Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Keybridge Capital Ltd v WAM Active Ltd [2021] NSWCA 203 Hearing dates: 17 June 2021 Decision date: 08 September 2021 Before: Bathurst CJ at [1]; White JA at [99]; Emmett AJA at [100] Decision: (1) Grant the applicant leave to appeal. (2) Order the appellant file a notice of appeal in the form of the draft notice of appeal contained in the White Folder within 14 days. (3) Vary Order 3 of the orders made by the primary judge as follows: "3 Order Keybridge Capital Limited to pay WAM Active Limited and the Australian Securities and Investments Commission their costs of the interlocutory process filed by WAM Active Limited on 16 July 2020 and amended on 15 October 2020, save to the extent that those costs relate to the seeking of the orders the subject of paragraph 2." (4) Otherwise dismiss the appeal. (5) Order the appellant pay the first and second respondents' costs of the appeal. Catchwords: CORPORATIONS – take-over offers – off-market bid – freeing off-market bids from defeating conditions – bifurcated conditions – where notice declaring the offer free of conditions was given within the seven day period of the close of the offer – whether the notice was effective to free the offer of a condition – Corporations Act 2001 (Cth), s 650F CORPORATIONS – take-over offers – off-market bid – freeing off-market bids from defeating conditions – bifurcated conditions – whether the condition related to the happening of an event or circumstance in s 652C(1) of the Corporations Act 2001 (Cth) Legislation Cited: Australian Securities and Investments Commission, ASIC Class Order [CO 13/521] (CO 13/521, 18 September 2018) Companies (Acquisition of Shares) Act 1980 (Cth) Companies and Securities Legislation Miscellaneous Amendment Act 1985 (Cth) Corporate Law Economic Reform Program Act 1999 (Cth) Corporations Act 1989 (Cth) Corporations Act 2001 (Cth) Cases Cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41 Gerrard Co of Australasia Ltd v Johns Perry Ltd (1982) 7 ACLR 699 In the matter of Keybridge Capital Ltd [2020] NSWSC 1917 Keybridge Capital Ltd 04, 05 & 06 [2020] ATP 6 Keybridge Capital Ltd 08R, 09R and 10R [2020] ATP 9 R v A2; R v Magennis; R v Vaziri [2019] HCA 35; (2019) 93 ALJR 1106 Re Multiplex Prime Property Fund 01 and 02 [2009] ATP 18; (2009) 74 ACSR 248 Repco Ltd v Commissioner for Corporate Affairs [1978] 1 NSWLR 350 SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 Texts Cited: Explanatory Memorandum, Companies and Securities Legislation (Miscellaneous Amendments) Bill 1985 (Cth) Explanatory Memorandum, Corporate Law Economic Reform Program Bill 1999 (Cth) Explanatory Statement, ASIC Class Order [CO/13/521] (Cth) Company Law Advisory Committee to the Standing Committee of Attorneys-General, Parliament of the Commonwealth of Australia, Second Interim Report – Disclosure of Substantial Shareholdings and Takeover Bids, (Parliamentary Paper No 43, February 1969) Legal Committee of the Companies and Securities Advisory Committee, Anomalies in the Takeovers Provisions of the Corporations Law (Report, March 1994) Category: Principal judgment Parties: Keybridge Capital Limited (Applicant) WAM Active Limited (First Respondent) Australian Securities and Investments Commission (Second Respondent) Representation: Counsel: N Hutley SC with J Entwisle (Applicant) D Barnett with T Rogan (First Respondent) A Garsia (Second Respondent) Solicitors: Allen & Overy (Applicant) Mont Lawyers (First Respondent) Australian Securities and Investments Commission (Second Respondent) File Number(s): 2021/17104 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Equity Citation: [2020] NSWSC 1917 Date of Decision: 24 December 2020 Before: Ward CJ in Eq File Number(s): 2020/163276 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] HEADNOTE [This headnote is not to be read as part of the judgment] The applicant, Keybridge Capital Limited (Keybridge), commenced proceedings the subject of this appeal against a decision of a Judge of the Equity Division of the Court in which her Honour concluded that the 2 March 2020 notice of the first respondent, WAM Active Limited (WAM), was effective to free its off-market takeover bid for all the shares in Keybridge (the Offer) of a condition in the Offer. On 13 December 2019, WAM announced an intention to make an off-market takeover bid for all the shares in Keybridge and lodged its bidder statement with the second respondent, the Australian Securities and Investments Commission (ASIC), and ASX Limited (ASX). The Offer, which opened on 3 January 2020, was conditional. Section 10.7(c) of the Offer set out a number of prescribed occurrences as defeating conditions, including s 10.7(c)(iv), which required that Keybridge or any subsidiary not make an issue of securities during the Offer period. Section 10.8(c) provided for the bifurcation of conditions upon the happening of any of the prescribed occurrences in s 10.7(c). Section 10.9 dealt with freeing the Offer of conditions, including that WAM may declare the Offer and any contract resulting from acceptance of the Offer free of the conditions in s 10.7(c) by giving written notice to Keybridge in accordance with the Corporations Act 2001 (Cth) (the Act), not later than three business days after the end of the Offer period. WAM extended the Offer period twice – first, to 17 February 2020 and second, up until 7:00pm on 3 March 2020. On 12 February 2020, Keybridge announced to the market that it had agreed to issue 22 million ordinary shares to sophisticated investors (the Placement). On 17 February 2020, the Placement was completed. In a supplementary target statement of 19 February 2020, Keybridge announced the issue of shares and noted that WAM had yet to advise its shareholders whether it would waive the defeating conditions which had occurred in the Offer period. The effect of the Placement was to trigger the bifurcating clause in s 10.8(c) of the Offer, such that the defeating condition in s 10.7(c)(iv) became two conditions, one relating to the placement of shares by Keybridge (the Placement Condition) and the other expressly excluding the Placement Condition. Relevantly, it empowered WAM, subject to the provisions of the Act, to free one of the two bifurcated provisions from the defeating conditions but not the other. On 24 February 2020, WAM gave notice that its Offer was free from all the conditions in s 10.7, except 10.7(c). On 25 February 2020, WAM issued a notice under s 630(3) of the Act, stating that the Offer remained subject to the condition in s 10.7(c) and was free from all other conditions. The notice was sent to ASX, which forwarded it to Keybridge. It was sent by WAM directly to Keybridge on 26 February 2020. On 2 March 2020, one day prior to the close of the Offer period, WAM issued a notice said to be issued pursuant to s 650F of the Act that the Offer was free of the conditions set out in s 10.7(c), and the Offer was then unconditional. On the same day, WAM issued a notice under s 650D of the Act extending the Offer until 3 April 2020. On 6 March 2020, WAM commenced processing acceptances of the Offer and acquired a substantial interest in Keybridge. On 11 March 2020, Keybridge made an application to the Takeovers Panel against WAM, seeking a declaration of unacceptable circumstances. Also on 11 March 2020, the Panel made interim orders prohibiting WAM from taking steps to process acceptances received under, or any transfers in relation to WAM's bid for Keybridge. On 7 April 2020, the Panel made a declaration that the conduct of WAM in purporting to declare the bid free of conditions within the seven day period prior to the closure of the Offer constituted unacceptable circumstances. On 20 May 2020, a review Panel of the Takeovers Panel affirmed the initial Panel's decision and agreed with the initial Panel that the legal status of the registration of the processed shares should be adjudicated by a Court. By an originating process filed on 1 June 2020, Keybridge sought orders under s 1325 of the Act, including a declaration that the transfer of those shares which had been registered in WAM's name as a result of the processing of the acceptances of the Offer was void. By an interlocutory process filed on 16 July 2020, WAM sought a declaration that the notice under s 650F of the Act of 2 March 2020 freed the WAM bid of all defeating conditions, and that the condition in s 10.7(c)(iv) was fulfilled at the end of the Offer period. The main issue on appeal was whether WAM was entitled to declare the Offer free of conditions within the seven day period of the close of the Offer. Additional grounds of appeal raised issues with the primary judge's findings in respect to remedial orders, consequences of contravening s 650G of the Act, and costs. The Court granted Keybridge leave to appeal but dismissed the appeal, finding that the primary judge was correct in her conclusion that WAM was entitled to declare the Offer free from the Placement Condition on 2 March 2020. Did the primary judge err in her conclusion that the bid was validly free from defeating conditions? i) The task of statutory construction must begin with a consideration of the text itself, although the meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it seeks to remedy: [75] (Bathurst CJ); [99] (White JA); [120] (Emmett AJA). Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41, referred to. ii) Context in its widest sense should be considered at the first stage of the construction process and not at some later stage: [76] (Bathurst CJ); [99] (White JA); [120] (Emmett AJA). SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34; R v A2; R v Magennis; R v Vaziri [2019] HCA 35; (2019) 93 ALJR 1106, referred to. iii) Section 10.7(c) of the Offer is a defeating condition and operates in such a way that on the occurrence of any of the events referred to in that section, the bidder will be entitled to rescind the takeover contracts: [81] (Bathurst CJ); [99] (White JA); [120] (Emmett AJA). iv) The bifurcation does not affect the position with respect to s 10.7(c) being a defeating condition: [81] (Bathurst CJ); [99] (White JA); [120] (Emmett AJA). v) The Placement Condition relates to the happening of an event in s 652C(1) of the Act and enlivens s 650F(1)(a): [84]-[87] (Bathurst CJ); [99] (White JA); [120] (Emmett AJA). vi) Section 650F(1)(a) is not limited to events occurring in the seven days prior to the close of an offer: [88] (Bathurst CJ); [99] (White JA); [120] (Emmett AJA). vii) The primary judge was correct in her conclusion that WAM was entitled to declare the Offer free from the Placement Condition on 2 March 2020: [90] (Bathurst CJ); [99] (White JA); [120] (Emmett AJA). The remedial orders i) Section 659C of the Act does not limit the Court's jurisdiction after the end of the bid period except in the particular circumstances set out in the provisions of the Act: [92] (Bathurst CJ); [99] (White JA); [120] (Emmett AJA). The costs issue i) Keybridge did not oppose the making of orders sought by WAM under s 1322 of the Act and should not have been ordered to pay WAM's costs of that particular application: [94]-[96] (Bathurst CJ); [99] (White JA); [120] (Emmett AJA). Judgment 1. BATHURST CJ: On 13 December 2019, the respondent, WAM Active Limited (WAM) announced an intention to make an off-market takeover bid (the Offer) for all the shares in the applicant, Keybridge Capital Limited (Keybridge), at 6.5 cents per share and lodged its bidder statement with the second respondent, the Australian Securities and Investments Commission (ASIC), and ASX Limited (ASX). Section 10.5 of the Offer dealt with acceptances of the Offer. Section 10.5(a)(i) and (ii) were in the following terms: "10.5. Effect of acceptance (a) By accepting the Offer in accordance with Section 10.4, you will have: (i) accepted this Offer in respect of all of your [Keybridge] Shares; (ii) agreed to transfer your [Keybridge] Shares to WAM Active (subject to this Offer and the contract resulting from your acceptance of it becoming unconditional)." 1. The Offer, which opened on 3 January 2020, was a conditional offer. The Offer was subject to a number of defeating conditions, including a 50.1 per cent minimum acceptance provision. Section 10.7(c) of the Offer set out a number of prescribed occurrences as defeating conditions. Of relevance are the following: "10.7 Defeating Conditions This Offer and the contract that results from acceptance of this Offer are each subject to the fulfilment of the following Conditions: … (c) No Prescribed Occurrences None of the following happens during the period commencing on the Announcement Date and ending on the expiry of the Offer Period (each being a separate condition): (i) the shares of [Keybridge] or any of the Controlled Entities of [Keybridge] are converted into a larger or smaller number of shares; (iv) [Keybridge] or a subsidiary of [Keybridge] makes an issue of or grants an option to subscribe for any of its securities or agrees to make such an issue or grant such an option." 1. Section 10.8 of the Offer is also relevant. It provides as follows: "10.8 Nature of Conditions (a) Each paragraph of Section 10.7: (i) is a condition subsequent; and (ii) subject to the Corporations Act, operates only for the benefit of WAM Active and any breach or non-fulfilment of such condition may be relied upon only by WAM Active which may waive (generally or in respect of a particular event) the breach or non-fulfilment of that Condition. (b) The Condition does not prevent a contract to sell your [Keybridge] Shares resulting from your acceptance of this Offer but breach of the Condition or non-fulfilment of the Condition at the end of the Offer Period entitles WAM Active to rescind that contract by notice to you. (c) Where an event occurs that would mean at the time the event occurs the Condition to which this Offer or the contract resulting from your acceptance of this Offer is then subject would not be fulfilled, each paragraph of the Condition in Section 10.7 affected by that event becomes two separate Conditions on identical terms except that: (i) one of them relates solely to that event; and (ii) the other specifically excludes that event. WAM Active may declare the Offer free under Section 10.7 from any paragraph of the Condition without declaring it free from the other paragraphs and may do so at different times." 1. Section 10.9 of the Offer dealt with freeing the Offer from conditions. It is in the following terms: "10.9 Freeing the Offer from Conditions (a) Subject to the Corporations Act, WAM Active may declare this Offer and any contract resulting from acceptance of this Offer free from: (i) the Condition in Section 10.7(c) by giving written notice to [Keybridge] not later than 3 business days after the end of the Offer Period; (ii) all other Conditions, not less than 7 days before the end of the Offer Period. (b) The date for giving the notice on the status of the Condition as required by section 630(1) of the Corporations Act is [*] (subject to extension in accordance with the Corporations Act) if the Offer Period is extended. (c) Your acceptance or the contract resulting from your acceptance of this Offer is void if: (i) at the end of the Offer Period the Condition in Section 10.7 is not fulfilled; and (ii) WAM Active has not declared this Offer and any contract resulting from the acceptance of it free of the Condition in accordance with Section 10.9(a)." 1. Section 10.2 of the Offer provided for the Offer to remain open until 3 February 2020, subject to any extension. On 24 January 2020, WAM gave notice pursuant to s 630(2) and s 650D of the Corporations Act 2001 (Cth) (the Act), extending the Offer period to 17 February 2020. On 10 February 2020, it announced a further extension of the Offer up until 7.00pm on 3 March 2020. The announcement confirmed that the Offer was subject to defeating conditions. 2. On 12 February 2020, Keybridge announced to the market that it had agreed to issue 22 million ordinary shares to sophisticated investors at an issue price of 6.9 cents per share (the Placement). On 17 February 2020, the Placement was completed. In a supplementary target statement of 19 February 2020, Keybridge announced the issue of shares and noted that WAM had yet to advise its shareholders whether it would waive the defeating conditions which had occurred in the Offer period. 3. The effect of the Placement was to trigger the bifurcating clause in s 10.8(c), such that the defeating condition in s 10.7(c)(iv) became two conditions, one relating to the placement of shares by Keybridge (the Placement Condition) and the other expressly excluding the Placement Condition. Relevantly, it empowered WAM, subject to the provisions of the Act, to free one of the two bifurcated provisions from the defeating conditions but not the other. 4. On 24 February 2020, WAM announced an increase in the Offer price to 6.9 cents per share and gave notice that its Offer was free from all the conditions in s 10.7, except s 10.7(c). It stated that at the time, WAM's voting power in Keybridge was approximately 21.88 per cent. On 25 February 2020, WAM issued a notice under s 630(3) of the Act, stating that the Offer remained subject to the condition in s 10.7(c) and was free from all other conditions. The notice was sent to ASX, which forwarded it to Keybridge. It was sent by WAM directly to Keybridge on 26 February 2020. 5. On 2 March 2020, one day prior to the close of the Offer period, WAM issued a notice said to be issued pursuant to s 650F of the Act that the Offer was free of the conditions set out in s 10.7(c), and the Offer was then unconditional. It stated that its voting power in Keybridge was approximately 50.6 per cent. 6. On the same day, it issued a notice under s 650D of the Act extending the Offer until 3 April 2020. 7. On 6 March 2020, WAM commenced processing acceptances of the Offer and acquired a substantial interest in Keybridge. Mr Jesse Hamilton, the Chief Financial Officer of the parent company of WAM, stated that he was aware by 9.30pm on 5 March 2020 that Keybridge had made submissions to the Takeovers Panel alleging WAM's offer had closed subject to defeating conditions. This was on the basis that s 650F of the Act required that to free the bid from the Placement Condition, notice be given not less than seven days prior to the end of the Offer period. Notwithstanding, he did not issue instructions to cease processing the transfer of the shares. 8. On 11 March 2020, Keybridge made an application to the Takeovers Panel against WAM, seeking a declaration of unacceptable circumstances. Also on 11 March 2020, the Acting President of the Panel made interim orders prohibiting WAM from taking steps to process acceptances received under, or any transfers in relation to WAM's bid for Keybridge: Keybridge Capital Ltd 04, 05 & 06 [2020] ATP 6. 9. On 7 April 2020, the Panel made a declaration of unacceptable circumstances. On 9 April 2020, it made the following orders: "THE PANEL ORDERS WAM Active's bid 1. For a period of 6 months after the date of these orders, WAM Active must not exercise any voting rights in respect of any Keybridge shares in which WAM Active has a relevant interest above the Creep Limit. 2. Order 1 does not apply to any shares WAM Active acquires through a takeover bid made after the date of these orders but continues to apply otherwise. … 5 WAM Active must: a. as soon as practicable, and in any event within 2 business days, provide to the Panel: i. a draft notice to be sent to all Unprocessed Shareholders informing them that their acceptances have been cancelled and ii. a draft notice to be sent to all Processed Shareholders informing them that their acceptances have been processed, the effect of Order 3 and that WAM Active's bid closed at 7.00pm (Sydney time) on 3 March 2020 subject to defeating conditions b. make any changes to either draft notice if requested by the Panel and c. as soon as practicable after the Panel confirms it has no comments or no further comments on the draft notice to be sent to all Unprocessed Shareholders, send the relevant notice by express post to all Unprocessed Shareholders with no other accompanying documents and d. unless a Court makes orders or a declaration inconsistent with Order 3, as soon as practicable after the later of: i. the Panel confirming it has no comments or no further comments on the draft notice to be sent to Processed Shareholders and ii. any date set by the Panel that is not later than 21 days after the date of these orders, send the relevant notice by express pose to all Processed Shareholders with no other accompanying documents." 1. On 20 May 2020, a review Panel of the Takeovers Panel affirmed the initial Panel's decision: Keybridge Capital Ltd 08R, 09R and 10R [2020] ATP 9. The review Panel gave its reasons on 25 June 2020. I have dealt with the Panels' reasoning subsequently in this judgment. 2. It appears that as a consequence of the initial Panel's order, processed shares totalling 6.7 per cent of the capital of Keybridge are the subject of the proceedings, although the actual number of shares held by WAM is greater as a result of some of the holders of the processed shares selling their shares to WAM following a subsequent takeover offer made by it for the shares in Keybridge. 3. By an originating process filed on 1 June 2020, Keybridge sought orders under s 1325 of the Act, including a declaration that the transfer of the shares the subject of Order 3 of the Panel's orders, namely, those shares which had been registered in WAM's name as a result of the processing of the acceptances of the Offer (the Processed Shares), was void. It also sought an order that the shares be vested in ASIC. 4. By an interlocutory process filed on 16 July 2020, WAM sought a declaration that the notice under s 650F of the Act of 2 March 2020 freed the WAM bid of all defeating conditions and that condition 10.7(c)(iv) was fulfilled at the end of the Offer period. Alternatively, it sought relief under s 1322(4)(d) of the Act that the time for declaring offers to be free of conditions in s 10.7(c)(i) and 10(c)(iv), in conjunction with s 10.8, be extended to 3 March 2020. 5. The primary judge concluded that the notice of 2 March 2020 was effective to free the offer from the condition in s 10.7(c)(iv): In the matter of Keybridge Capital Ltd [2020] NSWSC 1917 (the primary judgment). Her Honour also concluded that if she had reached a contrary view, she would have granted WAM relief under either s 1322 or s 1325D of the Act. 6. Keybridge has sought leave to appeal against the decision. The draft notice of appeal raises the following grounds: "APPEAL GROUNDS Issue 1 : Section 650G 1 The trial judge erred in holding that: (a) the 'Placement Condition' (as defined at J138 to mean the condition contained in 10.7(c)(iv) of the first respondent's bidders' statement as affected by the operation of the 'bifurcating' condition in cl 10.8(c) in that same document) related only to the happening of an event or circumstance referred to in s 652C(1) of the Corporations Act 2001 (Cth) (J185); (b) the first respondent's off-market takeover offer for the [applicant] could be (and was) validly freed of the 'Placement Condition' by the giving of a notice of up to 3 business days after the end of the offer period, pursuant to s 650F(1)(a) of the Corporations Act (as modified by ASIC Class Order [CO 13/521]) (J186-187). 2 The trial judge ought to have found that: (a) the Placement Condition did not relate only to the happening of an event or circumstance referred to in s 652C(1) of the Corporations Act; (b) the offer could only be (and was not) validly freed of the Placement Condition by giving notice not less than 7 days before the end of the offer period to s 650F(1)(a) of the Corporations Act (as modified by ASIC Class Order [CO 13/521]); (c) in those circumstances, all takeover contracts and acceptances pursuant to the offer were void, and the first respondent was prohibited from transferring the relevant securities, by operation of s 650G Corporations Act (as modified by ASIC Class Order [CO 13/521]). Issue 2: Remedial orders 3 The trial judge erred in holding that, in the event that s 650G did apply, it was appropriate to grant relief to the first respondent under s 1322(4)(b) of the Corporations Act 2001 (Cth) extending the period of time to give the notice required by s 650F(1)(b), thereby avoiding any contravention of s 650G (J220). 4 The trial judge ought to have found that s 1322 of the Corporations Act 2001 does not apply to remedial orders with respect to contraventions of Chapter 6, as s 1325D specifically addresses that subject matter. 5 Further or alternatively, to the extent it is found that, s 1322 does apply in the circumstances, the trial judge erred in holding that it was appropriate to make an order under s 1322(4)(b) in circumstances where: (a) the time periods in s 650G are essential to the operation of the Part 6.6 of the Corporations Act and are not merely procedural in nature; (b) the first respondent delayed in bringing the application or relief until the present proceedings were instituted; (c) the first respondent had not established (and there was no evidentiary basis for the finding) that there was no substantial injustice caused or likely to be caused to any person by reason of the order being made, as required by subsection 1322(6)(c). 6 Further or alternatively, to the extent the trial judge held that the remedial order extending time could be made under section 1325D rather than s 1322 (J281), the trial judge erred in holding that such an order should be made without considering or making factual findings in respect of each of the mandatory conditions to such an order contained in s 1325D(4). 7 Further or alternatively, an order that only extended time pursuant to s 1322 (or 1325D, to the extent relevant) would not affect the operation of s 650G as the offer had, in fact, closed subject to a defeating condition that had not been validly removed under s 650F(1), with the consequence that – at the time the purported transfer of securities occurred – the acceptances and contracts were void and the first respondent contravened s 650G. Issue 3: Consequences of contravention of s 650G 8 The trial judge erred in holding that if the first respondent had transferred the shares in contravention of section 650G, those transfers or conveyances were valid despite the contravention (J254). 9 The trial judge ought to have held that the first respondent's contravention of the prohibition in section 650G rendered the transfers void and of no legal effect. 10 Further or alternatively, the trial judge ought to have exercised the court's powers under s 1325A to reverse the effect of the contravention of section 650G. Issue 4: Costs 11 The trial judge erred in ordering the [applicant] to pay the first respondent and the second respondent's costs of the first respondent's interlocutory process, in circumstances where the [applicant] did not contest that part of the remedial relief ought to have been granted (J273)." 1. Prior to dealing with the reasoning of the primary judge and the parties' submissions, it is convenient to set out the relevant legislation and the legislative history. It is also necessary to make some reference to the two decisions of the Takeovers Panel dealing with the issues the subject of the appeal. The relevant legislation 1. Chapter 6 of the Act regulates takeovers. Section 602 describes the purpose of the Chapter. It is in the following terms: "602 Purposes of Chapter The purposes of this Chapter are to ensure that: (a) the acquisition of control over: (i) the voting shares in a listed company, or an unlisted company with more than 50 members; or (ii) the voting shares in a listed body (other than a notified foreign passport fund); or (iii) the voting interests in a listed registered scheme; takes place in an efficient, competitive and informed market; and (b) the holders of the shares or interests, and the directors of the company or body or the responsible entity for the scheme: (i) know the identity of any person who proposes to acquire a substantial interest in the company, body or scheme; and (ii) have a reasonable time to consider the proposal; and (iii) are given enough information to enable them to assess the merits of the proposal; and (c) as far as practicable, the holders of the relevant class of voting shares or interests all have a reasonable and equal opportunity to participate in any benefits accruing to the holders through any proposal under which a person would acquire a substantial interest in the company, body or scheme; and (d) an appropriate procedure is followed as a preliminary to compulsory acquisition of voting shares or interests or any other kind of securities under Part 6A.1." 1. Section 630 deals with what are described as defeating conditions. Defeating conditions are defined in s 9: "defeating condition for a takeover bid means a condition that: (a) will, in circumstances referred to in the condition, result in the rescission of, or entitle the bidder to rescind, a takeover contract; or (b) prevents a binding takeover contract from resulting from an acceptance of the offer unless or until the condition is fulfilled." 1. Section 630, as amended by ASIC Class Order [CO 13/521] (Australian Securities and Investments Commission, ASIC Class Order [CO 13/521] (CO 13/521, 18 September 2018) (the ASIC Class Order), is in the following terms: "630 Defeating conditions Off-market bid may include defeating conditions (1) Offers under an off-market bid may be made subject to a defeating condition only if the offers specify a date (not more than 14 days and not less than 7 days before the end of the offer period) for giving a notice on the status of the condition. (2) If the offer period is extended by a period: (a) the date for giving the notice is taken to be postponed for the same period; and (b) as soon as practicable after the extension, the bidder must give a notice that states: (i) the new date for giving the notice of the status of the condition; and (ii) whether the offers have been freed from the condition and whether, so far as the bidder knows, the condition has been fulfilled on the date the notice under this subsection is given. Bidder to give notice of status of defeating condition near end of offer period (3) On the date determined under subsection (1) or (2), the bidder must give a notice that states: (a) whether the offers are free of the condition; and (b) whether, so far as the bidder knows, the condition was fulfilled on the date the notice is given; and (c) the bidder's voting power in the target. The bidder must comply with this subsection whether or not the bidder has given a notice under subsection (4) or 650F(1). Bidder to give notice if defeating condition fulfilled (4) If the condition is fulfilled (so that the offers become free of the condition) during the bid period but before the date for giving the notice on the status of the condition, the bidder must give as soon as practicable a notice that states that the condition has been fulfilled. (5) A notice under this section is given by: (a) giving the notice to the target; and (b) for quoted bid class securities--giving the notice to the relevant market operator; and (c) for unquoted bid class securities--lodging the notice with ASIC. Strict liability offences (6) An offence based on subsection (2), (3) or (4) is an offence of strict liability." 1. Prior to the amendment by the ASIC Class Order, s 630(4) was in the following terms: "[630](4) If the condition is fulfilled (so that the offers become free of the condition) during the bid period but before the date for publishing the notice on the status of the condition, the bidder must publish as soon as practicable a notice that states that the condition has been fulfilled." 1. Section 650F deals with freeing off-market bids from defeating conditions. As amended by the ASIC Class Order, it provides as follows: "650F Freeing off-market bids from defeating conditions (1) If the offers under an off-market bid are subject to a defeating condition, the bidder may free the offers, and the takeover contracts, from the condition only by giving the target a notice declaring the offers to be free from the condition in accordance with this section: (a) if the condition relates only to the happening of an event or circumstance referred to in subsection 652C(1) or (2) ––not later than 3 business days after the end of the offer period; or (b) in any other case––not less than 7 days before the end of the offer period. (2) The notice must: (a) state that the offers are free from the condition; and (b) specify the bidder's voting power in the company. (3) The notice must be: (a) if the securities in the bid class are quoted––given to the relevant market operator; and (b) if those securities are not quoted––lodged with ASIC. (4) An offence based on subsection (3) is an offence of strict liability." 1. Section 650F(1)(a), as originally enacted, was in the following terms: "650F Freeing off-market bids from defeating conditions (1) If the offers under an off-market bid are subject to a defeating condition, the bidder may free the offers, and the takeover contracts, from the condition only by giving the target a notice declaring the offers to be free from the condition in accordance with this section: (a) if the condition is that the bidder may withdraw unaccepted offers if an event or circumstance referred to in subsection 652C(1) or (2) occurs in relation to the target––not later than 3 business days after the end of the offer period." 1. Section 650G provides that contracts resulting from acceptances of offers are void if defeating conditions are not fulfilled. As amended by the ASIC Class Order, it is in the following terms: "650G Contracts and acceptances void if defeating condition not fulfilled All takeover contracts, and all acceptances that have not resulted in binding takeover contracts, for an off-market bid are void if: (a) offers made under the bid have at any time been subject to a defeating condition; and (b) the bidder has not declared the offers to be free from the condition within the period before the date applicable under subsection 650F(1); and (c) the condition has not been fulfilled at the end of the offer period. A transfer of securities based on an acceptance or contract that is void under this section must not be registered." 1. Section 650G(b), as originally enacted, provided as follows: "650G Contracts and acceptances void if defeating condition not fulfilled All takeover contracts, and all acceptances that have not resulted in binding takeover contracts, for an off-market bid are void if: … (b) the bidder has not declared the offers to be free from the condition within the period before the date applicable under subsection 630(1) or (2);" 1. Section 652C(1) is in the following terms: "652C Withdrawal of market bids Bidder entitled to withdraw if certain events happen during the offer period (1) The bidder may withdraw unaccepted offers made under a market bid if 1 of the following happens during the bid period, but only if the bidder's voting power in the target is at or below 50% when the event happens: (a) the target converts all or any of its shares into a larger or smaller number of shares (see section 254H); (b) the target or a subsidiary resolves to reduce its share capital in any way; (c) the target or a subsidiary: (i) enters into a buy-back agreement; or (ii) resolves to approve the terms of a buy-back agreement under subsection 257C(1) or 257D(1); (d) the target or a subsidiary issues shares, or grants an option over its shares, or agrees to make such an issue or grant such an option; (e) the target or a subsidiary issues, or agrees to issue, convertible notes; (f) the target or a subsidiary disposes, or agrees to dispose, of the whole, or a substantial part, of its business or property; (g) the target or a subsidiary grants, or agrees to grant, a security interest in the whole, or a substantial part of its business or property; (h) the target or a subsidiary resolves to be wound up." 1. The modifications to s 630(4) made by the ASIC Class Order were stated in the Explanatory Statement which accompanied the ASIC Class Order for the purpose of clarifying its operation (the Explanatory Statement). The Explanatory Statement stated that the modification to s 650F(1)(a) was made because, as enacted, it referred to conditions that a bidder may withdraw unaccepted offers, which could cause confusion because a defeating condition does not allow a bidder to withdraw unaccepted offers. The Explanatory Statement stated that s 650G(b) was modified to correct the erroneous reference to s 630(1) and s 630(2). Thus, as senior counsel for the applicant correctly pointed out, the modifications were intended to clarify the provisions rather than to alter their scope and purpose. 