Keybridge Capital Limited v WAM Active Limited

Facts 2 WAM Active is a public company listed on the Australian Securities Exchange (ASX). At all relevant times, Keybridge held at least 5% of the voting shares in WAM Active; Keybridge calculated its shareholding at 7.2% of the issued share capital in WAM Active. 3 On 7 February 2022, Keybridge issued an ASX announcement stating its intention to make a conditional off-market takeover bid for WAM Active (the Proposed Bid). That same day, WAM Active wrote to Keybridge and issued an ASX announcement stating that it "does not consider that the Proposed Bid is genuine". 4 On 14 February 2022, Keybridge's solicitors sent a notice titled "Notice of Meeting & Explanatory Statement" calling a meeting of the company under s 249F of the Corporations Act to each member of WAM Active recorded on the WAM Active Share Registry as at 19 January 2022 (the Keybridge Notice). Keybridge also sent the Keybridge Notice to each director of WAM Active, WAM Active's registered office, WAM Active's auditor, and the ASX. 5 The Keybridge Notice gave notice that a general meeting of WAM Active would be held at 10.00 am on 17 March 2022 at Level 7, 370 St Kilda Road, Melbourne, Victoria (being an enclosed room on the rooftop of the building in which Keybridge's registered office was located) (the Melbourne Meeting). It set out proposed resolutions for the appointment of six individuals (the Keybridge Nominees) as directors of WAM Active (the Keybridge Resolutions). 6 The Keybridge Notice also enclosed proxy forms to be returned before 10.00am on 15 March 2022 by mail or hand delivery to either Keybridge's registered office in Melbourne, or WAM Active's registered office in Sydney. 7 Keybridge sought to conduct the Melbourne Meeting in person on the basis that WAM Active's general meetings were held in person prior to the COVID-19 pandemic in 2020, and that by March 2022, the spread and impact of COVID-19 had diminished and few Australian rules regarding travel and gathering restrictions remained. Mr Bolton, the Managing Director of Keybridge, understood that an ASIC Class Order providing for wholly virtual meetings was scheduled to expire soon after the date set for the Melbourne Meeting. Keybridge chose Melbourne as the location for the meeting as a material number of WAM Active's members were located in Melbourne and because Melbourne is a major financial capital in Australia. Keybridge did not propose to use technology to facilitate virtual participation at the Melbourne Meeting. 8 On 15 February 2022, WAM Active's board had a discussion by teleconference and decided to change the venue of the Melbourne Meeting to an online venue, so as to allow (in the board's view) as many members as possible to attend, participate and vote in the meeting called by Keybridge under s 249F. During this time, COVID-19 restrictions were still in place in Victoria (as will be discussed further below) and WAM Active's board were concerned about the health and safety of shareholders and staff attending any in-person meeting. 9 On 16 February 2022, WAM Active released an ASX announcement entitled "IGNORE defective Keybridge documents sent to you DIRECTORS DO NOT SUPPORT Keybridge's resolutions" (the 16 February WAM Active Notice). The 16 February WAM Active Notice stated that the venue of the meeting was being changed to a wholly online meeting using the "LUMI" platform to be held at 10.00 am on 17 March 2022 (the Online Meeting), citing the need to "minimise health risks created by the COVID-19 pandemic and to ensure compliance with public health orders". The 16 February WAM Active Notice enclosed an alternative proxy form issued by WAM Active. It also set out the Keybridge Resolutions, provided attendance and voting instructions, and asked members to ignore the "defective" Keybridge Notice, and instead vote at the Online Meeting online or through the "valid proxy forms". Proxies collected by WAM Active in the form it issued are referred to as the WAM Active Proxies. 10 Under the heading "IGNORE Keybridge proxy form - Keybridge's Notice is DEFECTIVE", the 16 February WAM Active Notice stated that "Keybridge's actions, including its DISINGENUOUS and FRIVOLOUS announcement of a potential proposed takeover bid for WAM Active, show a disturbing disregard for good corporate governance". The Notice made it clear that WAM Active's board did not support the Keybridge Notice and that members should ignore the Keybridge Notice: WAM Active's Board does not support any of the resolutions being proposed by Keybridge and each of them will be voting all shares under their control AGAINST all resolutions at the Meeting. We ask you to IGNORE the defective Keybridge Notice. Please refer to the Official Notice and Official Proxy Form for information regarding the Meeting and how to ensure your vote is counted. Do not complete the defective documentation provided by Keybridge. Voting on defective documentation provided by Keybridge will invalidate your vote. Vote using the proxy forms provided by WAM Active or via the online voting facility to ensure your vote is counted. 11 Jesse Hamilton (WAM Active's company secretary and Chief Financial Officer) had previously visited the venue for the Melbourne Meeting. He considered that the venue was too small to accommodate WAM Active's members, having regard to the COVID-19 situation. In the months leading up to the meeting on 17 March 2022, while COVID-19 restrictions were being relaxed, public health orders were still in effect. 