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[2025] NSWCA 142
procedural. The notice of motion filed 25 June 2025 was dismissed. There could be no discontinuance or dismissal of the appeal without leave of the Court. Yowie was ordered to pay Keybridge’s costs of the...
Yowie asked the Court of Appeal to stop a meeting that Keybridge had called to replace Yowie’s directors. The primary judge had already ruled that the meeting was valid and had found that Yowie’s attempt to postpone it had improper purposes. Leeming JA considered Yowie’s appeal grounds weak for the purpose of this urgent application and was not persuaded that the meeting would make the appeal pointless, because the Court could potentially make later orders to correct the result. He also considered the costs of postponing the meeting and Yowie’s circumstances. The injunction was refused, the appeal was expedited, and it could not be discontinued or dismissed without the Court’s leave. The appeal itself was not decided.
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This is an interlocutory ruling by Leeming JA in the NSW Court of Appeal, made on 26 June 2025. It did not determine Yowie Group Ltd’s appeal from the Supreme Court judgment. It decided whether to restrain a members’ meeting pending that appeal, and set a rapid timetable for the appeal itself.
Keybridge Capital Ltd, described in the judgment as Yowie’s majority shareholder, gave notice on 24 April 2025 that it intended to nominate five people as directors. On 28 May, Keybridge issued a notice under s 249F of the Corporations Act 2001 (Cth) for a meeting on 27 June. The proposed business included removing Yowie’s current directors and appointing the nominees [1]-[2].
The dispute unfolded alongside Yowie’s off-market takeover bid for Keybridge. Yowie’s bid included a condition relating to changes in the composition of Yowie’s board [17], [23]. Yowie’s directors purported to postpone the meeting to 14 July and change its venue. In the primary judgment, Black J held the relevant notices and meeting valid, declared that Keybridge could vote on the resolutions, and declared the purported postponement invalid [2].
Black J also found that Yowie’s directors had improper purposes for postponing the meeting. In particular, he found that they sought to allow time for Yowie’s takeover offer to dilute Keybridge’s shareholding if Keybridge shareholders accepted it [26]. Leeming JA emphasised that those findings were not relevantly challenged in the appeal before him [25], [28].
Yowie filed its notice of appeal and motion on 25 June, two days before the scheduled meeting. It sought an injunction preventing the meeting from taking place [3]-[4], [7]. Leeming JA dismissed the motion. He ordered that the appeal could not be discontinued or dismissed without leave, ordered Yowie to pay Keybridge’s costs of the motion, and set the appeal down for 10 July with written-submission deadlines [54]. The appeal’s merits remained to be decided.
The Court considered both the apparent strength of the appeal and the balance of convenience. The usual interlocutory question, described by reference to Australian Broadcasting Corporation v O’Neill, was whether there was a sufficient likelihood of success to justify preserving the status quo, rather than whether success was more probable than not [7].
But this was not an ordinary interlocutory application. A final hearing had already occurred, and the primary judge had refused the same substantive relief Yowie was now seeking on an interim basis. Leeming JA therefore treated the relative strength of the competing cases as especially important, drawing on Kolback Securities Ltd v Epoch Mining NL and the approach noted in U&D Coal Ltd [8].
The first appeal ground concerned s 659B of the Corporations Act. Yowie argued that the dispute was within the statutory restriction on proceedings “in relation to a takeover bid”. Leeming JA was not persuaded that a dispute about whether a members’ meeting had been validly called fell within that description simply because its outcome might affect a takeover bid. He said that an effect on a bid was not the statutory test. He also considered that construing s 659B to let a party affect the Court’s jurisdiction by making a bid with relevant conditions would sit uneasily with the ordinary narrow construction of provisions said to detract from a superior court’s jurisdiction [12]-[14], [29].
The judge nevertheless acknowledged that the first ground was “not hopeless”, while assessing it as weak at best [31]. He also noted that, even if s 659B(1) had been contravened, that would not necessarily make the proceedings a nullity. Section 659B(2), and the authorities discussed in Berowra Holdings Pty Ltd v Gordon and 2 Elizabeth Bay Road Pty Ltd v The Owners - Strata Plan No 73943, meant the consequences of a contravention could involve discretionary considerations. It did not follow that the primary judge’s orders would inevitably be set aside [30].
The second ground concerned Yowie’s constitution. Clause 13.3 referred to s 225 of the Corporations Act, while cl 32(f) stated that a constitutional provision inconsistent with the Listing Rules was deemed not to form part of the constitution to the extent of inconsistency. Leeming JA observed that Yowie’s written submissions did not address the primary judge’s reliance on cl 32(f). He also noted that the submission that s 225 affected the issue of the s 249F meeting notice had not been developed and that he did not understand how it could be supported by s 225 [32]-[36]. He did not finally resolve the construction issue, but considered the ground weak on the material available for the urgent application [36].
The third ground alleged error in the finding that Keybridge called the meeting for a proper purpose. Leeming JA noted that Keybridge’s directors had not been required for cross-examination after Yowie’s counsel said they were not required. He considered that it was difficult to criticise the primary judge for failing to make an improper-purpose finding when that matter had not been put to the directors in cross-examination [37]-[39]. He assessed the ground’s prospects as weak at best [39].
The fourth ground challenged a finding about Yowie’s statements to the ASX. Leeming JA did not have the email relied on in the ground, and the submissions did not answer the timing problem raised by Keybridge: the administrator’s office had ceased before the event discussed in the primary judgment. The submissions also did not clearly identify the error alleged [40]-[42]. The judge therefore saw no compelling basis for interim relief on this ground.
The balance of convenience reinforced the refusal. Yowie said its appeal rights would be rendered nugatory if the meeting went ahead. Leeming JA considered the asserted risks in turn. The takeover condition relied on was waivable, so a change in Yowie’s board would not necessarily terminate the bid. The condition had been included when Yowie knew that Keybridge intended to change the board, so the Court was not persuaded that Yowie should obtain a balance-of-convenience advantage from that feature of its own bid [46].
