Federal Court of Australia

Twinza Oil Ltd (Receivers and Managers appointed) v WM Clough Pty Ltd as trustee for the WM Clough Family Trust [2025] FCA 1165

ORDERS

PENAL NOTICE

THE COURT ORDERS THAT:

1.    Upon the undertaking of Hayden Leigh White in the terms annexed to these orders as Annexure A, the defendant is restrained and an injunction is hereby granted restraining the defendant whether by itself, its servants, or agents, or howsoever otherwise from holding a general meeting of members of the first plaintiff on 17 September 2025, or on any other date other than that determined by the Board of Directors of the first plaintiff, or until the final determination of these proceedings or until further order of the Court, whichever is the sooner.

2.    Liberty to apply on 48 hours’ notice.

3.    Costs in the cause.

Annexure A

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

REASONS FOR JUDGMENT

O’SULLIVAN J:

1    At a first court hearing held on 6 August 2025, the Court made orders pursuant to ss 411(1) and 1329 of the Corporations Act 2001 (Cth) convening a meeting of Scheme Creditors for the purpose of considering, and if thought fit, approving a scheme of arrangement proposed to be made between the plaintiff company Twinza Oil Ltd (Receivers and Managers appointed), the Scheme Creditors and certain shareholders of subordinate claims against Twinza (Scheme): In the matter of Twinza Oil Ltd (Recs and Mgrs Apptd) [2025] FCA 939 (Twinza No 1) (Banks-Smith J).

2    The first meeting of the Scheme Creditors was to be held at 10.00am AWST on 12 September 2025 in Perth (Western Australia), and electronically.

3    The Scheme is substantially in the form set out in Annexure SQ-19 to the affidavit of Stephen Richard Quantrill sworn on 23 July 2025 (Quantrill affidavit) and read on the application the subject of Twinza No 1. The second court hearing, for the purposes of hearing an application to approve the Scheme has been listed at 10.30am (AWST) on 23 September 2025.

4    The application for the convening of a meeting to consider the proposed Scheme was supported by an independent expert opinion provided by BDO Corporate Finance Pty Ltd.

5    The defendant to these proceedings, WM Clough Pty Ltd as trustee for the WM Clough Family Trust attended before the Court in Twinza No 1 as an interested party in three capacities - as a substantial shareholder, as the holder of convertible redeemable preference shares (CRPS) and as a creditor.

6    On that occasion, WM Clough applied for an adjournment of the hearing which was refused for the reasons set out in the Court’s reasons at [43]-[49].

7    On 14 August 2025, WM Clough gave notice to Twinza under s 203D of the Act of its intention to move a resolution at a general meeting to remove three of Twinza’s directors, Mr Quantrill, Mr Stefan White and Mr Stuart Brown (s 203D Resolution).

8    On 18 August 2025, WM Clough called a notice of general meeting pursuant to s 249F of the Act (s 249F Meeting), to consider resolutions to remove the three directors and replace them with three new directors which included Mr William Clough, a director of WM Clough.

9    On 25 August 2025, the Receivers and Managers of Twinza filed an Originating Process (WAD299/2025) in which, amongst other things, the plaintiffs sought directions that pursuant to s 424 of the Act the Receivers and Managers are justified in causing Twinza to commence proceedings substantially in the form of those set out in the draft originating process forming part of annexure HW-20 to the affidavit of Hayden Leigh White affirmed 25 August 2025 and read on that application. Mr White is one of Twinza’s Receivers and Managers.

10    That draft originating process sought:

(a)    a declaration that any decision of the Board of Directors of [Twinza] to postpone [the s 249F Meeting] called by WM Clough for 17 September 2025 is valid and effective;

(b)    injunctive relief under s 1324 of the [Act] or at general law (or both), restraining WM Clough Pty Ltd, whether by itself, its servants or agents or howsoever otherwise from holding a general meeting of members of [Twinza] on 17 September 2025:

(i)    for not complying with applicable notice requirements or the requirements of s 203D or both;

(ii)    for contravention of s 232 of the [Act].