2. Remedial powers of relevance are s 1322 and s 1325 of the Act. So far as relevant, s 1322 is in the following terms: "1322(4) Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes: (a) an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation; (b) an order directing the rectification of any register kept by ASIC under this Act; (c) an order relieving a person in whole or in part from any civil liability in respect of a contravention or failure of a kind referred to in paragraph (a); (d) an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Act or in relation to a corporation (including an order extending a period where the period concerned ended before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding; and may make such consequential or ancillary orders as the Court thinks fit. (5) An order may be made under paragraph (4)(a) or (c) notwithstanding that the contravention or failure referred to in the paragraph concerned resulted in the commission of an offence. (6) The Court must not make an order under this section unless it is satisfied: (a) in the case of an order referred to in paragraph (4)(a): (i) that the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature; (ii) that the person or persons concerned in or party to the contravention or failure acted honestly; or (iii) that it is just and equitable that the order be made; and (b) in the case of an order referred to in paragraph (4)(c)––that the person subject to the civil liability concerned acted honestly; and (c) in every case––that no substantial injustice has been or is likely to be caused to any person." 1. The following provisions of s 1325 are relevant: "1325A(1) The Court may make any order or orders (including a remedial order) that it considers appropriate if a person: (a) contravenes a provision of Chapter 6, 6A, 6B or 6C; or (b) contravenes a condition of a consent given by ASIC under section 652B; or (c) states in a notice under section 672B about securities that they do not know particular information about: (i) the securities; or (ii) someone who has a relevant interest in, or has given instructions in relation to, the securities. Note 1: Section 9 defines remedial order. Note 2: Sections 659B and 659C deal with court proceedings during and after a takeover bid. … (3) An order under this section may be made on application by the following: (a) ASIC; (b) the company, or the responsible entity of the registered scheme, whose securities are involved in the contravention; (c) a member or former member of that company or scheme; (d) a person from whom the relevant interest in the securities were acquired; (e) a person whose interests are affected by the contravention. … 1325D(1) The Court may declare that any act, document or matter: (a) is not invalid merely because a person has contravened a provision of Chapter 6, 6A, 6B or 6C; and (b) has had effect at all times as if there had been no contravention; if the Court is satisfied that the contravention ought to be excused in all the circumstances. (2) An application for an order under subsection (1) may be made by any interested person. (3) If the Court is satisfied that in all the circumstances a contravention of a provision of Chapter 6, 6A, 6B or 6C ought to be excused, the Court must not make an order under section 1325A, 1325B or 1325C other than: (a) an order restraining the exercise of voting or other rights attached to securities; or (b) an order that an exercise of voting or other rights attached to securities be disregarded. (4) In determining whether or not a contravention of a provision by a person ought to be excused, have regard to the contravention being caused by any of the following: (a) the person's inadvertence or mistake; (b) the person not having been aware of a relevant fact or occurrence; (c) circumstances beyond the control of the person. (5) This section applies notwithstanding anything contained in any other provision of this Chapter." 1. Remedial orders are defined in s 9 of the Act. The orders include a power to vest shares in ASIC. The legislative history 1. Provisions of the nature of those the subject of the present proceedings have had a lengthy history in corporations law in this country. The Second Interim Report of the Company Law Advisory Committee to the Standing Committee of Attorneys-General (the Eggleston Committee Report) dated February 1969 outlined the purpose of the takeover provisions in the form which now finds expression in s 602 of the Act: Company Law Advisory Committee to the Standing Committee of Attorneys-General, Parliament of the Commonwealth of Australia, Second Interim Report – Disclosure of Substantial Shareholdings and Takeover Bids, (Parliamentary Paper No 43, February 1969). As the applicant has pointed out in its written submissions, at the time of the Eggleston Committee Report, cl 4 of Pt A of the 10th Schedule of the Uniform Companies Acts allowed for minimum acceptance provisions, so long as the offer specified the latest date on which the offeror could declare the offer to become free of the condition and a further period of not less than seven days during which the offer would remain open for acceptance. As the Eggleston Committee Report pointed out, the object was to ensure that shareholders in a target company knew whether the bid was unconditional prior to the close of offers. However, the Eggleston Committee Report identified a difficulty in that the existing provisions failed to provide what would occur if no notice was given. The Eggleston Committee Report concluded that in those circumstances, the offer should be deemed to have elapsed at the end of the offer period. It commented as follows: "It is necessary also to provide for what is to happen if no declaration is made. In the absence of a statutory provision, an offeree who had accepted would not know whether he was bound or not, since he would have no means of knowing whether the condition had been fulfilled. An offeree who had not accepted would have a further seven days after the last date for a declaration, but would not have the information required to make a decision. It has been suggested that if no contrary declaration is made the condition should be treated has [sic] having been fulfilled. This would impose a heavy penalty on an offeror who accidentally failed to make a contrary declaration. In our view, if the offeror fails to publish a declaration that the offer is free of the condition, the offer should be deemed to have lapsed, unless the condition has in fact been fulfilled by the date specified. The Act should also, however, impose on the offeror an obligation to publish on that date a notice stating whether or not the condition has been fulfilled." 1. As a consequence of the Eggleston Committee Report, significant amendments were introduced into the Uniform Companies Acts. They included s 180N, which provided that an offeror may not declare a takeover offer to be free of particular conditions unless it is a term of the offer that it may do so not less than seven days before the end of the period during which the offer was open. It provided in s 180N(3) that the offeror was required to publish on the date specified in the takeover offer a notice stating whether the offeror has declared the offer free of conditions and whether the condition was fulfilled or not. It stated in s 180N(8) that where a condition had not been fulfilled and a notice not provided in accordance with s 180N(3), all contracts resulting from acceptance of the offer were void. 2. The provisions extended the previous provisions, first by providing that acceptance of offers subject to unfulfilled conditions are void. It also extended the notification provisions beyond the minimum acceptance provisions. The provision was considered by Needham J in Repco Ltd v Commissioner for Corporate Affairs [1978] 1 NSWLR 350 who concluded (at 354-355) that the provisions extended to other conditions apart from the minimum acceptance condition imposed by the offeror in respect of which the offeror reserved the right to free the bid from them. His Honour concluded that it was not limited to conditions in respect of which it was possible to say, as at the time the notice under s 180N(3) was required to be given, that they had been fulfilled. 3. Equivalent provisions were inserted into the Companies (Acquisition of Shares) Act 1980 (Cth) (CASA) by the Companies and Securities Legislation Miscellaneous Amendment Act 1985 (Cth). This followed the decision of Tadgell J in Gerrard Co of Australasia Ltd v Johns Perry Ltd (1982) 7 ACLR 699. At that time, s 28(1) of CASA provided that where an offer was subject to a prescribed condition, the offeror may only declare the offer free of conditions not less than seven days before the end of the offer period, and at the same time, declare other offers (made under the takeover scheme) free of conditions. Justice Tadgell held that declaring an offer free of conditions involved an alteration of the offer and did not prevent waiver of conditions subsequent. 4. As a consequence, s 28(9) was inserted into CASA, providing that where a prescribed condition had not been fulfilled and a notice had not been provided under the section, all contracts formed by acceptance of the offer under the relevant takeover scheme were void. The Explanatory Memorandum in respect of the Companies and Securities Legislation (Miscellaneous Amendments) Bill 1985 (Cth) stated at paragraph 71 that the intent of CASA was that if at the end of the offer period a condition was not fulfilled, the takeover scheme should not proceed and acceptances received under the scheme should be returned to offerees. It also stated that CASA sought to ensure that the only way an offeror may treat a conditional offer as being free from conditions was by making a declaration under s 28. 5. Equivalent sections to s 28 are now found in s 630, s 650F(1)(b) and s 650G of the Act. However, in 1994, the Legal Committee of the Companies and Securities Advisory Committee (CASAC) Report entitled "Anomalies in the Takeovers Provisions of the Corporations Law" (the CASAC Legal Committee Report) identified a difficulty arising by reason of the fact that a bidder might want to retain the protection of the prescribed occurrence condition until the close of the offer to take account of the fact that the event the subject of the condition might occur in the final seven days of the offer period: Legal Committee of the Companies and Securities Advisory Committee, Anomalies in the Takeovers Provisions of the Corporations Law (Report, March 1994) 74. The CASAC Legal Committee Report (at 74) contained the following comments on the question: "This requirement for early declaration may give rise to unreasonable consequences. The DP [(Discussion Paper)] noted that an offeror may, for good reason, want to retain the protection of 'prescribed occurrence' conditions during the final seven days of the offer period. However, s 663(2) prevents the offeror from declaring offers free from such conditions in that seven day period. The takeover scheme will fail completely if any event covered by a remaining prescribed occurrence condition occurs in that period. The DP therefore proposed that an offeror under a takeover scheme have up to three business days after the end of the offer period to declare the offer free of a prescribed occurrence defeating condition. This three day period would allow the offeror sufficient time to consider all relevant events concerning prescribed occurrences up to the end of the offer period. Submissions. Several submissions supported the proposal. However, the ASC disagreed. It considered it 'contrary to the policy of section 663 that offerees should have to accept offers without knowing the status of a defeating condition and then have to wait 3 days after the close of the offer period to know whether their offers are final'. The Legal Committee considers that this view ignores the present unwarranted advantage to offerees if the conditions are lifted, and the uncertainty and unsatisfactory consequences which may follow if they are not. An offeror should have sufficient time to consider all relevant events concerning prescribed occurrences up to the end of the offer period. The only matter of which offerees would be unaware under the DP proposal would be whether or not prescribed occurrence defeating conditions had been abandoned, and then only for a maximum of 10 extra days. Some submissions, while supporting the DP proposal, suggested that it should extend to any condition permitted under s 662 , not just prescribed occurrence defeating conditions. The Legal Committee disagrees. The prescribed occurrences all concern specific matters relating to the capital structure, financial standing and solvency of the target company. A bidder might reasonably be given an additional period after the close of the bid to consider whether to abandon conditions relating to the position of the target company. The variety of other possible conditions is so open-ended that to include them could give the bidder an unfair or unjustified discretion. For instance, it would be undesirable to permit a bidder to decide the status of a minimum acceptance condition after the close of the bid. Offerees may be unfairly disadvantaged." (Footnotes omitted.) 1. Provisions equivalent to s 630, s 650F and s 650G of the Act were introduced into the Corporations Act 1989 (Cth) by the Corporate Law Economic Reform Program Act 1999 (Cth). The Explanatory Memorandum in respect of the Corporate Law Economic Reform Program Bill 1999 (Cth) stated that the amendments took into account the recommendation of the CASAC Legal Committee in its March 1994 Report. The Takeovers Panels' decisions 1. As I indicated, Keybridge successfully sought a declaration that the conduct of WAM in purporting to declare the bid free of conditions within the seven day period prior to the closure of the Offer constituted unacceptable circumstances. This was essentially for two reasons. First, the initial Panel concluded that ss 10.7(c)(i) and 10.7(c)(iv) did not fall within the happening of an event or circumstance falling within s 652C(1) or (2) because the provisions include references to "Controlled Entities" in s 10.7(c)(i) and "subsidiary" in s 10.7(c)(iv): Keybridge Capital Ltd 04, 05 & 06 at [65]. The Panel also concluded (at [71], [72]) that, despite WAM being informed of the contention by Keybridge that the bid had closed subject to a defeating condition on 4 March 2020, they commenced processing acquisitions on 6 March 2020. 2. In the circumstances, the Panel made the orders to which I have referred at [13] above. In doing so, the Panel made the following comments: "126. As stated above in paragraph 70, a consequence of WAM Active's bid closing subject to defeating conditions is that all takeover contracts, and all acceptances that did not result in binding takeover contracts, were void. We also note that section 650G provides that: 'A transfer of securities based on an acceptance or contract that is void under this section must not be registered'. As a factual observation however, WAM Active is registered on the Keybridge share register in respect of some of the shares and also paid the consideration for them. This presents challenges in relation to making orders. 127. We considered vesting the relevant shares in ASIC for sale, but making such an order was potentially unfairly prejudicial given the challenging economic climate existing at the time of our orders and Keybridge's continuing suspension. ASIC was clear in its submissions that it was not in favour of this approach: ... ASIC considers it relevant for the Panel to consider that Keybridge's shares are currently suspended, limiting the options available to ASIC in the event that vesting orders are made. Additionally, ASIC refers to its submissions to the Brief and reiterates that the current economic climate is a relevant consideration for the Panel, as any sale (unless effected by way of, or transacted with a buyer with the sole intention of, accepting into the ADIT bid) may be at a substantial discount to the WAM Active offer price. … 131. We consider Keybridge's circumstances constrain our ability to make orders and are of the view there are no better options that meet the requirements of section 657D. We recognise that our orders leave WAM Active as the registered holder of the relevant shares. However, we have not validated that registration. We consider the question of whether the registration of those shares automatically became void or became voidable a question more appropriately adjudicated by a Court. Our order relating to shareholders' reversal right (see below) facilitates this by automatically ceasing if a Court makes orders or a declaration inconsistent with it." (Footnotes omitted.) 1. As I indicated, the review Panel affirmed the initial Panel's decision: Keybridge Capital Ltd 08R, 09R and 10R. In the course of reaching their conclusion, the review Panel made the following remarks: "55. Section 650F(1) provides a bidder with a significant concession in relation to a prescribed occurrences condition - under the legislation it can wait until 3 business days after its bid has ended to decide whether to waive the condition. We consider that a bidder can only rely on this concession in relation to conditions that at the very least closely match the prescribed occurrences listed in section 652C. We disagree with WAM Active's submission above to the extent that it suggests that a bidder can wait until 3 business days after a bid has closed to waive a condition that it does not closely match, but is of a similar subject matter, as a prescribed occurrence. 56. We agree with the initial Panel that the Placement triggered the condition in section 10.7(c)(iv) of WAM Active's bidder's statement and as a result of section 10.8(c) of WAM Active's bidder's statement, the condition then bifurcated into two. We think that the better view is that those conditions are not prescribed occurrences as defined in section 652C." 1. The review Panel (at [109]) concluded that, applying their commercial judgment, "a combination of a voting freeze and reversal rights, rather than a vesting order, is a more appropriate solution in the circumstances having regard to the requirements in s 657D(2)." The review Panel stated (at [115]) that they agreed "with the initial Panel that the legal status of the registration of the Processed Shares is more appropriately adjudicated by a Court." The primary judgment 1. In dealing with the question of whether WAM was entitled to declare the Offer free of conditions within the seven day period of the close of the Offer, the primary judge (at [170]) first rejected the argument that the words "or any of the Controlled Entities" in s 10.7(c)(i) meant that the condition was not one which related to the happening of an event or circumstance within s 652C(1)(a). Her Honour concluded correctly that there was no evidence to suggest that the condition was not fulfilled because there was no evidence to suggest that there was any conversion of shares. 2. This conclusion does not seem to be challenged on the appeal. 3. Her Honour (at [172]) accepted that the effect of the bifurcating clause in s 10.8 was that, as a result of the Placement, the condition became two separate conditions: first, a Placement Condition (that Keybridge or its controlled entities makes an issue of shares, which is what actually occurred); and second, the general condition that Keybridge makes any other issue of shares (excluding the Placement). Her Honour stated that the latter condition, which she described as the general condition, was fulfilled. 4. I agree with her Honour's analysis except to say that, in my view, the Placement Condition which arose as a result of the bifurcation would more accurately be described that Keybridge makes an issue of its securities. This is because it was Keybridge itself which made the Placement, and it is the actual placement which is the subject of the bifurcated provision. Although it is not material, it should also be noted that s 10.7(c)(iv) refers to a "subsidiary" rather than "Controlled Entities". 5. The primary judge concluded that the Placement Condition fell within s 652C(1). Her Honour stated (at [185]) that she saw "no warrant for reading a qualification into s 652C(1) to exclude from its operation a condition relating to an event that, at the time that the condition springs into existence, has actually occurred." Her Honour stated that it was still a condition that related to the happening or occurrence of an event within the period. In dealing with the argument that it could be said to give the bidder an election whether or not to waive a condition that it knows has already occurred (something her Honour described as a "free ride"), the primary judge pointed out that it must be borne in mind that the bifurcating clause, and the potential for its operation, must have been known at the outset of the bid. In those circumstances, Her Honour stated that the concept of a "free ride" seemed to be inapt. 6. The primary judge stated (at [186]) that "[i]f the legislature wished to limit the conditions in s 652C along the lines suggested by Keybridge, it would have been open for the legislature to have done so expressly." Her Honour stated (at [186]) that she did "not regard the tense used in s 652C as requiring the condition to be a forward-looking condition at the time that the condition springs into existence, at least where it was a forward-looking condition in its original or "unbifurcated" form." 7. The primary judge stated that if she was incorrect in her conclusion, she would have granted relief under s 1322(4) of the Act. Her Honour noted (at [193]) WAM's submission that the authorities recognise that the provision "is to be exercised liberally so as not unreasonably to stifle corporate and financial activity by restricting such activity merely on technical grounds." Her Honour also noted (at [193]) with WAM that the provision reflected "a long-standing legislative recognition that mistakes will happen in corporate governance and that it is not in the public interest that the validity of such decisions, that do not occasion substantial injustice to third parties, should be undermined." 8. The primary judge stated (at [220]) that had the question of remedial relief arisen, she would have concluded that there was power to grant it and that it was "appropriate to do so in circumstances where the breach was not deliberate and there is no substantial injustice to any of the shareholders of the Processed Shares." 9. Although her Honour did not expressly state this to be the case, it seems that although she was primarily referring to s 1322 of the Act, she would also have granted relief under s 1325D. Her Honour stated (at [222]) that the two powers to grant relief were distinct despite the practical consequences of their exercise in a particular case may be the same. 10. In dealing with the question of whether s 650G rendered the transfers of the shares void, her Honour stated (at [254]) that she considered there was a "distinction between a finding that a contract is void (and that a takeover acceptance pursuant to such a contract must not be registered) and the consequences if (inadvertently or otherwise) registration takes effect." Her Honour stated (at [254]) that "[u]nless and until the register is rectified (on an application by a relevant party), the register records who is the legal or beneficial holder of the shares." 11. The primary judge further concluded (at [255]) that she did not accept that a contravention of the section meant that a Court was deprived of the remedial powers provided for under the Act. Did the primary judge err in her conclusion that the bid was validly free from the defeating conditions (Issue 1, appeal grounds 1 and 2) The submissions a Keybridge 1. Senior counsel for Keybridge described the issue as a question of how s 650F(1) and s 650G, as modified, apply when a bifurcating clause, such as the one in the present case, is triggered, and particularly whether a bidder can validly retain an option to rely on the specific condition, concerning an event which arises in the course of the takeover period, to free the bid from that condition up to three business days after the end of the Offer period. 