Re Centennial Coal Co Ltd [2006] NSWSC 62

Re Centennial Coal Co Ltd [2006] NSWSC 62

The plaintiff's failure to post the s.650D(1)(c)(ii) notices until 8.20 pm, eighty minutes after the 7 pm expiry of the offer period, was a contravention for s.1322(4)(a), but the step was essentially procedural: all substantive steps had been taken and the default concerned timing only. Because the extension was announced to ASX at about 7.16 pm, trading had ceased for the night, shareholders would have received notices at the same time or at worst one day later than if posted before 7 pm, and neither Austral nor ASIC opposed the application, validation would cause no substantial injustice. The Court therefore validated the thirteenth extension and the later extensions.

Jurisdiction
Australia
Judgment Date
17 February 2006
Procedural Posture
Application for Validating Orders Under S.1322(4) of the Corporations Act 2001 (cth) Concerning an Off Market Takeover Bid / Final Judgment on Originating Process
Outcome
Validating orders made under s.1322(4)(a).
Legal Topics
['off Market Takeover Bid' 'extension of Offer Period' 'validation of Procedural Irregularity' 'corporations Act S.1322']
['corporations Law' 'takeovers'] ['off Market Takeover Bid' 'extension of Offer Period' 'validation of Procedural Irregularity' 'corporations Act S.1322']

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Procedural Posture

Application for Validating Orders Under S.1322(4) of the Corporations Act 2001 (cth) Concerning an Off Market Takeover Bid / Final Judgment on Originating Process

Legal Issues

  1. 1 ["Whether the plaintiff's failure to send the notice of extension to offerees before the end of the offer period meant the off-market bid offers were not validly extended." 'Whether that failure was a "contravention" for the purposes of s.1322(4)(a) of the Corporations Act 2001 (Cth).' 'Whether the sending of notices under s.650D(1)(c)(ii) was essentially of a procedural nature for the purposes of s.1322(6)(a).' 'Whether validating the extension would cause substantial injustice to any person under s.1322(6)(c).']

Ratio Decidendi

The plaintiff's failure to post the s.650D(1)(c)(ii) notices until 8.20 pm, eighty minutes after the 7 pm expiry of the offer period, was a contravention for s.1322(4)(a), but the step was essentially procedural: all substantive steps had been taken and the default concerned timing only. Because the extension was announced to ASX at about 7.16 pm, trading had ceased for the night, shareholders would have received notices at the same time or at worst one day later than if posted before 7 pm, and neither Austral nor ASIC opposed the application, validation would cause no substantial injustice. The Court therefore validated the thirteenth extension and the later extensions.

Court Disposition

Validating orders made under s.1322(4)(a).

Orders

  • ['Orders 2 and 3 in the originating process were made.' "The plaintiff's extension of the offer period in relation to the offer, which occurred on or about 10 October 2005, was declared valid for the purposes of s.650C of the Corporations Act 2001 (Cth)." 'Subsequent extensions of the offer period by the plaintiff...