12 As at 14 February 2022, when Keybridge issued the Keybridge Notice, COVID-19 related restrictions remained in force in Victoria. The restrictions in place at that time were those specified in the Guidance for the Pandemic (Movement and Gathering) Order 2022 (No 3) (Vic) (the Movement and Gathering Order), made on 10 January 2022, and the instruments referred to in that order, which included the Pandemic (Open Premises) Order 2022 (No 4) (Vic) (the Open Premises Order). That order was 39 pages long and, amongst other things, required an operator of "open premises" to maintain a system to check that those attending the premises were vaccinated or exempt, as well as requiring that those operating the "open premises" only permitted vaccinated or exempted workers to work there. Patron limits were also imposed and "COVID Check-in Marshals" were required. Dancing was only permitted at weddings. 13 The Movement and Gathering Order prohibited people from performing work outside their ordinary place of residence, and from entering, or remaining on, a "work premises" to perform work, unless they were permitted to do so under, inter alia, the Open Premises Order. People in Victoria (other than those under eight years of age, or otherwise exempted) were still required to carry masks at all times and to wear them in all indoor spaces. 14 While it was not contended by WAM Active that the restrictions then in force would have prohibited the conduct of a gathering at the Melbourne rooftop, these rules and restrictions illustrate that the pandemic was far from "over" in Victoria in February 2022. The Movement and Gathering Order was the third such set of orders in place since mid-December 2021, and the Open Premises Order was the fourth such set of orders in place since mid-December 2021. Restrictions were a moving feast. The Movement and Gathering Order was replaced by another set of orders which came into force just before midnight on 25 February 2022. That set of orders was then replaced by a fifth set of such orders, which came into force on 13 April 2022. The Open Premises Order was replaced by another set of orders which came into force on 18 February 2022, and yet another set on 13 April 2022. 15 By 10.00 am on 15 March 2022, 32 proxy forms had been returned to Keybridge in relation to the Melbourne Meeting (the Returned Keybridge Proxies). On the morning of 15 March 2022, Mr Bolton attended WAM Active's offices in Sydney and hand-delivered the Returned Keybridge Proxies to WAM Active and informed WAM Active's Chief Operating Officer by text message. 16 On 15 March 2022, WAM Active released an ASX announcement titled "Meeting update: Over 50.1% of all WAM Active shareholders have voted to SUPPORT the current Board of Directors and AGAINST the Keybridge resolutions". This ASX announcement stated that, in accordance with the 16 February WAM Active Notice, proxy forms lodged for the s 249F meeting before 10.00 am that day indicated that over 50.1% of WAM Active's members voted against the Keybridge Resolutions following confirmation of this result by Boardroom Pty Ltd (Boardroom). Boardroom was engaged by WAM Active to provide various share registry and meeting support services. 17 As part of the count of the proxies on 15 March 2022, all proxies in the bundle of Returned Keybridge Proxies, save for Keybridge's own proxy form, were disregarded. This was because those proxies were not provided by the relevant shareholder directly to either WAM or Boardroom, but were instead sent to and "warehoused" by Keybridge (in purported breach of s 250B of the Corporations Act). Keybridge disputed that the delivery of any proxy votes directly to WAM Active or Boardroom was required under the WAM Active Constitution or any applicable laws. 18 After the results of the proxies had been publicised by WAM Active, Mr Bolton emailed Mr Hamilton on the evening of 15 March 2022 to notify him that Keybridge would proceed with the Melbourne Meeting and requested a copy of any proxies received by WAM Active at its registered office in relation to the Melbourne Meeting. 19 At the Melbourne Meeting on 17 March 2022, Mr Bolton deposed to at least 32 members being present at the meeting, based on the Returned Keybridge Proxies. Individuals who physically attended the Melbourne Meeting included Simon Poidevin (the deputy chair and a non-executive director of WAM Active), Mr Bolton, John Patton (Keybridge's Company Secretary), Mr Hamilton, Martyn McCathie, at that time WAM Active's Head of Operations, and Huseyin Dervish, Finance Team Leader from Wilson Asset Management (International) Pty Limited, two of WAM Active's advisers, and an employee from Boardroom, as well as visitors. 20 Just before 10.09 am, Mr Bolton directed Mr Poidevin's attention to cl 5.5(b)(ii) of the WAM Active Constitution, which provides that if a general meeting of the company is held and the chairperson is not present within 15 minutes or is unwilling to act, the members present in person must elect one of their number to chair the meeting. Mr Bolton said that if Mr Poidevin did not open and conduct the meeting, then Mr Bolton would. Mr Poidevin opened the Melbourne Meeting at 10.09 am. 21 There was some dispute about what Mr Poidevin said at the Melbourne Meeting. Mr Bolton deposed that Mr Poidevin, after confirming that a quorum was present and that a vote would take place by poll, said words to the effect that he was "properly authorised by the board of WAM Active to attend and chair this general meeting on behalf of WAM" and that "I am now going to put each of the resolutions proposed by Keybridge to elect new directors to the vote". Mr Bolton also deposed that Mr Poidevin said that the Returned Keybridge Proxies would not be counted because they were not valid. The parties do not dispute that the Melbourne Meeting was quorate. 