1 The parties to these proceedings are Drillsearch Energy Ltd, a member of Drillsearch (Glenluce Properties Pty Ltd) and all but two of the directors of Drillsearch.
2 The Drillsearch directors who are parties are involved in disputes concerning a forthcoming meeting of members. The meeting has been called to consider proposed resolutions to remove each of those directors.
3 The directors who are parties are divided into two groups as regards their attitudes to the subject matter of the meeting.
4 A shareholder, Beach Petroleum Ltd, wishes to become a party to these proceedings and to file an originating process in separate proceedings with a view to the consolidation of those proceedings with these proceedings.
5 Beach Petroleum, as well as being a shareholder of Drillsearch, is the bidder under a recently initiated takeover bid for Drillsearch under Chapter 6 of the Corporations Act 2001 (Cth).
6 The final relief that Beach Petroleum would seek in its new proceedings - and it will be necessary for it to amend its originating process to encompass this - includes an injunction restraining the holding of the proposed meeting of members of Drillsearch until the Takeovers Panel has determined an outstanding application made by Beach Petroleum to the Panel based on allegations of "unacceptable circumstances" in relation to the takeover and until any remedial action ordered by the Takeovers Panel has been taken.
7 The allegation of "unacceptable circumstances" within s 657A of the Corporations Act advanced by Beach Petroleum was conveyed in a letter of 1 June 2009 from Beach Petroleum's solicitors to the Takeovers Panel. In summary, the complaints are concerned with circulars and statements made by one of the director parties and a former director, being statements made to shareholders in the lead up to the proposed meeting. The allegation made by Beach Petroleum to the Takeovers Panel is that shareholders of Drillsearch may be confused or misled in various ways by either or both of these circulars and that the circulars are misleading and deceptive.
8 Beach Petroleum has submitted to the Takeovers Panel that the matters outlined in its solicitors' letter of 1 June 2009 constitute unacceptable circumstances because they have produced deficient information which will result in inhibition of an efficient, competitive and informed market in Drillsearch shares and result in Drillsearch shareholders not having the information necessary to make an informed decision and being mislead about the Beach offer.
9 The orders Beach Petroleum asks the Takeovers Panel to make involve, in essence, the despatch of correcting or clarifying material plus restraints upon the two individuals concerned from making further announcements in relation to the Beach offer (unless required by law) until Drillsearch's target statement has been despatched. There is a catch-all claim for such other order as the Panel thinks fit.
10 Having regard to s 657D(2), it is clear that the Panel has, in the circumstances, wide and comprehensive powers. There is no reason to think that the Takeovers Panel cannot deal adequately with and correct the matters complained of, assuming they are found to constitute "unacceptable circumstances" in need of correction.
11 The question of immediate relevance is whether s 659B(1) operates to preclude the commencement by Beach Petroleum of the proceedings it now wishes to commence and its joinder to these present proceedings.
12 Section says 659B(1) is in these terms:
"Only the following may commence court proceedings in relation to a takeover bid, or proposed takeover bid, before the end of the bid period:
(a) ASIC;
(b) a Minister of the Commonwealth;
(c) a Minister of a State or Territory in this jurisdiction;
(d) the holder of an office established by a law of:
(i) the Commonwealth; or
(ii) a State or Territory in this jurisdiction;
(e) a body corporate incorporated for a public purpose by a law of:
(i) the Commonwealth; or
(ii) a State or Territory in this jurisdiction;
to the extent to which it is exercising a power conferred by a law of the Commonwealth or a State or Territory in this jurisdiction."
13 It is thus clear that only certain persons may "commence court proceedings in relation to a takeover bid, or proposed takeover bid, before the end of the bid period". It is accepted that, in the context of its takeover bid for shares in Drillsearch, Beach Petroleum is not within any of the permitted categories of litigant.
14 Section 659B(1) raises the question whether the steps Beach Petroleum now seeks to take in this court entail the commencement by it of proceedings "in relation to a takeover bid" as mentioned at the start of s 659B(1).
15 The submission made by Mr Sullivan QC on behalf of Beach Petroleum is that any such connection is lacking and that Beach Petroleum's standing as a shareholder of Drillsearch is such as to enable it, in any event, to complain about the particular statements in the context of the forthcoming meeting. He points out that one of the current plaintiffs, Glenluce Properties Pty Ltd, is a shareholder in Drillsearch and, in that respect, stands in the same position as Beach. He also points out that the wrong done from Beach Petroleum's point of view, in the particular context, is that often associated with the case of Bulfin v Bebarfald's Ltd (1938) 38 SR (NSW) 423; in other words, there has been a breach of the duty to give full, frank and fair information for the purpose of a meeting of members.
16 The scope of s 659B was considered by Austin J in Lionsgate Australia Pty Ltd v Macquarie Private Portfolio Management Ltd [2007] NSWSC 318; (2007) 210 FLR 106. His Honour said at [43]:
"Senior counsel for Lionsgate submitted that s 659B(1) can only apply to court proceedings concerning a matter over which the panel could exercise jurisdiction and make orders. Although that submission was contested, in my opinion, it is correct."
17 Austin J went on to say that the construction of s 659B is linked to the powers of the Takeovers Panel, with the intention that the Panel is to be the main forum for resolving disputes about a takeover bid until the bid period has ended. His Honour also said that the Panel is intended to have the power to deal as an administrative body with disputes that s 659B prevents a court, as a curial body, from dealing with during the bid period.
18 Beach Petroleum has seen fit to invoke the jurisdiction of the Takeovers Panel in relation to the matters that it would wish to agitate in its proposed proceedings in this court, including by way of its becoming a party to the proceeding now before me. Having chosen that forum and decided to seek the assistance of the Takeovers Panel, according to the broad remedial jurisdiction that the Panel possesses, Beach Petroleum has clearly accepted that the matters in respect of which it wishes to obtain redress are really matters within the Panel's province. Indeed, by seeking orders here imposing certain restraints until its application to the Takeovers Panel has been determined and until any remedial action the Panel may order has been taken, Beach seeks, in a real sense, to make its court proceedings an adjunct to its Panel application.
19 The controversy that Beach Petroleum wishes to air in court has already been put before the Takeovers Panel by Beach. That controversy has clearly arisen "in relation to" the takeover bid now on foot. The proposed court proceedings therefore involve matters in respect of which s 659B displaces the jurisdiction of the court until such time as the bid period has ended.
20 I refuse leave to Beach Petroleum Ltd to file its proposed originating process and interlocutory process. I decline Beach Petroleum Ltd's application to be joined as a party to the proceeding now before me.