active announced its intention to commence processing accepted offers, it had not been suggested to WAM Active (by Keybridge, Aurora or any other party) that WAM Active’s bid had closed subject to unfulfilled defeating conditions such that s 650G of the Corporations Act was enlivened. It says that the only place where ‘warnings’ of the kind referred to by Keybridge in its submissions on the present applications could be said to have been contained are in in the submissions made by Keybridge and Aurora to the Takeovers Panel (which, as adverted to above, Keybridge says are confidential and for that reason were not disclosed to this Court).

Application by WAM Active on 10 March 2020 (March Court Proceeding)

53. On 10 March 2020, WAM Active filed an originating application in this Court (in proceedings no 2020/0076908) (the March 2020 Proceeding) seeking relief in the nature of a declaration that WAM Active had given the requisite s 630(3) notice to the target (Keybridge) or in the alternative an extension of the time for the giving of that notice to 26 February 2020 (the day after the notice was due to be given, that being the day upon which an email attaching the notice was sent by WAM Active to Keybridge directly).

Takeovers Panel application by Keybridge on 11 March 2020

54. On 11 March 2020, Keybridge lodged an application with the Takeovers Panel against WAM Active (the Keybridge Capital 06 application), seeking a declaration of unacceptable circumstances, on the basis that WAM Active had not freed its bid of the defeating conditions not less than seven days before the end of the WAM Active Offer period (the time required under s 650F of the Corporations Act) and, accordingly, that WAM Active was not able to extend its bid on 2 March 2020 and the purported extension was not valid (see Reasons of the Takeovers Panel at [30]).

55. WAM Active again emphasises that, as at 11 March 2020, it had still yet to be suggested by Keybridge (or any other party) that the events of the first week of March 2020 had triggered s 650G of the Corporations Act. WAM Active says that this is significant insofar as Keybridge now alleges that WAM Active was dilatory in responding to suggestions of irregularity in its bid and in seeking relief from this Court (see below).

Interim determination of the Takeover Panel

56. On 11 March 2020, the Acting President of the Takeovers Panel made interim orders prohibiting WAM Active from taking any steps to process acceptances received under, or any transfers in relation to, WAM Active’s bid (see Reasons of the Takeover Panel at [31])

Aurora bid unconditional on 12 March 2020

57. On 12 March 2020, Aurora made an announcement declaring its bid unconditional (see the Hamilton Affidavit at [32]).

Keybridge Capital 07 application on 16 March 2020

58. On 16 March 2020, two shareholders (Bentley and Scarborough) made applications to the Takeovers Panel seeking final orders to the effect that their acceptances into Aurora’s bid be reversed and any contracts between those entities and Aurora arising as a result of the acceptances be cancelled (see Reasons of the Takeovers Panel at [34]). Pausing here, I note that, it seems, on 10 March 2020, the broker for Bentley Scarborough incorrectly sent CHESS takeover messages to accept Aurora’s bid instead of WAM Active’s (see Reasons of the Takeovers Panel at [29]).

Events in late March 2020

59. On 24 March 2020, Aurora issued an announcement in relation to its March 2020 announcement that its bid was unconditional (at 7.0 cents per share – see at [44] above) (see Reasons of the Takeovers Panel at [35]).

60. On 25 March 2020, Keybridge lodged its target’s statement in respect of Aurora’s bid with ASIC (see Reasons of the Takeovers Panel at [36]).

61. On 30 March 2020, Aurora lodged a second supplementary bidder’s statement with ASIC (see the Reasons of the Takeovers Panel at [37]).

Events in early April 2020

62. On 5 April 2020, the Takeovers Panel notified WAM Active of the Takeovers Panel’s proposed decision and orders in the Keybridge Capital 04, Keybridge Capital 05 and Keybridge Capital 06 proceedings (see Reasons of the Takeovers Panel at [119]).

63. On 6 April 2020, Aurora’s bid for Keybridge closed (see Reasons of the Takeovers Panel at [38]).

Leave to discontinue the March 2020 Proceeding

64. As noted above, on 10 March 2020, WAM Active commenced proceedings in this Court, seeking declaratory relief in relation to a possible contravention of s 650G of the Corporations Act. On 8 April 2020, Black J made orders, by consent, granting WAM Active leave to file a notice of discontinuance in relation to the March 2020 Proceeding, pursuant to r 12.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and directed that WAM Active pay Keybridge’s costs of the discontinued proceedings as agreed or assessed. Keybridge, in its submissions, relies on this as giving rise to an Anshun estoppel (see Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45 (Anshun)) or as otherwise leading to the conclusion that WAM Active’s present application is an abuse of process – see below).

Determination by Takeover Panel on 7 April 2020

65. On 7 April 2020, the Takeovers Panel made a declaration of unacceptable circumstances (with orders being made on 9 April 2020), concluding that WAM Active had acquired a substantial interest in Keybridge purportedly under a takeover bid in circumstances where its bid had closed subject to defeating conditions. More specifically, the Takeovers Panel concluded that WAM Active did not effectively free its bid of all its defeating conditions, and was unable to extend its bid at the time it purported to do so; and, hence, that the WAM Active Offer closed at 7:00pm (Sydney time) on 3 March 2020 subject to defeating conditions. The Takeovers Panel declared that all takeover contracts and acceptances in relation to the WAM Active Offer then became void and no transfers should have been registered.

66. The Takeovers Panel published its reasons on 8 May 2020, concluding that the 2 March 2020 Notice was invalid for two separate reasons, as follows.

67. First, that the Placement announced by Keybridge on 12 February 2020 (see at [20]ff above) triggered the “no prescribed occurrence” condition in Section 10.7(c)(iv) of the WAM Active Bidder’s Statement and, as a result of Section 10.8(c), this had the effect that the condition bifurcated into two: one relating specifically to the Placement; and the other relating generally to Keybridge issuing securities (but specifically excluding the Placement) (see Reasons of the Takeovers Panel at [58]); and that the bifurcated conditions did not fall within s 652C of the Corporations Act (see Reasons of the Takeovers Panel at [60]). The Takeovers Panel, in effect, simply adopted the submission or analysis of ASIC (not here before me) in relation to the first of the bifurcated conditions and extended that analysis to the second of the conditions, saying (at [60]):

60. ASIC submitted that “the condition relating to the Placement does not fall within s652C. Accordingly s 650F(1)(b) required that condition to be waived not less than 7 days before the end of the offer period. This was not done, as the WAM Active 630 Notice dated 25 February 2020 expressly excluded 10.7(c)”. We agree with this analysis. We also note that, as an extension of this analysis, the other part of the bifurcated condition (i.e., the condition specifically excluding the Placement) would also not fall within section 652C.

68. Second, that the purported “No Prescribed Occurrences” described in Section 10.7(c)(i) of the WAM Active Bidder’s Statement was inconsistent with s 652(C)(1)(a) of the Corporations Act, stating (at [61]-[67]) that:

61. The condition in section 10.7(c)(i) of WAM Active’s bidder statement is similar to the condition in section 652C(1)(a) but with the addition of the words “or any of the Controlled Entities of [Keybridge]”. We asked for submissions from the parties as to whether the inclusion of these words extends the condition beyond the circumstances set out in section 652.

62.   WAM Active submitted that it does not for a number of reasons, including that the definition of “Controlled Entities” in its bidder’s statement refers to the term as defined in the Corporations Act 2001 (Cth) and the term is not a defined term in that legislation.

