AMI v KING [2002] NSWSC 1033

AMI v KING [2002] NSWSC 1033

There is no serious question to be tried regarding insider trading as s.1002Q renders knowledge about one’s own transaction irrelevant and there is little causal connection between past contravention and present damage under s.1325. However, there is a serious question to be tried regarding the alleged breach of the 20% takeover threshold in connection with the rights issue, and statutory exceptions may not apply as defendants were not registered shareholders on the record date. Interim relief is justified pending further determination.

Jurisdiction
Australia
Judgment Date
04 November 2002
Procedural Posture
Equity (corporations) / Interim Injunction Application
Outcome
Interim injunction granted
Legal Topics
['insider Trading' 'takeovers' 'director Duties' 'remedies (injunctive Relief)']
['corporations Law' 'equity'] ['insider Trading' 'takeovers' 'director Duties' 'remedies (injunctive Relief)']

Case Brief

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Procedural Posture

Equity (corporations) / Interim Injunction Application

Legal Issues

  1. 1 ['Whether grantees of options to purchase shares at a price significantly below market value engaged in insider trading contrary to the Corporations Law' 'Whether the acquisition of shares breached the 20% takeover threshold under s.615 of the Corporations Law' 'Whether exceptions for pari passu allotment or prospectus allotment apply to the acquisition of shares']

Ratio Decidendi

There is no serious question to be tried regarding insider trading as s.1002Q renders knowledge about one’s own transaction irrelevant and there is little causal connection between past contravention and present damage under s.1325. However, there is a serious question to be tried regarding the alleged breach of the 20% takeover threshold in connection with the rights issue, and statutory exceptions may not apply as defendants were not registered shareholders on the record date. Interim relief is justified pending further determination.

Court Disposition

Interim injunction granted

Orders

  • ['Order restraining the third, fourth, and fifth defendants from disposing of shares in Australian Mining Investments Limited until 10am on 5 November 2002, upon the plaintiff giving the usual undertaking as to damages.' 'Time for service of the summons and affidavit is abridged to 12 noon on 4 November 2002.'...