Federal Court of Australia

Der Sarkissian v QGold Pty Ltd [2026] FCAFC 94

ORDERS

THE COURT ORDERS THAT:

1.    The appeal is dismissed.

2.    The Appellant pay the Respondents’ costs of and incidental to the appeal.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

THE COURT ORDERS THAT:

1.    The appeal is dismissed.

2.    The Appellant pay the Respondents’ costs of and incidental to the appeal.

[Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.]

REASONS FOR JUDGMENT

THE COURT:

overview

1    These appeals, both from the decision QGold Pty Ltd v Woods [2025] FCA 1201 (primary judgment) concern the meaning of, and permissible approach to determining, the “fair value” for securities in a company as a condition of the Court approving their compulsory acquisition by a “90% holder” under Ch 6A, Pt 6A.2, Div 1 of the Corporations Act 2001 (Cth).

2    The first respondent (QGold) became a “90% holder” of ordinary shares in the second respondent (Carawine) on 20 November 2023. As such, QGold became entitled to, and did, lodge a compulsory acquisition notice with the regulator (ASIC) on 21 March 2024: Act, s 664AA and s 664C(2)(a). QGold also provided ASIC with an expert report from Mr Sherif Andrawes of BDO Corporate Finance (WA) Pty Ltd dated 26 February 2024 (Andrawes Report): Act, s 664C(2)(b)(ii). Mr Andrawes was a person nominated by ASIC under s 667AA of the Act to prepare such a report: Act, s 667A(1)(a). Those documents, together with an “objection form”, were then provided to the other ordinary shareholders in Carawine including, relevantly, the appellant in QUD791/2025 (Mr Der Sarkissian) and in QUD802/2025 (Mr Catto): Act, s 664C(2)(b).

3    The notice provided that QGold proposed to compulsorily acquire the remaining ordinary shares in Carawine for a cash amount of $0.11 per share. The proposed price was within the range identified in the Andrawes Report for the assessed value for each Carawine share. Mr Andrawes expressed the view that the terms of the compulsory acquisition “give a fair value” to shareholders: Act, s 667A(1).

4    Mr Der Sarkissian and Mr Catto, amongst other Carawine shareholders, objected to the compulsory acquisition: Act, s 664E. QGold then applied to the Court for approval of the acquisition of the ordinary shares covered by the notice: Act, s 664F(1). Such approval is mandatory if the “90% holder” establishes that the terms set out in the notice “give a fair value for the securities”: Act, s 664F(3). Mr Catto was the representative defendant at the hearing before the primary judge.

5    The primary judge found that the Andrawes Report complied with the Act (and, if his Honour was wrong about that, that it was appropriate to excuse any alleged errors under s 1322 of the Act) and that the price for the proposed compulsory acquisition of the residual ordinary shares in Carawine gave a fair value for the securities: primary judgment at [146]-[152] and [193]. It followed that the primary judge was required to approve their acquisition on those terms: Act, s 664F(3).

6    Mr Der Sarkissian appeals the primary judgment on six grounds and Mr Catto appeals on two grounds. Those grounds of appeal, a number of which overlap, may be summarised as follows:

(a)    The primary judge erred in conflating s 667C(1) and s 667C(2) of the Act and failing to treat them as “separate legs”: QUD791/2025 (Grounds 2, 4 and 5) and QUD 802/2025 (Ground 2);

(b)    The primary judge erred in finding that Mr Andrawes took into account evidence of historical trading in Carawine shares and that the Andrawes Report complied with s 667C(2) of the Act: QUD791/2025 (Grounds 1, 2, 4, 5 and 6) and QUD802/2025 (Ground 1); and

(c)    The primary judge erred in finding that QGold established that the terms set out in the notice gave a fair value for the residual ordinary shares in Carawine: QUD791/2025 (Ground 3).

7    For the following reasons, the grounds of appeal are without substance, each of the appeals will be dismissed and Mr Der Sarkissian and Mr Catto will be ordered to pay the costs of their respective appeals.

legislative framework

8    Chapter 6A, Pt 6A.2 of the Act governs the compulsory acquisition of a class of securities by a “90% holder”. Where, as here, people holding at least 10 per cent of the securities covered by the acquisition notice object to the acquisition within the prescribed period, the 90% holder may apply to the Court for approval of the acquisition of the securities covered by the notice: Act, s 664F.

9    Section 664F(3) of the Act provides that the Court must approve the acquisition of the securities covered by a compulsory acquisition notice if the 90% holder establishes that the terms set out in the notice give a fair value for securities. Otherwise, the Court must confirm that the acquisition will not take place: Act, s 664F(3). The “note” to the section draws attention to s 667C “on valuation”.

