If a rival is creeping up the share register towards a blocking stake, often the instinct is to run to court and stop the meeting that approves it. AIM v Wiluna [2026] FCA 697 is a warning that this instinct usually fails. The Federal Court of Australia refused to restrain the meeting, because the applicant could not show even a serious question to be tried. For an investor or fund-level counsel in a contest for control, the lesson is not that the courts are shut. It is that a meeting injunction is the potentially the wrong tool, pointed at the wrong party. This article sets out what the applicant was really worried about, why the injunction failed, and the levers that actually assist in a control fight.
Executive summary
- A court will not stop a shareholder meeting without a serious question to be tried that a legal right will be breached. In AIM v Wiluna the bar was not met on any of three grounds.
- The takeover-approval exemption (item 7 of section 611 of the Corporation Act 2001 (Cth)) does not impose any duty on the target. Its consequences fall on the acquirer. An injunction against the company was aimed at the wrong party.
- Attacking an expert’s reasoning is not enough. You must identify the precise misrepresentation and prove it; an opinion is not misleading merely because it may be wrong
- The real battleground in a control contest is often the Takeovers Panel, the share register and the vote, not an urgent injunction to stop a meeting.
The problem with share acquisition creep
Control of an Australian company does not always change hands through a full takeover bid. It often shifts quietly, through stake-building and member approvals, below the level that triggers a bid. A holder above 19% may be able to rely on the creep exception to acquire a further 3% every six months. A holder with more than 25% of the votes cast can block a special resolution. At around 29.5%, a holder can block a scheme of arrangement if it votes against it, and can chill any rival approach while not paying any premium for the control it is consolidating.
That is the squeeze a substantial shareholder feels when a rival moves up on the register. The target stops being contestable. The newcomer acquires a practical veto, and because the shares change hands by private agreement and member approval rather than an on-market bid, the other holders are told they are not ‘missing out’ on a control premium, because none is being paid to anyone.
AIM v Wiluna is a clean illustration. It also shows how a court treats an urgent attempt to stop the approval that legitimises the creep. The decision is recent, and provides a useful map of what works, and what does not, when control is in play.
The contest
The players: AIM Mining (Creasy Group; about 8.8% of Wiluna), a frustrated would-be acquirer. Wiluna Mining, an unlisted public gold company recently out of a deed of company arrangement. Byrnecut Australia, already a 24.26% holder and a long-term supporter of Wiluna, appearing as an interested party.
The move: Byrnecut agreed to buy about 17.7 million shares from two holders at $0.725, lifting its voting power from 24.26% to 29.50%. That needed member approval under item 7 of section 611. Wiluna called a meeting; AIM applied to stop the resolutions being put.
What the applicant was fighting, and what the injunction was meant to do
Strip away the legal grounds and the concern was simple. A 29.50% holding would give Byrnecut a powerful blocking stake. On the applicant’s own evidence, that stake would let Byrnecut block any takeover of Wiluna by scheme of arrangement, would impair the applicant’s ability to buy more shares, and would have a significant deterrent effect on the applicant and any other bidder. In short, the creep would make Wiluna harder to contest and lock in Byrnecut’s practical veto – without paying a premium for that blocking vote.
The injunction was the holding move. Member approval is the gateway: no approval means no item 7 exemption, which means Byrnecut cannot lawfully complete the acquisition. Stop the meeting, the theory goes, and you stop the creep, keeping the company in play until the rights of the parties can be decided at trial. An interlocutory injunction (an order to hold the position pending trial) was sought to do exactly that.
It was a coherent theory. It also collapsed at the first question a court asks.
Why the injunction failed
To obtain interlocutory relief the applicant had to show a serious question to be tried, that damages would not be an adequate remedy, and that the balance of convenience favoured an injunction. The Court found no serious question on any of the three grounds advanced, so it never reached the balance of convenience. Each ground failed for a reason an investor should sit with.
It is important to keep the decision in its lane. This was an urgent interlocutory application, not a final trial of every complaint that might be made about the transaction. The point is narrower, but important: the case AIM ran was not strong enough to justify stopping the meeting.
Ground one:
the wrong party. The applicant relied on item 7 of section 611. The Court held this is not a source of any right against the target. Section 611 exempts an acquirer from the section 606 prohibition if conditions are met. If the disclosure condition is not met, the consequence is that the acquirer, Byrnecut, cannot use the exemption and may commit an offence. It is not a wrong by Wiluna. The applicant did not seek an injunction against Byrnecut. The case was aimed at the company, on an obligation the company did not owe.
Ground two:
misleading conduct that was never pinned down. The applicant attacked the independent expert’s opinion that the deal’s advantages outweighed its disadvantages. But an opinion is not misleading merely because it may be wrong (Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82); what an opinion implies is that it is held and based on reasonable grounds (Campbell v Backoffice Investments). The applicant never said the experts did not hold the opinion or lacked expertise; only that the grounds were thin. The real question was whether the company adopted or endorsed the opinion, or merely passed it on (Yorke v Lucas; Google v ACCC). The notice said plainly that the directors made no recommendation, badged the report as independent, and urged members to read it in full. That defeated the adoption case. The argument that telling members the chair would vote undirected proxies in favour was a ‘de facto’ recommendation also failed, especially as the directors did recommend on other resolutions.
Ground three:
a disclosure case with no evidence behind it. The duty to disclose is anchored to matters within the directors’ knowledge. The applicant led no evidence that the information it said was missing was actually known to any Wiluna director, or that the board failed to take reasonable steps to find it. Its market-impact experts also drew admissibility objections under sections 79 and 135 of the Evidence Act, which the Court did not need to resolve.
The thread running through all three grounds which failed, was the cost of speed. The urgency meant the alleged misrepresentations were ‘not clearly identified’ and the omission case was ‘elusive’. A rushed injunction application based on misrepresentations that does not say, precisely, what was misrepresented will fail before the merits are even considered.
The levers the applicant left on the table
This is where the real expertise lies. A meeting injunction is one tool, and, sometimes, a blunt one. A shareholder facing a creep has a wider armoury. Most of it sits outside the courtroom.
Sue the right party, for the right thing.
The judgment points to the real target: the exposure sits with the acquirer. A shareholder can seek an injunction under section 1324 to restrain the acquirer from completing the acquisition as a threatened section 606 Better still, restrain completion of the purchase, not the holding of the meeting. A narrower order is more likely to have a real purpose under section 1324(4), and it does not ask the court to stop members from voting.Take it to the Takeovers Panel.
The Panel, not the court, is often the forum built for control disputes. It can declare ‘unacceptable circumstances’ under section 657A and make orders even where there is no contravention, judged against the purposes in section 602 – an efficient, competitive and informed market in which control passes on equal terms. A creep that entrenches a blocking stake and deters bids is squarely the kind of control issue the Panel can examine. But, the Panel is also evidence-driven. A loose allegation of association or control effect will not be enough. The applicant had already been before the Panel; the strategic question is whether the Panel, not an urgent injunction, was the main game.Test for association.
If the acquirer is acting in concert with other holders, their voting power aggregates, and the item 7 condition that no associate vote in favour starts to bite. Map the register with substantial-holding notices (section 671B) and beneficial-ownership tracing notices (section 672A), then agitate any association at the Panel if the evidence supports it. Association can be the fact that changes the whole picture, and thwarts the creeping shareholder.Win the vote.
Item 7 needs an ordinary resolution of the non-associated members; the acquirer and its associates cannot vote in favour. An 8.8% holder with allies in the free float may simply defeat the resolution. That is faster, cheaper and more durable than litigation, and it does not depend on persuading a judge of anything.Attack the expert report properly, and early.
The window to influence an independent expert’s report is before it is finalised, not after the meeting is called. Engage while ASIC is reviewing the notice and report, focus on RG 111 on content and RG 112 on independence, lodge substantive objections before dispatch, and press for a supplementary or second report if the issue warrants it. If you do litigate, plead the precise implied representation – that the opinion rests on reasonable grounds – and back it with admissible expert evidence under section 79 of the Evidence Act 1995 (Cth). That is the gap the Court found here.Be the alternative.
The concern was deterrence of a rival bid. The sharpest answer is to be the rival. Put a superior proposal, make a competing bid, or requisition a general meeting under section 249D to place a different path before members. A live alternative is the best antidote to entrenchment, and it reframes the contest from defence to offence.Use oppression, but choose the right vehicle.
The oppression remedy (sections 232 and 233) can ground final relief and interlocutory relief in aid. The applicant pleaded it but did not press it for the injunction. A properly disclosed members’ resolution is a hard thing to call oppressive; the stronger oppression case is usually about the conduct of the company’s affairs over time, not a single vote.Mind the creep rule before you spend.
Even a win at the meeting may not solve the problem. Item 9 of section 611 lets a holder acquire a further 3% every six months once the company is listed. Blocking one approval may only delay the creep. So, weigh up whether the meeting fight is worth it, or whether the register, the Panel and a rival proposal are more viable routes to meeting your objective.Move in the first 48 hours.
The first step is not to choose a forum. It is to build the evidence. Map the register, identify voting exclusions, test any association theory, review the notice and expert report line by line, preserve correspondence, and decide whether the real target is the meeting, completion, the Panel, the vote or a competing proposal. In control disputes, the side that plans the strategy (together with mapping all ‘if then’ options) and frames the battlefield first usually has the advantage.
A practical framework
When a blockholder moves, match the concern to the right lever. The reflex is usually a meeting injunction; the better move is usually somewhere else.
If your concern is… | The common reflex | Consider |
The creep itself becoming lawful | Injunction to stop the meeting (wrong party) | Injunction against the acquirer to restrain completion (s 1324); or defeat the vote |
Entrenchment and deterrence of bids | Litigation against the board | Takeovers Panel – unacceptable circumstances (s 657A); s 602 purposes; evidence-led association or control case |
Hidden alignment on the register | Assertion of ‘acting in concert’ | Tracing and substantial-holding notices (ss 671B, 672A); association case at the Panel if the evidence supports it |
A weak independent expert report | Calling it ‘irrational’ at the hearing | Objections during ASIC review before dispatch (RG 111, RG 112); supplementary report; admissible s 79 evidence |
Loss of a control premium / value | Damages claim after the event | Be the alternative: superior proposal or competing bid; requisition a meeting (s 249D) |
Final note
First, control can be consolidated by creep and member approval, not only by full bids, with independent expert reports doing the heavy lifting on whether the other holders are worse off. That puts the quality and independence of those reports at the centre of disputes.
Secondly, the courts remain cautious about interfering with a properly run, independent-expert-backed approval process. AIM v Wiluna confirms that a board which makes no recommendation, badges the report as independent, and tells members to read it for themselves is hard to attack as having endorsed it. The contest, then, often moves to the forum that can look past the paperwork to the substance of control (the Takeovers Panel) and to the register itself. The investor who understands that early holds the advantage.
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Further Information
For further information about shareholder disputes, contests for control, creeping blockholder strategies, Takeovers Panel matters and urgent injunction applications, please contact the author of this article:
