FEDERAL COURT OF AUSTRALIA

Aussie Broadband Limited v Superloop Limited [2024] FCA 312

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s application for interlocutory relief is dismissed.

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

REASONS FOR JUDGMENT

O’CALLAGHAN J

INTRODUCTION

1    I have before me, in my capacity as a Commercial and Corporations Duty Judge, an application by Aussie Broadband Limited (ABB) for an interlocutory injunction to restrain the first respondent, Superloop Limited (SLC), from acting upon or giving effect to a notice issued by it to ABB on 15 March 2024.

2    The notice directed ABB to dispose of its legal and beneficial interest in 37,621,056 fully paid ordinary shares in SLC (or such lesser number as is required to give ABB voting power in SLC of less than 12%).

3    By a concise statement dated 18 March 2024, ABB alleges that by issuing the notice directing ABB to dispose of those shares, SLC acted for a purpose foreign to the power relied on, such that issuing the notice was a fraud on the power. It is also alleged that the same conduct was oppressive within the meaning of s 232(e) of the Corporations Act 2001 (Cth). The concise statement further alleges that the directors of SLC have breached a number of their duties arising under the Corporations Act or the general law, but ABB did not rely upon these claims for the purposes of its interlocutory application.

4    SLC wholly owns a Singaporean entity called Superloop Singapore Pte Ltd (Superloop Singapore).

5    The applicable law regulating the information, communications and media industry in Singapore, and SLC’s Constitution, required ABB to obtain the approval of the Singapore Info-communications Media Development Authority (the IMDA) before acquiring more than 12% of the voting rights in SLC. Through what it characterised as “inadvertence”, ABB did not obtain that approval. The failure to do so lies at the heart of this application.

6    I heard the matter yesterday. Mr PH Solomon KC appeared with Mr N. Walter for ABB. Mr M Borsky KC appeared with Ms L Hamzi for SLC.

7    The matter is urgent because the notice issued by SLC, the enforcement of which ABB seeks to restrain on an interlocutory basis, requires that ABB dispose of the shares within 10 business days of 15 March 2024, which (accounting for the Good Friday and Easter Monday public holidays) is next Tuesday, 2 April.

8    The second to eighth respondents to the proceeding are directors of SLC, but no relief is sought against them on this application.

9    For the reasons that follow, the application is to be dismissed.

THE EVIDENCE

10    ABB read affidavits, both affirmed on 18 March 2024, of Brian Gerard Maher and Rajesh Sreenivasan.

11    Mr Maher is the Chief Executive Officer of ABB. He deposed to the circumstances of ABB’s acquisition of a 19.9% shareholding in SLC in late February 2024. Mr Maher also gave evidence regarding the alleged inconvenience, loss and damage that ABB would likely suffer if required to divest itself of 37,621,056 shares in SLC.

12    Mr Sreenivasan is a practising solicitor in Singapore and a partner of Rajah & Tann Singapore LLP, the lawyers retained by ABB in relation to matters concerning the laws and regulations of Singapore. He gave uncontroversial evidence about the applicable statutory framework which regulates the information, communications and media industry in Singapore. He also deposed to his firm’s dealings with the IMDA regarding “retrospective” approval of ABB’s acquisition of shares in SLC.

13    SLC opposed the application. It read two affidavits of Mark Desmond Chapple affirmed on 25 March 2024.

14    The essence of SLC’s opposition to the application is that the powers in its Constitution (the relevant provisions of which are discussed below) were designed to ensure SLC’s compliance with its obligations under Singaporean law, and to provide a remedy where shares in SLC were acquired in contravention of SLC’s Constitution and Singaporean law. SLC contends that is precisely the circumstance in which it found and finds itself, as a result of ABB’s failure to obtain the approval of the IMDA before acquiring more than 12% of its shares. SLC says that the Board exercised the relevant power in its Constitution for the exact purpose and in the exact circumstance envisaged by the Constitution, and that there was thus no reasonably arguable improper purpose in it doing so.

15    Mr Chapple is a partner of Baker & McKenzie, solicitors for the respondents in this proceeding. He gave evidence about a number of matters, including in relation to the following:

(a)    Superloop Singapore holds a15-year “Licence to provide facilities-based operations” (FBO licence), which was granted by the IMDA and allows Superloop Singapore to establish, install and maintain telecommunications systems and provide telecommunications services in Singapore;

(b)    The FBO licence imposes a number of conditions on Superloop Singapore , and allows the IMDA to suspend or terminate the licence, and/or to require Superloop Singapore to pay a financial penalty in the event of certain breaches of the FBO licence and applicable Singaporean law; and

(c)     Superloop Singapore and its operations are of central importance within SLC’s overall business.

THE FACTS

What the parties do

16    SLC is an Australian public company listed on the Australian Stock Exchange (ASX). It operates fibre networks in Australia, Singapore and Hong Kong, directly and indirectly through subsidiaries.

17    ABB is an Australian telecommunications and technology company also listed on the ASX.

18    SLC’s wholly owned subsidiary, Superloop Singapore, provides internet and mobile telecommunication services in Singapore.

19    Singapore is a central part of Australia’s connectivity to the Internet and provides the main gateway to Asia and Europe. It supports SLC’s data transit requirements, contributes direct sales with a material contribution to earnings. SLC’s Singapore assets and INDIGO subsea cable network, which extends from Australia to Singapore, comprise over 15% of SLCs consolidated net assets. SLC’s Singapore business generates approximately 22% of SLC’s total consolidated earnings.

20    SLC has more than $360 million in net assets and generated more than $25 million in Earnings Before Interest, Tax, Depreciation, and Amortization last financial year.

21    In order to provide connectivity services in Singapore, SLC is required to hold an FBO licence.

22    SLC holds such a licence through Superloop Singapore, which allows it to establish, install and maintain telecommunication systems, and provide telecommunication services in Singapore.

23    Superloop Singapore (and the FBO licence) is regulated by IMDA. Superloop Singapore must comply with the law governing telecommunications in Singapore, including the Telecommunications Act 1999 (Singapore) (the Telecommunications Act) and the code issued by the IMDA, called the Code of Practice for Competition in the Provision of Telecommunication Services 2022 (the Code).

24    Because it holds an FBO licence, Superloop Singapore is a “Designated Telecommunication Licensee” as defined under the Code.

Relevant rules under SLC’s Constitution

25    Rule 12A.2 of SLC’s Constitution relevantly provides that “a person must not, alone or together with their associates, control, 12% or more … of the voting power in the Company, without the prior written approval of the [IMDA]”.

26    “Control” is defined in rule 12A.1 of SLC’s Constitution as having the meaning:

given to that term in section 10.1.1 of [the Code] as amended or replaced from time to time and, at the date of this document, means control that is direct or indirect, including control that is exercisable as a result of or by means of arrangements or practices, whether or not having legal or equitable force whether or not based on legal or equitable rights.

27    “Voting power” is similarly defined in rule 12A.1 of SLC’s Constitution as having “the meaning given to that term in section 10.1.1 of [the Code] as amended from time to time”.

28    Rule 12A.5 of SLC’s Constitution provides:

If a person and their associates acquire, or propose to acquire, voting power in the Company in contravention or likely contravention of rule 12A.2 or otherwise in a manner that causes the Company or any of its subsidiaries to contravene or likely contravene the relevant law governing telecommunications in Singapore (Contravening Shareholder) whether knowingly or otherwise then, without limiting any other rights the Company may have:

(a)    on notice from the board, all rights attaching to the shares held by the Contravening Shareholder, and any associate thereof (Specified Shares), to exercise a vote in respect of the Specified Shares are suspended;

(b)    on direction from the board, the Contravening Shareholder, and any associate thereof, must transfer or dispose of all or any part of the Specified Shares to a person or category of persons nominated by the board, within the timeframe nominated by the board;

(c)    on notice from the board, restrict the payment of any amount in connection with any Specified Shares (whether by way of dividends, the proceeds of sale under rule 12A.4(b) or otherwise); and

(d)    on determination of the board, take all steps it considers reasonably necessary to restrict a transfer in contravention or likely contravention of the relevant law governing telecommunications in Singapore, including not registering any transfer of shares,

and the Company shall, to the maximum extent permitted by law, have no liability to any member in connection with the exercise of its rights under this rule 12A.

Relevant provisions of the Code

29    Section 10.3.1.1 of the Code relevantly provides under the heading “Duty of Acquiring Party and Designated Telecommunication Licensee in Connection with Acquisition of Voting Shares or Voting Power” that:

(a)    Every Designated Telecommunication Licensee must give notice in writing to IMDA on the occasion when a person, whether by a series of transactions over a period of time or otherwise —

(i)    first holds 5% or more but less than 12% of the Voting Shares in the Designated Telecommunication Licensee; or

(ii)    first is in a position to control 5% or more but less than 12% of the Voting Power in the Designated Telecommunication Licensee.

(b)    Every Acquiring Party and Designated Telecommunication Licensee must seek IMDA’s approval in connection with the acquisition of Voting Shares or Voting Power in the Designated Telecommunication Licence that would result in such Acquiring Party becoming a 12% Controller of the Designated Telecommunication Licensee …

30    Section 10.1.2 of the Code provides a series of definitions. Relevantly the Code defines “12 %  Controller” as meaning:

(i)    in relation to a Designated Telecommunication Licensee, a person who, alone or together with his Associates —

(A)    holds 12% or more but less than 30% of the total number of Voting Shares in the Designated Telecommunication Licensee; or

(B)    is in a position to control 12% or more but less than 30% of the Voting Power in the Designated Telecommunication Licensee …

31    Section 10.1.2(ff) of the Code provides the following definition with respect to “Voting Power”:

“Voting Power” and a reference to control of a percentage of voting power in an entity is a reference to control that is direct or indirect, including control that is exercisable as a result of or by means of arrangements or practices, whether or not having legal or equitable force and whether or not based on legal or equitable rights, of that percentage of the total number of votes that may be case in a general meeting of that entity, as the case may be.

32    Section 10.3.5.2 of the Code under the heading “Duty to Seek Approval and to Notify IMDA” provides that:

(a)    Pursuant to Section 38(5) of the Telecommunications Act, no person shall, without obtaining the prior written approval of IMDA to do so, become, whether through a series of transactions over a period of time or otherwise, a 12% Controller of a Designated Telecommunication Licensee.

For this purpose, every Acquiring Party and the Designated Telecommunication Licensee must seek IMDA’s approval such Acquiring Party acquiring Voting Shares or Voting Power that results in such Acquiring Party becoming a 12% Controller of the Designated Telecommunication Licensee.

(b)    Where written approval has been granted by IMDA to a person to become a 12% Controller of a Designated Telecommunication Licensee, such person is not required to seek IMDA’s approval for any further acquisition of Voting Shares or Voting Power unless such an acquisition results in such person becoming a 30% Controller of the Designated Telecommunication Licensee, or otherwise constitutes a Consolidation with the Designated Telecommunication Licensee. If requested by IMDA in writing, the Designated Telecommunication Licensee must notify IMDA within seven days of each further acquisition of Voting Shares or Voting Power by such person, provided that such person does not become a 30% Controller of the Designated Telecommunication Licensee, or otherwise enters into a Consolidation with the Designated Telecommunication Licensee. The written notifications must state the percentage of Voting Shares or Voting Power in the Designated Telecommunication Licensee that such person held or controlled prior to the acquisition and the percentage of Voting Shares or Voting Power in the Designated Telecommunication Licensee that such person has further acquired.

33    Section 10.11 of the Code under the heading “Failure to Seek IMDA’s Approval for 12% Controller and Consolidation” provides:

(a)     Where an Acquiring Party, Regulated Person and/or Ancillary Media Service Provider contravenes the Telecommunications Act or the IMDA Act by failing to obtain IMDA’s approval under Sections 38(5), (6), and 7 of the Telecommunications Act or Section 65 of the IMDA Act, as the case may be, and it was not aware that it had contravened the provision in question, it shall —

(i)    notify IMDA in writing of the contravention within 14 days of becoming aware of the contravention;

(ii)    provide IMDA with such information as IMDA may require for the purpose of determining what directions to give to the Acquiring Party, Regulated Person and/or Ancillary Media Service Provider under Section 40 of the Telecommunications Act or Section 66 of the IMDA Act, including (without limitation) —

(A)    an explanation of why it contravened Sections 38(5), (6), and (7) of the Telecommunications Act or Section 65 of the IMDA Act, as the case may be; and

(B)     the information specified in Sub-sections 10.3.5.4, 10.3.6.4, 10.3.6.5, 10.4.5.4, 10.4.6.4, 10.4.6.5, 10.5.4.4, or 10.5.4.5 (as the case may be) of this Code; and

(iii)    where the Acquiring Party, Regulated Person and/or Ancillary Media Service Provider has contravened Sections 38(5), (6), and (7) of the Telecommunications Act or Section 65 of the IMDA Act by failing to seek IMDA’s approval for Consolidation, it shall pay to IMDA the application fee specified in Sub-sections 10.3.6.4(d), 10.3.6.5(c), 10.4.6.4(d), 10.4.6.5(c), 10.5.4.4(d), or 10.5.4.5(c) (as the case may be) of this Code.