10    Section 667C of the Act prescribes:

667C    Valuation of securities

(1)    To determine what is fair value for securities for the purposes of this Chapter:

(a)    first, assess the value of the company as a whole; and

(b)    then allocate that value among the classes of issued securities in the company (taking into account the relative financial risk, and voting and distribution rights, of the classes); and

(c)    then allocate the value of each class pro rata among the securities in that class (without allowing a premium or applying a discount for particular securities in that class).

(2)    Without limiting subsection (1), in determining what is fair value for securities for the purposes of this Chapter, the consideration (if any) paid for securities in that class within the previous 6 months must be taken into account.

11    The valuation to which s 667C refers is the subject of an expert’s report, which must be provided by the 90% holder to holders of securities of the relevant class, together with the compulsory acquisition notice and objection form on the day on which the notice is lodged with ASIC: Act, s 664C(2)(b). Relevantly, that expert’s report must state whether, in the expert’s opinion, the terms proposed in the compulsory acquisition notice give a fair value for the securities concerned and set out the reasons for forming that opinion: Act, s 667A(1)(b) and s 667A(1)(c).

primary judgment

12    The issues for determination by the primary judge relevantly concerned the Andrawes Report (which was supplemented by a report from Mr Andrawes dated 27 February 2025) and the methodology by which Mr Andrawes arrived at the conclusion that the terms of the notice offered a fair value for the remaining ordinary shares in Carawine. As the primary judge explained (at [25]):

At the heart of this matter lies s 664F(3). It is binary in its terms: the Court must approve the Compulsory Acquisition Notice if QGold establishes its terms give a fair value for the securities in question. Otherwise, the Court must confirm the proposed acquisition will not take place. In this context, it was said by Mr Bennett (on behalf of the representative defendant) that QGold had “failed to discharge the onus” impressed upon it by the terms of s 664F(3) because:

(1)    the Andrawes Report was inconsistent with the Act or otherwise deficient; and

(2)    the price at which the Compulsory Acquisition Notice proposed to acquire the residual ordinary shares in Carawine (being $0.11 per share) did not accord them “fair value”.

(Emphasis in original)

13    The representative defendant alleged that the assessment of fair value in the Andrawes Report did not comply with the requirement in s 667C(2) of the Act to take into account the price paid for securities in the class sought to be acquired within the previous six months: primary judgment at [82]. It was uncontroversial before the primary judge that the six-month period was to be determined by reference to the date on which QGold became a 90% holder, namely, 20 November 2023: primary judgment at [86].

14    The representative defendant took the primary judge to evidence which showed that during the relevant six-month period “there had been consistent trading [in Carawine ordinary shares] above 11 cents, including trades on 6 July 2023 and 10 July 2023 at 14 cents per share”: primary judgment at [85]. He submitted that such a circumstance was precisely what the legislature, by s 667C(2) of the Act, seeks to protect minority shareholders from. That is, a 90% holder acquiring securities at an “upper range” in the preceding six months and then offering the minority shareholders a lower price: at [85].

15    The primary judge rejected the contention that the Andrawes Report did not comply with s 667C(2) of the Act. That was because, the primary judge found it “rather pellucid that Mr Andrawes did take into account evidence of historical trading in ordinary Carawine shares”: primary judgment at [86] and [95]-[96]. Being otherwise satisfied that the methodology in the Andrawes Report was a “cogent mechanism by which to assess the value of a security”, the primary judge concluded that QGold had discharged its onus under s 664F(3) and, as such, the Court was obliged to approve the acquisition of the ordinary shares in Carawine on the terms set out in the notice: primary judgment at [193]-[194].

16    The grounds of appeal challenge the conclusions reached by the primary judge as to the proper construction of s 667C and s 664F of the Act and their application on the evidence before the Court. In particular, his Honour’s finding that the methodology used by Mr Andrawes gave effect to the requirement in s 667C(2) to take into account the historical price paid for those shares, such that QGold had established that the notice gave a fair value for the remaining ordinary shares in Carawine and that he was bound under s 664F(3) of the Act to approve the compulsory acquisition.

grounds of appeal

Grounds 2, 4 and 5 (QUD791/2025) and Ground 2 (QUD802/2025): The construction of s 667C of the Act

17    The first issue raised by the grounds of appeal concerns the primary judge’s construction of s 667C of the Act. Namely, that “whilst s 667C(2) requires that historical prices be taken into account, that evidence is not determinative of ‘fair value’”: primary judgment at [96]; see also, at [85] and [95].

18    Mr Der Sarkissian contends that construction is in error because s 667C of the Act contains “two separate legs” – the first being the valuation of the securities pro rata (s 667C(1)), the second being the consideration paid for the securities within the previous six months (s 667C(2)). Mr Der Sarkissian submits that the “second leg” cannot limit the “first leg” and the requirement in s 667C(2) to “take into account” the historical price paid for the securities “may, after due consideration, move the fair value point within a value range” and “may well influence where in a range of values the fair value, for compulsory acquisition, should be set”.

19    In support of that construction, Mr Der Sarkissian places reliance on ASIC’s “Regulatory Guide 111” with respect to the “content of expert reports”. The Regulatory Guide relevantly provides:

Compulsory acquisitions and buy-outs

RG 111.47    Chapter 6A prescribes the steps an expert must take in reaching an opinion for compulsory acquisitions and buy-outs. Section 667A(1) requires an expert to:

(a)    provide an opinion on whether the proposed terms in the buy-out or acquisition notice give a ‘fair value’ for the securities; and

(b)    set out the reasons for its opinion.

RG 111.48    To determine what is ‘fair value’, s667C requires that an expert:

(a)    first assess the value of the entity as a whole;

(b)    then allocate that value among the classes of issued securities in the company (taking into account the relative financial risk and the voting and distribution rights of the classes); and

(c)    then allocate the value of each class pro rata among the securities in that class (without allowing any premium or applying a discount for particular securities or interest in that class).

RG 111.49    In determining the fair value for securities, an expert must also take into account the prices paid for securities in that class in the previous six months: s667C(2).

RG 111.50    The weight of judicial authority is that an expert should not reflect ‘special value’ that might accrue to the acquirer (e.g. Capricorn Diamonds Investments Pty Ltd v Catto (2002) 41 ACSR 376 at 431; Winpar Holdings Ltd v Austrim Nylex Ltd [2005] VSCA 211 at [11]–[37]; Teh v Ramsay Centauri (2002) 42 ACSR 354 at 359). In practice, the issue of ‘special value’ might not be a critical issue. Special value might not be material once it has been allocated pro rata to each security in the class, including the securities of the party seeking to make the compulsory acquisition. An expert should not add any premium for forcible divestment: see Capricorn at 432.

Note: Similar considerations apply as to whether consideration under a capital reduction ‘is fair and reasonable to the company’s shareholders as a whole’: see s256B(1)(a) and Re Goldfields Kalgoorlie; Winpar Holdings Ltd v Goldfields Kalgoorlie Ltd (2000) 34 ACSR 737 at [69].

20    Mr Der Sarkissian highlights that Regulatory Guide 111.49 omits the words “without limiting subsection (1)” which appear in s 667C(2) of the Act. In his submission, that supports the conclusion that s 667C(2) is to be construed as a “second leg” in assessing the fair value of the securities the subject of the notice.

21    Mr Catto relies on the “principles of equal treatment of shareholders in public companies embodied in many aspects of the [Act] and particularly the [takeover] provisions in Chapter 6”. Materially, the introduction of Ch 6A as part of the Corporate Law Economic Reform Act 1999 (Cth) (which he describes as the “Elkington Catto amendment”) and the distinctions between Chs 6 and 6A of the Act. In particular, that in an off-market takeover bid under Ch 6 of the Act, the consideration offered for securities in the bid class must equal or exceed the maximum consideration that the bidder or an associate provided, or agreed to provide, for a security in the bid class under any purchase or agreement during the four months before the date of the bid: Act, s 621(3). Mr Catto also relies on s 1350 of the Act, which subject to its terms, renders a person liable to pay compensation if the operation of the Act results in their acquiring property otherwise than on just terms, which acquisition would be invalid under s 51(xxxi) of the Constitution.

22    The distinction Mr Der Sarkissian and Mr Catto seek to draw between taking into account the historical price paid for shares and the contention that consideration is to be given a separate operation that “cannot limit” and may well “influence” the determination of fair value is not easy to discern. The core of their contention appears to be that, properly construed, s 667C(2) of the Act requires that the price paid for securities in the relevant class within the previous six months inform a determination of “fair value” for the purposes of s 667C and s 664F(3) of the Act, in the sense of requiring a premium to be imposed on the value of the securities ascertained by reference to s 667C(1) when the historical price exceeds the pro rata valuation of the company as a whole.

How is s 667C to be construed?

