Re Centennial Coal Co Ltd [2006] NSWSC 62

Reported Decision : 56 ACSR 698

New South Wales Supreme Court

CITATION : Re Centennial Coal Co Ltd [2006] NSWSC 62

HEARING DATE(S) : 13/02/06

JUDGMENT DATE : 17 February 2006

JURISDICTION : Equity Division Corporations List

JUDGMENT OF : Barrett J

DECISION : Validating orders under s.1322(4)(a)

CATCHWORDS : CORPORATIONS - takeovers - off-market bid - extension of offer period - failure to send notice to offerees before end of offer period - sent 80 minutes after end of period - steps necessary to effect extension - whether failure was "contravention" - whether "essentially of a procedural nature" - whether validation would cause "substantial injustice"

Companies (Acquisition of Shares) Act 1980, s.48 LEGISLATION CITED : Corporations Act 2001 (Cth), ss.606(1)(c), 606(4)(a) , 618A, 633(1), 648B, 648C, 650A, 650C, 650D, 1322 Corporations Law, ss.657, 743(1)

Barondene Pty Ltd v Breakfree Ltd (2003) 22 ACLC 910 Diamond Rose NL v Striker Resources NL (1998) 85 FCR 76 CASES CITED : NRMA Ltd v Gould (1995) 18 ACSR 290 Pinnacle VRB Ltd v Reliable Power Inc (2001) 163 FLR 215 Re Wm Haughton & Co Ltd (1977) 2 ACLR 320 Winpar Holdings Ltd v Goldfields Kalgoorlie Ltd (2001) 166 FLR 144

PARTIES : Centennial Coal Company Limited - Plaintiff

FILE NUMBER(S) : SC 6114/05

COUNSEL : Mr J.K. Kirk - Plaintiff

SOLICITORS : Blake Dawson Waldron - Plaintiff

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

BARRETT J

FRIDAY, 17 FEBRUARY 2006

6114/05 RE CENTENNIAL COAL COMPANY LIMITED JUDGMENT 1 Chapter 6 of the Corporations Act 2001 (Cth) provides for two types of takeover bid: a "market bid" and an "off-market bid". In March 2005, the plaintiff made an off-market bid in respect of all the issued ordinary shares in Austral Coal Limited ("Austral"). It did so by sending an offer to each holder of ordinary shares in Austral in conformity with s.633(1). Each offer was, in accordance with s.618(a), an offer to buy all the offeree's ordinary shares. The period for which each offer was expressed to be open for acceptance was the period ending at 7.30 pm Sydney time on 22 April 2005. 2 The plaintiff took action on no less than fifteen occasions to vary the offers by extending the offer period. The present application arises from the plaintiff's failure, on the thirteenth of those occasions, to proceed strictly in accordance with the statutory procedure. The following relief is sought under s.1322(4) of the Corporations Act: "1. An order pursuant to section 1322(4) of the Act that the period for the plaintiff to give the notice of extension of offer dated 10 October 2005 in relation to its takeover offer for Austral Coal Limited originally issued on 21 March 2005 ('the Offer') be extended until midnight on 11 October 2005; 2. An order pursuant to section 1322(4) declaring that the plaintiff's extension of the offer period in relation to the offer, which extension occurred on or about 10 October 2005, is valid for the purposes of section 650C of the Act; and 3. An order pursuant to section 1322(4) of the Act declaring that subsequent extensions of the offer period by the plaintiff in relation to the offer, which extensions occurred on 24 October 2005 and 7 November 2005, are valid for the purposes of section 650C of the Act." 3 Chapter 6 of the Corporations Act, like predecessor legislation going back to s.184 of the Uniform Companies Acts of 1961-2, proceeds on the footing that a person wishing to acquire all shares in a company may resort to the law of contract in an attempt to do, so provided that the contractual conduct is engaged in in a way that complies with statutory requirements intended to ensure investor protection and fair dealing. In the case of an off-market bid, extension of the "offer period" (that is, according to the definition in s.9, "the period for which offers under the bid remain open") is dealt with in the present ss.650A, 650C and 650D: " 650A General