(b)    An Acquiring Party, Regulated Person and/or Ancillary Media Service Provider specified in Sub-section 10.11(a) shall not acquire any further Voting Shares, Units, Equity Interests, or Voting Power in any Designated Telecommunication Licensee, Designated Business Trust, Designated Trust, or Regulated Person until it has complied with Sub-section 10.11(a) and such directions as IMDA may give under Section 40 of the Telecommunications Act or Section 66 of the IMDA Act.

(c)    Nothing in this Sub-section 10.11 shall constitute any excuse for the failure by the Acquiring Party, Regulated Person and/or Ancillary Media Service Provider to comply with the requirements of Sections 38(5), (6), and (7) of the Telecommunications Act or Section 65 of the IMDA Act, nor affect IMDA’s right to take enforcement measures against the Acquiring Party, Regulated Person and/or Ancillary Media Service Provider for such contravention.

34    Section 12.6.4 of the Code under the heading “Enforcement Measures” provides:

In the event that IMDA concludes that the Telecommunication Licensee, Regulated Person or Person Controlling Media Resources (as the case may be) has contravened, or is likely to (or again likely to) contravene, any provision of this Code, IMDA may take such enforcement measures as it considers appropriate, including but not limited to the following enforcement actions …

35    Section 12.6.4.4 of the Code under the heading “Financial Penalties” provides:

(a)    Pursuant to Section 10(1) of the Telecommunications Act, or Section 66(3) of the IMDA Act, as the case may be, IMDA may impose financial penalties on a Telecommunication Licensee, Regulated Person or Person Controlling Media Resources that contravenes any provision of this Code.

(b)    In imposing financial penalties, IMDA will consider any aggravating factors. These factors include:

(i)    whether the contravention was serious;

(ii)    whether the contravention continued for an extended period;

(iii)    whether the contravention resulted in harm to third parties;

(iv)    whether the Telecommunication Licensee, Regulated Person or Person Controlling Media Resources acted wilfully, recklessly or in a grossly negligent manner;

(v)    whether the Telecommunication Licensee, Regulated Person or Person Controlling Media Resources received or is likely to receive any gain, profit or gratification from the contravention;

(vi)    whether the Telecommunication Licensee, Regulated Person or Person Controlling Media Resources has a previous history of contraventions; and

(vii)    whether the Telecommunication Licensee, Regulated Person or Person Controlling Media Resources made any effort to conceal the contravention.

(c)    In imposing financial penalties, IMDA will also consider any mitigating factors. These factors include:

(i)    whether the contravention was minor;

(ii)    whether the adverse consequences to third parties from the contravention were minor;

(iii)    whether the Telecommunication Licensee, Regulated Person or Person Controlling Media Resources took prompt action to correct the contravention;

(iv)    whether the contravention was accidental; and

(v)    whether the Telecommunication Licensee, Regulated Person or Person Controlling Media Resources voluntarily disclosed the contravention to IMDA and co-operated with IMDA in its investigation.

36    Section 12.6.4.5 of the Code under the heading “Suspension or Cancellation of the Relevant Licence” provides:

In serious cases, the IMDA may cancel or suspend the relevant licence pursuant to Section 10 of the Telecommunications Act, or Section 12 of the Broadcasting Act, as the case may be.

Relevant provisions of the Telecommunications Act

37    Sections 10(1) and (2) of the Telecommunications Act provide:

(1)    If the Authority is satisfied that a person who is granted a licence under section 5 or 7 or any regulations made under this Act is contravening, or has contravened, whether by act or omission —

(a)    any of the conditions of the licence or part thereof;

(b)    any provision of any code of practice or standard of performance;

(c)    any direction of the Authority given under section 31, 40(2)(a), (b) or (c), 41(2)(d)(ii) or 43(3); or

(d)    section 38 or any terms or conditions of participation in a dispute resolution scheme (within the meaning of section 51(2)),

the Authority may, by written notice, do either or both of the following:

(e)    issue such written order to the person as the Authority considers requisite for the purpose of securing compliance thereof;

(f)    require the person to pay, within a specified period, a financial penalty of an amount not exceeding the higher of the following amounts:

(i)    10% of the annual turnover of that part of the person's business in respect of which the person is granted the licence, as ascertained from the person's latest audited accounts;

(ii)    $1 million.

(2)    If the Authority is satisfied that -

(a)    the person mentioned in subsection (1) is again likely to contravene, whether by act or omission, any condition, provision, direction or section mentioned in that subsection;

…

(c)    the person mentioned in subsection (1) is no longer in a position to comply with this Act or the terms or conditions of the person's licence; or

(d)    the public interest so requires,

the Authority may (in lieu of an order or a financial penalty under subsection (1)(e) or (f)) by written notice and without payment of any compensation or refund of any fee, do all or any of the following:

(e)    cancel the licence or part thereof;

(f)    suspend the licence or part thereof for such period as the Authority thinks fit;

(g)    reduce the period for which the licence is to be in force.

38    Pursuant to s 38(5) of the Telecommunications Act “a person must not, without obtaining the prior written approval of the [IMDA] … become … a 12 % controller … of a designated telecommunication licensee”.

ABB’s acquisition of SLC shares

39    On 26 February 2024, SLC announced to the market that it had rejected “a conditional, unsolicited and incomplete indicative and non-binding proposal” from ABB to acquire all shares in SLC via a scheme of arrangement. The announcement stated that:

The Board of Superloop has, together with its retained financial and legal advisers, considered the offer and believes that the Indicative Proposal is opportunistic and fundamentally undervalues Superloop. Consequently, the Board does not intend to engage with ABB on the Indicative Proposal …

40    On or about 28 February 2024, ABB paid $92,856,536.85 to acquire 97,643,723 SLC shares, representing 19.9% of the voting power of SLC. It did so without having sought or obtained the IMDA’s approval. It was common ground between the parties that the acquisition was in contravention of the Telecommunications Act, the Code and SLC’s Constitution. It was also common ground that, by its failure to notify and seek approval from the IMDA, ABB put SLC in breach of the Telecommunications Act and the Code.