23    What is a “fair value for securities” within the meaning of s 667C and, consequentially, s 664F(3) of the Act, is to be determined by reference to the text of the statute, whilst at the same time having regard to its context and purpose: SZTAL v Minister for Immigration and Border Protection & Anor [2017] HCA 34; (2017) 262 CLR 362 at [14] (Kiefel CJ, Nettle and Gordon JJ).

24    The text of s 667C(1) addresses the determination of fair value for securities, not the securities themselves, and by reference to the value of the company as a whole, the value of which is then dealt with in particular ways: Capricorn Diamonds Investments Pty Ltd v Catto [2002] VSC 105; (2002) 5 VR 61; (2002) 41 ACSR 376 at [63]. As Warren J (as her Honour then was) explained in Capricorn Diamonds by “addressing the value of the company as a whole the legislature has struck a balance between” the “competing interests of those involved in the compulsory acquisition process” – being the minority and majority shareholders of a company regulated under the Act: at [63]. That is because “the entirety of the advantage that the enterprise is capable of generating for the totality of the shareholder base is derived” and the “potential disadvantages to the minority” because they lack control “over management decisions and the like” are also avoided: at [64].

25    Section 667C(2) of the Act is, in terms, expressed not to limit the determination for which s 667C(1) of the Act provides. As such, in Teh v Ramsay [2002] NSWSC 456; (2002) 42 ACSR 354, Barrett J expressed the view that, properly construed, s 667C(2) (at [27]):

… identifies a matter which must be “taken into account” in determining “fair value for securities”, but which is in no sense derived pursuant to s 667C(1) from the starting point of “the value of the company as a whole” identified in s 667C(1)(a). … The view I take of the interaction between the two subsections, as derived from their own terms, is that the process in s 667C(1) is to be undertaken first and, after the result it produces has been ascertained, that result is to be reviewed in the light of the material to which s 667C(2) directs attention. A direction that a particular factor “must be taken into account” in “determining” a matter which is the subject of a peremptory command (“To determine what is fair value   …”) indicates that the peremptory command is to be obeyed in the first instance; and the outcome is then to be checked for consistency with the identified factor so that a decision can be made as to whether that outcome needs adjustment before the statutory result is regarded as having emerged.

(Emphasis added)

26    To similar effect, Warren J explained in Capricorn Diamonds (at [65]):

In applying s 667C(1) regard must be had to the consideration paid for the securities in the preceding six months: s 667C(2). If the trading price has more likely than not been driven by the prospect of a compulsory acquisition at an inflated price, or if there has been insufficient trading to render the trading price a proper indicator of value, or if takeover activity has distorted the market price, or if the trading in the securities has been too thin to provide any reliable indicator even of market value, no adjustment to the value determined in accordance with s 667C(1) is required.

27    We respectfully agree with the construction of s 667C(2) as outlined in Teh and Capricorn Diamonds. Namely, that the price paid for securities within the previous six months is to be taken into account so as to “check” that the value derived under s 667C(1) achieves the statutory object of a “fair value” for the securities, but is not determinative of the outcome of that inquiry. That is for five reasons.

28    First, that construction gives effect to the plain meaning of the words “without limiting”, as used in s 667C(2), and the content of the statutory requirement to “take into account” a consideration as settled by the authorities. The duty to “take into account” a consideration requires that an “active intellectual process” be brought to the matter and that it be given “proper, genuine and realistic consideration”: He v Minister for Immigration and Border Protection [2017] FCAFC 206; (2017) 255 FCR 41 at [53] (Siopsis, Kerr and Rangiah JJ). It does not follow, however, that the matter required to be taken into account is to be determinative of the inquiry. Rather, it necessitates that the matter be considered and whether it should be given any, or any particular, weight: Roads Corporation v Dacakis [1995] 2 VR 508 at p 536.

29    Second, the construction accords with the ordinary approach, endorsed in the authorities, for valuing property subject to compulsory acquisition, by assuming the hypothetical sale between willing but not anxious parties without regard to the consequence of the proposed acquisition: Spencer v Commonwealth of Australia [1907] HCA 82; (1907) 5 CLR 418 at p 432 (Griffith CJ), pp 436-437 (Barton J) and p 440-441 (Isaacs J).