[…]

64.   In ASIC’s view, “[the Companies and Securities Advisory Committee] contemplated that the operation of s 650F would be confined strictly to the matters included in s 652(C)” and that the condition should have “technically” been properly addressed by a notice issued under section 650F(1)(b). Accordingly, the condition was not validly waived as it should have been waived not less than 7 days before the end of the offer period. We agree with this analysis.

65.   For the reasons above, the ‘No Prescribed Occurrences’ condition to WAM Active’s bid (including the sub-conditions (i) and (iv) (as varied)) did not relate only to the happening of an event or circumstance referred to in section 652(C)(1) or (2).

66. Accordingly, in accordance with section 650F(1), WAM Active needed to give a notice to Keybridge freeing its bid from those conditions not less than 7 days before the end of the offer period in order to do so validly.

67.   This did not occur. At the time WAM Active purported to free its bid from the ‘No Prescribed Occurrences’ condition (on 2 March 2020) the offer period was scheduled to end at 7.00pm (Sydney time) on 3 March 2020.

69. The Takeovers Panel said (at [72]):

72.   Despite this [a reference to the statement at [71] that WAM Active was on notice that its bid may have closed subject to defeating conditions as it was informed of the matters there set out before its bid had closed and prior to Keybridge lodging its Panel application], WAM Active commenced processing acceptances … WAM Active therefore acquired a substantial interest in Keybridge (i.e. purportedly under a takeover bid) in circumstances where its bid had closed subject to defeating conditions.

70. Pausing here, WAM Active says that the Takeovers Panel’s observation (at [71]) to the effect that “WAM Active was on notice that its bid may have closed subject to defeating conditions” mixes fact and law and thus does not attract the operation of s 658B(1) of the Corporations Act and hence is not binding on me (see Attorney General (Cth) v Alinta Limited (2008) 233 CLR 542; [2008] HCA 2 (Alinta)).

71. In any event, WAM Active says that the observation is only correct in the sense that Keybridge and Aurora had canvassed the possibility that WAM Active may have been unable to waive the condition in Section 10.7(c)(i). WAM Active contends that, as at 6 March 2020, WAM Active had no reason to believe that contracts resulting from or acceptances of its bid were void pursuant to s 650G of the Corporations Act. It says that, as at 6 March 2020, there is no evidence that any person concerned in the affairs of Keybridge (or the market more broadly) believed that WAM Active’s bid contravened s 650G of the Corporations Act; and that neither Keybridge nor Aurora had at this time expressed any such view. WAM Active says that there is no evidence that it was aware that s 650G of the Corporations Act may have been triggered.

72. The Takeovers Panel went on to say (at [73]):

73. There was another procedural issue relating to WAM Active’s bid. On 10 March 2020, WAM Active commenced Court proceedings to seek, in effect, a declaration that alleged non-compliance by it with section 630(5) was not a defect affecting its bid or, alternatively, orders effectively rectifying the alleged defect. WAM Active’s proceedings did not extend to other alleged procedural defects relating to its bid that were the subject of the Keybridge Capital Limited 06 application. This is surprising. In our commercial judgment, we would have expected any bidder seeking to rectify an aspect of its bid (or alternatively seeking to receive confirmation that rectification was not required) would also seek similar orders in relation to any other potential defects in its bid.

73. The Takeovers Panel also noted (in footnote 9), that subsequent to the Takeovers Panel making a declaration of unacceptable circumstances WAM Active had discontinued the March 2020 Proceeding. Strictly speaking, it appears from the chronology above, that while leave to discontinue the March 2020 Proceeding was granted, with Keybridge’s consent, on 8 April 2020, the March 2020 Proceeding was not formally discontinued until the filing of the notice of discontinuance at a later date (i.e., 15 June 2020 – see at [82] below). In any event (and leaving aside any debate as to the precedential value of footnotes – see, for example, New South Wales Land and Housing Corporation v Quinn [2016] NSWCA 338 at [61]), for the reasons that I set out in due course, I do not consider that the discontinuance of the March 2020 Proceeding gives rise to any Anshun estoppel or abuse of process.

Takeovers Panel Orders on 9 April 2020

74. As noted above, on 9 April 2020, the Takeovers Panel published its orders, inter alia, restricting WAM Active’s rights in relation to voting the Processed Shares for a period of 6 months. Further, WAM Active was ordered to cancel unprocessed acceptances and to send notices to unprocessed and processed shareholders in a form to be approved by the Takeovers Panel. In addition, a number of orders were made which provided former holders of the Processed Shares with the right to reverse the holder’s transfer.

75. Pausing here, I note that there was debate in the course of submissions in the present application as to the “perpetual” nature of this right, in the sense that there was no temporal limitation on its exercise (see further below). ASIC, by way of background, noted that at [118] the Review Panel responded to a submission ASIC had made that those reversal rights be time limited (and, thus, it says that at the review panel stage the temporal issue was considered and declined). Relevantly, for present purposes, it may simply be noted that any differential treatment between classes of shareholders – in respect of which Keybridge criticises the relief here sought by WAM Active – arose at the outset from the making of the Takeovers Panel orders.

76. Relevantly, Order 3 provided:

Unless a Court makes orders or declarations inconsistent with this Order, from and including the date of these orders WAM Active must comply with a request from any Processed Shareholder to reverse the transaction by which WAM Active acquired any Processed Shares from that Processed Shareholder.

77. Order 5 required WAM Active to forward within two business days (see Order 5(a)(2)) a notice to all processed shareholders informing them that their acceptances had been processed and the effect of order 3. Order 5(d) provided that:

Unless an order were to be made inconsistent with order 3, as soon as practicable after the date, after the later of the panel confirming it has no comments or further comments on the draft notice, and any date set by the panel not later than the date after these orders WAM Active is to send the notice by Express Post to all process shareholders with no other company documents.

78. Thus, processed shareholders were notified in April 2020 of their withdrawal or reversal right (on which no temporal limit was there placed) but also (as Keybridge notes) of the possibility that the Court might make an inconsistent declaration. Hence there was some inconsistency in the submissions of Keybridge, as between the reversal right being a valuable right for processed shareholders but also as to the proposition that there could be orders affecting processed shareholders without them being heard on that issue.

79. The April 2020 Orders were subsequently varied on 8 September 2020, in circumstances where there was by then a further offer made by Catalano on 9 July 2020.

80. The Takeovers Panel (Reasons of the Takeovers Panel at [131]-[132]) observed that the effect of the orders was that WAM Active would remain the registered holder of the relevant shares. The Takeovers Panel noted that the Panel had not “validated that registration” and, relevantly for present purposes, that whether the “registration of those shares automatically became void or voidable [was] a question more appropriately adjudicated by a Court”.

Review of the Takeover Panel decision and orders

81. WAM Active then sought a review of the Takeovers Panel’s decision. In May 2020, the Review Panel affirmed the initial decision of the Takeovers Panel. The Review Panel stated (see Keybridge Capital Ltd 08R, 09R and 10R [2020] ATP 9 at [115] (Reasons of Review Panel)) that the Panel agreed with the initial Takeovers Panel that “the legal status of the registration of the Processed Shares is more appropriately adjudicated by a Court”.

Filing of notice of discontinuance of the March 2020 proceeding

82. On 15 June 2020, WAM Active filed its notice discontinuing the March 2020 proceeding.

Processed Shares

83. Approximately 8.5% of the share capital of Keybridge was accepted by WAM Active initially (the Processed Shares).

Relevant legislative and other provisions

84. I now turn to outline the relevant legislative provisions.

85. Section 630 of the Corporations Act relevantly provides that:

630     Defeating conditions

Off‑market bid may include defeating conditions

(1)   Offers under an off-market bid may be made subject to a defeating condition only if the offers specify a date (not more than 14 days and not less than 7 days before the end of the offer period) for giving a notice on the status of the condition.

(2)   If the offer period is extended by a period:

(a)   the date for giving the notice is taken to be postponed for the same period; and

(b)   as soon as practicable after the extension, the bidder must give a notice that states:

(i)   the new date for giving the notice of the status of the condition; and

(ii)   whether the offers have been freed from the condition and whether, so far as the bidder knows, the condition has been fulfilled on the date the notice under this subsection is given.

[…]

(5)   A notice under this section is given by:

(a)   giving the notice to the target; and

(b)   for quoted bid class securities – giving the notice to the relevant market operator;

[…]

86. The term “defeating condition” is defined in s 9 of the Corporations Act as follows:

“defeating condition” for a takeover bid means a condition that:

(a)   will, in circumstances referred to in the condition, result in the rescission of, or entitle the bidder to rescind, a takeover contract; or

(b)   prevents a binding takeover contract from resulting from an acceptance of the offer unless or until the condition is fulfilled.

87. Section 650G of the Corporations Act, entitled “[c]ontracts and acceptances void if defeating condition not fulfilled”, as amended by class order 13/521, provides as follows:

650G    Contracts and acceptances void if defeating condition not fulfilled

All takeover contracts, and all acceptances that have not resulted in binding takeover contracts for an off-market bid are void if:

(a)   offers made under the bid have at any time been subject to a defeating condition; and

(b)    the bidder has not declared the offers to be free from the condition within the period before the date applicable under subsection 630(1) or (2); and

(c)   the condition has not been fulfilled at the end of the offer period.

A transfer of securities based on an acceptance or contract that is void under this section must not be registered.

88. The term “takeover contract” is defined in s 9 of the Corporations Act as meaning “a contract that results from the acceptance of an offer made under a takeover bid”.

89. Section 650F(1)(a) of the Corporations Act (as modified by ASIC Class Order [CO 12/521]) relevantly provides as follows:

650F     Freeing off‑market bids from defeating conditions

(1)   If the offers under an off-market bid are subject to a defeating condition, the bidder may free the offers, and the takeover contracts, from the condition only by giving the target a notice declaring the offers to be free from the condition in accordance with this section:

(a)   If the condition relates only to the happening of an event or circumstance referred to in subsection 652C(1) or (2) – not later than 3 business days after the end of the offer period;

(b)   in any other case—not less than 7 days before the end of the offer period.

90. Section 652C of the Corporations Act relevantly provides that:

652C     Withdrawal of market bids

Bidder entitled to withdraw if certain events happen during the offer period

(1)    The bidder may withdraw unaccepted offers made under a market bid if 1 of the following happens during the bid period, but only if the bidder’s voting power in the target is at or below 50% when the event happens:

(a)    the target converts all or any of its shares into a larger or smaller number of shares (see section 254H);

[…]

(d)    the target or a subsidiary issues shares, or grants an option over its shares, or agrees to make such an issue or grant such an option;

[…]

91. As to the remedial or curative relief here sought by WAM Active, the following provisions are relevant.

92. Section 1322 of the Corporations Act relevantly provides that:

[…]

(4)    Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes:

[…]

(d)   an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Act or in relation to a corporation (including an order extending a period where the period concerned ended before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding;

[…]

(6)    The Court must not make an order under this section unless it is satisfied:

[…]

(c)    in every case – that no substantial injustice has been or is likely to be caused to any person.

93. Section 1325D of the Corporations Act provides, relevantly, that:

(1)   The Court may declare that any act, document or matter:

(a) is not invalid merely because a person has contravened a provision of Chapter 6 […] and;

(b)   has had effect at all times as if there had been no contravention;

if the Court is satisfied that the contravention ought to be excused in all the circumstances.

[…]

(4)   In determining whether or not a contravention of a provision by a person ought to be excused, have regard to the contravention being caused by any of the following:

(a)   the person’s inadvertence or mistake;

(b)   the person not having been aware of a relevant fact or occurrence;

(c)   circumstances beyond the control of the person.

[…]

94. As to the means by which the Processed Shares were conveyed to WAM Active, the following provisions are relevant.

95. Section 1073D(2) of the Corporations Act provides that the Regulations may specify, inter alia, “what amounts to a proper or sufficient transfer” and the “legal effect of a proper or sufficient transfer”.

96. Regulation 1.0.02 of the Regulations defines an “ASTC-regulated transfer” to mean a transfer of a Div 4 “financial product”:

(a)   within the meaning of:

(i)   Division 4 of Part 7.11 of the Act;

(ii)   regulations relating to transfer made for sections 1074A and 1074E of the Act; and

(b)   that is effected through ASTC; and

(c)   that, according to the ASTC operating rules, is an ASTC-regulated transfer.

97. The expression “ASTC Regulated Transfer” is given its meaning by the ASX Settlement Operating Rules, which provide at r 2.10.1 as follows:

For the purposes of the definition of “ASTC-regulated transfer” in Regulation 1.0.02 of the Corporations Regulations, any Transfer or purported Transfer of Approved Financial Products, whether or not effected in accordance with the Rules, is an ASTC-regulated transfer. Any ASTC-regulated transfer is, for the purposes of the Corporations Regulations, to be taken, and always to have been, a proper ASTC transfer (emphasis added)

98. Regulation 7.11.27 of the Regulations dictates the effect of a proper ASTC transfer, which is that “the transferee is taken to have agreed at that time to accept the Division 4 financial product subject to the terms and conditions on which the transferor held them immediately before that time” (see reg 7.11.27(1)(a)).

Legislative history and extrinsic materials

99. It is next desirable to outline in some greater detail the legislative history and extrinsic materials to which the parties have referred.

100. It is noted by Keybridge that a provision declaring “void” contracts which had been entered into subject to conditions which had not been waived prior to the end of the offer period was first enacted by s 28(9) of the Companies (Acquisition of Shares) Act 1980 (Cth) (Companies (Acquisition of Shares) Act) (as amended by the Companies and Securities Legislation Miscellaneous Amendments Act 1985 (Cth)); and that the explanatory memorandum to that Bill records that the amendment was implemented to overcome the effect of the decision in Gerrard Company of Australasia Ltd v Johns Perry Ltd (1982) 7 ACLR 699; (1983) 1 ACLC 646 (Gerrard).

101. In Gerrard, Tadgell J determined that offers which had been accepted, but which were subject to conditions subsequent which had not been fulfilled or waived by the end of the bid period, were capable of resulting in binding contracts for the acquisition of shares even though such conditions could entitle the bidder, at its election, to rescind the contracts.