Correspondence between the parties and with the IMDA

41    On 3 March 2024, SLC’s solicitors sent a letter to Phillip Britt, Group Managing Director of ABB titled “Notice of contravention under rule 12A of the Constitution of Superloop Limited”. The letter relevantly stated:

As you either are, or should be, aware:

(a)    SLC's wholly owned subsidiary, Superloop (Singapore) Pte Ltd (Superloop Singapore), is the holder of a facilities based operator licence under the Telecommunications Act (Chapter 323) of Singapore and is a “Designated Telecommunications Licensee” within the meaning of the “Code of Practice for Competition in the Provision of Telecommunication Services 2022” issued by the Singapore Info-communications Media Development Authority (IMDA) pursuant to section 6(1) of the Info-communications Media Development Authority Act 2016 Singapore (the Code);

(b)    relevantly, under section 10.3.1.1(b) of the Code, a party wishing to hold 12% or more, but less than 30%, of SLC's voting shares is required to obtain IMDA's prior approval to that holding in circumstances where the fact that Superloop Singapore is wholly owned by SLC would mean that such a holding would make the acquiring party a "12% Controller" within the meaning of the Code;

(c)    if ABB has acquired the SLC shares the subject of its notice of initial substantial holder without obtaining that prior approval from the IMDA then ABB has exposed Superloop Singapore to sanctions, including loss of licence; and

(d)    under rule 12A of SLC's Constitution, SLC's board is given a range of powers to protect SLC from the consequences of someone becoming a 12% Controller without the necessary prior IMDA consent (Control Restrictions).

42    In this letter, SLC’s solicitors also asked ABB urgently to advise whether it:

(a)    obtained IMDA's approval prior to ABB acquiring the relevant shares in SLC (and, if so, provide evidence thereof);

(b)    instead contends that prior approval was not required for some reason (and, if so, explain why not); or, alternatively

(c)    is prepared to provide an enforceable undertaking to SLC to dispose of the relevant shares in SLC in an orderly manner, over 14 days from the date hereof or such other period as SLC may agree, to two or more third parties who are not associated with ABB (or each other) and who would not become associated with ABB were they to acquire those shares.

43    On 5 and 6 March 2024, SLC’s Singaporean solicitors informally notified the IMDA of ABB’s acquisition of the shares.

44    On 6 March 2024, ABB’s solicitors sent a letter to SLC’s solicitors stating that “any potential, technical non-compliance” with Singaporean law was “inadvertent”. The letter also relevantly stated:

Our client accepts that its acquisition of shares in SLC on 28 February 2024 (Relevant Acquisition) resulted in potential, technical non-compliance with Rule 12A.2 of SLC’s Constitution (Constitution), which our client became bound by, upon and from becoming a holder of shares in SLC.

In response to this issue, our client is in discussions with the IMDA to address any regulatory requirements under the Code in respect of the Relevant Acquisition and will engage constructively with the IMDA to resolve any issues.

We highlight that Section 10.11 of the Code expressly sets out the process that an Acquiring Party may take for a failure to seek IMDA’s prior approval in connection with acquisitions resulting in a person becoming a 12% Controller. ABB intends to fully comply with this process to address any technical non-compliance and obtain IMDA’s approval for the Relevant Acquisition. In this regard, our client seeks SLC’s co-operation in providing any necessary information regarding SLC and Superloop Singapore which IMDA may require for its assessment. We expect that the IMDA would appreciate the parties cooperating to provide all relevant information to enable the IMDA to make its assessment in a timely manner.

…

Since ABB is actively engaging with the IMDA to resolve any issues, and the IDMA (sic) has yet to issue its position, ABB is not prepared to provide the enforceable undertaking requested in Your Letter to dispose of SLC shares. Instead, ABB is willing to provide an undertaking to not exercise any voting rights on those SLC shares acquired under the Relevant Acquisition that resulted in technical, non-compliance with Rule 12A.2 of the Constitution (Relevant Shares). Our client will offer this undertaking to the IMDA.

45    On 8 March 2024, SLC’s solicitors sent a letter in response asserting that ABB had engaged in “actual (rather than merely ‘potential’)” breaches of the Telecommunications Act, the Code and the Constitution. SLC’s solicitors emphasised the implications of the breach for SLC “including the potential cancellation of the FBO licence held by its subsidiary.” The letter went on to say that “our client does not agree that the approval your client now seeks under rule 10.11 eliminates any risk for SLC and, as a result, SLC does not agree that any exercise of the SLC board’s discretion under rule 12A of the SLC constitution is unnecessary…”.

46    On that same day, SLC’s solicitors sent a “without prejudice” letter to ABB’s solicitors. It relevantly stated:

… the SLC board continues to consider the possible application of rule 12A.5 to the circumstances SLC now finds itself in (through no fault of our own).

In making its determination, the SLC board is prepared to consider any willingness of ABB to give written undertakings to SLC in the terms, or the effect, set out below, namely:

(a)    undertakings, to have effect until seven days after the final outcome of any applications ABB may make to the IMDA as a consequence of its breach of the Code are advised in writing to SLC that:

(i)    ABB will not exercise any voting rights attached to SLC shares in which ABB or its associates have a relevant interest;

(ii)    ABB will not announce or propose a takeover bid; and

(iii)    ABB will provide a copy of the notification given to IMDA under rule 10.11(a)(i) of the Code; and

(b)    an undertaking that, if the IMDA refuses to provide retrospective approval to ABB having become a 12% Controller without the IMDA’s prior approval, then:

(i)    ABB will dispose of such SLC shares as necessary so as to avoid your client (either alone or with its associates) being a 12% Controller; and, having done so,

(ii)    neither ABB nor any of its associates will acquire any further SLC shares, or announce or make any proposal to do so, unless and until it has first fully complied with both rule 12A and the Code with respect to any additional shareholding.

In return, subject to suitable arrangements being put in place for confidential or commercially sensitive information and without limiting SLC’s ability to make such submissions as it sees fit to IMDA in connection with any application by ABB under section 10.11 of the Code (or otherwise), SLC would agree to provide any information reasonably required by the IMDA in connection with any such application.

47    On 12 March 2024, ABB’s solicitors wrote to SLC’s solicitors, annexing an “enforceable Undertaking”. The letter relevantly stated:

By way of update, on 12 March 2024 our client notified IMDA of the Relevant Acquisition pursuant to section 10.11(a)(i) of the Code of Practice for Competition in the Provision of Telecommunication and Media Services 2022 (the Code) and is working towards providing IMDA with such information that IMDA may require, in accordance with section 10.11(a)(ii) of the Code to enable IMDA to determine what directions (if any) to make. A copy of the notification to IMDA is annexed to this letter for SLC’s reference as Annexure B …

Further, acknowledging the restrictions under the Code and Constitution on acquiring voting power in SLC of 12% or more, our client hereby provides an enforceable Undertaking that it will not exercise voting rights in respect of certain SLC shares on the terms set out in Annexure A to this letter …

Given that our client has provided the Undertaking and is otherwise using all reasonable endeavours to remedy any potential non-compliance with Singaporean laws, the directors of SLC ought not exercise their powers under Rule 12A.5 of the Constitution, the exercise of which was contemplated in Your Letter. Any decision by the directors of SLC to exercise such powers (including to require the transfer or disposal of ABB’s shareholding) would manifestly be for a purpose outside of or inconsistent with the purpose for which such powers are conferred, and inconsistent with the duties of SLC’s directors to act in good faith and for a proper purpose.

In such circumstances, we request that you provide us with 72 hours’ prior written notice if SLC seeks to exercise, or take any steps to exercise, any powers under Rule 12A.5 of the Constitution. Please confirm by close of business Friday, 15 March 2024 as to whether SLC agrees to provide such notice.

48    The annexed undertaking was in the following terms:

1.    This undertaking is given to Superloop Limited ACN 169 263 094 (SLC) by Aussie Broadband Limited ACN 132 090 192 (ABB) (Undertaking).

2.    This Undertaking comes into effect when this Undertaking is executed by ABB (Commencement Date).

3.    This Undertaking is taken to be withdrawn on the earlier of:

(a)    the date that the Singapore Info-communications Media Development Authority established pursuant to the Info-communications Media Development Authority Act 2016 approves or makes a determination in relation to the shares in SLC acquired by ABB on 28 February 2024 as announced to market by ABB in ABB’s ASIC Form 603 lodged on the ASX Market Announcements Platform on 28 February 2024; and

(b)    the date that ABB has a Relevant Interest (as that term is defined in the Corporations Act 2001 (Cth)) of less than 12% in SLC’s issued shares.

4.    From the Commencement Date until the date this Undertaking is taken to be withdrawn under paragraph 3 above, ABB will not exercise any voting rights attaching to the shares in SLC held by ABB that result in ABB having a Relevant Interest in SLC of 12% or more.

5.    ABB agrees to submit to the jurisdiction of the Federal Court of Australia in relation to this Undertaking.

49    On that same day, ABB’s Singaporean solicitors provided formal notification to the IMDA of an “inadvertent” and “technical breach” of section 10.3.1.1(b) of the Code and s 38(5) of the Telecommunications Act. This was done pursuant to sub-section 10.11(a)(i) of the Code, which provides a procedure for an acquiring party to inform the IMDA when it was not aware that it needed to seek the IMDA’s prior approval.

The SLC Board meeting

50    On 13 March 2024, SLC issued an announcement to the market which stated that SLC had “signed an exclusive six-year contract to provide wholesale internet services to Origin Energy Limited and its subsidiaries”.

51    On 14 March 2024, SLC held a Board meeting. The minutes of that meeting show that it commenced with a discussion of the successful Origin Energy deal, and then turned to the “Breach of SLC’s Constitution”. The minutes relevantly record the following:

2.2 Breach of SLC's constitution

2.2.1 SLC Letter to IMDA (with attachments) dated 8 March 2024

The Chair tabled a letter to the IMDA that had been sent on 8 March 2024.

…

It was noted that the breach by ABB of the Code gives rise to a breach by Superloop Singapore of the Code and its FBO licence, and that there are a range of powers available to IMDA, including cancellation of Superloop Singapore's FBO licence and financial penalty.

…

Discussion then followed:

1.    as to whether ABB might have been “aware” of the breach before it acquired the shares and the potential implications of that for Superloop Singapore, including in circumstances where IMDA is unable to retrospectively approve a breach of the 12% threshold if the acquirer (ABB) was “aware” of the requirement at the time of the breach;

2.    as to whether IMDA might have concerns that SLC's constitutional provisions were not effective in preventing this breach and other possible breaches in the future and therefore a firm response by SLC to the breach was important in that regard.

There was also discussion about significant assets held by Superloop Singapore and the importance of the Superloop Singapore business conducted in Singapore under the FBO licence.

2.2.2 Baker McKenzie’s letters to Gadens dated 8 March 2024 and Gadens dated 8 March 2024 and Gadens’ letter to Baker McKenzie dated 12 March 2024

The Chair noted the correspondence between Baker McKenzie and Gadens on 8 and 12 March 2024 respectively, and observed that the undertaking not to vote certain shares given in Gadens’ letter falls well short of the undertakings sought by SLC in Baker McKenzie's “without prejudice” letter to Gadens of 8 March 2024, which included an undertaking by ABB to dispose of sufficient shares to take ABB below the 12% threshold (Excess Shares) in the event IMDA approval was not obtained.

2.2.3 Discussion and decision to direct disposal

The Chair noted that legal advice had been received from Baker McKenzie as to the power of the board to direct ABB to dispose of SLC shares. The board discussed that advice.

A draft notice directing ABB to dispose of shares under Rule 12A.5 (Direction) was tabled.

…

A broad ranging discussion followed as to the reasons why the board might, or might not, exercise its discretion to direct the disposal of the Excess Shares.

52    The minutes also record that in resolving to direct ABB to dispose of the “Excess Shares” only, and not all the acquired shares, the Board had regard to the following:

1.    the legal and reputational risks associated with Superloop Singapore breaching the Code as a result of ABB's actions;

2.    related to point 1, the responsibility of SLC to exercise rights available to it to “self-cure” ABB's breach and restore Superloop Singapore back to compliance with its regulatory obligations;

3.    the strategic nature and importance of Superloop Singapore's assets and business in Singapore;

4.    the benefit (as a deterrent to any future contraventions in the eyes of both the IMDA and the market generally) in SLC taking proactive steps to enforce its constitution;

5.    the uncertainty as to whether the breach by ABB was indeed 'inadvertent' given the available information on SLC's website, and ABB's Symbio acquisition which closed in February 2024 (and consequential uncertainty as to whether the breach could in fact be retrospectively approved by IMDA);

6.    ABB's continuing failure to acknowledge the seriousness of its actions (in acquiring its interest in breach of both Singaporean law and the Company's constitution); and

7.    the fact that the exercise of power by SLC can be limited to the Excess Shares so as to do no more than necessary to correct the ABB breach…

53    The SLC Board then unanimously resolved as follows:

…that the Direction [for ABB to dispose of the Excess Shares] be given to ABB without further notice, subject only to the final decision of a sub-committee of the board (comprising the Chair and CEO/MD) to be made on Friday evening (15 March 2024) after market close, on the basis that the sub-committee can decide to hold off giving the Direction pending further consideration by the full board if any of the following occurs in the intervening period:

1.    SLC becomes aware of a sale by ABB of SLC shares;

2.    any new correspondence from the IMDA;

3.    any new correspondence from ABB or its lawyers;

4.    any other new and material circumstances arise which, in the opinion of the sub- committee, necessitates further consideration of the full board of SLC as to whether the Direction be given and, if so, when.

54    On 15 March 2024, a sub-committee of the SLC Board, comprising the Chair (Peter O’Connell) and the CEO/Managing Director (Paul Tyler) resolved that SLC’s Chief Legal & Corporate Officer (Tina Ooi) direct ABB to dispose of the excess shares in SLC in accordance with the terms of the notice.

The notice and direction to dispose of shares

55    The notice the subject of this application was dated 15 March 2024 and was in the following terms:

Direction to dispose of shares under Rule 12A.5 of Superloop Limited Constitution

1.    In this Notice and Direction, unless the context requires otherwise, terms used have the same meaning as in Superloop Limited's Constitution as it currently applies.

2.    The Board of Superloop Limited (SLC) hereby directs Aussie Broadband Limited (ABB), as a member of SLC bound by SLC's Constitution and who holds 12% or more of SLC's shares without the prior approval of the Authority:

a.    to dispose of the legal and beneficial interest in 37,621,056 fully paid ordinary shares in SLC, or such lesser number as is required to give ABB voting power in SLC of less than 12% (Excess Shares) to someone other than an associate of ABB; and

b.    to effect that disposal of the Excess Shares within 10 business days of the date of this direction.

56    On 18 March 2024, ABB’s Singaporean solicitors then sought, in effect, what ABB described as “retrospective” approval from the IMDA of ABB’s acquisition of shares in SLC.

57    During the interlocutory hearing, I was told by senior counsel for ABB that the IMDA has 30 days to make its determination on the approval or otherwise of the acquisition. I was not directed, however, to any evidence or statutory provision to support that proposition.

58    Whenever it is that IMDA makes a determination, Mr Sreenivasan’s evidence was that if ABB does obtain IMDA’s approval on becoming a “12% Controller” of Superloop Singapore, ABB would be able to continue holding and acquiring shares above 12% but less than 30% in SLC, subject to any conditions and directions that IMDA may issue in relation to the approval.

59    ABB submitted that this demonstrates that retrospective approval by the IMDA of the acquisition is at least available. Senior counsel for SLC accepted as uncontroversial that IMDA may – or may not – approve or cure the admitted the contraventions.

RELIEF SOUGHT BY ABB

60    ABB seeks interlocutory relief, pursuant to s 1324(4) of the Corporations Act, s 23 of the Federal Court of Australia Act 1976 (Cth) “and/or the general law”, that SLC be restrained from acting upon or giving effect to the notice, until the hearing and final determination of this proceeding, or further order.

61    The final relief sought by ABB includes declarations to the effect that, in issuing the notice:

(a)    the SLC directors contravened ss 180, 181 or 182 of the Corporations Act, or the general law;

(b)    the SLC directors did so for an improper purpose; and

(c)    the conduct of the SLC’s affairs was oppressive to and/or unfairly prejudicial to ABB, within the meaning of s 232 of the Corporations Act,

along with an order that the notice be set aside and/or permanently restraining SLC from acting upon or giving effect to the notice.

62    As I said earlier, the only grounds argued on the hearing of this interlocutory application were the improper purpose and oppression grounds.

RELEVANT LEGAL PRINCIPLES

63    In order to secure an interlocutory injunction, ABB must show: first, that there is a serious question to be tried, or that it has made out a prima facie case, in the sense that if the evidence remains as it is, there is a probability that, at the trial of the action, it will be held entitled to relief; second, that it will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and third, that the balance of convenience favours the granting of an injunction. See Castlemaine Tooheys Limited v South Australia (1986) 161 CLR 148 at 153 (Mason ACJ); Australian Broadcasting Corporation v Lenah Game Meats Pty Limited (2001) 208 CLR 199; and Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238 at [53] (Dowsett, Foster and Yates JJ).

64    The court’s task of assessing the balance of convenience and justice requires it to determine whether the inconvenience or injury which the applicant would be likely to suffer if an injunction were refused is outweighed by the injury which the respondent would suffer if an injunction were granted. See Beecham Group Limited v Bristol Laboratories Pty Limited (1968) 118 CLR 618; Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238. As the Full Court (Dowsett, Foster and Yates JJ) said in that case at [62]:

The assessment of harm to the plaintiff, if there is no injunction, and the assessment of prejudice or harm to the defendant, if an injunction is granted, is at the heart of the basket of discretionary considerations which must be addressed and weighed as part of the court’s consideration of the balance of convenience and justice. The question of whether damages will be an adequate remedy for the alleged infringement of the plaintiff’s rights will always need to be considered when the court has an application for interlocutory injunctive relief before it. It may or may not be determinative in any given case. That question involves an assessment by the court as to whether the plaintiff would, in all material respects, be in as good a position if he were confined to his damages remedy, as he would be in if an injunction were granted: see the discussion of this aspect in Spry, The Principles of Equitable Remedies (8th ed, 2010 at pp 383–389; pp 397–399; and pp 457–462).

65    Further, the apparent strength of a party’s substantive case will often be an important consideration to be weighed in the balance. As the Full Court observed in StarTrack Express Pty Ltd v TMA Australia Pty Ltd [2023] FCAFC 200 at [53]-[54] (O’Callaghan, Stewart and Button JJ):

…In cases where the grant of interlocutory relief would be tantamount to the grant of final relief, the strength of the prima facie case will often attract particular scrutiny. But the strength of an applicant's prima facie case may still be relevant in other cases as the grant of interlocutory relief may still be warranted even if the balance of convenience is finely balanced where the prima facie case is relatively strong. Likewise, the grant of interlocutory relief may be warranted where the applicant has a strong case on the balance of convenience, but its prima facie case (while made out) is less compelling …

(Citations and internal quotations omitted).

66    As SLC submitted, the authorities make it clear that where an applicant’s prima facie case is weak (assuming it is made out at all), the grant of interlocutory relief will be warranted only where there is a marked balance of convenience in favour of the applicant.

