Metalicity Ltd v Allen

Case [2022] WASC 291

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   METALICITY LTD -v- ALLEN [2022] WASC 291

CORAM:   HILL J

HEARD:   29 AUGUST 2022

DELIVERED          :   31 AUGUST 2022

FILE NO/S:   COR 140 of 2022

BETWEEN:   METALICITY LTD

Plaintiff

AND

KENNETH MALCOLME ALLEN

First Defendant

KENNETH MALCOLME ALLEN as trustee for THE ALLEN SUPER FUND A/C

LEE KIANG ALLEN as trustee for THE ALLEN SUPER FUND A/C

Second Defendants

THOMAS FRANCIS PERCY

Third Defendant

HOCK HOO CHUA

Fourth Defendant

B3 PROSPECTING PTY LTD

Fifth Defendant

LEE KIANG ALLEN

Sixth Defendant

LEE KIANG ALLEN as trustee for ANDREA K ALEN

Seventh Defendant

LEE KIANG ALLEN as trustee for ROYCE K ALLEN

Eighth Defendant

LEE KIANG ALLEN as trustee for AMELIA V ALLEN

Ninth Defendant

ANDREA KATHLEEN HUANG LING ALLEN

Tenth Defendant

BRETT ROYLE

Eleventh Defendant

PECK CHONG YEO

Twelfth Defendant

HOCK PENG CHUA

Thirteenth Defendant

AGENOR PTY LTD as trustee for THE GLAMUZINA SUPER FUND

Fourteenth Defendant

MATE AUTO ELECTRICAL PTY LTD

Fifteenth Defendant

MATTHEW GUY MAYNE as trustee for THE MAYNE SUPER FUND

LISA MAYNE as trustee for THE MAYNE SUPER FUND

Sixteenth Defendants

TOPRANGE PTY LTD as trustee for THE KEVDEN SUPER FUND

Seventeenth Defendant

JETT HOLDINGS PTY LTD

Eighteenth Defendant

SIANG JOON GOH

Nineteenth Defendant

BARRY LUCAS

Twentieth Defendant

DION GERALD MEREDITH

Twenty First Defendant

PETER VANDA RESOURCES PTY LTD

Twenty Second Defendant

HIGHAM HILL PTY LTD

Twenty Third Defendant

ALIC TRPCEV

Twenty Fourth Defendant

EFFIS PTY LTD

Twenty Fifth Defendant

ROBERT RITCHER as trustee for THE ROBERT RICHTER SUPER FUND NO 2

ANNE LYELL RITCHER as trustee for THE ROBERT RICHTER SUPER FUND NO 2

Twenty Sixth Defendants

NEX METALS EXPLORATIONS LTD

Twenty Seventh Defendant


Catchwords:

Corporations - Application by plaintiff for declarations in relation to votes cast at annual general meeting and extraordinary general meeting of company - Application by plaintiff for orders under s 1325A of the Corporations Act 2001 (Cth) - Where plaintiff has made takeover bid for shares in company - Whether commencement of proceedings precluded by s 659B of Corporations Act 2001 (Cth) - Whether these proceedings are a proceeding 'in relation to a takeover bid' - Whether proceedings are a proceeding to enforce an obligation imposed by ch 6 of Corporations Act 2001 (Cth) - Proper construction of s 659B of the Corporations Act 2001 (Cth)

Legislation:

Acts Interpretation Act 1901 (Cth) s 15AB
Corporations Act 2001 (Cth) s 606, 659AA, 659B, 1325A

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Plaintiff : G D Cobby SC & C C Spencer
First Defendant : A Pieniazek
Second Defendants : A Pieniazek
Third Defendant : No appearance
Fourth Defendant : No appearance
Fifth Defendant : No appearance
Sixth Defendant : A Pieniazek
Seventh Defendant : A Pieniazek
Eighth Defendant : A Pieniazek
Ninth Defendant : A Pieniazek
Tenth Defendant : A Pieniazek
Eleventh Defendant : No appearance
Twelfth Defendant : No appearance
Thirteenth Defendant : No appearance
Fourteenth Defendant : No appearance
Fifteenth Defendant : No appearance
Sixteenth Defendants : No appearance
Seventeenth…

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Details
AGLC
Metalicity Ltd v Allen [2022] WASC 291
Case
[2022] WASC 291
Decision Date

CaseChat Overview and Summary

Metalicity Ltd brought proceedings against Allen and others, challenging various matters arising from the ongoing dispute between Metalicity and Nex, including the Takeover. The Allen parties initially sought to stay the proceedings on the basis that the court lacked jurisdiction over the matter due to section 659B of the Corporations Act 2001 (Cth). The Allen parties later abandoned their application, but the Effis parties maintained their application, asserting that Metalicity was prevented from bringing these proceedings until after the Takeover had closed. The court was required to determine whether the proceedings fell within the scope of section 659B of the Act, and thus whether the court had jurisdiction to hear the matter.

