APM Investments Pty Ltd v Trade Practices Commission & Ors [1983] FCA 248

Federal Court of Australia|1983-09-21|Before: Jenkinson JJ, Smithers J, Woodward J

| oy VICTORIA DISTRICT REGISTRY { ' GENERAL DIVISION

' FIBRE CONTAINERS LIMITED, LEITGH-MARDON PTY. LITD., ASSOCIATED NOMINEES PTY. LTD., FRANCIS BURKE, PETER BECKER, WILLIAM GIBSON, JOHN FRANCIS ELFVERSON (FIFTH TO EIGHTH

' LEIGH-MARDON PTY. LTD.) AND root ARTHUR KEVIN SMITH

Amendments to the judgment of the Honourable Mr. Justice Smithers of 21 September 1983:

p.27 Lines 12 and 13 shall read: "J... interlocutory injunction, with an opportunity to ADM to call evidence on relevant matters and be heard on the

incur" shall be "occur". p.34 Lines 21 - 23 shall read: "... shareholders and in a commercial sense suffered unfairly. In such a case there is much to be said for all bids awaiting

CATCHWORDS Appeal - principles to be taken into account in an appeal against the exercise of a discretion by the primary Judge - ' q matters of practice and procedure - undertakings - nature of undertakings - when undertakings can be released - Trade

Practices Act - interlocutory injunctions - whether

interlocutory injunction application argued before primary

APM INVESTMENTS PTY. LIMITED v. TRADE PRACTICES COMMISSION &

FIBRE CONTAINERS LIMITED, LEIGH-MARDON PTY. LTD., ASSOCIATED NOMINEES PTY. LTD., FRANCIS BURKE, PETER BECKER, WILLIAM GIBSON, JOHN FRANCIS ELFVERSON (FIFTH TO EIGHTH RESPONDENTS AS TRUSTEES FOR LEIGH- MARDON PTY. LTD.) AND ARTHUR KEVIN SMITH

. THE COURT ORDERS THAT:

The appeal be allowed and the order

: set aside. : oy 2. The costs of and incidental to oa reserved. - ' ' {a a 1 - iF '

ee eee a naernerrmneneemanrarnnneireetetenarn aaa Sunnnnnegmn ae 2 me

FIBRE CONTAINERS LIMITED, LEIGH-MARDON PTY. LTD., ASSOCIATED NOMINEES PTY. LTD.,

FRANCIS BURKE, PETER BECKER, WILLIAM GIBSON, JOHN FRANCIS

RESPONDENTS AS TRUSTEES FOR LEIGH- MARDON PTY. LTD.) AND

S.C.I. OPERATIONS PTY. LTD. (S.C.1. PACKAGING PTY. LTD.)

Smithers Jet This is an appeal in attion No. ,VG 84 of 1983 against an order of his Honour Mr. Justice Woodward, made on 24 August 1983 whereby upon certain undertakings peing given to the Court by the second respondent and the third, fourth, fifth, sixth, seventh and eighth respondents, his Honour released the first respondent, and the second - ninth respondents inclusive, from undertakings which had been given by those parties to the Court in these proceedings on 23 May 1983 and also released a company called SCI Operations Pty. Ltd. and related companies (SCI) from undertakings given by them to the Court also on 23 May 1983.

The first respondent APM Investments Pty. Limited appeals against this order on various stated grounds, but in substance alleges that it operates unjustly to Australian Paper Manufacturers Ltd. and itself who are both comprehended

within the expression "APM" hereinafter appearing, in as much as it permits SCI to proceed with a takeover offer for all the shares in the second respondent (ECL) and at' the same time it creates conditions effectively "preventing APM from

acquiring those shares pursuant to an offer which it desires

It is necessary to look at the form and history of action No. VG 84 of 1983 and the events shortly preceding the

institution of those proceedings. ' K FCL is a company conducting business, including that of a converter of paper board into cardboard boxes which it

sells as containers for fruit, vegetables, wine 'and other goods. The first respondent is a subsidiary of the company called Australian Paper Manufacturers Ltd. APM and SCI are each producers in a large way of the raw materials from which such boxes are made. APM is a larger producer than 'is sctI. APM supplies a substantial part of the raw material used by FCL in the manufacture of the boxes which it sells. Of the paper board which is consumed in Australia 72% is supplied by AM and 23% by SCI. Imports comprised 3% and Visy Board, one

On 4 May 1983 SCI announced that it would offer $3.50 per share for all the shares in FCL. Thereupon APM bought shares of FCL on the market for $3.65 and thereby brought its holding in FCL to 18%. On 6 May an ex parte application was made by SCI in the Federal Court seeking an injunction to restrain APM from proceeding to acquire the shares of FCL. The application came before Mr. Justice Jenkinson and was

refused. On 11 May 1983 APM announced that it intended to

lodge a Part A statement with a view to the acquisition of

the remaining shares at the price of $4.00. On 19 May SCI issued proceedings in the Federal Court No. VG 82 of 1983 in which it seeks relief against APM on the ground that acquisition of the shares of FCL by APM would 'contravene the

t w provisions of s.50 of The Trade Practices Act 1974 (the Act)

and for other relief under the provisions of the'Act.

Becoming aware of the imminence of the competing bids of SCI and APM to purchase all the shares of FCL the Trade

Practices Commission (the Commission) sent telexes to SCI, APM and FCL on 6 May 1983 seeking undertakings that the status quo be maintained pending consideration by the Commission of the proposed offers. The telex to SCI was in

"This is to confirm that the TPC has asked ADM not to take any action to acquire shares in Fibre Containers Ltd until 10.00 am-Monday 16 May 1983 to enable investigation of your clients suggestion that the acquisition may breach s.50

No commitment can be obtained today but APM has been informed that any further acquisition of shares in the face of this request would result in TPC taking immediate court proceedings -

APM has also been informed that your client similarly undertakes to acquiré no share in Fibre containers during the same period. Your written confirmation is requested please. .

understand they are prepared to undertake not to sell shares to either party for the same period." (p.270 AB)

The parties complied with the request of the Commission by

stating their undertakings in telexés sent by them to the Commission. On 10 May 1983 a meeting was held between the representatives of APM and the Commission at which a possible

bid by APM in response to the bid by SCI was discussed. On NX

12 May 1983 a meeting was held in Canberra between representatives of SCI and members of'the Commission at which

On 16 May 1983 SCI informed the Commission by telex that at its request and subject to certain conditions SCI undertook not to acquire or take any further steps to acquire any shares in FCL until:

(a) the determination of the proceedings to be instituted by the Commission against APM pursuant

(b) the Commission determined not 'to institute such

The specified conditions were: J (1) If the Commission has, by 4.00 p.m. on 18 May 1983

proceedings, this undertaking shall lapse. : (2) This undertaking shall not bind Scr unless an identical undertaking is given to the Commission by APM by 4.00 p.m. on 18 May 1983 and remains in

(3) SCI shall be released from this undertaking if the ncsc fails to agree and declare that for the

Ltd. by SCI and APM respectivély, shall cease to run while this undertaking and any identical

undertaking by APM are in force to the intent that if and when this undertaking "ana any. identical undertaking by APM lapse, SCI and APM shall, upon such lapse be at liberty to act for the purposes of the code and at any time periods specified therein in relation to the service of a Part A statement or

On 17 May 1983 APM informed the Commission that it acknowledged its advice that the Commission intended to move promptly in the Federal Court for appropriate orders to stop AP's acquisition of FCL shares and noted that it was seeking undertakingS so as to hold the present 'position between the parties until the Court had decided on the legality of the acquisition, by APM. APM advised that it "undertakes and agrees subject to conditions set out below not to acquire or take any further steps to acquire any shares in FCL until the

determination of the proceedings being instituted by the

Commission against APM or a related corporation pursuant to

s.80 of the Trade Practices Act in respect of a contravention of s.50 of the Act by APM.". The specified conditions were: (1) Undertakings to be given to the Commission (a) by SCI to the same effect as ithe | above undertaking by APM; and ' (b) by the Amatil Group that the shares of FCL held by that Group will not be sold to

(2) That APM be released from the undertaking te the NCSC fails to agree that the fourteen days following delivery of Part A statements by SCI and

APM respectively 'shall cease to run while this undertaking and the above undertakings are in

On 20 May 1983 SCI confirmed. that it had received copies of the telex from APM and from "Mr. McComas of Freehill's" and confirmed that the undertakings given in its

telex of 16 May 1983 remained current , subject to the current

undertakings of APM remaining in :force and the third t

condition concerning the extension ,time by ncsc. Such

On 19 May 1983 FCL sent a telex to the Commission the

first paragraph of which is in the following terms:-

"I have received a copy of the APM undertakings given on behalf of that company by Russell W. Evans in his telex of 19th May and on the understanding that an undertaking to the like effect will issue from SCI Packaging Pty. Limited (Smorgon) or that Smorgon confirms' that the undertaking contained in Mr. Graham Smorgon's telex to the Commission on 16th May 1983 is revived. I confirm on behalf'of the Amatil Group that the undertaking contained in my telex No. 757 to you of 18th May is also revived and will remain on foot subject only to conditions 3 and 4 of my telex." : .

It should be noted that the expression "the Amatil Group" is used to refer to the third to eighth respondents being the holders of some 74% of the shares of FCL. Mr. McComas acted

On 23 May 1983 counsel for the Commission, the applicant in the proceedings No. VG 84 of 1983, and for the respondents APM, FCL, the Amatil Group, and for SCI appeared

before Northrop Jd. on an application by the applicant that

certain undertakings proposed to be given by these parties bereceived by the Court and certain directions be given.

Hereinafter the expression FCL is used to refer to FCL and

the Amatil group of its shareholders unless the contrary is

indicated. Mr. Williamson for the applicant said: :

"May I take your Honour to the application in matter VG 84. That application sets out the relief that the applicant claims and the relief is for injunctions framed with respect to section 50 proceedings under the Trade Practices Act. There is also a claim for interlocutory relief, and to put the matter shortly the parties to the

application and my learned friend Mr. O'Callaghan's clients, [SCI] are here to give undertakings to the court which we envisage would take the place and stand instead of interim injunctions which we would otherwise have sought." (p.176 AB) . 1 7 a He explained that as a result of a round of activities in the

previous few days, "we reached the point where, it was clear

that on a certain basis undertakings would be given", and

that in consequence only a formal affidavit was before the

Court. It was pointed out by the learned Judge that SCI was not a party to the proceedings No. VG 84 of 1983. Mr. O'Callaghan replied: "We accept the proposition that we are inextricably bound up...". Mr. Williamson also referred the Court to the telexes "because they form the basis of the undertakings which will be given". Counsel for the parties then gave undertakings on behalf of their clients and their associated companies. Reflecting theSe proceedings an order of the Court for directions was made referring to

undertakings which were given in the following terms:-

"Upon the following undertakings being given by the First Respondent, SCI Operations Pty. Ltd. and SCI Packaging Pty. Ltd.:- _ APM Investments Pty. Ltd., SCI Operations Pty. Ltd. and SCI Packaging Pty. itd. each by their respective Counsel undertake ,to the Court: that they and any related corporations will not, prior to the hearing or determination of Application No. VG84 of 1983 or until further order, acquire or take any further steps to 'acquire any shares in the capital of Fibre Containers Ltd,

AND upon the following undertakings being given by the Second to Ninth Respondents:-

that until the determination of these proceedings or further order - -

sell to or accept any offer from APM INVESTMENTS PTY. LTD. (APM ) (or any related corporation of APM) or SscI PACKAGING PTY. LTD. (SCI) or any related corporation of SCI) to purchase any shares held by them or on their behalf in FIBRE CONTAINERS LTD. '

The Second to Ninth Respondents will not aid, abet, counsel or procure APM (or any related corporation of APM) or SCI (or any related corporation of SCI) to acquire directly or indirectly'any shares in FIBRE CONTAINERS LTD. or in any way be knowingly concerned in or a party to any such

acquisitions. AND subject to the making of an appropriate Declaration by the National Companies and Securities Commission to enable effect to be given to the undertakings herein pursuant to the Companies (Acquisition of Shares) (New South Wales) Code.

THE COURT ORDERS THAT: {There followed lengthy directions for the conduct of proceedings]"

& It is to be noted that the original order taken out did not correctly reflect the undertakings given by the parties.

On 20 July 1983 FCL sought an order that it be released from so much of para. 2 of the order of 23 May 1983 as related: to scl. In support of this application it was said the duration of the proceedings and the uncertainty which would attend the outcome thereof had been and would continue to be disruptive of FCL's business and unsettling to

its employees and customers. FCL also stated that it wished

to be free to conduct discussions with SCI to ascertain whether that company would alter the conditions upon which it had given notice of its intention to make a take over offer

for the shares of FCL so that the Directors of FCL would be t Ae

able to recommend acceptance thereof to the shareholders of FCL. This application was opposed by'the Commission and APM.

Mr. O'Callaghan also opposed the application on behalf of SCI ,

"We understand and I sympathise with the position of Fibre' Containers, but the fact is that we gave the undertaking and we have in recent days indicated to the Trade Practices Commission that if the fact of Mr. McComas' undertaking would in any way prejudice the prospects of their pursuing their proceedings, then we would oppose Mr. McComas' application and pursuant to that we are committed to state our opposition to it, which I do." (p.223 AB)

"I would say in the light of the suggestion made by my learned friend Mr. Shaw, for me to say that even if APM were free to have discussions with Fibre Containers Limited, Fibre Containers Limited would not feel itself free to have discussions with APM because of the existence of these proceedings and that in its turn is the very basis upon which the application is made.

I suggest that the maintenance of that state of mind removes an injustice or, if you like, shifts the creator of that injustice from the ¢ourt, from the commission or indeed: from SCI squarely to the target because that is the target's view and I have the clearest instructions to make that clear to the Court." (p.225 AB)

"It seems to me that in relation to this matter I have received submissions from the four parties and bearing in mind that the status quo in a difficuit commercial situation has been maintained now for two months, I think that, in the light of the' attitudes of the respective parties, and what_I' perceive as being the justice of the situation the undertakings and orders that have been made should continue. I do not propose to vary them." (p.227 AB)

On 11'August 1983 the second to eighth respondents namely FCL and the Amatil Group of its shareholders other than the ninth respondent applied upon motion that FCL and the Amatil group -of its shareholders be released from the undertakings given by them to the Court on 23 May 1983 in relation to SCI and that SCI be released from the undertakings given by SCI on 23 May 1983, upon the undertaking to the Court by the third to eighth respondents that: '

(a) they would not nor would any of them sell to or accept any offer from' APM Investments Pty. Ltd. or any corporation related to that company to purchase any shares held by them or on their behalf in FCL;

and the undertaking by the second to eighth respondents that

(b) they would not aid, abet, counsel or procure APM Investments pty. Ltd. or any corporation related to it, to acquire directly or indirectly any shares in

The hearing of the notice of motion took place on 17 August

In support of this motion evidence was submitted that

by reason of the circumstance that APM and SCI had announced their intentions to bid for the shares of FCL and that there was a state of uncertainty surrounding the status of such

bids, due to the proceedings in -the Federal 'Court of

Australia, the business of FCL was being disrupted and its

employees were being unsettled. It was said that the second

--- Have given further consideration to their respective positions in the light of the circumstance hereinbefore referred to. [such circumstance being the view held by the Commission that an acquisition by APM of FCL's shares would be a breach of. s-50 of. the Act] They are concerned at the effect which these proceedings are having and will continue to have upon the business of the Second Respondent and upon its employees and at the effect which the time which will be taken -to resolve these proceedings might have upon'*the value of the shares of the Second respondent and of the interests of the shareholders of the Second respondent in those shares.

In all of these circumstances the Third to Eighth Respondents believe that the -circumstances in which the undertakings given ion their behalf to this Honourable Court on 23rd May 1983 in relation to SCI Packaging Pty. Limited :-have sufficiently changed to justify the Third to

Eighth Respondents deciding that they should not entertain an offer from -the First Respondent (or any other company related to the First Respondent) to acquire shares held by them and each of them in the Second Respondent."

On behalf of SCI which supported the motion although it was

not a party to the proceedings brought by the Commission

¢ 4 "SCI Packaging Pty. Ltd. (which together with SCI

Operations Pty. Ltd. and other related companies is hereinafter referred to as "SCI") gave the undertakings contained in the exhibits to the affidavit of the said Stanley David Martin Wallace predominantly to ensure that the Trade Practices Commission instituted and pursued proceedings under Section:50 of the Trade Practices Act 1974 against APM Investments Pty. Ltd. ("APM"). There were undertakings given by SCI prior to those referred to in the said affidavit which are exhibited thereto and marked with the letter "A". :

SCI believed that if such undertakings were not given then the Commission would not institute and pursue such proceedings and that Fibre Containers Limited and its shareholders ("FCL") were prepared to entertain offers by APM to acquire the subject shares."

These are the submissions which appealed to the learned Judge and contributed to his decision that the application should succeed. But his Honour was conscious that "because of the interlocking nature of the undertakings which were given on the understanding that both APM and SCI would be similarly bound" it would be unfair to release FCL

t and SCI from their undertakings without considering afresh

t the position of APM. But it is clear that in so-doing he

4 , - took the view that APM's position must be considened on the basis that, in any event, APM must be prevented from acquiring the shares before the litigation was concluded and

that an appropriate provision to that effect must be

maintained notwithstanding the provisions of s.81. In these circumstances the best he could do for APM was to propose that it might, on giving an undertaking not to acquire the shares until the proceedings were concluded, be permitted to negotiate for the shares on the condition that acquisition thereof should take effect only if thé Court should find that

The problem was dealt with by the acceptance by his

Honour of an undertaking proffered by the Amatil group not to sell to APM until the proceedings were determined or further order and by FCL not to aid or assist in any such sale. On that basis he was able to and did release APM entirely from its existing undertaking. FCL and the shareholders gave the undertakings in the terms last stated and his Honour released all parties from their undertakings of 23 May 1983.

It is apparent that from the point of view of APM it gained nothing of practical benefit by its release because the potential sellers to whom it might make an offer to buy were restrained, until the determinatipn in its favour of the

proceedings against it, from unconditional acceptance of such offer. During the period of the restraint SCI was at liberty to make and FCL was at Liberty to accept an unconditional offer to purchase the shares from SCI. From a practical

point of view it would seem futile for it to make such an

offer. And a conditional offer would, to say the least, be

In view of the circumstance that the undertaking of APM was given on the basis of reciprocal undef takings being given by SCI and FCL, it is a serious question whether the imposition of this potentially crippling condition should have been imposed upon APM as a condition of its release, when, in the same proceeding, SCI was unconditionally released from its undertaking and FCL were unconditionally released from their undertaking so far as it related to selling the shares in FCL to SCI. Did the imposition of the condition not do a substantial injustice to APM? It is a reasonable inference that had his Honour not felt that the case for restraining APM from acquiring the FCL shares while the Commission was asserting that such acquisition would contravene s.50 of the Act was irresistible, "he would not have made the order that he did. But as his Honour saw the inevitability of APM being restrained, in any event, from acquiring the shares until the claim under s.50 of the Act was disposed of, the element of injustice in an order the practical effect of which was that APM, could only acquire the

shares from offerees who would accept, an offer on condition

that acceptance took effect only after the prdceedings against APM were concluded and concluded in its favour was correspondingly reduced. But with deference to the view

expressed by his Honour, to approach the problem on the basis

that APM must inevitably be restrained from acquiring the

shares until the claim in relation to s.50 of the Act was

Although there had always been on foot a claim for an

interlocutory relief by way of injunction to restrain APM

that the application for an interlocutory injunction

their undertakings the Commission was satisfied not to seek

During the argument' before Woodward J. Mr. Williamson

"In saying that the commission opposes the release of all the parties, one of course really means by that APM from its undertakings. To maintain that view, we accept as the equivalent to containing that the equivalent and interim injunctions should continue. We equate the existing undertaking with that position. So in saying we would oppose the release, we are in effect saying an injunctive type situation should continue." (p.303) '

"My learned friend, Mr. Williamson, said that he applied for an injunction. If that was the view that your Honour did take in relation to the undertakings, and your Honour was minded to desolve them all, for our part we fail to understand how it could make such an application: he has no material before your Honour; the matter has not been argued; no notice has been give; it

seems, in our submission, rather the expression of a desire than the proper making of an application. The only application that would be before your Honour would be an application by Fibre Containers for the release of these undertakings." (p.317)

4 . "The main point is that the release oF APM from

this undertaking in effect determines any subsequent injunction application because the issues are the same. In practical terms it comes down to the balance of converfience.with the same sort of factors that have beéSn canvassed today, and so for that reason we seek to persuade your Honour that the appropriate course is not to release APM for the reasons that have been put. If, contrary to that submission, your Honour were minded to release APM then our submission in relation to that would be that as part of the present proceedings concerning the re-arrangements of undertakings, that APM should be released on terms, that is conditions attached to the release promise undertaking, ...

That is, to preserve the prospects for effective section 81 proceedings should the need for that

arise. So we see no point in regurgitating an injunction application if the same material has been considered today. We prefer to take that course that I have just outlined. That is, no release, or if there is, on terms, and the question of appropriate terms can be readily advised." (p.323/4 AB)

Thus the question of whether in these proceedings APM should be restrained by way of interlecutory injunction from

taking steps: to acquire the FCL shares was not judicially

investigated. APM had shown every intention of defending the

case brought against it by the Commission. Had the Commission sought an interlocutory injunction there is every reason to believe that APM would have resisted it. It would

have desired to file affidavits and argue the matter in full.

The issue was not raised or debated before the learned Judge. And indeed it cannot be thought to have been a foregone conclusion that had the Commission sought such an injunction it would have been granted. It would have been pu that the bid which APM desired to make was purely as a 'matter of defence against the SCI bid which if successful would have deprived APM of one of its most important customers and led

to a considerable reduction in its :factory production and employment. The significance of s-81 of the Act might have appeared differently had the matter been argued. Obviously a strong case could be made that the loss suffered by APM might be extremely high if it were restrained by injunction and then ultimately succeeded in its defence in these proceedings. In such a situation the existence of the remedy provided by s-8l1 is most relevant. Where the parties

concerned are large responsible entities the viability of the target company and thus the value of its shares would be capable of being maintained by appropriate conditions or undertakings if the shares were acquired before the action of

the Commission against APM was determined. In addition, if

APM acquiréd the shares before the, determination of the

action by the Commission it would 'do so because it was offering to "the shareholders the best price available to the shareholders.On a divestiture, if it became a fact; any loss would be that of APM itself. The operation would have been to the distinct advantage of the shareholders. lf

shareholders refrained from selling to APM in fear of being

found to have aided and abetted a contravention of s.50 of

the Act then to that extent AP's offer would fail. If it was ultimately decided that there was a contravention the question whether those who sold to APM were in fact guilty of so aiding and abetting would remain to be decived. In respect of each individual vendor to APM it, could not be asserted that he would necessarily be in any way knowingly concerned in or a party to the contravention. 'Until the

proceedings between the Commission and APM were concluded

In addition, an interlocutory injunction cbtained by

the Commission carries no undertaking for the payment of damages by the Commission. Whilst this may be approriate in relation to the law enforcement operations of the Commission it cannot be irrelevant on the matter: of the granting of an interlocutory injunction in a matter which is genuinely contested, in respect of which the issue will depend on a judgment in a difficult field after a hearing of some three

months, and where the consequences of the grant of an

interlocutory injunction, later found to have been granted on ?

a wrong assessment of the actual legal position, would be f

irreparable loss. It is to be observed also,that an a ' -

infringement of s.50 does not do immediate harm to any

person. It results merely in a disturbance of what is

considered the desirable state of national "economic

organization which s.50 is designed to protect. If a

proposed acquisition of shares which it is thought may contravene the provisions of the section is carried out and is ultimately shown to be a contravention, irreparable harm is not normally likely to result because s-81 provides the means to correct the organizational disturbance that has occurred. Should an interlocutory injunction preventing the acquisition be granted and it not be established that the

acquisition would contravene s.50, irreparable harm to the entity restrained is almost inevitable. The ordinary and normal flow of business would have been obstructed, and the entity restrained would have been prevented from protecting an important and perhaps vital business interest by competing in the market. In a case like the present where there are two suitors for the shares such interlocutory relief would eliminate competition in the market, a result hardly compatible with the general purposes "of the Act. It would appear, therefore, that although after considering such Matters, and such other factors as might have been raised on an application for an interlocutory injunction, there

certainly were weighty arguments, meet for consideration of

the Court, against the granting of such an application.

The, critical consideration for present purposes is however that the learned Judge did not have such 'arguments pefore him. It would seem therefore, "that the learned Judge

erred in assuming that APM could not escape from a position

in which it was restrained from acquiring the shares or

making a bid while the Commission was claiming that to do so

It would seem that one factor influencing the learned Judge to make the assumption was the ascription py him of a special significance to the view of the Commission that the proposed acquisition by APM would contravene s.50 of the Act. His Honour appears to have treated as, material to the course he took, that the possible detriment to APM, should it remain bound while SCI and FCL were released, was "a direct result of the view responsibly held by the government regulatory authority that it would be in breach of the Act if its takeover proceeded". With all respect, the reference to the responsible character of the Commission and its views were not really relevant to the problem. In relation to Part VI of the Act it is to ascribe too much to the role of the Commission to describe it as a regulatory authority. Its authority is to enforce the law and put its arguments to the

Court in the same way as any other party to litigation. It

is to be noted that the learned Judge himself in In re

Queensland Co-operative Milling Association (1976) 25 FLR 169 sueens sane worcesrstawe neg a ssocnaenct

at 176, in relation to a merger problem, drew attention to t

the circumstance that, there was in his opinion, "no

presumption that any particular finding by the Commission was

correct.". But the practical effect of the order under

appeal is to secure to the Commission the benefits of

interlocutory relief against APM without it having had to

It istto be observed that, within the limits set by

his assumption that APM must inevitably be restrained from ' »

acquiring the shares until the case against it was determined, he did all he could to put APM on equai terms with SCI. However, those limits were, in my opinion, wrongly set. This is important because it went to the question of the assessment of the requirements of justice as between the parties which arose out of "the giving of the undertakings on 23 May 1983. It is clear that SCI gave its undertaking for the express purpose of, as it thought, ensuring that the Commission would pursue APM to judgment effectively removing it as a competitor. The willingness of SCI to regard itself as "inextricably bound up" in action No. VG 84 of 1983 when on 23 May 1983 it gave its undertaking reflected its intense desire to be the only bidder. However, the price it paid was to be party to an arrangemént with APM under which APM gave its undertaking. The genesis of the arrangmenet was in the terms of the original telexes which were before the Court on 23 May 1983. Each of thoge telexes contained stipulations that the undertaking of each party was conditional on similar undertakings being' given by the others. The price which APM paid as part of the arrangement was that it undertook not to proceed with its offer pending the determination of the case.

On ordinary considerations' of fairness, ~ save in special

circumstances, one party could hardly be kept in the position

it had accepted as part of the arrangement and the others be released. It seems that his Honour appreciated this, and would not have proceeded, to maintain, in a practical way, the disabilities endured by APM under its undertaking whilst relieving SCI and FCL had he not assumed APM cour' not, in any event, escape those disabilities. The result was that SCI having been a party to an arrangement which was, in its view, directed to encourage the Commission to proceed against APM, and having in a sense, induced APM" to give its undertaking, has reached a position that it is as free as it

would have been had it remained aloof from action No. VG 84

This appeal relates to an order made by his Honour in the exercise of a discretion. The manner in which an appeal against an exercise of discretion should be determined is set

out in House v. The King (1936) 55 CLR 449 at 505 where Dixon

appellate court consider that, if they had been in the position of the primary .judge they would

have taken a different coursd. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong

principle, if he allows extraneous or irrelevant Matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then' his determination should be reviewed and the appellate court may exercise its own discretion in substitution for

Gibbs C.J., Aickin, Wilson and Brennan JJ in Adam P. Brown

Male Fashions Pty. Ltd. v. Philip Morris Incorporated and

Philip Morris Ltd. (1981) ALJR 548 at 550 stated that not

At a glance

Court

Decision date

Before

Source

Judgment (866 paragraphs)

Cases Cited (4)

Cited By (1)