CONSIDERATION

Prima facie case

Improper purpose

67    As Owen J explained in Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) (2008) 39 WAR 1 at [4458]-[4459]:

The limited powers of directors can only be exercised for the purpose for which they are granted. Any exercise of a power for an extraneous purpose is a fraud on the power. … It does not necessarily denote conduct on the part of the appointor amounting to fraud in the common law meaning of the word or any conduct that could properly be termed dishonest or immoral. It simply means that the power has been exercised for a purpose, or with an intention, beyond the scope of, or not justified by, the instrument creating the power.

The first task of the court is to construe the power and to determine the limits within which it may be exercised. This is a question of law. Having done that, the court turns to a question of fact; namely whether, in all of the circumstances, the purported exercise goes beyond the constitutional powers of corporation or is otherwise an abuse of the power so construed. Put simply, the court must identify the nature and scope of the power and the purpose for which it was exercised and then decide whether the purpose was permissible or impermissible.

68    And as Mason, Dawson and Deanne JJ said in Whitehouse v Carlton Hotel Proprietary Limited (1987) 162 CLR 285 at 294:

As a matter of logic and principle, the preferable view would seem to be that regardless of whether the impermissible purpose was the dominant one or but one of a number of significantly contributing causes … [the relevant decision] will be invalidated if the impermissible purpose was causative in the sense that, but for its presence, “the power would not have been exercised” (citing Dixon J in Mills v Mills (1938) 60 CLR 150 at p.186).

69    While ABB acquired 19.9% of the shares in SLC, it accepted for present purposes that, on 26 February 2024, it acquired commensurate voting power in Superloop Singapore in breach of the Code and the Telecommunications Act.

70    ABB submitted, however, that because it gave an enforceable undertaking on 12 March that it would only exercise voting power up to 12%, the giving of that undertaking prospectively “cured” the breach that had occurred on 26 February. In those circumstances, ABB contended that there was no necessary occasion for the SLC Board to exercise the power under rule 12.A5 of the Constitution to require ABB to divest itself of the excess shares.

71    ABB submitted that it had made good a prima facie case that SLC’s professed (legitimate) commercial interests for exercising the power as recorded in the 14 March 2024 Board minutes could therefore not be the actuating purpose for the exercise of the power under rule 12A.5 of the Constitution.

72    It is important to record precisely how that submission was put at the hearing.

73    Senior counsel for ABB, Mr Solomon, submitted that, at trial, ABB would, through cross-examination, test the various attendees at the Board meeting about the “broad ranging discussion” regarding the exercise of the power under rule 12A.5 of SLC’s Constitution and why, in circumstances where ABB had itself already remedied its contravention by making the undertaking, it was nevertheless necessary to require ABB to dispose of the excess shares “to cure the breach”.

74    I asked Mr Solomon “why do you say that it [the power under SLC’s Constitution] was exercised for an improper or oppressive purpose?” He responded as follows:

I’m going to do that right now, so let me take your Honour to the code. The short answer – but it is only a short answer – is that we cured the breach of the code, and that there was, in that circumstance, no necessary occasion for the exercise of the power.

….

… but let me say that again, so I’ve anchored one prospect for what this fight is about; Aussie Broadband gave an enforceable undertaking on 12 March, which I’ve shown your Honour, that it would not vote rights attached to 19.9 per cent of its shares, and it would only exercise voting power up to 12 per cent. I now want to show your Honour why we consider that sufficient, prospectively, to remedy our breach.

…

We have for better or worse accepted – we have accepted in our representations to IMDA and we accept before your Honour this morning that even though we acquired only 19.9 per cent of shares in the holding company, we thereby acquired voting power in a commensurate percentage in Superloop Singapore.

…

And we have made representations to IMDA on that basis and we don’t adopt a different position in Court before your Honour, although, presumably, there was an argument that we acquired no voting power in the subsidiary when we acquired 19.9 per cent in the holding company. On 12 March, in our enforceable undertaking, we sought with an eye on this circumstance, to ensure that going forwards, we did not have voting power in Superloop Singapore. And at least thus far, it hasn’t been put against us that the undertaking was ineffective to achieve that outcome. If that be arguably so, that means, straightforwardly, this: On 26 February, there was a contravention. And on 12 March, prospectively only, it was remedied or cured.

75    Mr Solomon submitted that if an interlocutory injunction to restrain the enforcement of the notice were granted, then:

… at trial with the benefit of … all of the documents we got yesterday and other documents, we will be able to test with the chair or the CEO or whoever the witnesses are from the board meeting what the broad ranging discussion was and why the board thought it necessary to require us to dispose of shares when we’ve already undertaken to ensure that we control voting rights of less than 12 per cent, and where neither of those steps can reach back to 26 February.

76    The reference to “all of the documents we got yesterday” included text messages and emails which SLC had produced by way of informal discovery. Some of these documents were tendered as confidential exhibits, and were said to show that SLC was in fact motivated by commercial considerations other than those set out in the minutes of the Board meeting held on 14 March.

77    If it matters, and speaking on a necessarily preliminary basis, I doubt whether any of that (very limited) material suggests anything of the sort.

78    SLC submitted that the undertaking made by ABB misses the point, and pays no regard to the fact that Superloop Singapore was at risk, and is still at risk, of sanction by the IMDA by reason of ABB’s failure to notify it of the acquisition. It relied, in particular, on section 12.6.4 of the Code which provides that “[i]n the event that IMDA concludes that the telecommunication licensee [here Superloop Singapore] ... has contravened or is likely to (or again likely to) contravene any provision of the Code, IMDA may take such enforcement measures as it considers appropriate, including but not limited to” financial penalties and cancellation or suspension of the licence. See [35] and [36] above.

79    As Mr Borsky put it:

… if Superloop didn’t take prompt action to correct the contravention, and instead allowed it to continue for an extended period, its risks of sanction were heightened. So that was – those considerations, and that purpose, were entirely proper, and not oppressive. It was entirely responsible and proper of the board to take that proportionate measure available [under] the constitution. And why we say, “proportionate”, was because of the 19.9 per cent issue; the power would have authorised a direction to divest 19.9, but the board didn’t go that way. The board decided to require divestment of 7.9 per cent only.

80    Mr Borsky also pointed to section 12.6.4.4(c) of the Code which provides that in imposing financial penalties, IMDA will also consider any mitigating factors, including “(iii) whether the Telecommunication Licensee … took prompt action to correct the contravention.”

81    For those reasons, SLC submitted that ABB is not able to make out even a prima facie case as to improper purpose, or alternatively, at best, it is only able to make out a very weak prima facie case.

