Re Cabcharge Australia Ltd - [2007] FCA 421

FEDERAL COURT OF AUSTRALIA
Cabcharge Australia Limited, in the matter of Cabcharge Australia Limited [2007] FCA 421
Corporations Act (2001) (Cth), ss 625, 723, 724, 1322 and 1325
Re Insurance Australia Group Limited [2003] FCA 581 cited
IN THE MATTER OF CABCHARGE AUSTRALIA LIMITED ABN 99 001 958 390
NSD316 OF 2007
EMMETT J
5 MARCH 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD316 OF 2007

IN THE MATTER OF CABCHARGE AUSTRALIA LTD ABN 99 001 958 390

CABCHARGE AUSTRALIA LIMITED
ABN 99 001 958 390
Plaintiff

JUDGE:

EMMETT J

DATE OF ORDER:

5 MARCH 2007

WHERE MADE:

SYDNEY

THE COURT:
1.Grants leave to Cabcharge Australia Limited to file an originating process in the form initialled by Emmett J.
2.Directs that the initiating process be returnable instanter before Emmett J for hearing.
3.Orders that Clause 8.9(j) of the replacement Bidder’s Statement dated 5 January 2007 be deemed to be varied by substituting the words “no later than 19 February 2007” for the words “within a period of 7 days after the start of the Offer Period”.
4.Orders that the Statutory Offer Condition of each contract made by acceptance of the Offers made under replacement Bidder’s Statement be deemed to have been satisfied on 19 February 2007.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD316 OF 2007

IN THE MATTER OF CABCHARGE AUSTRALIA LTD ABN 99 001 958 390

CABCHARGE AUSTRALIA LIMITED ABN 99 001 958 390
Plaintiff

JUDGE:

EMMETT J

DATE:

5 MARCH 2007

PLACE:

SYDNEY

REASONS FOR JUDGMENT

In late 2006 the plaintiff Cabcharge Australia Limited (Cabcharge), announced an off-market takeover bid for shares in Newcastle Taxis Limited (Newcastle Taxis). After an original Bidder’s Statement was lodged with the Australian Securities and Investments Commission (the Commission), on 28 November 2006, Cabcharge lodged a replacement Bidder’s Statement with the Commission on 5 January 2007. The replacement Bidder’s Statement was sent to Newcastle Taxis and Australian Securities Exchange Limited (ASX) on the same date. The Bidder’s Statement and accompanying takeover offer to shareholders of Newcastle Taxis was dispatched to shareholders and lodged with ASX on 17 January 2007. The Offer was dated 17 January 2007. It was to remain open until 1 March 2007 unless extended or withdrawn.
Under the Offer, Cabcharge offered to acquire all A class and B class shares in Newcastle Taxis. The consideration for each share in Newcastle Taxis was one share in Cabcharge. Accordingly, s 625 of the Corporations Act 2001 (Cth) (the Act) was applicable. By s 625(3)(a), (b), (c) and (d), if the consideration offered is or includes securities, and the bidder’s statement states that the securities are to be quoted on a financial market, then relevantly, two rules apply. They are:
(1)the offer is subject to a condition that an application for admission to quotation will be made within seven days after the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Cabcharge Australia Ltd

Details

AGLC: Re Cabcharge Australia Ltd [2007] FCA 421
Case: [2007] FCA 421
Decision Date: 5 March 2007

CaseChat Overview and Summary

Cabcharge Australia Limited (Cabcharge) sought leave to amend the statutory offer condition in their off-market takeover bid for Newcastle Taxis Limited (Newcastle Taxis) due to an administrative oversight in the timing of their application for the admission of securities to quotation on the Australian Securities Exchange (ASX). The application for admission was intended to be made within seven days after the start of the offer period, but due to a clerical error, it was not made until 19 February 2007, well after the seven-day period had lapsed. The Australian Securities and Investments Commission (ASIC) indicated it had no objections to the proposed amendments, and Newcastle Taxis did not wish to be heard on the matter. The court was required to determine whether it had the authority to vary the statutory offer condition under the Corporations Act 2001 (Cth) to accommodate the oversight, and if so, whether making such an order would cause substantial injustice to any party.

The court examined the relevant sections of the Corporations Act, specifically ss 1322, 1325A, and 1325D, to determine the appropriate legal basis for granting the relief sought by Cabcharge. While sections 1322 and 1325D provided some flexibility, the court found that s 1325A(2) was the most apt provision, as it allowed the court to make any order it considered appropriate if an application for admission to quotation was not made within the required timeframe. The court was satisfied that no substantial injustice would result from the proposed orders, as the majority of shareholders had already accepted the offers, and Newcastle Taxis did not oppose the application.

In light of the above, the court granted leave for Cabcharge to file an amended originating process, varied the statutory offer condition to extend the deadline for the application to 19 February 2007, and deemed the condition to have been satisfied on that date. This allowed the takeover bid to proceed as intended, with the oversight rectified through the court's intervention.

Orders