Metals Exploration Limited v Samic Limited

Metals Exploration Limited sought special leave to appeal to the High Court of Australia from a decision of the Full Court. The dispute concerned the proper construction and effect of Chapter 6 of the Corporations Law, which governs the acquisition of shares. The applicant argued that one of the judges in the Full Court's majority based their decision on a ground that the respondent was not entitled to raise, leading to unfairness.

The central legal issue before the High Court was the interpretation of Chapter 6 of the Corporations Law, specifically section 615, which prohibits acquiring shares if it would result in a person holding more than 20% of the issued share capital. The court was required to consider the exceptions to this prohibition, particularly section 617 concerning acquisitions pursuant to takeover announcements and section 620(2), which allows acquisitions in the ordinary course of trading on a stock market once a takeover announcement has been made. The court also needed to determine the requirements for a valid takeover announcement under Part 6.4 of the Law.

The applicant contended that the Full Court's majority decision was flawed because one judge relied on an argument that was not properly before the court. The scheme of Chapter 6, as explained, establishes a prohibition on exceeding the 20% threshold unless specific exceptions are met. These exceptions include acquiring shares under a takeover announcement, subject to timeframes, or acquiring shares in the ordinary course of trading on a stock exchange after a takeover announcement has been made. The validity of a takeover announcement itself is defined by Part 6.4, which sets out the conditions for offers to acquire shares to be considered made under such an announcement.