AXA Asia Pacific Holdings Limited v Direct Share Purchasing Corporation Pty Ltd

STATUTORY FRAMEWORK 7 Chapter 2C of the Act deals with registers. Part 2C.1, which consists of ss 167A to 178 inclusive, deals with registers generally. Relevantly, s 168(1)(a) provides that a company must set up and maintain a register of members. Section 169(1) relevantly provides that the register of members must contain each member's name and address and the date on which the entry of the member's name in the register was made. Sections 169(3)(c) and 169(3)(d) provide that the register must also show the number of shares held by each member and the class of shares held. 8 Section 173(1) relevantly provides that a company must allow anyone to inspect a register kept under Ch 2C. If the register is kept on a computer, the person is to inspect a hard copy of the information on the register, unless otherwise agreed between the company and the person under s 173(1A). Section 1300 deals with the place and times for such inspection. Section 173(2) relevantly provides that a member of a company may inspect a register kept under Ch 2C without charge. Other people (ienon-members) may inspect the register only on payment of any fee up to the prescribed amount required by the company. 9 Section 173(3) requires a company to provide a copy of its register. A company must give a person a copy of its register within seven days if the person: · asks for the copy; and · pays any fee up to the prescribed amount required by the company. However, the Commission may allow a longer period to comply with the request. Unlike s 173(2), s 173(3) draws no distinction between members and other persons. 10 It is the common practice of publicly listed companies in Australia to retain outside agents to provide share registry services and there are very few public listed companies in Australia that maintain their own share registries. The number may be as few as four or five. The two largest organisations that provide such services are Computershare Investor Services Pty Limited (Computershare) and Link Market Services Limited (Link). AXA has retained Computershare, as described below. Section 174(1) of the Act recognises the possibility of a company's appointing an agent to provide such services and relevantly provides that a person who agrees to maintain a register on behalf of a company for the purposes of Ch 2C must make the register available for inspection under Ch 2C and provide the copies required by Ch 2C. 11 It is relevant to notice at this stage two other regimes analogous to Ch 2C for obtaining information concerning the contents of registers maintained by companies. The first is contained in Pt 6.5 of the Act, which consists of ss 631 to 648H and deals with the procedure in relation to takeovers. Section 632 gives an overview of the steps involved in an off-market bid and s 634 gives an overview of the steps involved in a market bid. Each involves the bidder preparing a bidder's statement and sending a copy of the bidder's statement to the target. Under each procedure, the target must prepare a target's statement and send a copy of the target's statement to the bidder. Division 2 deals with the contents of the bidder's statement. 12 Division 3 deals with the contents of the target's statement. Section 641, which is in Div 3, relevantly provides that, if the bidder has given a bidder's statement to the target and requested the target to give the bidder information in accordance with s 641, the target must inform the bidder of the name and address of each person who, at a time specified by the bidder, held securities within the bid class and the type and number of each type of those securities held by the person at the specified time. Section 641(5) provides that the target may require the bidder to pay an amount, not exceeding the prescribed amount, for the provision of the information to the bidder. Under s 641(6) the target must give the information to the bidder no later than the latest of the following times: · the end of the second day after the day on which the bidder requested the information; or · the end of the next day after the day as at which the information must be correct; or · the time when the target receives the amount mentioned in s 641(5). 13 The second analogous regime is to be found in Ch 6C of the Act, which is concerned with information about the ownership of listed companies and managed investment schemes. Relevantly, Pt 6C.1 deals with the giving to a company of information about substantial holdings of shares in the company. Part 6C.2 is concerned with the tracing of beneficial ownership of shares. Section 672DA(1), which is in Pt 6C.2, relevantly provides that a listed company must keep a register of certain information that it receives under Pt 6C.2. 14 Section 672DA(6) provides that the register must contain the name of each holder of shares in the company to whom the relevant information relates, together with the names and addresses of each other person who has a relevant interest in any of the shares in the company and of those who have given relevant instructions in relation to any of the shares. Section 672DA(7) relevantly provides that the register must be open for inspection: · by any member of the company - without charge; and · by any other person, if the company requires the payment of a fee for the inspection, on payment of the fee. The amount of the fee required by the company must not exceed the amount prescribed by the Regulations for the purposes of s 672DA(7). 15 Section 672DA(8) relevantly provides that a person may request a company to give the person a copy of the register. If such a request is made, the company must give the person a copy. If the company requires payment of a fee for the copy, the copy must be given before the end of 21 days after the day on which the payment for the fee is received by the company, or within such longer period as the Commission approves. The amount of the fee required by the company must not exceed the amount prescribed by the Regulations for the purposes of s 672DA(8). 16 The Regulations were made under the Act and prescribe the amounts to be charged by companies for providing information under the three regimes described above. Regulation 1.1.01 provides that the "amount specified in an item in column 3 of Schedule 4 is prescribed in relation to the matter specified in the item in column 2". Schedule 4 to the Regulations contains, relevantly, the following items: Column 1 Column 2 Column 3 Item Matter Amount ($) 1 Inspection of registers for the purposes of: (a) subsection 173(2) or subsection 672DA(7): (i) if a register is not kept on a computer - for each inspection…………………………………………………… 5.00 … (ii) if a register is kept on a computer - for each inspection…………………………………………………… a reasonable amount that does not exceed the marginal cost to the company of providing an inspection 1A Inspection of registers or records for: (a) subsection 271(3) (b) subsection 668A(3); for each inspection …………………………………………………….. 5.00 … 3 Supply of copies for subsection 173(3) or subsection 672DA(8): (a) if a register is not kept on a computer - for each page, or part of a page, not exceeding international sheet size A4 of the copy supplied or, at the option of the supplier, for each 100 words or part of 100 words……………………………………………….. 0.50 (b) if a register is kept on a computer - for each inspection……………………………………………………….. a reasonable amount that does not exceed the marginal cost to the company of providing a copy … 4 Payment for each name and address provided under subsection 641(5)…………………………………………………………………. 0.10

