(23) Where a bid has lapsed and is effectively reinstated by a remedial order, and shares have traded during the hiatus between the lapse and the remedial order, it is appropriate to consider as a condition of relief, an undertaking by the bidder to compensate the vendors of such shares in the target for the difference between their sale price and the bid price: Barondene at 913.
9 ASIC was informed of these proceedings and wrote a letter, which was tendered, stating it did not wish to appear. That letter asked that the Barondene decision be brought to my attention. In Barondene, an undertaking was given by the bidder to compensate those who had traded their shares (on the basis that they had not been informed that the bid had been extended) at a price which was less than the bid price. In these proceedings, the evidence is that the market price has at all material times exceeded the bid price, so anyone selling on the basis that there was no extant bid would not be out of pocket. In short, the factual situation is the opposite of Barondene. The defendant target announced to the ASX on Tuesday, 8 February 2005 that the bid had lapsed, and the plaintiff announced to the ASX after the close of business that day that it intended to apply to the Court for remedial orders, so the trading window between the two pieces of information was limited to Tuesday, 8 February 2005. On these facts, Senior Counsel submitted that a "Barondene undertaking" was unnecessary, and I accepted that submission.
10 There still remained three other issues affecting the members. The first issue was that one effect of making a remedial order in relation to the notice of variation was that the members of the defendant who had accepted the plaintiff's offer remained uninformed of their s 650E right to withdraw their acceptances. This was dealt with by an undertaking to the Court by the plaintiff to send a notice, referred to in these proceedings as a "withdrawal notice", in a form submitted to the Court, informing members of the s 650E right. The plaintiff undertook to lodge the withdrawal notice with ASIC, and send it to the ASX, the defendant and all members of the defendant.
11 The second issue was that the period of one month under s 650E for a member of the defendant accepting the bid to withdraw the acceptance is tied by the CA to receipt of the notice of variation, which, as I observed, did not include notification of the s 650E withdrawal of acceptance right. This was dealt with by an order under s 1322(4)(d) of the CA extending the one month period, to allow for the month to run from receipt of the withdrawal notice.
12 The third issue was that between 8 February 2005 and receipt of the withdrawal notice, a member who had accepted the offer may have dealt with his or her shares on the basis that the bid had lapsed, and thus not be in a position to lodge a withdrawal notice as the shares were no longer held. This was dealt with by an undertaking to the Court by the plaintiff to treat any action by any member of the defendant who accepted the bid, which action was inconsistent with the terms of the offer and which action occurred between 8 February 2005 and the date of receipt of the withdrawal notice by such member, as a valid exercise of that member's right to withdraw acceptance of the offer.
13 In all the circumstances, I was satisfied that s 1322(6)(c) was fulfilled.
14 Section 1325D(1) permits the Court to declare a document "not invalid" because a person has contravened a provision of Ch 6 of the CA "if the Court is satisfied that the contravention ought to be excused in all the circumstances". Section 1325D(4) permits the Court to have regard to a contravention caused by a person's "inadvertence or mistake". The relevant "inadvertence" is that of the solicitor drafting the notice of variation and omitting the s 650D(1)(a)(ii) information. In all the circumstances, I was satisfied that the contravention ought to be excused.
15 For these reasons I made the orders and accepted the undertakings of the plaintiff set out in the short minutes.
16 Mr Oakes, of Senior Counsel for the plaintiff, put his case at hearing on the basis of s 1322(4) and s 1325D. After I had made my orders, Mr Oakes SC submitted another way in which the facts might be analysed, and that is that the notice of variation was a "proceeding under this Act" within s 1322(1)(a), that the omission of the s 650D(1)(a)(ii) information was a "defect … of notice" within s 1322(1)(b)(ii), was thus a "procedural irregularity" within s 1322(1)(b), and was thus contingently valid under s 1322(2). I note this argument but it can wait for another day.