22 Mr Poidevin's account of what he said at the beginning of the meeting differs in several respects from Mr Bolton's account. Mr Poidevin's account, which is supported by the signed minutes of the meeting and a copy of the script from which he read, was that he said "[a]ny meeting you purport to separately hold here is invalid, however to the extent that you propose to do so, as a WAM Active director I am the Chairman". Mr Poidevin said in his affidavit that he informed the attendees that "I also need to let you know that as at the start of the meeting, none of the proposed directors is eligible to be elected" as "Keybridge has not complied with the requirements for nominating directors under the constitution". When cross-examined, Mr Poidevin's account of what he said was more limited. When invited to state what he said, Mr Poidevin did not relay all the detail included in the account he gave in his affidavit (with the benefit of his script). Nevertheless, as Mr Poidevin was not challenged on his evidence that he used his script in addressing the Melbourne Meeting, I accept his account in his affidavit as the most reliable evidence of what was said. 23 The signed minutes of the Melbourne Meeting also reflected Mr Poidevin's account of the meeting. The minutes recorded that "[t]he Chair noted that while any meeting that Keybridge purports to separately hold in Melbourne today is invalid, to the extent that Keybridge proposes to do so, as a WAM Active director and Deputy Chair of the Board, [Mr Poidevin] is the Chair of the purported meeting". The minutes also recorded that "[t]he Chair noted that, as at the start of the meeting, none of the directors proposed were presently eligible to be elected" and that the Keybridge Resolutions were not carried. The minutes of the Melbourne Meeting are signed by Mr Poidevin and dated 23 March 2022. WAM Active relied on s 251A of the Corporations Act, which provides that a minute "is evidence of the proceeding, resolution or declaration to which it relates, unless the contrary is proved". 24 In any event, the Keybridge Resolutions were then put to a vote. Boardroom collected Keybridge's votes in favour of the Keybridge Resolutions in person at 10.22 am. Mr Poidevin, as chair, voted all open proxies directed to the chair against the Keybridge Resolutions and then closed the meeting at 10.23 am or 10.24 am. The proxies which Mr Poidevin voted at the Melbourne Meeting were the WAM Active Proxies (the Returned Keybridge Proxies having been deemed invalid). 25 Mr Poidevin did not declare the results of the Melbourne Meeting and said that Boardroom would count and announce the results of the poll in due course. 26 The Online Meeting took place virtually. Mr Geoff Wilson (WAM Active's Chair) chaired the Online Meeting, which commenced at 10.02 am. Anthony Loizou, Keybridge's Legal Counsel, virtually attended the Online Meeting and voted on behalf of Keybridge in favour of the Keybridge Resolutions before attending the Melbourne Meeting at 10.17 am. Mr Wilson declared the Online Meeting closed at 10.16 am. 27 After the Melbourne and Online Meetings, WAM Active received a report from David Parkinson of Boardroom setting out the results of the polls in respect of the Keybridge Resolutions. The results of the polls conducted at the Online Meeting were announced in, and the report was attached to, an ASX announcement released by WAM Active at 1.31 pm on 17 March 2022. The ASX announcement was titled "WAM Active shareholders vote overwhelmingly with the Board and AGAINST all Keybridge resolutions". It stated that the shareholders had voted strongly against the Keybridge Resolutions. The notice went on to address the Melbourne Meeting. It described the Melbourne Meeting as "illegitimate", and said that, having been notified by Keybridge on 15 March 2022 that it would still proceed to try and hold the meeting in Melbourne: Accordingly, and to avoid future arguments and protect shareholders, a WAM Active Director, Joint Company Secretary and our share registry, Boardroom, attended the old meeting venue in Melbourne. WAM Active is pleased to note that Keybridge's inappropriate actions to try and hold its own purported meeting had no impact on the outcome. The Chairman of that purported meeting is also pleased to declare that none of the resolutions were passed. 28 Following the events of 17 March 2022, representatives of Keybridge and WAM Active exchanged correspondence whereby Keybridge sought, unsuccessfully, to have WAM Active recognise the passing of the Keybridge Resolutions and the appointment of the Keybridge Nominees to WAM Active's board. 29 By 7 April 2022, Keybridge had not progressed its takeover bid in respect of WAM Active, as it had not lodged a bidder's statement. That day, Mr Bolton advised WAM Active that Keybridge was withdrawing its Proposed Bid. On 8 April 2022, Keybridge released an ASX announcement in relation to the withdrawal of its Proposed Bid, and WAM Active released an ASX announcement in response.

Consideration 30 The decisive issues are whether the directors of WAM Active had the power to change the venue of the s 249F meeting called by Keybridge so that it took place wholly virtually and, if they did, whether they effectively exercised that power. If both those issues are determined in WAM Active's favour, as I consider they must be, then it follows that the meeting called by Keybridge exercising its rights under s 249F was the Online Meeting. Keybridge's originating application does not seek any relief in respect of the Online Meeting. Rather, it seeks declaratory relief in respect of the Melbourne Meeting. It is clear that the Keybridge Resolutions did not carry at the Online Meeting. A further, subsidiary, issue is whether what occurred at the Melbourne Meeting constituted a second general meeting. In my view, it did not. 31 There is no dispute that Keybridge was entitled to call a meeting pursuant to s 249F of the Corporations Act. Keybridge held more than 5% of the voting shares in WAM Active and was the company's largest shareholder.

The power to change the s 249F meeting to a wholly virtual meeting 32 It is not in dispute that, at the relevant time, temporary pandemic-related measures permitted companies to hold wholly virtual meetings. Pursuant to Determinations (detailed in WAM Active's submissions) made by the Minister in exercising powers under s 1362A of the Corporations Act (introduced in March 2020), and pursuant to amendments to the Corporations Act made by Sch 1 to the Treasury Laws Amendment (2021 Measures No 1) Act 2021 (Cth), companies were permitted to hold exclusively virtual shareholder (and other) meetings between 5 May 2020 and 21 March 2021, and between 14 August 2021 and 31 March 2022 (see ss 249R and 253Q as the Corporations Act stood at that time). After that date, between 1 April 2022 and 31 May 2022, listed companies could continue to hold wholly virtual meetings, subject to the company resolving that, in the opinion of directors, it would be unreasonable for the company to hold a meeting of its members wholly or partially at one or more physical venues: Australian Securities and Investments Commission, ASIC Corporations (Virtual-only Meetings) Instrument 2022/129 (2 March 2022) (moderating the effect of s 249R as it was amended from 1 April 2022). ASIC, pursuant to a media release published on 29 March 2021, adopted a "no action" stance on companies holding virtual meetings during almost the whole of the gap between the periods of time covered by the Determinations in 2021. Following the expiry of the ASIC instrument on 31 May 2022, s 249R of the Corporations Act permitted hybrid meetings and, if required or expressly permitted by the company's constitution, wholly virtual meetings. 33 As such, the general meeting called by Keybridge, to be held on 17 March 2022, was to be held during a period of time in which the Corporations Act (as it stood at the time) permitted companies to hold wholly virtual meetings, recognising the ongoing impact of the pandemic on the gathering of people for purposes of general meetings. 34 In my view, it was open to the board of WAM Active to change the venue of the meeting from the Melbourne rooftop, to a wholly online meeting. Clause 5.1(c) of the Constitution provided that the directors could postpone, cancel or "change the venue" for a general meeting. There is no basis for construing the word "venue" to limit it to a physical location, so as to preclude the directors from changing a meeting at a physical venue to a wholly online meeting. Construed objectively, cl 5.1(c) authorises the directors to change the time and place at which general meetings initially convened by any of the means stated in cl 5.1(a) are held; that includes general meetings called by a member pursuant to s 249F. Changing the time and place extends to changing a meeting to an online meeting where permitted by the Constitution or the Act (noting that cl 1.3(a) of the Constitution provides that it is to be "interpreted subject to the [Corporations] Act"). As already detailed, the Corporations Act clearly permitted general meetings of WAM Active to be held wholly virtually at the relevant time. 35 Despite submitting, in opening, that the "venue" of a meeting was a "physical concept", in closing, Keybridge accepted that, as the Corporations Act and regulations then stood, it was open to WAM Active to hold wholly virtual meetings. Counsel for Keybridge also accepted, without making any formal concession, that it was "very difficult" to argue against a construction of cl 5.1(c) of WAM Active's Constitution by which the directors were empowered to change a meeting of the members to a wholly virtual meeting. In light of that acknowledgement, the burden of Keybridge's argument was really that the power to change the venue was not validly exercised. 36 In any event, as counsel for WAM Active submitted, provisions of the Corporations Act in force at the relevant time also deemed a meeting taking place virtually to have taken place at a physical location. WAM Active referred the Court to provisions of the Corporations Act in place in February and March 2022. Compilation 113 applied from 1 January 2022 to 22 February 2022, and compilation 114 applied from 23 February 2022 to 31 March 2022. Mercifully, the relevant provisions recorded in compilation 113 were unchanged in compilation 114. 37 Section 249R concerned accessibility of meetings of members. Meetings were required to be held at a reasonable time and, if any of the company's members were entitled to physically attend the meeting, "at a reasonable location or locations" (ss 249R(1)(a)-(b)). Section 249R(1)(c) also provided that, if "virtual meeting technology is used in holding the meeting", the meeting must be held "in accordance with s 253Q". Section 249R(2) set out what constituted a reasonable time, and, for meetings using virtual meeting technology, s 249R(2)(c) referred to the time "at the place where the meeting in taken to be held under section 253QA" (emphasis added). For wholly virtual meetings, that place was deemed to be the registered office of the company (s 253QA(3)). It should also be noted that s 253Q(3) deemed all persons participating in a meeting via virtual technology to be "present in person at the meeting while so participating". 38 WAM Active relied on these provisions as deeming virtual meetings to have a physical location at which participants were deemed to be present. While, as set out above, I do not consider that cl 5.1(c) of the Constitution restricted the directors to changing the venue to another wholly physical venue, these provisions of the Corporations Act further support the conclusion that the board of WAM Active were empowered by the company's Constitution to change the location of a meeting called by a shareholder under s 249F from a physical location to a wholly virtual meeting.

