Yowie Group Ltd and Bolton v Keybridge Capital Ltd (No 3)

[2025] NSWCA 168

Court of Appeal

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Yowie Group Ltd and Bolton v Keybridge Capital Ltd (No 3) [2025] NSWCA 168

Hearing dates:

24 July 2025

Date of orders:

30 July 2025

Decision date:

30 July 2025

Before:

Bell CJ; Payne JA; Stern JA

Decision:

(1)   Appeal dismissed;

(2)   Second appellant (Mr Bolton) pay the respondent’s costs.

Catchwords:

CORPORATIONS — takeover bid — whether this proceeding commenced contrary to s 659B of Corporations Act 2001 (Cth) — whether this is a proceeding “in relation to a takeover bid” — s 659B(1) does not apply to this proceeding

CORPORATIONS — Directors and officers — Appointment, removal and retirement of directors – Notice — where respondent issued notice of intention to move a resolution at general meeting of shareholders removing directors of first appellant and notice of intention to nominate new directors — whether notices were valid

Legislation Cited:

Corporations Act 2001 (Cth) ss 173, 203D, 203E, 224, 225, 229, 249D, 249F, 259G, 657A, 659B

659B(2), 659C

Cases Cited:

2 Elizabeth Bay Road Pty Ltd v The Owners - Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409

Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364; [2006] HCA 32

Bolton v WAM Active Ltd (No 2) [2025] NSWCA 99

Bolton v WAM Active Ltd [2025] NSWCA 81

Cromwell Corporation Ltd v ARA Real Estate Investors XXI Pte Ltd (2020) 148 ACSR 217; [2020] FCA 1492

In the matter of Keybridge Capital Ltd [2025] NSWSC 240

In the matter of Keybridge Capital Ltd [2025] NSWSC 240

Lionsgate Australia Pty Ltd v Macquarie Private Portfolio Management Ltd (2007) 62 ACSR 178; [2007] NSWSC 371

Metalicity Ltd v Allen (2022) 165 ACSR 509; [2022] WASC 291

Owner of the Ship “Shin Kobe Maru” v Empire Shipping Co Ltd (1994) 181 CLR 404

Re application by the Chief Commissioner of Police (Vic) [2005] 79 ALJR 881; [2005] HCA 18

Re Yowie Group Ltd [2025] NSWSC 524

Wollongong City Council v Papadopoulos [2019] NSWCA 178

Yowie Group v Keybridge Capital Ltd [2025] NSWCA 142

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Yowie Group Limited (Appellant)
Nicholas Bolton (Second Appellant)
Keybridge Capital Limited (Respondent)

Representation:

Counsel:
L Judd (Second Appellant)
J S Emmett SC / D Krochmalik / D Monteith (Respondent)

Solicitors:
Bridges Lawyers (Second Appellant)
Mill Oakley (Respondent)

File Number(s):

2025/243020

Publication restriction:

None

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Equity Division

Citation:

[2025] NSWSC 648

Date of Decision:

20 June 2025

Before:

Black J

File Number(s):

2025/213618

HEADNOTE

[This headnote is not to be read as part of the judgment]

The respondent, Keybridge Capital Ltd (“KCL”), sought relief in the Supreme Court in respect of several issues relating to a general meeting of the first appellant, Yowie Group Limited (“YGL”) convened under s 249F of the Corporations Act 2001 (Cth) (“the Act”) which was to take place on 27 June 2025, but which YGL had purported to defer to 14 July 2025. The meeting was called by KCL as a majority shareholder of YGL.

The primary judge, Black J, after an urgent hearing, made orders declaring notices dated 1 April 2025 and 9 April 2025 issued by KCL to YGL under s 203D(2) of the Act to be valid notices of intention to move a resolution for the removal of directors at the meeting of YGL called under s 249F of the Act (“YGL 249F Meeting”). The primary judge held that the notice of intention to nominate directors for election issued by KCL to YGL dated 24 April 2025 was a valid director nomination notice under YGL’s constitution for the election of directors at the YGL 249F Meeting. His Honour held that the notice of general meeting dated 26 May 2025 issued by KCL and despatched to YGL shareholders under s 249F of the Act was a valid notice convening a general meeting of shareholders of YGL. The primary judge made further orders, which are no longer in issue, to ensure that the YGL 249F Meeting went ahead on 27 June 2025.

On 25 July 2025, YGL filed a notice of appeal from Black J’s decision. On 26 June 2025, Leeming JA dismissed a notice of motion filed on 25 June 2025 by YGL seeking an interlocutory injunction preventing the meeting of YGL going ahead on the following day, 27 June 2025. The appeal was set down for an urgent hearing in this Court on 10 July 2025. On 3 July 2025, as a result of the intervention and indication by a former director of YGL, Mr Bolton, that he intended to prosecute the appeal, Leeming JA vacated the 10 July hearing and fixed the final hearing for 24 July 2025. On 9 July 2025, Leeming JA made orders joining Mr Bolton as the second appellant with carriage of the appeal.

The issues on the appeal were:

1. Did the primary judge err in refusing to stay the proceedings under s 659B(2) of the Act, or in failing to find that KCL lacked standing to commence the underlying proceedings by reason of s 659B(1) of the Act?

2. Did the primary judge err in finding that:

(a) cl 13.5, not cl 13.3, applied to KCL’s proposed resolutions (such that the arguments as to the effect of cl 13.3 of the Constitution could be put to one side);

(b) even if cl 13.3 operated as YGL contended below (and Mr Bolton contended on appeal), the proposed resolutions for the election of directors nominated by KCL would not permit the giving of a financial benefit to KCL within the meaning of ss 224, 225 and 229 of the Act; and

(c)   cl 13.3, if it operated as YGL contended below (and as Mr Bolton contends on appeal) to exclude KCL’s right to vote, would be inconsistent with ASX Listing Rule 6.9 and would be deemed not to be contained in YGL’s Constitution by reason of cl 32?

1. Did the primary judge err in finding at [20] that YGL’s letter to the ASX on 19 May 2025 contained a denial which was “plainly false or at best highly misleading”?

2. Should the Court permit additional written submissions in “reply” to be made by the Second Appellant after the Court had reserved its decision without the Second Appellant filing a notice of motion seeking leave to re-open the proceedings?

The Court (per Bell CJ, Payne and Stern JJA) held, dismissing the appeal:

On issue (i):

1. The Court's jurisdiction is not excluded by the existence of YGL’s bid for KCL. The well-established presumption in favour of a narrow interpretation of any statutory provision detracting from the jurisdiction of a superior court applies to s 659B of the Act: [51]-[55].

   Lionsgate Australia Pty Ltd v Macquarie Private Portfolio Management Ltd (2007) 62 ACSR 178; [2007] NSWSC 371; Cromwell Corporation Ltd v ARA Real Estate Investors XXI Pte Ltd (2020) 148 ACSR 217; [2020] FCA 1492; Metalicity Ltd v Allen (2022) 165 ACSR 509; [2022] WASC 291; Owner of the Ship “Shin Kobe Maru” v Empire Shipping Co Ltd (1994) 181 CLR 404 discussed.

2. Each of the text, context and purpose of the section supports a construction that limits the exclusion of the court’s jurisdiction to proceedings in relation to a takeover, which concern the takeover offer or which may impact the progress or outcome of the bid: [56]-[59].

   Metalicity Ltd v Allen (2022) 165 ACSR 509; [2022] WASC 291 discussed.

3. On the facts of this case, Mr Bolton’s submissions do not establish error by the primary judge, even if the construction he advances were correct: at [60]-[64].

On issue (ii):

1. Clause 13.5 of the YGL Constitution does not apply only to the removal and appointment of YGL’s directors by resolution of its board as opposed to its members: [68].

Corporations Act s 203E applied.

1. On the contingent basis that the primary judge erred and that cl 13.3 of the YGL Constitution was the only relevant power engaged, KCL was not prohibited from voting on resolutions proposed by KCL at a general meeting of YGL’s shareholders for the appointment of its nominated directors under ss 224 and 225 of the Corporations Act. It is fundamental that a resolution to appoint a director to a public company does not, of itself, confer or permit any financial benefit to be given to another company: [69]-[73].

