Shaw and Partners Ltd v Netlinkz Ltd

District Court

New South Wales

Medium Neutral Citation:

Shaw and Partners Ltd v Netlinkz Ltd [2025] NSWDC 26

Hearing dates:

11 November 2024

Date of orders:

14 February 2025

Decision date:

14 February 2025

Jurisdiction:

Civil

Before:

Andronos SC DCJ

Decision:

(1)   Judgment for the plaintiff against the defendant in the sum of $577,500 including GST.

(2)   Dismiss the cross-claim.

(3)   Direct the parties to liaise as to appropriate interest and costs orders. In the event that the parties have not reached agreement on orders with respect to interest and costs, and notified my Associate of such agreement by 5pm on 28 February 2025, list the question of interest and costs for hearing on 14 March 2025 at 10am before Andronos SC DCJ.

Catchwords:

CONTRACTS — Construction and interpretation

ESTOPPEL — Promissory estoppel — Representation

Cases Cited:

Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99

Legione v Hateley (1983) 152 CLR 406

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37

Category:

Principal judgment

Parties:

Shaw and Partners Ltd (plaintiff/cross-defendant)
Netlinkz Ltd (defendant/cross-claimant)

Representation:

Counsel:
Mr S Gray (plaintiff/cross-defendant)
Mr R Notley (defendant/cross-claimant)

Solicitors:
HWL Ebsworth Lawyers (plaintiff/cross-defendant)
Gillis Delaney (defendant/cross-claimant)

File Number(s):

2023/00201876

Publication restriction:

Nil

JUDGMENT

1. The plaintiff, Shaw and Partners Ltd, is a provider of corporate advisory services and the defendant, Netlinkz Ltd, is a publicly listed company. On 24 June 2022, they agreed on the provision, by the plaintiff to the defendant, of lead management and book runner services in respect of a capital raising on the defendant’s behalf (“the Mandate”). In due course, capital was raised by way of a private share placement pursuant to an Equity Finance Agreement (“EFA”) between the defendant and Regal Funds Management Pty Ltd as trustee for Regal Emerging Companies Opportunities Fund (“Regal”) in August 2022.

2. The maximum sum that could be raised under the EFA was $20.5 million, capable of being drawn down in increments of $1,000,000 over a period of 36 months. Regal was prohibited by ASX Listing Rule 7.1 from acquiring more than 440,000,000 shares if doing so would cause it to hold more than 15% of the issued share capital of the defendant. Accordingly, the market price of the shares at the time of each drawdown affected the amount that could be drawn down under the EFA during the three-year term.

3. Although the EFA specified that the maximum amount that could be drawn down was $20.5 million, the sum drawn down pursuant to the EFA in two tranches in November 2022 and February 2023 was only $7 million. No more funds could be drawn down because more than 440,000,000 shares were issued to Regal pursuant to those drawdown requests.

4. The plaintiff has invoiced $1.025 million (+ GST) under the Mandate on the basis that the Proceeds (as defined) of the equity raising were $20.5 million, being the sum committed by Regal under the EFA. The defendant says that the amount payable is…