30    Third, the construction is consistent with the purpose of s 667C of the Act as stated in the Explanatory Memorandum to the Corporate Law Economic Reform Program Bill 1998 (Cth), by which Pt 6A.2 of the Act was introduced (cf, Acts Interpretation Act 1901 (Cth), s 15AB(1)(a)):

7.13     The issue of valuing companies for the purposes of compulsory acquisition is a difficult one and the draft provisions provides guidance to experts as to how they should go about valuing a company (proposed section 667C). It is proposed that experts would not account for premiums on account of the special value of the outstanding securities to the acquirer, or discounts on account of the lack of a market for particular securities.

(Emphasis added)

31    The Explanatory Memorandum reflects recommendation 14 of the Compulsory Acquisitions Report published in 1996 by the Legal Committee of the Companies and Securities Advisory Committee and adopted by Parliament: Capricorn Diamonds at [75]; Acts Interpretation Act, s 15AB(2)(b). Relevantly, that, “In determining fair value, a court should … expressly disregard whether the remaining securities of the offer class should attract a premium or discount” (emphasis added).

32    As was explained in Capricorn Diamonds, this definition of “fair value” was adopted because it “promoted fairness and equity among all shareholders and acted to prevent the exploitation by one or a few shareholders of their minority status”: at [75]. In Pauls Ltd v Dwyer [2002] QCA 545; (2002) 43 ACSR 413 at [20] (Davies JA, with whom Jerrard JA and Jones J agreed) expressed the latter proposition thus:

… one of its purposes was to provide a method of valuation which would discourage greenmailing; which I understand to mean, in this context, minority security holders in a listed entity obtaining from the majority security holder a price for their securities which reflects the premium which the majority security holder would pay to acquire the whole of the minority securities …

(Footnotes omitted)

33    It can be seen, therefore, that the purpose of s 667C is to arrive at a valuation of the securities unaffected by consideration of premiums or discounts. That purpose is given effect by performing the valuation prescribed by s 667C(1) and then checking that outcome by reference to the price paid for the relevant class of securities within the previous six months, so that a decision can be made as to whether the outcome needs adjustment before the statutory result of ascertaining the “fair value” of the securities is regarded as having emerged: cf, Teh at [27]; Capricorn Diamonds at [65]; and Pauls at [21].

34    Fourth, the Regulatory Guide does not compel a different construction of s 667C of the Act. The Regulatory Guide, which was published on 22 October 2020, some 21 years after Ch 6A was enacted, cannot inform the interpretation of the provision: Acts Interpretation Act, s 15AB(2). But in any event, there is nothing in the Regulatory Guide that mandates s 667C(2) be treated as a “separate leg” in the assessment of “fair value” or calls for a different construction of the section to that set out above. Rather, as appears from its terms, the Regulatory Guide calls on an expert to “take into account” the historical price paid for the securities and emphasises, consistent with the authorities to which we have referred, that an expert should not add a premium for forcible divestment.

35    Finally, neither s 621 nor s 1350 of the Act inform the construction of s 667C(2) of the Act. Section 621 pertains to a different takeover mechanism in a different part of the statutory scheme. As QGold submits, the fact that a minimum consideration requirement is included in Ch 6 (by s 621), tends to suggest that if the legislature intends such a requirement to be imposed it will say so explicitly. And s 1350 of the Act is not engaged because the requirement to pay a “fair value” for securities compulsorily acquired under Ch 6A of the Act satisfies any “just terms” requirement within the meaning of s 51 (xxxi) of the Constitution: Capricorn Diamonds at [104]-[127].

36    It follows that we are not persuaded that, properly construed, s 667C(2) requires the historical price paid for securities to inform the determination of fair value in the sense Mr Der Sarkissian and Mr Catto contend. The primary judge was correct in finding that the historical prices must be considered by the expert in determining “fair value”, but are not determinative of that assessment. Rather, the Act requires that the expert check the valuation achieved under s 667C(1) by reference to the historical prices paid for the securities for consistency in order to decide whether the valuation needs adjustment, before the statutory result under s 667C can be regarded as having emerged.

37    This issue, and those aspects of the grounds to which it relates, are without substance.

Grounds 1, 2, 4, 5 and 6 (QUD791/2025) and Ground 1 (QUD802/2025): Did the primary judge err in finding that Mr Andrawes took into account evidence of historical trading in Carawine shares and that the Andrawes Report complied with s 667C(2) of the Act?

38    The second issue raised by the grounds of appeal concerns the findings made by the primary judge that the Andrawes Report complied with s 667C of the Act. Relevantly, that “Mr Andrawes did take into account evidence of historical trading in ordinary Carawine shares” and, relatedly, that Mr Andrawes “gave active, intelligent consideration to the evidence of historical prices”, but “his reasons for discounting such were substantive and compelling”: primary judgment at [86] and [96].

39    Mr Der Sarkissian and Mr Catto contend that the primary judge erred in reaching those conclusions because there were inadequacies in how the Andrawes Report dealt with, or failed to deal with, data with respect to the trading in Carawine ordinary shares during the six-month period to which s 667C(2) of the Act refers in arriving at his opinion of fair value. In particular, that:

(a)    Historical prices in the period “showed a low of 9.8 cents, high of 14.8 cents, and a weighted average of 13.2 cents” and Mr Andrawes’ “unexplained logic” to arrive at his valuation of Carawine ordinary shares “should not have been seen to satisfy s 667C(2) as opposed to treating s 667C(2) as a separate leg and taking into account unadjusted historical prices”;

(b)    The purchase by QGold of ordinary shares in Carawine at $0.14 per share between 6 and 10 July 2023, “should be the basis for the determination of what represented fair value”;

(c)    The purchase by QGold of 16.2 per cent of ordinary shares in Carawine at “prices significantly higher” than the amount offered in the notice “should have been given some weight, some discussion, some reasoning” by Mr Andrawes as to why it was not deemed relevant. Specifically, its purchase of 4,211,892 ordinary Carawine shares between 18 May 2023 and 10 October 2023, being 16.2 per cent of the shares they did not own;

(d)    Having regard to the Act and the Regulatory Guide, the price paid for shares in the six-month period prescribed by s 667C(2) of the Act cannot be diminished, and effectively disregarded in situations of low liquidity, as was done in the Andrawes Report;

(e)    The proposition in the Andrawes Report (noted at [93] of the primary judgment) that the fact only QGold subscribed to a pro rata renounceable entitlement offer in October 2023 (2023 Entitlement Offer) of two fully paid ordinary shares for every nine shares at a price of $0.11 per share (the Subscription Price) indicated that “the Subscription Price was in excess of that at which other shareholders were willing to transact” was illogical and misleading; and

(f)    The conclusion in the Andrawes Report that the weighted average market price for ordinary Carawine shares for the six-month period under s 667C(2) of the Act was $0.132 per share, which it is said was not taken into account by Mr Andrawes and may well have influenced where in the range of values the fair value of the compulsory acquisition should be set.

What did the primary judge find?

40    The primary judge found that the Andrawes Report complied with s 667C(2) because Mr Andrawes took into account evidence of historical trading in ordinary Carawine shares “by considering the quoted market prices for those shares” as part of a “quoted market price methodology” (QMP) and considering the Subscription Price under the 2023 Entitlement Offer: primary judgment at [86], [93] and [95].

41    The QMP and Subscription Price were two of the methodologies used by Mr Andrawes to value the residual ordinary shares: primary judgment at [84]. The third, which founded Mr Andrawes’ opinion that the terms of the notice gave a “fair value” was the “sum-of-parts” (SoP) methodology: at [84].

QMP Methodology

42    The QMP methodology involved an analysis of the quoted market price of Carawine shares in the six months preceding QGold becoming a 90% holder on 20 November 2023. The assessment was in two parts. First, an assessment of the quoted market price on a “minority interest basis”. Second, to add a premium for control to the minority interest value. As the primary judge outlined (at [89]):

… In relation to [the premium for control to the minority shares], the Andrawes Report first sets out a chart. It is titled “Carawine share price and trading volume history” and represents the quoted market price of ordinary Carawine shares as between 18 May 2023 to 17 November 2023. It revealed the following information:

(1)    the daily price of a Carawine share was at its lowest on 9 June 2023 ($0.0975);

(2)    the daily price of a Carawine share was at its highest on 2 October 2023 ($0.1477);

(3)    the volume of trading was low, with the largest trade being the acquisition of 2,262,864 shares by QGold on 6 July 2023 (at a price of $0.14 per share).

43    Those trades encompass those to which Mr Der Sarkissian and Mr Catto refer, at [39] above.

44    The Andrawes Report recorded that only 2.06 per cent of Carawine’s current issued capital was traded in the six-month period between 18 May 2023 and 17 November 2023, “being, at least on Mr Andrawes’ view, influenced by QGold’s status as the 90% holder”: primary judgment at [90].

45    The primary judge noted that (at [91]):

In the result, Item 10.2 [of the Andrawes Report] offered the following conclusion:

In the case of Carawine, we consider the shares to display a low level of liquidity, on the basis that less than 1% of securities have been traded weekly on average, with 2.06% of Carawine’s current issued capital being traded over a six-month period and 21.94% when excluding the shares held by QGold. Across the period assessed, there were 62 trading days where there was no trading in the Company’s shares.

