Metals Exploration Ltd v Samic Ltd [1994] HCA 38

High Court of Australia Mason C.J. Deane, Toohey, Gaudron and McHugh JJ. Metals Exploration Ltd v Samic Ltd [1994] HCA 38

ORDER Appeal allowed. Set aside orders 1, 2, 3, 4, 5, 6, 7, 8 and 14 made by the Full Court of the Supreme Court of South Australia on 17 August 1993. Remit the matter to the Full Court of the Supreme Court of South Australia for reconsideration of the appropriate order to be made under s. 739, and of the appropriate order for costs in that Court. The respondent to pay the costs of the appellant of the appeal in this Court.

Cur. adv. vult.

The following written judgments were delivered:—

Sept. 7 Mason C.J.,Gaudron and McHugh JJ.

This appeal raises an important question concerning the operation of the takeover provisions of the Corporations Law ("the Law"). The appellant, Metals Exploration Ltd. ("M.E.X."), and the respondent, Samic Ltd. ("Samic"), a cash-box company, are both companies listed on the Australian Stock Exchange Ltd. ("the A.S.X."). On 13 April 1993, M.E.X. owned 11.58 per cent of the fully paid ordinary shares in Samic. On 14 April, M.E.X. purchased 1,292,000 shares from Harvest Corporation Pty Ltd and 28,000 shares from Mr. S. T. Hartley who had a substantial interest in Harvest Corporation. The price was 45 cents per share. The shares were purchased by means of a "crossing" made by a firm of stockbrokers, Day Cutten Ltd., who acted for the vendors as well as M.E.X. on the purchase and for M.E.X. in connexion with the takeover. The purchases took M.E.X.'s holding in Samic to 19.88 per cent of its capital, just under the maximum permitted by s. 615 of the Law without complying with the takeover provisions.

On the following day, 15 April, M.E.X., through Day Cutten Ltd., made an announcement on the floor of the Stock Exchange at Adelaide that it offered to acquire all the fully paid ordinary shares of Samic at a cash price of 45 cents per share or such higher price at which the shares were traded on the Stock Exchange. The form of that announcement is set out in a letter dated 15 April 1993 from Day Cutten Ltd. to the Manager Companies, A.S.X., Adelaide. The announcement consisted of seven numbered paragraphs and concluded by providing certain information evidently prescribed by the Business Rules of the A.S.X. Paragraphs 1 and 3-7 inclusive dealt with matters relevant to the statutory provisions relating to the making of a takeover announcement. Paragraph 2 was in these terms: