Dourado Resources Limited v Aurium Resources Limited

REASONS FOR JUDGMENT 1 On 2 September 2010, the plaintiff, Dourado Resources Limited, lodged an off‑market takeover bid for the defendant, Aurium Resources Limited. On the same date, the plaintiff sent a copy of its bidder's statement to the defendant. 2 Section 625(3) of the Corporations Act 2001 (Cth) (the Act) provides that: (3) If: (a) the consideration offered is or includes securities; and (b) the offer or the bidder's statement states or implies that the securities are to be quoted on a financial market (whether in Australia or elsewhere); the following rules apply: (c) the offer is subject to a condition that: (i) an application for admission to quotation will be made within 7 days after the start of the bid period; and (ii) permission for admission to quotation will be granted no later than 7 days after the end of the bid period; (d) the offer may not be freed from this condition. 3 Section 9 of the Act provides that the "bid period" commences when the bidder's statement is given to the takeover target. In this case, therefore, the bid period commenced on 2 September 2010. 4 However, the plaintiff did not apply to the Australian Stock Exchange (ASX) for the quotation of the shares referred to in the bidder's statement by 9 September 2010 - being seven days from 2 September 2010. Instead, the plaintiff made the application to the ASX for the quotation of the shares on 16 September 2010, which was the date of the commencement of the offer period. 5 The plaintiff now seeks an order under s 1325A(2)(b)(i) of the Act extending the time for compliance with s 625(3)(c)(i) to 16 September 2010 - being, as I have said, the date upon which the application to the ASX for the quotation of the shares was actually made by the plaintiff. 6 Mr David Grant Sanders is a solicitor employed by the solicitors advising the plaintiff in relation to this takeover bid. Mr Sanders deposed that he had made an error in the advice that he gave the plaintiff in relation to the making of the application under s 625(3) of the Act. Mr Sanders said that he misconstrued the legal position and was of the view that the share quotation application had to be made to the ASX within seven days of the commencement of the offer period, rather than within seven days of the commencement of the bid period. 7 The Court has the power under s 1325A(2)(b)(i), in these circumstances, to make orders of the kind which are sought by the plaintiff. The Court has, in a number of recent cases, exercised that power in similar circumstances to those prevailing in this case. (See, Re Grain Corp Ltd [2008] FCA 996; Re McMahon Holdings Ltd [2008] FCA 1079; and Re Venturex Resources Ltd (2009) 177 FCR 391.) 8 I observe, in passing, that this application was heard at the same time as application WAD 305 of 2010 because the same error was made by Mr Sanders in relation to the takeover bid, the subject of that application. (See, FE Limited v Padbury Mining Limited [2010] FCA 1207.) 9 I am of the view that the orders sought by the plaintiff should be made. 10 In my view, the error which was made by Mr Sanders was an honest mistake. 11 Further, on being informed by an officer from the Australian Securities and Investments Commission (the Commission) on 7 October 2010 of the plaintiff's failure to comply with s 625(3)(c)(i) of the Act, the plaintiff acted expeditiously to regularise the position, by commencing this application. 12 In addition, if the orders were not made, the acceptances of the takeover bid, which have been received by the plaintiff, would likely be rendered void, and the interests of third parties would thereby be prejudiced. 13 These factors weigh in favour of the Court exercising its discretion in favour of making the orders. 14 Mr Ogilvie, who appeared on behalf of the defendant, did not oppose the making of the orders. 15 Further, this application was also served on the Commission. The Commission has not appeared today, but did inform the Court that it neither consented to, nor opposed, the making of the orders. 16 In those circumstances, I will make the orders sought by the plaintiff. I note that the plaintiff will pay the defendant's costs of this application, including the costs of Mr Ogilvie's appearance. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.