Lion Nathan Australia Pty Ltd (ACN 008 596 370) v Coopers Brewery Ltd [2005] FCA 1426 | Case summary

REASONS FOR JUDGMENT 1 On 1 September 2005, the plaintiff, Lion Nathan Australia Pty Limited ("Lion Nathan Australia") announced its intention to make offers to all shareholders in Coopers Brewery Ltd ("Coopers") (an unlisted public company) to purchase all of the issued shares in the capital of Coopers for $260 per share. On 21 September 2005 Coopers sent a notice to its shareholders convening an Extraordinary General Meeting of its shareholders for 20 October 2005 at which shareholders will be asked to consider a resolution amending the constitution of Coopers in a number of respects. In proceeding VID 1196 of 2005 Lion Nathan Australia seeks declarations in relation to the effect of the amendments proposed to be made to the constitution of Coopers and interlocutory injunctive relief restraining Coopers from taking any further steps pursuant to the notice of meeting including conducting the meeting until the hearing and determination of the proceeding. 2 In proceeding VID 1195 of 2005 the plaintiff, ACN 116 149 092 Pty Ltd ("the Lion Nathan ACN company") whose issued share capital is ultimately beneficially owned by Lion Nathan Limited, the parent company of Lion Nathan Australia, seeks orders that it be registered as the holder of 500 shares in the capital of Coopers which have been transferred to it by Mr Barry Schrapel, presently a member on the share register of Coopers. In that proceeding the Lion Nathan ACN company also seeks injunctive relief restraining Coopers from taking any further steps pursuant to the notice of meeting including conducting the meeting until the hearing and determination of the proceeding. 3 The proceedings arise because of provisions in the Articles of Association of Coopers, which contain pre‑emptive rights and restrictive rights in relation to the sale and transfer of shares in Coopers. In short, the Articles provide: · A member proposing to transfer any shares must give notice to Coopers of its desire to transfer the shares and of the sum it fixes as the fair value of the share (Art 40). · The directors are to endeavour to find a member or a "member's relative" (as defined) who is willing to purchase the shares and if such a member is found the transferor is bound to transfer the shares at the price fixed by the transferor as the fair value or the fair value fixed by the auditor as the case may be (Art 41). · If there is a dispute as to the fair value of a share, the auditor shall certify the fair value (Art 42). · If there is a change in control in any member that member is deemed to have offered to sell its shares to the other members (Art 44). · If the directors cannot find a member or a member's relative willing to purchase the shares offered by the transferor then the shares must be offered to Australian Mutual Provident Society and to any other trustee of a superannuation fund in which more than 10% of the employees of Coopers are members (Art 46). · If the institutions (AMP Society and the superannuation funds) do not purchase all the shares within a twenty‑eight day period Coopers must offer the remaining shares to Lion Nathan Australia at a price equal to the price at which the shares were offered to the members (Art 49). · Within twenty‑eight days of notification Lion Nathan Australia must notify Coopers of the number of shares it wishes to purchase and a failure by it to do so is deemed to be a notice of an election not to purchase any shares (Arts 50 and 51). · If Coopers does not find any person willing to purchase the shares then the transferor can sell the shares to any person at a price no lower than the price earlier offered (Art 52). 4 These pre‑emptive right provisions do not apply in the circumstances set out in Art 53 which provides: "Any share may be transferred by a member to any Member's relative of that member and any share of a deceased member may be transferred by the executors or administrators of that deceased member to any Member's relative of that deceased member and shares standing in the name of the trustees of the will of any deceased member may be transferred on any change of the trustee to the trustees for the time being of such will and the restrictions in Article 38 shall not apply to any transfer authorised by this Article." 5 The expression "member's relative" is defined in Art 2(p) in the following terms: "'Members relative' means, in relation to a member who is a natural person:- (i) the spouse of a member … (ii) … (iii) … (iv) a company which acts as trustee of a trust of which such member is the sole beneficiary or of a discretionary trust which in the opinion of the Directors was created wholly for the benefit of that person or a family group of which that person is a member; or (v) a company in which such member or persons referred to in (i) to (iv) above have a relevant interest in all of the voting shares and any other class of security of such company. 'Members relative' means, in relation to a member who is a body corporate:- …" 6 Articles 54 and 143 are also relevant. They provide: "54. The Directors may refuse to register any transfer or [sic] a share:- (a) where the Company has a lien on the share; or (b) where the Directors are of the opinion that it is not desirable to admit the proposed transferee to membership; but this paragraph shall not apply where the proposed transferee is already a member nor to a transfer made pursuant to Article 53 or Articles 46‑51 inclusive. The Directors must refuse to register any transfer for a share where, in accordance with Article 143, that person may be required to retire as a member. … 143. No member, shall without the consent in writing of the Directors be interested as a shareholder, partner, director, manager, lender or otherwise in any concern carrying on any business in competition with the Company, or having interests inconsistent with those of the Company, and if it shall be proved to the satisfaction of the majority of the Directors that any member has committed a breach of this clause they may serve him with notice in writing requiring him to retire from or otherwise determine his interest in such concern and stating that in the event of non‑compliance with such requisition within twenty‑eight days his shares will be liable for sale by the Company in like manner as if the offending member had given notice of desire or intention to transfer his share in manner prescribed by Article 40. For the purposes of this Article The South Australian Brewing Company Pty Limited, Lion Nathan Australia Pty Limited (ACN 008 596 370) and any related body corporate of Lion Nathan Australia Pty Limited (the 'Lion Nathan Companies') shall be deemed not to be a concern carrying on business in competition with the Company. Any interest in the Lion Nathan Companies in their businesses or any part of their businesses shall be deemed not to be inconsistent with the interests of the Company and Article 143 does not apply to or in respect of any interest which the Lion Nathan Companies may have in any other concern or business. For the purpose of this Article a member shall be considered to be carrying on a business in competition if any entity that directly or indirectly controls or influences that member (or is under common control or influence with a person that controls or influences that member) carries on a business in competition." 7 As can be seen from the Articles, Lion Nathan Australia has what has been called a third tier pre‑emptive right to acquire shares in Coopers if shareholders wish to sell their shares. The prohibition on a competitor of Coopers acquiring shares in Coopers without the consent in writing of the directors (provided for in Art 143) does not apply to Lion Nathan Australia and, at the present time, the discretion which directors have under Art 54 to refuse to register a transfer of shares does not apply to a transfer to Lion Nathan Australia. 8 The provisions in the Articles which create and allow for the opportunity for Lion Nathan Australia to acquire shares in Coopers are protected and entrenched by cll 6, 7 and 8 of Coopers' Memorandum of Association which are in the following terms: "6. A special resolution:- (a) altering or omitting Articles 38 to 54 (inclusive) or 143 of the Articles of Association of the Company; or (b) purporting to amend or delete an existing article or inset [sic] a new article, which is inconsistent with the rights granted to Lion Nathan Australia Pty Limited (ACN 008 596 370); does not have any effect unless and until the consent of Lion Nathan Australia Pty Limited (ACN 008 596 370) is obtained. 7. A special resolution altering or omitting regulation 6 of the Memorandum of Association of the Company, does not have any effect unless and until the consent of Lion Nathan Australia Pty Limited (ACN 008 596 370) is obtained. 8. Regulations 6 and 7 of this Memorandum of Association will cease to have effect on a Change in Control (as that term is defined in Article 44 of the Articles of Association as at the date of adoption of this Regulation) of Lion Nathan Australia Pty Limited (ACN 008 596 370) or if Lion Nathan Australia Pty Limited (ACN 008 596 370) and its related bodies corporate cease to be substantial brewers of beer." 9 The clauses of the Memorandum of Association of Coopers and the Articles to which I have referred relating to Lion Nathan Australia have been included in the Memorandum of Association and Articles since around March 1995 consequent upon an agreement reached between Coopers and Lion Nathan Australia. 10 In or about April 1998 Kirin Brewery Company Limited ("Kirin") acquired an interest in approximately 45% of the issued share capital of Lion Nathan Limited the parent company of Lion Nathan Australia. Coopers claimed that the effect of this acquisition operated as a "change in control" of Lion Nathan Australia within the meaning of that expression as found in cl 8 of Coopers' Memorandum of Association and Art 44. 11 In March 2002 Coopers filed a summons in the Supreme Court of South Australia against Lion Nathan Australia seeking a declaration: (a) that there had been a change in control of Lion Nathan Australia for the purposes of cl 8 of Coopers' Memorandum of Association; (b) that cll 6 and 7 of the Memorandum of Association of Coopers had ceased to have effect by reason of there having been a change in control of Lion Nathan Australia. That summons came on for hearing before Perry J in August 2005 and on 2 September 2005, Perry J found that in April 1998 Kirin acquired a relevant interest in more than 40% of the issued share capital of Lion Nathan Limited within the meaning of Art 44 of Coopers' Articles and that there had been a change in control of Lion Nathan Australia within the meaning of cl 8 of Coopers' Memorandum of Association. Perry J declared that there had been a change in control of Lion Nathan Australia for the purpose of cl 8 of Coopers' Memorandum of Association and that cll 6 and 7 of the Memorandum of Association had ceased to have effect by reason of the change in control of Lion Nathan Australia. Lion Nathan Australia has appealed against that decision and the appeal was fixed for hearing on 10 October 2005. 12 In its media release on 1 September 2005 announcing that it intended to make a takeover offer for all the shares in Coopers at $260 per share in cash Lion Nathan Australia said that its offer represented: (a) a 478% premium to the price of the buy‑back conducted by Coopers of $45.01 per share in 2003; (b) a 416% to 557% premium to the value of Coopers as assessed by the independent expert KPMG in a report prepared in relation to the buy‑back conducted by Coopers in 2003. 13 On 21 September 2005 the Chairman of Coopers sent a letter to the shareholders in Coopers informing them that Coopers had received a requisition from shareholders representing more than 5% of Coopers' capital requiring the Board to call a meeting of shareholders to consider, and if thought appropriate, approve a modification to the constitution of Coopers. The letter stated that the resolution proposed in the requisition sought to remove "the references to Lion Nathan Australia Pty Limited". There was enclosed with the letter an Explanatory Memorandum which, according to the letter, provided "the possible effects of passing or not passing the resolution". In substance, the resolution proposed: (a) The deletion of cll 6, 7 and 8 of the Memorandum of Association in their entirety. (b) The deletion of Arts 49, 50 and 51 in their entirety. (c) The amendment of Art 143 by deleting the words: "For the purposes of this Article The South Australian Brewing Company Pty Limited, Lion Nathan Australia Pty Limited (ACN 008 596 370) and any related body corporate of Lion Nathan Australia Pty Limited (the 'Lion Nathan Companies') shall be deemed not to be carrying on business in competition with the Company. Any interest in the Lion Nathan Companies in their businesses or any part of their businesses shall be deemed not to be inconsistent with the interests of the Company and Article 143 does not apply to or in respect of any interest which the Lion Nathan Companies may have in any other concern or business." The effect of this deletion is to remove the exemption of Lion Nathan Australia from the prohibition on a member carrying on a business in competition with Coopers. (d) A number of consequential amendments which provided for the deletion of article numbers and the renumbering of Articles consequent upon the deletions to which I have referred. 14 A copy of the Explanatory Memorandum is Schedule "A" to these reasons. Section 3.1 which is headed "Introduction" is not the subject of any specific complaint by Lion Nathan Australia. 15 Section 3.2 headed "Requisition of Meeting" is the subject of complaint and is in the following terms: "On 8 September 2005 the Company received a requisition from members holding more than 5% of the Company requiring the board to call a general meeting in order to propose a resolution which, if passed, would have the effect of deleting all references to Lion Nathan from the Constitution. A copy of that resolution is set out in the accompanying notice of meeting." 16 Section 3.3 headed "Lion Nathan Takeover Offer" summarises a number of conditions to which Lion Nathan Australia's takeover offer is subject. Complaint is made about the condition entitled "various prescribed occurrences". 17 Section 3.4 is headed "If the Proposed Resolution is Passed" and complaint is made about the following part of that section: "If the proposed resolution is passed the following implications need to be considered by all members: · Members who wish to sell to Lion Nathan under the Lion Nathan Offer would only be able to do so with the consent of the directors of the Company or by amending the constitution because, being a competitor, Lion Nathan would be otherwise prohibited from acquiring shares. At this time the directors do not intend to provide their consent for Lion Nathan to acquire shares in the present circumstances. · Lion Nathan may seek the permission of ASIC to not make takeover offers, or if the offers have been made, to withdraw the offers, on the basis that a number of conditions to the Lion Nathan Offer would not or could not be satisfied. If this was to occur members who wished to accept the Lion Nathan Offer would not be able to do so. · Lion Nathan's third tier pre‑emptive rights would be removed. …" 18 Section 3.6 is headed "Intention of Directors" and complaint is made about the statement that the directors have included in this Explanatory Memorandum: "… the information which they consider should be taken into account by members when deciding whether or not to vote in favour of the proposed resolution …" 19 Lion Nathan Australia also complains that a number of matters have been omitted from the Explanatory Memorandum which ought to have been included in it for the benefit of Coopers' shareholders. 20 There are a number of background matters which are relevant to Lion Nathan Australia's complaints. In September 2003 Coopers decided to implement a buy‑back of up to 10% of its issued capital at the buy‑back price of $45.01 per share. That price was fixed by KPMG as the fair market value, in substance, of all the shares in Coopers. That price was the mid‑point of KPMG's valuation range of $39.59 to $50.43 per share. 21 On 21 July 2005 Lion Nathan Australia wrote to Coopers confirming that it was willing either to make a cash offer to acquire all the shares in Coopers for $260 per share or to enter into a 50/50 joint venture proposal with Coopers in respect of which it would be willing to value Coopers at $305 million on an enterprise value basis, representing $220 per share. Coopers replied to this letter on 5 August 2005 noting that it was unlikely to recommend the takeover proposal and rejecting the joint venture proposal for a number of reasons which included the view which Coopers said was "supported by preliminary external advice" that the enterprise value proposed by Lion Nathan Australia significantly undervalued Coopers' business. 22 On 2 September 2005 Coopers wrote a letter to its shareholders in which it stated that: "In due course you will receive a formal offer document from Lion Nathan (a Bidders Statement) and a formal response from the Board of Coopers (a Target Statement). Until you receive the Target Statement we advise that you take no action in relation to the offer or any documents that you receive from Lion Nathan or discuss the offer with Lion Nathan." (Emphasis added) 23 On 6 September 2005, after Lion Nathan Australia announced its takeover offer, Coopers put out a media release in which it noted that the board of Coopers had unanimously recommended that shareholders reject the takeover offer from Lion Nathan Australia and noted that: "A statement from the Coopers Board said the detailed reasons for their recommendation to reject will be set out in the Company's target statement". 24 Lion Nathan Australia makes the following complaints about the Explanatory Memorandum: (a) Section 3.2 states that the proposed modifications will have the effect of deleting all references to Lion Nathan Australia in the constitution of Coopers. Lion Nathan Australia contends that the intended effect of the proposed modifications is not simply to remove the references to Lion Nathan Australia in the constitution but rather to prohibit Lion Nathan Australia from being a member of Coopers and thereby prevent any member of Coopers from selling shares to Lion Nathan Australia and to provide for the expropriation and sale by Coopers of any shares held by Lion Nathan Australia if it does not comply with a request from the directors to cease its competing business; (b) Section 3.3 states that the Lion Nathan Australia proposed offer is subject to conditions which include "various prescribed occurrences". Lion Nathan Australia contends that the Explanatory Memorandum does not state, as is the fact, that one of the prescribed occurrences is any change to the Articles of Coopers; (c) Section 3.4 asserts that the effect of the proposed modifications is that any member of Coopers who wishes to sell shares to Lion Nathan Australia will only be able to do so with the consent of the directors of Coopers or by virtue of some further amendment of the constitution of Coopers. Lion Nathan Australia contends that the proposed modifications will increase the restrictions on the transfer of shares held by members of Coopers by eliminating Lion Nathan Australia as a possible transferee and that by virtue of s 140(2) of the Corporations Act 2001 (Cth) will not be binding on any member of Coopers at the time that it is passed unless that member has consented in writing to be so bound. Lion Nathan Australia contends that any member of Coopers who has not agreed in writing to be bound by the proposed modifications will not be bound thereby and will continue to be entitled to sell its shares to Lion Nathan Australia without the consent of the directors or further amendment of the Constitution; (d) Section 3.4 states that if the resolution is passed members who wish to accept the takeover offer will not be able to do so if Lion Nathan Australia seeks the permission of the Australian Securities and Investments Commission ("ASIC") not to make its proposed offers on the basis that a number of conditions to the offer will not, or cannot, be satisfied. Lion Nathan Australia contends that if the resolution is passed a condition to which the proposed offers are to be subject (a change to the Articles) will be fulfilled so that Lion Nathan Australia will not be bound to purchase any shares in Coopers from members who accept one of its offers regardless of the result of any such application to ASIC; (e) The second bullet point in section 3.5 describes any exercise of Lion Nathan Australia's third tier pre‑emptive rights as "purported" which suggests there is something untoward or improper in Lion Nathan Australia exercising its third tier pre‑emptive rights; (f) Lion Nathan Australia contends that Coopers and its directors are under a duty to include in the Explanatory Memorandum all the information material to the decision of a shareholder whether or not to vote in favour of the resolution and that they have impliedly represented to the shareholders that: (i) the Explanatory Memorandum sets out all the information material to the decision of a shareholder whether or not to vote in favour of the resolution, and that (ii) the only implication of the approval of the proposed modifications the shareholders need to consider are those specified in section 3.4. Lion Nathan Australia contends that the following information is material to the decision of a shareholder whether or not to vote in favour of the resolution, that this information is known to Coopers and its directors and that it is not disclosed in the Explanatory Memorandum: A an offer of $260 per share is a material premium to the buy‑back price of $45.01 and the trading price of $16.27 or less in the 3.5 years preceding the buy‑back; B an offer of $260 share represents a multiple of 19.4 times Coopers' 2004 earnings before interest, tax and amortisation; C the recent trading history of Coopers' shares including prices nominated by proposing transferors, prices for which shares were actually purchased and the identity of purchasers; D the material interests of directors of Coopers in the proposed modifications including the respective shareholdings of each director, the number of shares purchased by each director in the last five years, the price for which such shares were purchased and the current intentions of each director in respect of purchasing any further shares in Coopers. (g) the Explanatory Memorandum does not disclose the following information material to the decision of a shareholder whether or not to vote in favour of the resolution: (i) the opinions of the directors about the current enterprise value of Coopers as a whole, and on a per share basis, and the reasons for that opinion; (ii) the opinions of the directors about the fair value of shares in Coopers which shareholders would be likely to receive under the Articles if a proposed purchaser elected to have fair value determined by Coopers' auditors; (iii) any valuation reports relating to the current enterprise value of Coopers and relating to the fair value of shares in Coopers; (iv) the reason for the directors' decision to recommend that shareholders should reject Lion Nathan Australia's proposed offers; (v) all of the information which shareholders in Coopers would reasonably require to make an informed assessment whether to accept Lion Nathan Australia's proposed offers; (h) the Explanatory Memorandum does not state that if the proposed modifications are passed the restrictions on transfer of Coopers shares will be further increased adversely affecting the liquidity of those shares and that the prospect of members selling their shares for a price around $260 per share either now or at sometime in the foreseeable future will be very substantially reduced. 25 The matters of which Lion Nathan Australia complains are alleged by Lion Nathan Australia to result in Coopers engaging in conduct in trade or in commerce or in relation to a financial product (shares in Coopers) that is misleading or deceptive in contravention of s 1041H(1) of the Corporations Act and/or s 52 of the Trade Practices Act 1974 (Cth). 26 In the course of the hearing Coopers sought to meet a number of Lion Nathan Australia's complaints by proffering a further Explanatory Memorandum, a copy of which is Sch Bto thesereasons. Coopers submitted that what was contained in the further Explanatory Memorandum contained such further information as the shareholders might be entitled to and that the further information sought by Lion Nathan Australia to be included in the Explanatory Memorandum was not warranted. 27 Coopers submitted that notwithstanding that the effect of the passing of the resolution in a commercial sense was to end the takeover offer, the shareholders in Coopers should not have as much information available to them as if the takeover offer was before them. It was said that the two matters of the resolution and the takeover offer should not be conflated. Coopers submitted that the purpose of the resolution was to carry through the intention found in cll 6 to 8 of Coopers' Memorandum of Association so that, as there had been a change in control of Lion Nathan Australia since 1995, the right reserved to remove the favourable treatment given to Lion Nathan Australia was being exercised. 28 Coopers submitted that the background leading to the amendment of the Articles in March 1995 demonstrated that Lion Nathan Australia's position in the Articles of Coopers was that of a gatekeeper rather than as a preferred purchaser with a pre‑emptive right. 29 Coopers submitted that Lion Nathan Australia was seeking to preclude the shareholders exercising their right to consider a resolution to amend the constitution of Coopers which right they had wanted to exercise since 1998. Coopers submitted that the proposal to amend the Articles had been under consideration since 1998 and had been delayed because of Lion Nathan Australia's refusal to concede that Kirin controlled or had a relevant interest in 46% of the share capital of Lion Nathan Limited. It is not necessary to enter into any consideration of the history which brought about the amendments to the constitution of Coopers in March 1995 or the reasons which might have delayed the calling of the meeting of shareholders to consider the resolution to change the Articles. The relevant question under consideration at the present time is whether there has been a full and fair disclosure to the shareholders of relevant information to enable them to consider the resolution which has been placed before them. 30 Coopers submitted that the issue in relation to the resolution to change the Articles and the issue of a takeover were two very separate processes which ought to be kept separate and distinct but that Lion Nathan Australia was seeking to collapse the consideration of both issues together. Clearly those two matters are quite separate and distinct as a matter of structure but they are inevitably drawn together because of the consequence and effect of the passing of the resolution to change the Articles. 31 Lion Nathan Australia submitted that shareholders are still not being provided with a full and fair set of disclosures or information concerning the proposed resolution and that the further Explanatory Memorandum does not correct errors which still exist in the Explanatory Memorandum. The consequence is that the memoranda are still misleading. Senior Counsel for Lion Nathan Australia referred to the following matters: (a) there still remains in section 3.4 the implication said to exist that if the resolution is passed members will only be able to transfer their shares to Lion Nathan Australia with the consent of the directors. That statement is in contradiction of, and inconsistent with, a number of the statements in par 4 of the further Explanatory Memorandum; (b) the implications stated in section 3.4 that Lion Nathan Australia may seek the permission of ASIC to not make the takeover offers or if the offers have been made to withdraw the offers is not corrected by par 3 of the further Explanatory Memorandum. Paragraph 3 sets out more accurately the position but it is not entirely consistent with the statement in the second bullet point of section 3.4; (c) the further Explanatory Memorandum does not remove the word "purported" from the second bullet point in section 3.5; (d) the statement remains in section 3.6 that there is included in the Explanatory Memorandum all the information which directors consider should be taken into account by members which is therefore inconsistent with there being a further Explanatory Statement. 32 Lion Nathan Australia contended that notwithstanding the further Explanatory Statement and the possible correction of the errors and inconsistencies to which I have referred there is still a fundamental continuing problem relating to the information which should be given to shareholders. This relates to the statement at the end of section 3.3 in the Explanatory Memorandum that each member will receive a Target's Statement from Coopers: "to assist members to make an informed assessment whether to accept or reject the Lion Nathan Offer. The target's statement will also contain a recommendation from each director of the Company in relation to the Lion Nathan Offer and the reasons for their recommendation." 33 Lion Nathan Australia submitted that the Explanatory Memorandum was saying that the shareholders were going to need, and be provided with, further information to enable them to make an informed assessment about the acceptance or rejection of the Lion Nathan Australia offer. It was said that the Extraordinary General Meeting to consider the resolution throws up exactly the same commercial issue. 34 However, much depends upon how one characterises the issue which is before the shareholders at the Extraordinary General Meeting. It was implicit in Lion Nathan Australia's submissions that the issue was whether its takeover offer should be allowed to proceed. Coopers' contention was rather that shareholders were being asked to exercise a right that had been available to them for some years, the exercise of which right had been frustrated or impeded in the past by Lion Nathan Australia. 35 I consider that the proper characterisation to place on the issue before the shareholders at the Extraordinary General Meeting is whether shareholders want to keep open the opportunity to receive the Lion Nathan Australia offer or whether they do not want to have the opportunity to consider it. If they want the former situation they should reject the resolution whereas if they want the latter situation they should vote in favour of the resolution. 36 There was little debate about the relevant principles to be applied. Rather the issue joined between the parties was the extent of the information which needed to be provided. 37 In general terms it may be said that where a general meeting of the shareholders of a company has been called to consider, and if thought fit, pass a resolution which affects the company and its shareholders the directors are bound to make a full and fair disclosure of all matters which are within their knowledge and which would enable the shareholders to make a properly informed judgment on the issue in question: Peters' American Delicacy Co Ltd v Heath (1939) 61 CLR 457 at 486 per Latham CJ; Bulfin v Bebarfald's Ltd (1938) 38 SR (NSW) 423 at 432‑438. The obligation upon directors in this respect is even more significant where they have either made a recommendation to shareholders as to what they should do or have advised shareholders as to how they (the directors) propose to vote. 38 In Chequepoint Securities Ltd v Claremont Petroleum NL (1986) 11 ACLR 94, McLelland J said at 96‑97: "Where directors take it upon themselves to urge or recommend or advise members to exercise their powers in general meeting in a particular way, they are in general required to make a full and fair disclosure of all matters within their knowledge which would enable the members to make a properly informed judgment on the matters in question". (See also Devereaux Holdings Pty Ltd v Pelsart Resources NL (No 2) (1985) 9 ACLR 956.) 39 There are two aspects to the information which directors are bound to disclose to shareholders in order to enable the shareholders to make a fully informed decision on the matter and issue being put before them. The material must not be materially misleading and at the same time there should not be omitted any material which is important and relevant to the decision which the shareholders are asked to make. In Fraser v NRMA Holdings Limited (1994) 52 FCR 1, Gummow J said (at 20), in relation to the issues before him, that the members were entitled: "reasonably to expect that what was put before them involved no 'half truths' and contained a full and fair disclosure of matters to enable them to make a properly informed judgment on the proposal." 40 In substance, Gummow J's decision and reasons were upheld by the Full Court in Fraser v NRMA Holdings Limited (1995) 55 FCR 452. At 466 the Full Court said: "A duty to make disclosure of relevant information arises as part of the fiduciary duties of the directors to the company and its members in relation to proposals to be considered in general meeting and under s 1022 of the Law in respect of the contents of a prospectus. The fiduciary duty is a duty to provide such material information as will fully and fairly inform members of what is to be considered at the meeting and for which their proxy may be sought. The information is to be such as will enable members to judge for themselves whether to attend the meeting and vote for or against the proposal or whether to leave the matter to be determined by the majority attending and voting at the meeting … A proper discharge of the duty may require that the directors take reasonable steps to ascertain relevant information for communication to members if that information is not known to the board. Directors must not consciously refrain from seeking relevant information or turn a blind eye to relevant material in order to avoid placing before members information which may contradict or qualify any particular position taken or advocated by the directors or a majority of them." 41 Gambotto v WCP Limited (1995) 182 CLR 432 was concerned with a company passing a resolution to amend its Articles, so as to enable the shareholder holding at least 90% of the issued capital to acquire compulsorily shares held by minority shareholders for a particular price. However, the principles explained by the High Court are relevant to the situation such as the present where the proposed amendment of the constitution and Articles of Coopers is arguably to limit the opportunity of the shareholders of the company to sell their shares. At 446 the majority of the High Court (Mason CJ, Brennan, Deane and Dawson JJ) said: "… an alteration to the company's articles permitting the expropriation of shares will not be valid simply because it was made for a proper purpose; it must also be fair in the circumstances. Fairness in this context has both procedural and substantive elements. The first element, that the process used to expropriate must be fair, requires the majority shareholders to disclose all relevant information leading up to the alteration …" 42 I am satisfied that there is a serious question to be tried (the application being for an interlocutory injunction) that the Explanatory Memorandum in its initial form is misleading and does not make a full and fair disclosure of the nature and effect of the resolution which is being put before the shareholders. I am satisfied that the effect and consequence of the proposed resolution is to put an end to the takeover offer which Lion Nathan Australia announced on 1 September 2005. Senior Counsel for Coopers accepted, as he was bound to do on the proper interpretation of the resolution, that in practical terms the effect of the resolution would be to preclude Lion Nathan Australia's takeover on its current terms. Lion Nathan Australia went further and submitted that the effect of the resolution was to preclude Lion Nathan Australia forever from making a takeover offer for the issued capital in Coopers. It is not necessary at this stage to resolve the question whether that is the ultimate effect of the resolution. It is sufficient that the effect of the passing of the resolution is to end the current takeover offer. That proposition and effect or consequence is not made clear and is not fully disclosed in the initial Explanatory Memorandum. To say, as is said in section 3.2 of the initial Explanatory Memorandum that the resolution if passed, "would have the effect of deleting all references to Lion Nathan from the Constitution" is disingenuous and not a full or fair explanation of the effect of the resolution. That situation is not cured by section 3.4 in its present form. 43 Further, section 3.3 states that the Lion Nathan Australia takeover offer is subject to "various prescribed occurrences". What is a critical occurrence is that an alteration to the Articles of Coopers will put an end to the takeover offer. Such a critical occurrence should be specifically stated and set out for Coopers' shareholders, especially where a proposal is being put to them to bring about that occurrence. 44 Section 3.4 which sets out what are said to be the "implications" of the passing of the resolution also lacks fullness and fairness because the most significant implication, namely the termination of Lion Nathan Australia's takeover offer is not explicitly stated. Further, if it be correct that the passing of the resolution ends the opportunity for the current takeover offer to proceed, then it is arguable that s 140(2)(c) of the Corporations Act is brought into play. That subsection provides: "Unless a member of a company agrees in writing to be bound, they are not bound by a modification of the constitution made after the date on which they became a member so far as the modification: (a) … (b) … (c) imposes or increases restrictions on the right to transfer the shares already held by the member …" 45 Coopers submitted that the modification to Art 143 expanded the opportunity of shareholders to transfer their shares as the removal of Lion Nathan Australia from the Articles would create the opportunity for other persons to make offers. Coopers submitted that the restriction on the right to transfer shares was found in the pre‑emptive right given to Lion Nathan Australia and that if this was removed then the field would be open to any offeror. It was said that at the present time a bid from an offeror would be stifled by the opportunity for Lion Nathan Australia to exercise its pre‑emptive right. In short, it was said that the third tier pre‑emptive right in favour of Lion Nathan Australia presently imposed a restriction which would be removed by the passing of the resolution. 46 However, if the resolution is passed Coopers' shareholders will not be able to transfer their shares to Lion Nathan Australia in the same manner as they could have done following the appropriate procedure prior to the passing of the resolution. In its present form Art 143 excludes Lion Nathan Australia from being a company in business competition with Coopers so that it cannot prior to the passing of the resolution be precluded from acquiring shares in Coopers if the directors of Coopers do not give their consent in writing. The prohibition in Art 54 on directors registering the transfer where Art 143 has been activated does not apply to a transfer to Lion Nathan Australia. After the passing of the resolution, if it is passed, Lion Nathan Australia will no longer be in that position. Section 3.4 of the initial Explanatory Memorandum does not make it clear that s 140(2) of the Corporations Act has a role to play in the matter or that Art 54 is relevant. 47 There is a further difficulty with section 3.4 of the initial Explanatory Memorandum where it states that Lion Nathan Australia may seek the permission of ASIC "to not make takeover offers or if the offers have been made to withdraw the offers on the basis that a number of conditions to the Lion Nathan Offer will not or could not be satisfied". If the resolution is passed Lion Nathan Australia will not be bound to purchase any shares in Coopers because of the relevant prescribed occurrence regardless of the result of any application to ASIC. 48 Until such time as the Articles are altered as proposed by the resolution Lion Nathan Australia is entitled to exercise its third tier pre‑emptive right and it is misleading to describe any exercise of such rights at the present time as "purported". 49 What is not addressed in the initial Explanatory Memorandum is what is probably the most critical issue for Coopers' shareholders, namely that if the resolution is passed an offer to pay $260 for the shares in Coopers will no longer be available to them. In short, it will have "gone out the door". Put another way, shareholders in Coopers will not have the opportunity to consider the takeover offer which Lion Nathan Australia has announced. The most significant effect of the passing of the resolution is that the offer to acquire shares in Coopers for $260 will be blocked. There is no such explicit statement in the initial Explanatory Memorandum. 50 The passing of the resolution will mean that Coopers' shareholders have taken an action to terminate or end or block the takeover offer announced by Lion Nathan Australia. However, they were told on 2 September 2005 by the directors of Coopers that: "Until you receive the Target Statement we advise that you take no action in relation to the offer or any documents that you receive from Lion Nathan or discuss the offer with Lion Nathan". Further they have been told in the initial Explanatory Memorandum that: "Each member will also receive a target's statement from the Company that responds to the bidder's statement and includes information to assist members to make an informed assessment whether to accept or reject the Lion Nathan offer." (Emphasis added) 51 In the Target's Statement Coopers must include all the information that Coopers' shareholders and their professional advisers "would reasonably require to make an informed assessment whether to accept the offer under the bid": s 638(1) of the Corporations Act. Having told the shareholders of Coopers to take no action in relation to the takeover offer until they receive the Target's Statement and that the Target's Statement will assist them to make an informed decision whether to accept or reject the takeover offer, the directors are now telling the shareholders of Coopers not to wait for the Target's Statement but to consider a resolution to put the takeover offer at an end. 52 Although the directors do not give a recommendation as to how to vote on the proposed resolution in the initial Explanatory Memorandum, four of the six directors make it clear that they intend to vote in favour of the resolution. So much is stated in accentuated bold type. If the directors wish to cut off the takeover offer before it can be put to shareholders and if they tell the shareholders that they intend to vote to bring about this consequence, I consider that they are bound to provide the shareholders with more information than they have presently provided, particularly in relation to the value of the shares in Coopers if the Lion Nathan Australia takeover offer is terminated. 53 In Fraser v NRMA Limited (supra) Gummow J at 18 accepted the submission that: "the issue is whether in the light of all of the relevant factual circumstances, constituted by acts, omissions, statements or silence, there has been conduct that is or is likely to be misleading or deceptive". In the circumstances of this case, in particular where the directors told the shareholders of Coopers to take no action in relation to the takeover and are now telling them that the directors intend to vote in a way which will end the takeover, I consider that it is arguably misleading in the initial Explanatory Memorandum and not full and fair disclosure not to provide some of the information which would be required in the Target's Statement. 54 As I noted earlier, Coopers have sought to rectify or respond to a number of the complaints made by Lion Nathan Australia in the further Explanatory Memorandum. That Memorandum goes some of the way but not the full distance. 55 When shareholders are considering how they should vote on the proposed resolution I would expect that they would ask themselves the question - what do I gain and what do I lose by voting in favour of the resolution and what do I gain and what do I lose if I vote against the resolution? In each case the significant issue will be either the value they may be able to realise if they wish to sell their shares or what value they will lose the opportunity to obtain if they do not sell their shares. A fundamental issue underlying these questions is the value that their shares have if they forego the opportunity to consider whether or not to accept the proposed takeover offer. The shareholders can see from the initial Explanatory Memorandum that they have the opportunity to obtain $260 from Lion Nathan Australia on the takeover. However, they are not told what the consequence or the effect is for the value of their shares if the takeover offer from Lion Nathan Australia is no longer open to them. 56 Coopers submitted that it was not obliged to provide financial information or detailed values in the Target's Statement. Coopers relied upon Practice Note 43 put out by ASIC in relation to "Valuation Reports and Profit Forecasts" to support the proposition that there was a regulatory policy against the casual use of financial information. That may be so, but it does not answer the proposition that the shareholders in Coopers are entitled to know, if the information is available to the directors, what may be the value of their shares if they give up the opportunity to consider an offer of $260 a share. 57 Coopers submitted that the further Explanatory Memorandum made it starkly clear to shareholders that if they passed the resolution the takeover offer by Lion Nathan Australia on its current terms would no longer be available and that therefore they would not realise a price of $260 for their shares. It was submitted that if the shareholders wished the opportunity to consider the takeover offer they should vote against the resolution and that this was made clear in the further Explanatory Memorandum. 58 This is correct as far as it goes but what the shareholders are not told is what alternative values of shares are open to them if they decide to terminate the opportunity to consider the Lion Nathan Australia takeover. The issue of the value of the shares is controversial. But it is a relevant consideration for a shareholder in considering the proposed resolution. Paragraph 4 of the further Explanatory Memorandum tells the shareholders that if the resolution is not passed they will have the opportunity to consider the Lion Nathan Australia takeover offer but then notes that if the takeover offer does not proceed and the shareholders wish to sell their shares, the shareholders will first have to offer to sell the shares to another member of Coopers who may request Coopers' auditor to fix the fair value of the shares if the purchaser does not agree with the seller's estimate of fair value. Further, the further Explanatory Memorandum states that even if the Lion Nathan Australia takeover offer proceeds, a member wishing to accept the offer will first have to offer the shares to other members under the pre‑emptive rights and that the members willing to purchase the shares can request Coopers' auditor to fix the price at a fair value. It is also stated that the directors are not in a position to say at what price the auditors might fix their value once requested to do so. 59 However, the directors have available to them the fair value fixed by KPMG at the time of the buy‑back proposal in 2003. That value was fixed at $45.01. In the letter to shareholders dated 23 August 2005 Coopers also stated that any shareholder accepting the Lion Nathan Australia offer would still be subject to the pre‑emptive right in Coopers' Articles so that the board was to endeavour to find a purchaser from fellow shareholders first. The letter then stated that any such person might require that the price of the shares be a fair value as determined by the auditors. The following statement then appeared: "This may be different to the price offered to you by Lion Nathan". It can therefore be seen that the issue of the value of Coopers' shares is no doubt upper‑most in the minds of shareholders. 60 Although the directors may not be in a position to give an up‑to‑date estimate of fair value backed by an expert report I consider that they are under an obligation at least to tell shareholders what the last valuation carried out by the auditors was, namely $45.01 and the price per share at which the last sale was transacted. If they have available to them a later valuation by the auditor which has not been disclosed to shareholders, or a later sale, that should also be referred to in the Explanatory Memorandum. 61 It did not appear that Coopers was resistant to this information being given to shareholders. Senior Counsel for Coopers said in the course of argument that he was sure that Coopers would be prepared to repeat the information Lion Nathan Australia had given shareholders that the bid price was $260 but three years ago the buy‑back price was $45, that there have been no shares sold above $45 since then and that before that there had been a sale at $16 a share. 62 Although Lion Nathan Australia had given the shareholders some information on value on 1 September 2005, I consider that a full and fair disclosure by the directors required them to tell shareholders in the document which they said included: "the information which they consider should be taken into account by members when deciding whether or not to vote in favour of the proposed resolution", what information was available to them as to the value of the shares if the resolution was passed with the result that the $260 offer by Lion Nathan Australia fell away. It is important for shareholders to know whether the directors have available to them information as to the value of the shares if the $260 offer by Lion Nathan Australia is not on the table, and whether the directors dissent from the values of $45 and $16 a share given by Lion Nathan Australia. 63 If this view conflates consideration of the resolution with a consideration to an extent of the merits of accepting or rejecting the takeover offer, then that is an inevitable consequence of the nature and effect of the resolution. A consideration of the resolution inevitably draws into it a consideration of the merits of keeping the takeover offer alive. A critical issue in that consideration is - what value will be ascribed to the shares if the takeover offer falls away, as it will, if the resolution is passed. 64 I do not consider that the information to be disclosed by the directors should include (as submitted by Lion Nathan Australia) the recent trading history of Coopers' shares (other than the last sale price) or the material interests of Coopers' directors in the proposed modifications. It is sufficient at this stage, which is considering whether or not to keep the takeover offer alive, for the shareholders to be told of the latest valuation by the auditor and the latest sale price known by the directors. The Explanatory Memorandum already tells shareholders that four out of six directors are members, or control entities that are members and that they hold 14.26% of the votes exercisable at the general meeting. That disclosure puts the members on sufficient notice at this stage of the material interests of directors. 65 Similarly, I do not consider that at this stage the Explanatory Memorandum should disclose the opinions of the directors about the current enterprise value of Coopers (which is a concept of value different from that of share value either under the Articles or otherwise) or the fair value of the shares in Coopers (other than is disclosed by an auditor's valuation), the reason for the directors' decision to recommend that shareholders reject Lion Nathan Australia's takeover, if they have in fact made such a recommendation, or all the information required for a Target's Statement in accordance with s 638 of the Corporations Act. As I have observed earlier, at this stage the members are only considering whether or not to keep the Lion Nathan Australia takeover offer alive for further consideration at a later point of time when further and more complete information will be made available to them by Coopers and its directors. What is critical at this stage is to know what they will gain, lose or preserve by voting for or against the resolution. 66 Although the further Explanatory Memorandum clarifies in part the issue which arises under s 140 of the Corporations Act, explains the effect of the proposed resolution in relation to the Lion Nathan Australia offer, explains that one prescribed occurrence is any alteration to the constitution of Coopers and explains the consequences on the Lion Nathan Australia takeover offer if the resolution is passed, there are inconsistencies between the two statements. 67 In par 3 there is set out more accurately the nature of the relevant prescribed occurrence but it leaves the second bullet point in section 3.4 of the initial Explanatory Memorandum still extant. Although the further statement is accurate it does not lie easily with the earlier statement in section 3.4. Further, the first bullet point in section 3.4 remains uncorrected and is inconsistent with a number of the statements in par 4 of the further Explanatory Memorandum. 68 Although the further Explanatory Statement states that the information in it is additional to that contained in the initial Explanatory Memorandum "and should be read together with" the Explanatory Memorandum, I consider it is difficult for a shareholder to reconcile a number of the matters contained in each statement. For example, the further Explanatory Memorandum states: "the Company reaffirms the various matters set out in the EM". If the company is reaffirming everything set out in the initial Explanatory Memorandum, that does not lie easily with the subsequent statements in the further Explanatory Memorandum which qualify and expand in part a number of those matters. 69 The interests of the shareholders in Coopers are the paramount issue to be considered in this application and are the beacon and touchstone by reference to which the outcome of the application is to be measured and determined. In the present circumstances the shareholders' interests are not congruent with those of either Lion Nathan Australia or the directors of Coopers. More particularly is this so where four of the six Coopers directors have told the shareholders in the initial Explanatory Memorandum that they intend to vote in favour of the resolution, knowing that the passing of the resolution will effectively bring Lion Nathan Australia's takeover offer to an end. Yet the directors have told the shareholders on one occasion (2 September 2005) to take no action in relation to the offer until they receive the Target's Statement and on another occasion (21 September 2005) that they will receive a Target's Statement from Coopers which will assist them to make an informed assessment whether to accept or reject the Lion Nathan Australia offer and which will also contain a recommendation from each director in relation to the offer and the reasons for their recommendation. In effect four of the directors have made a de facto recommendation to the shareholders as to how they should vote on the resolution. True it is that they have not made a recommendation as such; rather they have stated that they intend to vote in favour of the resolution. In my view, telling the shareholders this is tantamount to a recommendation to do the same; it has the same effect. 70 In these circumstances it was incumbent on the directors to be more forthcoming and frank in the initial Explanatory Memorandum than they were. I accept that it has been open for shareholders in Coopers to requisition a meeting to consider the proposed resolution for some considerable time. But once the Lion Nathan Australia offer was on the table the landscape changed as did the context within which a consideration of the information to be given to shareholders asked to consider a resolution changing the constitution of Coopers arose. 71 The directors were in those circumstances bound to make the practical consequence of voting in favour of the resolution explicit and to tell shareholders in particular that if the resolution was passed the Lion Nathan Australia offer would no longer be available and that their shares might have a different value from the price offered by Lion Nathan Australia. 72 However I do not agree that the directors are obliged at this stage to supply shareholders with the equivalent of a Target's Statement prior to the time it should be provided in accordance with the provisions of the Corporations Act. What is critical is that it should be made quite clear to shareholders in Coopers that if they want to keep open the opportunity to consider the Lion Nathan Australia offer, receive a Target's Statement from Coopers and have available a recommendation from each director and the reasons for that recommendation, they should vote against the resolution. 73 I am not satisfied that shareholders will be given a full and fair disclosure of all relevant matters which are material to their decision how to vote on the resolution if they receive the supplementary or further Explanatory Memorandum in its present form. That is a decision, from a practical point of view, whether or not to keep the takeover offer alive. I consider that the only way in which shareholders can be properly, adequately and completely informed of the matters contained in the two memoranda is if a consolidated memorandum is prepared in place of the initial Explanatory Memorandum and the further Explanatory Memorandum which incorporates all relevant matters including the information as to share value to which I have referred and eliminates the inconsistencies and earlier errors in the initial Explanatory Memorandum to which I have referred. 