Our assessment is that a range of values for Carawine shares based on market pricing is between $0.105 and $0.125.

46    The Andrawes Report recorded that, adding a premium for control, the appropriate range of shares for Carawine ordinary shares would be between $0.131 and $0.169: primary judgment at [92]. But as the primary judge emphasised, Mr Andrawes (at [92]):

… cautioned against ‘placing too much reliance on these values … due to the low liquidity of the shares’ in question.

Subscription Price

47    Dealing with the Subscription Price, the primary judge noted that Mr Andrawes accounted for that offering as part of his assessment of the historical market price of Carawine’s shares, but that (at [93]):

… [Mr Andrawes] discounted much of what had transpired in relation to the rights’ issue because “substantively”, it was only QGold who had subscribed for shares under the 2023 Entitlement Offer. This was said to indicate that the Subscription Price was in excess of that at which other shareholders were willing to transact at and that, had the price been closer to the market price, it would have been reasonable to expect a greater degree of participation from shareholders other than QGold. On that basis, he found that the Subscription Price, of itself, did not reflect a fair market value.

Compliance with s 667C(2) of the Act

48    The primary judge squarely addressed the representative defendant’s submission that evidence of shares being sold in the relevant period in excess of $0.11 per share (eg, $0.135 and $0.14) “had the consequence that the ‘fair value’ of an ordinary Carawine share should have been higher than as determined by Mr Andrawes”: primary judgment at [96].

49    Of this argument, the primary judge said (at [96]):

That submission, however, fails to appreciate the assessment process and that, whilst s 667C(2) requires that historical prices be taken into account, that evidence is not determinative of “fair value”. Here, the prices received were taken into account; their relevance was, however, considered to have been diminished by reason of the circumstances of the market when the shares were sold and, in particular, the low liquidity of share transactions. It is plain Mr Andrawes gave active, intelligent consideration to the evidence of the historical price of the shares, but it is also clear his reasons for discounting such were substantive and compelling.

The primary judge’s finding was not attended by error

50    The conclusion reached by the primary judge is not attended by error. The duty to “take into account” a matter is a duty to consider the matter and whether any, or any particular, weight should be given to it: Dacakis at p 536. That is precisely what Mr Andrawes did. Mr Andrawes considered the price paid for Carawine shares in the relevant period (including those sales at $0.14 per share to which Mr Der Sarkissian and Mr Catto refer on appeal) as part of both the QMP and Subscription Price methodologies. Having done so, Mr Andrawes determined not to attribute the high prices paid for ordinary Carawine shares in the previous six months weight because of the low liquidity in the shares and found that the absence of take-up of the 2023 Entitlement Offer by persons other than QGold indicated that $0.11 was not sufficiently close to the market price: cf, Capricorn Diamonds at [65]. Mr Der Sarkissian and Mr Catto may not agree with the conclusions reached by Mr Andrawes, or the methodologies by which he analysed the historical prices, but the fact of the analysis described makes evident that Mr Andrawes discharged his statutory obligation.

51    Mr Der Sarkissian also referred to the volume of the weighted average market price for the six-month period ($0.132). That price was noted in the Andrawes Report, but Mr Der Sarkissian nonetheless asserts that the Andrawes Report did not take the weighted average market price into account in reaching a view as to “fair value”. It is not apparent that this issue was agitated below. In any event, the weighted average market price for “10, 30, 60, 90 day periods and six months to 17 November 2023” was considered as part of the QMP valuation, which the primary judge concluded gave effect to the requirement in s 667C(2) of the Act. It follows that this contention cannot be sustained.

52    It is also necessary to keep distinct the Court’s task under s 664F(3) from the task of an expert valuer.  The Court was required to decide whether QGold had established that the terms of the compulsory acquisition notice gave fair value for the securities.  It was not required to substitute its own valuation methodology for that of the expert or to select a different point within a valuation range.

53    This issue, and those aspects of the grounds to which it relates, are without substance.

Ground 3 (QUD791/2025): Did the primary judge err in finding that QGold established that the terms set out in the notice gave a fair value for the residual ordinary shares in Carawine?

54    The third issue raised by the grounds of appeal concerns the finding by the primary judge that QGold has discharged its onus under s 664F(3) of the Act and, as such, that the Court was obliged to approve the acquisition of ordinary shares in Carawine on the terms proposed in the notice: primary judgment at [193].

55    Mr Der Sarkissian contends that finding is in error because of the evidence, referred to above, of “very significant purchases of Carawine shares within six months of QGold becoming a 90% shareholder” at prices in excess of $0.11 per share, including as high as $0.14 per share.

What did the primary judge find?

56    The primary judge found that QGold discharged its onus because (at [193]):

The SoP methodology is a cogent mechanism by which to assess the value of a security. Here, that method was used to calculate the value of an ordinary Carawine share; the manner in which it was relied upon in the Andrawes Report, and the calculations undertaken by the VRM Report to ascertain the value of Carawine’s mineral assets, have not been shown to be either inherently flawed or incorrect. Ultimately, the SoP method identified the value of a Carawine share to be between $0.064 and $0.141, with a preferred value of $0.104. In light of the fact that the offer price proposed in the Compulsory Acquisition Notice falls within the range of estimated values of a Carawine share, and is $0.006 or 5.45% greater than the “preferred” (or most likely) market value, it can be accepted that the terms set out in that notice give a fair value for the securities in question. …

57    The SoP methodology estimated “the market value of a company by separately valuing each asset and liability of the company” and then aggregating the component parts using the net asset value methodology: primary judgment at [103]. The valuation achieved, “represents the amount that would be distributed to shareholders if all the Company’s assets and liabilities were sold and settled on an orderly basis”: primary judgment at [104].

58    The SoP methodology resulted in the following range of values of Carawine shares (at [106]):

59    As the primary judge outlined at [111], Mr Andrawes ultimately preferred the SoP methodology because he considered that:

… the sum-of-parts value, which is a control value, to represent the fair value of Carawine’s shares to Shareholders. This represents the amount that would be distributed to shareholders if all the Company’s assets and liabilities were sold and settled on an orderly basis. In our opinion no premium would be received in excess of the net asset value by selling 100% of the Company noting that RG111.11 requires that any special value of the target to a particular bidder should not be taken into account in the assessment of fairness.

Based on the results above we consider the value of a Carawine share to be between $0.064 and $0.141, with a preferred value of $0.104.

The primary judge’s finding is not attended by error

60    Mr Der Sarkissian accepts that QGold provided a “supportive valuation” of “fair value” by the Andrawes Report. He nonetheless contends that the primary judge ought not to have accepted the Andrawes Report because of the “evidence” presented of the higher prices paid for ordinary Carawine shares in the previous six months.

61    It is not the role of the Court, in discharging its function under s 664F of the Act, to step into the role of the expert: Masters Home Improvement Pty Ltd v North East Solution Pty Ltd [2017] VSCA 88; (2017) 372 ALR 440 at [420]-[421] (Santamaria, Ferguson and Kaye JJA). Rather, its function is to evaluate the expert evidence and either accept or reject it: Masters at [420]-[421].

62    That is precisely what the primary judge did. His Honour considered the Andrawes Report, including the complaints made by the representative defendants as to its consideration of the historical price paid for ordinary Carawine shares. The conclusion reached by his Honour in that regard – that QGold discharged its onus of establishing that the notice gave a fair value for the compulsory acquisition of the residual Carawine ordinary shares – is not attended by error. The prices paid for those shares in the six months preceding QGold becoming a 90% holder are not, for the reasons we have already given, determinative of the “fair value” for the shares. It was open to the primary judge to conclude that the Andrawes Report was cogent and, on the basis of such report, that QGold had discharged its onus.

63    This issue, and the ground to which it relates, is without substance.

Expert’s costs

64    Mr Catto also complains about the refusal of the primary judge, at a directions hearing on 23 October 2024, to make an order that QGold pay the costs of an expert to be retained by the representative defendant for the hearing. That was because the primary judge considered that he was not in a position to impose a costs order on a party without being in a position to assess the basis on which the costs order should be made. As QGold highlights, that decision was not appealed by Mr Catto, nor is it the subject of this appeal. In any event, Mr Catto has not identified an error in the exercise of the discretion to refuse to make that order that renders it amenable to appeal: cf, House v The King [1936] HCA 40; (1936) 55 CLR 499 at p 505 (Dixon, Evatt and McTiernan JJ).

conclusion

65    The appeal in each of QUD791/2025 and QUD802/2025 will be dismissed. As the appeals will be dismissed, costs should follow the event.  Section 664F(4) concerns costs of the application for approval of the acquisition: Pauls at [60].  No issue has been raised which would justify departure from the ordinary appellate position that the unsuccessful appellants pay the respondents’ costs of the appeals. Mr Der Sarkissian and Mr Catto will pay the costs of their respective appeals.

Associate:

Dated:    24 July 2026