82    In my view, ABB’s prima case is at best a very weak one. One fundamental problem with ABB’s prima facie case submission is that the claim of improper purpose, it seems to me, is speculative at best, because it was expressed to depend on what may, or may not, fall out through cross-examination of the attendees of the 14 March Board meeting at trial. So much is clear from the submission put by ABB at [74] above. There, counsel submitted that “at trial … we will be able to test with the chair or the CEO or whoever the witnesses are from the board meeting what the broad ranging discussion was and why the board thought it necessary to require us to dispose of shares when we’ve already undertaken to ensure that we control voting rights of less than 12 per cent, and where neither of those steps can reach back to 26 February.”

83    In my view, the proposition that the stated reasons for the exercise of the power to require ABB to dispose of the excess shares were not the true reasons that actuated the board, and that the true causative purpose was “to make it more difficult for ABB to acquire a 100% interest in SLC”, is a very weak one, not only because it is speculative, but because there is no evidence of the existence of any extant actual, or even proposed, bid. It also does not address the fact that SLC’s own commercial interests and reputation were and are at stake (including risks of fines) if Superloop Singapore does not act promptly to remedy its own breach of the Code, which ABB’s actions caused.

84    As Mr Borsky put it:

Your Honour knows, and I have sought to make it good that the risk of sanction to Superloop continued. And so there certainly was occasion and good reason for the exercise of the power available to the Superloop directors under Superloop’s constitution that was to mitigate the risk of sanction. And our learned friend’s improper purpose theory does not engage with that fact.

Oppression

85    It is not necessary separately to consider this ground, because it relies on the same facts.

86    The only thing said in support of the ground in ABB’s written submission was this:

For substantially the same reasons that there is a prima facie case that the Directors were animated by a purpose foreign to the power for which rule 12A.5 could properly be exercised, there is also an argument at trial that their conduct was also oppressive or unfairly prejudicial to SLC within the meaning of s 232 of the Corporations Act. … [O]ppression may be found even where there is no breach of a fiduciary duty or other duty. In the present case, it was commercially unfair to issue the Notice to require divestment: this would cause ABB significant harm in circumstances where there was no evidence of a pressing need for SLC to require the disposal occur within 10 business days (particularly in light of the undertakings given by ABB about voting); instead SLC could have awaited the outcome of IMDA’s deliberations.

87    Nothing of substance was said about the ground in ABB’s oral submissions.

88    In my view, for the reasons given above, ABB’s oppression case is also a very weak one.

Adequacy of damages and balance of convenience

89    ABB submitted that the balance of convenience favours it because:

(1)    There is no suggestion that IMDA has requested that SLC cause ABB’s shareholding to be divested urgently. No reason is present as to why SLC could not have waited for IMDA to make its determination before determining whether to exercise the power in rule 12A.5 of the Constitution.

(2)    ABB is prepared to provide an undertaking as to damages.

(3)    Were ABB to act on the notice, it would crystallise a capital gains tax liability for ABB of approximately $3.68 million.

(4)    Damages would not be an adequate remedy, including because requiring a divestment may make it easier for a competing bidder to make a control proposal (at present, as the holder of 19.9% of the shares, ABB can block a takeover (90% to have compulsory acquisition) and likely block a scheme of arrangement (75% vote, but typically not all shareholders vote such that 19.9% is close to a blocking stake)).

90    On the takeover point, ABB submitted that I should have regard to the fact that in the course of without prejudice correspondence directed to some resolution of the matter, SLC’s solicitors had sought an undertaking from ABB that “ABB will not announce or propose a takeover bid”. It was submitted in that regard that:

And if your Honour considers whether there’s validity to that challenge, it’s relevant for your Honour to have regard to what the company was asking us a week earlier. Secondly, it’s put against us, I think, that on balance of convenience, this isn’t a case about takeovers; it’s a case about regulatory compliance, but on the first occasion that SLC asked us for undertakings, the [s]tark undertaking referred to was that we wouldn’t propose a takeover bid. So at least for those reasons it might be relevant to your Honour’s evaluation.

91    It was, relatedly, also submitted that “the balance of convenience flows steadily downhill for us by reference to all of these considerations in the context of a matter where there are takeover issues in play”.

92    In my view, the balance of convenience is, on the contrary, overwhelmingly in favour of not granting the relief sought.

93    First, it is ABB’s contravention that caused SLC to breach the conditions of its licence and which has therefore exposed it to the risk of sanctions, including penalties and potentially even a loss of the FBO licence. That is an obvious matter that must weigh in SLC’s favour in the exercise of discretion.

94    Secondly, SLC is a publicly-listed company whose shares trade on the ASX. It would seem to me that there is no reason why ABB could not reacquire a larger stake in SLC, if and when it obtains approval from the IMDA, at an appropriate time in the future. And ABB did not contend that there was any such reason.

95    Thirdly, damages would be a complete remedy. As Mr Borsky put it:

… if it be the case that, at a trial one day, the improper purpose theory, or the oppression theory, is made good, there’s no reason why your Honour, or the trial judge, could not then order Superloop to pay damages for the losses, which would readily be quantifiable by reference to the losses, the extra price paid for the reacquisition, the capital gains tax on the profitable illegal acquisition; all those matters will be readily quantifiable, and therefore compensable, by an order for damages, if that is how things transpired.

96    Fourthly, SLC’s net asset position and earnings are healthy, so it would be able to meet any award of damages.

97    Fifthly, if the court were to grant the relief that ABB seeks, that would extend the period within which SLC would be at risk of sanction from the IMDA.

98    Sixthly, and conversely, allowing the notice to take effect would allow the period of the contravention effectively to end and allow submissions to be made by SLC to the IMDA premised upon prompt action having been taken and having effectively cured the contravention – something which, again as Mr Borsky said, could only assist SLC in any attempt to retain its licence and to mitigate any penalties or other sanctions which the IMDA might otherwise decide to impose.

99    Seventhly, as to ABB’s point at [89(4)] above that the context of a so-called “putative” takeover bid is in some way relevant to the balance of convenience, I disagree. As I said above, there is no evidence before me at all about the prospects or terms of any such bid, putative or otherwise.

100    Eighthly, as to ABB’s contention that it will be prejudiced by having to pay capital gains tax on the profit it is likely to make, that ignores the underlying and obvious point that that will only happen if it makes a capital gain, which is hardly a prejudice. In any event, as Mr Borsky put it, if that analysis is “too glib”, then “one could barely think of a more quantifiable and compensable loss by an order of damages.”

DISPOSITION

101    For those reasons, the application for interlocutory relief will be dismissed.

Associate:

Dated:    28 March 2024

SCHEDULE OF PARTIES