74 It follows therefore that I am satisfied that there is a serious question to be tried that the initial Explanatory Memorandum and the further Explanatory Memorandum, in all the circumstances, are misleading and do not constitute a full and fair statement of the matters which the directors should put before the shareholders for he purpose of considering the resolution proposed at the meeting on 20 October 2005 and that, subject to a consideration of the balance of convenience, the company and the directors should be restrained from conducting the meeting on 20 October 2005 until a further comprehensive Explanatory Memorandum containing information consistently with these reasons is prepared for submission to the shareholders in Coopers. 75 I consider that the balance of convenience is in favour of this course of action. It was not suggested that there would be any significant or serious prejudice to Coopers or its directors if this course was adopted. On the other hand, it is critical that shareholders be given a full and fair disclosure of all relevant matters to enable them to make a properly informed judgment and decision on the proposal being placed before them. 76 I turn to the other proceeding in which the Lion Nathan ACN company seeks an order that the register of members of Coopers be corrected so as to record it as a member in respect of 500 shares transferred to it by Mr Barry Schrapel. In that proceeding, the Lion Nathan ACN company also seeks an order restraining the conduct of the meeting on 20 October 2005 until the share transfer is registered. The background to that proceeding is that Lion Nathan Limited has sought to take advantage of the "member's relative" provisions in Coopers' constitution. These are found in Arts 2(p) and 53. 77 The Lion Nathan ACN company has an issued capital of two ordinary shares which are owned by ACN 116 149 510 Pty Ltd ("the trustee company"). The shares in the trustee company are held by Lion Nathan Limited. 78 On 16 September 2005 the trustee company executed a declaration of trust in which it declared that it holds the two ordinary shares in the capital of the Lion Nathan ACN company upon trust for Mr Schrapel. Mr Schrapel is the sole beneficiary of that trust and is a member of Coopers. On 16 September 2005 the Lion Nathan ACN company, the trustee company and Mr Schrapel entered into an agreement whereby Mr Schrapel sold 500 shares in Coopers to the Lion Nathan ACN company. By that agreement the trustee company granted Mr Schrapel certain pre‑emptive rights in respect of its shares in the Lion Nathan ACN company and Mr Schrapel agreed to transfer 500 shares in Coopers to the Lion Nathan ACN company for $130,000. The agreement noted that the transfer was to be effected under Art 53 of Coopers' Articles. 79 As a result of this sequence of transactions the Lion Nathan ACN company contends that it is a "member's relative" of Mr Schrapel within Art 2(p) of Coopers' Articles of Association and entitled to be a transferee of those shares pursuant to Art 53. On 22 September 2005 the Lion Nathan ACN company sent Coopers the relevant documentation and requested it to register the Lion Nathan ACN company as a member of Coopers in respect of the shares transferred to it by Mr Schrapel. The Lion Nathan ACN company contends it is such a "member's relative" as it is a company in which the trustee company has a relevant interest in all its voting shares. 80 Although Coopers has been asked to register the transfer of Mr Schrapel's 500 shares to the Lion Nathan ACN company it has not yet done so. The Lion Nathan ACN company wishes to participate in the Extraordinary General Meeting and be in a position to vote in relation to the proposed resolution. 81 I consider there is a serious question to be tried that the Lion Nathan ACN company is entitled to be registered forthwith as the holder of the 500 shares sold by Mr Schrapel on the basis that it is the transferee of those shares and has as its sole shareholder a company which is acting as a trustee of a trust of which Mr Schrapel is the sole beneficiary. In those circumstances there is a serious question to be tried that the trustee company has a relevant interest in the Lion Nathan ACN company. However, having regard to the balance of convenience, I do not consider that that is sufficient reason on its own at the present time to restrain the conduct of the Extraordinary General Meeting until the shares have been registered. According to Mr Hayden Duffield, Coopers' company secretary, Coopers has an issued capital of 1,353,358 shares. The situation may not arise whereby the voting of Mr Schrapel's 500 shares is critical to the outcome of the resolution. 82 So far as the balance of convenience is concerned as between the holding of the meeting and the registration of the 500 shares the balance is in favour of the holding of the meeting. If the Lion Nathan ACN company was entitled to be present at the meeting as a shareholder and to vote in respect of the 500 shares it will be able to be determined after the voting has occurred whether the voting of the 500 shares would have made any difference to the outcome of the resolution. If they would have made a difference, then the validity of the meeting can be challenged on the basis that a person entitled to vote at the meeting was precluded from voting. 83 So long as Coopers is prepared to undertake to the Court to keep a record of the total number of votes cast in relation to the resolution both for and against, and to disclose that record to the Lion Nathan ACN company it will be able to be determined hereafter whether the voting of the 500 shares would have made any difference to the outcome of the resolution. In any event, Mr Schrapel is still eligible to attend the meeting and to vote in respect of those shares and presumably his interest in the matter is allied to that of the Lion Nathan ACN company having regard to the transactions into which he as entered. 84 Lion Nathan Australia submitted that the order which I should make in proceeding No VID 1196 of 2005 is to grant an injunction restraining the further conduct of the meeting until further order so as to give Coopers the opportunity to formulate a further Explanatory Memorandum which was in a more acceptable form. Coopers submitted that it should be allowed to present a consolidated Explanatory Memorandum to the Court and have this approved forthwith so that the meeting can proceed on 20 October 2005. 85 Having regard to the deficiencies and issues I have found in relation to the initial Explanatory Memorandum and the further Explanatory Memorandum I consider that the best way to deal with this matter is to publish these reasons, accept an undertaking as to damages in the usual form from Lion Nathan Australia, grant an injunction restraining the further conduct of the meeting until further order but to reserve liberty to apply to Coopers on 24 hours' notice in writing to vary the injunction or discharge it on the basis of presenting a comprehensive Explanatory Memorandum taking the place of the initial Explanatory Memorandum and the further Explanatory Memorandum to shareholders within a specified time. If that can be done promptly then the meeting may be able to proceed on 20 October 2005. If sufficient time is not available to enable this to be achieved then the meeting will have to be adjourned to a later date. 86 Accordingly, I propose to order that upon Lion Nathan Australia giving the usual undertaking as to damages it be ordered that Coopers be restrained from proceeding further with the conduct of the meeting of shareholders proposed to be held on 20 October 2005 (other than to adjourn it to a date and time to be notified to shareholders at the time of such adjournment) until further order, but reserving liberty to Coopers to apply on 24 hours' written notice to vary or discharge that injunction. 87 In proceeding No VID 1195 of 2005, I propose to order that upon Coopers undertaking to keep a written record, certified by the chairman of the meeting, of the total number of votes cast in person or by proxy and the number of those votes in favour and against the resolution and to make that record available for inspection by the plaintiff and its solicitors, the application for interlocutory relief be refused. 88 In all the circumstances I propose to reserve the question of the costs of these applications for interlocutory relief.

Lion Nathan Australia Pty Ltd (ACN 008 596 370) v Coopers Brewery Ltd

At a glance

Court

Decision date

Before

Source

Judgment (15 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (4)

Cited By (2)