2. Senior counsel for Keybridge submitted that s 10.7(c), as set out in the bidder's statement, did not contain defeating conditions within the meaning of the definition of that expression in s 9, as it did not entitle WAM to rescind the bid; rather, it triggered two other terms having that potential coming into effect. However, he accepted that s 10.7, absent the bifurcating clause, was a condition which fell within s 652C(1), entitling WAM to free the bid from it three days after the end of the Offer period by virtue of s 650F(1)(a). He submitted that the bifurcating clause was entirely different to one with which s 650F(1)(a) is concerned. He submitted that the Placement Condition, specific to a particular event, is not a section to which s 652C(1) was directed. He accepted, however, that the two conditions were, individually, defeating conditions. 3. Senior counsel for the applicant emphasised that it was not simply a question of waiving the condition, stating that for a bid to become unconditional it was necessary for the bidder to free itself from the condition. He submitted that the object of the bifurcating clause was a tactical desire of the bidder to want to go into the marketplace in the last seven days to deter, "for example, what used to be called 'white knights', or counterbids, and things like that", whilst retaining the benefit of the substance of the condition. 4. Senior counsel for Keybridge described subparagraph (a) of the definition of "defeating condition" (see at [22] above) as having two elements. First, it has to be a condition entitling the bidder to rescind, and second, it has to be in the circumstances referred to in the condition. 5. Senior counsel for the applicant accepted, as found by the primary judge, that on 17 February 2020, the date of completion of the Placement, the Offer became subject to a defeating condition. He pointed out that to free the Offer from that condition, notice had to be given in accordance with s 650F not less than seven days before the end of the Offer period, unless the event or circumstance fell within s 625C(1) or (2). He stated that these events were "generic events that may happen at any time during the bid period including importantly in the last seven days of the bid period". He submitted that the conditions were "forward looking", particularly looking to the last seven days of the bid period. He submitted that an event or occurrence which has occurred prior to or simultaneously with the creation of the condition does not fall within the exception because of its specificity. He submitted that the words in s 650F(1)(a) "relate only to the happening of an event referred to in subsection 652C(1) or (2)" and do not relate to an individual or particular incident of such occurrences. He submitted that the relevant provisions of s 652C(1) refer to an issue of shares, rather than a particular issue of shares. He submitted that the construction contended for by WAM would read into s 650F(1)(a) the words "if the condition specifies or states that it is triggered by occurrences as set out in those provisions". 6. He submitted that the construction for which he contended was reinforced by the definition of defeating condition. He submitted that the words "referred to" are used to signify the circumstances specified in the condition. 7. Senior counsel for the applicant also submitted that the construction for which he contended was supported by the legislative history. He submitted that the purpose of s 650F(1)(a) was to provide protection for an event which fell within the circumstances described in s 652C, occurring in the last seven days of the bid, and the bidder being stuck with a company whose structure is materially altered in those seven days. 8. He submitted that it had to be asked whether s 10.7(c) could in fact be described as a defeating condition because it may never give a right to terminate by virtue of the operation of s 10.8. He stated that having regard to the way it operated, the only thing that gave a right to terminate was the specific condition which arose as a result of the operation of s 10.8. He accepted, however, that the question of whether the general condition was a defeating condition was not material in the present case. 9. Senior counsel for the applicant also submitted that there was a profound difference between simply s 10.7(c), and s 10.7(c) coupled with the bifurcating clause contained in s 10.8. He submitted that the whole point of the takeover provisions was to get an informed market and a level playing field. He submitted that the object of the bifurcating clause was to get "a march on the market" in relation to the present situation because it was possible to tell the market that "I'm giving up the right", but still have a condition to protect yourself against a defence by a target company during the last week. Whether it be the object or not, in the present case WAM did not seek to free itself from s 10.7(c) in its announcement to the market on 24 February 2020. Further, the proposition assumes that the market was unaware of the bifurcating clause or its potential as a defence. 10. Senior counsel for Keybridge referred to the expression, "relates only to the happening of an event". He submitted that the relevant "happening" must be of an event referred to in s 652C. He submitted that all the events in that section are expressed in the present tense and were all generic. He submitted that because of their generic character, it was reasonable to give bidders additional time to consider whether they wished to rely on a right to rescind upon the occurrence of such an event. He submitted in contrast that where a bidder chooses to insert a condition into its bid relating to a specific event, it purposely does so knowing its significance. 11. He also submitted that the legislative history to which I have referred supported his contentions. He submitted that since the early 1970s, Australian takeover law has regulated takeover bids. Referring to the CASAC Legal Committee Report to which I have referred at [39] above, he submitted that the carve out from the seven day rule was to address a specific problem, namely bidders being forced to elect whether to free the bid of an important defeating condition when there was a possibility that it could be triggered in the last seven days. He submitted that it was important to recognise the exception was directed to generic conditions, and that there was nothing to suggest it was contemplated that a specific condition addressed to a specific event should be excepted. He referred to the fact that the Committee rejected broader exceptions. 12. Senior counsel for the applicant submitted that WAM's construction was less likely to result in an informed market because the legislature never intended specific conditions to be able to be maintained. He submitted that the market was entitled to know for at least seven days whether the condition would be relied upon. 13. In his submissions in reply, senior counsel for the applicant submitted that the "constructional choice" in s 650F(1)(a) is not governed by the words "relate only" but by the expression "happening of an event or circumstance". He submitted it was central to the purpose that the happening could occur in the last seven days. b WAM's submissions 1. Counsel for WAM submitted that the phrase "relates only to the happening of an event or circumstance" referred to in s 650F(1)(a) means, in the present case, that the condition is breached by something that is an issue of shares in the bid period. He submitted that it did not matter if it was a specific issue of shares or a general issue of shares. He pointed out that the section could relate to an issue of shares to specific persons or entities, or the issue of a particular percentage of shares in the capital of the company. He submitted that the condition was still a condition which falls within s 652C. He submitted that the condition is designed to provide certainty, and a construction which opens up uncertainty every time the bidder strays from the precise words of s 652C is not a construction which commends itself, particularly where there is an obvious natural meaning of the words used. 2. Counsel for WAM also pointed out that the bid was always conditioned on there being no issue of shares, and that Keybridge accepted that if s 10.7(c)(iv) stood on its own and there were one or more share issues in the bid period, the bidder could wait for three days after the bid period, saying nothing of its intention, and then freeing itself of the conditions for any reason it thought fit. He submitted that the separation out of the Placement Condition did not do anything that could not otherwise have been done and it was not detrimental to the market. He accepted, however, that a bidder could not rid itself of a condition related to a specific event unless the specific event was in the bid at the outset or there was no bifurcating clause. He submitted that if the bidder freed itself of the specific condition early, that would improve the informed nature of the market because the market would know that the offer would not fall over for breach of the specific condition. He submitted that if the condition was not freed early, the market would be in no different position than it otherwise would have been had s 10.7(c)(iv) applied without a bifurcating clause. 3. He submitted that there was nothing in the legislation that the event to which the condition applied had to arise only after the condition is created. He also emphasised that the bifurcating clause was always a term of the Offer, and that the bifurcating clause arose as a matter of contractual mechanics. 4. Counsel for WAM referred to the CASAC Legal Committee Report. He referred, in particular, to the submissions of ASIC to the Committee that it would be contrary to the policy of the legislation that offerees should have to accept offers without knowing of the status of the defeating condition, and then have to wait for up to three days to know of the outcome of the Offer. He noted the rejection of this submission by the Committee on the basis that it ignored the unwarranted advantage to offerees if the conditions are lifted, and the uncertainty and unsatisfactory consequences which may follow if they are not. He also noted the Committee's conclusion that an offeror should have sufficient time to consider all relevant events concerning prescribed occurrences up to the end of the offer period. He submitted that the CASAC Legal Committee Report showed that the regime reflected a deliberate balancing of the competing interests between bidders on the one hand, and shareholders and the market on the other. 5. He emphasised that it was immaterial whether s 10.7(c)(iv) in conjunction with s 10.8 was a defeating condition, noting that there was no dispute that the Placement Condition was a defeating condition. He submitted there was nothing anomalous in that s 10.7(c) and s 10.8 read together answer the description of a defeating condition. c ASIC 1. Apart from helpfully referring to the explanatory material relating to this issue, ASIC made no submissions. Consideration 1. The principles surrounding the construction of the provisions in question are not in dispute in the present case and were correctly summarised by the primary judge. In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41, the plurality stated at [47] that the task of statutory construction must begin with a consideration of the text itself, although the meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it seeks to remedy. 2. It has been subsequently emphasised that context in its widest sense should be considered at the first stage of the construction process and not at some later stage. The principles were stated by the plurality in SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 in the following terms (at [14]): "[14] The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected." 1. In R v A2; R v Magennis; R v Vaziri [2019] HCA 35; (2019) 93 ALJR 1106, Kiefel CJ and Keane J emphasised the importance of considering context at the first stage of the process, stating that "[a] literal approach to construction, which requires the courts to obey the ordinary meaning or usage of the words of a provision, even if the result is improbable, has long been eschewed by this Court": 93 ALJR 1106 at [31]-[34] (footnotes omitted); see also Bell and Gageler JJ at [124]. 2. The purpose of the provisions contained in Ch 6 of the Act is set out in s 602 of the Act and its provisions should be construed by reference to those purposes. Of particular importance is the need for an acquisition to take place in an "efficient, competitive and informed market" (s 602(a)) and that holders of shares in the target company "have a reasonable time to consider the proposal" (s 602(b)(ii)). 3. The provision must also be considered in the context of the broad powers of the Takeovers Panel to make declarations of unacceptable circumstances, contained in s 657A of the Act. In exercising those powers, the Panel is required by s 657A(3) to have regard to "the purposes of the Chapter as set out in section 602". The power extends to actions which are authorised by the express provisions of Ch 6. Thus, in Re Multiplex Prime Property Fund 01 and 02 [2009] ATP 18; (2009) 74 ACSR 248, the Panel chaired by Professor Ian Ramsay held that a bidder's withdrawal of an on-market bid under s 652C(1)(h) on the basis that the target resolved to be wound-up, constituted unacceptable circumstances because the bidder had stated in its bidder statement that it intended to wind-up the target if the bid was successful. In those circumstances, the Panel stated (at [29]) that one of the policy bases of s 652C was the preservation of market integrity, referring to s 602(a). The Panel described the withdrawal of the bid as at odds with basic principles and policies underlying takeover regulation. 4. That is not to say that the construction of the provisions should be undertaken without regard to the legislative purpose and the history of the legislation, leaving it to the Panel to determine what particular conduct is unacceptable. Rather, it is simply to acknowledge that the legislature recognised that in some circumstances, literal compliance with the provisions of the legislation could still produce results contrary to the purposes of Ch 6. 5. Section 10.7(c), in my opinion, is a defeating condition. It operates in such a way that on the occurrence of any of the events referred to in that section (relevantly, for present purposes, s 10.7(c)(iv)), the bidder will be entitled to rescind the takeover contracts. The bifurcation does not affect that condition as the bifurcated condition in this case, the Placement Condition, entitled WAM to rescind if it was not freed. In that sense, the position is not materially different to the position which would have existed had there been no bifurcating clause. In both scenarios, WAM had a right to rescind as a result of the issue of shares. If there were no other defeating conditions, that would remain the only basis it could rescind, irrespective of the bifurcation. 6. Senior counsel for the applicant accepted that the Placement Condition was a defeating condition. Whilst he also accepted that, absent s 10.8, WAM would have been entitled to free itself from that condition up to three days after the close of the Offer, he contended that because the right to rescind after the operation of s 10.8 only arose because of the Placement Condition, if WAM wished to free itself of that condition, it had to do so outside the seven day period referred in s 650F(1)(b). 7. The critical question is whether the Placement Condition "relates only to the happening of an event or circumstance referred to in subsection 652C(1)". 8. On its face, the Placement Condition relates to the happening of an event in s 652C(1). However, senior counsel for the applicant submitted that on its correct construction the issue did not fall within s 652C(1), at least for the purpose of s 650F(1)(a), essentially for two reasons. First, s 652C(1) refers to issues of shares generally and not to a specific issue of shares. Second, the expression "happening of an event or occurrence" in s 650F(1)(a) is forward looking and does not relate to an event arising simultaneously with the creation of the condition. 9. There are a number of difficulties with this submission. First, and not conclusively, it is contrary to the literal meaning of the provision. The relevant event which occurred or happened during the bid period was an issue of shares. On its face, that would fall within s 652C(1) and enliven s 650F(1)(a). 10. Second, the fact that s 652C relates to what might be called generic events is not in my opinion of particular assistance in the present case. The subsection, although expressed generally, can only operate on the happening of a particular event, in this case, a particular issue of shares. 11. Thus, whilst I agree that s 650F(1)(a) is limited to the happening of an event which occurs during the bid period, the issue of shares in the present case did so. The real criticism made by the applicant is that the Placement Condition was said to be created simultaneously with the issue of the shares. However, that ignores the fact that the Placement Condition arose as a result of the terms of the Offer itself. The Placement Condition became a separate condition as a result of s 10.8(c) of the Offer. That does not alter the position that the happening of the event, irrespective of the bifurcation, was an event which occurred during the course of the bid and to which s 10.7(c) applied. 12. The question must be considered in context and with regard to the purpose of the legislature, particularly s 650F(1)(a). I have set out the relevant portions of the CASAC Legal Committee Report at [39] above and I agree that its purpose was to protect offerors against a prescribed occurrence occurring during the last seven days of the offer period. However, as was properly conceded by Keybridge, the legislature did not choose to limit s 650F(1)(a) to events occurring in the seven days prior to the close of the offer. 13. Nor do I consider what might be described as the literal meaning of the provisions as contrary to the purposes of Ch 6, as summarised in s 602. Undoubtedly, as senior counsel for the applicant pointed out, it would have been open to the bidder to take advantage of the bifurcation, permitting it to announce that the Offer was free from the general provision whilst preserving the right to rescind against any other eventualities by virtue of the retention of the Placement Condition. Minds might differ as to whether this was acceptable. It is difficult to see why it affected an informed market as the market would be aware of the bifurcating clause and its effect. Senior counsel for the applicant also submitted that it altered a level playing field. That also is a matter on which minds might differ. Suffice to say, the Panel found the conduct unacceptable and its orders have not been challenged. It does not in my opinion impact on the question of construction. 14. It follows that the primary judge was correct in her conclusion that WAM was entitled to declare the Offer free from the Placement Condition on 2 March 2020. The remedial orders (appeal grounds 3 – 10) 1. Senior counsel for Keybridge, contrary to the grounds of appeal and the written submissions, accepted that the power conferred on the Court under s 1322(4) of the Act extended to making remedial orders in respect of a contravention of Ch 6 of the Act. As he correctly pointed out, that was made clear by the provisions of s 659C(1)(f). 2. It should be noted that it was not suggested that s 659C prevented the bringing of these proceedings. That, in my opinion, was correct. Section 659C imposes a limitation on the powers of the Court when the Panel has refused to make a declaration in respect of particular conduct. It does not limit the Court's jurisdiction after the end of the bid period, but rather limits its powers in the particular circumstances set out in the provisions. The section has no application in the present case. 3. Beyond this, it is unnecessary and undesirable to consider the hypothetical question of what relief might be given had it been concluded that the bid closed subject to a defeating condition and the transfer of the processed shares was a contravention of the Act. This is particularly the case where the Panel has made remedial orders which have not been challenged. The costs issue (appeal ground 11) 1. In paragraph 8 of its interlocutory process, WAM sought relief under s 1322 of the Act in respect of its failure to give notice that the defeating condition had been fulfilled in the manner prescribed by s 630(5)(a) and s 630(5)(c) of the Act. 2. Keybridge did not oppose the making of these orders if the judge found against it on the question of whether the bid closed subject to defeating orders. 3. It seems to me that in those circumstances, Keybridge should not have been ordered to pay WAM's costs of that particular application. Leave to appeal 1. Because the matter is of general importance, I would grant Keybridge leave to appeal. However, the appeal should be dismissed. Conclusion 1. In the result, I would make the following orders: 1. Grant the applicant leave to appeal. 2. Order the appellant file a notice of appeal in the form of the draft notice of appeal contained in the White Folder within 14 days. 3. Vary Order 3 of the orders made by the primary judge as follows: "3 Order Keybridge Capital Limited to pay WAM Active Limited and the Australian Securities and Investments Commission their costs of the interlocutory process filed by WAM Active Limited on 16 July 2020 and amended on 15 October 2020, save to the extent that those costs relate to the seeking of the orders the subject of paragraph 2." 1. Otherwise dismiss the appeal. 2. Order the appellant pay the first and second respondents' costs of the appeal. 1. WHITE JA: I agree with Bathurst CJ. 2. EMMETT AJA: These proceedings arise out of an off-market takeover bid made by WAM Active Limited (the Offeror) for all the issued shares in the capital of Keybridge Capital Limited (the Company). The offers made by the Offeror were conditional upon, amongst other things, a number of specified occurrences not happening during the period before the expiry of the period during which the offers were to remain open. One of the occurrences was the Company or a subsidiary of the Company making an issue of or granting an option to subscribe for any of its securities or agreeing to make such an issue or grant such an option (the Share Issue Occurrence). 3. On 2 March 2020, the Offeror issued a notice declaring, relevantly, that its offers were free of the condition that the Share Issue Occurrence not happen during the relevant period. Accordingly, from that date, the share registry for the Company began to process transfers of shares from shareholders of the Company who had accepted the offers. Substantial numbers of shares in the Company were subsequently registered in the name of the Offeror. 4. However, the Company contends that, notwithstanding the notice of 2 March 2020, the offers made by the Offeror remained subject to the condition that the Share Issue Occurrence not happen (the Share Issue Condition) and that the Share Issue Condition was not satisfied. Accordingly, the Company contends, all contracts resulting from the acceptance of offers made by the Offeror and all acceptances that did not result in binding contracts were void, with the consequence that transfers of shares based on such contracts or acceptances were prohibited by s 650G of the Corporations Act 2001 (Cth) (the Corporations Act). 5. By originating process filed on 1 June 2020, the Company sought declarations that the Offeror had contravened s 650G of the Corporations Act and that the transfers of shares to the Offeror was void. The Company also sought an order that the shares transferred be vested in the Australian Securities and Investments Commission (the Commission) pursuant to the Corporations Act and that the Commission undertake a sale process in relation to the shares. 6. By amended interlocutory process filed on 15 October 2020, the Offeror sought, relevantly, a declaration that the notice of 2 March 2020 freed all offers of the relevant condition. Alternatively, the Company sought an order under s 1322(4)(d) or s 1325D of the Corporations Act that the time for declaring its offers to be free from the relevant condition be extended to 2 March 2020. 