Whether the power to change the venue of the general meeting was validly exercised 39 Keybridge relied on the observations of Emmett J in Central Exchange Ltd v Rivkin Financial Services Ltd [2004] FCA 1546; (2004) 213 ALR 771 (Central Exchange) at [33] where his Honour stated that (emphasis in original) the circumstances in which it will be proper for the board to postpone or change the place for a meeting called pursuant to s 249F, or to cancel such a meeting, will be limited and such powers must, of necessity, be exercised extremely sparingly so as not to frustrate the right conferred by s 249F. If the directors change the place, as well as the time, they must have some justification for doing so. The Directors cannot arbitrarily postpone or change the place for the meeting. Nevertheless, the powers exist. The question is whether they have been validly exercised in the present case. 40 Keybridge relied on the inflammatory and intemperate terms of the 16 February WAM Active Notice as revealing animus on the part of the WAM Active board towards Keybridge and its proposed resolutions. It argued that the criticisms levelled by WAM Active at Keybridge's notice and proxy form were baseless and revealed that the board acted for an improper purpose in changing the venue to a wholly virtual meeting. Keybridge also relied on the board's failure to change the meeting to a hybrid meeting - characterised as a "half-way house" - as further supporting its contention that the power was not exercised for proper purposes. Keybridge did not submit that, to the extent that any or all of the criticisms mounted by WAM Active in the 16 February WAM Active Notice were baseless, those inaccuracies rendered the change of venue notice ineffective per se; rather, the submission was put on the basis that baseless criticisms and intemperate language revealed the improper purposes of the directors and the improper use of the power to change the venue of the meeting, which rendered the change ineffective. 41 WAM Active objected to this line of argument on the basis that Keybridge had not pleaded that the power to change the venue of the meeting was exercised for an improper purpose. There is substance in WAM Active's submission that a contention of an improper purpose, held by members of the board of WAM Active, ought to be squarely pleaded; such an allegation ought not lurk, unarticulated, beneath the surface of a pleaded allegation that the change of venue was ineffective, where the particulars given do not raise such an improper purpose. Nevertheless, I am satisfied on the evidence that the board of WAM Active had good reasons for changing the venue of the s 249F meeting so that it was conducted wholly virtually, and did not change the venue arbitrarily or for an improper purpose (Central Exchange at [33]). 42 While memories may fade, it should be recalled that the meeting called for 17 March 2022 was called at a time when COVID-19-related restrictions and public health guidelines were still in force, as set out above. Victoria was still in a position when those restrictions were changing relatively frequently. From 2008 to 2019 all general meetings of WAM Active were held exclusively in Sydney. From 2020 to 2021, at the height of the pandemic, general meetings of WAM Active were held virtually. WAM Active's general meeting held on 29 November 2022 was a hybrid meeting, using the online platform and a location in Sydney. 43 The meeting, as originally called by Keybridge, did not allow at all for virtual participation (where WAM Active's previous two annual general meetings had both been conducted virtually). That was so despite the Keybridge Notice not only recognising the continued impact of the pandemic, but actively encouraging shareholders not to attend in person. The Keybridge Notice stated: As a result of the potential health risks and the Governments [sic] recommendations in response to the COVID-19 pandemic, the Company encourages all shareholders to lodge a directed proxy form prior to the meeting rather than planning on attending the meeting in person. 44 Mr Hamilton gave evidence that the board of WAM Active met informally on 15 February 2022 by teleconference and decided to change the venue to an online venue so as to allow as many shareholders as possible to attend, participate in and vote at the s 249F meeting. His evidence was that there was a concern about the safety of shareholders and staff attending any in person meeting, due to COVID-19. Mr Poidevin also gave evidence of that teleconference and stated that the decision was taken to change the venue and conduct the meeting online, as meetings had been conducted by WAM Active throughout the pandemic. Both of these witnesses were cross-examined on their accounts of that teleconference and accepted that it was not a formal board meeting. Nothing turns on this as Keybridge did not contend that a decision to change the venue of a meeting had to be taken at a minuted board meeting with formal resolutions. Mr Hamilton was challenged on his evidence that the board's discussion on 15 February 2022 leading to the change of venue included concern about COVID-19. Mr Hamilton maintained his evidence, disputing that there was no discussion of COVID-19 concerns, or that the board merely sought to thwart Keybridge's resolutions. Mr Poidevin was not cross-examined on that aspect of his account of the board's discussion on 15 February 2022, although he could not recall the details of the 15 February 2022 meeting as they related to purported defects in the Keybridge Notice. 45 I accept that the board of WAM Active determined to change the venue of the meeting to an online meeting, to allow as many shareholders as possible to attend, participate in and vote at the s 249F meeting and so as to protect the health and safety of shareholders and staff. The 16 February WAM Active Notice recorded that the company was providing for online attendance to facilitate participation by shareholders and to minimise health risks created by the pandemic. 