Yowie also argued that the resolutions might be passed on an incorrect construction of its constitution. Leeming JA considered that the Court could later make orders, potentially with retrospective effect, to give effect to the correct construction and declare what the result should have been [47]. He was also concerned that a change of control of Yowie might lead to the appeal being discontinued. The order requiring leave before discontinuance or dismissal addressed that risk [48]-[50].
Against Yowie’s case were the unchallenged findings of improper purpose, the company’s ongoing non-compliance with s 201A(2), and the absence of any undertaking or other commitment from the directors conducting the litigation on Yowie’s behalf [28], [51]. Postponement would also waste substantial meeting-related costs, including the cost of the venue arrangements and independent chair [52]. In the judge’s assessment, the appeal could be heard quickly and later relief could address any prejudice from the meeting [53].
This ruling did not purport to change the general law of interlocutory injunctions or to finally settle the meaning of s 659B. It applied existing principles to an urgent application made after a final hearing.
The interlocutory framework came from O’Neill: the relevant question was whether there was a sufficient likelihood of success to justify preserving the status quo [7]. For an application seeking, in substance, interim versions of relief already refused after trial, the Court considered that the relative strengths of the cases carried greater weight than they would in an ordinary interlocutory application. Leeming JA referred to Kolback Securities and U&D Coal in support of that approach [8].
On s 659B, the judgment’s contribution is a case-specific application. The Court did not accept that potential practical consequences for a takeover bid automatically made separate proceedings about the validity of a members’ meeting proceedings “in relation to” that bid. The Court also relied on the principle that statutory language said to limit a superior court’s jurisdiction should be construed narrowly, citing Shin Kobe Maru [29]. The judgment did not finally decide the appeal ground or provide a comprehensive construction of s 659B.
The decision also illustrates the Court’s assessment of whether appellate relief would become ineffective if a meeting proceeded. The fact that votes might be counted on a disputed construction did not, on this record, establish that later relief was impossible. Leeming JA considered that the Court could potentially make corrective orders, including with retrospective effect [47]. That conclusion was part of the discretionary assessment in this case, not a categorical rule that meetings should always proceed pending appeal.
Finally, the order restricting discontinuance demonstrates a procedural safeguard the Court considered appropriate in the circumstances. Leeming JA was concerned that directors whose positions were at stake might have an interest in prosecuting the appeal, and that a new board might otherwise discontinue it without those former officers having an opportunity to participate [49]-[50]. The decision did not determine whether any former director had a right to intervene or whether an application under s 237 would succeed.
At [8], Leeming JA said that where final relief had already been refused after a final hearing, “the relative strengths of the competing cases become much more important”. In plain English, an applicant in that position cannot rely only on the ordinary threshold for interim relief. The Court will look closely at whether the appeal appears sufficiently strong to justify temporarily reversing the result reached after trial.
At [29], he said, “It is not the test in s 659B that litigation will have some effect upon a takeover bid.” The practical connection between the meeting dispute and Yowie’s bid was not, on its own, enough to establish that the proceedings fell within s 659B.
At [30], he explained that a contravention of s 659B(1) would not necessarily make the court proceedings a nullity. In plain English, even if the restriction applied, it would still be necessary to consider what consequence followed. The primary judge’s orders would not automatically be set aside.
At [47], he considered that if votes were counted inconsistently with the constitution’s correct meaning, the Court could later make orders to give effect to the proper construction. The immediate holding of the meeting did not, in the Court’s view, necessarily prevent effective appellate relief.
At [53], Leeming JA described the appeal prospects as “at best weak” and considered that the balance of convenience favoured allowing the meeting to proceed. That was an assessment for the interlocutory motion, not a final determination of the appeal.
The ruling is most relevant to an application for an injunction pending appeal where a final judgment has already decided the substantive relief against the applicant. The Court’s approach indicates that the appeal’s apparent strength may carry particular weight in that setting [8].
It may also be relevant where the applicant argues that a corporate meeting should be stopped because it is connected with a takeover bid. The decision shows that a practical effect on a bid does not, without more, establish that proceedings concern the bid for s 659B purposes [29]. The result will depend on the statutory language and the nature of the proceedings.
The case may assist where a party says that a meeting must be restrained because votes could be cast under an incorrect interpretation of a constitution. Leeming JA considered whether later declarations or corrective orders could remedy the outcome [47]. The judgment does not establish that such later relief will always be adequate. Its assessment depended on the circumstances and the Court’s view that the proposed prejudice could be addressed.
The ruling also bears on cases where the balance of convenience includes a scheduled meeting, costs that would be wasted by postponement, an alleged improper purpose, and a company’s compliance with statutory director requirements. Those matters were considered together here, not as independent automatic rules [28], [51]-[53].
The judgment is dated 26 June 2025 and the material provided contains no later decisions considering or applying it. Its procedural directions set the appeal down for 10 July 2025, but this judgment does not report the outcome of that later hearing [54].
The judgment itself refers to earlier authorities: O’Neill on interlocutory relief; Kolback Securities and U&D Coal on the significance of case strength after final determination; Contouris and Rana on the general reluctance to restrain members’ meetings; Shin Kobe Maru on narrow construction of provisions said to detract from superior court jurisdiction; and Berowra Holdings and 2 Elizabeth Bay Road on consequences of proceedings commenced in contravention of a prohibition [7]-[10], [29]-[30]. Those references are the treatment recorded in this ruling. The supplied material does not establish how later courts have treated Yowie Group Ltd v Keybridge Capital Ltd.
The substantive appeal remained open. Leeming JA repeatedly made clear that he was assessing grounds in an urgent interlocutory setting, without the full benefit of appeal submissions, appeal books, or detailed consideration of documents [5]-[6], [43]. His assessment that the grounds were weak at best was not a final ruling on their merits.
The proper construction of Yowie’s constitution, including the relationship between cls 13.3 and 13.5, cl 32(f), the Listing Rules, and the references to ss 224 and 225 of the Corporations Act, remained for the appeal [32]-[36]. Leeming JA acknowledged that the clause might contain a textual error and that further argument could be made [36].
The scope of s 659B in the circumstances remained unresolved at final-appeal level. The Court rejected the proposition that some practical effect on a takeover bid was enough, but did not finally determine every possible application of the section to the parties’ proceedings [29]-[31]. The consequences of any contravention also remained a matter for consideration rather than an automatic nullity [30].
The appeal’s eventual outcome, any later participation by former Yowie directors, and the final effect of the meeting were not determined in this ruling. The order preventing discontinuance or dismissal without leave protected the appeal from unilateral termination while leaving those questions open [50], [54].
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Yowie Group Ltd v Keybridge Capital Ltd [2025] NSWCA 142
Hearing dates: 26 June 2025
Decision date: 26 June 2025
Before: Leeming JA
Decision: 1. Dismiss the notice of motion filed 25 June 2025.
2. Order that there be no discontinuance or dismissal of the appeal without leave of the Court.
3. The appellant to pay the respondent’s costs of the notice of motion.
4. Set down the appeal for 10 July 2025.
5. The appellant to file and serve written submissions by 1 July 2025.
6. The respondent to file and serve written submissions by 5 July 2025.
7. The appellant to file and serve submissions in reply by 4pm on 8 July 2025.
8. Direct the Registrar to make other directions as to the preparation of appeal books and otherwise readying the matter for hearing.
9. Liberty to apply on one business day’s notice to Justice Leeming by his Associate, or the Registrar.
Catchwords: PRACTICE – interlocutory relief pending appeal – appellant a subsidiary of respondent – respondent called members’ meeting to replace directors – primary judge determined meeting valid and found appellant’s efforts to adjourn it motivated by improper purpose – appellant had also made off-market takeover offer for respondent, conditional on its directors not being removed – appellant sought injunctive relief pending appeal preventing meeting from occurring – consideration of strength of appeal – whether primary judge erred concerning exclusive jurisdiction of Takeovers Panel – whether primary judge erred concerning appellant’s Constitution – whether primary judge erred in failing to find respondent motivated by improper purpose – prospects of success weak at best – consideration of balance of convenience – significance of failure by appellant’s directors to become parties or offer any undertaking – ongoing breach of s 201A(2) of Corporations Act 2001 (Cth) – unchallenged finding that earlier attempt to vacate meeting for improper purpose – costs thrown away – interlocutory relief refused
Legislation Cited: Civil Procedure Act 2005 (NSW), s 56
Corporations Act 2001 (Cth), ss 195, 201A, 224, 225, 237, 249D, 249F, 249Q, 659B
Cases Cited: 2 Elizabeth Bay Road Pty Ltd v The Owners - Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409
Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46
Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364; [2006] HCA 32
Bolton v WAM Active Ltd (No 2) [2025] NSWCA 99
Contouris v Kallos [2008] NSWSC 840; 67 ACSR 543
In the matter of U&D Coal Ltd [2014] NSWSC 1128
In the matter of Yowie Group Ltd [2025] NSWSC 648
Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533
Owner of the Ship “Shin Kobe Maru” v Empire Shipping Co Ltd (1994) 181 CLR 404; [1994] HCA 54
Rana v Survery [2012] NSWCA 394
Re Yowie Group Ltd [2025] NSWSC 524
Category: Procedural rulings
Parties: Yowie Group Ltd (Appellant/Applicant)
Keybridge Capital Ltd (Respondent)
Representation: Counsel:
G Sirtes SC, A Byrne, A Ford (Appellant/Applicant)
J Emmett SC, D Monteith (Respondent)
Solicitors:
Hamilton Locke (Appellant/Applicant)
Mills Oakley (Respondent)
File Number(s): 2025/243020
Publication restriction: Nil
LEEMING JA: This is another instalment of the litigation between Keybridge Capital Limited and Yowie Group Limited (to which I shall refer as Keybridge and Yowie). On 24 April 2025 Yowie’s majority shareholder Keybridge gave notice of its intention to nominate for election to the office of director the following five nominees, Mr Geoffrey James Wilson, Mr Jesse Michael Hamilton, Mr Martyn McCathie, Mr Frank Antony Catalano, and Mr Sulieman Ahmad Ravell. It advised that it intended to propose and nominate those people at a general meeting occurring at least 30 business days from the date of that notice.
On 28 May this year, Keybridge issued a notice pursuant to s 249F of the Corporations Act 2001 (Cth) to shareholders of Yowie stating that the meeting at which those five men were sought to be appointed and the then current directors removed was to take place on Friday 27 June 2025 at 10am at the offices of Mills Oakley in Melbourne. Thereafter, proceedings were commenced in this Court on 4 June and proceeded to a final hearing on 18 June, which is last Wednesday, following which the primary judge (Black J) reserved and produced a substantial judgment of 33 pages on 20 June 2025: In the matter of Yowie Group Ltd [2025] NSWSC 648. His Honour granted the following substantive relief:
1. Declare that the notice issued by the Plaintiff, Keybridge Capital Ltd (“KCL”) to the Defendant, Yowie Group Ltd (“YGL”) under s 203D(2) of the Corporations Act 2001 (Cth) (“Act”) dated 1 April 2025 is a valid notice of intention to move a resolution for the removal of directors at the meeting of YGL called under s 249F of the Act (“YGL 249F Meeting”).
2. Declare that the notice issued by KCL to YGL under s 203D(2) of the Act dated 9 April 2025 is a valid notice of intention to move a resolution for the removal of directors at the YGL 249F Meeting.
3. Declare that the notice of intention to nominate for election issued by KCL to YGL dated 24 April 2025 is a valid director nomination notice under YGL's constitution for the election of directors at the YGL 249F Meeting.
4. Declare that the notice of general meeting dated 26 May 2025 issued by KCL and despatched to shareholders of YGL under s 249F of the Act (Notice of 249F Meeting) is a valid notice convening a general meeting of shareholders of YGL to be held on Friday 27 June 2025.
5. Further and in the alternative to orders 1-4, declare, to the extent necessary, pursuant to s 1322(4) of the Act that the Notice of 249F Meeting is not invalid by reason of any contravention of the requirements of s 203D(2), s 249F or the requirements of cl 13.3 of the YGL's constitution, arising from any contravention of s 198G of the Act.
