case_text: Ordinarily, where the legislature has given a party aggrieved by an administrative decision a full statutory right of appeal on facts and law, that is indicative of a legislative intention that that right is the party's only means of redress against the failure of the original decision-maker to follow, according to law, the rules of procedural fairness in coming to the decision: The Queen v Marks; Ex parte Australian Building Construction Employees and Builders Labourers' Federation [1981] HCA 33 ; (1981) 147 CLR 471 at 484 per Mason J, with whom Murphy J at 489, Aickin J at 493 and Wilson J at 494 agreed on this point; Twist v Randwick Municipal Council [1976] HCA 58 ; (1976) 136 CLR 106 at 113-117, esp at 117; Zubair v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 248 ; (2004) 139 FCR 344 at 354 [31] - [32] (and see too at 353 [29] where Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307, 41 FLR 338; was followed).


case_outcome: referred to

case_text: The Full Court of this court has held in Australian Building Construction Employees' and Builders Labourers' Federation v David Syme & Co Ltd (1982) 59 FLR 48; 40 ALR 518 that the court had no jurisdiction to hear an appeal against a verdict of acquittal on the merits on a charge of criminal contempt. That case had applied an earlier decision of a Full Court in Thompson v Mastertouch TV Service Pty Ltd [No 3] (1978) 38 FLR 397; 19 ALR 547 which had held that the court under s 24(1)(a) of the Federal Court of Australia Act 1976 (Cth) had no jurisdiction to hear an appeal against a verdict of acquittal on the merits of a criminal charge. This line of authority was subsequently approved in Davern v Messel [1984] HCA 34 ; (1984) 155 CLR 21 (see esp at 46 per Mason and Brennan JJ). As Bowen CJ, Evatt and Deane JJ pointed out in Australian Building Construction and Builders' Labourers' Federation v David Syme & Co Ltd (1982) 59 FLR 48 at 53; 40 ALR 518 at 522: 'A finding of guilt of criminal contempt is a "conviction" (see Izuora v R [1953] AC 327 at 334-5) of an "offence" (see Shamadasani v King-Emperor [1945] AC at 264 at 270: "so grave an offence as contempt of court"). In Re James W Thompson (1893) 19 VLR 286, the Full Court of the Supreme Court of Victoria (Williams, Holroyd and Hood JJ) held that an appeal against an order attaching the appellant for contempt of court in publishing certain articles in a newspaper commenting on pending proceedings was incompetent for the reason that the proceedings for attachment were "a criminal matter, and therefore there is no appeal to this court". Their Honours commented that the purported appeal was "virtually an appeal from a punishment inflicted by a judge presiding in the criminal court for a criminal offence" (see, also, the equally strong comments of Cussen J in Re Dunn [1906] VLR 493 at 501-2). Acquittal of a charge of criminal contempt after a hearing on the merits is, in our view, an acquittal in criminal proceedings for the purposes of the established principle that no appeal lies from an acquittal on the merits of a criminal charge.'


case_outcome: applied

case_text: Ordinarily, where the legislature has given a party aggrieved by an administrative decision a full statutory right of appeal on facts and law, that is indicative of a legislative intention that that right is the party's only means of redress against the failure of the original decision-maker to follow, according to law, the rules of procedural fairness in coming to the decision: The Queen v Marks; Ex parte Australian Building Construction Employees and Builders Labourers' Federation [1981] HCA 33 ; (1981) 147 CLR 471 at 484 per Mason J, with whom Murphy J at 489, Aickin J at 493 and Wilson J at 494 agreed on this point; Twist v Randwick Municipal Council [1976] HCA 58 ; (1976) 136 CLR 106 at 113-117, esp at 117; Zubair v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 248 ; (2004) 139 FCR 344 at 354 [31] - [32] (and see too at 353 [29] where Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307, 41 FLR 338; was followed). 131 Even though Twist v Randwick Municipal Council [1976] HCA 58 ; (1976) 136 CLR 106 was decided on different legislation, I am of opinion that Mason J (136 CLR at 116) enunciated the approach which is appropriate to apply to a case like the present when he said: 'But if the right of appeal is exercised and the appellate authority acts fairly and does not depart from natural justice the appeal may then be said to have "cured" a defect in natural justice or fairness which occurred at first instance. Certainly this view has been taken in a number of cases--notably by the Privy Council in De Verteuil v. Knaggs ([1918] AC 557); Pillai v. Singapore City Council ([1968] 1 WLR 1278 at p 1286) and by the Supreme Court of Canada in Re Clark and Ontario Securities Commission ((1966) 56 DLR 92d) 585) and King v. University of Saskatchewan ((1969) 6 DLR (3d) 120); cf. Denton v. Auckland City ([1969] NZLR 256) and Leary v. National Union of Vehicle Builders ([1971] Ch 34) where the contrary view was taken. In this conflict of authority my preference is for the approach taken by the Privy Council and the Supreme Court of Canada: first, because the party affected has elected to treat the administrative decision as a valid, though erroneous decision, by appealing from it, in preference to asserting his right to a proper performance by the authority of its duty at first instance; and secondly, because in some cases the court will be compelled to take account of the public interest in the efficiency of the administrative process and the necessity for reasonably prompt despatch of public business and balance that interest against the countervailing interest of the individual in securing a fair hearing--in appropriate cases that balance will be achieved if the individual secures a fair hearing on his appeal.'


case_text: However, Doyle v The Commonwealth [1985] HCA 46 ; (1985) 156 CLR 510 at 516 establishes authoritatively for this matter that the old and unsatisfactory distinctions apply, and I do not feel that I can follow Lord Atkin's advice in United Australia Ltd v Barclays Bank Ltd [1941] AC 1 at 29, where he said: 'When these ghosts of the past stand in the path of justice clanking their mediæval chains the proper course for the judge is to pass through them undeterred.'


case_text: In Young v Registrar, Court of Appeal [No 3] (1993) 32 NSWLR 262 at 281D-282G Kirby P and at 288A-D Handley JA held that Pt 55 r 14 of the Supreme Court Rules 1970 (NSW), which contained a power to discharge a convicted contemnor from prison, was authorized by an Act, namely the Supreme Court Act 1970 (NSW). They held that this was because, first, the rule had been made as delegated legislation under the Act and, secondly, in The Queen v Kirby; Ex parte Boilermakers' Society of Australia [1956] HCA 10 ; (1956) 94 CLR 254 at 280 Dixon CJ, McTiernan, Fullagar and Kitto JJ had approved of the explanation given by Dixon J in Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan [1931] HCA 34 ; (1931) 46 CLR 73 at 101-102 that a statute may authorize the Executive to make a law i.e. to make delegated legislation and that such a law is made under the statute.


case_text: The reasons for administrative decisions are not to be pharsed and analysed as if they are judgments. Their role is to explain in the decision-maker's own words why he or she or they arrived at the result. Administrative decision-makers are not necessarily or, I apprehend, usually trained lawyers with a keen eye to what court might find revelatory of an error of law (cf: Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) [1993] HCA 27 ; 182 CLR 26 at 41-42 per Deane, Toohey, Gaudron and McHugh JJ; Meyers v Casey [1913] HCA 50 ; (1913) 17 CLR 90 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ). The court cannot acquire jurisdiction to review a decision if the tribunal merely makes an error of fact ( Waterford v The Commonwealth ((1987) [1987] HCA 25 ; 163 CLR 54 at 66 per Mason and Wilson JJ, 77 per Brennan J).


case_text: In Waugh v Kippen [1986] HCA 12 ; (1986) 160 CLR 156 at 164-165 Gibbs CJ, Mason, Wilson and Dawson JJ said (I have added in the following passage the interpolation in square brackets which McHugh J inserted when citing it in Newcastle City Council v GIO General Ltd [1997] HCA 53 ; (1997) 191 CLR 85 at 109 and see too per Toohey, Gaudron and Gummow JJ at 102-103; Chew v The Queen [1992] HCA 18 ; (1992) 173 CLR 626 at 632): 'The modern approach in construing penal statutes was stated by Gibbs J. (as he then was) in Beckwith v. The Queen ((1976) [1976] HCA 55 ; 135 CLR 569 at 576) as follows: "The rule formerly accepted, that statutes creating offences are to be strictly construed, has lost much of its importance in modern times. In determining the meaning of a penal statute the ordinary rules of construction must be applied, but if the language of the statute remains ambiguous or doubtful the ambiguity or doubt may be resolved in favour of the subject by refusing to extend the category of criminal offences: see R. v. Adams ((1935) [1935] HCA 62 ; 53 CLR 563 at pp. 567-568); Craies on Statute Law , 7th ed. (1971), pp. 529-534. The rule is perhaps one of last resort." In the course of argument, the question arose whether the two principles of interpretation to which we have referred [ie a purposive interpretation which furthered industrial safety and the rule that penal provisions should be strictly construed] come into conflict in the present case and if so, how the conflict is to be resolved. If such a conflict was to arise, the court must proceed with its primary task of extracting the intention of the legislature from the fair meaning of words by which it has expressed that intention, remembering that it is a remedial measure passed for the protection of the worker. It should not be construed so strictly as to deprive the worker of the protection which Parliament intended that he should have: Harrison v. National Coal Board ([1951] AC 639 at p. 650), per Lord Porter; John Summers & Son Ltd. v. Frost ([1955] AC 740 at p. 751), per Viscount Simonds; McCarthy v. Coldair Ltd. ([1951] 2 TLR 1226 at pp. 1227-1228), per Denning L.J. In such a context the strict construction rule is indeed one of last resort. Furthermore, the process of construction must yield for all purposes a definitive statement of the incidence of an obligation imposed on the employer. The legislature cannot speak with a forked tongue.'


case_text: On behalf Mr Seymour it was submitted that the procedure used before Buddin J followed the scheme in SCR Pt 55 r 6-13 and that the proceedings were in the civil jurisdiction in the Supreme Court. It was said that contempt proceedings are sui generis , particularly where the proceedings were themselves taken within the original 1994 proceedings in which the undertaking had been given by Mr Seymour. Those proceedings arose out of the earlier 1982 disciplinary proceedings in which Mr Seymour had been found guilty of professional misconduct and struck off. Accordingly, it was argued that having regard to the fact that disciplinary proceedings both under the relevant legislation and in the exercise of the Supreme Court's inherent jurisdiction were not criminal proceedings but sui generis because the Court was called upon to examine the conduct of solicitors as explained by Mason J in Weaver v Law Society of New South Wales [1979] HCA 35 ; (1979) 142 CLR 201 at 207, that the contempt proceedings brought before Buddin J were of the same character. 87 Although Mr Seymour argued that the Supreme Court's disciplinary jurisdiction over solicitors was sui generis , as Mason J had said in Weaver v Law Society of New South Wales [1979] HCA 35 ; (1979) 142 CLR 201 at 207), I do not consider that to be relevant here. The charge of contempt related to disobedience of an order of that Court. The judicial source of the order, even if, sui generis , is not of any significance to the charge. The charge related to the conduct of Mr Seymour in contravening an order of the Court which was valid and binding on him. And while it may be that the offence of contempt of court attracts remedies which are also sui generis , the uniqueness of the remedies is not decisive of the question whether contempt is properly to be characterized as a criminal offence.


case_text: I can see no error of law (and a good deal of common sense) in the clear inference drawn by the tribunal that Mr Seymour had purported to act as a solicitor before Blanch J made his order. Mr Seymour had knowledge of the facts and he cannot complain that having failed fully and clearly to provide them to the tribunal, it drew inferences against him: cp: Blatch v Archer (1774) 1 Cowp 63 [98 ER 969]; R v Burdett (1820) 4 B & Ald 95 [106 ER 873]; Weissensteiner v The Queen [1993] HCA 65 ; (1993) 178 CLR 217 at 225 per Mason CJ, Deane and Dawson JJ, 233 per Brennan and Toohey JJ; Azzopardi v The Queen [2001] HCA 25 ; (2001) 205 CLR 50 at 74-75 [65] - [67] per Gaudron, Gummow, Kirby and Hayne JJ; see too Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418E-G per Handley JA; Temora Shire Council v Stein (2004) 134 LGERA 407 at 424 [52] per Giles JA, [56] per Hodgson JA, 425 [62] per Pearlman AJA; see too Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18 ; (2000) 200 CLR 121 at 142-143 [51] per Gleeson CJ and McHugh J.


case_outcome: considered

case_text: In Western Australia v The Commonwealth (the Native Title Act case) [1995] HCA 47 ; (1995) 183 CLR 373 at 487 Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ said: 'A "law of the Commonwealth", as that term is used in the Constitution , cannot be the unwritten law. It is necessarily statute law, for the only power to make Commonwealth law is vested in the Parliament (Consitiution, s 1 ; see also Covering Clause 5 and ss 51 and 52 ). ... But the common law is not itself a law of the Commonwealth.' 62 I am of opinion that the common law is a law of each State. The reasoning underlying the decision in the Native Title Case [1995] HCA 47 ; (1995) 183 CLR 373 at 487 was that the Constitution was the only source of the laws of the Commonwealth and it identified the Parliament as the mechanism by which such laws came into existence. But the nature of the federation created by the Constitution recognized that a body of law, separate from statute, existed in the former colonies which became States on 1 January 1901. That body of law, the common law, undoubtedly exists today. It forms part of the 'single system of jurisprudence constituted by the Constitution , federal, State and Territory laws and the common law of Australia' identified by Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36 ; (2000) 203 CLR 503 at 534 [66] (see too Lange v Australian Broadcasting Corporation [1997] HCA 25 ; (1997) 189 CLR 520 at 562).


case_text: While in centuries gone by it may have been legally possible to imprison people who owed but had not paid debts, imprisonment in Australia today can only occur where a person is sentenced to a term by a court pursuant to law, be it a statute or the unwritten law, or is remanded (or held for a very limited time before he or she must be brought before a court or a justice of the peace: cf: Williams v The Queen [1987] HCA 36 ; (1986) 161 CLR 278) in custody as incident of the administration of the criminal law so as to be available at his or her trial. Administrative detention is not imprisonment ( Al-Kateb v Godwin [2004] HCA 37 ; (2004) 219 CLR 562) and some statutes can authorize preventative detention after a term of imprisonment has been served (cf: Fardon v Attorney-General (Qld) [2004] HCA 46 ; (2004) 210 ALR 50, 78 ALJR 1519; Baker v The Queen [2004] HCA 45 ; (2004) 210 ALR 1, 78 ALJR 1483; Kable v DPP (NSW) [1996] HCA 24 ; (1996) 189 CLR 51). As Salmon LJ remarked in Jennison v Baker [1972] 2 QB 52 at 61G, of the distinction between 'civil' and 'criminal' contempt: 'I think that, at any rate today, this is an unhelpful and almost meaningless classification.' see too per John Laws (then junior counsel to the Treasury) in: Current Problems in the Law of Contempt (1990) 43 Current Legal Prolems 99 at 101, 102 quoted in Aldridge Eady & Smith on Contempt (3 rd ed) at [3-48].


case_outcome: discussed

case_text: The Tribunal then proceeded to consider whether the proceedings before Buddin J could be described as having resulted in a conviction for a criminal offence. It referred to a number of authorities to which I will have to refer in due course, including Attorney General (NSW) v Whiley (1993) 31 NSWLR 314; Whitham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 and Australasian Meat Industry Employees' Union v Mudginberri Pty Limited [1986] HCA 46 ; (1986) 161 CLR 98. The Tribunal concluded that there was no doubt that proceedings before Buddin J had been brought with the purpose of punishing Mr Seymour noting that it had been common ground, as Buddin J recorded in his reasons, that the provisions of the Crimes (Sentencing Procedure) Act 1999 (NSW) applied and that the penalty imposed had been one of imprisonment for a fixed term, as opposed to an indefinite term until the contempt of being purged. The tribunal then said: '24. Therefore whilst not free from doubt, I accept for current purposes that the contempt proceedings before Buddin J were criminal. 25. The result of that finding has application to both subparagraphs 5.2 and 5.4 of the Respondent's Statement of Facts and Contentions.' 31 Mr Seymour relied upon the statement that all proceedings for contempt ' must realistically be seen as criminal in nature ' as Deane J pointed out in Hinch v Attorney General (Vict) [1987] HCA 56 ; (1987) 164 CLR 15 at 49 and as approved by Brennan, Deane, Toohey and Gaudron JJ in Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 at 534. It was said that, accordingly, the tribunal's finding that the contempt charge determined by Buddin J was criminal was an error of law. Next he argued that that error of law affected the tribunal's finding that Mr Seymour demonstrated a lack of candour and openness by his apparently contradictory stances taken before the Court of Appeal in the earlier contempt proceedings (namely that the Law Society should not be allowed to appeal against his acquittal) and his stance in the proceedings before the tribunal (that the proceedings before Buddin J were not criminal). 34 The Authority submitted that the tribunal was correct to classify the proceedings before Buddin J as having involved a conviction of a criminal offence by reference to the character of the jurisdiction invoked under Pt 55 rr 7 and 13 of the Supreme Court Rules , the fact that the proceedings were to seek the punishment by imprisonment of Mr Seymour and the nature of the inherent jurisdiction to punish for contempt. The Authority submitted that the character of the contempt charged before Buddin J was that of disobedience, in the sense of a defiance of the authority of the Supreme Court and that there was a public injury occasioned by such defiance. It was said that, the purpose of the proceedings was to maintain the integrity of the judicial process, to advance the public interest to vindicate judicial authority or to maintain the integrity of the judicial process, relying on that class of contempt as being within a class of criminal contempt as explained in Witham v Holloway (1995) 183 CLR at 531. 73 In Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 all justices considered the historical classification of contempts as 'civil' and 'criminal' to be unsatisfactory. Brennan, Deane, Toohey and Gaudron JJ described the differences upon which the distinction of classification is based as being in many respects 'illusory' (183 CLR at 534) while McHugh J said the case for abolishing the distinction 'is a strong one' (183 CLR at 549). 75 The reliance on the distinction in a case like the present, where the applicant was sentenced to nine months imprisonment, suspended, for breaching a court order shows how unworkable the distinction really is in practice. Was the contempt with which the applicant was charged civil when the charge was preferred? Did it remain so or did it transmute, as the seriousness of, and contumaciousness of, his conduct was proved in evidence or found by Buddin J when giving judgment? The very notion that an allegation of contempt can have such a chameleon-like character demonstrated, in Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd [1986] HCA 46 ; (1986) 161 CLR 98 at 108-109 and in Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525, that all such cases had to be decided on the criminal standard of proof. The High Court did not have to decide in the latter case whether the distinction between 'civil' and 'criminal' contempt should be abolished (see 183 CLR at 549). 76 In Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 at 534, Brennan, Deane, Toohey and Gaudron JJ said that because of the illusory nature of the differences said to exist between the 'civil' and 'criminal' classes of contempt and the fact that the usual outcome of all such proceedings is punishment, all proceedings for contempt must realistically be seen as criminal in nature. 77 That does not result in all contempt proceedings themselves being now seen to be for a criminal offence. Indeed, their Honours went on to say (183 CLR at 534): 'However, to say that proceedings for contempt are essentially criminal in nature is not to equate them with the trial of a criminal charge. There are clear procedural differences, the most obvious being that criminal charges ordinarily involve trial by jury, whereas charges of contempt do not. There is no basis, in our view, for importing into the law of contempt the nineteenth century rules which allowed a verdict of guilty, given in a jury trial, to be quashed on appeal, but did not permit of an order for retrial. Moreover, the issue, so far as contempt is concerned, is not whether there should be a retrial, but whether there should be a rehearing.' 84 The elusiveness of the distinction Windeyer J identified is demonstrated by the result in Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525. There the question was what standard of proof applied, i.e. civil or criminal, in proceedings which fell squarely within Lord Atkinson's 'civil' classification, namely, charges of contempt that the appellant knowingly or recklessly presented a false or misleading statement of his assets and liabilities in an affidavit which he had been ordered to make and that he breached (what was then termed) a Mareva injunction, (this is now known as a Mareva order: Cardile v LED Builders Pty Ltd [1999] HCA 18 ; (1999) 198 CLR 380 at 393-394 [25] [-26]) by dealing with his assets contrary to the terms. Brennan, Deane, Toohey and Gaudron JJ said (183 CLR at 533-534): 'Given that purpose or object cannot readily be disentangled from effect and given, also, that a penal or disciplinary jurisdiction may be called into play in proceedings alleging breach of an order or undertaking, it is necessary to acknowledge, as it was in Mudginberri ((1986) [1986] HCA 46 ; 161 CLR 98 at 108), that punitive and remedial objects are, in the words of Salmon LJ "inextricably intermixed" ( Jennison v Baker [1972] 2 QB 52 at 64). Moreover and, perhaps, of more importance, nothing is achieved by describing some proceedings as " punitive " and others as " remedial or coercive ". Punishment is punishment, whether it is imposed in vindication or for remedial or coercive purposes. And there can be no doubt that imprisonment and the imposition of fines, the usual sanctions for contempt, constitute punishment. And the same is true of a sequestration made in consequence of a company's failure to comply with an order or undertaking.' 98 When the High Court held in Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 at 534 that all contempts are criminal in nature and must be proved on the criminal standard, it ensured that the alleged contemnor was afforded the safeguards given at common law to all accuseds. The Court also recognized that the historical classification of 'civil' and 'criminal' contempt is unsatisfactory. 104 Accordingly, I must decide whether Mr Seymour was found by Buddin J to have acted contumaciously in breach of the injunction. A 'civil' contempt can become 'criminal' where the act charged is contumacious in the sense that in doing it there was a direct intention to disobey the order ( Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 at 541 per McHugh J citing Warrington J's well known dictum in Stancomb v Trowbridge Urban Council [1910] 2 Ch 190 at 194). A breach of an injunction or undertaking to the Court can also be criminal if it is '... an obstinate disregard' of the obligation imposed by or owed to the Court ( Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd [1986] HCA 46 ; (1986) 161 CLR 98 at 111-112). The hallmark of a classification of 'criminal' contempt of this nature is contumacy or defiance ( Australian Consolidated Press Ltd v Morgan [1965] HCA 21 ; (1965) 112 CLR 483 at 489 per Barwick CJ, 501-502 per Windeyer J; Doyle v The Commonwealth [1985] HCA 46 ; (1986) 156 CLR 510 at 516).


case_text: In Young v Registrar, Court of Appeal [No 3] (1993) 32 NSWLR 262 at 281D-282G Kirby P and at 288A-D Handley JA held that Pt 55 r 14 of the Supreme Court Rules 1970 (NSW), which contained a power to discharge a convicted contemnor from prison, was authorized by an Act, namely the Supreme Court Act 1970 (NSW). They held that this was because, first, the rule had been made as delegated legislation under the Act and, secondly, in The Queen v Kirby; Ex parte Boilermakers' Society of Australia [1956] HCA 10 ; (1956) 94 CLR 254 at 280 Dixon CJ, McTiernan, Fullagar and Kitto JJ had approved of the explanation given by Dixon J in Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan [1931] HCA 34 ; (1931) 46 CLR 73 at 101-102 that a statute may authorize the Executive to make a law i.e. to make delegated legislation and that such a law is made under the statute. 114 I am also of opinion that s 312(1)(e) required Mr Seymour to notify the Authority of his conviction of the offence of contempt which is an offence under the law of New South Wales. For the reasons above, I am of that opinion whether the contempt power was inherent in the Supreme Court of New South Wales, and so was part of that State's unwritten law, or was created under the Supreme Court Act 1970 (NSW) or SCR Part 55 rr 7, 13 (see Young v Registrar Court of Appeal [No 3] (1993) 32 NSWLR 262 at 281D-282G, 288A-D). 115 Accordingly, the tribunal committed no error of law in finding that Mr Seymour had been convicted of a criminal offence by Buddin J and that he had not declared that he was the subject of a criminal proceeding in his 1 May 2004 application to the Authority when he ought to have declared that he was. It was also correct to have decided that Mr Seymour failed to notify the Authority in accordance with s 312(1)(e) after his conviction by Buddin J. 116 It was open to the tribunal in coming to a view as to whether or not Mr Seymour was a person of integrity or was a fit and proper person to give immigration assistance to consider his conduct in making the original application in 1993 for registration as a migration agent. The tribunal found, correctly, that there was no question at that time that the PCA high range offence conviction had not been spent by reason of the Criminal Records Act 1991 (NSW) ss 7 and 9 (see [34]).


case_text: The tribunal noted that at the commencement of the hearing Mr Seymour challenged the validity of the decision that had been made by a body which described itself as the Professional Standards & Registration Sub-Committee of the Authority. The tribunal referred to its earlier ex tempore decision in which it had ruled that the sub-committee had not been given a delegation in writing pursuant to s 319A of the Act and that therefore its decision was invalid. The tribunal noted that pursuant to Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 41 FLR 338; 41 ALR 307 and Z ubair v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 248 ; (2004) 139 FCR 344 it had jurisdiction to review the impugned decision and in doing so could exercise all the powers and discretions of the Authority. The Tribunal dealt with the first of the Authority's contentions by reciting the facts the subject of the institution of the contempt proceedings before Buddin J and noting the plea of guilt. After recording his Honour's orders, the Tribunal continued: '12. Buddin J in his judgment refers to the circumstances of the offence. It would appear that the Applicant acted for a client in the purchase of a property and that the solicitor for the vendor assumed that the Applicant was a solicitor and the Applicant did not disabuse the vendor's solicitor of that assumption. As Buddin J said in his judgment at paragraph 6: "... I have no difficulty in accepting Ms Doolin's evidence that had she known that the offender was not a solicitor, she would have approached her dealings with him quite differently. I accept that she would not have, for example, permitted him to act as her firm's agent on settlement. Nor is it likely that she would have forwarded the signed transfer to him in the circumstances in which she did, or at least not without having first obtained instructions about the matter." 13. The circumstances which led to the orders of Blanch J were not before me and the Applicant was vague when asked to recount the events leading to the proceedings before Blanch J in 1994. I find that a clear inference is that the Applicant did purport to act as a solicitor, hence the nature of the orders made. 14. In the course of his judgment, Buddin J referred to proceedings before Barr J in 1997 where the Law Society of New South Wales had sought orders from the Supreme Court that the Applicant was in contempt of that Court for failing to comply with the orders of Blanch J. There were in those proceedings, three transactions in which the Applicant's conduct was alleged to have constituted breaches of the orders made by Blanch J. That Notice of Motion was dismissed by Barr J and an appeal against his decision was dismissed by the Court of Appeal on 3 May 1999 (see Law Society of New South Wales v Seymour [1999] NSWCA 117). 15. As Buddin J pointed out, the significance of those proceedings was that only just over 12 months after those proceedings were brought to finality in his favour, the Applicant embarked upon the activities which gave rise to the proceedings before him.' 123 Ordinarily, where the legislature has given a party aggrieved by an administrative decision a full statutory right of appeal on facts and law, that is indicative of a legislative intention that that right is the party's only means of redress against the failure of the original decision-maker to follow, according to law, the rules of procedural fairness in coming to the decision: The Queen v Marks; Ex parte Australian Building Construction Employees and Builders Labourers' Federation [1981] HCA 33 ; (1981) 147 CLR 471 at 484 per Mason J, with whom Murphy J at 489, Aickin J at 493 and Wilson J at 494 agreed on this point; Twist v Randwick Municipal Council [1976] HCA 58 ; (1976) 136 CLR 106 at 113-117, esp at 117; Zubair v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 248 ; (2004) 139 FCR 344 at 354 [31] - [32] (and see too at 353 [29] where Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307, 41 FLR 338; was followed).


case_outcome: related

case_text: background to this judgment is set out in full in Combis, Trustee of the Property of Peter Jensen (Bankrupt) v Jensen [2009] FCA 778 and Combis, Trustee of the Property of Peter Jensen (Bankrupt) v Jensen (No 2) [2009] FCA 1383. In Combis, Trustee of the Property of Peter Jensen (Bankrupt) v Jensen (No 2) [2009] FCA 1383 I ordered that these proceedings be transferred to the Family Court of Australia. The only outstanding matter for decision at this stage relates to costs incurred in the following proceedings: An application by Mrs Jensen for a stay of the proceedings for abuse of process. Mrs Jensen was unsuccessful in respect of this application.


case_title: Combis, Trustee of the Property of Peter Jensen (Bankrupt) v Jensen (No 2) [2009] FCA 1383


case_outcome: cited

case_text: Third, I am not persuaded by the trustee's submission that costs of the notice of motion for transfer should be costs in the cause of the trustee's application in this court to be transferred to the Family Court. While the trustee had, appropriately, commenced these proceedings in this Court and had a prima facie right to have his claim heard in this Court, Mrs Jensen was well within her rights to apply for an order that the proceedings be transferred to the Family Court. I do not agree that Mrs Jensen sought, unsuccessfully, to have the proceedings transferred to the Family Court at the hearing of 31 March 2009 in fact although counsel for Mrs Jensen invited the Court to make the order of its own initiative, no formal application for transfer was made. I do not think that, at this stage, an order should be made that such costs should be costs in the cause and awarded according to the final award of costs in the action (cf comments of Lord Denning in JT Stratford & Son Ltd v Lindley (No 2) [1969] 3 All ER 1122 at 1123).


case_text: Finally, even were I minded to order costs in favour of the trustee in whole or in part, I am not persuaded that the demands of justice require a departure from the general rule that an order for costs of an interlocutory proceeding shall not entitle a party to have a bill of costs taxed until the principal proceeding has concluded (cf Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297 at 312, Life Airbag Co of Australia Pty Ltd v Life Airbag Co (New Zealand) Ltd [1998] FCA 545). Although the trustee was successful in its notice of motion to strike out paragraphs of the Defence and in its opposition to para 24 of the Cross-Claim, the principal proceedings will now continue in the Family Court. In my view it is for the trial judge in that Court to determine where costs should fall, including in respect of the interlocutory proceedings. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. Associate: Dated: 10 December 2009 Counsel for the Applicant: Mr PP McQuade Solicitor for the Applicant: James Conomos Lawyers Counsel for the Respondent: Mr J Griffin QC and Mr FG Forde Solicitor for the Respondent: Michael Sing Lawyers Date of Hearing: 6 October 2009 Date of Last Submission: 10 December 2009 Date of Judgment: 10 December 2009 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2009/1482.html


case_title: Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297


case_text: The disclosure of the contents of the letter of 3 March 2005 in the Notice of Appeal signed by the debtor is inconsistent with the maintenance of confidentiality. The only apparent purpose of the reference to the letter is to summarise the content of the letter and indicate that it supported the assertion that the debtor was domiciled in Australia. The reference to the letter in the Notice of Appeal cannot be linked to the Tribunal's alleged error since the letter is dated 3 March 2005 and, according to the Notice of Appeal, the Tribunal's decision was made on 11 March 2005. In my view it constitutes waiver of legal privilege in accordance with the principle expressed in Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 at 13 and for that reason I decline to set aside paragraph 4 of the subpoena. 6 This subpoena was not referred to in the interim application; however it was raised at the hearing. As the documents sought under this subpoena are the same as those sought under the subpoena already discussed, the debtor's objections can be dealt with expeditiously. The documents produced in response to the above subpoena are also responsive to paragraphs 1 and 2 of this subpoena and there are no documents falling within paragraph 3. The only issue is the legal professional privilege issue discussed above and my conclusion is the same as that expressed above, for the same reasons. 7 The notice seeks documents in eight categories. I was informed that there are not any documents in six of the categories. The remaining categories are in paragraphs 4 and 5: '4. Trust account and general account statements of account from Salvatore Russo, solicitor for the period 1 January 2005 to 30 December 2005 issued with respect to the Union Club litigation in the Supreme Court of New South Wales Equity Division; Supreme Court of New South Wales defamation list; Administrative Decisions Tribunal; the Supreme Court of New South Wales Court of Appeal and the Applicant's litigation before Gyles J in the Federal Court and Full Court of the Federal Court. 5. Statements of account and/or memorandum of fees from Murray Aldridge SC and James Dupree for the period 1 January 2005 to 30 December 2005 and records by way of cheque butts, direct deposit and bank statements to show payment of same.'


case_text: It is, of course, clear that the Court's role on this application is not to pass a final view on whether the proposed scheme should be approved, either by the members at the proposed meeting, or then by the Court under s 411(4)(d). The decision must first await the will of the members to be expressed at the scheme meeting. Assuming the members support the proposed scheme, when the Court is then called upon to approve it, dissenting members or other interested parties will have the opportunity to oppose the Court's granting approval: Re Sonodyne International Limited (1994) 15 ACSR 494 at 497 per Hayne J. 16 However, the authorities indicate that, at this point, the Court should review the proposed scheme and the proposed explanatory statement, and may invite the plaintiff company to attend to any matters which seemed to the Court to require attention before the distribution of the documents.


case_text: In FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69 at 72, Street CJ said: [T]he court will not ordinarily summon a meeting unless the scheme is of such a nature and cast in such terms, if it achieves the statutory majority at the creditor's meeting [in this case, the members' meeting] the court would be likely to approve it on the hearing of a petition which is unopposed. That passage was cited with approval by the High Court in Australian Securities Commission v Marlborough Goldmines Ltd [1993] HCA 15 ; (1993) 177 CLR 485, and has been followed in many decisions since, including recently Re Coles Group Limited [2007] VSC 389 per Robson J.


case_title: Australian Securities Commission v Marlborough Goldmines Ltd [1993] HCA 15 ; (1993) 177 CLR 485


case_text: The Court's task when considering the convening of a proposed scheme meeting under s 411(1) of the Act was described by Santow J in Re NRMA Ltd [2000] NSWSC 82 ; (2000) 33 ACSR 595 at [3] as follows: The Court must be satisfied, at least at a prima facie level, as to the legality of what it proposed, that there has been proper disclosure with nothing misleading or deceptive in any material sense and that the scheme will, if and when approved by members, be likely then to be approved by the Court as being "so far fair and reasonable as an intelligent and honest man" may approve. It is not for the Court otherwise to be concerned with the merits of the proposal or to inhibit consideration by members so that they can form their own judgment whether to vote for or against. 19 Obviously, one focus of the Court in fulfilling that task is to ensure that there is sufficient disclosure to those who may be affected by the proposed scheme of its details and effect: see Re Central Pacific Minerals NL [2002] FCA 239. In that case, Emmett J at [9] said that, amongst the factors to which the Court should have regard in exercising its discretion whether to convene a meeting, were the acceptability of the documentation of the proposed scheme; the commercial viability and morality of the proposed scheme; the likely acceptability of the proposed scheme; the bona fides of the proposals; whether the proposal could be achieved by another method; and any objections or submissions by the Australian Securities and Investments Commission (ASIC). Both Conti J in Re CSR Ltd (2003) 45 ACSR 34 at 36-37 and Lander J in Re Adelaide Bank Limited [2007] FCA 1582 at [38] referred to those criteria with approval, and as conforming with the observations of Santow J in Re NRMA Limited [2000] NSWSC 82 ; 33 ACSR 595 referred to. 20 I therefore turn to consider the matters of which I had to be satisfied before making an order convening the proposed scheme meeting. The first is that there has been proper disclosure in the proposed explanatory statement as required by s 411(3) of the Act: see Re NRMA Limited [2000] NSWSC 82 ; 33 ACSR 595 at [15] - [49] . The explanatory statement must explain the effect of the proposed arrangement and set out any information that is material to the making of a decision by a member or members to approve or not to approve the proposed scheme. Section 411(3A) in effect requires a statement of all the main facts which will enable shareholders to exercise their judgment whether to support the proposed scheme. I carefully considered the proposed scheme. In my view, adopting the words in s 411(3)(a), the explanatory statement does explain the effect of the proposed scheme, including in particular stating the material interests of the directors of Hostworks, and the effect on those interests of the proposed scheme. On the material, its effect on them is no different from the effect on other members of Hostworks. 21 Section 411(3) requires the explanatory statement to set out the prescribed information, and other information that is material to the making of a decision by a member of Hostworks whether or not to agree to the proposed scheme. Regulation 5.1.01(1) of the Corporation Regulations 2001 (Cth) (the Regulations) provides that, unless ASIC otherwise allows, the explanatory statement must state the matters set out in Pt 3 of Sch 8 to the Regulations and have annexed to it the reports and copies of the documents mentioned. There is nothing to indicate that ASIC has agreed that less information than that prescribed should be provided. I considered each of the pieces of information prescribed in Pt 3 of Sch 8 to the Regulations to determine whether they are contained within the proposed explanatory statement. I will not go through them seriatim. In my view, they are each apparently covered by material in the explanatory statement. 22 In reaching that view, I was assisted by the schedule provided in the written submissions of counsel for Hostworks in which each of the requirements of ss 411 and 412 and Pt 3 of Sch 8 of the Regulations are set out and cross-referenced to the relevant parts of the explanatory memorandum or other materials. There is also evidence from Hostworks that a process of verification was undertaken in relation to each of those pieces of information to ensure that it is accurately reported in or with the explanatory memorandum.


case_text: Obviously, one focus of the Court in fulfilling that task is to ensure that there is sufficient disclosure to those who may be affected by the proposed scheme of its details and effect: see Re Central Pacific Minerals NL [2002] FCA 239. In that case, Emmett J at [9] said that, amongst the factors to which the Court should have regard in exercising its discretion whether to convene a meeting, were the acceptability of the documentation of the proposed scheme; the commercial viability and morality of the proposed scheme; the likely acceptability of the proposed scheme; the bona fides of the proposals; whether the proposal could be achieved by another method; and any objections or submissions by the Australian Securities and Investments Commission (ASIC). Both Conti J in Re CSR Ltd (2003) 45 ACSR 34 at 36-37 and Lander J in Re Adelaide Bank Limited [2007] FCA 1582 at [38] referred to those criteria with approval, and as conforming with the observations of Santow J in Re NRMA Limited [2000] NSWSC 82 ; 33 ACSR 595 referred to.


case_title: Re CSR Ltd (2003) 45 ACSR 34


case_text: Obviously, one focus of the Court in fulfilling that task is to ensure that there is sufficient disclosure to those who may be affected by the proposed scheme of its details and effect: see Re Central Pacific Minerals NL [2002] FCA 239. In that case, Emmett J at [9] said that, amongst the factors to which the Court should have regard in exercising its discretion whether to convene a meeting, were the acceptability of the documentation of the proposed scheme; the commercial viability and morality of the proposed scheme; the likely acceptability of the proposed scheme; the bona fides of the proposals; whether the proposal could be achieved by another method; and any objections or submissions by the Australian Securities and Investments Commission (ASIC). Both Conti J in Re CSR Ltd (2003) 45 ACSR 34 at 36-37 and Lander J in Re Adelaide Bank Limited [2007] FCA 1582 at [38] referred to those criteria with approval, and as conforming with the observations of Santow J in Re NRMA Limited [2000] NSWSC 82 ; 33 ACSR 595 referred to. 41 Under cl 7.3(a) of the Implementation Agreement, each scheme participant is deemed to have warranted that all of its shares in Hostworks which are transferred under the scheme will be free from all mortgages and encumbrances. Fryberg J in Re Mincom Ltd (No 3) (2007) 25 ACLC 207, regarded an almost identical deemed warranty clause as onerous and unreasonable and "calculated to catapult unsuspecting shareholders who have not read the small print of the arrangement in the schedule to the explanatory statement into a state of breach of warranty": at [21]. In Re APN News & Media Ltd 62 ACSR 400, Lindgren J disagreed with the approach of Fryberg J: see at [59]-[62]. I respectfully agree with and adopt the views of Lindgren J. I share the understanding of his Honour that the purpose and effect of such a clause is simply to ensure that a scheme participant whose shares are subject to an encumbrance is not unfairly advantaged. The amount of the damages payable for breach of the warranty would be equal to the amount required to discharge the encumbrance. I note that the approach of Lindgren J has been preferred in subsequent cases, including by Robson J in Re Coles Group Limited [2007] VSC 389 at [45] ; by Lander J in Re Adelaide Bank Limited [2007] FCA 1582 at [33] ; and by Gyles J in Orion Telecommunications Ltd [2007] FCA 1389 at [9] .


case_title: Re Mincom Ltd (No 3) (2007) 25 ACLC 207

case_text: Section 411 further requires that the Court is satisfied that the scheme can properly be described as a compromise or arrangement so as to come within its ambit. The word "arrangement" has been held to be a word of wide import, not limited by its relationship or the expression "compromise". An arrangement may extend to any subject matter which is something which a company is able to agree with its members, and is likened to a contract between a company and its members. As noted earlier, there have been a number of cases in which a scheme involving the acquisition of a company's issued capital for cash, so that the company becomes a wholly owned subsidiary of an acquiring entity, is a common use of the Pt 5.1 procedure. See also e.g. Re Mincom Ltd (No 3) (2007) 25 ACLC 207; and Re APN News & Media Ltd (2007) 62 ACSR 400. 41 Under cl 7.3(a) of the Implementation Agreement, each scheme participant is deemed to have warranted that all of its shares in Hostworks which are transferred under the scheme will be free from all mortgages and encumbrances. Fryberg J in Re Mincom Ltd (No 3) (2007) 25 ACLC 207, regarded an almost identical deemed warranty clause as onerous and unreasonable and "calculated to catapult unsuspecting shareholders who have not read the small print of the arrangement in the schedule to the explanatory statement into a state of breach of warranty": at [21]. In Re APN News & Media Ltd 62 ACSR 400, Lindgren J disagreed with the approach of Fryberg J: see at [59]-[62]. I respectfully agree with and adopt the views of Lindgren J. I share the understanding of his Honour that the purpose and effect of such a clause is simply to ensure that a scheme participant whose shares are subject to an encumbrance is not unfairly advantaged. The amount of the damages payable for breach of the warranty would be equal to the amount required to discharge the encumbrance. I note that the approach of Lindgren J has been preferred in subsequent cases, including by Robson J in Re Coles Group Limited [2007] VSC 389 at [45] ; by Lander J in Re Adelaide Bank Limited [2007] FCA 1582 at [33] ; and by Gyles J in Orion Telecommunications Ltd [2007] FCA 1389 at [9] .


case_text: Section 411 further requires that the Court is satisfied that the scheme can properly be described as a compromise or arrangement so as to come within its ambit. The word "arrangement" has been held to be a word of wide import, not limited by its relationship or the expression "compromise". An arrangement may extend to any subject matter which is something which a company is able to agree with its members, and is likened to a contract between a company and its members. As noted earlier, there have been a number of cases in which a scheme involving the acquisition of a company's issued capital for cash, so that the company becomes a wholly owned subsidiary of an acquiring entity, is a common use of the Pt 5.1 procedure. See also e.g. Re Mincom Ltd (No 3) (2007) 25 ACLC 207; and Re APN News & Media Ltd (2007) 62 ACSR 400. 31 In Re APN News Ltd 62 ACSR 400, Lindgren J discussed at some length aspects of the proposed scheme then under consideration which may be described as performance risk; "no-shop" and "no-talk" restrictions; break fee; and a deemed warranty by the members of the target company. Each of those features is present in the proposed scheme. It is appropriate to consider them each in turn. 32 The performance risk concern has been raised in previous scheme of arrangement applications. They are referred to by Lindgren J in Re APN News 62 ACSR 400 at [23]. I will not repeat them. It is necessary to consider the so called "performance risk" of shareholders being left in a position, once the scheme has become effective, of their shares having been transferred to Broadcast Australia, but then facing a delay in the provision of the scheme consideration, so that their only remedy would be to sue on the Deed Poll. That risk has been overcome here by requiring the scheme consideration to be paid to Hostworks before 12 noon on the "implementation date" to be held in trust by Hostworks for the purpose of being paid to the scheme participants, that is the shareholders of Hostworks, before they are divested of their shares in Hostworks later on in the implementation date. Broadcast Australia must provide the funds to pay for the shares it is to acquire before they are transferred. A similar arrangement was satisfactory to Robson J for the purposes of authorising or directing the calling of the proposed meeting in Re Coles Group [2007] VSC 389 ; see at [38]. The Deed Poll contains a covenant on the part of Broadcast Australia to provide the scheme consideration on the implementation date in accordance with the terms of the scheme so that it ties the settlement step of payment and transfer together. 41 Under cl 7.3(a) of the Implementation Agreement, each scheme participant is deemed to have warranted that all of its shares in Hostworks which are transferred under the scheme will be free from all mortgages and encumbrances. Fryberg J in Re Mincom Ltd (No 3) (2007) 25 ACLC 207, regarded an almost identical deemed warranty clause as onerous and unreasonable and "calculated to catapult unsuspecting shareholders who have not read the small print of the arrangement in the schedule to the explanatory statement into a state of breach of warranty": at [21]. In Re APN News & Media Ltd 62 ACSR 400, Lindgren J disagreed with the approach of Fryberg J: see at [59]-[62]. I respectfully agree with and adopt the views of Lindgren J. I share the understanding of his Honour that the purpose and effect of such a clause is simply to ensure that a scheme participant whose shares are subject to an encumbrance is not unfairly advantaged. The amount of the damages payable for breach of the warranty would be equal to the amount required to discharge the encumbrance. I note that the approach of Lindgren J has been preferred in subsequent cases, including by Robson J in Re Coles Group Limited [2007] VSC 389 at [45] ; by Lander J in Re Adelaide Bank Limited [2007] FCA 1582 at [33] ; and by Gyles J in Orion Telecommunications Ltd [2007] FCA 1389 at [9] .


case_title: Re Promentum Limited [2007] FCA 446

case_text: Generally, there is no apparent reason, at this stage, and on the material now before me, to consider that the proposed scheme is improper. The independent expert's report has assessed the offer to be fair and reasonable and in the best interests of the shareholders of Hostworks in the absence of an alternative offer on better terms. The evidence indicates that the offer made by Broadcast Australia is at the upper range of the valuation of shares in Hostworks made by the independent expert, and is considerably in excess of any listed share price in the recent past. There is nothing to suggest that the scheme works unfairly as between members of Hostworks, or that in any other respect the directors of Hostworks or others associated with it, or with Broadcast Australia, will profit to the detriment of the members of Hostworks, or that they will profit differently from the other members of Hostworks. Consequently, if the proposed scheme is supported at the proposed meeting of shareholders of Hostworks, at present, there does not appear to be any reason why the scheme then would not be approved. That seems to be a test, perhaps even put at a slightly higher level than necessary, to determine whether the proposed scheme is a proper one: see e.g. Re Promentum Limited [2007] FCA 446 at [13] ; IOR Friendly Society Ltd v IOR Group Ltd (2007) FCA 970 at [28] ; Re CCI Holdings Limited [2007] FCA 832 at [21] ; and Re Gloucester Coal Ltd [2007] FCA 1017 at [28] . Later in these reasons, I refer to particular features of the arrangement as contained in the Implementation Deed and the Deed Poll which warrant specific comment.


case_title: IOR Friendly Society Ltd v IOR Group Ltd (2007) FCA 970


case_title: Re CCI Holdings Limited [2007] FCA 832


case_title: Re Gloucester Coal Ltd [2007] FCA 1017


case_title: Re Coles Group Ltd [2007] VSC 389

case_text: In FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69 at 72, Street CJ said: [T]he court will not ordinarily summon a meeting unless the scheme is of such a nature and cast in such terms, if it achieves the statutory majority at the creditor's meeting [in this case, the members' meeting] the court would be likely to approve it on the hearing of a petition which is unopposed. That passage was cited with approval by the High Court in Australian Securities Commission v Marlborough Goldmines Ltd [1993] HCA 15 ; (1993) 177 CLR 485, and has been followed in many decisions since, including recently Re Coles Group Limited [2007] VSC 389 per Robson J. 30 There may be some difference of opinion, or perhaps only of emphasis, between the views of Robson J in Re Coles Group Ltd [2007] VSC 389 and Fryberg J in Re Mincom Ltd (2007) 61 ACSR 266 as to whether it is necessary to consider s 411(17) at the first stage of the two stage process for the Court to direct the meeting and then, after the scheme is voted upon, to approve it. If that consideration is relevant at this point, that is whether there is a likelihood (or prospect) of s 411(17) being satisfied at first stage, I have the necessary level of satisfaction at this point and on the material referred to. The provisional view of ASIC referred to above indicates that there is a prospect of it producing to the Court the form of statement referred to in s 411(17)(b), although of course the Court then clearly is not obliged to approve the proposed scheme. Alternatively, on the information presently available to me, as I have indicated, I do not see a reason why, if the members of Hostworks at the proposed meeting of the scheme support the proposed scheme, I would not be satisfied that the scheme has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6. That must necessarily be only a tentative and provisional judgment. However, it is accepted, as is now commonplace, that in circumstances such as the present, an entity such as Hostworks has a choice between following the takeover procedure in Chapter 6 in conjunction with Broadcast Australia or following the scheme of arrangement procedure supported by inter partes documentary agreements as contemplated by Pt 5.1 of Chapter 5 of the Act. Consequently, the mere choice of the procedure now being adopted is not an indication that a purpose of this procedure is to enable any person to avoid the operation of any provisions of Chapter 6. There will thus need to be some identification of which provision or provisions of Chapter 6 might relevantly operate so as to produce potentially a different outcome to that which would follow from the present procedure and an exploration of why the Pt 5.1 procedure has been used having regard to that provision or those provisions if s 411(17)(a) is to be enlivened. Such consideration may also be relevant to the discretion of the Court under s 411(17) if ASIC has provided a statement under s 411(17)(b). No such provision has presently been identified. 32 The performance risk concern has been raised in previous scheme of arrangement applications. They are referred to by Lindgren J in Re APN News 62 ACSR 400 at [23]. I will not repeat them. It is necessary to consider the so called "performance risk" of shareholders being left in a position, once the scheme has become effective, of their shares having been transferred to Broadcast Australia, but then facing a delay in the provision of the scheme consideration, so that their only remedy would be to sue on the Deed Poll. That risk has been overcome here by requiring the scheme consideration to be paid to Hostworks before 12 noon on the "implementation date" to be held in trust by Hostworks for the purpose of being paid to the scheme participants, that is the shareholders of Hostworks, before they are divested of their shares in Hostworks later on in the implementation date. Broadcast Australia must provide the funds to pay for the shares it is to acquire before they are transferred. A similar arrangement was satisfactory to Robson J for the purposes of authorising or directing the calling of the proposed meeting in Re Coles Group [2007] VSC 389 ; see at [38]. The Deed Poll contains a covenant on the part of Broadcast Australia to provide the scheme consideration on the implementation date in accordance with the terms of the scheme so that it ties the settlement step of payment and transfer together. 41 Under cl 7.3(a) of the Implementation Agreement, each scheme participant is deemed to have warranted that all of its shares in Hostworks which are transferred under the scheme will be free from all mortgages and encumbrances. Fryberg J in Re Mincom Ltd (No 3) (2007) 25 ACLC 207, regarded an almost identical deemed warranty clause as onerous and unreasonable and "calculated to catapult unsuspecting shareholders who have not read the small print of the arrangement in the schedule to the explanatory statement into a state of breach of warranty": at [21]. In Re APN News & Media Ltd 62 ACSR 400, Lindgren J disagreed with the approach of Fryberg J: see at [59]-[62]. I respectfully agree with and adopt the views of Lindgren J. I share the understanding of his Honour that the purpose and effect of such a clause is simply to ensure that a scheme participant whose shares are subject to an encumbrance is not unfairly advantaged. The amount of the damages payable for breach of the warranty would be equal to the amount required to discharge the encumbrance. I note that the approach of Lindgren J has been preferred in subsequent cases, including by Robson J in Re Coles Group Limited [2007] VSC 389 at [45] ; by Lander J in Re Adelaide Bank Limited [2007] FCA 1582 at [33] ; and by Gyles J in Orion Telecommunications Ltd [2007] FCA 1389 at [9] .


case_title: Re Mincom Ltd (2007) 61 ACSR 266

case_text: There may be some difference of opinion, or perhaps only of emphasis, between the views of Robson J in Re Coles Group Ltd [2007] VSC 389 and Fryberg J in Re Mincom Ltd (2007) 61 ACSR 266 as to whether it is necessary to consider s 411(17) at the first stage of the two stage process for the Court to direct the meeting and then, after the scheme is voted upon, to approve it. If that consideration is relevant at this point, that is whether there is a likelihood (or prospect) of s 411(17) being satisfied at first stage, I have the necessary level of satisfaction at this point and on the material referred to. The provisional view of ASIC referred to above indicates that there is a prospect of it producing to the Court the form of statement referred to in s 411(17)(b), although of course the Court then clearly is not obliged to approve the proposed scheme. Alternatively, on the information presently available to me, as I have indicated, I do not see a reason why, if the members of Hostworks at the proposed meeting of the scheme support the proposed scheme, I would not be satisfied that the scheme has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6. That must necessarily be only a tentative and provisional judgment. However, it is accepted, as is now commonplace, that in circumstances such as the present, an entity such as Hostworks has a choice between following the takeover procedure in Chapter 6 in conjunction with Broadcast Australia or following the scheme of arrangement procedure supported by inter partes documentary agreements as contemplated by Pt 5.1 of Chapter 5 of the Act. Consequently, the mere choice of the procedure now being adopted is not an indication that a purpose of this procedure is to enable any person to avoid the operation of any provisions of Chapter 6. There will thus need to be some identification of which provision or provisions of Chapter 6 might relevantly operate so as to produce potentially a different outcome to that which would follow from the present procedure and an exploration of why the Pt 5.1 procedure has been used having regard to that provision or those provisions if s 411(17)(a) is to be enlivened. Such consideration may also be relevant to the discretion of the Court under s 411(17) if ASIC has provided a statement under s 411(17)(b). No such provision has presently been identified.


case_text: Clauses 10.1 and 10.2 of the Implementation Agreement contain "no-shop" and "no-talk" provisions during the "exclusivity period", defined as the period from the date of the Implementation Agreement to the "sunset date" or the date when the agreement is earlier terminated. The sunset date is 31 May 2008. During that period, Hostworks is obliged to ensure that neither it nor its representatives directly or indirectly solicits or invites any discussions in relation to, or which may reasonably be expected to lead to, a competing transaction, that is defined as any expression of interest, proposal or offer by a third party to evaluate or enter into any transaction similar to the proposed scheme or by which a person would acquire an interest in 10% or more of the issued shares in Hostworks or engage in other like transactions. During the same period, under the "no-talk" provision, Hostworks is to ensure that neither it nor its representatives negotiates with any persons in relation to, or which might reasonably be expected to lead to, a competing transaction, even if it was not solicited or initiated by Hostworks in any way. It is also obliged under cl 10.3 to ensure that neither it nor any of its representatives in relation to a competing transaction, facilitates any other party undertaking due diligence investigations in relation to Hostworks, or makes any non-public information relating to Hostworks available to any such person. Because such clauses provoke obvious concerns as to the directors' potential breach of fiduciary duty or statutory obligations by entering into such agreements, cl 10.7 contains what is called "fiduciary and other carve-out" provisions. It provides that the restrictions in cl 10.2 and cl 10.3 do not apply to the extent that, in response to an approach by a third party, Hostworks informs the third party that it can only participate in negotiations or discussions with that third party if the third party proposes a competing transaction of a certain quality. If a competing transaction is then made which meets certain criteria, and if Hostworks' directors determine in good faith and acting reasonably that failing to respond to a bona fide competing transaction would "more likely than not" constitute a breach of their fiduciary or statutory obligations, they are not bound to comply with cl 10.2 or cl 10.3. Before that carve-out operates, the directors of Hostworks must be satisfied that the competing transaction is bona fide and in writing by a reputable entity, and they must have determined in good faith and acting reasonably (after independent advice) that the competing transaction is capable of being valued and completed, and is of a higher value to Hostworks and its shareholders than the proposed scheme. They must also have received written advice from Hostworks' external legal adviser that failing to respond to such a bona fide competing transaction would more likely than not constitute a breach of the independent directors' fiduciary duties or statutory obligations. In Re Arthur Yates and Co Ltd (2001) 36 ACSR 758, Santow J expressed the view that no-talk provisions should satisfy certain particular concerns, at [9] which Lindgren J in Re APN News Ltd 62 ACSR 400 at [29] described in the following terms: (a) it should be for no more than a reasonable period capable of precise ascertainment; (b) while it may differentiate between actively soliciting an alternative merger proposal and simply dealing with an unsolicited one, in either case the provision should be framed so that it is subject to the overriding obligation not to breach the directors' fiduciary duties or be otherwise unlawful; and (c) there should be adequate prominence given to the provision in the explanatory memorandum sent to shareholders. 34 I note that the Takeover Panel "Guidance Note: 7 Lock-up Devices" distinguishes between the anti-competitive effect of "no-talk" agreements and "no-shop" agreements. It identifies the former as inherently more anti-competitive at [7.30], and so considers it necessary for a "no-talk" agreement to contain an appropriate fiduciary carve out. It does not require generally that a "no-shop" agreement be similarly subject to a fiduciary carve out, because such a clause generally only prevents the target company from soliciting alternative or additional bidders or transactions, and does not prevent an interested party from bidding: at [7.31] and [7.7]. 35 As I have noted, the exclusivity period will expire by no later than 31 May 2008, and the "no-talk" provision in the Implementation Agreement is subject to a carve out recognising the directors' fiduciary obligations and statutory duties. The evidence also indicated that the directors of Hostworks (other than Mr Shore who did not participate in the decision-making processes at all) considered the interests of the members of Hostworks in agreeing to those provisions, including the procuring of legal advice about them.


case_text: Clause 11 of the Implementation Agreement imposes a break fee provision. Break fees are also now a commonplace feature in proposed agreements for schemes of arrangements and in merger and takeover agreements, both in Australia and overseas. See per Lindgren J in APN News Ltd 62 ACSR 400 at [43]. As his Honour said at [44], break fees are justified by reference to the costs incurred by the offeror company; the benefit that that company confers on the members of the target company by increasing its value; and the desirability, from the viewpoint of those members, that takeover offers be made to them. His Honour then went on to consider contemporary practice in relation to break fees. There is a more lengthy discussion by his Honour of general considerations relating to break fees in Bolnisi Gold NL in the matter of Bolnisi Gold NL (No 2) [2007] FCA 2078 at [9] - [30] . It is a most helpful discussion. 39 There have been a number of orders made by the Court under s 411(1) of the Act in which the existence of provisions such as those in cl 11 of the Implementation Agreement concerning break fees have not been an obstacle to the making of orders for the convening of meetings. 40 In this case, the break fee is not payable if the members of Hostworks fail to support or approve the proposed scheme. A term to the contrary effect was removed from the Implementation Agreement by its amendment on 14 December 2007. There can therefore be no suggestion that the provision for the payment of the break fee will coerce shareholders to vote in favour of the proposed scheme. Those matters are fully explained in the draft explanatory statement. It is also fair to observe that, as reported in the Implementation Agreement, the break fee proposed is not of an inappropriate magnitude. It is identified as being $675,000, representing an estimate of Broadcast Australia's costs of and in relation to making the proposed offer. My general understanding is that that was not an unrealistic figure. It is a figure which the parties have agreed is a genuine and reasonable pre-estimate of the costs that Broadcast Australia will suffer if the proposed scheme does not proceed: cl 11.3. I note that the break fee is less than 1% of the equity value of Hostworks. To that extent, it accords with the Takeovers Panel Guidance Note 7: Lock Up Devices at [7.17]. I am not sure that it is appropriate to determine that an appropriate break fee may be fixed by reference to a percentage of the equity value of the takeover target as distinct from a genuine pre-estimate of the costs of the proposed offer. However, that is not of significance here because the break fee is less than 1% of the equity value of Hostworks. It is not necessary to take that further. There is in the circumstances no reason why that provision of the Implementation Agreement should have impeded the Court from making the order for the convening of the proposed meeting.


case_text: Under cl 7.3(a) of the Implementation Agreement, each scheme participant is deemed to have warranted that all of its shares in Hostworks which are transferred under the scheme will be free from all mortgages and encumbrances. Fryberg J in Re Mincom Ltd (No 3) (2007) 25 ACLC 207, regarded an almost identical deemed warranty clause as onerous and unreasonable and "calculated to catapult unsuspecting shareholders who have not read the small print of the arrangement in the schedule to the explanatory statement into a state of breach of warranty": at [21]. In Re APN News & Media Ltd 62 ACSR 400, Lindgren J disagreed with the approach of Fryberg J: see at [59]-[62]. I respectfully agree with and adopt the views of Lindgren J. I share the understanding of his Honour that the purpose and effect of such a clause is simply to ensure that a scheme participant whose shares are subject to an encumbrance is not unfairly advantaged. The amount of the damages payable for breach of the warranty would be equal to the amount required to discharge the encumbrance. I note that the approach of Lindgren J has been preferred in subsequent cases, including by Robson J in Re Coles Group Limited [2007] VSC 389 at [45] ; by Lander J in Re Adelaide Bank Limited [2007] FCA 1582 at [33] ; and by Gyles J in Orion Telecommunications Ltd [2007] FCA 1389 at [9] .


case_text: In my view, neither of those matters is necessary. The relevant question is to determine whether either the option holders, or the three major shareholders who have granted an option over their shares in favour of Broadcast Australia, have rights which are so dissimilar as to make it impossible to consult together with a view to their common interest: see e.g. per Bowen LJ in Sovereign Life Assurance Co v Dodd [1892] 2 QB 573 at 583. Whilst not foreclosing the possibility that a dissenting shareholder might persuade me in due course that there should have been separate meetings of one or other of those classes, as well as of the other members of Hostworks excluding those three shareholders, so that the Court would not approve the scheme if the members otherwise approve it under s 411(4)(b), at this point I do not see that such separate meetings are necessary. 44 I do not regard the shareholders and the option holders as having different interests to such an extent that they could not consult together with other shareholders. The consideration payable for the cancellation of options takes into account the strike price of options. Upon exercise of the options, the option holders will receive consideration equivalent to the scheme consideration. The scheme consideration exceeds the exercise price of all the options. The only impediment to the immediate exercise of some of the options is the approval of the proposed scheme, triggering the operation of r 6.2(p) of the ESOP Rules, but I do not think that consideration renders the interests of the option holders so dissimilar from those of the shareholders of Hostworks as to preclude them from having a general common interest with the shareholders. Ultimately, they are proposed to be treated the same. 45 As the price to be paid by Broadcast Australia, if it exercises its call options over some 19% of the issued capital of Hostworks, is equivalent to the scheme consideration, and because if the scheme is not approved, those call options will lapse, in my view there is no sufficient reason to consider that the present holders of those shares should constitute a separate class for the purposes of the scheme meeting. The options do not affect the rights and obligations of those shareholders in relation to Hostworks. Those option grantors will not be advantaged or disadvantaged depending upon the outcome of the scheme in relation to other members of Hostworks. Broadcast Australia does not have the ability to exercise or to control the exercise of the votes attached to those shares in Hostworks before the exercise of the options, and effectively in practice before the meeting.


case_title: SZFOH v Minister for Immigration and Citizenship (2007) 159 FCR 199

case_text: The principal submission of the Minister however is that, assuming a breach of the Act in that the invitation cannot be said to have been duly sent to the still authorised recipient, in the circumstances of this case such failure cannot possibly have made any difference to the decision and the Court should, in its discretion, withhold relief. The case is to be distinguished from others such as: SZFOH v Minister for Immigration and Citizenship ( 2007) 159 FCR 199 where there had been no appearance by the applicant at the Tribunal's hearing; Lee v Minister for Immigration and Citizenship (2007) 159 FCR 181 where the failure to reply to a notice of invitation to comment allowed the Tribunal to proceed to make a decision without further invitation to the applicant; and Vean of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 311 ; (2003) 133 FCR 570 where the appellant did not receive the invitation until a considerable time after it had been sent to and received by the authorised recipient because it had been addressed to the applicant care of the authorised recipient. Because the appellant was in fact fully heard and the Tribunal rejected the veracity of his claims it is a case where the "decision-maker was bound by the governing statute to refuse the application": SZBYR v Minister for Immigration and Citizenship (2007) 235 ALR 609 at [29] per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ and separately Kirby J and Hayne J. 24 On the discretion point, the appellant chiefly relies on SZFOH 159 FCR 199 and Lee 159 FCR 181. In the latter case the Full Court considered discretionary relief and accepted a "forward looking" approach to the question of utility and futility. In SZFOH 159 FCR 199, Lee 159 FCR 181 was applied and the fact that the authorised recipient may have known of the notice, though the notification was irregular, was apparently held not sufficient to warrant a discretionary refusal of relief (cf Buchanan J at [60]). In Lee 159 FCR 181, as I understand it, the Court appeared to prefer the view given by Merkel J in a separate judgment in Giretti v Deputy Commissioner of Taxation (1996) 70 FCR 165, favouring a "forward-looking" view. 25 However, the decision in SZBYR 235 ALR 609 was given on 13 June 2007 shortly after the decisions in Lee 159 FCR 181 and SZFOH 159 FCR 199 and in my opinion SZBYR 235 ALR 609 now provides authoritative guidance. As succinctly put by counsel for the Minister, the appellants in SZBYR 235 ALR 609 argued that the Tribunal had failed to comply with s 424A of the Act in dealing with issue A, but the Tribunal had also relied on issue B which was in itself an independent ground for refusing their application. At [29], Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ said: The present is a case in which no useful result could ensue from the grant of the relief desired by the appellants. This is so because, even if the appellants be correct as to the proper operation of s 424A , they cannot overcome the tribunal's finding that their claims lacked the requisite convention nexus. The appellants' case, like Mobile Oil Canada Limited ... cited in [ Re Refugee Tribunal; Ex parte] Aala [(2000) [2000] HCA 57 ; 204 CLR 82 at [56] ], was one in which "irrespective of any question of procedural fairness or individual merits, the decision-maker was bound by the governing statute to refuse". (Footnotes omitted.) Hayne J likewise said at [91]: The Refugee Review Tribunal's finding that the appellants' claims lacked the requisite nexus with the Convention was inevitable. That being so, the appellants were not entitled to relief of the kind they sought. The discretion to grant that relief was to be exercised against them. (Footnotes omitted.) 30 If my decision should not be in accord with Lee 159 FCR 181 and SZFOH 159 FCR 199, I believe any departure of mine from the reasoning in those cases is appropriate and warranted after SZBYR 235 ALR 609. I should add, however, that all the cases on exercise of discretion have to be closely examined in the light of their own facts. It is very easy to make remarks able to be read as nostrums for general application when really what the court is doing is seeking to explain the considerations which have weighed with it in the instant case. I have probably been guilty of the same thing here myself. I do not suggest that I would necessarily have decided Lee 159 FCR 181 or SZFOH 159 FCR 199 differently, even after SZBYR 235 ALR 609. Their facts are not these facts.


case_title: Lee v Minister for Immigration and Citizenship (2007) 159 FCR 181


case_text: The principal submission of the Minister however is that, assuming a breach of the Act in that the invitation cannot be said to have been duly sent to the still authorised recipient, in the circumstances of this case such failure cannot possibly have made any difference to the decision and the Court should, in its discretion, withhold relief. The case is to be distinguished from others such as: SZFOH v Minister for Immigration and Citizenship ( 2007) 159 FCR 199 where there had been no appearance by the applicant at the Tribunal's hearing; Lee v Minister for Immigration and Citizenship (2007) 159 FCR 181 where the failure to reply to a notice of invitation to comment allowed the Tribunal to proceed to make a decision without further invitation to the applicant; and Vean of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 311 ; (2003) 133 FCR 570 where the appellant did not receive the invitation until a considerable time after it had been sent to and received by the authorised recipient because it had been addressed to the applicant care of the authorised recipient. Because the appellant was in fact fully heard and the Tribunal rejected the veracity of his claims it is a case where the "decision-maker was bound by the governing statute to refuse the application": SZBYR v Minister for Immigration and Citizenship (2007) 235 ALR 609 at [29] per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ and separately Kirby J and Hayne J.


case_text: The principal submission of the Minister however is that, assuming a breach of the Act in that the invitation cannot be said to have been duly sent to the still authorised recipient, in the circumstances of this case such failure cannot possibly have made any difference to the decision and the Court should, in its discretion, withhold relief. The case is to be distinguished from others such as: SZFOH v Minister for Immigration and Citizenship ( 2007) 159 FCR 199 where there had been no appearance by the applicant at the Tribunal's hearing; Lee v Minister for Immigration and Citizenship (2007) 159 FCR 181 where the failure to reply to a notice of invitation to comment allowed the Tribunal to proceed to make a decision without further invitation to the applicant; and Vean of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 311 ; (2003) 133 FCR 570 where the appellant did not receive the invitation until a considerable time after it had been sent to and received by the authorised recipient because it had been addressed to the applicant care of the authorised recipient. Because the appellant was in fact fully heard and the Tribunal rejected the veracity of his claims it is a case where the "decision-maker was bound by the governing statute to refuse the application": SZBYR v Minister for Immigration and Citizenship (2007) 235 ALR 609 at [29] per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ and separately Kirby J and Hayne J. 25 However, the decision in SZBYR 235 ALR 609 was given on 13 June 2007 shortly after the decisions in Lee 159 FCR 181 and SZFOH 159 FCR 199 and in my opinion SZBYR 235 ALR 609 now provides authoritative guidance. As succinctly put by counsel for the Minister, the appellants in SZBYR 235 ALR 609 argued that the Tribunal had failed to comply with s 424A of the Act in dealing with issue A, but the Tribunal had also relied on issue B which was in itself an independent ground for refusing their application. At [29], Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ said: The present is a case in which no useful result could ensue from the grant of the relief desired by the appellants. This is so because, even if the appellants be correct as to the proper operation of s 424A , they cannot overcome the tribunal's finding that their claims lacked the requisite convention nexus. The appellants' case, like Mobile Oil Canada Limited ... cited in [ Re Refugee Tribunal; Ex parte] Aala [(2000) [2000] HCA 57 ; 204 CLR 82 at [56] ], was one in which "irrespective of any question of procedural fairness or individual merits, the decision-maker was bound by the governing statute to refuse". (Footnotes omitted.) Hayne J likewise said at [91]: The Refugee Review Tribunal's finding that the appellants' claims lacked the requisite nexus with the Convention was inevitable. That being so, the appellants were not entitled to relief of the kind they sought. The discretion to grant that relief was to be exercised against them. (Footnotes omitted.) 26 Kirby J agreed that relief should be refused on discretionary grounds but on a narrower basis. His Honour took the view that "issue B" as counsel and I have called it, (the nexus issue in SZBYR 235 ALR 609) was on analysis the only reason for the Tribunal's decision and was sufficient. However, his Honour said at [87]-[89]: Once the foregoing conclusion became clear, it was immaterial ... to examine the extent of the default of the tribunal, if any, under section 424A ... Any such default could not have affected the decision of the tribunal for the reason that it accepted. An application for judicial review of that decision was therefore liable to dismissal on discretionary grounds. Discretionary refusal of judicial review must be exercised with care, particularly where the hypothesis of jurisdictional error is a possibility. However, in some such cases (of which this was one) invocation of the discretion is proper, prudent, economical and just. In effect, the discretion allows the reviewing court to say: The case is clear. A sound basis for the challenged decision has been established. Even if a postulated error has occurred in complying with s424A and could be proved, any such error is immaterial because it could not undermine the essential legal basis that sustains the decision. In that event, to divert the court's time and resources into examining a supposed technical breach is not a proper use of its energies. Nor is it required by the justice of the case. When such conclusions are reached, the reviewing court is entitled to, and should, reject the application in the exercise of its discretion. It should leave analysis of suggested technical infractions to a case where the result of such analysis might influence the outcome. This was not such a case. (Footnotes omitted.) 27 In my opinion those pungent observations of Kirby J are entirely applicable by way of analogy here. 28 Factors relevant to the exercise of discretion in this case are, it seems to me, first, the Tribunal's default was patently one of a mere clerical oversight rather than a studied misapplication of the law. Second, this is not a case where, simply, actual notice had also come to the attention of the appellant personally in his application before the Tribunal but there was no notice to any person authorised by him to be his desired recipient. Third, there was, in fact, notification to someone in whose understanding of the legal and practical implications of his litigious position the appellant had confidence. Fourth, here the appellant acted on that actual notice and in the event there was secured to him every right and opportunity of substance which s 441G envisaged for him. There was adequate and due notice of the hearing and an unmistakably clear and adequate opportunity to attend before the Tribunal and for him to put his case to it, all of which opportunities the appellant took up. 30 If my decision should not be in accord with Lee 159 FCR 181 and SZFOH 159 FCR 199, I believe any departure of mine from the reasoning in those cases is appropriate and warranted after SZBYR 235 ALR 609. I should add, however, that all the cases on exercise of discretion have to be closely examined in the light of their own facts. It is very easy to make remarks able to be read as nostrums for general application when really what the court is doing is seeking to explain the considerations which have weighed with it in the instant case. I have probably been guilty of the same thing here myself. I do not suggest that I would necessarily have decided Lee 159 FCR 181 or SZFOH 159 FCR 199 differently, even after SZBYR 235 ALR 609. Their facts are not these facts.


case_title: Giretti v Deputy Commissioner of Taxation (1996) 70 FCR 151

case_text: On the discretion point, the appellant chiefly relies on SZFOH 159 FCR 199 and Lee 159 FCR 181. In the latter case the Full Court considered discretionary relief and accepted a "forward looking" approach to the question of utility and futility. In SZFOH 159 FCR 199, Lee 159 FCR 181 was applied and the fact that the authorised recipient may have known of the notice, though the notification was irregular, was apparently held not sufficient to warrant a discretionary refusal of relief (cf Buchanan J at [60]). In Lee 159 FCR 181, as I understand it, the Court appeared to prefer the view given by Merkel J in a separate judgment in Giretti v Deputy Commissioner of Taxation (1996) 70 FCR 165, favouring a "forward-looking" view. 29 To set aside the Tribunal's decision and require reconsideration of the appellant's claims de novo would be, in my opinion, to allow the triumph of mere technicality over substance and would be, as Lindgren J observed in Giretti 70 FCR at 165, to put the appellant in a better position than if the technical error had not occurred. Bray CJ of the Supreme Court of South Australia was fond of saying that if the application of the law by courts, or its declaration, strayed too far from what reasonable and open-minded lay members of the community might see as correct, and sensible and just, then the application or declaration of the law is likely wrong. I do not suggest that lay notions of injustice should govern the exercise of discretion in this area, but I do feel that there are considerations in the public interest which justify not exalting technical errors to a tyrannical role where manifestly there is no question of substantial or practical injustice.


case_outcome: followed

case_text: person applying for an order pursuant to s 247A bears the onus of establishing that he is acting in good faith and that the inspection is to be made for a proper purpose: Acehill Investments Pty Ltd v Incitec Ltd [2002] SASC 344 at [29] . Merim must do more than demonstrate that it is dissatisfied with the management decisions: Re Augold NL [1987] 2 Qd R 297 at 308 Cescastle Pty Ltd v Renak Holdings Ltd (1991) 6 ACSR 115 at 117. Merim must satisfy me that it is entitled to inspect the books because the information sought relates to matters that it as a shareholder ought to be informed of by the company: see, for example, Czerwinski v Syrena Royal Pty Ltd (No 1) [2000] VSC 125 ; (2000) 34 ACSR 245 at 248. The authorities in relation to s 247A and its predecessor were usefully summarised in a series of propositions by Debelle J in Acehill Investments Pty Ltd v Incitec (supra) at [29]: "1. The requirement that the applicant is acting in good faith and that the inspection is to be made for a proper purpose expresses a composite notion and the court will determine whether each has been demonstrated by applying an objective test. The onus is on the applicant to demonstrate that he is acting in good faith and that the inspection is for a proper purpose. The section operates where the applicant seeks to protect some specific or a personal right by the making of the order. Examples are where a shareholder contemplates proceedings under s 233 of the Corporations Act (the statutory successor of s 320 of the Companies Code)... or where a shareholder reasonably takes the view that a transaction could adversely affect his investment and he seeks to investigate the transaction for the purpose of determining what action he should take ... or where a shareholder seeks to ascertain facts for the purpose of considering a takeover offer.... If the applicant's primary or dominant purpose is a proper purpose, it is not to the point that an inspection may be of benefit to the applicant for some other purpose... The rights provided by s 247A should not be regarded as affecting the basic rule of company law that a shareholder should not ordinarily have recourse to the courts to challenge a managerial decision made by or with the approval of the directors. Since every shareholder has a right to apply under the section for an inspection order, it is no answer to an application that, if an order is made, the applicant may acquire information not available to other shareholders and thereby be in a more advantageous position than those shareholders. Applicants do not necessarily lack a proper purpose merely because (a) they are hostile to other directors; or (b) they will, after inspection, have more information than other members. The procedure under s 247A is not intended to be a process as wide-ranging as the process of discovery of documents so that, as a general rule, inspection will be confined to, say, the results of decisions of directors rather than all the documents such as board papers leading to decisions... I emphasise that this is a general rule. There may be occasions where it is proper to admit inspection of board papers ... Even where an applicant is acting bona fide and has shown a proper purpose, the court has a discretion whether to order inspection. " [citations omitted] Mr Yunghanns said that he has sought information from Style in relation to various matters, including the application of the funds acquired through the capital raising and the settlement of the debt recovery proceedings, and that, in particular, he has not received a substantive response to the request contained in his email of 4 July 2008. That proposition is not disputed by Style. In answer to a question from me, whether Mr Yunghanns had received an answer to his queries, counsel for Style replied "Not comprehensively". I am satisfied Merim has not received an answer to the questions raised in Mr Yunghanns' email of 4 July 2008, nor has Merim received answers to a number of the questions and issues raised in subsequent emails and letters sent to Style and its officers. Style's explanation for not responding to, and answering these queries is partly, as Style's counsel put it: "...he [Mr Yunghanns] has to establish some reason to suspect that the funds have been used other than properly ... and there is nothing to suggest that it [money] has been taken by the directors or used improperly."


case_title: Re Augold NL [1987] 2 Qd R 297

case_text: person applying for an order pursuant to s 247A bears the onus of establishing that he is acting in good faith and that the inspection is to be made for a proper purpose: Acehill Investments Pty Ltd v Incitec Ltd [2002] SASC 344 at [29] . Merim must do more than demonstrate that it is dissatisfied with the management decisions: Re Augold NL [1987] 2 Qd R 297 at 308 Cescastle Pty Ltd v Renak Holdings Ltd (1991) 6 ACSR 115 at 117. Merim must satisfy me that it is entitled to inspect the books because the information sought relates to matters that it as a shareholder ought to be informed of by the company: see, for example, Czerwinski v Syrena Royal Pty Ltd (No 1) [2000] VSC 125 ; (2000) 34 ACSR 245 at 248.


case_title: Cescastle Pty Ltd v Renak Holdings Ltd (1991) 6 ACSR 115


case_text: there is some evidence that Mr Yunghanns may be contemplating action to gain control of, or take over, Style, I do not consider that I should reject his evidence as to his purpose in seeking the order for inspection. In the absence of cross-examination of Mr Yunghanns there is no reason why I should reject his evidence as to his purpose having regard to the sequence of communications between Mr Yunghanns and Style to which I have referred. I am satisfied that even if the inspection sought may assist Mr Yunghanns or Merim in a proposal to gain control of, or take over, Style, Merim's primary or dominant purpose is as stated by Mr Yunghanns. In any event as Brooking J observed in Knightswood Nominees Pty Ltd v Sherwin Pastoral Company Ltd (1989) 15 ACLR 151 at 158, the fact that a takeover offer for the defendant (in the position of Style) might be made by a company controlled by a person who controls the plaintiff which is seeking inspection of the books of the defendant and that information derived from inspection of the defendant's books might be used for the purposes of the takeover offer: "neither prevents the arising of the power to make the order sought, nor makes it appropriate to refuse the order sought as a matter of discretion." I am satisfied that Mr Yunghanns has not been given a satisfactory answer or information in relation to the financial issues concerning Style which he has raised. Section 247A requires me to be satisfied that Merim is acting in good faith and that the inspection is to be made for a proper purpose. I am so satisfied. Mr Yunghanns has raised a number of financial issues concerning Style which Style has not answered. In my view, those issues are substantive and not fanciful. Mr Yunghanns' queries raise specific matters that cause concern to Mr Yunghanns and, on the material placed before me, I do not consider those concerns are artificial, specious or contrived. To adopt the expression used by Brooking J in Intercapital Holdings Ltd v MEH Ltd (1988) 13 ACLR 595 at 601-602 and in Knightswood Nominees Pty Ltd v Sherwin Pastoral Company Ltd (supra) at 154, I consider there is a "case for investigation".


case_text: Yunghanns' queries raise specific matters that cause concern to Mr Yunghanns and, on the material placed before me, I do not consider those concerns are artificial, specious or contrived. To adopt the expression used by Brooking J in Intercapital Holdings Ltd v MEH Ltd (1988) 13 ACLR 595 at 601-602 and in Knightswood Nominees Pty Ltd v Sherwin Pastoral Company Ltd (supra) at 154, I consider there is a "case for investigation".


case_title: Czerwinski v Syrena Royal Pty Ltd (No 1) [2000] VSC 125 ; (2000) 34 ACSR 245


case_text: the primary or dominant purpose for which the inspection is sought by Merim is a proper purpose, any subsidiary purpose for some other benefit is not relevant. In Unity APA Ltd v Humes Ltd (No 2) [1987] VR 474 Beach J said at 480: "Having heard the evidence of the witness Wayland in relation to the matter I am satisfied that although Unity APA may well be seeking an order for inspection with a view to assisting its takeover offer that is not its dominant purpose. In my view its primary or dominant purpose is to ascertain whether or not the directors of Humes have been and are in breach of their duties to the shareholders of Humes in so far as the proposed acquisition of Smorgon Steel is concerned and whether or not it should oppose the proposal. If that is its dominant purpose as I am satisfied it is, in my opinion it is not to the point that an inspection of Humes books relating to the proposal may in some way be of benefit to Unity APA so far as its take over is concerned. If its primary purpose is a valid purpose such a consideration is irrelevant. ..."