46 The decision of the directors to proceed with a wholly virtual, and not hybrid, meeting, also does not support Keybridge's contention that the directors acted for an improper purpose. WAM Active had held both its general meetings in 2020 and 2021 wholly virtually. The fact that it held a hybrid meeting much later in 2022 (and after the expiry of the relevant temporary Determinations and the repeal of temporary amendments to the Corporations Act governing general meetings) is neither here nor there as to the directors' motivations in February 2022. There is also no basis on which to derive ill-intent from the directors' failure to change to a hybrid meeting as there is nothing to suggest that the Keybridge Resolutions would have enjoyed any better prospects at a hybrid - versus a wholly virtual - meeting. 47 The directors' exercise of the power to change the venue of the s 249F meeting to a wholly virtual meeting did not operate to "frustrate the right conferred by s 249F" (Central Exchange at [33]). The change of venue in no way undermined the statutory right of a shareholder in Keybridge's position to call a general meeting. Exactly the same resolutions were put to the Online Meeting as had been proposed by Keybridge. Moreover, the participation of shareholders was facilitated by the provision of virtual technology. 48 In my view, the inflammatory and intemperate language of the 16 February WAM Active Notice does not warrant a conclusion that the board acted for improper purposes in changing the venue. Evidence was given that the notice was reviewed by WAM Active's lawyers and issued in its form, having been reviewed by WAM Active's lawyers. Whether that advice was well-founded is not to the point. 49 As I have accepted that the board of WAM Active changed the meeting to a virtual meeting to facilitate participation by shareholders and to minimise health risks created by the pandemic, it is not strictly necessary to address the merits of WAM Active's criticisms of the Keybridge Notice. Nevertheless, as the parties addressed the alleged defects in submissions, I will deal with them briefly. 50 Counsel for WAM Active identified five defects in how Keybridge proceeded. It was suggested that it was these defects which, at least to a large degree, accounted for the criticisms levelled at the Keybridge Notice in the 16 February WAM Active Notice. 51 First, WAM Active contended that, by calling a meeting to be held wholly physically in Melbourne, Victoria, Keybridge did not call the meeting, so far as is possible, in the same way in which general meetings of WAM Active were usually called (contrary to s 249F(2)), and the meeting was not called at a "reasonable location" (contrary to s 249R(1)(b) as it stood at the time). WAM Active relied on the fact that, before the pandemic, general meetings of WAM Active were held in Sydney, New South Wales, and had never been held in Melbourne, Victoria, and had been held wholly virtually during the pandemic. 52 Section 249F(2) was in the following terms at the relevant time (and remains unchanged): 249F Calling of general meetings by members … (2) The meeting must be called in the same way - so far as is possible - in which general meetings of the company may be called. … 53 I do not accept that, by calling a meeting to be held in Melbourne, Keybridge contravened s 249F(2) just because WAM Active had previously held physical meetings in Sydney when there was no restriction in WAM Active's Constitution or the Corporations Act preventing a meeting being called in another major Australian capital city. Section 249R(1)(b) provided that: (1) A meeting of a company's members must be held: … (b) if any of the company's members is entitled to physically attend the meeting - at a reasonable location or locations; and … 54 I do not accept that the Melbourne venue was not a "reasonable location" for the purposes of s 249R(1)(b) as it stood at the time. That section requires that the physical location be a reasonable one "if any of the company's members is entitled to physically attend the meeting". The Melbourne rooftop was not an unreasonable location for members who were entitled to physically attend the meeting simply because it was not in the same city or state where meetings had been previously held, or because members may reasonably not wish to attend a physical location in another state given the state of the pandemic at the time (cf Eastone Mining Pty Ltd v Eastone Holding Pty Ltd [2019] NSWSC 1850; (2019) 142 ACSR 38 where a meeting was called to occur in Beijing). While I do not consider that the nomination of the Melbourne venue contravened s 249R(1)(b) or s 249F(2), that does not suggest that the directors of WAM Active acted for an improper purpose in changing the meeting to a wholly virtual meeting. To the extent that criticisms levelled by the 16 February WAM Active Notice derived from a view that it was not open to Keybridge to nominate the Melbourne venue, they may have been misplaced; but a misplaced criticism is not tantamount to, nor evidence of, a want of good faith or an improper purpose. It was open to WAM Active's directors to consider that the Melbourne rooftop venue was not suitable, even if that unsuitability fell short of making the location unreasonable for the purposes of s 249R(1)(b). 55 The second defect in the Keybridge Notice identified by WAM Active was what was referred to as the "warehousing" of proxies. The Keybridge Notice provided for proxies to be returned either to Keybridge or to WAM Active. WAM Active took the view that it was inappropriate for Keybridge to collect proxies before delivering them to WAM Active. Before me, WAM Active accepted that the Constitution did not preclude such warehousing, but submitted that it was reasonable for the directors to consider that the manner in which Keybridge proposed, by its notice, to handle proxies was inappropriate in light of s 250B of the Corporations Act (which provides that a proxy must be "received by the company") and the decision of Dodds-Streeton J in Bisan Ltd v Cellante [2002] VSC 430; (2002) 43 ACSR 322 (Bisan) at [44], where her Honour stated as follows regarding the handling of proxies by intermediaries: The interception of proxy appointment forms by an intermediate party who is under no fiduciary duty or other apparent obligations in relation to their safeguarding, entails an inherent exposure to the possibility of filtering or other inappropriate handling. In my opinion, it could constitute a grave defect in the electoral process in respect of any contemplated meeting. 56 The generality of the propositions stated in Bisan has since been doubted. Subsequent authorities have made it clear that s 250B of the Corporations Act does not prevent proxies being handled by any third party prior to receipt by the company. In Carson v Dynasty Metals Australia Ltd [2011] FCA 621 (Carson) at [24], Jagot J (as her Honour was then) did not accept "the proposition that proxies cannot be handled by any third party on their way from a shareholder to a company" and observed that s 250B does not contain any requirement that proxy documents be sent directly by the shareholder in question to the company: Carson at [24]. In Carson, a number of proxies had not been received directly by the company, but had been faxed to a director of the company and thereafter faxed by the director to the company. The observations of Jagot J in Carson were cited with agreement by Edelman J (as his Honour was then) in Northwest Capital Management v Westate Capital Ltd [2012] WASC 121; (2012) 264 FLR 424 (Northwest Capital Management), at [115]-[116]. Edelman J distinguished Bisan, stating that the decision is confined to the factual circumstance where a proxy is directed to a third party by both the notice of meeting and by the proxy form itself. In CellOS Software Ltd v Wong [2017] FCA 95; (2017) 118 ACSR 501 (CellOS) at [22], Middleton J was of the view that "based upon the wording of s 250B(1) and the weight of authorities, s 250B(1) does not in itself prevent proxy forms being handled by any third party prior to receipt by the company". Justice Middleton also agreed with the basis on which Edelman J confined and distinguished Bisan in Northwest Capital Management. 57 Here, the Keybridge Notice invited shareholders to deliver their proxies to either WAM Active directly, or to Keybridge. As such, this is not a case where proxies happen to have been received by a third party, before being passed on to the company. Nevertheless, it should be noted that CellOS was a case in which shareholders were instructed to return proxies to a third party, and Middleton J rejected the submission that the notice was invalid on that basis. 58 If the outcome of this case turned on whether or not the Returned Keybridge Proxies were rightly rejected, it would be necessary to reach a final view on whether they were rightly rejected by WAM Active due to having been "warehoused". As it is, I have concluded that the Online Meeting was the only valid s 249F meeting, and the issue of whether or not the Returned Keybridge Proxies were rightly rejected does not arise. 59 The only remaining relevant aspect of the "warehousing" issue is whether the criticism of the Keybridge Notice on that basis reveals a lack of good faith or improper purposes on the part of the WAM Active directors. While it is, at the very least, debateable whether the Returned Keybridge Proxies were invalid due to their having been received first by Keybridge, in my view the concerns of the board of WAM Active that the proposed "warehousing" of proxies was inappropriate is understandable in the circumstances, and criticisms of Keybridge's Notice on that basis are not suggestive of an improper purpose on the part of WAM Active's directors in changing the meeting to a virtual meeting. 60 The third suggested defect was Keybridge's use of an out of date register of members. This criticism was overblown. While the evidence before me was not comprehensive, it appears that Keybridge used a register provided to it by WAM Active. On the same day as it issued its s 249F notice, Keybridge asked WAM Active by email to "please advise of any additional shareholders on your register since you provided the register to us, so that we can duly notify those new shareholders of the meeting". WAM Active accepted that it did not reply to Keybridge's email or provide an updated share registry as it issued the 16 February WAM Active Notice. 61 The fourth defect raised was the fettering of the chair's discretion as to how to vote open proxies. The Keybridge Notice stated that, where the appointed proxy was the chair of the meeting "the Chair will vote undirected proxies in favour of all resolutions". Clause 5.5(a) of the Constitution provides that general meetings are to be presided over by the elected chairperson of the directors or, "in his absence, the deputy chairperson". As such, Keybridge had no right to determine who would be the chair of the s 249F meeting and the terms of its proxy form did purport to fetter the chair's discretion as to how to vote open proxies. Keybridge submitted that the wording was not inappropriate as WAM Active included similar wording in respect of other general meetings. That may be so, but is not to the point given that those other meetings were routine general meetings considering, it is safe to assume, resolutions proposed under the direction of the incumbent board, one of whose number would be the chair voting such proxies. 62 The fifth identified defect was that cl 6.2 of the Constitution required, relevantly, that a person nominated for election to the board have "given the Company notice under section 249N of the Act". The technical point taken by WAM Active was that no notice was formally given under that section. The further objection - that no information was provided about the candidates for election to the board - has no foothold in the legislation or the Constitution. 63 While some of the defects identified by WAM Active were questionable, I am not satisfied that either the misplaced criticisms, or the intemperate language in which the 16 February WAM Active Notice was cast, reveal that the directors changed the venue of the meeting for an improper purpose. As I have noted, evidence was given as to the reasons for the change of venue, which I accept. Moreover, the terms of the 16 February WAM Active Notice were reviewed by WAM Active's professional advisers, including its lawyers.