7. On 24 December 2020, for reasons published on that day, the Chief Judge in Equity (the primary judge) dismissed the Company's originating process with costs and extended to 26 February 2020 the time for compliance by the Offeror with s 630(3) of the Corporations Act in respect of the giving of notice to the Company of the status of the Share Issue Condition. The primary judge also ordered the Company to pay the Offeror and the Commission their costs of the interlocutory process filed by the Offeror on 16 July 2020. By summons filed on 24 March 2021, the Company seeks leave to appeal from the orders made by her Honour. A direction has been given that the application for leave, and the appeal if leave be given be heard concurrently. The Offeror and the Commission are the respondents to the summons and the proposed appeal. Relevant Statutory Framework 1. Section 630(1) of the Corporations Act relevantly provides that offers under an off-market bid may be made subject to a defeating condition only if the offers specify a date for giving a notice on the status of the condition. If the offer period is extended by a period, the date for giving the notice is taken to be postponed for the same period. On the date determined under those provisions, the bidder must give a notice that states whether the offers are free of the condition and whether, so far as the bidder knows, the condition was fulfilled on the date the notice is given. Under s 9 of the Corporations Act, a defeating condition is a condition that, relevantly, will, in circumstances referred to in the condition, result in the rescission of, or entitle the bidder to rescind, a contract resulting from acceptance of an offer made under, relevantly, an off-market bid (takeover contracts). Section 630(4), as amended by a Commission class order, relevantly provides that, if, during the offer period but before the date for giving the notice on the status of the defeating condition, the defeating condition is fulfilled and the offers become free of the condition, the bidder must as soon as practicable give a notice that states that the condition has been fulfilled. 2. Next s 650F(1) of the Corporations Act relevantly provides that, if the offers under an off-market bid are subject to a defeating condition, the bidder may free the offers, and the takeover contracts, from the condition only by giving to the company whose shares are the subject of the off-market bid (the target) a notice declaring the offers to be free from the condition in accordance with s 650F. If the relevant condition relates only to the happening of an event or circumstances referred to in s 652C(1) or s 652C(2), the notice must be given no later than three business days after the end of the offer period. In any other case, the notice must be given not less than seven days before the end of the offer period. Section 652C(1) refers to eight events and s 652C(2) refers to a further five events. The only event relevant for present purposes is that referred to in s 652C(1)(d) in the following terms: "the target or a subsidiary issues shares, or grants an option over its shares, or agrees to make such an issue or grant such an option." 1. Section 650G, as amended by a Commission class order, relevantly provides that all takeover contracts, and all acceptances that have not resulted in binding takeover contracts, for an off-market bid are void if: * offers made under the bid have at any time been subject to a defeating condition; and * the bidder has not declared the offers to be free from the condition prior to the date applicable under s 650F; and * the condition has not been fulfilled at the end of the offer period. Section 650G provides that a transfer of securities based on an acceptance or contract that is void the section must not be registered. Relevant Terms of the Offers 1. By the offers made under the Offeror's off-market bid on 3 January 2020, the Offeror offered to purchase shares in the Company for 6.5 cents per share. The offers were made on terms specified by the Offeror (the Terms). The offers were open for acceptance until 3 February 2020. On 24 January 2020, the Offeror extended its offers so that the closing date for acceptance was 7pm Sydney time on 17 February 2020 unless otherwise extended or withdrawn. On 10 February 2020, the offers were further extended to 7pm Sydney time on 3 March 2020. 2. Clause 10.7 of the Terms relevantly provided that the offers and the contracts that resulted from acceptance of offers were each subject to the fulfilment of a number of conditions. Under cl 10.7(c)(iv), one of the conditions was that the following did not happen during the period commencing on 13 December 2019 and ending on the expiry of the offer period: "[The Company] or a subsidiary of [the Company] makes an issue of or grants an option to subscribe for any of its securities or agrees to make such an issue or grant such an option". The language of the clause is essentially the language of the event referred to in s 652C(1)(d). Clearly enough, the intention of the Offeror was that that condition be a defeating condition. 1. Clause 10.8(a) of the Terms also relevantly provided that each sub-clause of cl 10.7 was a condition subsequent and operated only for the benefit of the Offeror. Clause 10.8(b) relevantly provided that the conditions did not prevent a contract for the sale of shares resulting from acceptance of the offer but breach of a condition or non-fulfilment of a condition at the end of the offer period would entitle the Offeror to rescind the contract. Critical for present purposes was cl 10.8(c) of the Terms, which was relevantly in the following terms: "(c) Where an event occurs which would mean that the time the event occurs the Condition to which this Offer or the contract resulting from your acceptance of this Offer is then subject would not be fulfilled, each paragraph of the Condition in Section 10.7 affected by that event becomes two separate Conditions of identical terms except that: (i) one of them relates solely to that event; and (ii) the other specifically excludes that event. [The Offeror] may declare the Offer free under Section 10.7 from any paragraph of the Conditions without declaring it free from other paragraphs and may do so at different times." Non-Fulfilment of Condition 10.7(c) 1. On 12 February 2020, the Company announced that it had agreed to place 22 million shares to "sophisticated investors" at an issue price of 6.9 cents per share to raise the sum of $1,518,000. On 17 February 2020, the Company completed the placement of those shares (the February Placement). The February Placement was an event referred to in cl 10.7(c)(iv) of the Terms. Accordingly, cl 10.8(c) of the Terms became operative, with the consequences referred to below. 2. On 18 February 2020, the Offeror lodged an application with the Australian Takeovers Panel (the Panel) seeking a declaration of unacceptable circumstances by reason of the February Placement. The Offeror submitted that the February Placement was a frustrating action on the part of the Company that had the effect of denying the Company's shareholders their right to consider and choose between competing transactions. 3. On 24 February 2020, the Offeror increased its offer price from 6.5 cents to 6.9 cents per share and announced that it had elected to waive the majority of the defeating conditions in the Terms. The Offeror announced that its offers were now only subject to the condition set out in cl 10.7(c). 4. As the result of the extension of the offers by the Offeror on 10 February 2020, the date by which the Offeror was required to give notice of the status of conditions to its bid was 25 February 2020. On that day, the Offeror issued a notice to the effect that the offers remained subject to the condition in cl 10.7(c) but had been freed of all other conditions set out in cl 10.7. Although the notice was given to the Australian Securities Exchange on 25 February 2020, the Offeror inadvertently failed to give the notice directly to the Company until 26 February 2020. On the other hand, the Company accepted that it received the notice of 25 February 2020, albeit that it was not given notice directly by the Offeror on that date. 5. On 2 March 2020, the Offeror issued a notice stating that its bid was free of the conditions set out in cl 10.7(c) and declaring that its bid was unconditional. On the same day, the Offeror announced that its bid was extended to 7pm Sydney time on 3 April 2020. Reasons of the Primary Judge 1. The primary judge began by observing that, if a defeating condition is not satisfied, the bidder is entitled to rescind any contract made as a result of accepting an offer. Her Honour observed that cl 10.8(c) of the Terms provided for the bifurcation of defeating conditions in certain circumstances and that the "bifurcation" of the condition referred to in cl 10.7(c)(iv) brought into existence two separate conditions. Thus, if there was an issue of shares such as occurred with the February Placement, which fell within cl 10.7(c)(iv), then the condition constituted by that clause became two separate conditions. The first condition was that the Company not make the February Placement (the specific condition). The second condition was that the Company, or a subsidiary of the Company, not make an issue of, or grant an option to subscribe for, any of its securities or agree to make such an issue or grant such an option, other than the February Placement (the general condition). Her Honour found that there was no evidence that the general condition was not satisfied within the relevant period. 2. The primary judge characterised the issue as being whether the fact that the February Placement had already occurred meant that the condition was one that could never be fulfilled and, hence, was not a condition falling within s 652C(1). Her Honour saw no warrant for reading a qualification into s 652C(1) so as to exclude from its operation a condition relating to an event that, at the time the condition "springs into existence", had already occurred. Her Honour considered that it was still a condition that related to the happening or occurrence of an event within the relevant period. Her Honour noted that the bifurcation provision was in the Terms at the outset of the bid and the potential for its operation must be taken to have been known. Her Honour concluded that the specific condition satisfied s 652C(1) in its terms and, hence, it was open to the Offeror validly to waive the specific condition at the time when it did. That is the primary conclusion challenged by the Company in the proceedings in this Court. 3. The effect of reading cl 10.7(c)(iv) and cl 10.8(c) together is, in one sense, that there was a very large number of events specified as occurrences, namely, the Company or a subsidiary of the Company making an issue of or granting an option to subscribe for any different number of its securities to any person or agreeing to make an issue or grant an option of any number of its securities to any person. One of those events occurred, namely, the February Placement. That and every other possible issue of or granting of an option to subscribe for securities was a specified occurrence. I would not characterise the effect of the provisions as a new condition "springing" into existence as did the primary judge. Rather, that large number of events was always inherent in the language of cl 10.7(c)(iv) as read in conjunction with cl 10.8(c). Each of those events was an event referred to in s 652C(1)(d). 4. The primary judge did not err in concluding that it was open to the Offeror to declare its offer free of the defeating conditions that none of the events referred to in cl 10.7(c)(iv) happen. Further questions would arise if her Honour erred in that conclusion. In the circumstances, it is unnecessary to deal with those further questions. I have had the advantage of reading in draft form the reasons and proposed orders of the Chief Justice, with which I agree. I consider that, to the extent that leave is required, leave to appeal should be granted but that the appeal should be dismissed with costs. ********** Amendments 10 September 2021 - Amendment to instructing solicitor for the Applicant. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 September 2021