6. Order pursuant to s 1322(4) of the Act that Mr R P Austin act as independent chair of the general meeting of YGL scheduled for Friday 27 June 2025.
7. Declare that KCL is entitled to vote its interests as shareholder at the forthcoming YGL 249F Meeting on each resolution set out in the Notice of 249F Meeting.
8. Declare that the purported resolution by the board of directors of the YGL on 2 June 2025 pursuant to cl 11.2 of YGL’s constitution to postpone and change the venue of the general meeting of shareholders convened by the Notice of 249F Meeting is invalid and of no effect.
His Honour also noted that two of Yowie’s directors, Messrs Bolton and Patton, resigned their offices shortly before the trial commenced. That left that public company with three directors. More recently a third has resigned. As I noted, the meeting which was flagged as long ago as 24 April is to be held tomorrow at 10am. Notwithstanding the fact that Black J’s published judgment was available last Friday, it was not until yesterday afternoon that a notice of appeal and the motion which comes before me today was filed.
Ordinarily, filing a notice of appeal six days after the final judgment would be regarded as commendably expeditious. As I pointed out during the hearing this is not that case, at least in my view. What has happened is that through the delay in commencing proceedings until effectively the day before the meeting to occur on Friday, this Court has been forced to determine something much more complicated than the subject matter of the appeal.
The appeal gives rise to four discrete questions, and I understood it to be common ground at the bar table that it would likely be heard and determined in half a day. But rather than the hearing that has taken place earlier today being confined to those issues, it extended to a range of additional issues concerning balance of convenience. Even so, it will be necessary for me to express views about the strength or otherwise of the grounds of appeal, for the purposes of exercising a discretionary decision which cannot fully resolve the dispute between the parties. It cannot have come as a surprise to either litigant that Black J would, as he said he would, deliver judgment very speedily. It cannot have come as a surprise to the litigants that one was disappointed with the outcome. As it happens, there was part of Friday and all of the weekend and all of Monday, Tuesday and Wednesday to consider what steps would be taken. Had a notice of appeal been filed on Monday, and more especially had full submissions in support of that notice of appeal been filed around the same time, then this Court could and in all likelihood would have acceded to an application to an expedited final hearing of the appeal this week. As it is, I was in a position today (a Thursday) to offer final hearing dates next week, or the week after, or the week after that, for an appeal filed yesterday afternoon, if the parties were able to be prepared. The Court of Appeal can and will provide extreme expedition in an appropriate case, and the fact that this dispute is between two listed companies, one of which had made a takeover offer for the other which is open for another four weeks, is an example of such a case.
It is ordinarily much more preferable to determine things on a final basis than on an interlocutory basis for a range of reasons, not least of which is that it accords with the obligations in s 56 of the Civil Procedure Act 2005 (NSW) to concentrate on the just, quick and cheap resolution of the real issues in dispute. The issues going to balance of convenience that commonly loom large in applications for interlocutory relief may be sidestepped by an expedited final hearing of an appeal. It is also perhaps not sufficiently appreciated that an appellant who seeks interlocutory relief without the advantages of having submissions in support of the appeal in any detail and appeal books may incur a disadvantage if, as has been the case today, the respondent advances serious submissions as to the weakness of the appeal. That is another reason for focussing upon the main game, namely, the final hearing of the appeal rather than the interlocutory relief that is sought.
As a general rule, the Court will not prevent meetings and discussions and voting, and a fortiori that is the situation where if subsequently it is shown that there was equitable fraud or breach of duty or operative maliciousness that the election would be set aside.
The general reluctance of courts to prevent meetings of members casting votes was repeated by Beazley JA in Rana v Survery [2012] NSWCA 394 at [19].
Accordingly, I first turn to the grounds of appeal and then to the balance of convenience, in that respect following the same approach as was adopted by the parties.
Ground 1 challenged the reasoning of the primary judge concerning the operation of s 659B of the Corporations Act which provides restrictions upon the commencement of court proceedings “in relation to a takeover bid” at certain periods and, by s 659B(2), confers power on the Court to grant a stay to “court proceedings in relation to a takeover bid”.
The term “court proceedings in relation to a takeover bid” is relevantly defined to mean any proceedings before a court in relation to “an action taken or to be taken as part of, or for the purposes of, the bid or the target’s response to the bid” and includes a number of other proceedings none of which, as I understood it, were said to be engaged by this litigation.
Before the primary judge, Yowie had contended that by reason of s 659B, a stay pursuant to subs (2) should be ordered. His Honour’s reasons on this are set out at [30]-[31] as follows:
Mr Green addresses the scope of s 659B and s 659C of the Act and submits, and I accept, that their intent is to make the Takeovers Panel the main forum for resolving disputes about a takeover bid until the bid period has ended. Nonetheless, consistent with authority, I accept that the Court should not treat its jurisdiction as excluded unless the statutory words clearly and unambiguously apply in the relevant circumstances; s 659B applies only in respect of Court proceedings in relation to a takeover bid or proposed takeover bid, and the question whether proceedings are Court proceedings in relation to a takeover bid is tested at the date of the application brought to the Court: Lionsgate Australia Pty Ltd v Macquarie Private Portfolio Management Ltd (2007) 62 ACSR 178 at [27]-[28]; Cromwell Corporation Ltd v ARA Real Estate Investors XXI Pte Ltd (2020) 148 ACSR 217 at [64]; Metalicity Ltd v Allen (2002) 165 ACSR 509 at [38]ff.
These proceedings relate to the validity or otherwise of the steps taken to call the YGL 249F Meeting and will not determine any question as to the takeover bid by YGL for KCL. It is not to the point that these proceedings may have a connection with the relevant parties’ strategies in respect of that takeover bid or that the outcome of the proceedings (and, no doubt, many other events) may have a practical impact upon the bid. The Court’s jurisdiction is therefore not excluded by the existence of YGL’s bid for KCL and YGL did not submit it was excluded by KCL’s reference of other matters to the Takeovers Panel.
In order to explain more precisely the way in which the section is said to have been infringed, it is necessary to give some more details as to timing.
These litigants were last before this Court on 8 May where, shortly following the hearing of an earlier expedited appeal, the Court made orders, with reasons delivered a few days later: see Bolton v WAM Active Ltd (No 2) [2025] NSWCA 99. It will be recalled that by that date those associated with Wilson Asset Management had flagged an intention to nominate the five men as directors of Yowie. The following is taken from the more detailed chronology reproduced in the primary judge’s reasons for judgment at [8]-[28].
On 9 May 2025, Keybridge made a further request for access to Yowie’s register. On that day Yowie released an announcement to the Australian Stock Exchange entitled “Yowie announces scrip takeover bid for Keybridge”. The announcement included the following “defeating condition” as condition 9:
No change to Yowie board composition
[Keybridge] its directors, officers or associates do not:
(a) Issue a notice pursuant to ss 249D, 249F or 249G for the purpose of convening a meeting of Yowie shareholders; or
(b) Propose a resolution at a meeting of Yowie shareholders; or
(c) Take any actions,
that would influence the control or composition of the Yowie board of directors.
On 12 May 2025 Keybridge commenced proceedings against Yowie seeking an order that it provide a copy of its register of members. On that day Yowie announced that it had resolved to issue more than 34 million new shares in Yowie with the result of diluting Keybridge’s voting power from 66.78% to 58.07%.
On 14 May 2025, at a directions hearing before Nixon J in the proceedings brought for the access to Yowie’s register, Yowie’s counsel stated:
The purpose is so that they can call a meeting under 249D in order to remove Mr Bolton and other existing directors to replace them with nominee directors from Keybridge.
The primary judge noted that the reference to s 249D was plainly intended to be a reference to s 249F.
On 21 May 2025, Nixon J ordered that Yowie deliver a copy of its register of members to Keybridge: Re Yowie Group Ltd [2025] NSWSC 524. As I have noted, on 28 May 2025, Keybridge called a meeting pursuant to s 249F.
On 1 June 2025, Mr Patton issued an invitation to Yowie’s directors to attend a meeting to approve an ASX announcement to postpone and change the venue of the s 249F meeting. On 2 June 2025, the director of Yowie attended a meeting concerning the postponement and change of venue of the 249F meeting. On that date Yowie announced to the stock exchange that its board had unanimously resolved to postpone the meeting to 10am on 14 July 2025 and change the venue of the meeting “to the extent the purported meeting is valid”.
On 13 June 2025, Yowie issued a bidder’s statement in respect to its off-market takeover bid for Keybridge. As well as the condition concerning Keybridge not altering the composition of Yowie’s board, another condition of that offer was that Keybridge’s control of Yowie would be diluted, by the issue of a sufficient number of shares to Keybridge shareholders accepting the bid, to less than 50%.
The primary judge noted that two of Yowie’s directors resigned on the morning of the hearing before his Honour. A third, Mr Ranger, was cross examined at that hearing.
It is not necessary for me to express any view about the purposes of the current and former directors of Yowie in the course of conduct that has been summarised above. That is because express findings have been made by the primary judge and they are not challenged, relevantly, in this appeal. The primary judge at [74] reproduced Yowie’s announcement to the stock exchange made on 2 June 2025, which is as follows:
Although the Constitution does not require the provision of reasons, the Board wishes to advise members that the postponement and change of venue for the EGM is necessary for a number of reasons, including (but not limited to):
● [YGL] refers to its earlier announcement on 1 May 2025 and its response dated 19 May 2025 to an ASX Query letter which was released onto the [announcement platform] on 20 May 2025, regarding the validity of the meeting request.
● [YGL] notes that separate applications have been made to the Takeovers Panel by [KCL] and YGL both pertaining to the prospective meeting. One regarding [KCL’s] ability to call the meeting (at least insofar as the change of board resolutions) during [YGL’s] takeover offer for [KCL] and the other involves voting eligibility at the meeting. Both of these matters must be resolved prior to the holding of the meeting.
● The purported notice of meeting raises issues about a constitutional clause that affects a number of the resolutions purportedly put at the meeting, where shareholders are not properly informed by the notice about the impact of that constitutional clause and the practical consequences of changing it.
● [YGL] has been made aware that a [KCL] shareholder, holding more than 5% of [KCL], issued, on 1 April 2025, a s 230D notice seeking the removal of all [KCL] directors and that a s 249F meeting has since been called by that shareholder seeking the removal of Mr Wilson, Mr Hamilton, Mr McCathie and Mr Ravell (WAM directors) from the [KCL] board.
I also find that YGL’s directors had a further and substantial improper purpose in postponing the YGL 249F Meeting which was not disclosed by that announcement. As I noted above, YGL’s directors plainly knew that YGL’s takeover bid for KCL was structured to seek to dilute KCL’s shareholding in YGL, if KCL shareholders accepted that bid; Mr Ranger accepted that he knew the offer operated in that way in cross-examination; and I comfortably draw the inference that YGL’s directors postponed the meeting so as to allow additional time for any such dilution to take place. To the extent that Mr Ranger did not accept that he held that purpose in cross-examination, I am not persuaded by his denial of that matter and I infer that no evidence that could have been led by the other directors or former directors of YGL who did not give evidence, including Mr Patton and Mr Bolton, would have assisted YGL in displacing that inference.
I should note lest there be any doubt about it that his Honour at [79] considered s 195 of the Corporations Act and stated that he did not need to determine whether there was a contravention of that section here.
One of the matters propounded in opposition to the interlocutory relief is that it would leave in place a listed company, which, as of the resignation of yet another director earlier this week, is now in non-compliance with the obligation in s 201A(2) of the Corporations Act that it have at least three directors and where the two remaining directors are the subject of an unchallenged finding of a substantial improper purpose in postponing the very meeting that is sought to be postponed by the application before me today. There is a great deal of force in that submission.
But I return to the strength of ground 1, which turns upon the application of that factual background to the prohibition in s 659B. I am not persuaded that any substantial attack has been made upon the reasoning in those two paragraphs. It is not the test in s 659B that litigation will have some effect upon a takeover bid. As indicated in argument, I would strain against a construction of s 659B which would lead to the result that, by the device (I do not use that noun in a pejorative way) of making a takeover bid and including within it conditions which impacted upon existing litigation, one litigant could deprive this Court of jurisdiction. That conclusion would be contrary to the ordinary approach of construing provisions detracting from the jurisdiction of a superior court narrowly: see Owner of the Ship “Shin Kobe Maru” v Empire Shipping Co Ltd (1994) 181 CLR 404 at 421; [1994] HCA 54.
Further, it is plain from s 659B(2) that, even if the prohibition in subs (1) is contravened, that does not render the proceedings in the Court a nullity. Mr Sirtes, who appeared for Yowie in this Court, candidly and very properly acknowledged as much in his submissions in reply. The position of proceedings commenced in contravention of a prohibition is considered in two decisions mentioned during argument, Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364; [2006] HCA 32 and 2 Elizabeth Bay Road Pty Ltd v The Owners - Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409. That, in turn, therefore, may engage discretionary considerations as to what consequences any contravention of the provision would be. It certainly does not follow that the inevitable result would be setting aside the orders made by the primary judge.
My note of Mr Sirtes’ submissions is that, in response to Mr Emmett, he maintained that at least ground 1 was “not hopeless”. I am inclined to agree with that submission, but nonetheless regard it as, at best, a weak one.
Ground 2 concerns a peculiarity of Yowie’s Constitution. The primary judge noted at [46] that the reference to s 225 in cl 13.3 of Yowie’s Constitution may simply be a straightforward error. However, he did not decide the case on that basis, although plainly it is open, by way of notice of contention, to uphold this aspect of the reasons on that basis. Clause 13.3 is as follows:
13.3 Election of Directors
Subject to the provisions of this Constitution, the Company may elect a person as a Director by resolution passed in general meeting. A Director elected at a general meeting is taken to have been elected with effect immediately after the end of that general meeting unless the resolution by which the Director was appointed or elected specifies a different time. No person other than a Director seeking re-election shall be eligible for election to the office of Director at any general meeting unless the person or some Shareholder intending to propose his or her nomination has, at least 30 Business Days before the meeting, left at the Registered Office a notice in writing duly signed by the nominee giving his or her consent to the nomination and signifying his or her candidature for the office or the intention of the Shareholder to propose the person. Notice of every candidature for election as a Director shall be given to each Shareholder with or as part of the notice of the meeting at which the election is to take place. The Company shall observe the requirements of Section 225 of the Corporations Act with respect to the election of Directors. If the number of nominations exceeds the vacancies available having regard to clause 13.1, the order in which the candidates shall be put up for election shall be determined by the drawing of lots supervised by the Directors and once sufficient candidates have been elected to fill up the vacancies available, the remaining candidates shall be deemed defeated without the need for votes to be taken on their election.
I do not accept YGL’s submission as to the effect of cl 13.3 of YGL’s constitution for several reasons, and it is possible to address that issue briefly because of the straightforward character of those reasons. First, cl 32 of YGL’s constitution provides, in paragraph (f) that:
“If any provision of this Constitution is or becomes inconsistent with the Listing Rules, this Constitution is deemed not to contain that provision to the extent of inconsistency.”
If cl 13.3 of YGL’s constitution operated in the manner that YGL contends, so as to exclude the exercise of voting rights by KCL, then it would be inconsistent with the voting rights conferred on KCL, and all shareholders, on a poll under rule 16.9 of the ASX Listing Rules on a poll and cl 13.3 would be deemed not to contain the relevant reference to s 225 of the Act to the extent of that inconsistency. YGL’s reliance on that clause cannot assist it for that reason.
Second, cl 13.3 of the Act does not apply to the resolutions sought to be passed at the YGL 249F Meeting, because KCL here seeks to remove directors of YGL before the expiration of their period in office, and, by resolution, appoint other directors in their place, and that procedure is governed by cl 13.5 of YGL’s constitution, which does not incorporate a reference to s 225 of the Act. I accept that, as Mr Green contends, YGL’s constitution must be read as a whole, and by reference to applicable principles of construction, but that does not have the consequence that a requirement that does not apply to one procedure should be attached to it, because it applies to another different procedure.
Third, even if cl 13.3 of YGL’s constitution incorporates s 225 of the Act and then extends further to s 224 of the Act as Mr Green contends, those sections deal with the procedure for obtaining member approval for the giving of financial benefit under Ch 2E of the Act. Section 225 imposes certain obligations on the relevant company in respect of such a resolution, and the reference on that section in cl 13.3 would require YGL to comply with those obligations if they were otherwise applicable on the terms of the section. Those obligations apply, on the widest possible reading of the sections, where the resolution would approve the giving of a financial benefit (as defined in s 229 of the Act) to a related party. However, there is no evidentiary basis for Mr Green’s further assumption that the election of directors nominated by KCL would give a “financial benefit” to KCL for the purposes of Ch 2E of the Act. While I recognise that the concept of “giving a financial benefit” in Ch 2E of the Act is to be read widely and in accordance with s 229 of the Act, that does not have the consequence that the election of a director which has no apparent financial impact, positive or negative, on a shareholder can amount to a “financial benefit” under Ch 2E, without more.
For completeness, I have not neglected that cl 33.1 of YGL’s constitution requires YGL to comply with Ch 2E of the Act, dealing with related party transactions, although those provisions would apply to YGL irrespective of that provision. That does not alter the conclusions that I have reached above.
As I have noted, Yowie provided brief written submissions in advance of the hearing. Three paragraphs were directed to ground 2. The first is introductory. The second asserted error and contended that if the primary judge's construction were correct, the clear words of cl 13.3 would have no work to do whenever a director was being replaced. The third paragraph referred to a related matter concerning the construction of the words “permit the giving of a financial benefit” in s 224(1)(a) of the Act. Those submissions do not attend to the first point made by the primary judge which is that, by reason of cl 32 of the Constitution, the Listing Rules trump or override any provision which is inconsistent with them.
In oral submissions in reply, it was said on behalf of Yowie that the effect of s 225 extended not merely to voting but also to the issue of the notice under s 249F to call the meeting. I did not understand that submission to have been developed below, or at any length in this Court, and I do not understand how it can be supported by s 225 or how it can undermine a member’s statutory right to call a meeting.