2. Even if cl 13.3 otherwise operates in the way Mr Bolton contends to prevent KCL from voting at a general meeting to appoint its nominated directors, that provision of the Constitution would be inconsistent with the ASX Listing Rules and is deemed to be excised to the extent of the inconsistency: [74]-[77].

On issue (iii):

1. The unchallenged findings of the primary judge established that YGL’s letter to the ASX on 19 May 2025 contained a denial which was “plainly false or at best highly misleading”. Further, Mr Ranger admitted in cross-examination that he knew about KCL’s intention to call a meeting to remove and replace YGL’s directors from at least 24 April 2025, prior to the time relevant to the denial in YGL’s letter of 19 May 2025: [80]-[86].

On issue (iv):

1. No notice of motion seeking leave to re-open the appeal to provide additional submission was made, as it ought to have been. It is improper for parties to provide additional submissions after the hearing of an appeal unless leave has been granted. Leave to rely on the additional submissions has not formally been sought, but if it had been, leave would be refused as no sufficient reason has been shown to permit such an unsatisfactory course: at [12].

   Re application by the Chief Commissioner of Police (Vic) [2005] 79 ALJR 881; [2005] HCA 18; Wollongong City Council v Papadopoulos [2019] NSWCA 178 applied.

JUDGMENT

1. THE COURT: This is a case which has been heard urgently in this Court following an expedited hearing in the Corporations List. For the reasons which follow, the appeal should be dismissed with costs.

Relevant procedural history

2. By Originating Process filed on 4 June 2025, the respondent Keybridge Capital Ltd (“KCL”) sought relief in respect of several issues relating to a general meeting of the Yowie Group Limited (“YGL”) convened under s 249F of the Corporations Act 2001 (Cth) (“Corporations Act“ or the “Act”) which was to take place on 27 June 2025, but which YGL had purported to defer to 14 July 2025.

3. An expedited hearing was held in the Corporations List on 18 June 2025 before the primary judge, Black J. On 20 June 2025, the primary judge published reasons for making the following orders:

1. Declare that the notice issued by the Plaintiff, Keybridge Capital Ltd (“KCL”) to the Defendant, Yowie Group Ltd (“YGL”) under s 203D(2) of the Corporations Act 2001 (Cth) (“Act”) dated 1 April 2025 is a valid notice of intention to move a resolution for the removal of directors at the meeting of YGL called under s 249F of the Act (“YGL 249F Meeting”).

2. Declare that the notice issued by KCL to YGL under s 203D(2) of the Act dated 9 April 2025 is a valid notice of intention to move a resolution for the removal of directors at the YGL 249F Meeting.

3. Declare that the notice of intention to nominate for election issued by KCL to YGL dated 24 April 2025 is a valid director nomination notice under YGL's constitution for the election of directors at the YGL 249F Meeting.

4. Declare that the notice of general meeting dated 26 May 2025 issued by KCL and despatched to shareholders of YGL under s 249F of the Act (Notice of 249F Meeting) is a valid notice convening a general meeting of shareholders of YGL to be held on Friday 27 June 2025.

5. Further and in the alternative to orders 1-4, declare, to the extent necessary, pursuant to s 1322(4) of the Act that the Notice of 249F Meeting is not invalid by reason of any contravention of the requirements of s 203D(2), s 249F or the requirements of cl 13.3 of the YGL's constitution, arising from any contravention of s 198G of the Act.

6. Order pursuant to s 1322(4) of the Act that Mr R P Austin act as independent chair of the general meeting of YGL scheduled for Friday 27 June 2025.

7. Declare that KCL is entitled to vote its interests as shareholder at the forthcoming YGL 249F Meeting on each resolution set out in the Notice of 249F Meeting.

8. Declare that the purported resolution by the board of directors of the YGL on 2 June 2025 pursuant to cl 11.2 of YGL's constitution to postpone and change the venue of the general meeting of shareholders convened by the Notice of 249F Meeting is invalid and of no effect.

9. Direct the parties submit agreed orders as to costs, or otherwise their respective proposed costs orders and submissions not exceeding five pages in Arial font 12 as to costs, by 4:00pm on 4 July 2025.

4. On 25 June 2025, YGL filed a notice of appeal from Black J’s decision.

5. On 26 June 2025, Leeming JA dismissed a notice of motion filed on 25 June 2025 by YGL seeking an interlocutory injunction preventing the meeting of YGL going ahead on the following day, 27 June 2025. His Honour also made the following orders to bring the matter before this court for an urgent final hearing of YGL’s appeal:

1.   Dismiss the notice of motion filed 25 June 2025

2.   Order that there be no discontinuance or dismissal of the appeal without leave of the Court.

3.   The appellant to pay the respondent’s costs of the notice of motion.

4.   Set down the appeal for 10 July 2025.

5.   The appellant to file and serve written submissions by 1 July 2025.

6.   The respondent to file and serve written submissions by 5 July 2025.

7.   The appellant to file and serve submissions in reply by 4pm on 8 July 2025.

8.   Direct the Registrar to make other directions as to the preparation of appeal books and otherwise readying the matter for hearing.

9.   Liberty to apply on one business day’s notice to Justice Leeming by his Associate, or the Registrar.

6. It was common ground that the s 249F Meeting went ahead on 27 June 2025 and that the directors proposed by KCL were elected to the Board of YGL. The preparation for the appeal fixed for 10 July 2025 was case managed by Leeming JA.

7. On 3 July 2025, as a result of Mr Bolton’s intervention and indication that he intended to prosecute the appeal, Leeming JA vacated the 10 July hearing and fixed the final hearing for 24 July 2025 and made the following orders:

1.   Vacate the appeal presently set down for hearing on 10 July, and the various directions for the supply of submissions made by me on 26 June.

2.   Note that of the five former directors of Yowie Group Ltd, three have communicated their decision not to seek to intervene in the appeal, but one (Mr Bolton) has advised that he wishes an opportunity to do so and the fifth (Mr Patton) is taking advice on that point.

3.   Note that at present, the firm Hamilton Locke remains on the record for the appellant on this appeal but has indicated it no longer holds instructions from the appellant.

4.   List the appeal for further directions before me on 9 July at 9.30am with a view to hearing from all interested parties as to the efficient conduct of the appeal.

5.   Set down the appeal for hearing on 24 July 2025.

6.   Note that these directions and orders will be sent by my Associate to each of the 5 former directors of Yowie Group by email at addresses which have recently been used by those men.

7.   Direct Hamiliton Locke also to supply a copy of the Court’s orders or directions to Mr Bolton.

8. On 9 July 2025, Leeming JA made orders joining Mr Bolton as the second appellant with carriage of the appeal and, from at least that date, Mr Bolton was the only party actively prosecuting the appeal. Mr Bolton was represented by Mr Broadfoot KC. A further directions hearing occurred on 16 July 2025 at which hearing Mr Bolton was represented by his solicitor, Mr Shaw, who stated that Mr Green SC and Mr Ford were briefed to appear on the appeal. Written submissions in support of the appeal, signed by Mr Green and Mr Ford, were e-filed on 17 July 2025, with submissions in response by KCL filed on 21 July 2025.

9. On 23 July 2025, Mr Bolton filed a notice of motion seeking to vacate the hearing on 24 July 2025. An affidavit filed by Mr Bolton’s solicitor, Mr Shaw, deposed that Senior and Junior Counsel briefed in the matter had returned their briefs the night before because insufficient funds had not been placed in trust and (approximately 3 hours later) junior counsel indicated that he had a conflict of interest in appearing in the matter.

10. Leeming JA stood over the application to 10.15am on 24 July 2025 before the Court as presently constituted and indicated to Mr Shaw that if the application to vacate the hearing was refused the appeal would proceed on that day. The application was heard on 24 July 2025.

11. The Court dismissed the application to vacate the hearing: Yowie Group Limited and Bolton v Keybridge Capital Limited (No 2) [2025] NSWCA 167. On 24 July 2025, Mr Bolton was represented by counsel and solicitor both at the hearing of the unsuccessful application to vacate and at the hearing of the appeal. That Mr Judd was briefed on the appeal was at least twice confirmed by him in the course of the hearing.