Item 3(b) was drafted somewhat carelessly. It is clear that the word "inspection" in Item 3(b) should be "copy".

THE REGISTRY SERVICES AGREEMENT 17 AXA's share registry is maintained on its behalf by Computershare, pursuant to a Registry Services Agreement entered into on 1 August 2006. By cl 3.1 of the Registry Services Agreement, AXA appointed Computershare, with effect from 1 August 2006, to perform the Services (as defined in cl 1.1) and Computershare accepted that appointment. By cl 3.2, Computershare agreed to perform the Services in accordance with the Performance Standards (as defined) and for the purposes of the Requirements (as defined). By cl 6.1, AXA agreed to pay the Fees (as defined). 18 Services is defined as including the Standard Services, being the registry and plan management services as set out in Sch 1. Under the heading "REGISTRY SERVICES", Sch 1 specifies, inter alia, the following items that involve information concerning all shareholders: Service Activity Measure of Performance Standard 27) Supply copies of the Register or any part thereof within the relevant period Copies of the Register supplied to entitled people in accordance with the Requirements 28) notify AXA of the amounts and payees for all dividend payments including amount of all cheques where AXA has instructed to issue cheques for dividend payments. Accuracy of information provided and compliance with time frame of request 29) Send broadcast emails to shareholders Accuracy of mail out, on day required by AXA

Item 27 is of particular relevance in so far as it would involve satisfying AXA's obligations under ss 173(3), 641(1) and 672DA(8). 19 Requirements is defined as including the Act and the Regulations, as amended from time to time, and the conditions of any instrument of exemption or declaration applicable to AXA under the Act or the Regulations. Requirements also includes the listing rules of the ASX and the constitution of AXA. 20 Fees is defined as meaning the fees for Standard Services set out in Sch 3. Schedule 3 is headed "SCHEDULE OF FEES". Item 1 of Sch 3 is in the following terms: 1. FEES FOR REGISTRY STANDARD SERVICES Note that all pricing is GST exclusive unless stated otherwise. The total fees for all standard services and reports (as specified in Schedule 1) are as follows. Item Unit Price (Per holder)

Registry costs Live holding fixed Redacted Inactive holding $0.50 Nil balance holding $0.50

Disbursements New Holder packs $1.08

Copy of Share Register $0.04 per Holder record read $0.01 per Holder record provided in a CD rom format. In the 4th and 5th contract years only, the pricing of the items in the table above entitled: (1) Standard Service costs - Live holding fixed; and (2) Disbursements - New Holder packs, will be increased by the lesser of: (3) the percentage increase (or 0% if there is a decrease) in the CPI over the most recent period of 12 months for which CPI figures are available as at the beginning of each of those contract years; or (4) 2.50%. The above pricing is not volume dependent. There will be no adjustment if the number of Holders is greater or less than any number indicated prior to the execution of this agreement or changes over the term of this agreement. 21 In the calendar year 2007, AXA paid Computershare approximately $1,300,000 pursuant to the Registry Services Agreement for the provision of share registry services. There was no evidence as to the breakdown or calculation of that figure. 22 Prior to the making of the Registry Services Agreement, an earlier agreement had been in place between AXA and Computershare. During the currency of that earlier agreement, AXA was called upon to produce a copy of the register only twice. Once was at the request of a company associated with Mr David Tweed, who is the principal of Direct. The other time was at the request of the holding company of AXA. The charge made to the holding company was that provided for in the equivalent of Sch 3 to the current Registry Services Agreement. AXA itself has never had occasion to obtain a copy of its register from Computershare.

THE DECISION OF THE PRIMARY JUDGE 23 The question in the proceeding turns on the construction of Item 3(b) in Sch 4 to the Regulations. The amount of $17,195.39 charged by AXA for providing the CD Rom to Direct was calculated in accordance with the formula under the heading "Copy of Share Register" in Sch 3 to the Registry Services Agreement. Direct contends that the amount charged exceeds the amount that would be a reasonable amount for the purposes of Item 3(b) of Sch 4. The primary judge accepted that contention and concluded that a reasonable amount was no more than $250. His Honour therefore ordered AXA to refund to Direct the sum of $16,945.39 and ordered AXA to pay Direct's costs of the proceeding. 24 The primary judge considered that, by reason of the Registry Services Agreement, Computershare had an obligation under s 174 to make AXA's register available for inspection and to provide a copy to any person entitled to receive a copy: it is implicit in the provisions of the Act that the satisfaction by Computershare of its obligations under s 174 was the means by which AXA itself satisfied its duty under s 173 to do those things. 25 The primary judge found that the marginal cost to Computershare of providing a copy of AXA's register was "not great" but that the marginal cost to AXA was "substantial" (see Direct Share Purchasing Corporation Pty Ltd v AXA Asia Pacific Holdings Ltd (2008) 67 ACSR 99 at [17]). His Honour considered that the marginal cost to Computershare of producing a copy of the register on CD Rom was less than $100 but that the marginal cost to AXA was in excess of $17,195.39 (at [20]), notwithstanding that AXA did nothing more than receive the CD Rom from Computershare and give it to Direct. 26 Direct contended before the primary judge that the marginal cost to the company, as referred to in Item 3(b), should be interpreted as the marginal cost to Computershare, as AXA's agent. The primary judge did not expressly make a finding on that issue, but it is tolerably clear that his Honour found that the marginal cost to AXA itself constituted the upper limit of the prescribed fee, since the "reasonable amount" decided upon ($250) exceeded the marginal cost to Computershare ($100). In any event, Direct filed no notice of contention in relation to that issue and did not press the argument on appeal. The focus of the appeal was whether the primary judge erred in concluding that the fee charged was more than a reasonable amount for providing to Direct the CD Rom containing the AXA register. 27 The primary judge considered that, in determining what constitutes a "reasonable amount" to charge for a copy of the register, ordinarily one would begin by examining the market price for CD Roms containing a register. However, his Honour found that there was no evidence of any market for the supply of such a product (Direct (2008) 67 ACSR 99 at [21]). AXA challenged that conclusion on the appeal. His Honour also considered that, in the absence of a market price, the price paid by the supplier of a product can be a useful guide as to what is a reasonable fee. However, his Honour considered that that price would "only be useful if it were arrived at in negotiations where the supplier was attempting to purchase the product at the lowest possible price" (at [22]). AXA contended that his Honour erred in so concluding and that negotiation for the lowest possible price is not the relevant criterion. AXA contended that the only relevant limitation is one designed to counter extravagance or unreasonableness: see Fung v Stocovaz (2007) 14 ANZ Ins Cas 61-730 at [38]. 28 Before the primary judge, AXA also argued, by analogy from Item 4 of Sch 4 to the Regulations, which deals with the amounts to be paid for the provision of names and addresses of shareholders in a takeover context, that the amount charged by AXA was a reasonable amount, since it would be less than half the amount payable under Item 4 for providing what was said to be much the same information. AXA complained on the appeal that his Honour did not deal with that contention at all.

NEGOTIATION OF THE REGISTRY SERVICES AGREEMENT 29 It may well be that there is market for the supply of share registry services such as are provided under the Registry Services Agreement and that both Computershare and Link are participants in that market. Nevertheless, there is nothing to undermine the conclusion of the primary judge that there was no separate market for the supply of copies of share registers such as AXA's. The appellant submitted that the existence of such a market was evidenced by the fact that the price charged to AXA was consistent with that charged to its other clients. The answer to that submission, however, is that Computershare's actions in charging its clients a particular price does not of itself establish that it was the market price or that it was shaped by competitive market forces. While the provision of copies may be an incident of the overall services provided by a participant such as Computershare or Link under a registry services agreement, the fee payable for the provision of such copies, as an incident of the provision of overall registry services, is no indication of the reasonableness of that fee. In that sense, the second question is very much related to the first that his Honour decided. That is to say, in determining the reasonableness of the price charged by a supplier, the price paid by the supplier to acquire the product may have some relevance, but only if the price was arrived at by arm's length negotiation. 30 Further, the relevance, to the question of reasonableness, of the charge prescribed by Item 4 in Sch 4 to the Regulations will depend very much upon the extent to which the charge made by Computershare to AXA for the provision of a copy of the register could be said to have been the subject of any real arm's length negotiation. 31 It is necessary, therefore, to examine the evidence concerning the negotiation of the terms of the Registry Services Agreement. Evidence in that regard was given by Mr Kevin Keenan, who is the secretary of AXA, and Ms Karen Guyer, who is the state manager for Victoria for Computershare. Both were cross-examined, but no question of credit arose and their evidence can be taken at face value. 32 While Mr Keenan participated in the tender process that led to the Registry Services Agreement, his role was not concerned with the dollar figure calculations. His role was more concerned with making sure that all the services were covered, the quality of services was satisfactory and the performance standards were correct. Mr Keenan set fairly broad parameters. Although his instructions to the procurement team were that they needed to get the costs down, his evidence was that he did not remember giving any instruction to the procurement team to lower the price for providing a copy of the register. The AXA procurement team consisted of about five people. Mr Keenan dealt directly with Mr Chander Singh, a member of the procurement team who conducted the negotiation, however Mr Singh did not give evidence. 33 AXA sought and obtained tenders from both Computershare and Link. The fees and range of services proposed by each tenderer were similar, however Computershare was ultimately successful because AXA's procurement team considered that the bundle of services, the service levels, the service quality, the terms and pricing offered were superior to those offered by Link. 34 Mr Keenan explained that the fees payable for providing a copy of the share register in a CD Rom format are over and above the fees payable by AXA to Computershare for the provision of the registry standard services in Sch 1, calculated as provided for by Item 1 of the table in Sch 3. That is to say, the fees payable for providing a copy of the share register are additional to the fees payable in accordance with the formula in the table in Sch 3. However, AXA's intention was to pass on those fees to any person who requested a copy of the share register. 35 Mr Keenan accepted that, when the Registry Services Agreement was being negotiated, one of the circumstances that was under consideration was where someone in the position of Mr Tweed or his companies was seeking details of the register in order to make offers to shareholders of AXA. At the time of negotiating the agreement, Mr Keenan was aware that Mr Tweed had requested copies of the register in the past and the purpose for which he had done so. He admitted that AXA took an unfavourable view of Mr Tweed and that it had written a letter to its shareholders warning them of his conduct. 36 Ms Guyer was a member of the Computershare team involved in the negotiation of the Registry Services Agreement in 2006. Ms Guyer understood that all aspects of the proposed arrangement were up for negotiation, notwithstanding that there was already in place an agreement between AXA and Computershare. Ms Guyer said that, because AXA engaged in a tender process, it was in Computershare's interest to produce the most attractive package for AXA that suited both parties. Ms Guyer said that Computershare saw its role as very much acting in accordance with its client's instructions. Accordingly, if a client instructed Computershare to make it difficult for someone like Mr Tweed or his companies to obtain or to use a copy of a register, Computershare would, within reason, carry out that instruction. 37 Ms Guyer admitted also that, at the time of conducting the negotiations, Computershare knew about Mr Tweed's practice of obtaining company registers for the purpose of making unsolicited offers to buy shares, and that Mr Tweed had done so in relation to AXA. Ms Guyer stated that she knew the "industry as a whole" viewed Mr Tweed's conduct unfavourably, but was unable to comment on AXA's views specifically. Later in her evidence, though, Ms Guyer said that she knew AXA had, in the past, requested Computershare to send letters to AXA's shareholders warning them of Mr Tweed's offers. 38 Ms Guyer said that, although AXA had never requested a copy of the entire register for itself, if it did so, Computershare would make the same charge as it would make for providing a copy of the register to a third party. Ms Guyer explained how the charge for providing a copy of the share register operated. The register contains details of all persons who have ever held shares in AXA. To produce the current register, it was necessary for the computer to access the entry for each present and each former shareholder to determine whether that person was still the holder of shares. The fee was 4 cents for each such entry. In addition, there was a charge of 1 cent for each person who was still a current shareholder. Thus, the charge was 5 cents for every current shareholder and 4 cents for every former shareholder. 39 Ms Guyer had no personal recollection of how that fee was arrived at, but said that it was not inconsistent with fees that Computershare charges all its clients. Computershare provides similar services to some 1200 companies and the fees charged to AXA are within the standard range of what Computershare charges to its clients. 40 Ms Guyer said that it was not suggested, in the course of the negotiations, that Computershare should charge more to AXA for providing a copy of its share register than it would charge someone else. She said that the negotiation was a commercial one in circumstances where Computershare was up against its major competitor. Computershare was very keen to retain AXA as a client and there was no hint of charging AXA more than it would charge any other client for that service. On the other hand, Ms Guyer was aware during the negotiation that, whatever the cost for that service, it would be passed on to the third party asking for a copy of the share register. She was aware, however, that the charge would be made by Computershare to AXA and that Computershare would look to AXA for payment. 41 When asked whether the amount that Computershare charged AXA for providing a CD Rom represented, for the most part, pure profit to Computershare, Ms Guyer said that there was an element of cross-subsidisation. She said that it would be necessary to look at the entire revenue that Computershare derived from the Registry Services Agreement and Computershare's costs in providing the services in their entirety, before determining whether the amount charged for the provision of a copy of the share register was pure profit.

RELEVANCE OF THE FEE CHARGED BY COMPUTERSHARE 42 Clearly enough, the Registry Services Agreement as a whole resulted from arm's length negotiation between AXA and Computershare. However, in those negotiations, AXA had no particular interest in striking a fee for giving a copy of its register of shareholders at a low level. The evidence establishes that, during the negotiations, both parties knew that there was little prospect of AXA ever having to cover personally the cost of acquiring a copy of the register. Both parties knew that, unless AXA itself requested a copy (which, to their knowledge, had never occurred) whatever cost was specified in the agreement would be passed on to a third party. There was, in fact, good reason for AXA to favour a higher fee rather than a lower fee for giving a copy of its register, since that would tend to discourage third parties, such as Direct, from seeking information about shareholders. It was clear from Mr Keenan's evidence that AXA had an unfavourable view of Mr Tweed's conduct and that a request by Mr Tweed was one of the circumstances envisaged when negotiating the contract. 43 There was no effective contradictor of Computershare in the negotiations between Computershare and AXA in relation to the fee for providing a copy of the share register. AXA had no particular interest in its negotiations with Computershare in reducing the fee payable for providing a copy of its register; if anything, it had an interest in increasing that fee. That, of course, was the object of Computershare in the negotiations. Computershare had little or no incentive to discount the fee, since it knew that, in most cases, AXA would be able to pass on the cost to the party requesting a copy of the register. It is reasonable to infer that Computershare knew of AXA's views regarding Mr Tweed since it knew that AXA had written a letter to shareholders warning them about his conduct. In that sense, both parties were in the same interest so far as the negotiation of that aspect of the fee is concerned. 44 An alternative explanation for the high fee could be that Computershare was using it to subsidise the cost of providing the Standard Services to AXA, with a corresponding reduction in other fees charged to AXA under the Registry Services Agreement. The evidence shows, however, that there was so little exercise by third parties of the right under s 173 that any cross-subsidisation would be likely to be negligible in the overall arrangement between AXA and Computershare. 45 The considerations just outlined demonstrate that the primary judge was quite correct in concluding that the amount charged by Computershare to AXA under the Registry Services Agreement gives no guidance in deciding what would be a reasonable amount for AXA to charge to a person for giving that person a copy of its share register pursuant to s 173. It is in that context that we understand the primary judge's comment that the amount of the charge would be useful only if it were arrived at by negotiations where AXA was attempting to acquire the service at the lowest possible price. In that context, his Honour's comment was unexceptionable. 46 It is of course true that a "reasonable amount" need not be the "lowest possible price" (see Fung (2007) 14 ANZ Ins Cas 61-730). However, the learned primary judge did not fall into the error of finding that it had to be. Rather, his Honour held that the fee had to have been negotiated in circumstances where AXA was attempting to secure the lowest possible price (Direct (2008) 67 ACSR 99 at [22]). It is a fundamental principle of tort law that the plaintiff is entitled to be restored, so far as money can, to the position he was in before the defendant's negligence (Fung (2007) 14 ANZ Ins Cas 61-730 at [11]), however there is no such overriding principle in the context of s 173 of the Act. 47 The conclusion, that the invoice did not provide a useful guide to a "reasonable amount", is also an answer to AXA's complaint about the finding of the primary judge that there was no market for the provision of a copy of AXA's share register. Clearly enough, there was a market for the provision of share registry services and there was competition in that market that resulted in the fees charged by Computershare referred to in the table in Sch 3 to the Registry Services Agreement. However, the provision of a copy of AXA's share register in satisfaction of its obligations under s 173 is no more than an incident of the provision of share registry services. His Honour made no error in concluding that there was no market for providing a copy of AXA's register as such.

A REASONABLE AMOUNT 48 It is tolerably clear that the drafter of Sch 4 to the Regulations did not have in contemplation the possibility that a company may enter into an arrangement with a third party, whereby the company agreed to pay an artificially inflated and unrealistic fee for having a copy of its register provided by the third party. Where a company maintains its share register itself, the amount charged is not permitted to exceed the marginal cost to the company of giving a copy of the register. It is reasonable to infer that, if AXA had maintained its own share register, the marginal cost of providing a copy would not have been more than the amount the trial judge found to have been the marginal cost to Computershare. 49 The fee charged by AXA bore no relation to the marginal cost to Computershare of the labour and materials involved in providing a copy of the register. The program and any other infrastructure necessary for producing a copy must have been in place already. The evidence showed that the cost to Computershare of preparing a copy of the AXA register involved the cost of somebody's time to do the report, the cost of the system time to do the data extraction, the cost of downloading the report and the cost of purchasing and putting the report onto a CD Rom. Ms Guyer accepted that that cost would be in the vicinity of $150. Even if it be the fact that the marginal cost to AXA in the present case was in the order of $17,000, as the primary judge concluded, in the circumstances that was no necessary indication of what was a reasonable amount for providing a copy. 50 If the conclusion of the primary judge is correct, there is a huge differential between the cost of providing a copy of the register pursuant to s 173, on the one hand, and the cost of providing identical information for the purposes of s 641, in a takeover context, on the other hand. It is difficult to see a rationale for such a significant difference. Certainly, the time frame within which information is to be provided under s 641 is shorter than that contemplated by s 173 and s 672DA. However, that difference could not possibly justify such a differential in cost. 51 Nevertheless, whatever may be the rationale for the arbitrary charge provided for in the takeovers context, it cannot explain the language of Item 1 and Item 3 in referring to "a reasonable amount that does not exceed the marginal cost to the company". A reasonable amount for providing a copy was no greater than the fee of $250 arrived at by the primary judge.

CONCLUSION 52 No question has been raised concerning the nature of the relief granted by the primary judge. The primary relief claimed by Direct was a declaration that AXA contravened s 173, by requiring Direct to pay an amount exceeding the prescribed amount, as a condition of providing Direct with a copy of AXA's register. It is by no means clear that AXA did in fact contravene s 173(3). 53 The requirement of s 173(3) is that the company must give a person a copy of the register within seven days, if the person asks for the copy and pays any fee required by the company, up to the prescribed amount. In the present case, it is by no means clear that AXA imposed a condition upon providing the register to Direct. Direct volunteered $20,000 but asked for a refund. AXA declined to give the refund to which Direct may have been entitled. That may have given rise to a right to a remedy on the part of Direct. However, it is difficult to see how there was a contravention of s 173(3). It therefore follows that there may have been no basis for an order under s 1324 of the Act for repayment of any amount by AXA to Direct. 54 However, the relief granted by the primary judge was simply an order that AXA repay an amount to Direct. The precise basis upon which Direct would be entitled to that remedy has not been the subject of argument. Nevertheless, there seems to be little doubt that it would have been entitled to that relief on some basis or another. It follows that the appeal should be dismissed. AXA should pay Direct's costs of the appeal. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Black and the Honourable Justice Emmett.

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

AND: DIRECT SHARE PURCHASING CORPORATION PTY LTD

REASONS FOR JUDGMENT GREENWOOD J: 55 The question to be determined in this appeal is the proper construction of a provision of Sch 4 of the Regulations made under the Act which determines the amount, or at least the maximum amount, that might be charged to a person for the supply by a company of a copy of the company's register of members, to that person. I have had the benefit of reading the draft reasons for judgment of the Chief Justice and Justice Emmett and generally agree with their Honours' observations. I adopt their Honours' statement of the background facts and make these additional comments. 56 Section 173(1) of the Act casts an obligation on a company to allow anyone to inspect a register kept under Ch 2C of the Act which includes a register of members. The register might be a physical register capable of inspection. If however the register is kept on a computer, that is, kept electronically, the person seeking inspection inspects a hard copy of the information kept on the register unless the person and the company agree that access to the register will be given by computer. Section 173(3) of the Act provides that a company must give a person a copy of the register within seven days if the person asks for the copy and pays any fee required by the company, up to a prescribed amount. 57 Regulation 1.1.01 of the Regulations provides that the amount specified in column 3 of a Schedule to the Regulations (Sch 4) is the "prescribed amount" in relation to the activity described in column 2 of that Schedule in respect of a particular item in the Schedule. One such item, Item 3(b), provides that if a register of members of a company is kept on a computer, the amount that may be charged for the supply of a copy of the register as contemplated by s 173(3) of the Act is: a reasonable amount that does not exceed the marginal cost to the company of providing a copy. 58 Item 3(b) is set out in its entirety at [16] of their Honours' judgment. Although I have described Item 3(b) as specifying an amount for the activity of supplying a copy of the register kept on computer, Item 3(b) mistakenly describes the fee as applicable to "each inspection" of the register rather than each "copy" of the register supplied, for the purposes of s 173(3). The drafting of Item 3(b) failed to properly take account of the relationship between s 173(3) and the activity of making a copy as contemplated by that subsection rather than inspection as contemplated by s 173(1) and s 173(2) of the Act. 59 The evidence before the primary judge was that virtually every public company listed on the ASX (but for four or five companies) seeks to discharge its obligation to maintain a register of members by contracting with a share registry service provider to maintain a register on behalf of the company. In this case, the appellant, AXA, contracted with Computershare to provide it with that service on the terms of a contract described as a Registry Services Agreement dated 1 August 2006. 60 Section 174 of the Act provides that a person, such as Computershare, who agrees to maintain a register on behalf of a company for the purposes of Ch 2C of the Act, must make the register available for inspection under Ch 2C and must provide copies of the register as required by Ch 2C. In this case, the respondent, Direct, by its agent, requested AXA to provide a copy of its register in a particular electronic format and enclosed with the letter of request a cheque in the sum of $20,000. AXA provided the respondent with a CD Rom, in a different format (uncontroversially for present purposes), containing the information on the register kept electronically by Computershare. The appellant charged a fee for the supply of the CD Rom of $17,195.39 and refunded $2,804.61 to Direct. AXA charged that fee for the supply of a copy of the register on CD Rom because that was the fee Computershare charged it, consistent with the terms and conditions of the Registry Services Agreement. Under the Registry Services Agreement, Computershare agreed to supply copies of the register it maintained for the appellant, to "entitled people" for the purposes of the Act, the Regulations, the Rules of the ASX and the constitution of AXA. 61 The primary judge found that although the Registry Services Agreement entitled Computershare to charge AXA a fee of $17,195.39 (calculated according to each line of particular classes of data (current and former members of AXA) interrogated by the software) the actual cost incurred by Computershare of producing a copy of the register on CD Rom represented something in the nature of Computershare's avoidable cost of producing that additional unit of production, otherwise described as a copy of the register. The cost of components were the cost of a person's time to run a computer report of current members, the cost of system time to interrogate and download data comprising entries of current members into a report and the cost of purchasing and formatting the data onto a CD Rom. The evidence of Computershare was that those costs amounted to approximately $150 in the aggregate. The primary judge found that the marginal cost to Computershare of producing the CD Rom was less than $100. However, the marginal cost of AXA, so the primary judge found, in bringing into existence as a supplier and supplying the CD Rom to Direct was something slightly greater than $17,195.39. That result arose because the marginal cost to AXA was the avoidable cost of producing Direct's copy of the register. Had AXA notionally elected (absent statutory obligation) not to supply that unit of production represented by Direct's copy, it would have avoided Computershare's contractual outsourcing charges for making the copy and those AXA consequential costs directly related to on‑supply of that copy to Direct. 62 Section 173(3) contemplates that Direct might ask AXA for a copy of its register. AXA must supply it if Direct pays it the prescribed amount for providing a copy. AXA has however put it out of its power to do so itself. It cannot make a copy of its electronic register as it does not maintain the register. If it did so, the marginal cost to AXA of producing a copy on CD Rom for supply to Direct would be approximately the same marginal cost Computershare incurs in producing a copy, on the evidence. Although AXA cannot give a person a copy of its register by making and supplying a copy as it has put it out of its power to do so, Computershare by operation of s 174 of the Act must provide all copies of the register required to be supplied by operation of Ch 2C having regard to Computershare's contractual obligation to maintain the register on behalf of the company under the Registry Services Agreement. AXA discharges its obligation under s 173(3) by Computershare discharging its obligation to provide copies "required by this Chapter". The copy required by Ch 2C was a copy AXA was required to give to Direct. Section 174(1)(b) cast a statutory obligation on Computershare to discharge that requirement by supplying the copy required to be supplied to Direct notwithstanding that Computershare would do so by physically giving the CD Rom to AXA to give to Direct. 63 Since Computershare assumed that obligation under the Registry Services Agreement and, by reason of the services under the agreement, s 174(1)(b) cast a statutory obligation on Computershare to provide the copy required by the Act, the question that arises is what meaning is to be given to the words of the fee schedule at Item 3(b) that prescribe the amount payable by Direct for the supply of the copy, that is, "a reasonable amount that does not exceed the marginal cost to the company of providing a copy" (emphasis added). 64 That formulation is expressly linked by Item 3(b) to s 173(3) which contemplates supply by AXA itself in the sense of a copy made and given by AXA upon request within the limits of the subsection. There is no reference to s 174 in Item 3(b) of the prescribed fee that might be payable having regard to a copy made by an agent of the company and thus having regard to the intersection between s 173(3) and s 174 of the Act. Had AXA maintained its register, the marginal cost of making a copy would have been approximately $100. The fee prescribed would be a reasonable fee that did not exceed $100. Item 3(b) does not expressly deal with an amount referable to the making of a copy by a person who has agreed to maintain a register for another and who has, by doing so, assumed an obligation to provide copies of the register required to be made and supplied by Ch 2C of the Act. It seems to me that ss 173(3) and 174(1)(b) of the Act require Item 3(b) of Sch 4 to the Regulations incorporated by reg 1.1.01 in an attempted expression of the "prescribed amount" payable for the making of a copy to be construed as: a reasonable fee that does not exceed the marginal cost to the company of providing a copy and where produced by a person in the circumstances of s 174 of the Act, a reasonable fee that does not exceed the marginal cost of that person of providing a copy. 65 Such a construction of Item 3(b) gives effect to the statutory intention reflected in ss 173 and 174 of the Act. It does not assume, impermissibly, that the marginal cost of AXA is the marginal cost of Computershare. It is not. The marginal cost to AXA is at least, as found, $17,195.39. However, the relevant marginal cost when the true position is that the copy was made by a s 174 person, in discharge of its statutory obligation, is the marginal cost of that person. The fee in such a case is to be a reasonable fee that does not exceed the marginal cost of the s 174 person incurred in providing the copy. 66 The respondent on appeal sought to say that the marginal cost of AXA in providing a copy of the register to Direct ought to be regarded as the marginal cost incurred by Computershare. However, the finding of fact as to AXA's marginal cost was not challenged and no notice of contention was put on by the respondent. In that sense, it seems difficult to identify a basis upon which it can now be contended that AXA's marginal cost of providing a copy of the register is to be treated as the marginal cost actually incurred by Computershare in producing the copy. However, a construction of the language contained in a column of a schedule (referable to an item that mistakenly describes the relevant activity (Item 3(b))) to a regulation (intended to bear a relevant relationship to the primary provisions of the Act dealing with the topic of making copies as required by Ch 2C of the Act), that treats the relevant marginal cost as the marginal cost of the agent when the copy is produced by the agent in discharge of the particular statutory obligation under s 174(1)(b), does not substitute the agent's marginal costs for that of the company. It treats the agent's marginal cost as the relevant marginal cost having regard to the relationship between ss 173(3) and 174(1)(b) of the Act. 67 If this more purposive construction of Item 3(b) is not consistent with the statutory purpose derived from the conjunction of s 173, s 174 and the Regulations, I nevertheless agree with the Chief Justice and Justice Emmett that a reasonable fee, for the reasons they indicate, for the supply of a copy of the register on CD Rom to Direct is of the order of $250. 68 I adopt their Honours' observations in relation to the other matters addressed by their Honours in the joint judgment. 69 It follows that the appeal must be dismissed with costs. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of Justice Greenwood.

Associate: Dated: 20 February 2009 Counsel for the Appellant: Mr J G Santamaria QC and Dr M J Collins

Solicitor for the Appellant: Corrs Chambers Westgarth

Counsel for the Respondent: Mr I G Waller SC and Ms G King-Siem