In relation to this ground, I am conscious that there is at least arguably a textual error in Yowie’s Constitution. The legal effect of such an error can be difficult to predict, no differently from many questions of construction in litigation where some error of drafting either a statute or a contract or a will or other legal document has been made. I mean absolutely no criticism to the lawyers who have argued on very short notice today before me, but it is often the case that a deal more can be said on these questions of construction than the parties have had a chance to advance today. Nonetheless, doing the best I can, I do not regard ground 2 as a ground that is strong.
Ground 3 can be dealt with more concisely. This ground is that there was error in the finding of the primary judge at [53] and [54] that Keybridge had called the meeting for a proper purpose. The ground, as framed, draws attention to s 249Q of the Corporations Act. The submissions in support complain that no reference was made to 249Q, notwithstanding arguments made at the hearing, and referred in para 18 as follows:
It was not in dispute before Black J that Keybridge commenced taking steps to remove the board of Yowie and replace it with the Keybridge directors following Yowie issuing to Keybridge a creditor statutory demand for repayment of a debt. The explanatory memorandum of the 249F notice referred to the proposed directors assessing the debt once they are elected. The purpose of Keybridge assessing its own indebtedness to Yowie is not a proper purpose, nor is it in the best interests of Yowie as a whole.
Towards the conclusion of his address, Mr Emmett proffered an undertaking not to compromise the loan which was the subject of that submission. The response was a complaint about the potential ambiguity of that offer. It is not necessary for me to go any further because, as Mr Emmett submitted, there is a supervening difficulty with acceptance of this ground.
Although Yowie pointed to decisions to the effect that a member must exercise its entitlements bona fide for the benefit of the company as a whole, and complained that not all of its submissions had been addressed by the primary judge, his Honour is not fairly to be criticised for failing to attend to all of the arguments advanced to him by counsel then appearing for Yowie (not Mr Sirtes). Indeed his Honour expressly said that given the commercial urgency of the litigation, he would address only the matters necessary to determine the issues. Keybridge served affidavits of two of its directors and, after some objections to some of those affidavits were acceded to, senior counsel then appearing for Yowie advised that neither Mr Hamilton nor Mr Ravell were required for cross examination (transcript 18 June 2025, T21.42). I do not see how the primary judge can be criticised for failing to make a finding that the meeting was called for an improper purpose when counsel then appearing had not put that to the directors called by Keybridge. I do not have those affidavits, or the objections, or the rulings that were made, but I am inclined to think that Mr Emmett’s submission is correct. The prospects of ground 3, doing the best I can in the circumstances I am called upon to do so today, are, at best, weak.
Ground 4 complains of an error made by the primary judge at para 20. The ground is as follows:
The trial judge erred at J[20] in finding that the Appellant’s denial to the ASX that its directors had been made aware that a person or persons holding more than 50 per cent of the Appellants ordinary shares intended to call, or requested the directors to call, a general meeting to appoint or remove directors of the Appellant was “plainly false or at best highly misleading” in circumstances in which the Respondent’s voluntary administrator, Mr Rathner, had emailed the Appellant and advised the Appellant that he had not authorised such a meeting and had no intention to call such a meeting.
I do not have Mr Rathner’s email which is referred to in that ground. I do not know its date. However, Mr Emmett said that on the face of the ground, it was “not maintainable” because Mr Rathner’s office as administrator ceased after this Court made orders on 8 May 2025, and paragraph 20 of the primary judgment refers to what occurred on 19 May 2025. Nor did I understand Mr Sirtes to make any response to those criticisms of this ground.
Two paragraphs were supplied in the written submissions in support of ground 4, but aside from asserting that this is “a serious issue to be determined”, those submissions do not respond to the timing difficulty identified by Mr Emmett or otherwise identify where the error is.
As I noted at the outset, it is less than satisfactory to deal with grounds of appeal in the way that has been forced upon me, namely, in this interlocutory fashion, where neither side has had the benefit of taking me to the documents or supplying written submissions in advance of the appeal, let alone the opportunity to reflect upon them. As noted at the outset, the timing, which is a product of Yowie’s decision, obliges me to make a decision today.
I turn to balance of convenience. In support of the relief it seeks, Yowie contends that its appeal rights would be rendered nugatory. That is hotly in issue, and it is necessary to address the variety of arguments that were exchanged on both sides.
First, Yowie says that the proposed resolutions would be passed because Keybridge is a majority shareholder and I shall proceed on that basis.
Secondly, Yowie says that its extant takeover bid for Keybridge would be terminated by reason of condition 9 to which I have referred above. There are two answers to that. One is that the bid identified two sorts of conditions, those which were waivable and those which were not. Condition 9 is a condition that is waivable. It does not follow therefore that the change to the board of Yowie, which will probably occur if the meeting tomorrow takes place, will of itself terminate the takeover bid. However, to my mind, the more substantive objection to this point is that the takeover bid itself and in particular the inclusion of condition 9 was formulated by Yowie and supplied at a time when it well knew and had known for weeks that this was precisely Keybridge’s intention. I do not see how rationally Yowie can obtain a benefit on balance of convenience because it contrived, and again I do not mean by that verb to convey or imply anything pejorative, to structure a bid which is affected by its lack of success to date in the litigation.
The third proposition propounded by Yowie that its appeal rights will be rendered nugatory if interlocutory relief is not granted is that the proposed resolutions may be passed on the basis of a construction of Yowie’s Constitution that is incorrect. That is possible. Telling against it is the fact that there has been an expedited final hearing binding both Keybridge and Yowie as to what the proper construction of the Constitution is. Also telling against it is the fact that if the meeting takes place and votes be counted in a way that turns out to be inconsistent with the Constitution on its proper construction, then I see no reason whatsoever why this Court cannot craft relief to give effect to the proper construction of the Constitution. As indicated during argument, it is relatively straightforward for this Court to declare, including with retrospective effect, what the outcome of resolutions put at the meeting should have been in accordance with the correct construction of the Constitution.