The court considered the nature of the proceedings and the provisions of section 659B of the Act. Section 659B(1) states that a person is not to commence court proceedings in relation to a takeover bid or proposed takeover bid unless certain conditions are met. The court held that the proceedings brought by Metalicity were not 'court proceedings in relation to a takeover bid, or proposed takeover bid', as they did not concern the Takeover itself but rather the broader disputes between Metalicity and Nex. As a result, the court found that it had jurisdiction to hear the matter and dismissed the application with costs. The court emphasised that the proceedings were not precluded by section 659B of the Act, as they did not relate to the Takeover but rather to other disputes between the parties.

The court's decision clarified the scope of section 659B of the Act and the types of proceedings that may be commenced during a takeover bid. The court held that proceedings not directly related to the takeover bid itself are not precluded by section 659B, and thus the court has jurisdiction to hear such matters. This decision provides guidance to parties involved in takeover bids and their disputes, and highlights the importance of understanding the scope of section 659B of the Act.

The court dismissed the application by the Effis parties and ordered that Metalicity recover costs from the Effis parties. The court found that the Effis parties' application was without merit and that the proceedings were not precluded by section 659B of the Act. The court ordered that Metalicity recover costs from the Effis parties on an indemnity basis, reflecting the fact that the application was without merit. This outcome serves as a reminder to parties that frivolous applications may result in costs orders against them.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The originating process has been brought in the context of a series of disputes between the plaintiff and Nex. These disputes range from disputes concerning a joint venture agreement between these parties or their subsidiaries,[1] matters concerning general meetings of Nex,[2] as well an off-market takeover offer that has been made by Metalicity for all shares in Nex (Takeover). The evidence before me is that the Takeover has been the subject of six separate applications to the Takeovers Panel.[3][1] Affidavit of Robert Hartley Downey filed 19 August 2022 'RAD1'.[2] Metalicity Ltd v Nex Metals Explorations Ltd [2022] WASC 234.[3] Affidavit of Robert Hartley Downey filed 19 August 2022 [4], 'RDH03' - 'RDH13'. The Takeover was announced on 14 September 2021[4] and closed at 5.00 pm on 29 August 2022,[5] the day this application was heard.[4] Affidavit of Robert Hartley Downey filed 19 August 2022 'RHD01'.[5] Affidavit of Audrey Pieterse filed 29 August 2022 'AP1'. Initially, the jurisdiction of the court was challenged by the first, second, and sixth to tenth defendants (the Allen parties) (who sought a stay of the proceedings) as well as the twenty‑second to twenty‑sixth defendants (the Effis parties). On the morning of the hearing, given the announcement by Metalicity on 29 August 2022 that the Takeover would close that day, the Allen parties did not proceed with their application and did not make submissions on the application. The Effis parties maintained their application on the basis of their contention that Metalicity was prevented from commencing these proceedings by reason of s 659B of the Act until after the close of its takeover bid for Nex and that, accordingly, these proceedings were a nullity and should be dismissed. In support of their application, the Effis parties relied on the following affidavits:(a)an affidavit of Robert Hartley Downey filed 19 August 2022;(b)an affidavit of Mark Andrew Desa filed 24 August 2022; and (c)an affidavit of Justin Charles Barton filed 27 July 2022. For the reasons that follow, I do not consider these proceedings are 'court proceedings in relation to a takeover bid, or proposed takeover bid'. As a consequence, I do not consider these proceedings fall within s 659B of the Act and find the court has jurisdiction to hear these proceedings. As a result, the application should be dismissed with costs. The proposed Takeover by Metalicity for Nex was announced on 14 September 2021 and has been open since 14 October 2021.[6] It has been extended on a number of occasions and closed at 5.00 pm on 29 August 2022.[6] Affidavit of Robert Hartley Downey filed 19 August 2022 'RHD01' - 'RDH02'. As at 4 May 2022, Metalicity held a relevant interest in 34.21% of the issued capital of Nex.[7][7] Affidavit of Robert Hartley Downey filed 19 August 2022 'RDH17'. During the bid period, Metalicity nominated three people to be appointed as directors of Nex. Resolutions for the appointment of these directors were put to both the AGM and the EGM but were not passed. At the AGM, a resolution to re‑appoint Mr Percy, the chair of Nex, was passed. At the EGM, resolutions were also put to remove each of the current directors of Nex but failed to pass.[8] [8] Affidavit of Robert Hartley Downey filed 19 August 2022 'RDH18' - 'RDH19'.