The Online Meeting was the only s 249F meeting 64 It follows from the foregoing that, in my view, there was only one s 249F meeting held on 17 March 2022. It was the Online Meeting. The meeting was held on the same date as called by Keybridge and at the same time. It was simply changed to being an online meeting. The Online Meeting was not a second, general meeting; nor was there a "hybrid" meeting occurring partly in Melbourne and partly online. The 16 February WAM Active Notice was clear: the venue was being changed to an entirely online meeting. Keybridge took no issue with the change of venue until 15 March 2022, after WAM Active announced to the ASX that over 50.1% of WAM Active's shareholders had (via proxy) already voted against the Keybridge Resolutions. 65 It follows from my conclusion that the directors of WAM Active validly exercised their power to change the venue of the s 249F meeting so that it occurred wholly virtually, that the meeting that occurred in Melbourne was not a general meeting called under s 249F. It did not gain such status by Mr Poidevin proceeding to conduct the meeting in an orderly way, effectively under protest, even if he relied on his status as deputy chair to claim the right to chair the meeting. Mr Poidevin's remarks made it clear that the meeting was invalid but that, insofar as any separate meeting was being held, he would chair it. These remarks were, in my view, sufficient to avoid WAM Active being taken to have accepted the validity of what was occurring in Melbourne as a general meeting of the company. 66 I have accepted the evidence of Mr Poidevin as to the remarks he made before the meeting commenced, as his evidence was supported by the script he made, which he read out, by the evidence of Mr Hamilton and by the minutes. While Mr Poidevin's evidence was contradicted by the evidence of Mr Bolton, Mr Bolton does not say he made any notes of the meeting and accordingly was relying on his recollection alone. As Mr Bolton was not cross-examined, I accept that his affidavit accurately states his recollection of what was said. Nevertheless, I prefer Mr Poidevin's evidence as it was supported by his script and Mr Hamilton's account, and accords with the signed minutes of the meeting. 67 If, contrary to my view, the change of venue was ineffective, then the s 249F meeting called by Keybridge was constituted by the Melbourne Meeting. In that event, the question arises as to whether or not the poll in relation to the Keybridge Resolutions proposed at the Melbourne Meeting should be calculated by including or excluding the WAM Active Proxies. As was announced by WAM Active to the ASX on 15 March 2022, those proxies resulted in more than 50.1% of WAM Active shareholders having voted against the Keybridge Resolutions. 68 If the change of venue was ineffective and the s 249F meeting was the Melbourne Meeting, the WAM Active Proxies were not "spent" by having been voted at the Online Meeting. The Constitution provides, by cl 5.10(f) that "[a]n instrument appointing a proxy must be in the form which accompanies the relevant notice of meeting or in such other form as the Directors accept". Accordingly, even accepting that WAM Active Proxies were not in "the form" accompanying the Keybridge Notice calling the Melbourne Meeting, it was open to the directors to accept the proxies for the purposes of the Melbourne Meeting. Mr Poidevin accepted the WAM Active Proxies, although the assessment of which proxies were and were not valid was undertaken by Boardroom and WAM Active's advisers. The 16 February WAM Active Notice, which attached its proxy form, clearly stated each of the six resolutions in question (ie, the Keybridge Resolutions). There was no room for confusion on the part of shareholders as to the resolutions on which they were voting. 69 The WAM Active Proxy form clearly identified the relevant meeting as the general meeting being held on 17 March 2022 at which the Keybridge Resolutions were to be put. That is sufficient, on the facts of this case, to mean that the proxy forms satisfied s 250A(1)(d) even through the form also stated that the meeting was going to be conducted virtually. Accordingly, in my view, even if the Melbourne Meeting was validly held and conducted, the Keybridge Resolutions failed to pass. It also follows that the inclusion of these proxies in assessing the outcome of the Keybridge Resolutions, insofar as they were put to the Melbourne Meeting, does not depend on the proposition that there was a hybrid meeting conducted both in Melbourne and online. Nor does the outcome depend on whether the Returned Keybridge Proxies were rightly rejected. 70 It remains to mention some minor issues. 71 Keybridge complained that WAM Active had failed to publish the result of the poll conducted at the Melbourne Meeting as required pursuant to cl 5.7(i) of the Constitution. As I have concluded that the Melbourne Meeting was not a validly constituted general meeting, nothing turns on this. Even if the meeting was valid, any failure to follow the relevant process does not change the result of the meeting. 72 Keybridge's evidence drew attention to the fact that the number of votes cast on 17 March 2022 pursuant to proxies far exceeded the proportion of shares voted at previous general meetings by a significant margin. Mr Bolton observed that he was not aware of any explanation for the increase in the votes cast and abstained at the Online Meeting. While the increase in shares voted is striking, as WAM Active submitted, the lack of support for the Keybridge Resolutions is unsurprising in circumstances where Keybridge had not distributed any information about the credentials of the Keybridge Nominees, WAM Active's board did not support the resolutions, and the resolutions were proposed when Keybridge had announced its Proposed Bid for WAM Active with certain defeating conditions. 73 I also do not consider that the present matter warrants drawing any adverse Jones v Dunkel inferences. While counsel for Keybridge made much of Mr Poidevin being the only director to "front the witness box", it is hardly surprising that not all directors provided affidavits covering the same ground, when Keybridge had not clearly articulated a contention that the directors acted for improper purposes in changing the venue of the s 249F meeting. 74 Keybridge's originating application will be dismissed with costs. I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Button.