FEDERAL COURT OF AUSTRALIA

QGold Pty Ltd v Woods (No 2) [2026] FCA 37

ORDERS

THE COURT ORDERS THAT:

1.    The plaintiff pay one-third of the costs incurred by the representative defendant on legal proceedings in relation to the amended originating process (filed 28 April 2025).

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

REASONS FOR JUDGMENT

DERRINGTON J:

1 On 2 October 2025, orders were made approving an application (the Application), filed by the plaintiff (QGold Pty Ltd (QGold)) under s 664F of the Corporations Act 2001 (Cth) (the Act), for the acquisition of all of the ordinary shares in Carawine Resources Limited (Carawine) not already held by QGold:  QGold Pty Ltd v Woods [2025] FCA 1201 (QGold).  At that time, the question of costs was reserved and submissions were invited on the question of whether, in the context of the case, the prima facie rule in s 664F(4) of the Act ought to be departed from.

2 In context, s 664F of the Act relevantly provides as follows:

664F The Court’s power to approve acquisition

(1)    If people who hold at least 10% of the securities covered by the compulsory acquisition notice object to the acquisition before the end of the objection period, the 90% holder may apply to the Court for approval of the acquisition of the securities covered by the notice.

(2)    The 90% holder must apply within 1 month after the end of the objection period.

(3)    If the 90% holder establishes that the terms set out in the compulsory acquisition notice give a fair value for the securities, the Court must approve the acquisition of the securities on those terms. Otherwise it must confirm that the acquisition will not take place.

Note: See section 667C on valuation.

(4)    The 90% holder must bear the costs that a person incurs on legal proceedings in relation to the application unless the Court is satisfied that the person acted improperly, vexatiously or otherwise unreasonably.  The 90% holder must bear their own costs.

3 By a written outline of submissions filed 24 October 2025, QGold asserts first, that Mr Robert Catto, the representative defendant (as per the Orders of 9 August 2024), is the only defendant who incurred costs on legal proceedings relating to the Application and second, that Mr Catto’s opposition to the Application was unreasonable and improper for the purposes of s 664F(4) of the Act.  On that basis, it is submitted that no order should be made requiring QGold to pay Mr Catto’s costs of the proceedings.  As developed below, that submission can largely be accepted.

4 For the avoidance of doubt, all references to Chapters, Parts, Divisions and Sections throughout these reasons should be understood to be, unless indicated otherwise, references to the Act.  All capitalised terms and phrases bear the same meaning as in QGold, unless indicated otherwise.

Section 664F(4): legislative context and existing jurisprudence

5 Section 664F(4) is a product of the Corporate Law Economic Reform Program Act 1999 (Cth). It falls within Division 1 (“Compulsory acquisition of securities by 90% holder”) of Part 6A.2 (“General compulsory acquisitions and buy-outs”) of Chapter 6A and delineates the manner, at least prima facie, in which the costs associated with an application filed under s 664F(1) (a s 664F(1) Application) are to be borne by the applicant (the 90% holder) and objecting minority shareholders:  cf Winpar Holdings Ltd v Austrim Nylex Ltd (No 2) (2005) 12 VR 417, 420 [7].  In so doing, s 664F(4) gives “effect to a recommendation in a report by the Legal Committee on Compulsory Acquisitions for the Companies and Securities Advisory Committee … [and] corresponds to a similar provision in s 430C of the Companies Act 1985 (UK)”:  Pauls Ltd v Elkington [2001] QCA 414 [3], citing the Legal Committee of the Companies and Securities Advisory Committee, Compulsory Acquisitions (Report, 1996) 86 [10.38]; see also Corporate Law Economic Reform Program, Proposals for Reform: Paper No 4, Takeovers (1997) 30.

6 Though s 430C of the Companies Act 1985 (UK) has since been repealed (now see s 986(5) of the Companies Act 2006 (UK)), it precluded, at subsection (4), the imposition of a costs order against a shareholder who brought an application to oppose the compulsory acquisition of their shareholding (in the context of a formal takeover bid) “unless” the Court considered “that the application was unnecessary, improper or vexatious” or involved some “unreasonable” conduct or delay.  As Nourse LJ observed in Re Britoil plc [1990] BCC 70 (Britoil) (at 74):

It cannot be doubted that, in erecting … a shield for dissentient shareholders against orders for costs, the general purpose of section 430C(4) is not to discourage them from applying except in cases which ought not properly to engage the attention of the court. If there is something which it is proper for the court to consider, the applicant, even though unsuccessful, ought not to have to pay the offeror’s costs.

(Emphasis added).

7 Much the same can be said in relation to s 664F(4) in that it seeks to remove a barrier (namely, a liability for costs incurred in legal proceedings) that might otherwise discourage shareholders from seeking to have their opposition to a compulsory acquisition notice determined by a Court – so long as, in so doing, they do not improperly engage the attention of the Court. After all, in circumstances where the issue of “fair value” is in question (recall ss 664F(1) and (3)), it is of assistance to the Court to have the 90% holder’s material tested by ordinary forensic processes and to have the assistance of any contrary views which are reasonably advanced by minority shareholders:  see Energex Ltd v Elkington (2003) 21 ACLC 557, 558 [3] (Energex).

8 So much comports with the recent observations of Nixon J in In the matter of Navalo Financial Services Group Limited [2025] NSWSC 317 (Navalo), where his Honour noted (at [101]) that:

In general terms, when considering, in the context of any determination regarding costs, whether a party has behaved “unreasonably” in relation to a proceeding [for the purposes of s 664F(4)], the Court is considering whether the party, by the position adopted in respect of the proceeding or by the manner in which that position has been advanced, has caused time to be wasted or unnecessary expense to be incurred.

(Emphasis added).

9 Similarly, in Winpar Holdings Ltd v Goldfields Kalgoorlie Ltd (2000) 35 ACSR 363 (Winpar), Santow J said (at 366 [11]) that, in the context of a costs award under s 664F(4), there must be:

some limit based upon the reasonable plausibility of submissions and the absence of illegitimate time wasting, requiring some economy of presentation. For the principles applicable to objectors: see Re NRMA Insurance Ltd (2000) 33 ACSR 595 at 608-9. … [C]ourts should not encourage waste of court time and resources with objections that have no real substance, by excessive lenience with cost orders.

(See, relatedly, the observations of Mackenzie J in Energex 558 [3] – [4]).

10 As an aside, is noted that the authority that was cited by his Honour – Re NRMA Insurance Ltd (No 1) (2000) 33 ACSR 595 – set out the principles which govern whether the costs of objectors on their objection (in the context of a scheme of arrangement) ought to be met by the relevant scheme company.  Those principles were summarised thus (at 608 [45]):

(i)    The ordinary rule is that the scheme companies pay the objector’s costs and do not suffer cost orders against them.

(ii)     However, this is subject to the objections not being frivolous or without substance but rather such as to be properly and justifiably advanced, even if unsuccessfully. …

11 The foregoing logic can be seen to undergird the findings of Mackenzie J in Energex.  There, his Honour discounted, by two-thirds, the costs that had been incurred by minority shareholders in opposing a s 664F(1) Application because (at 559 [12]) that opposition was predicated upon a challenge to a valuation approach (in an expert’s report on the question of “fair value”) which “proceeded on the most favourable view to the respondents [the shareholders] [and] result[ed] in a higher determination of “fair value”” than if other views had been used (see also 560 [15]; affirmed in Energex Ltd v Elkington (2003) 47 ACSR 442, 446 – 447 [24] – [29]).

12 Reference ought also be had to the reasoning of Douglas J in Pauls Ltd v Dwyer [2001] QSC 103 (Dwyer (Costs)).  In short, his Honour, having approved a s 664F(1) Application (in Pauls Ltd v Dwyer (2001) 19 ACLC 959 (Dwyer)), was concerned with whether various objecting shareholders – a Mr Catto and Dr and Mrs Elkington– ought to be precluded from recovering certain costs which had been reserved during the carriage of that application.  Specifically:

(1)    in relation to the costs arising from a shareholder’s unsuccessful application to transfer the s 664F(1) Application to another jurisdiction, his Honour found (at [5]) in favour of the shareholder because her application “was not without some chance of success”.

(2)    in relation to the costs arising from a shareholder’s unsuccessful challenge against the constitutional validity of Part 6A.2, his Honour first noted (at [7]) the claim put against the shareholders – that their challenge “was in respect of a much wider issue” than the s 664F(1) Application, such that “it could not be said that the costs in that regard were entirely in relation to” the s 664F(1) Application – and second, held (at [8]) that:

it was not unreasonable for the respondents to make such an application. Nor was it vexatious or improper. The fact that I thought the issue was clear is not determinative of the issue of costs. If in fact, the application had succeeded the situation, with respect to value, would have been placed back where it was before the passing of Pt6A2 of the Law.

(3)    in relation to the costs arising from the re-listing of the matter on 10 November and 11 December 2000, his Honour found (at [6]) that “the re-listing of the matter on each of those occasions was caused by the default” of the shareholders – being, relevantly, the failure to deliver various documents – such that Mrs Elkington was denied her costs.

(4)    in relation to the costs arising from the s 664F(1) Application, his Honour:

(a)    accepted (at [10] – [11]) the submission that:

the respondents [the shareholders] put in issue that the applicant was a 90% holder of shares in Pauls Victoria Ltd (“PVL”). This was so notwithstanding the applicant’s initial affidavit material which showed that the applicant was a 99.9% holder. This necessitated the respondents asking for and the applicant giving disclosure of documents to demonstrate that it was a 90% holder. … This involved considerable effort and expense. Then, after all this effort, the respondents did not even raise as an issue on the final hearing of the application the fact that the applicant did not meet the threshold of being a 90% holder. It is submitted that this issue was raised unreasonably. It is submitted that the respondents should not get any costs associated with seeking disclosure of documents regarding the applicant’s 90% ownership of PVL.

(b)    noted (at [12]) that:

it is alleged that the respondents acted improperly, vexatiously or unreasonably [because] Mr Catto and Dr Elkington were self represented when Mrs Elkington was represented by solicitors and counsel. It is submitted that the interests of the three respondents who took an active part in the litigation were not discernibly different.

and concluded (at [13]) that Mr Catto and Dr Elkington:

added nothing to the case and, indeed, the bulk of Mr Catto’s evidence was … inadmissible. Nothing that was said by either of those gentlemen assisted me in coming to the conclusions to which I ultimately came. In my view Mr Catto and Dr Elkington should not be allowed any costs of representing themselves on the application.

(cf Navalo [103]; Pauls Ltd v Dwyer [2004] 2 Qd R 176, 198 [61] (Pauls)).

13 Similarly, in Austrim Nylex Ltd v Kroll (No 3) (2002) 42 ACSR 479, 483 – 484 [23] (Kroll (No 3)), Warren J was concerned with the entitlement of certain shareholders to the costs of their unsuccessful opposition to a s 664F(1) Application (in relation to that application, see Austrim Nylex Ltd v Kroll (No 2) (2002) 42 ACSR 18 (Kroll (No 2)).  Her Honour reasoned as follows:

(1)    in relation to the costs arising from the shareholders’ unsuccessful application to stay the proceedings, her Honour found (at 483 – 484 [23]) that:

It seems to me that the application was entirely misconceived. … Even so, … in my reasons for dismissing the stay application it was apparent that it was inappropriate to stay the present proceeding pending the outcome of the appeals in the Pauls matters. … In my view it cannot have been contemplated that minority shareholders would be entitled to pursue interlocutory applications that were misconceived and lacked sufficient evidence to invoke the discretion to stay the subject proceeding. It seems to me, therefore, that on proper analysis the defendants acted otherwise unreasonably in bringing the stay application …

(2)    in relation to the costs arising from an “attack” launched by the shareholders vis-à-vis an alleged lack of material disclosure by the 90% holder, her Honour:

(a)    extracted (at 484 [24]) certain observations that had been made in Kroll (No 2):

Ultimately, there was no evidence or insufficient evidence of the matters complained about by the defendants with respect to material disclosure. Importantly there was no evidence that any of the matters relied on by the defendants were material to a minority shareholder’s decision to object. Furthermore, it behoved the defendants to demonstrate knowledge by Austrim Nylex of the information concerned, that it was material to deciding whether to object to the acquisition and that the information was not disclosed in the independent expert’s reports.

(b)    and, in those circumstances, held (at 484 [26]):

It seems to me that the attack brought by the defendants on procedural matters particularly concerned with lack of material disclosure was misconceived. The complaints were rejected. In my view in ventilating these matters at trial and thereby prompting the plaintiff to respond to the complaints the defendants acted otherwise unreasonably and, therefore, are not entitled to any costs associated with those matters.

(3)    in relation to the costs arising from a shareholder’s personal attendance in the Court, it was found (at 485 [28]) that:

… Dr Elkington could have allowed his representation to be encompassed with that of the other defendants. Such view was expressed by Douglas J in [Dwyer (Costs)] with respect, I agree. Dr Elkington elected to represent himself before this court and any costs he incurred involved unnecessary duplication. In my view in seeking to represent himself, while Dr Elkington was entitled to do so, for the purposes of s 664F(4) of the Corporations Act he acted otherwise unreasonably. …

(4)    in relation to all other costs of the proceeding, her Honour noted (at 483 [19] – [20]):

At trial …, [the objecting shareholders] principally relied upon the evidence of their expert, Wayne Lonergan.

Here the plaintiff said that once the report of Lonergan was produced … to the defendants and considered they ought have known in light of [Pauls Ltd v Dwyer (2001) 19 ACLC 959] and other authority that the Lonergan analysis was untenable. … They said that in the context of the authorities for the defendants to proceed as they did they acted improperly, vexatiously and unreasonably and ought not be awarded costs thenceforth.

and concluded (at 483 [21] – [22]) that:

[The plaintiff’s] submissions do not allow for a significant factor. This proceeding was heard very shortly after [Capricorn Diamonds Investments Pty Ltd v Catto (2002) 41 ACSR 376] was heard and while judgment in that matter was reserved. Mr J Santamaria QC who appeared with Mr J Moore argued for the plaintiff that my judgment in Capricorn did not affect their defendants’ position because the law was known beforehand. … To an extent there is some attraction in that argument. Nevertheless, Capricorn provided an opportunity to consider at length the application of ss 664(3) and 664F(1) of the Corporations Act. Indeed, I relied extensively on the judgment in Capricorn in reaching my findings in this matter. On balance, I consider that on this occasion the defendants did not act improperly, vexatiously or otherwise unreasonably in the conduct of their cases given that at the relevant time the judgment in Capricorn had not been delivered. … It may have been a different matter if the defendants pressed on after the reasons for judgment in Capricorn were known but that is not the case before me.

(Emphasis added).

14 Relatedly, in identifying the nature of the costs to which the relevant shareholders were entitled to, her Honour concluded that s 664F(4) contemplated costs in the ordinary event (on a party–party basis); there was nothing in the Act to indicate “any contemplation by the legislature that the acquiring party should pay other than the usual costs” or “that the usual discretion exercised … in proceedings with respect to costs should be supplanted”:  Kroll (No 3) 486 – 487 [36].

15 Perhaps the neatest delineation of the standard of “unreasonableness” in s 664F(4) can be found in the reasoning of Muir J in Bromley Investments Pty Ltd v Elkington (2002) 43 ACSR 584 (Bromley).  There, his Honour held (at 600 [88]) that:

Dr Elkington [an objecting shareholder] was entitled to put the applicant to proof and the other objectors were entitled to argue the grounds in their statements of opposition. Their respective attempts to go outside their grounds of opposition … were, in my view unreasonable. It was this conduct which caused the hearing to go into a second day and it is not appropriate that the applicant bear the costs of that day.

16 The foregoing can be distilled in the following terms:

(1)    under s 664F(4), the 90% holder must bear the costs which any person “incurs on legal proceedings in relation to” a 664F(1) Application unless the Court is satisfied that the person has acted “improperly, vexatiously or otherwise unreasonably”.

(2)    in assessing whether a person has acted improperly, vexatiously or unreasonably for the purposes of s 664F(4), the Court looks to whether they have, by the position adopted in respect of the relevant proceeding or the manner in which that position was advanced,  improperly engaged the Court’s attention:  Britoil 74; Navalo [101]; Winpar 366 [11].

(3)    persons have been found to have acted “unreasonably” where they incur costs by:

(a)    raising issues that were specious:  Dwyer (Costs) [10] – [11]:  or misconceived:  Kroll (No 3) 484 [26]; see also Energex 559 [12], 560 [15]: or, arguably, at odds with accepted or appellate authority:  see Kroll (No 3) 483 [21]; Pauls 429 [61];

(b)    causing the unnecessary prolongation of a matter:  Dwyer (Costs) [6], [12] – [13]; Kroll (No 3) 485 [28]; Bromley 600 [88]; but see Pauls 429 [61]; and

(c)    pursuing interlocutory applications that were “misconceived” and not supported by sufficient evidence:  Kroll (No 3) 483 – 484 [23]; and

(4)    persons have been found to not have acted “unreasonably” where they incur costs by:

(a)    appearing at the hearing of a s 664F(1) Application to draw the Court’s attention to those matters set out in their objection notices (see s 664E) and put the 90% holder to proof on the issue of fair value:  Navalo [103]; Bromley 600 [88]; and

(b)    pursuing an application that (a) “is not without some chance of success”:  Dwyer (Costs) [5]:  or (b) presents some novel question for resolution:  Pauls 429 [61].

(5)    s 664F(4) contemplates party-party costs:  Kroll (No 3) 485 – 487 [31] – [36].

The relevant positions

17 QGold contends that Mr Catto’s conduct was unreasonable and improper for the purposes of s 664F(4).  It does so for two reasons.  First, it claims that “a number of the objections maintained at the hearing were unreasonable”.  Second, it claims that “Mr Catto’s private communications with representatives of QGold evidence that his actions were in furtherance of an improper greenmailing campaign, by which he sought an advantage not permitted by, and antithetical to, the purposes of the [Act]”.  It is appropriate to consider each of those submissions in turn.

Submission (1):  Mr Catto’s conduct in relation to the Application was “unreasonable”

18 The context in which the Application came before the Court is set out in QGold (at [12] – [25]).  In brief, Mr Catto, having received the Compulsory Acquisition Documents in 2024, sought to assert that QGold had failed to establish that the terms of the Compulsory Acquisition Notice – which gave notice that it proposed to acquire the residual ordinary shares in Carawine for the cash amount of $0.11 per share – gave a “fair value” to those securities (cf s 664F(3)) for two reasons.  First, the relevant expert’s report (the Andrawes Report) did not comply with the Act.  Second, there was insufficient evidence to support a finding that the price at which QGold had proposed to acquire the relevant shares ($0.11 per share) was a “fair value”:  see QGold [25].

19 As QGold accepts (subject to infra [27] – [31]), there is nothing “unreasonable” in Mr Catto’s latter objection:  supra [16(4)(a)].  However, it submits that such conclusion does not hold vis-à-vis the (seven) deficiencies that were said, by Mr Catto, to leave the Andrawes Report at odds with the Act.  Those deficiencies were summarised in QGold (at [47]) in the following terms:

The defendants submit that the Andrawes Report did not [comply with the Act] for the following reasons – it:

(1)     valued the relevant shares at the incorrect date;

(2)    did not comply with s 667C(1)(b), because it failed to consider or attribute any value to certain tranches of options which had been issued by Carawine;

(3)    did not comply with s 667C(2), because it failed to consider the consideration paid for ordinary shares in Carawine within the previous six months;

(4)    did not comply with s 667C(1)(c), because it applied a control premium to the shares;

(5)     did not comply with s 667A(1)(c), because it did not disclose Mr Andrawes’ reasoning;

(6)    contained technical data that had been incorrectly reported; and

(7)    attached an annexure that was ineligible.

20 For the reasons developed in QGold (at paragraphs [46] – [152]), each of the aforementioned “deficiencies” were not made out – that is, they did not support the conclusion that QGold had failed to establish that the terms set out in the Compulsory Acquisition Notice gave a fair value for the residual ordinary shares in Carawine.  While it is not necessary to delve into the minutiae of why that was so, it is nonetheless important, for present purposes, to observe the following.

21 Several of the “deficiencies” were, on any objective view, wholly misconceived.  For instance, the second deficiency comprised an allegation that the Andrawes Report was in contrivance of s 667C(1)(b) because Mr Andrawes did not attribute any value to certain options that Carawine had issued.  Not only was he amply justified in not doing so: QGold [75] – [80]: but, strikingly, had Mr Andrawes in fact done so, this would only have decreased his estimate of the “market value” of an ordinary Carawine share (against which QGold’s offer price ($0.11 per share) was to be assessed):  QGold [81].  Necessarily, this would have strengthened the plaintiff’s case on the Application:  if the Andrawes Report had proceeded upon the footing sought by Mr Catto, QGold’s offer price would have been (a) higher than the market price of a Carawine share to a greater extent than it otherwise would; or (b) lower than the market price of a Carawine share to a lesser extent than it otherwise would.  As explained by Mr Ananian-Cooper for QGold:

… What Mr Andrawes did was to allocate the entirety of Carawine as a whole to the ordinary shareholders, the people whose shares were to be acquired. He allocated nothing to the option-holders. If he had allocated some of the value to the option-holders, that would have decreased the amount allocated to the ordinary shareholders and would have decreased his assessment of the range of [market] values of the shares held by the ordinary shareholders. … [I]f this is an error, it’s an error that rebounded to the benefit of the people whose shares are sought to be compulsorily acquired.

22 At no point could the existence of the second deficiency have served as a basis for finding that $0.11 was less than “fair value” for an ordinary Carawine share and, in that sense, its relevance to the Application (recall s 664F(3)) is, at best, rather dubious.  Further, and relatedly, it should not be overlooked that such “deficiency”, if it indeed existed, only enured to the benefit of the shareholders in relation to the Application (i.e., it placed the plaintiff in a weaker position than it otherwise would have been) and their personal interests (i.e., it inflated the market price of the relevant securities).  Much the same can be said in relation to the fourth deficiency:  if the Andrawes Report did, as Mr Catto alleged, incorrectly add a “control premium” to the value of the securities (which it did not:  QGold [121]), that would only have inflated their market price.  Again, that (a) does not provide a basis for finding that $0.11 was below “fair value”; and (b) would, indeed, enure to the shareholders’ benefit. On any view, the advancement of objections that are irrelevant and, as here, antithetical to the substance of the objectors’ position, comprises an improper engagement of the attention of the Court:  see Energex 559 [12], 560 [15].

23 A similar conclusion applies vis-à-vis the sixth and seventh deficiencies.  As regards the former, which comprised an assertion that the Andrawes Report erroneously reported certain technical data, it is noted that such error was not alleged to have affected the accuracy of the conclusions expressed nor was evidence led to suggest that any shareholder had noticed, or been influenced by, the relevant error:  QGold [142] – [143].  As regards the latter, which amounted to a claim that the Andrawes Report was illegible in part, it is noted that, after considerable time was spent dealing with such submission at the hearing of the Application, it was revealed that the version of the report that was provided to shareholders – including Mr Catto – was not illegible in the manner alleged:  see QGold [147].  The ventilation of such irrelevant and, indeed, false issues is an improper engagement of the Court’s attention insofar as it unnecessarily complicates (and prolongs) both the hearing and resolution of the Application:  see Dwyer (Costs) [10] – [11]. That reasoning applies with equal measure in respect of the fifth deficiency:  see QGold [139].

24 In relation to the third deficiency, which comprised an assertion that the Andrawes Report was in breach of s 667C(2) (because it did not, in determining the “fair value” of an ordinary share in Carawine, take into account “the consideration (if any) paid for securities in that class within the previous 6 months”), QGold claims that Mr Catto’s position was “contrary to plain fact and authority”.  Both limbs of that submission ought to be accepted. It is pellucid that Mr Andrawes had regard to, in the preparation of the Andrawes Report, evidence of the historical price paid for a relevant share in Carawine:  QGold [86] – [90].   The weight to be ascribed to that evidence was a matter solely for him (provided it did not contradict or detract from the requirements of s 667C(1)):  Pauls 191 [31]; Capricorn Diamonds Investment Pty Ltd v Catto (2002) 5 VR 61, 78 [65] – [66] (Capricorn); Teh v Ramsay Centauri Pty Ltd (2002) 42 ACSR 354, 360 [27].  That being so, the prosecution of the third deficiency was specious.  Indeed, to the extent that it comprised an attack upon how Mr Andrawes took the relevant evidence into account (QGold [96]), it was an objection that could not have succeeded under s 667C(2): cf Dwyer (Costs) [5].

25 By contrast, it is difficult to conclude that advancement of the first deficiency was unreasonable in circumstances where it raised a (somewhat) novel issue:  QGold [55] – [61]; Pauls 429 [61].

26 On balance, the allegations advanced by Mr Catto vis-à-vis the “deficiencies” in the Andrawes Report were unreasonable for the purposes of s 664F(4).  On one view, they comprised no more than a “scattergun” attack upon the plaintiff’s evidence with limited, if any, appreciation of the consequences of doing so:  see, in particular, supra [21] – [22].  In that setting, QGold should not have to bear the costs that were incurred by Mr Catto in objecting to the Andrawes Report.

Submission (2):  Mr Catto’s attempt to greenmail the plaintiff was “improper”

27 Part 6A.2, of which s 664F(4) is a constituent element, was introduced to, amongst other things, “discourage minority shareholders from demanding a price for their securities that is above a fair value (often referred to as ‘greenmailing’)”: Explanatory Memorandum, Corporate Law Economic Reform Bill 1998 (Cth) 40 [7.2]; see also Pauls 188 [20], 193 [41]; Dwyer 964 [22].  As Justice Warren helpfully explained in Capricorn (at 69 [28]; see also 67 – 69 [21] – [27]):

… the legislature was seeking to balance the interests of the two groups of parties, that is, the interests of facilitating changes in corporate ownership with the need to protect the rights of the minority shareholders. Part of the process was the discouragement of minority shareholders from demanding a price for their securities that is above a fair value, the practice of greenmailing. The explanatory memorandum shows that part of the objective of the legislative scheme was to remove that potential, that is, to remove the matters that would otherwise operate to force a price above fair value were there to be the ordinary commercial bargaining context in which consent of both parties is required before a transaction can be concluded. …

28 That objective is embodied, for example, by the prohibitions imposed upon the 90% holder (in relation to their ability to withdraw a notice of compulsory acquisition once made:  s 664C(6):  and give benefits to a person:  s 664D) as well as the methodology defined for identifying what is “fair value” for securities for the purposes of Chapter 6A:  s 667C; see Pauls 188 – 189 [20] – [21], 189 [24], 190 – 191 [29] – [30].

29 QGold now asserts that Mr Catto’s conduct, “as a whole”, is precisely that which the legislature sought to discourage by the introduction of Part 6A.2 and, as such, “improper” for the purposes of s 664F(4).  That submission comprises two distinct limbs; they are best considered in turn.

Was Mr Catto’s conduct in furtherance of an attempt to “greenmail” the plaintiff?

30 It is not controversial that Mr Catto is no stranger to litigation involving Part 6A.2; an affidavit filed by Mr Stephen Lloyd on 24 October 2025 identifies nine proceedings in which he (a) was a shareholder in a company the subject of a takeover; and (b) became a party to (or witness in) litigation or other applications in respect of that takeover.  Nor is it controversial that Mr Catto has been found to have engaged in “greenmailing”:  see, eg, Dwyer 962 [12], 964 [22].

31 In its written outline of submissions, QGold places much emphasis upon the fact that Mr Catto, at some time in early 2024 (after QGold had become the 90% holder in Carawine and Carawine had informed the market of such), increased his shareholding in Carawine by more than 400%. Understood in context, that might tend to support QGold’s submission; it is, however, certainly not determinative of it.  The plaintiff also relies upon certain communications that it alleges Mr Catto engaged in as evidence that he “was endeavouring to extract an agreement from [QGold] that it pay a much higher price than 11 cents to acquire the outstanding shares in Carawine”. Although the evidence relied upon is, to a not insignificant extent, suggestive of such, I am not satisfied that it is of sufficient veracity to sustain a finding that Mr Catto’s conduct can “only be characterised as an attempt to greenmail the Plaintiff”. Were such a finding to be made, it would be difficult to conclude other than that Mr Catto had acted in a manner antithetical to a core purpose of Part 6A.2 and, as such, “improperly” in relation to the proceedings:  s 664F(4); see Britoil 75.  It is, however, unnecessary to reach any definitive conclusion upon that matter.

Conclusion

32 The crux of Mr Catto’s case at trial was that QGold had failed to establish that the terms of the Compulsory Acquisition Notice gave a “fair value” to those securities (cf s 664F(3)).  This was said to be for two reasons.  First, the Andrawes Report was inconsistent with the requirements of the Act.  For the reasons given at supra [21] – [26], that objection was, on balance, advanced unreasonably.  Second, there was insufficient evidence to support a finding that QGold’s offer price was fair value.  Necessarily, the taking of such an objection was not unreasonable:  supra [16(4)(a)]. In those circumstances, it is appropriate that QGold be made to bear only a portion of the costs which Mr Catto incurred on legal proceedings in relation to the Application.  Given the overwhelming extent to which the making of the former objection consumed the hearing of the Application on 6 and 8 May 2025, it is appropriate that Mr Catto’s costs be discounted by two-thirds.  In the absence of sufficiently persuasive evidence to support a finding that he acted otherwise improperly or vexatiously, no further reduction of Mr Catto’s costs should be made.

Associate:

Dated:    4 February 2026

SCHEDULE OF PARTIES