1. Dismiss the notice of motion filed 25 June 2025.
2. Order that there be no discontinuance or dismissal of the appeal without leave of the Court.
I will hear you about this if there is anything to be said. But at the moment my view is that there is nothing to displace costs of the motion following the event.
3. The appellant to pay the respondent’s costs of the notice of motion.
4. Set down the appeal for 10 July 2025.
5. The appellant to file and serve written submissions by 1 July 2025.
6. The respondent to file and serve written submissions by 5 July 2025.
7. The appellant to file and serve submissions in reply by 4pm on 8 July 2025.
8. Direct the Registrar to make other directions as to the preparation of appeal books and otherwise readying the matter for hearing.
[After discussion with counsel]
9. Liberty to apply on one business day’s notice to Justice Leeming by his Associate, or the Registrar.
**********
Yowie Group Ltd
Keybridge Capital Ltd [2025] NSWCA 142
(2014) 88 NSWLR 488
(2006) 227 CLR 57
(2006) 225 CLR 364
(1987) 8 NSWLR 533
(1994) 181 CLR 404
The notice of motion filed 25 June 2025 was dismissed. There could be no discontinuance or dismissal of the appeal without leave of the Court. Yowie was ordered to pay Keybridge’s costs of the motion. The appeal was set down for 10 July 2025, with directions for written submissions and appeal preparation.
The principles applicable to the determination of the notice of motion filed yesterday afternoon which seeks an injunction preventing the long-scheduled meeting tomorrow morning from taking place are relatively clear. Certainly, they were not disputed before me. The helpful and succinct written submissions supplied on behalf of the appellant contended that in relation to each of the four grounds of appeal, a prima facie case has been made out. I did not understand there to be any dispute that for present purposes “prima facie case” was to be determined in accordance with what was held by the High Court in Australian Broadcasting Corporation v O*’*Neill (2006) 227 CLR 57; [2006] HCA 46, in the sense that Yowie must show a sufficient likelihood of success to justify the preservation of the status quo pending the trial as opposed to establishing that it was more probable or not that it would succeed.
However, those principles fall to be modified in a case, where as here there has already been a final hearing and what is not sought is a stay of execution of judgment but further albeit interlocutory injunctive relief in the same terms as that which has already been determined on a final basis adversely to Yowie following a final hearing, and which may be dispositive of the litigation. That situation is analogous to the situation identified by McLelland J in Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 536, where his Honour indicated that in such circumstances the relative strengths of the competing cases become much more important a consideration than on ordinary applications for an interlocutory injunction. As much was reiterated by Brereton J in In the matter of U&D Coal Ltd [2014] NSWSC 1128 at [5]. What I have just said probably is not controversial and certainly it accorded with the approach taken by both sides in engaging relatively fully – much more fully than is ordinarily the case in applications of this kind – in the merits of the grounds of appeal.
Finally, Mr Emmett who with Mr Monteith appears for Keybridge directed my attention to what had been said by Young CJ in Contouris v Kallos [2008] NSWSC 840; 67 ACSR 543 at [14] to the effect that:
The fourth point put forward on behalf of Yowie is that given the proposed directors of Yowie are the same directors as Keybridge, it can be assumed that, upon being appointed directors of Keybridge, they would cause the appeal to be discontinued.
During the course of argument I raised my concerns that the men whose offices may be vacated in the event that voting takes place at the meeting scheduled to take place tomorrow in accordance with everyone’s expectations themselves have a personal interest. It may only be a reputational interest, although it may be more than that, and by saying that I do not mean to diminish the significance of a reputational interest, given the seriousness of the findings made by the primary judge.
There was no opposition from Keybridge to the proposition that those men in their own right might be permitted to intervene in and indeed run the appeal which was commenced yesterday. Indeed, in addition to this outcome being achieved through joinder, Mr Emmett floated the possibility of an application under s 237 of the Corporations Act. I think that it is sufficient to address this concern at this stage at least by simply ordering that there be no discontinuance or dismissal of the extant appeal without the leave of the Court. That will prevent the possibility that by unilateral action (for example the filing of a notice of discontinuance) in the event that Mr Emmett’s clients obtain control of Yowie, of the appeal being discontinued or dismissed without those former officers of Yowie exercising such entitlement as they may have to intervene or otherwise prosecute the appeal.
Telling against the considerations advanced by Yowie are a number of matters raised by Keybridge. Some I have already mentioned. There is the extant finding of a substantial improper purpose, and that purpose is closely connected to the interlocutory relief that is sought today. There is the extant and unremedied contravention of s 201A(2) by a listed public company. There is absolute silence from something in response to submissions at the forefront of Keybridge’s address, namely that this litigation is being run against Keybridge at the expense of a subsidiary of Keybridge, by directors who are faced with that they say is the certainty of their removal tomorrow unless interlocutory relief is obtained. Yet, says Mr Emmett, not a jot has been said in support of the natural persons either being joined and exposed to the potential liability for costs or proffering security for costs, or proffering their own undertaking to meet the costs of such litigation in these circumstances.
It may seem a small point, but there is also evidence about the costs that will be thrown away in the event the interlocutory relief is granted. The uncontested evidence is that a room has been booked, arrangements to attend including overnight accommodation have been made and an independent chair has been retained to convene that meeting and his costs are not insubstantial. These costs total some tens of thousands of dollars. They will be thrown away if interlocutory relief is granted in the form sought.
When I first began to look at this late yesterday afternoon, the matter having been allocated to me, I thought it might be relatively difficult. With the assistance of written and oral submissions from the parties, for the reasons I have sought to indicate above, I regard this as a very clear case. The prospects of success in the ultimate appeal are at best weak. I propose to make directions shortly, which in substance are consensual between the parties, both of which accept the appropriateness of a highly expedited final hearing of the appeal, which will have the appeal heard within the next three weeks and hopefully determined before the takeover period has expired. The balance of convenience in very large measure supports maintaining what has been the declared position of Keybridge for many weeks, namely that tomorrow there will be a meeting of shareholders of the company to determine who will hold office as directors. I am unpersuaded that in the event that the appeal is successful orders of this Court will not be able fairly to cure such prejudice as will occur in the next very small number of weeks.
For those reasons, the Court will make the following orders: