Keybridge Capital Limited v WAM Active Limited

1. The appellant pay the respondent's costs of and incidental to the appeal on an indemnity basis. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THE COURT 1 On 12 December 2023 we published our reasons in this appeal. See Keybridge Capital Limited v WAM Active Limited [2023] FCAFC 194. 2 We ordered that the appeal be dismissed, and also directed that the parties file written submissions about costs, which they duly did. We also said that we would determine the question on the papers. 3 Regrettably, the matter was overlooked, which resulted in some delay. 4 We have now considered the parties' written submissions about costs, and having done so we are of the clear view that the grounds of appeal were sufficiently meritless to warrant, on accepted authority, the making of an order that the respondent's costs of and incidental to the appeal be paid on an indemnity basis. 5 The relevant legal principles were not disputed. The cases say that there may be a basis to depart from the ordinary position (an award of party/party costs to the successful party) and award costs on an indemnity basis if the commencement or continuation of a proceeding was, among other things, without substance, groundless, fanciful or so weak as to be futile; or where the moving party, properly advised, should have known that it had no chance of success. See generally Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 at 230-234 (Sheppard J). 6 The gist of the appeal was that the learned primary judge had erred in concluding that the power to change the venue of a general meeting from an in-person meeting to an online meeting was not invalidly exercised by the board of WAM Active Limited (the respondent) on 16 February 2022. Keybridge Capital Limited (the appellant) had called the general meeting pursuant to s 249F of the Corporations Act 2001 (Cth) to propose resolutions for the appointment of six individuals as directors of the respondent (referred to in the reasons as the Keybridge resolutions). 7 Her Honour found that the board "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 [online] meeting and [in light of COVID-19 related health concerns and restrictions in force at the time] so as to protect the health and safety of shareholders and staff", and not for "any improper purpose". See Keybridge Capital Limited v WAM Active Limited [2023] FCA 339 at [45]. 8 The appellant contended that, contrary to her Honour's finding, the change was made by the directors of the respondent for an improper purpose, being "seeking to ensure their control of the board". See reasons at [18] and [23]. 9 The appellant rightly acknowledged that it needed to show that her Honour's finding that the respondent's evidence as to its purpose in making the change was to be accepted was glaringly improbable or contrary to compelling inferences. See reasons at [22], citing Warren v Coombes (1979) 142 CLR 531 at 552 (Gibbs ACJ, Jacobs and Murphy JJ); and Fox v Percy (2003) 214 CLR 118 at 128 [29] (Gleeson CJ, Gummow and Kirby JJ). 10 The appellant also accepted that if it failed to do so, each of the other grounds contained in the notice of appeal fell away. See reasons at [31]. 11 The contention that her Honour's finding was glaringly improbable or contrary to compelling inferences, with respect, was always bound to fail because "it was never explained how the Keybridge resolutions would have enjoyed any better prospect of being passed at a meeting held in-person, rather than an online meeting." See reasons at [24]. 12 Each of the appellant's other contentions were equally meritless in any event, for reasons we explained at [25]-[27], and at [30(a)-(d)] of the reasons. 13 In those circumstances, in our view, this is a plain case for the awarding of indemnity costs, and we will make an order accordingly. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices O'Callaghan, Halley and O'Sullivan.