The Panel has re-issued Code Word Number 25 as Code Word 25A. This Code Word contains a Guidance Note on the timing rules of the Code. Please discard any copies of Code Word Number 25 that you have and replace them with Code Word Number 25A.
The new edition corrects an error in paragraph 3.3, and its accompanying Table, that has only recently come to our attention.
We have taken the opportunity provided by the re-issuing to amend the formatting of some of the Tables that illustrate how to apply the Code's timing rules. In addition, we have added in references to several of the timing rules that were not included in the original Code Word Number 25.
Finally, we have made some minor editorial changes to the last section of the Guidance Note that deals with rule 3(2) of the Code: days that are not working days.
The Guidance Note on rule 7(e) of the Code (relating to 'creeping') that is also contained in this edition of Code Word remains unchanged.
1
Introduction
1.1
The purpose of this Guidance Note is to advise market participants on the Panel's interpretation and application of the rules in the Code that relate to time.
1.2
A party to a Code-regulated transaction must observe all applicable time limits that are prescribed in the Code. If a party takes some action that is out of time, that action may be invalid or likely to result in a breach of the Code.
1.3
All of the timing rules in the Code relate to takeover offers. The Companies Act 1993 contains the timing rules that relate to the holding of shareholder meetings for rules 7(c) and 7(d) of the Code.
2.
The law
2.1
Section 35 of the Interpretation Act 1999 prescribes general rules of interpretation for statutory and regulatory timing provisions.
2.2
Section 35 provides that:
- A period of time described as beginning from or after a specified day, act, or event does not include that day or the day of the act or event.
- A period of time described as ending by, on, or with, or as continuing to or until, a specified day, act, or event includes that day or the day of the act or event.
- (4) A period of time described as ending before a specified day, act, or event does not include that day or the day of the act or event.
- (5) A reference to a number of days between 2 events does not include the days on which the events happened.
2.3
In
T v J1, a full High Court decision, Robertson and Potter JJ gave guidance on the interpretation of statutory timing provisions. The Court noted that, as a general rule, fractions of a day ought to be disregarded from the calculation of timing provisions, to avoid uncertainty. Accordingly, the Court considered that in relation to a time period specified in a statute the whole of the first day of the specified period should be either included or it should be excluded.
2 The Court also observed that the general rule (i.e. disregarding fractions of a day) applies at the end of a specified time period: "the period ends at the termination of the day on which the terminating event occurs."
32.4
In
Forster v Jododex Aust Pty Ltd4, the High Court of Australia held that the phrase "not later than" indicates that a clear or full period of time must expire between two events, unless the context or the subject matter provides for a contrary intention.
3.
The Panel's approach to the timing rules in the Code
3.1
The timing rules in the Code must be interpreted and applied in accordance with section 35 of the Interpretation Act and in light of any
relevant case law.
3.2
Where a period of time is expressed as being "not later than" or "at least" x days between two acts or events, the day of the act or event
which triggers the time period and the day on which the required act is to be done are excluded from the time period.
Example - Rule 42A(2) - "not later than..."
Not later than 2 days after receiving a takeover notice, the target company must send the offeror a class notice.
Two whole days may lapse between the day the takeover notice is received and the day on which the target sends the class notice. The application of the rule may be illustrated in Table A (the shaded areas represent the timeframe specified in the rule):
Table A
| Day 1 |
Day 2 |
Day 3 |
Day 4 |
| The day on which the target company receives a takeover notice. |
|
|
That target company must send a class notice to the offeror by the end of this day. |
3.3
Where a period of time is expressed as being "within" x days of or after an act or event, the day on which the act or event occurs is excluded from the specified time period but the day on or by which the thing is to be done is included in the specified time period.
Example - Rule 10(2)- "within..."
A target company, or its agent, that receives an approval or objection before the expiration of the offer period must, if requested by the offeror, send a copy of the approval or objection to the offeror within 2 days of its receipt.
The target company has two whole days after it receives the request from the offeror before it must send a copy of the approval or objection. The application of the rule may be illustrated in Table B:
Table B
| Day 1 |
Day 2 |
Day 3 |
| Target company receives request at some time on this day. |
|
Target company must send copy of votes by the end of this day |
3.4
Where a period of time is expressed as commencing with an act or event, or ending with an act or event, the specified time period includes the days of those acts or events.
Example - Rule 24(2)- "with..."
The offer period must-
- commence with the date of the offer; and
- be not shorter than 30 days, and not longer than 90 days.
The specified time period begins on the same day as the date of the offer. It must be no shorter than 30 days including the date of the offer. It must end on the day that is not longer than 90 days including the date of the offer. The application of the rule may be illustrated in Table C:
| Day 1 |
Day 2 |
Day 30 |
Day 90 |
Date of the offer.
Offer period begins on this day |
|
Offer period must run until at least the end of this day |
Offer period must not run any longer than the end of this day |
Footnotes
- [2000] 2 NZLR 236.
- Ibid, paragraph 20.
- Ibid, paragraph 20.
- (1972) 127 CLR 421.