11    On 27 August 2025, the Court made orders amongst others, that the Receivers and Managers would be justified in causing Twinza to commence proceedings: White, in the matter of Twinza Oil Limited [2025] FCA 1054 (Twinza No 2) (Feutrill J).

12    On 27 August 2025, Twinza’s Board met and with the benefit of legal advice, voted to postpone the s 249F Meeting until 5 November 2025.

13    On 28 August 2025, the plaintiffs in these proceedings filed an Originating Process in which they applied, amongst other things, for the following relief:

2.    . . .

2.1.    A declaration that the decision of the Board of Directors of [Twinza] made on 27 August 2025 to postpone the general meeting called by WM Clough Pty Ltd (ACN 088 516 269) for 17 September 2025 is valid and effective.

2.2.    Injunctive relief under s 1324 of the [Act], or pursuant to the implied (or inherent) power of this Court (or both), restraining WM Clough Pty Ltd whether by itself, its servants or agents or howsoever otherwise, from holding a general meeting of members of the First Plaintiff on 17 September 2025:

2.1.1. for not complying with applicable notice requirements or the requirements of s 203D or both;

2.1.2. for contravention of s 232 of the [Act]; and (or)

2.1.3. for seeking to convene the meeting for other than a proper purpose, being to cause the Company to be unable to satisfy condition precedent 2.1(i) and to enliven an event of termination under clause 7.2 of the Scheme Implementation Deed, and otherwise to prevent the completion of the scheme process in accordance with the orders of the Federal Court of Australia in WAD 247 of 2025.

. . .

14    On 4 September 2025, the plaintiffs issued an interlocutory process in which they seek an interim injunction pursuant to s 1324 of the Act or pursuant to the implied and inherent power of the Court (or both) restraining WM Clough whether by itself, its servants or agents or howsoever otherwise from holding the s 249F Meeting on 17 September 2025 in the following terms:

…

2.2.    Upon the giving of the usual undertaking as to damages, an interim injunction under s 1324 of the [Act], or pursuant to the implied or inherent power of this Court (or both), restraining the defendant, whether by itself, its servants or agents or howsoever otherwise, from holding a general meeting of members of the first plaintiff on 17 September 2025 on one or more of the following grounds:

2.2.1.    for not complying with applicable notice requirements or the requirements of s 203D of the [Act] or both;

2.2.2.    for contravention of s 232 of the [Act];

2.2.3.    for contravention of s 249Q of the [Act] by seeking to convene the meeting, for other than a proper purpose, which would cause the first plaintiff to be unable to satisfy condition precedent 2.1(i) and to enliven an event of termination under clause 7.2 of the Scheme Implementation Deed, and otherwise to prevent the completion of the scheme process in accordance with the orders of the Federal Court of Australia in WAD 247 of 2025;

until the final determination of these proceedings or further order of the Court.

15    Given the urgency of the matter, I made programming orders and listed the matter for argument on 12 September 2025.

16    At the conclusion of the hearing, I made orders restraining WM Clough from holding the s 249F Meeting and indicated I would publish reasons for doing so subsequently. These are those reasons.

Documents Read

17    The plaintiffs read:

(a)    The affidavit of Hayden Leigh White sworn 28 August 2025 (White affidavit);

(b)    The affidavit of Abby Sarah Macnish Niven sworn 5 September 2025 (Macnish Niven affidavit);

(c)    The affidavits of Desiree Bernedette Pavey sworn;

(i)    3 September 2025 (First Pavey affidavit);

(ii)    5 September 2025 (Second Pavey affidavit); and

(iii)    11 September 2025 (Third Pavey affidavit).

18    The defendant reads:

(a)    The affidavit of William McRae Clough sworn 8 September 2025 (Clough affidavit);

(b)    The affidavits of Jessica Sara Chapman sworn;

(i)    3 September 2025 (First Chapman affidavit);

(ii)    11 September 2025 (Second Chapman affidavit); and

(iii)    12 September 2025 (Third Chapman affidavit).

Background

19    The history of this matter including the proposed Scheme was set out in detail by Banks-Smith J in Twinza No 1. I do not repeat it.

20    In broad terms, Twinza is an Australian publicly listed company which has been pursuing a gas project in Papua New Guinea for some years through its subsidiary Twinza Oil PNG Limited.

21    Funding for the project was made available to Twinza under a syndicated facility agreement. Twinza fell into default under that agreement and various of its Senior Lenders appointed the second plaintiffs as receivers and managers of Twinza. As at 31 May 2025, Twinza owed some US$324 million to the Senior Lenders.

22    On 19 February 2025, the Receivers and the Senior Lenders (Tor Asia Credit Opportunity Master Fund LP and Tor Asia Credit Master Fund LP) as well as other Senior Lenders entered into a Scheme Implementation Deed (annexure SQ14 to the Quantrill affidavit).

23    Clause 7.2 of the SID provides contractual rights to the Senior Lenders to terminate the SID in the event that Twinza, its directors and/or shareholders take steps to call a meeting pursuant to s 249D and/or s 249F of the Act.

24    Clause 2.1(i) of the SID also provides as one of the conditions precedent to the Scheme becoming effective, that there are no resignations of existing directors of Twinza or new appointments of directors of Twinza.

25    The Scheme has the following key components: Twinza No 2 at [10] (Feutrill J):

(a) The senior lenders will provide a release of up to 92% of the senior debt. The senior debt will be reduced to USD$30 million.

(b) The company will issue new ordinary shares to the senior lenders. The senior lenders will hold 85% of the ordinary shares on issue.

(c) The company will issue new ordinary shares to holders of convertible redeemable preference shares in the company by which the preference shares will be replaced and substituted with ordinary shares in the company. The holders of preference shares will hold 10% of the ordinary shares on issue.

(d) Current shareholders will hold 5% of the ordinary shares on issue.

(e) The facility agreement will be amended by reducing the senior debt, reducing the interest rate on the balance of the debt, removing a subset of senior lenders from the agreement, removing the existing fee structure and associated amendments.

(f) There will be provision that ensure the scheme, if implemented, will not effect employees or List A creditors (ordinary course of trade creditors).

26    If the Scheme proceeds, the debt to Senior Lenders will reduce from approximately US$324 million to US$30 million with the Senior Lenders and other Senior Lenders receiving equity in lieu of the balance owing in excess of US$30 million. The consequence is that the Senior Lenders and other Senior Lenders would collectively hold at least 85% of Twinza’s issued share capital.

27    If the Scheme is not implemented, then without additional funding, Twinza will be insolvent and will need to enter applicable insolvency procedures.

28    The calling of the s 249F Meeting has triggered the right on the part of the Senior Lenders pursuant to cl 7.2 of the SID to terminate the SID. That right has not yet been exercised although the Senior Lenders have reserved their position on exercising that right: Third Pavey affidavit annexure DP-2.

29    In the event the meeting proceeds on 17 September 2025 and there are new directors appointed, the condition precedent in the SID at cl 2.1(i) would not be satisfied. It is open to the Senior Lenders to waive compliance with cl 2.1(i) but that had not yet been done as at the date of the hearing.

Principles

30    The principles applicable to an application for an interim injunction are well-settled requiring a serious question (or prima facie case) to be tried and the a consideration of where balance of convenience lies: Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57 at 81-82 [65] (Gummow and Hayne JJ).

Serious Question to be Tried

31    On the question of a serious question to be tried or a prima facie case, the plaintiff is not required to establish that it is more probable than not that it will succeed at trial, but rather that there is a sufficient likelihood of success at trial if the evidence remains as it is: ABC v O’Neill at 81-82 [65].

32    As I have noted, the application for interlocutory relief is brought on two bases - the Court’s equitable jurisdiction and s 1324(4).

33    Section 1324(4) of the Act provides:

(4) Where in the opinion of the Court it is desirable to do so, the Court may grant an interim injunction pending determination of an application under subsection (1).

34    The interim injunctive relief sought under s 1324(4) is based on alleged non-compliance with s 203D, a contravention of s 232 and seeking to convene the s 249F Meeting for other than a proper purpose.

35    The plaintiffs do not press for an interim injunction based on a contravention of s 232 of the Act.

36    Irrespective of whether an application is brought under the Act or the Court’s implied or inherent jurisdiction, the test remains the same. The plaintiffs need to establish a serious question to be tried. Those questions are:

(a)    whether the decision of Twinza’s board to postpone the s 249F Meeting was a valid exercise of power by the Directors;

(b)    whether in seeking to convene the s 249F Meeting to consider the s 203D Resolution, the defendant is in breach of s 203D; and

(c)    whether WM Clough Pty Ltd convened the s 249F Meeting for a proper purpose.

Was the Decision by Twinza’s Board to Postpone the s 249F Meeting a Valid Exercise of Power

37    The plaintiffs refer to cl 9.8 of Twinza’s Constitution: Annexure SQ-3 to the Quantrill affidavit.

38    That clause provides: “The Directors may postpone or cancel any general meeting whenever they think fit (other than a meeting convened as a result of a requisition under clause 9.6).”

39    There is no issue between the parties, that the reference to cl 9.6 in Twinza’s Constitution should be a reference to cl 9.5 which is in the following terms:

Clause 9.5 Requisitioned Meeting

A general meeting shall also be convened on requisition as is provided by the Corporations Act 2001 or in default may be convened by such requisition as its empowered to do so by the Corporations Act 2001.

40    The plaintiffs submit that the power in cl 9.8 of the Constitution is expressed in broad terms such that the power may be exercised to postpone the s 249F Meeting: Central Exchange Ltd v Rivkin Financial Services Ltd [2004] FCA 1546; (2004) 213 ALR 771 at [32]-[33] (Emmett J); Colbern Nominees Pty Ltd and Prime Minerals Limited [2009] WASC 289; (2009) 74 ACSR 236 at [14]-[15] (Lemier J).

41    The plaintiffs submit further that the prohibition in cl 9.8 of Twinza’s Constitution against postponing or cancelling a general meeting convened as a result of a requisition does not apply to a meeting called under s 249F as opposed to a meeting called by directors on a requisition by members under s 249D.

42    There is a strong case to support the contention, without deciding, that a meeting called by members under s 249F is not a requisitioned meeting within the meaning of Twinza’s Constitution. That is for the following reasons.

43    First, Clause 9.7 of Twinza’s Constitution provides:

9.7 Expenses of Requisition Meeting

Any reasonable expenses incurred by the requisitionists by reason of the failure to Directors to convene a general meeting must be paid to the requisitionists by the Company and any sum so paid may be recovered by the company in the manner provided by Section 249E(5) of Corporations Act 2001.

44    Clearly, by referring to a requisitioned meeting and by reference to s 249E(5) Twinza’s Constitution has as its object, the consequence of a failure of Twinza’s directors to call a meeting under s 249D: see 249E(1).

45    So too, cl 9.5 of Twinza’s Constitution, provides that a general meeting is to be convened on requisition or “in default may be convened by such requisitionists as empowered to do so by the [Act]”.

46    The second part of cl 9.5 dealing with a default by directors in not convening a meeting requisitioned under s 249D, contemplates s 249E which provides that the members of a corporation “with more than 50% of the votes of all members who make a request under s 249D may call and arrange to hold a general meeting if the directors do not do so within 21 days after the request is given to the company”.

47    In contrast, s 249F allows the members to call a meeting without requisitioning the directors.

48    The defendant submits that cl 9.8 of Twinza’s Constitution should be read constructively so as to apply to a meeting called under s 249F. That may well be but there is a serious question to be tried as to whether or not that is the case.

49    It follows that there is a serious question to be tried as to whether or not the postponement of the s 249F Meeting by the Directors was a valid exercise of power.

A Breach of s 203D(1)

50    The next question concerns a contention by the plaintiffs that in purporting to call the s 249F Meeting, the defendant is in breach of s 203D(1) and (2) which provide:

(1)    A public company may by resolution remove a director from office despite anything in:

(a) the company's constitution (if any); or

(b) an agreement between the company and the director; or

(c) an agreement between any or all members of the company and the director.

. . .

(2)    Notice of intention to move the resolution must be given to the company at least 2 months before the meeting is to be held. However, if the company calls a meeting after the notice of intention is given under this subsection, the meeting may pass the resolution even though the meeting is held less than 2 months after the notice of intention is given.

51    The plaintiffs submit that the defendant’s notice of intention to move the resolution under s 203D was given to Twinza on 14 August 2025 following which on 18 August 2025 the defendant called the s 249F Meeting. The plaintiffs submit that the consequence is that the notice given under s 203D was given less than two months before the s 249F Meeting is to be held.

52    On that basis, the plaintiffs submit that Twinza is entitled to a final injunction under s 1324(1) of the Act to restrain the defendant from holding a general meeting on 17 September 2025 given that it is in contravention of s 203D(2).

53    I am not dealing with a final injunction, however, I accept that the effect of an interim injunction restraining the s 249F Meeting from proceeding on 17 September 2025 is to grant final relief.

54    The defendant refers to cl 11.5(a) of Twinza’s Constitution which provides:

11.5 Removal of Director

(a)    The Company in general meeting may by resolution (of which notice is given in accordance with the Corporations Act 2001) remove any director from office and may by resolution appoint another person in that director’s stead.

55    The defendant submits that notice of the resolution to remove directors has been given by it in accordance with the Act, namely s 249F. It refers to s 249F(2) which provides that a meeting called by members under s 249F(1), “must be called in the same way, so far as possible, in which general meetings of the company may be called.”

56    It is from that point that the defendant submits that the effect of s 249F(2) when read with s 203D(2) is that a general meeting called by a shareholder to pass a resolution of which notice has been given under s 203D, may be held notwithstanding the meeting is to be held less than two months after the notice of resolution was given.

57    I do not accept that submission. Section 203D makes it quite clear that a notice of intention to move a resolution to remove a director must be given to the company at least two months before a meeting to consider the resolution is to be held. The meeting to which that refers is a meeting called by the company although if the company does not call a meeting, there is scope for the members to call a meeting. However, that does not mean the requirements in s 203D can be ignored.

58    Sections 249C to 249G deal with who may call meetings. In summary, meetings may be called:

(a)    by a director – s 249C (replaceable rule);

(b)    in the event a company is listed, by a director – s 249CA;

(c)    as noted, by the Directors on the request of members of the company – s 249D;

(d)    by members with more than 50% of the votes of all the members who make a request under s 249D if the directors do not call a general meeting within 21 days after the request is given to the company – s 249E;

(e)    as noted, under s 249F by members holding at least 5% of the votes that may be cast at a general meeting with such meeting to be called in the same way, so far as possible, in which general meetings of the company may be called; and

(f)    by order of the Court – s 249G.

59    Section 249H provides that at least 21 days’ notice must be given of a meeting of the members of a public company at which a resolution will be moved to remove a director under s 203D.

60    There is a distinction between giving notice of intention to move a resolution under s 203D which requires that the notice be given at least two months before a meeting to consider the resolution is to be held and the calling of a meeting per se. Whereas it is the case that under s 249D and s 249F, members may call meetings under the circumstances set out in those sections, that is a different matter altogether from the requirement to give two months’ notice. So much so is evident from the remaining terms of s 203D which, for example, provide for an entitlement to the director(s) in question to put their case to the members in writing and in advance of any meeting called to consider the resolution. Whereas it is open for directors to call a meeting and consider a s 203D Resolution in circumstances where less than two months’ notice has been given, that is not the case here.

61    Under those circumstances, I do not accept the defendant’s submission that because a meeting has been called pursuant to s 249F less than two months after notice of intention to put a resolution is given to the company pursuant to s 203D(1), the resolution may nonetheless be passed at the s 249F Meeting.

62    Next, the defendant submits that the s 203D Resolution may be considered in part at the s 249F Meeting by only considering those parts of the proposed resolution which seek the appointment of the three directors, including Mr Clough.

63    I do not accept that submission. The notice of intent to move resolutions for removal of directors was expressed as being under s 203D. That section is concerned with the removal of directors, not the appointment of directors.

64    Next, the defendant refers to s 1322 of the Act which deals with procedural irregularities. That section was raised for the first time during the hearing. Section 1322(4) provides:

(4) Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes:

(a) an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation;

(b) an order directing the rectification of any register kept by ASIC under this Act;

(c) an order relieving a person in whole or in part from any civil liability in respect of a contravention or failure of a kind referred to in paragraph (a);

(d) an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Act or in relation to a corporation (including an order extending a period where the period concerned ended before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding;

and may make such consequential or ancillary orders as the Court thinks fit.

65    The exception to s 1322(4) is contained in s 1322(6)(c) which provides that an order under s 1322(4) must not be made if substantial injustice has been or is likely to be caused to any person.

66    It is quite clear that in the event the directors are replaced, the Senior Lenders may elect to terminate the Scheme which may result in a substantial injustice.

67    The ability of the defendant to call in aid s 1322 does not mean there is no serious question to be tried.

68    It follows that on this question, the plaintiffs have established there is a serious question to be tried as to whether the defendant has, by calling the s 249F Meeting for 17 September 2025 in order to consider the s 203D Resolution, contravened the Act.

Section 249Q – Calling the s 249F Meeting for other than a proper purpose

69    The next question is whether WM Clough has called the s 249F Meeting for other than a proper purpose.

70    Section 249Q provides: “A meeting of the company’s members must be held for a proper purpose”.

71    The plaintiffs submit that power of a member to call a general meeting under s 249F of the Act must be exercised for the benefit of the company as a whole and for a proper purpose.

72    The plaintiffs submit that there is a serious question to be tried as to whether or not the defendant is calling the s 249F Meeting for other than a proper purpose, namely to prevent the satisfaction of the conditions precedent in the SID or to cause the Senior Lenders to terminate the SID.

73    The plaintiffs refer to the explanatory statement that accompanied the s 249F Notice: White affidavit [24] annexure HW-11.

74    The plaintiffs submit that the explanatory statement made no reference to either of clauses 2.1(i) or 7.2 of the SID nor to the consequences of the Scheme not being implemented which, as pointed out in the BDO Report and summarised by Banks-Smith J in Twinza No 1, is that the total debt owing to the Senior Lenders and other Senior Lenders exceeds the value of Twinza’s assets by between US$55 million and US$128 million.

75    The plaintiffs also submit that, the explanatory statement did not explain that:

(a)    in the event the Scheme does not proceed, the expected dividend available to the Senior Lenders and other Senior Lenders is between US$179 million (55% of the amount owing) and US$254 million (78% of the amount owing);

(b)    priority creditors would receive an expected dividend of US$123,000 (100% of the amount owing); whilst

(c)    unsecured creditors, CRPS, and other shareholders would receive a nil return.

76    The plaintiffs continue by submitting that the explanatory statement that accompanied the notice calling the s 249F Meeting, stated that “the creditor’s scheme of arrangement being proposed by Twinza’s board”, is inaccurate as the SID was entered into between the Receivers and the Senior Lenders.

77    Next, the plaintiffs refer to a Delegation of Authority from the Receivers to the Directors dated 25 February 2025: Annexure WMC-1 to the Clough affidavit. The Delegation provides that in exercising the delegated authority, each Director must observe the key objectives of the appointment of the Receivers, which is the implementation of the Scheme: cl 3(b)(ii). Further, cl 3(c) provides that in exercising any delegated authority, the Directors are not to take any steps which may interfere with or prejudice the proper discharge of the Receivers’ function, including the implementation of the Scheme.

78    Still further, cl 4 of the Delegation provides that it continues in full force and effect until the earlier of:

(a)    the Directors ceasing to act as directors of the Company; or

(b)    …

79    The plaintiffs refer to the following matters, which were put to Feutrill J in Twinza (No 2) and noted by his Honour at [39], as providing a basis for the Court to infer that the calling of the section 249F Meeting has not been done for a proper purpose:

(a)    the attempts by the defendant along with another interested party, who is not a party to these proceedings but of whom Mr Clough is also a director, to adjourn the first court hearing before Banks-Smith J in Twinza No 1, to delay or prevent the convening of the meeting of creditors to consider the Scheme;

(b)    calling the s 249F Meeting to consider the removal of the three directors giving rise to a right on the part of the Senior Lenders’ right to terminate the SID;

(c)    the removal of the three directors would result in the non-satisfaction of one of the conditions precedent to the Scheme become effective;

(d)    the Directors currently have very limited functions with their residual powers largely relating to matters of insolvency, such as defending winding up proceedings and appointing administrators;

(e)    the error in the explanatory statement that the Board proposed the Scheme as opposed to the Receivers so that the proposed resolution is evidently founded, at least in part, on a false premise;

(f)    the issue of a statutory demand by McRae Clough Pty Ltd, a company of which Mr Clough is also a director, on 19 August 2025 to Twinza in the sum of $496,395.02, as well as an application by WM Clough on 20 August 2025 to the Takeovers Panel under s 657C of the Act for a declaration of unacceptable circumstances with respect to the Scheme; and

(g)    the absence of a cogent explanation of what would be achieved by the removal and replacement of the three directors and the reasons why the resolution is being pursued at this stage.

80    The defendant submits the matters set out above are speculative.

81    As to that submission, all these factors have some basis on the material before the Court. Whether they are sufficient to establish the inference sought is another question and is for another day.

82    The defendants submit that contrary to the applicants’ submissions in Twinza No 2, the calling of the s 249F Meeting was made for a proper purpose. They refer to the evidence of Mr Clough that the sole purpose of the s 249F Meeting is that if shareholders form the view that their interests have not been best served by the current Board, they have an opportunity to vote to remove certain directors and appoint new directors.

83    The defendant submits that its justification for proposing the resolution and calling the s 249F Meeting was for the purpose of providing an avenue for the shareholders to express their views on the proposed scheme, which it submits is a paradigm example of a proper purpose: Clough affidavit at [15].

84    It is not clear to me why the proposed removal and appointment of replacement directors will achieve the stated purpose of representing the interests of the shareholders in the particular circumstances of this matter.

85    The term “Directors” is defined in the Delegation as six identified directors, three of whom are Mr White, Mr Quantrill and Mr Brown. It follows that in the event the three Directors are removed at the s 249F Meeting, not only are any replacement directors not able to interfere with or prejudice the proper discharge of the Receivers’ function, including the implementation of the Scheme, the Delegation terminates.

86    Further, Mr Clough does not commit one way or the other to whether if appointed, he will move for the appointment of a Voluntary Administrator. He is correct not to bind himself one way or the other but he has the opportunity to address that point at the second Court hearing.

87    The plaintiffs also refer to Mr Clough deposing that he may seek to contest BDO’s independent expert valuation and expresses his opinion that a second valuation would be prudent: Clough affidavit at [26].

88    The plaintiffs submit that the issue of valuation is before the Court in the scheme approval proceedings, which was the subject of Twinza No 1, and falls to be addressed at the second Court hearing. The plaintiffs submit that the Clough entities are free to procure their own valuation.

89    I accept that submission.

90    It is for the reasons set out above that there is a serious question to be tried as to whether the section 249F Meeting was called for a proper purpose in the particular circumstances of the defendant’s actions in providing a notice of intention to move a resolution for the removal of the directors in accordance with s 203D(2) and calling a meeting of members under s 249F. That is because that the reasons given by the defendant for giving notice of the resolution and calling the meeting cannot, in any event, influence the process contemplated by the SID save for providing to the Senior Lenders an event justifying termination of the SID or alternatively providing for the non-fulfillment of a condition precedent of the SID.

Conclusion on Serious Question

91    It follows from the matters that I have set out above, that there is a serious question to be tried in relation to a potential contravention of s 203D(2) and/or s 249Q and whether in postponing the s 249F Meeting the Directors acted within power.

Balance of Convenience

92    The plaintiffs submit that the balance of convenience weighs heavily in favour of the grant of an interim injunction. They submit that the holding of the meeting called by the defendant, and the passage of the s 203D Resolution would jeopardise the Scheme for the reasons set out above.

93    They submit that the only real alternative to the Scheme is that Twinza be wound up which would provide for partial repayment of the Senior Lenders and a nil return for Twinza’s unsecured creditors, convertible redeemable preference shareholders and members: Twinza No 1 at [34].

94    They submit further that an interim injunction occasions no real prejudice to the defendant, particularly in circumstances where the second Court hearing in the Scheme proceedings is yet to be held at which time the Court will consider whether the Scheme should be approved.

95    The defendant submits that shareholders representing 44% of the issued ordinary share capital of Twinza have provided the defendant with copies of their submitted proxy forms in favour of the resolution to remove the three directors.

96    There is an issue as to whether the shareholders referred to in fact represent 44% of the issued ordinary share capital however, in any event, the defendant submits that the application by the Directors in this matter represents a mechanism by which the Receivers seek to silence shareholders from expressing their concerns in exercising the statutory rights.

97    I do not accept that submission. The second Court hearing at which the Court will consider whether or not, if passed, the Scheme is to be approved, provides the opportunity for the defendant, as an interested party, to be heard against the approval of the Scheme.

98    Next, the defendant submits that the Receivers have not adduced any evidence which would suggest that the Senior Lenders will not agree to waive condition precedent 2.1(i) or that they will exercise their rights under cl 7.2 of the SID.

99    The defendant observes that it is extraordinary that the Board entered into the SID which prohibits shareholders from exercising their statutory rights.

100    I pause to observe that it was not the Board who entered into the SID.

101    I take into account that by restraining the defendant from conducting the s 249F Meeting the Court is in effect giving final relief however, that is offset by the opportunity for the defendant to address the Court at the second Court hearing.

102    I do not accept that the balance of convenience favours not granting the injunctive relief sought. By holding the s 249F Meeting on 17 September 2024 and, potentially, passing the s 203D Resolution, there is a prospect, which I do not consider to be fanciful, that the Senior Lenders will terminate the SID resulting in the liquidation of Twinza. The defendant (and other interested parties) will have the opportunity to address the Court at the second Court hearing held to consider whether or not the Scheme should be approved

103    It is for these reasons that the balance of convenience strongly favours the plaintiffs.

Conclusion

104    There will be orders as follows:

1.    Upon the undertaking of Hayden Leigh White in the terms annexed to these orders as Annexure A, the defendant is restrained and an injunction is hereby granted restraining the defendant whether by itself, its servants, or agents, or howsoever otherwise from holding a general meeting of members of the first plaintiff on 17 September 2025, or on any other date other than that determined by the Board of Directors of the first plaintiff, or until the final determination of these proceedings or until further order of the Court, whichever is the sooner.

2.    Liberty to apply on 48 hours’ notice.

3.    Costs in the cause.

Associate:

Dated:    19 September 2025