Takeovers Panel Costs Orders: Rarity, Principles and Emu NL 03 (Costs)

The Takeovers Panel is the primary forum for resolving disputes arising from takeover and control transactions in Australia, providing an efficient and commercially focused mechanism for addressing issues of corporate control.

One of the Panel’s key functions is remedial. In limited circumstances, and only where the statutory preconditions are met, that function includes the power to make costs orders. This article outlines the statutory framework governing costs orders, explains why they are rare, and considers the significance of the recent decision in Emu NL 03 (Costs) [2025] ATP 36.

Statutory framework for costs orders

The Panel’s power to make costs orders arises under s 657D of the Corporations Act 2001 (Cth). Critically, s 657D(1) provides that the Panel may only make orders if it has made a declaration of unacceptable circumstances. Costs orders under s 657D(2) are therefore contingent on the making of a declaration.

Where the Panel declines to conduct proceedings, or where proceedings are resolved without a declaration, the Panel has no power to make a costs order. In those circumstances, each party must ordinarily bear its own costs as a matter of statutory consequence.

Guidance Note 4 and the exceptional nature of costs orders

Where the statutory gateway in s 657D(1) is satisfied, the Panel’s approach to costs is informed by Guidance Note 4: Remedies General. At paragraph [26], the Panel explains that costs orders are exceptional and may be considered only in limited circumstances, including where a party has failed to comply with Panel orders, caused unnecessary delay, or otherwise unnecessarily prolonged proceedings.

Even where a declaration has been made, the Panel has consistently emphasised that costs orders are not automatic and should be confined to costs reasonably and directly attributable to the conduct in question.

Reluctance to award costs where power exists

Consistently with Guidance Note 4, the Panel has historically exercised restraint in awarding costs even where a declaration of unacceptable circumstances has been made and the statutory power to award costs is enlivened.

This approach is reflected in decisions such as Minemakers Ltd [2012] ATP 8, Accelerate Resources Ltd 02 (Consent to Review of Interim Orders) [2012] ATP 2, Coopers Brewery Ltd 03R [2005] ATP 23 and Careers Australia Ltd [2012] ATP 11, where the Panel declined to award costs in the absence of conduct warranting a departure from the usual position that parties bear their own costs.

The same approach can be seen in later decisions. In Mount Gibson Iron Ltd [2008] ATP 4 and MacarthurCook Ltd 01 & 02 [2008] ATP 21, the Panel made declarations of unacceptable circumstances but did not order costs, notwithstanding the complexity of the proceedings and the need for substantive remedial orders. More recently, in Viento Group Ltd [2011] ATP 6 and Keybridge Capital Ltd 01 & 02 [2018] ATP 1, the Panel again declined to award costs despite having jurisdiction to do so, reinforcing that costs are not a routine consequence of regulatory intervention.

Taken together, these authorities demonstrate that the Panel’s reluctance to award costs is not confined to earlier jurisprudence, but reflects a consistent and ongoing approach even where the statutory power exists.

Costs orders against non-parties

Section 657D(2) permits the Panel, where a declaration has been made, to make orders directing costs to be borne by “a party or another person”. While that language allows costs orders against non-parties in principle, the Panel has rarely exercised that power.

Most costs orders have been directed at corporate parties. In a smaller number of cases, costs have been ordered against individuals who were parties to the proceedings. Costs orders against individuals who were not parties to the substantive proceedings are particularly uncommon.

It is in this context that Emu NL 03 (Costs) [2025] ATP 36 is significant.

Case focus: Emu NL 03 (Costs) [2025] ATP 36

In Emu NL 03 (Costs), the Panel had made a declaration of unacceptable circumstances. The statutory gateway in s 657D(1) was therefore satisfied. The Panel then considered whether to make costs orders under s 657D(2), including against certain former directors who were not parties to the proceedings other than for the purposes of costs.

Power and procedural fairness

At paragraph [44] of the reasons, the Panel expressly addressed its power to make a costs order against a non-party. The Panel confirmed that s 657D(2) permits costs orders against “another person”, and noted that the former directors were provided with an opportunity to make submissions on costs, satisfying procedural fairness.

Only after addressing those threshold matters did the Panel turn to whether costs should in fact be ordered.

Conduct giving rise to costs

The Panel identified two categories of conduct relevant to the exercise of its discretion.

First, the Panel referred to late and inadequate compliance with interim Panel orders. While those orders were formally directed to the company, the Panel considered that compliance was, in substance, within the control of the board at the relevant time. Delays in confirming compliance and deficiencies in communication were treated as having caused additional costs.

Secondly, at paragraph [46], the Panel referred to conduct following the declaration of unacceptable circumstances that contributed to the extension of the proceedings. The Panel observed that, once a declaration has been made, it expects parties to engage constructively in the implementation of remedies. Conduct that unnecessarily prolongs that process may give rise to costs consequences.

Both categories of conduct correspond with the circumstances identified in Guidance Note 4 at [26].

Apportionment of liability

The Panel apportioned costs across two discrete periods and limited liability to those directors involved during each period (paragraphs [45]–[46]). This approach reflects an attempt to align costs liability with responsibility for the conduct that gave rise to the costs.

Implications

Emu NL 03 (Costs) does not signal a general change in the Panel’s approach to costs. Costs orders remain rare, and costs orders against non-parties rarer still.

The decision does, however, demonstrate that where a declaration of unacceptable circumstances has been made, the statutory gateway in s 657D(1) is satisfied, and specific conduct falls within the categories identified in Guidance Note 4, the Panel may be prepared to make a costs order, including against persons who were not parties to the substantive proceedings.

How Opportuna Legal Can Assist

Opportuna Legal can assist boards, management teams and shareholders in relation to takeover and control transactions, including advising on matters before the Takeovers Panel. Opportuna Legal can assist with Panel applications, responses and engagement throughout the Panel process.

If you would like further information about our services or to discuss a takeover or control matter, please contact Opportuna Legal.