102. It is noted that, by the introduction of s 28(9), the legislature reversed the outcome in Gerrard by mandating that such contracts would be void. More specifically, the Explanatory Memorandum accompanying the Companies and Securities Legislation Miscellaneous Amendments Bill 1985 (Cth) that introduced the amendments explained that the intended effect of them was to ensure that where bids were not validly declared free of conditions, and where conditions have not been met, the bid should not proceed and acceptances should be returned. The Explanatory Memorandum stated (at [71]-[73]) that:

71.    Background An offeror may not treat a conditional take-over offer as being free from a condition unless he publishes a declaration to that effect not less than 7 days before the end of the offer period (CASA s.28). Where no such declaration is made, and at the end of the offer period the condition has either failed or has not been fulfilled, then the intent of CASA is that the take-over scheme should not proceed and acceptances received under the scheme should be returned to offerees. However, the interaction of CASA and the common law of contract has created a degree of uncertainty in this area. While CASA seeks to ensure that the only way an offeror may treat a conditional take-over offer as being free from a condition is by making a declaration under CASA s.28 prior to the end of the offer period, the common law still allows an offeror (who has not made a declaration under CASA s.28) to waive the condition after the close of the offer period (see Gerrard Company of Australia Ltd v. Johns Perry Ltd (1983) 1 ACLC 646).

72.    Proposed amendment It is proposed that CASA s-sec. 28(9) will be amended so that where offers under a take-over scheme have at any time been subject to a prescribed condition, all contracts formed by the acceptance of offers under the scheme will be void if at the end of the offer period:

(a)    the offeror has not declared the offers to be free from the condition;

(b)    the offers have not become free from the condition under CASA s-sec. 30(1); and

(c)    the condition has not been fulfilled.

(Bill cl. 16 - proposed s-sec. 28(9)).

73.    The purpose of this proposed amendment is to overcome the decision in Gerrard Co. v. Johns Perry.

103. ASIC points to the genesis of ss 652C and 650F of the Corporations Act as found in the Report by the Companies and Securities Advisory Committee (CASAC) in March 1994 entitled “Anomalies in the Takeovers Provisions of the Corporations Law” in the section on s 663 of the Corporations Law, where CASAC set out its reasons for not recommending the inclusion of a more expansive list of prescribed occurrences (see at pp 46-47), namely that:

…an offeror may, for good reason, want to retain the protection of ‘prescribed occurrence’ conditions during the final seven days of the offer period. However, s 663(2) [as it then was] prevents the offeror from declaring offers free from such conditions in that seven day period. The takeover scheme will fail completely if any event covered by a remaining prescribed occurrence condition occurs in that period. The [Discussion Paper] therefore proposed that an offeror under a takeover scheme have up to three business days after the end of the offer period to declare the offer free of a prescribed occurrence defeating condition. This three day period would allow the offeror sufficient time to consider all relevant events concerning prescribed occurrences up to the end of the offer period.

… Several submissions supported the proposal. However, the ASC disagreed. It considered it contrary to the policy of section 663 that offerees should have to accept offers without knowing the status of a defeating condition and then have to wait 3 days after the close of the offer period to know whether their offers are final'. The Legal Committee considers that this view ignores the present unwarranted advantage to offerees if the conditions are lifted, and the uncertainty and unsatisfactory consequences which may follow if they are not. An offeror should have sufficient time to consider all relevant events concerning prescribed occurrences up to the end of the offer period. The only matter of which offerees would be unaware under the DP proposal would be whether or not prescribed occurrence defeating conditions had been abandoned, and then only for a maximum of 10 extra days.

Some submissions, while supporting the DP proposal, suggested that it should extend to any condition permitted under s 662, not just prescribed occurrence defeating conditions. The Legal Committee disagrees. The prescribed occurrences all concern specific matters relating to the capital structure, financial standing and solvency of the target company. A bidder might reasonably be given an additional period after the close of the bid to consider whether to abandon conditions relating to the position of the target company. The variety of other possible conditions is so open- ended that to include them could give the bidder an unfair or unjustified discretion. For instance, it would be undesirable to permit a bidder to decide the status of a minimum acceptance condition after the close of the bid. Offerees may be unfairly disadvantaged.

[Citations omitted]

104. I now turn to adumbrate the issues for determination.

Issues for determination

105. Keybridge’s application focusses on the consequences of, and hence is predicated upon, a contravention of s 650G of the Corporations Act, that being the finding of the Takeovers Panel and affirmed on review by the Review Panel. However, there are two logically anterior questions raised by WAM Active in resisting the application by Keybridge, namely: first, whether s 650G of the Corporations Act was engaged, as alleged by Keybridge; and, second, if so, whether remedial orders should be granted as sought in WAM Active’s interlocutory process to cure the defect or defects which otherwise would lead to s 650G being engaged.

106. WAM Active says that the question as to the consequences of a contravention of s 650G of the Corporations Act arises only if the first two questions are resolved adversely to WAM Active. I note that I agree with this proposition.

107. Following then, that third question is as to whether s 650G of the Corporations Act has the effect of making void completed transfers (or conveyances) of shares as distinct from contracts for transfer. In that regard, WAM Active submits that s 650G of the Corporations Act does not render void completed share transfers and therefore does not affect WAM Active’s status as owner of shares in respect of which acceptances have been processed via CHESS (i.e., the Processed Shares).

108. The final question (which WAM Active says does not affect Keybridge’s originating process but is relevant to one of the prayers for relief sought by WAM Active), is as to whether WAM Active has failed to comply with s 630 by giving notice of the status of defeating conditions to its bid at the prescribed time to Keybridge. As adverted to above, WAM Active submits that it has complied with s 630 of the Corporations Act or, alternatively, that remedial orders should be made to cure its inadvertent breach.

109. Before addressing the first of those two anterior questions (i.e., whether s 650G of the Corporations Act was engaged), it is relevant to deal with the complaints made by Keybridge as to abuse of process or Anshun estoppel in the raising by WAM Active of the matters here relied upon in resisting the relief sought by Keybridge and in bringing its own interlocutory process.

Preliminary issue: abuse of process and/or Anshun estoppel

110. As noted, Keybridge’s submissions as to abuse of process or Anshun estoppel are referred to in the context of WAM Active’s interlocutory application, but it is convenient to deal with them at the outset.

Keybridge’s submissions

111. Keybridge’s position is that it was open to WAM Active in March 2020, at the time it was notified of the bid closing subject to defeating conditions, to apply to the Court for curative or remedial relief under s 1325D of the Corporations Act. Keybridge says that, while WAM Active did commence the March 2020 Proceeding for declaratory relief, it only did so in respect of certain (and not all) of the defects in its s 630 notice.

112. Keybridge submits that, given the history of WAM Active’s “abandoned” application and its decision to contest the merits of the defeating condition issue in the Takeovers Panel, there is an “obvious and serious vice” in the relief now sought in WAM Active’s interlocutory process. Specifically, it says that WAM Active, having started Court proceedings for curative relief in the context of the then takeover bid, now (ex post, and in an attempted answer to the orders sought by Keybridge) seeks through its interlocutory process relief which it should reasonably have sought in the proceeding which it issued but then abandoned. It is said that, in the Hamilton Affidavit (see at [98]), Mr Hamilton concedes that each time any allegation was made by Keybridge, its complaints were given “due consideration”, noting that Mr Hamilton refers (see at [105]ff) to the circumstances in which Keybridge complained that WAM Active had not freed its bid from defeating conditions.

113. Keybridge says that, as the Takeovers Panel found (see at [71]) on 4 March 2020, “WAM Active was on notice that its bid may have closed subject to defeating conditions”; but, despite this, WAM Active commenced processing acceptances on 6 March 2020 and issued proceedings on 10 March 2020 (before the Takeovers Panel had determined Keybridge’s complaints raising the issue of whether it had complied with s 630 of the Corporations Act). It is noted that WAM Active’s application to the Court in the March 2020 Proceeding did not raise Keybridge’s complaint (and, again, that WAM Active discontinued its proceeding).

114. Keybridge says that WAM Active presumably decided that it was content to let the Takeovers Panel deal with the matter instead of raising the issue in the proceeding that it had issued on 10 March 2020 and, in these circumstances, it is submitted that the discretion to grant relief in favour of WAM Active should not be exercised, as to do so would encourage parties to have a “second bite at the cherry” approach to Takeovers Panel proceedings and would encourage multiplicity of proceedings and forum shopping.

115. In this connection, while it is accepted by Keybridge that discontinuance of a claim does not operate as a release, it emphasises the public interest in the timely and efficient administration of justice. Keybridge says that WAM Active’s approach is contrary to the statutory duty arising under s 56(3) of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act).

116. Further, to the extent that WAM Active seek declarations or orders which are inconsistent with the decision of the Takeovers Panel, it is submitted that its application is an abuse of process or that WAM Active is otherwise estopped from seeking such relief (in circumstances where, on Mr Hamilton’s evidence, the issues sought to be ventilated were considered by him but not included in the earlier proceeding, and the earlier proceeding was discontinued).

117. In this regard, reliance is placed on the observation by Gageler J (at [68]) in UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45 (UBS AG) that there is a substantial overlap between abuse of process and the form of estoppel identified in Anshun (his Honour there citing Lord Bingham in Johnson v Gore Wood & Co [2002] 2 AC 1 (Johnson v Gore Wood), as an “acknowledgment that an abuse of process might be established by nothing more than the bringing of a claim in later proceedings which ‘should’ have been brought in earlier proceedings”). Keybridge points out that, in UBS AG, the High Court determined that it was an abuse of process for claims to be brought that had earlier been brought but discontinued without any adjudication of the merits, with the plurality (Kiefel J, as her Honour then was, Bell and Keane JJ) observing that such conduct gave rise to unjustifiable oppression, the “core” of which (see at [58]) was the vexation of being required to deal again with claims that should have been resolved in the earlier proceedings. In the present case, Keybridge says that the claims now brought should reasonably have been brought in the earlier proceeding.

118. Keybridge thus contends that the interlocutory process in this case is an abuse of process, or that WAM Active is estopped from seeking the declarations it seeks in respect of unacceptable circumstances (given that WAM Active considered Keybridge’s complaints, ignored them, issued proceedings in this Court, then was content to let the Takeovers Panel and then the Review Panel deal with the dispute and so discontinued its proceeding). It is here also noted that no application for judicial review of the decision of the Takeovers Panel has been made.

119. Insofar as prayers 1-3, 5-6 and 9 of WAM Active’s interlocutory process seek declarations to the effect that the notice complied with the requirements of s 650F of the Corporations Act; that the WAM Active Offer was validly extended to 3 April 2020; and that WAM Active was validly registered as holder of the Processed Shares, Keybridge says that, even if this aspect of the application is not an abuse of process (or that WAM Active is not estopped as it has contended), the difficulty with the relief sought is that it seeks to re-litigate matters that have already been determined by the initial Takeovers Panel and affirmed by the Review Panel and, if successful, would result in inconsistent decisions. It is said that, in circumstances where the Takeovers Panel determined that the notice did not comply with s 650F of the Corporations Act, the declarations here sought should not be granted as a matter of discretion and comity.

120. It is noted that, where Takeovers Panel proceedings duplicate matters currently before a Court, the Takeovers Panel will often decline to exercise jurisdiction as a consequence of concerns to avoid duplicative proceedings and to discourage forum shopping (see, for example, Re Taipan Resources NL (No 2) (2000) 36 ACSR 704 at [26]ff; see also Re Precious Metals Australia Ltd (2002) 41 ACSR 546 at [33]); and it is noted that, although the findings made by the Takeovers Panel are not binding, s 658B of the Corporations Act has the effect that findings of fact made by the Takeovers Panel are proof of that fact in the absence of evidence to the contrary. It is said that this evidences a policy of discouraging multiplicity of proceedings.

121. Keybridge maintains that the proper forum for WAM Active to take issue with findings made by the Takeovers Panel is by way of an application for judicial review pursuant the Administrative Decisions (Judicial Review) Act 1977 (Cth), or s 39B of the Judiciary Act 1903 (Cth), noting that WAM Active has not sought review of the decisions of the Takeovers Panel or the Review Panel. Keybridge says that it is undesirable, having regard to considerations of comity and in light of the nature of the Takeovers Panel’s supervisory and regulatory function, for courts to entertain de facto appeals from decisions of the Takeovers Panel in circumstances where the party said to be aggrieved has litigated the matter in question before the Takeovers Panel and not availed itself of its right to seek judicial review.

122. Accordingly, Keybridge says that, in the exercise of its discretion, the Court ought to decline to grant declaratory relief of a kind sought by WAM Active; and, in contrast, Keybridge notes that the Takeovers Panel expressly recognised that the effect of s 650G of the Corporations Act is appropriately dealt with by a Court (see also, for example, Reasons of Review Panel at [115]). It is submitted that it is appropriate for Keybridge to have that issue determined by this Court in circumstances where there is doubt as to who is entitled to hold and vote its shares (as described in the affidavits of Mr Kriewaldt).

WAM Active’s submissions

123. In response to the above submissions, WAM Active says as follows.

124. First, with respect to the Takeovers Panel, that as at 10 March 2020 the only possible procedural defect for which judicial relief could be necessary or useful to any party was the defect for which WAM Active sought relief, namely the alleged non-compliance with s 630(5). It is said that, by 9 April 2020, further and other defects had been disclosed (or identified) by the Takeovers Panel in its reasons but that, as at the time WAM Active commenced the March 2020 Proceeding seeking to remedy procedural defects in its bid, those potential problems which the Takeovers Panel would later identify (and in particular, the possibility that s 650G of the Corporations Act was engaged by a failure to waive the condition triggered by the Placement prior to the close of the offer period) had not yet been canvassed. In this regard, it is said that the Takeovers Panel’s expressions of “surprise” and disapproval of WAM Active’s actions are misplaced, in that they suggest that WAM Active was expected to litigate issues which had yet to crystallise.

125. WAM Active says that on 10 March 2020, when WAM Active commenced the March 2020 Proceeding seeking relief in relation to its giving notice pursuant to s 630, WAM Active was not on notice of the potential engagement of s 650G of the Corporations Act. It is said that the evidence establishes only that WAM Active was on notice that its bid may have closed subject to condition 10.7(c)(i) (as to which, see the above chronology). WAM Active maintains that that condition had been fulfilled and so its non-waiver could not engage s 650G of the Corporations Act. WAM Active says that no question as to the operation of 10.7(c)(iv) in conjunction with condition 10.8 as invalidating acceptances was raised until later (and not before 9 April 2020 when the Takeovers Panel handed down its reasons for decision).

126. Thus it is submitted that there was nothing untoward or “surprising” about WAM Active not having sought relief in respect of a possible contravention of s 650G in the now discontinued proceedings (cf Reasons of the Takeovers Panel at [73]); and that this should not affect the exercise of discretion in respect of the relief here sought here. WAM Active says that no other procedural defects necessitating relief had been alleged at the time when WAM Active commenced the (subsequently discontinued) proceedings.

127. Second, WAM Active says that merely because there was a prospect that WAM Active’s bid did not satisfy requirements of the Corporations Act does not mean that WAM Active is required to seek judicial relief at that time. It is said that WAM Active could take the view that it could “live with” the outcome imposed by the Takeovers Panel (which it is noted is one that occurs without a judicial determination of legal rights). It is said that it is in no sense unusual, still less any kind of abuse of process, for WAM Active to seek available judicial relief in response to proceedings commenced by Keybridge alleging contraventions of the Corporations Act. WAM Active says that the scheme of Ch 6, and the interests of justice more generally, are not served by imposing any requirement (even under the rubric of “discretionary factors”) that a party in WAM Active’s position must immediately bring applications for judicial relief in relation to potential breaches of the takeover provisions when there is no practical benefit at the time to so doing. It is said that the exercise of restraint in taking up court resources should not be equated with dilatory behaviour.

128. Third, Keybridge says that, even if WAM Active “should” have sought relief in respect of the asserted s 650G contravention in the proceedings which it earlier brought, no abuse of process or estoppel of any kind arises. It is noted that the earlier proceedings were discontinued with the consent of Keybridge and did not proceed to judgment so as to give rise to the potential for Anshun estoppel. Similarly, it is submitted that there is no abuse of process involved in WAM Active bringing via its interlocutory process claims for relief which include a claim for relief sought in the earlier (discontinued) proceedings. It is said that that course is expressly permitted under r 12.3(1) of the UCPR, subject to the terms of the discontinuance (which in this case did not impose any prohibition on bringing fresh proceedings).

Determination re abuse of process and/or Anshun estoppel

129. The principles of Anshun estoppel prevent a party from raising, in subsequent proceedings, matters which that party ought reasonably to have raised in prior proceedings (see Henderson v Henderson (1843) 3 Hare 100; 67 ER 313 at 319 per Wigram VC; and the statements by the High Court in Metwally v University of Wollongong [1985] HCA 28; (1985) 60 ALR 58 at 71 and also the Victorian Court of Appeal in Timbercorp Finance Pty Ltd (In Liq) v Collins [2016] VSCA 128 at [136]-[137] per Warren CJ, Santamaria and McLeish JJA (Timbercorp Finance)). The public interest underlying the Anshun doctrine is “reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole” (see Timbercorp Finance at [138], citing Johnson v Gore Wood at 31).

130. For the reasons submitted by WAM Active, I do not consider that there is any abuse of process or Anshun estoppel that would preclude WAM Active here seeking the relief sought in its interlocutory process. I accept that this is a defensive application and that it is not inappropriate for WAM Active here to raise issues as to the validity of the steps it took (or to seek relief for the contraventions alleged) particularly in circumstances where it is Keybridge itself that is seeking relief predicated on a conclusion that there was a contravention of s 650G of the Corporations Act.

233. Furthermore, reference is made to the following observations of Isaacs and Gavan Duffy JJ in Roach v Bickle (1915) 20 CLR 663; [1915] HCA 80 (Roach v Bickle) (at 671-672):

Where a statute prohibits a transaction either expressly or by implication, no such transaction can be validly created.

The law which forbids its existence cannot consistently recognise it as ever having any binding force…

[…]

… In any case, where an Act of Parliaments lays down a rule of public policy it is impossible for private individuals to abrogate it at will … [w]here that rule of public policy takes the form of express declaration of invalidity no Court can permit personal relations to effect a virtual repeal of the enactment.

235. Similarly, reference is made to Re Rosemac Pty Ltd’s Caveat [1994] 1 Qd R 137, where White J, considering a provision to the effect that, where application for an exemption was not made within 30 days, the instrument in question was void, applied Roach v Bickle and held that the contract was void, observing (at 141) that “[t]here are not degrees of voidness”. Keybridge also noted what was said by Dyson LJ, as his Lordship then was, in Islington London Borough Council v Uckac [2006] EWCA Civ 340; [2006] 1 WLR 1303 (at [25]), namely that:

25.   It is important to keep in mind the fundamental difference between a contract which is void and one which is voidable. A void contract is strictly a contradiction in terms, because if an agreement is truly void, it is not a contract; but the term is a useful one and well understood by lawyers: see Chitty on Contract, 29th ed (2004), para 1-070. A contract which is void is no contract at all. Since it never exists, it is not something which … can be “brought to an end”.

236. Keybridge submits that WAM Active never acquired any contractual or other rights in respect of the Processed Shares, nor could it confer upon third parties valid title to any of the shares registered to it pursuant to void acceptances or contracts. It is said that it would be open to WAM Active to seek the return of funds paid by it to shareholders, should it wish to do so, and that shareholders (subject, potentially, to defences including that of change of position) might be obliged to return to WAM Active any funds paid by it. It is further said that the fact that this may be commercially inconvenient to WAM Active is a circumstance of its own making and a consequence of the application of the unambiguous words of the statute to the facts.

237. Keybridge places significant emphasis on the statutory command that any transfers of shares purportedly obtained by WAM Active in such circumstances “must not be registered”. The orders proposed by Keybridge are said to give effect to the requirements of s 650G of the Corporations Act as follows: first, declarations (at prayer 2 of the originating process) that the transfer of the Processed Shares to WAM Active is void; second, an order under s 175(1) of the Corporations Act recording ASIC as the registered holder of the shares in its capacity as receiver of the Sale Shares (defined as the Processed Shares excluding the shares that have been withdrawn pursuant to the Orders of the Takeovers Panel of 9 April 2020); and, third, orders providing a process by which ASIC, as receiver, sells the Sale Shares.

238. It is noted that there is power pursuant to s 1325A of the Corporations Act to make any order or orders considered appropriate where there has been a contravention of the provisions of Ch 6; and that orders vesting shares in ASIC as a receiver for the purpose of sale were made in Flinders Diamonds Ltd v Tiger International Resources Inc (No 2) [2003] SASC 182; (2003) 45 ACSR 608 (overturned on appeal on a different issue – see Flinders Diamond Ltd v Tiger International Resources Inc (2004) 88 SASR 281; [2004] SASC 119).

239. Keybridge thus contends that the orders proposed are appropriate to give effect to the statutory intent of s 650G of the Corporations Act. It is submitted that the contracts on which WAM Active relies by maintaining its registration of the Processed Shares never had any binding force or legal consequence.

240. I now turn to consider WAM Active’s submissions.

WAM Active’s submissions

241. As to the third question, whether s 650G of the Corporations Act operates to render void completed share transfers, WAM Active emphasises that the text of s 650G of the Corporations Act provides that “all takeover contracts” and “all acceptances that have not resulted in a binding takeover contract” are “void” (if the criteria in sub-ss (a) to (c) are satisfied) and provides that “a transfer of securities based on an acceptance or contract that is void under this section must not be registered”. WAM Active says that the section itself thus draws a distinction between contract and conveyance or transfer.

242. Insofar as Keybridge submits that the effect of s 650G of the Corporations Act is that no legal effect must (“not may”) be given to a transfer affected by s 650G, WAM Active says that this is not what the text of s 650G provides; rather, that the text says only that a transfer “must not be registered”. WAM Active says that s 650G of the Corporations Act does not invalidate or purport to effect the validity of any transfer/conveyance of shares, nor does it make an offence a transfer or conveyance of shares effected where the criteria in sub-ss (a)-(c) are satisfied.

243. WAM Active submits that, given that the purpose of Ch 6 is to provide commercial certainty (referring to Pinnacle VRB at [12]; Primelife at [8]), WAM Active says that, if it had been intended that s 650G should have any consequences for completed conveyances, the legislature would have said as much in specific terms. Furthermore, in this respect, it is contended that Keybridge’s submissions to the contrary conflate a contract and a conveyance.

244. WAM Active points to the means by which the Processed Shares were conveyed to it (as prescribed by the Corporations Act in conjunction with the Corporations Regulations and the ASX Settlement Operating Rules). It refers to the operation of those provisions as set out above.

245. More specifically, WAM Active points out that, under the ASX Settlement Operating Rules, a Takeover Transfer is effected by the shareholder accepting into the bid when that shareholder transmits a message within CHESS accepting the bidder’s offer (see r 14.17.3). It says that the effect of the interaction between the Corporations Act, Regulations and ASX Settlement Rules is therefore that “any ASTC Regulated Transfer” is “a proper ASTC transfer”, “whether or not completed in accordance with the Rules”; and that once a proper ASTC transfer has been effected, r 7.11.27 dictates the result. Thus, it says that s 650G of the Corporations Act does not purport to invalidate a proper ASTC transfer.

246. As to the circumstances here, WAM Active submits that the evidence establishes that WAM Active became registered holder of the Processed Shares pursuant to a proper ASTC transfer (referring to the McCathie Affidavit at [32]-[35]) and that no further step is required to be taken to complete the conveyance of the Processed Shares to WAM Active. Thus, it is said that the transfer of property is complete, even if the contract formed by acceptance of WAM Active’s Offer by the relevant shareholder is void and that nothing in s 650G of the Corporations Act alters that position.

247. It is said that, on that basis, even if s 650G of the Corporations Act was engaged and WAM Active is not entitled to relief extending the time for waiver of the Placement Condition, there is no ability under the Corporations Act, Regulations or ASX Settlement Operating Rules (or the inherent jurisdiction of the Court) to disturb the completed conveyance of the Processed Shares. Accordingly, it is submitted that there should be a declaration that WAM Active was validly registered as holder of those Processed Shares which it continues to hold because the reversal rights granted under the Takeovers Panel’s orders have not been exercised by the former holders of those shares.

248. Pausing here, as to the construction contended for by WAM Active to the effect that completed conveyances are not void, Keybridge’s response is that this should be rejected and that, absent remedial relief, any contracts and transfers made in breach of s 650G are void (i.e., of no legal effect).

249. In this regard, Keybridge again emphasises that the section provides that transfers “must not be registered”. Keybridge says that if WAM Active’s construction were accepted then it would render the express command of the statute meaningless. Keybridge also says that WAM Active’s approach would also encourage a bidder “to race to register” a transfer before a challenge is made so as to render the operation of s 650G of the Corporations Act otiose (which it is said would be a “rather unlikely” and no doubt an unintended outcome). Finally, it is said that this would make redundant the ability of the Court to rectify the register pursuant to s 175 of the Corporations Act.

250. To this, and as I have noted, WAM Active emphasises the distinction drawn in s 650G between contract and conveyance or contract and transfer. WAM Active says that, first, it is the contracts and the acceptances that are void if the conditions in s 650G are met; and that, separately, the section provides that a transfer of securities based on a contract that is void must not be registered. WAM Active says that that does not mean that the transfer is void (because the legislation would say that it was void if that was the intention); rather, the section says that the transfer must not be registered. WAM Active submits that if a transfer is registered in breach of s 650G then this enlivens s 1325A (again, noting that it accepts that if there is a contravention of a provision of Ch 6 then the relief that can be ordered, which is discretionary but includes an order that the shares be transferred to ASIC).

251. WAM Active says that the problem with the orders proposed by Keybridge is that they alter the operation of the Takeover Panel’s orders (conceding that the Takeovers Panel left it open for this to occur) but that they have the effect of depriving persons who have not exercised reversal rights yet of their right to do so. I interpose to add that this is in the context where Keybridge’s submissions on the present application suggested that there might be a benefit to a shareholder in having what was described as a “perpetual” right of reversal.

252. WAM Active contends that an order should not be made, as a matter of discretion, which has the effect of depriving people of a right which they currently have if such an order is not required. Again, I interpose to observe that, arguably, such persons would be appropriate, if indeed not necessary, parties to be heard insofar as they would be affected by the orders sought by Keybridge.

253. It is noted that some shareholders were party to the Takeover Panel proceedings (by way of example, Catalano, Samuel Terry Asset Management Limited, Bentley and Aurora), and reference is also made to the application by Bentley and Scarborough to the effect that their acceptances in respect of Aurora’s bid be reversed. It is thus said that they would be necessary parties to be joined.

Determination re issue 3: whether s 650G renders the transfers (or conveyances) void

254. As I have said, it is not necessary to determine this issue. Had it been necessary to do so, I would have accepted WAM Active’s submissions (and, also, as relevant, those made by ASIC). I consider that there is a distinction between a finding that a contract is void (and that a takeover acceptance pursuant to such a contract must not be registered) and the consequences if (inadvertently or otherwise) registration takes effect. Unless and until the register is rectified (on an application by a relevant party), the register records who is the legal or beneficial holder of the shares.

255. Moreover, as I have said above, I do not accept that a contravention of the section means that the Court is deprived of the remedial powers provided for under the Corporations Act.

256. I now turn to the final issue for determination identified above as to whether WAM Active has failed to comply with s 630.

Issue 4: whether WAM Active failed to comply with s 630

257. It is convenient first to consider WAM Active’s submissions.

WAM Active’s submissions

258. Again, I have set out above the relevant provisions. It is accepted that, as at 24 February 2020, the date by which WAM Active was required to give notice of the status of the defeating conditions to its bid pursuant to s 630 was 25 February 2020. I have set out in the chronology of events the evidence as to the giving of the 25 February 2020 Notice. It is not disputed that Keybridge in fact was given notice (by email from the ASX) on 25 February 2020. The issue is that it was not given notice directly by WAM Active.

259. As WAM Active notes, the first question which here arises is whether, by giving the notice to the ASX, WAM Active also gave the notice to Keybridge on 25 February 2020 within the meaning of s 630(5)(a) of the Corporations Act.

260. In this regard, WAM Active says that a requirement to “give” notice in Ch 6 of the Corporations Act means to “send” or “dispatch” and does not connote service or actual receipt (citing Pinnacle VRB at [12]; Primelife at [8]). It is said that while s 630(5) requires that, for quoted bid class securities (as here), notice be given both to the target and the market operator, the section does not mandate any particular means by which such notice is to be given. WAM Active argues that the section does not require that notice be given without any intermediate steps and notes that it does not say that each person identified in s 630(5) must be sent the notice by separate and independent processes.

261. WAM Active submits that the requirement that a s 630 notice be given to Keybridge on 25 February 2020 was satisfied by the combination of the delivery of the notice to the ASX and the steps which the ASX took on that day.

262. In the alternative, in the event that WAM Active has failed to give the notice required by s 630 to the target (Keybridge) on 25 February 2020, WAM Active seeks orders: extending the time for the giving of the s 630 notice to the target, to 26 February 2020; or declaring that WAM Active’s giving notice for the purposes of s 630 was not invalid merely because it was late, and has had effect at all times as if there had been no contravention of s 630(5).

263. It is noted that a failure to comply with the procedural stipulations of s 630 amounts to a contravention of s 630. Thus it is said that a failure to give the s 630 notice in time is therefore a contravention against which relief pursuant to s 1325D is available.

264. As has also been covered above, WAM Active submits that any contravention was due to inadvertence or mistake (referring to the Yeo Affidavit at [15] and McCathie Affidavit at [11]-[13]) and that making an order under s 1325D would not result in any substantial injustice. It is said that there is no suggestion that any party has taken any position in relation to the affairs of Keybridge on the basis that WAM Active’s failure to send the s 630 notice to Keybridge directly prior to 26 February 2020 invalidated any part of WAM Active’s bid for Keybridge (rather, WAM Active says that the evidence is that all parties proceeded on the basis WAM Active’s bid for Keybridge was validly and effectively made).

265. Accordingly, it is said that, for the purposes of s 1325D, any contravention of s 630 ought in all the circumstances be excused.

266. Alternatively, WAM Active seeks relief under s 1322 of the Corporations Act. The principles applicable to the grant of relief under s 1322 are as set out above. WAM Active says that it is open to the Court to make orders pursuant to s 1322(4)(d) extending the time for the giving of the s 630 notice, since such an order is an order “extending the period for doing” an act of thing; and that, for the same reasons as those given in relation to s 1325D, the Court should be satisfied for the purposes of s1322(6) that if the orders sought by WAM Active were made “no substantial injustice would be done to any person”.

267. I now turn to consider Keybridge’s submissions.

Keybridge’s submissions

268. As to the invocation by WAM Active of s 1322(4)(d) of the Corporations Act to extend time in respect of the notice requirements regarding defeating conditions or otherwise seeks curative relief under s 1325D of the Corporations Act, Keybridge submits as follows (on the assumption that there has been a contravention of s 650G of the Corporations Act).

269. First, Keybridge says that neither s 1325D nor s 1322(4) (if it applies – as to which, see above) should be relied on to make orders having the effect of validating WAM Active’s “title” to the shares in circumstances where s 650G of the Corporations Act has the effect that contracts and acceptances are void. It is said that the curative relief would be contrary to the statement by Isaacs and Gavan Duffy JJ (set out at [234] above) to the effect that courts cannot permit personal relations to effect a virtual repeal of an enactment and contrary to the intended consequence of the provision, which is that acceptances should be returned.

270. Second, that, in circumstances where s 1325D is a specific remedial or curative power, it is that provision that applies (not s 1322(4)(d) – as to which, again, see above).

271. Third, Keybridge says that s 1325D(4) identifies the matters that ought be taken into account in determining whether the contravention of Ch 6 should be excused, noting that sub-para (b) refers to “the person not having been aware of a relevant fact or occurrence” and sub-para (c) to “circumstances beyond the control of the person”. Keybridge maintains that WAM Active is “on the wrong side” of these discretionary matters, on the basis that WAM Active disregarded the warnings given to it and failed to raise promptly the issue with the Court. It is submitted that this favours the Court declining to exercise any relief in WAM Active’s favour and that, to do so would, be implicitly to sanction the actions of WAM Active and its officers in circumstances where those acts were not inadvertent or mistaken and where the circumstances were not beyond the control of WAM Active.

272. Fourth, Keybridge says that, even if s 1322(4)(d) applies, for similar reasons to those considered above, curative relief should be declined in circumstances where WAM Active has acted deliberately (referring to Re PW Saddington & Sons Pty Ltd (1990) 19 NSWLR 674).

273. As to the s 630 notice issue specifically, Keybridge accepts that if its primary submissions as to s 650G of the Corporations Act are not accepted then WAM Active should obtain remedial relief to the extent needed for its procedural breach set out at [48]ff of WAM Active’s submissions. I note that I agree with this proposition.

274. Finally, it is convenient to consider, as relevant, the matters raised by ASIC.

ASIC’s submissions

275. As to the relief sought by WAM Active in relation to the s 630 notice, ASIC’s position is that providing the notice to the ASX rather than to the target does not fulfil the requirements of s 630(5)(a). However, ASIC does not oppose a remedial order being granted, though raises concern that there not be a finding that such a notice is sufficient. As to the remedial order, ASIC accepts that there would be power to exercise the discretion to grant relief in circumstances where there is a contravention but nothing flows therefrom and does not cavil with the fact that notice was provided the next day (such that an extension of time under s 1322(4)(d) may be appropriate).

276. As to sufficiency of notice, ASIC does not accept that the ASX giving notice to the target is sufficient; rather, it says that the legislation requires that the bidder give that notice (referring to s 633 of the Corporations Act). It is said that, read with that section, for the purposes of s 635, the bidder must give the notice. ASIC says s 630(5) has a conjunction and is not disjunctive, such that it requires giving notice to the target (and either sub-s (b) or (c) will apply).

275. Accordingly, in those circumstances, ASIC contends that the particular declaration sought in the interlocutory process should not be made and that the proposed order for an extension of time to the next day is preferable.

276. As to the last submission, again, WAM Active says it is open to construe the section as requiring the bidder to give notice but for that to be able to be given indirectly (i.e., through another person).

Determination re issue 4: whether WAM Active failed to comply with s 630

279. In the circumstances, I do not propose to make the declaration. It might be fortuitous that ASX forwarded the email on that date, even though I accept that the participants understood that the ASX would forward it on to the target. However, my tentative view is that what is required is the giving of notice by the bidder to the target directly. I say that this is a tentative view because, here, other relief will adequately address the issue.

280. For this reason, it is not appropriate here to make the declaration sought.

Conclusion

281. For the reasons given above, I have concluded that there were no relevant unfulfilled conditions to the WAM Active Offer at the end of the offer period because the condition at clause 10.7(c)(iv) was waived in accordance with s 650F(1) on 2 March 2020. Had I concluded otherwise, I would have extended the time within which to waive that condition to 2 March 2020 under s 1325D or s 1322 of the Corporations Act. It follows that Keybridge’s originating process should be dismissed.

282. As to WAM Active’s interlocutory process, I am not persuaded that a declaration should be made that WAM Active did not breach s 630(3) of the Corporations Act. This is because I consider, without expressing a concluded view, that the better view is that what is required by way of the giving of notice to the target for the purposes of that section is the giving of notice by the bidder. Furthermore, and even if it is possible to give notice through a third party, here there was no direct causation by, or intention on the part of, WAM Active of the giving of notice through ASX, simply an assumption on its part that the ASX would on-forward the notice. It is also not necessary to make any concluded finding on this issue because I am of the view that the alternative remedial relief should be made which will adequately address the issues.

283. As to costs, WAM Active seeks its costs of the originating process and interlocutory process. In the ordinary course, costs should follow the event. ASIC submits that it is appropriate that its costs as second defendant in the proceedings be paid by either Keybridge or WAM Active, as best reflects the resolution of the issues between those parties. I agree with these propositions. It follows that Keybridge should pay the costs of WAM Active and ASIC on the ordinary basis.

Orders

284. As it is not necessary in light of the above determinations to consider any formulation of orders referable to the Processed Shares, I do not need further submissions from the parties and will make the following orders:

1. Dismiss Keybridge Capital Limited’s originating process filed 1 June 2020 with costs.

2. Pursuant to s 1322(4) or s 1325D of the Corporations Act 2001 (Cth), extend to 26 February 2020 the time for compliance by WAM Active Limited with s 630(3) of the Corporations Act 2001 (Cth), in respect of the giving of notice to Keybridge Capital Limited of the status of the defeating conditions of the WAM Active Offer (as defined) in accordance with s 630(5)(a) of the Corporations Act 2001 (Cth).

3. Order Keybridge Capital Limited to pay WAM Active Limited and the Australian Securities and Investments Commission their costs of the interlocutory process filed by WAM Active Limited on 16 July 2020 and amended on 15 October 2020.

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