12. On 28 July 2025, and whilst judgment was reserved, Mr Bolton personally made email contact with the Court asking to make additional written submissions. On 28 July 2025, the Associate to the Chief Justice informed Mr Bolton that any application he wished to make should be made through his solicitor and only with the consent of the other party to the proceedings. On 29 July 2025, without filing a motion seeking leave to re-open the proceedings and without any indication that he had obtained the consent of the respondent, Mr Bolton sent an affidavit to the Associate to the Chief Justice explaining why he wished to make further submissions and annexing written submissions by Mr Broadfoot KC, purportedly in “reply”. No notice of motion seeking leave to re-open the appeal to provide additional submissions was made, as it ought to have been: Re application by the Chief Commissioner of Police (Vic) [2005] 79 ALJR 881; [2005] HCA 18 at [22], [54]. It is improper for parties to provide additional submissions after the hearing of an appeal unless leave has been granted: Wollongong City Council v Papadopoulos [2019] NSWCA 178 at [49] per Leeming JA and the cases cited therein. Leave to rely on the submissions of Mr Broadfoot KC has not formally been sought, but if it had been, leave would be refused as no sufficient reason has been shown to permit such an unsatisfactory course. In any event, even if leave had been granted, those submissions are essentially repetitive of the submissions in chief relied upon by Mr Bolton and we do not regard them as affecting any of the conclusions in these reasons.

Relevant Facts

13. On 23 May 2024, YGL and KCL entered into loan agreements which are in issue in other proceedings and which were relied upon by YGL to assert that KCL had an improper purpose in seeking to replace its directors. YGL contended that it advanced in excess of $4.4m to KCL between 24 May 2024 and 24 December 2024.

14. On 6 February 2025, YGL demanded payment of in excess of $4.56m from KCL consisting of principal and interest. A voluntary administrator was appointed to KCL on 9 February 2025. YGL subsequently unsuccessfully opposed an application brought by a shareholder in KCL, WAM Active Limited (WAM Active), to terminate the voluntary administration of KCL, relying on the asserted failure by KCL to pay the amount of the debt that YGL claimed against it.

15. On 10 February 2025, Messrs Bolton and Patton were removed as directors of KCL following resolutions passed at a general meeting of its members called under section 249F of the Corporations Act. Mr Patton, as chair of that meeting, sought to adjourn that meeting prior to a vote on the resolutions but the shareholders present elected a new chair and the resolutions to remove Mr Bolton, Mr Patton and a third director of KCL, Mr Dukes were passed. The validity of those resolutions has since been confirmed in other proceedings in this Court: In the matter of Keybridge Capital Ltd [2025] NSWSC 240, with those findings affirmed in Bolton v WAM Active Ltd (No 2) [2025] NSWCA 99.

16. On 1 April 2025 and 9 April 2025, KCL issued notices of its intention to move resolutions for the removal of YGL’s board of directors pursuant to s 203D of the Corporations Act (“First 203D Notice” and “Second 203D Notice”, respectively and, together “the 203D Notices”). The First 203D Notice was directed to KCL’s intention to move resolutions for the removal of YGL’s then directors, Messrs Bolton, Patton and Ranger as directors of YGL pursuant to s 203D of the Corporations Act. As I will explain, on 18 June 2025, immediately prior to the hearing before the primary judge, Mr Bolton and Mr Patton resigned as directors of YGL.

13. On 7 April 2025, YGL announced to the ASX that Messrs Agocs and Schwarze had been appointed as directors of YGL effective from 1 April 2025. The primary judge referred to evidence that at least Messrs Agocs and Schwarze had other family or business relationships with Mr Bolton but his Honour did not find it necessary to determine that matter. On 9 April 2025, KCL then issued the Second 203D Notice directed to their removal as directors of YGL.

14. An affidavit dated 17 April 2025 was read in proceedings before Leeming JA in the Court of Appeal between Mr Bolton and WAM Active: Bolton v WAM Active Ltd [2025] NSWCA 81. Mr Simmons, the solicitor acting for WAM Active and a majority of KCL’s directors deposed, on information and belief, the intention of KCL’s directors to issue a request to YGL for a copy of its members register under s 173(3) of the Act; issue a notice of intention to nominate KCL’s nominees for election as directors of YGL (which as required by YGL's constitution must occur at least 30 business days prior to a general meeting at which the election of the directors is to be considered); and issue a notice of general meeting and an explanatory memorandum calling a general meeting of YGL under s 249F of the Act for members of YGL to consider resolutions for the removal of the current directors of YGL and resolutions for the appointment of KCL's nominees as directors of YGL. The primary judge found that, in the ordinary course, Mr Bolton’s legal representatives would then have made him aware of those matters, even if he was not present in Court and did not review the transcript. Mr Bolton did not challenge this finding in this Court.

15. By email dated 22 April 2025, the solicitor acting for the then voluntary administrators of KCL referred to a request for consent to issue the Director Nomination Notice and noted that that would need to occur after KCL had obtained the YGL share register, as to which the voluntary administrator had given approval; and indicated that:

We are instructed that our client will consent to the second step and you may rely upon this email as evidence of such consent.

20. On 24 April 2025, KCL gave the Director Nomination Notice which stated that KCL intended to propose its nominated persons for election as directors of YGL “at a general meeting of [YGL] which occurs at least 30 Business Days from the date of” the notice. On 24 April 2025, KCL also requested access to YGL’s register of members under s 173 of the Act.

21. On 1 May 2025, YGL released an ASX announcement stating that it “has not received nominations from [KCL]” and “does not propose to engage with the intention to nominate”. The same day, YGL refused to provide a copy of its register of members to KCL.

22. At a board meeting held on 8 May 2025, KCL’s board ratified the several steps as to which any question of authority arose in the proceedings before the primary judge, including the issue of the 203D Notices and the Director Nomination Notice.

23. On 9 May 2025, KCL made a further request for access to YGL’s share register.

24. On 9 May 2025, YGL released an ASX announcement entitled “[YGL] announces scrip takeover bid for [KCL]”. A “defeating condition” to the bid was said to be that KCL did not “issue a notice pursuant to section 249D, 249F or 249G for the purpose of convening a meeting of [YGL’s] shareholders” or “propose a resolution at a meeting of [YGL] shareholders that would influence the control or composition of the [YGL] board of directors”.

25. On 12 May 2025, KCL commenced proceedings against YGL seeking an order that YGL provide a copy of YGL’s register of members. On the same day, YGL announced that it had resolved to issue 34,405,185 new shares in YGL under a private placement. The share placement reduced KCL’s voting power in YGL from 66.78% to 58.07%. KCL brought an application in the Takeovers Panel concerning the issue of these shares.

26. On 13 May 2025, KCL's solicitors wrote to YGL's then solicitors referring to the meeting of members of YGL that KCL intended to call under s 249F of the Act to replace YGL's board of directors.

27. On 14 May 2025, at a directions hearing before Nixon J in the proceedings brought by KCL for access to YGL's register, YGL's Counsel stated that:

“The purpose [of the call for access to YGL's register] is so that they can call a meeting under 249D in order to remove Mr Bolton and other existing directors to replace them with nominee directors from Keybridge.”

28. The reference in the transcript to s 249D was plainly intended to refer to s 249F, in circumstances where, to the knowledge of all parties, KCL as a member was proposing to call a meeting of YGL under s 249F of the Act.

29. On 16 May 2025 the ASX issued a letter to YGL requesting, relevantly, the following information:

Request for information

Having regard to the above, ASX asks YOW [YGL] to respond separately to each of the following questions:

….

Shareholders meeting and Placement

6. In the period since 21 March 2025 to the date of this letter, has YOW, or any of its directors, been made aware that:

6.1   a member with at least 5% of the votes that may be cast at a general meeting of the company called, and arranged to hold, a general meeting of YOW?

6.2a person or persons holding more than 50% of the ordinary securities told YOW, or any of its directors, that they intend to call, or request the directors to call, a general meeting to appoint or remove directors of YOW?

Please answer separately for each of the items in question 6 above and for each separate occasion on which YOW or its directors may have been made aware.

….

30. By email dated 19 May 2025 from Mr Patton to other directors of YGL, he asked whether an affidavit "doesn't count as a valid notification" of the proposed removal of YGL's directors, where YGL proposed to deny that it had received notice of KCL taking steps to effect such a removal in its communication with ASX. On 19 May 2025, Mr Bolton responded arguing that that earlier affidavit was "infected by the same problems of validity", indicating that he would forward it to solicitors and ask. There was no evidence before the primary judge or this Court that he did so.

31. On 19 May 2025, YGL sent a letter to the ASX, signed by Mr Patton. The primary judge found that it was plain that there was a dispute about the validity of the Director Nomination notice since, in that letter, YGL characterised that notice as a “purport[ed] intention statement to nominate directors” and contended (contrary to the findings of the primary judge) that it was not sent with the consent of KCL’s then voluntary administrator. By the same letter, YGL denied to the ASX that it or its directors had been made aware that a person or persons holding more than 50% of its ordinary shares intended to call, or requested the directors to call, a general meeting to appoint or remove directors of YGL. The primary judge found that this denial was plainly false or at best highly misleading. Mr Bolton challenges this finding on appeal.

32. On 21 May 2025, Nixon J ordered that YGL deliver a copy of its register of members to KCL: Re Yowie Group Ltd [2025] NSWSC 524.

33. By 22 May 2025, Mr Schwarze, then a director of YGL, was considering the question of a postponement of any s 249F meeting called by KCL, before that meeting was called, and he sent an email to Mr Ranger and Mr Agocs on that date contemplating that possibility, noting that it was “probably for the full board and best handled by Nick [Bolton]”.

34. On 23 May 2025, the Takeovers Panel received an application from YGL seeking a declaration of unacceptable circumstances and seeking an interim order that KCL be restrained from issuing a s 249F notice to YGL.

35. On 26 May 2025, KCL called the YGL 249F Meeting pursuant to s 249F of the Act. The meeting was to be held on 27 June 2025 to vote on resolutions to replace the current directors of YGL Mr Bolton, Mr Patton, Mr Agocs, Mr Schwarze and Mr Ranger.

36. On 29 May 2025, Australian Style Group Pty Ltd (ASG), a company associated with Mr Bolton, issued a notice to convene a general meeting of KCL’s shareholders under s 249F to be held at 9.00am on 27 June 2025 (one hour before the YGL 249F Meeting) seeking to remove KCL’s board of directors.

37. On 1 June 2025, Mr Patton issued an invitation to other directors of YGL to attend a meeting of YGL's directors to approve an ASX announcement of the postponement and change of venue for the YGL 249F Meeting. The primary judge found that the agenda item was phrased in a manner which assumed that the meeting would be postponed.

38. On 2 June 2025, the directors of YGL attended a meeting which discussed the postponement and change of venue of the YGL 249F Meeting. On the same date, YGL announced to ASX that its board of directors had unanimously resolved, pursuant to cl 11.2 of YGL’s constitution, to postpone the YGL 249F Meeting to 10.00am on 14 July 2025 and change the venue of the meeting “to the extent the purported meeting is valid”. That announcement referred to YGL’s earlier ASX announcement on 1 May 2025 and its response dated 19 May 2025 to an ASX query letter which was released on 20 May 2025, regarding the “validity of the meeting request”.

39. On 13 June 2025, YGL issued a bidder’s statement in respect of an off-market takeover bid for KCL to the ASX. Mr Ranger was cross-examined about the structure of that offer, which contemplated that KCL’s present control of YGL would be diluted by the issue of YGL shares to KCL shareholders accepting the bid, to satisfy a condition that, by the end of the offer period, KCL no longer controlled YGL.

40. On 16 June 2025, the Takeovers Panel announced that it declined to make a declaration of unacceptable circumstances in response to YGL’s 23 May 2025 application, as YGL “was aware of the likelihood that [KCL] may seek to change the composition of the [YGL] board when [YGL] announced its proposed bid, and accordingly, the condition was likely to be triggered by [KCL]”.

41. On the morning of the hearing before the primary judge, 18 June 2025, Mr Bolton and Mr Patton resigned as directors of YGL.

42. On 20 June 2025, Black J made orders and delivered his Honour’s reasons.

Amended Notice of Appeal

43. As noted above, on 9 July 2025 Leeming JA made an order joining Mr Bolton as the second appellant. Although in writing KCL asserted that Mr Bolton required leave to appeal to prosecute grounds 1 and 3 of the appeal, this contention was not pressed before us. Leeming JA also noted the application by YGL to discontinue its appeal but, as his Honour observed, YGL remained a necessary party. It was common ground that YGL from that date would take no steps to prosecute the appeal.

44. By a document styled “Amended Notice of Appeal” served electronically on 16 July 2025, Mr Bolton appeals from the decision of the primary judge on four grounds. In relation to the fourth ground, the respondent filed a Notice of Contention. On the hearing of the appeal, however, this ground 4 was not pressed with the consequence that the Notice of Contention necessarily fell away. The decision not to press ground 4 made the submission made on the application to adjourn the hearing, namely that the adjournment was required in order to respond to the Notice of Contention, at best disingenuous: Yowie Group Limited and Bolton v Keybridge Capital Limited (No 2) [2025] NSWCA 167 at [11] and [14]. The three remaining grounds were as follows:

1    The trial judge erred at J[31]:

a. in finding that these proceedings “will not determine any question as to the takeover bid by [the First Appellant] for [the Respondent]” in circumstances in which the outcome of the proposed resolutions to be put at the s 249F meeting called by the Respondent would have the effect of terminating a takeover bid by the First Appellant for the Respondent;

b. in finding that the proceeding was not “in relation to a takeover bid” within the meaning of s 659B of the Corporations Act 2001 (Cth) (the Corporations Act); and

c. in not staying the proceeding under s 659B(2) of the Corporations Act; and

d. further or alternatively, by misunderstanding the question to be determined under s 659B of the Corporations Act. With respect, his Honour proceeded on the basis that the question was whether the proceeding should be stayed under s 659B(2). However, his Honour did not address the question of whether the Respondent had standing to commence the proceeding under s 659B(1) where:

i.   a takeover bid was on foot; and

ii. two applications under s 657A were before the Takeovers Panel in circumstances where:

1. section 659B(1) allows only the enumerated authorities and persons to commence proceedings in relation to a takeover bid with no discretion or exception to permit any other person or entity to commence such a proceeding;

2.   the proceeding was in relation to a takeover bid; and

3. section 659C contemplates that the Court cannot act where an application is made to the Takeovers Panel under s 657A until after the application is determined (s 659C(1)(c): …a Court finds after the end of the bid period that the conduct contravenes this Act).

2   The trial judge erred at J[49], J[50] and J[51]:

a.   in finding that the removal and election of directors in the circumstances of this case was governed solely by cl. 13.5 of the First Appellant’s Constitution, which is directed to the removal and the election of replacement directors, and erred in finding that the power in cl. 13.5 is not qualified by the provisions of cl. 13.3, which is directed solely to the election of directors;

b. in finding that cl. 13.3, which requires the First Appellant to observe the requirements of s 225 of the Corporations Act, does not apply to the Respondent’s proposed resolutions to elect directors;

c.   in making the findings referred to in subparagraphs 2(a) and 2(b) above, the trial judge misapplied the principles of construction that:

i. the Constitution must be read and construed as a whole;

ii. words in the Constitution should be given their natural and ordinary meaning;

iii. the construction of a provision of the Constitution should give congruent operation to the various provisions of the Constitution; and

iv. provisions of the Constitution dealing broadly with subject matter ought to be given a narrower reading where a broad reading would negate the operative efficacy of a specific clause directed to the issue,

d. in finding at J[51] that ss 224(1) and 225 of the Corporations Act impose obligations where the resolutions would “approve the giving of a financial benefit” (as defined in s 229 of the [Corporations Act]) to a related party”, whereas the test under s 224(1) is broader, applying where resolutions would “permit the giving” of a financial benefit;

e.   in finding at J[51] that the proposed resolutions for electing the Respondent’s board as the board of the First Appellant would not permit a financial benefit to be given to the Respondent, where:

i.   the Respondent owes the First Appellant a substantial debt; and

ii.   the proposed resolutions to remove the First Appellant’s board of directors and elect the members of the Respondent’s board would “permit the giving of a financial benefit” to the Respondent in the form of the release of an obligation;

iii. release of an obligation is an example of a giving a financial benefit in s 229(3)(f) of the Corporations Act.,

f. in finding at J[49] that cl. 13.3 of the Constitution is inconsistent with rule 6.91 of the Listing Rules and, therefore, by reason of cl. 32 of the Constitution, which says that the Listing Rules prevail over provisions of the Constitution in the event of an inconsistency, cl. 13.3 is deemed not to contained the reference to s 225 of the Corporations Act.

3   The trial judge erred at J[20] in finding that the First Appellant’s denial to the ASX that its directors had been made aware that a person or persons holding more than 50 per cent of the First Appellant’s ordinary shares intended to call, or requested the directors to call, a general meeting to appoint or remove directors of the First Appellant was “plainly false or at best highly misleading” in circumstances in which the Respondent’s voluntary administrator, Mr. Rathner, had emailed the First Appellant and advised the First Appellant that he had not authorised such a meeting and had no intention to call such a meeting.

.

45. The relief sought was as follows:

1   Appeal allowed.

…

3   Order 4 of the orders made by the Court below on 20 June 2025 be set aside

….

5   Order 7 of the orders made by the Court below on 20 June 2025 be set aside.

6   Order 8 of the orders made by the Court below on 20 June 2025 be set aside.

7   An order that the matter be remitted to the Court below and be decided according to law.

8   The Respondent pay the Appellant's costs.

Ground 1 of the appeal

46. By ground 1, Mr Bolton submitted that the primary judge misapplied the provisions in Div 3, Part 6.10 of Chapter 6 of the Corporations Act. The central provision, s 659B of the Corporations Act, provides:

659B Court proceedings before end of bid period

Delay in commencing court proceedings until after end of bid period

(1)   Only the following may commence court proceedings in relation to a takeover bid, or proposed takeover bid, before the end of the bid period:

(a)   ASIC;

(b)   a Minister of the Commonwealth;

(c)   a Minister of a State or Territory in this jurisdiction;

(d)   the holder of an office established by a law of:

(i)   the Commonwealth; or

(ii)   a State or Territory in this jurisdiction;

(e)   a body corporate incorporated for a public purpose by a law of:

(i)   the Commonwealth; or

(ii)   a State or Territory in this jurisdiction;

to the extent to which it is exercising a power conferred by a law of the Commonwealth or a State or Territory in this jurisdiction.

Note: This restriction starts to apply as soon as there is a takeover bid, or a proposed takeover bid; it does not start to apply only when the bid period commences.

Court power to stay proceedings that have already commenced

(2)    A court may stay:

(a)   court proceedings in relation to a takeover bid or proposed takeover bid; or

(b)    court proceedings that would have a significant effect on the progress of a takeover bid;

until the end of the bid period.

(3)    In deciding whether to exercise its powers under subsection (2), the court is to have regard to:

(a)   the purposes of this Chapter; and

(b)   the availability of review by the Panel under Division 2.

(4)   For the purposes of this section:

court proceedings in relation to a takeover bid or proposed takeover bid:

(a)   means any proceedings before a court in relation to:

(i)    an action taken or to be taken as part of, or for the purposes of, the bid or the target’s response to the bid; or

(ii)   a document prepared or to be prepared, or a notice given or to be given, under this Chapter; and

(b)   includes:

(i)   proceedings to enforce an obligation imposed by this Chapter; or

(ii)   proceedings for the review of a decision, or the exercise of a power or discretion, under this Chapter; or

(iii) proceedings for the review of a decision, or the exercise of a power or discretion, under Chapter 6C in relation to securities of the target of a takeover bid during the bid period; and

(iv)    proceedings under Part 2F.1A for leave to bring, or to intervene in, proceedings referred to in paragraph (a) or subparagraph (b)(i), (ii) or (iii).

This is not limited to proceedings brought under this Chapter or this Act but includes proceedings under other Commonwealth and State or Territory laws (including the general law).

(5) Nothing in this section is intended to affect the jurisdiction of the High Court under section 75 of the Constitution.

47. Mr Bolton submitted that the primary judge erred by refusing to stay the proceedings under s 659B(2) or, in failing to find that KCL lacked standing to commence the underlying proceedings by reason of s 659(1) of the Corporations Act.

47. The essence of ground 1 is that the words “in relation to” in s 659B(4) should be understood in context to carry a very broad meaning encompassing the present circumstances.

48. Mr Bolton submitted that s 659(4) was here enlivened because there was a cause-and-effect relationship between the matter before the court and YGL’s takeover bid. Mr Bolton submitted that because a condition of the YGL bid was that KCL not attempt to change the makeup of the YGL board, and a proposed change in the makeup of the board being “a” if not “the” reason for the calling of the board meeting by KCL, the majority shareholder, meant that the resolutions proposed at the board meeting would pass, and therefore that the proceedings before the primary judge must have been ‘in relation to’ the takeover bid as they effectively, if not directly, decided whether a terminating condition of the takeover bid would occur or not.

49. At the hearing, KCL did not press a submission made in writing that Mr Bolton lacked standing to advance ground 1. The respondent submitted that ground 1 should nevertheless be rejected:

1. First, as there was no challenge to the Court’s exercise of jurisdiction to make orders 1, 2, 3, 5 and 6, it was unclear what utility there could be in Mr Bolton’s attempt to invoke s 659B to set aside some only of the orders made by the primary judge. Accepting for the purposes of argument that the power under s 659B(2) to stay court proceedings includes a power to stay part of a proceeding, the respondent submitted that Mr Bolton does not advance any reason why it would be appropriate for the Court to stay the proceedings insofar as they concern the application for relief relating to orders 4, 7 and 8 of the primary judge’s orders, but not the balance;

2. Secondly, Mr Bolton does not address any of the authorities cited by the primary judge concerning the meaning of s 659B(2) of the Corporations Act;

3. Thirdly, Mr Bolton’s submissions ignore the structure of s 659B(4)(a)(i) and the proper focus on what brings the matter to court. The purpose of the proceedings was to protect the integrity of the meeting called by KCL. That meeting, and the calling of it, was not part of the bid or KCL’s response to the takeover bid, nor was it for the purposes of the bid, or KCL’s response to the takeover bid;

4. Fourthly, the Court’s power to grant a stay under s 659B(2) is discretionary. It does not follow that a contravention of the provision would result in the setting aside of the primary judge’s orders.

Consideration of ground 1

51. Although there are formidable discretionary reasons advanced by the respondent standing in the way of Mr Bolton on this appeal on ground 1, we will first address the substance of Mr Bolton’s complaints.

52. The term “court proceedings in relation to a takeover bid” in s 659B of the Corporations Act is relevantly defined to mean any proceedings before a court in relation to “an action taken or to be taken as part of, or for the purposes of, the bid or the target's response to the bid” and includes a number of other proceedings none of which are alleged to be engaged by this litigation. Simply reading the words of the definition in s 659B makes it tolerably clear here that the Court's jurisdiction is not excluded by the existence of YGL’s bid for KCL.

53. The proceedings before the primary judge related to the validity or otherwise of the steps taken to call the YGL 249F Meeting. Those proceedings did not determine any question raised by the takeover bid by YGL for KCL. It may be accepted, as the primary judge did, the proceedings may have had a connection with the relevant parties’ strategies in respect of that takeover bid or that the outcome of the proceedings (and, no doubt, many other events) may have a practical impact upon the bid. That is not the point. The proceedings did not thereby become “court proceedings in relation to a takeover bid" within the meaning of s 659B of the Corporations Act.

54. Mr Bolton in his written submissions asserted that the relevant question is “whether there was an existing connection, as in a relation between cause and effect, between the subject matter of the Proceeding Below and Yowie’s takeover bid for Keybridge”. No authority was cited for that proposition. For the following reasons, we are unable to agree it is correct.

55. First, the well-established presumption in favour of a narrow interpretation of any statutory provision detracting from the jurisdiction of a superior court applies to s 659B: Lionsgate Australia Pty Ltd v Macquarie Private Portfolio Management Ltd (2007) 62 ACSR 178; [2007] NSWSC 371 at [27]-[28]; Cromwell Corporation Ltd v ARA Real Estate Investors XXI Pte Ltd (2020) 148 ACSR 217; [2020] FCA 1492 at [64]; Metalicity Ltd v Allen (2022) 165 ACSR 509; [2022] WASC 291 at [38], [42]. The Court should not hold the jurisdictional prohibition in s 659B to be applicable unless the statutory words clearly and unambiguously apply: Owner of the Ship “Shin Kobe Maru” v Empire Shipping Co Ltd (1994) 181 CLR 404 at 421. We agree with what Leeming JA said in the earlier interlocutory stage of this appeal in Yowie Group v Keybridge Capital Ltd [2025] NSWCA 142 that:

[29] It is not the test in s 659B that litigation will have some effect upon a takeover bid. As indicated in argument, I would strain against a construction of s 659B which would lead to the result that, by the device (I do not use that noun in a pejorative way) of making a takeover bid and including within it conditions which impacted upon existing litigation, one litigant could deprive this Court of jurisdiction. That conclusion would be contrary to the ordinary approach of construing provisions detracting from the jurisdiction of a superior court narrowly: see Owner of the Ship "Shin Kobe Maru" v Empire Shipping Co Ltd (1994) 181 CLR 404 at 421; [1994] HCA 54.

56. Secondly, s 659B(4) contains an exhaustive definition of “court proceedings in relation to a takeover bid, or proposed takeover bid”. In this regard, while the words “in relation to” may be of wide import, the text of s 659B(4)(a) limits their meaning. In Metalicity at [42], Hill J correctly explained:

In my view, the proper construction of s 659B of the Act was accurately summarised by Austin J in Lionsgate Australia Pty Ltd v Macquarie Private Portfolio Management Ltd. This is as follows:

(a) unless the statutory words clearly and unambiguously apply, the court should not hold that s 659B prevents the commencement of proceedings by a party;

(b) the effect of s 659B(1) of the Act is to prevent any party, other than those listed in that section, from commencing 'court proceedings in relation to a takeover bid, or proposed takeover bid' before the end of the bid period;

(c) s 659B(4) is an exhaustive definition of 'court proceedings in relation to a takeover bid, or proposed takeover bid' which encompasses two steps. First, in subparagraph (a), a definition of the scope of the phrase and second, in subparagraph (b), by listing some specific matters that fall within or are deemed to be within the definition;

(d) while the words 'in relation to' are very wide, they are combined in s 659B(4)(a)(i) and (ii) with more specific words which, by their context, limit their meaning;

(e) if the proceedings do not fall within the definition in s 659B(4), there is no restriction on a party commencing or continuing with the proceedings.

57. Thirdly, each of the text, context and purpose of the section supports a construction that limits the exclusion of the court’s jurisdiction to proceedings in relation to a takeover, which concern the takeover offer or which may impact the progress or outcome of the bid. In Metalicity, Hill J held:

[43] None of the text of s 659B nor its context or purpose support this section being given the expansive meaning contended by counsel for the Effis parties. Each of the text, context and purpose of the section support a construction that limits the exclusion of the court's jurisdiction to proceedings in relation to a takeover, which concern the takeover offer or which may impact the progress or outcome of the bid. That is, the section does not prevent the commencement of any proceedings (other than by those specified in s 659B(1) of the Act) during the bid period, but only certain types of proceedings.

58. Fourthly, the question posed by s 659B is “what brings the matter to court”. In Metalicity, Hill J said:

[48]   However, in my view, neither proposing to appoint or remove directors of the target, nor seeking to convene a meeting of shareholders to consider the appointment or removal of directors of the target during a bid period are actions that are taken as part of the bid or in response to the bid or 'in relation to the bid'. While it may be the case that the takeover tactics of both sides lie behind these actions (and any subsequent proceedings), what brings the proceedings to court is the actions of parties in relation to contested shareholder meetings of the target.

59. No different conclusion arises in relation to Mr Bolton’s submission that the respondent lacked standing to commence the proceedings by reason of the prohibition in s 659B(1). That prohibition applies to “court proceedings in relation to a takeover bid” and for the reasons given these proceedings fell outside that defined term.

60. Further, on the facts of this case Mr Bolton’s submissions do not establish error by the primary judge, even if the construction he advances were correct. Mr Bolton identifies five events said to be of significance to his argument on s 659B, commencing with the announcement of YGL’s takeover bid on 9 May 2025. This is an entirely artificial identification of the relevant facts and in the teeth of the primary judge’s careful findings about the long prior history of the relevant dealings. Mr Bolton makes no reference to the fact that he (and YGL’s other directors) knew from 1 April 2025, when KCL served the first of the 203D Notices, that KCL intended to move resolutions to remove YGL’s directors at a general meeting. Critically, the primary judge found that Mr Bolton was aware from 17 April 2205 that KCL’s directors intended to issue a request to YGL for a copy of its members register under s 173(3) of the Act; issue a notice of intention to nominate KCL’s nominees for election as directors of YGL (which as required by YGL's constitution must occur at least 30 business days prior to a general meeting at which the election of the directors is to be considered); and issue a notice of general meeting and an explanatory memorandum calling a general meeting of YGL under s 249F of the Act (allowing for members of YGL to consider the proposed resolutions for the removal of the current directors of YGL and resolutions for the appointment of KCL's nominees as directors of YGL). On 24 April 2025, KCL gave the Director Nomination Notice which stated that KCL intended to propose its nominated persons for election as directors of YGL “at a general meeting of [YGL] which occurs at least 30 Business Days from the date of [the notice]” After that time, YGL’s directors announced a takeover bid for KCL that included the defeating condition set out above. If it were necessary to do so, we would strain against a construction that would lead to the result that by the device of making a takeover bid and including within it conditions which impacted upon existing contested issues relating to the calling of a shareholders meeting a litigant could deprive the Court of jurisdiction.

61. The primary judge correctly concluded that these proceedings related to the validity or otherwise of the steps taken to call the YGL 249F Meeting and would not determine any question as to the takeover bid by YGL for KCL. It is not to the point that these proceedings may have a connection with the relevant parties’ strategies in respect of that takeover bid or that the outcome of the proceedings (and, no doubt, many other events) may have a practical impact upon the bid. The Court’s jurisdiction was therefore not excluded by the existence of YGL’s bid for KCL and YGL did not submit it was excluded by YGL or KCL’s reference of matters to the Takeovers Panel.

62. Finally, it is plain from s 659B(2) that, even if the prohibition in subs (1) was contravened, that does not render the proceedings in the Court a nullity. The position of proceedings commenced in contravention of a prohibition was considered in Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364; [2006] HCA 32 and 2 Elizabeth Bay Road Pty Ltd v The Owners - Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409.

63. Even if Mr Bolton were correct on ground 1, large discretionary considerations as to what consequences any contravention of the provision would be would arise. It certainly does not follow that the inevitable result would be setting aside the orders made by the primary judge. As Mr Bolton’s attack in ground 1 fails, it is unnecessary to consider these discretionary questions further.

64. Ground 1 should be rejected.

Ground 2 of the appeal

65. Ground 2 concerns a series of alleged errors in the primary judge’s interpretation of cl 13.3 and 13.5 of YGL’s Constitution. Clauses 13.3 and 13.5 of the YGL Constitution provide:

13.3   Election of Directors

Subject to the provisions of this Constitution, the Company may elect a person as a Director by resolution passed in general meeting. A Director elected at a general meeting is taken to have been elected with effect immediately after the end of that general meeting unless the resolution by which the Director was appointed or elected specifies a different time. No person other than a Director seeking reelection shall be eligible for election to the office of Director at any general meeting unless the person or some Shareholder intending to propose his or her nomination has, at least 30 Business Days before the meeting, left at the Registered Office a notice in writing duly signed by the nominee giving his or her consent to the nomination and signifying his or her candidature for the office or the intention of the Shareholder to propose the person. Notice of every candidature for election as a Director shall be given to each Shareholder with or as part of the notice of the meeting at which the election is to take place. The Company shall observe the requirements of Section 225 of the Corporations Act with respect to the election of Directors. If the number of nominations exceeds the vacancies available having regard to clause 13.1, the order in which the candidates shall be put up for election shall be determined by the drawing of lots supervised by the Directors and once sufficient candidates have been elected to fill up the vacancies available, the remaining candidates shall be deemed defeated without the need for votes to be taken on their election.

13.5   Removal of Director

The Company may by resolution remove any Director before the expiration of his period of office, and may by resolution appoint another person in his place. The person so appointed is subject to retirement at the same time as if he had become a Director on the day on which the Director in whose place he is appointed was last elected a Director.

66. There are three elements to ground 2 of Mr Bolton’s appeal (each of which must succeed for ground 2 to be upheld):

1. a challenge to the primary judge’s reasoning at [50] that cl 13.5, not cl 13.3, applied to KCL’s proposed resolutions (such that the arguments as to the effect of cl 13.3 of the Constitution could be put to one side);

2. a challenge to the primary judge’s reasoning at [51] that, even if cl 13.3 operated as YGL contended below (and Mr Bolton contends on appeal), the proposed resolutions for the election of directors nominated by KCL would not permit the giving of a financial benefit to KCL within the meaning of ss 224, 225 and 229 of the Corporations Act; and

3. a challenge to the primary judge’s reasoning at [49] that cl 13.3, if it operated as YGL contended below (and as Mr Bolton contends on appeal) to exclude KCL’s right to vote, is inconsistent with ASX Listing Rule 6.9 and would be deemed not to be contained in YGL’s Constitution by reason of cl 32.

67. The respondent submitted that ground 2 should be dismissed, essentially for the reasons given by the primary judge. In the critical paragraphs attacked by Mr Bolton in ground 2 the primary judge said this:

[49]   I do not accept YGL’s submission as to the effect of cl 13.3 of YGL’s constitution for several reasons, and it is possible to address that issue briefly because of the straightforward character of those reasons. First, cl 32 of YGL’s constitution provides, in paragraph (f) that:

“If any provision of this Constitution is or becomes inconsistent with the Listing Rules, this Constitution is deemed not to contain that provision to the extent of inconsistency.”

If cl 13.3 of YGL’s constitution operated in the manner that YGL contends, so as to exclude the exercise of voting rights by KCL, then it would be inconsistent with the voting rights conferred on KCL, and all shareholders, on a poll under rule 16.9 of the ASX Listing Rules on a poll and cl 13.3 would be deemed not to contain the relevant reference to s 225 of the Act to the extent of that inconsistency. YGL’s reliance on that clause cannot assist it for that reason.

[50] Second, cl 13.3 of the Act does not apply to the resolutions sought to be passed at the YGL 249F Meeting, because KCL here seeks to remove directors of YGL before the expiration of their period in office, and, by resolution, appoint other directors in their place, and that procedure is governed by cl 13.5 of YGL’s constitution, which does not incorporate a reference to s 225 of the Act. I accept that, as Mr Green contends, YGL’s constitution must be read as a whole, and by reference to applicable principles of construction, but that does not have the consequence that a requirement that does not apply to one procedure should be attached to it, because it applies to another different procedure.

[51] Third, even if cl 13.3 of YGL’s constitution incorporates s 225 of the Act and then extends further to s 224 of the Act as Mr Green contends, those sections deal with the procedure for obtaining member approval for the giving of financial benefit under Ch 2E of the Act. Section 225 imposes certain obligations on the relevant company in respect of such a resolution, and the reference on that section in cl 13.3 would require YGL to comply with those obligations if they were otherwise applicable on the terms of the section. Those obligations apply, on the widest possible reading of the sections, where the resolution would approve the giving of a financial benefit (as defined in s 229 of the Act) to a related party. However, there is no evidentiary basis for Mr Green’s further assumption that the election of directors nominated by KCL would give a “financial benefit” to KCL for the purposes of Ch 2E of the Act. While I recognise that the concept of “giving a financial benefit” in Ch 2E of the Act is to be read widely and in accordance with s 229 of the Act, that does not have the consequence that the election of a director which has no apparent financial impact, positive or negative, on a shareholder can amount to a “financial benefit” under Ch 2E, without more.

Consideration of ground 2

68. We do not accept that cl 13.5 of the YGL Constitution applies only to the removal and appointment of YGL’s directors by resolution of its board as opposed to its members. Section 203E of the Corporations Act makes plain that directors of a public company cannot, by resolution, request or notice, remove a director from office. In terms, cl 13.5 permits YGL, by resolution, to remove a director before that person’s term of office has expired. We see no compelling reason to read down cl 13.5 to exclude the exercise of this power of removal by the company acting through its members in general meeting. The primary judge did not err in so concluding at [50]. Ground 2 fails at the first hurdle.

68. As to the remaining parts of ground 2, we will approach them on the contingent basis that the primary judge erred in paragraph [50] and that cl 13.3 of the YGL Constitution was the only relevant power engaged. The essence of Mr Bolton’s submission is that the effect of cl 13.3 is that KCL could not vote on the resolutions it proposed for the appointment of directors nominated by it. This was because cl 13.3 “extends the requirements of s 225 of the Corporations Act beyond only voting on resolutions for the election of directors, but to proposing the election of directors”.

69. Sections 224 and 225 of the Corporations Act provides:

224   Voting by or on behalf of related party interested in proposed resolution

(1)   At a general meeting, a vote on a proposed resolution under this Division must not be cast (in any capacity) by or on behalf of:

(a)   a related party of the public company to whom the resolution would permit a financial benefit to be given; or

(b)   an associate of such a related party.

(2)   Subsection (1) does not prevent the casting of a vote if:

(a)    it is cast by a person as a proxy appointed by writing that specifies how the proxy is to vote on the proposed resolution; and

(b)    it is not cast on behalf of a related party or associate of a kind referred to in subsection (1).

(3)    The regulations may prescribe cases where subsection (1) does not apply.

(4)    ASIC may by writing declare that:

(a)   subsection (1) does not apply to a specified proposed resolution; or

(b)   subsection (1) does not prevent the casting of a vote, on a specified proposed resolution, by a specified entity, or on behalf of a specified entity; but may only do so if satisfied that the declaration will not cause unfair prejudice to the interests of any member of the public company.

(5)    A declaration in force under subsection (4) has effect accordingly.

(6)    If a vote is cast in contravention of subsection (1), the related party or associate, as the case may be, contravenes this subsection, whether or not the proposed resolution is passed.

(7)    For the purposes of this section, a vote is cast on behalf of an entity if, and only if, it is cast:

(a)    as proxy for the entity; or

(b)    otherwise on behalf of the entity; or

(c)    in respect of a share in respect of which the entity has:

(i)   power to vote; or

(ii)    power to exercise, or control the exercise of, a right to vote.

(8)   Subject to subsection 225(1), a contravention of this section does not affect the validity of a resolution.

(9)    Subject to Part 1.1A, this section has effect despite:

(a)    anything else in:

(i)    this Act; or

(ii)    any other law (including the general law) of a State or Territory; or

(b)    anything in a body corporate’s constitution.

225   Voting on the resolution

(1)    If any votes on the resolution are cast in contravention of subsection 224(1), it must be the case that the resolution would still be passed even if those votes were disregarded.

(2)    If a poll was duly demanded on the question that the resolution be passed, subsections (3) and (4) apply in relation to voting on the poll.

(3)    In relation to each member of the public company who voted on the resolution in person, the public company must record in writing:

(a)    the member’s name; and

(b)    how many votes the member cast for the resolution and how many against.

(4)    In relation to each member of the public company who voted on the resolution by proxy, or by a representative authorised under section 250D, the public company must record in writing:

(a)    the member’s name; and

(b)    in relation to each person who voted as proxy, or as such a representative, for the member:

(i)    the person’s name; and

(ii)    how many votes the person cast on the resolution as proxy, or as such a representative, for the member; and

(iii)    how many of those votes the person cast for the resolution and how many against.

(5)   For 7 years after the day when a resolution under this Division is passed, the public company must retain the records it made under this section in relation to the resolution.

(6)    An offence based on subsection (3), (4) or (5) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

71. We do not accept that KCL was prohibited from voting on resolutions proposed by KCL at a general meeting of YGL’s shareholders for the appointment of its nominated directors because to do so would “permit” a financial benefit to be given to KCL contrary to ss 224 and 225 of the Corporations Act. The financial benefit identified by Mr Bolton was described as the “opportunity or possibility of releasing an obligation of the related party” being, a debt said to be owed by KCL to YGL.

72. We regard it as fundamental that a resolution to appoint a director to a public company does not, of itself, confer or permit any financial benefit to be given to another company. As the primary judge correctly observed, “[w]hile I recognise that the concept of “giving a financial benefit” in Ch 2E of the Act is to be read widely and in accordance with s 229 of the Act, that does not have the consequence that the election of a director which has no apparent financial impact, positive or negative, on a shareholder can amount to a “financial benefit” under Ch 2E, without more”. In the present case, the resolution did not change any rights or obligations as between KCL and YGL and did not affect in any way any assets of YGL. While, for the sake of argument, it may readily be accepted that the release of a debt owed by KCL to YGL could very well, depending on the consideration involved, constitute the giving of a financial benefit, a resolution to appoint a director does not operate to release any existing obligation. The directors remain subject to their statutory and general law duties, including to exercise their powers in good faith in the best interests of the company, and to avoid conflicts of interest. Minority shareholders have exactly the same remedies before and after the resolution to appoint new directors to YGL. The resolution says nothing about how the directors would exercise their powers or discharge their duties.

73. We accept KCL’s submission that there was no evidentiary foundation for Mr Bolton’s submission. It was not put to either of KCL’s two witnesses at trial, Mr Hamilton and Mr Sulieman, each of whom was nominated for appointment as a director of YGL, that either would, if appointed as a director of YGL, act other than in accordance with their duties to YGL or use their position to release an obligation owed by KCL to YGL.

74. Finally, no error has been shown in the conclusion of the primary judge at [49] about the effect of ASX Listing Rule 6.9 and cl 32 of YGL’s Constitution. Even if cl 13.3 otherwise operates in the way Mr Bolton contends to prevent KCL from voting at a general meeting to appoint its nominated directors, that provision of the Constitution would be inconsistent with the ASX Listing Rules and is deemed to be excised to the extent of the inconsistency.

75. Mr Bolton in writing submitted that the primary judge did not address a submission by YGL that cl 13.3 extended the requirements of s 225 to proposing the election of directors and that this element of the clause is not inconsistent with the ASX Listing Rules. Mr Bolton’s submission should be rejected. The primary judge specifically addressed this submission:

[44] Mr Green places significant reliance on this clause and contends that the reference to s 225 of the Act is applicable to an election of directors. Mr Green submits that cl 13.3 of YGL’s constitution, by its reference to s 225 of the Act, incorporates s 224(1) of the Act and prevents YGL shareholders from casting a vote on a resolution to whom the resolution would permit a financial benefit to be given. He makes extended submissions as to the structure of Ch 2E of the Act, to which I have regard, although I do not repeat them. He then submits that cl 13.3 of YGL’s constitution is “broader than simply casting votes as contemplated by ss 224(1) and 225(1) [of the Act]” and that:

“Therefore, members that are related to [YGL] cannot issue a s 249F Notice or propose resolutions to elect directors if to do so would permit the related entity to be given a financial benefit, which is the case here.

This for good reason because it prevents a majority shareholder from exercising its majority voting rights to the detriment of members as a whole by electing directors that will act in the interests of the majority shareholder or will not be able to exercise independent judgment free from conflict by reason of the director’s association with the majority shareholder.”

76. Further, Mr Bolton does not appeal from the declaration made by the primary judge in order 3 that the Director Nomination Notice was a valid notice under YGL’s Constitution. The complaint thus goes nowhere. Finally, the submission made, that cl 13.3 prevents KCL from “issuing a s 249F Notice” to elect directors as to do so would permit KCL to be given a financial benefit is inconsistent with the statutory rights conferred by s 249F upon shareholders (with more than 5% of the votes able to be cast) to call a meeting of members of a company and, in conjunction with s 203D, to propose a resolution for the replacement of the company’s directors.

77. Ground 2 should be rejected.

Ground 3 of the appeal

78. Ground 3 asserts an error in the finding at [20] that YGL’s letter to the ASX on 19 May 2025 contained a denial which was “plainly false or at best highly misleading” because “the finding is inconsistent with the evidence that was before his Honour”. That evidence which is said to be inconsistent with the evidence that was before his Honour is submitted to be contained in the affidavit evidence of a former director of YGL, Mr Ranger.

79. The primary judge said:

[20]   It is plain that there is a dispute as to the validity of the Director Nomination notice since, in YGL’s letter to ASX dated 19 May 2025, signed by Mr Patton (Ex P1, CB 608, 610), YGL characterised that notice as a “purport[ed] intention statement to nominate directors” and contended (contrary to the evidence that I addressed above) that it was not sent with the consent of KCL’s then voluntary administrator. By the same letter, YGL denied to the ASX that it or its directors had been made aware that a person or persons holding more than 50% of its ordinary shares intended to call, or requested the directors to call, a general meeting to appoint or remove directors of YGL. That denial was plainly false or at best highly misleading.

Consideration of ground 3

80. The question asked by the ASX and YGL’s response is set out in detail at [29]-[30] above. We have also set out above the detailed and unchallenged findings of the primary judge relevant to determination of this issue. The primary judge was plainly correct to describe the response by YGL to the ASX as “false or at best highly misleading”.

81. At the risk of repetition, the unchallenged findings of the primary judge established:

1. that in April 2025 s 203D notices had been issued by KCL to YGL as a precursor to calling a meeting to remove directors of YGL, an issue squarely raised by the ASX;

2. that on 17 April 2025 and affidavit was read before Leeming JA (and which the primary judge found came to Mr Bolton’s attention on about that date) which established that a majority of KCL’s directors intended to issue a request to YGL for a copy of its members register under s 173(3) of the Act; issue a notice of intention to nominate KCL’s nominees for election as directors of YGL (which as required by YGL's constitution must occur at least 30 business days prior to a general meeting at which the election of the directors is to be considered); and issue a notice of general meeting and an explanatory memorandum calling a general meeting of YGL under s 249F of the Act for members of YGL to consider resolutions for the removal of the current directors of YGL and resolutions for the appointment of KCL's nominees as directors of YGL; and

3. that on 24 April 2025, KCL gave the Director Nomination Notice which stated that KCL intended to propose its nominated persons for election as directors of YGL “at a general meeting of [YGL] which occurs at least 30 Business Days from the date of” the notice.

82. If this were not enough, Mr Ranger admitted in cross-examination that he knew about KCL’s intention to call a meeting to remove and replace YGL’s directors from at least 24 April 2025, prior to the time relevant to the ASX’s question.

83. As we have said, in written submissions, Mr Bolton asserted that the primary judge overlooked evidence from Mr Ranger relevant to this issue. We do not agree. Objection was successfully taken at trial to the evidence of Mr Ranger relied upon by Mr Bolton, including the documents referred to therein. Mr Bolton has not appealed from that evidentiary ruling nor has he sought leave to adduce further evidence on appeal.

84. Even if the evidence were admitted, it would not mean that the primary judge erred in finding that YGL’s answers to the ASX were false or highly misleading, given that KCL’s administration came to an end on 8 May 2025 and there was clear evidence that YGL knew that KCL intended to call the s 249F meeting: see the uncontested facts which we have referred to at [81]-[82]. .

85. Finally, there was no evidence before the primary judge or in this Court supporting Mr Bolton’s submission that YGL’s directors “based their belief on … cl 13.3” of the YGL Constitution.

86. Ground 3 should be rejected.

Conclusion and orders

87. Each of the grounds of the Amended Notice of Appeal which were pressed must be dismissed. For the foregoing reasons we make the following orders:

1. Appeal dismissed;

2. Second appellant (Mr Bolton) pay the respondent’s costs.

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Amendments

30 July 2025 - Date of the decision below - amended to 20 June 2025

Decision last updated: 30 July 2025