Castlemaine Tooheys Ltd v South Australia

g him to refuse an application by Janola Dale Pty Ltd ('Janola') to acquire the business and real estate known as the Dreamworld Theme Park, Coomera, Queensland; secondly, an injunction restraining him from approving that application; and thirdly, by way of interlocutory relief, an injunction, pending the hearing of the application, restraining the Treasurer from approving Janola's application. Section 39B(1) of the Judiciary Act 1903 provides: " The original jurisdiction of the Federal Court of Australia includes jurisdiction with respect to any matter in which a writ of mandamus or prohibition or an injunction is sought against an officer or officers of the Commonwealth. " It is common ground that the Treasurer is "an officer of the Commonwealth" for the purposes of that section. I am presently concerned with the application for interlocutory relief. By notice of motion filed also on 27 December 1995, the applicant sought an order that, pending the hearing of this matter, an injunction issue restraining the respondent, Mr Willis, from approving an application by Janola to acquire the business and real estate known as Dreamworld Theme Park, Coomera, Queensland. The time within which that motion was to be served was abridged. On an application for interlocutory relief, an applicant must show, first, that there is a serious question to be tried and, secondly, that the balance of convenience favours the granting of the injunction. In Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148, Mason ACJ, as he then was, said at 153: " The principles governing the grant or refusal of interlocutory injunctions in private law litigation have been applied in public law cases, including constitutional cases, notwithstanding that different factors arise for consideration. In order to secure such an injunction, the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction. " It may be that the second matter referred to by his Honour is merely an aspect of the third. See also Epitoma Pty Ltd v AMIEU (1984) 54 ALR 713 at 739-740, and the judgment of Cooper J in the Full Court of the Supreme Court of Queensland in Active Leisure (Sports) Pty Ltd v Sportsman's Australia Limited [1991] 1 Qd R 301 at 311. When the application for interlocutory relief was called on last Friday, 29 December 1995, application was made pursuant to O 6 r 8(1)(b) by Janola and by Kenneth John Stout and Ross Andrew Duus to be joined as respondents to the principal application. Mr Stout and Mr Duus are the receivers appointed by the mortgagee of Dreamworld, the Independent Order of Odd Fellows of Victoria Friendly Society ('IOOF'). As Janola and the receivers were clearly interested in the grant of interlocutory relief, as well as the relief claimed in the principal proceedings, they became, respectively, the second and third respondents in these proceedings. The affidavit in support of the application for, inter alia, interlocutory relief, was by Mr Lindsay Schmalkuche, a director of Leisure. Leisure was incorporated on 10 November 1995 with a paid up capital of $2. Mr Schmalkuche was appointed a director of Leisure on 22 December 1995; the other directors are Ross Palmer and his wife, Sue Palmer, and the ultimate controller of Leisure is Mr Palmer, an Australian citizen. Dreamworld is a major tourism and leisure theme park, situated at Coomera near the Gold Coast, which comprises a main tourism and leisure park of approximately 30 hectares and a large amount of surplus land adjacent to the main park, which is undeveloped and vacant, of approximately 52 hectares. Dreamworld is owned by Dreamworld Productions Pty Ltd (Receivers and Managers appointed) and, as I indicated, Mr Stout and Mr Duus of Messrs Ernst & Young, chartered accountants, were appointed by IOOF, the mortgagee of Dreamworld, to be receivers. On 13 November 1995, a contract was executed between the receivers and Janola. That contract was unconditional except in that it required the "approval" of the Financial Investments Review Board. In the affidavit of Paul Geoffrey Newman, solicitor of Feez Ruthning, he says: " The Contract is conditional upon Janola Dale obtaining approval by the Completion Date of the Treasurer under the Foreign Acquisitions and Takeovers Act for the acquisition by Janola Dale of Dreamworld. " I should say that both in the principal application and in the notice of motion for interlocutory relief, as well as in the paragraph to which I have just referred, there is reference to obtaining the "approval" and "refusing to approve" an application. The significance of that description will appear later. The original completion date for the contract between the receivers and Janola was 16 December 1995, but it was extended until 14 February 1996. Under clause 5(4) of the contract, Janola is obliged to pay interest on $76,141,502 at the rate of 10% per annum. That is, at a rate of $20,860 per day from 16 December 1995 until completion is effected. The interest is payable on completion. On 20 November 1995 an application was lodged with the Foreign Investment Review Board seeking "approval". Dreamworld has been marketed extensively both within and outside Australia, both prior to and following the appointment of receivers on 20 July 1990. That marketing includes marketing by merchant bankers, Capel Court, on behalf of a Mr Bruce Jenkins who was formerly associated with Dreamworld; marketing by merchant bankers Wardley James Capwell on behalf of the receivers between August 1991 and September 1993; an option granted to a major listed tourism company in late 1993; and an agreement to sell to a company to be floated which was frustrated by litigation by a former owner and disclosure demands placed upon the float company by the Australian Securities Commission. In addition there have been, I accept, frequent approaches by interested parties between October 1994 and June 1995 being inquiries both from Australian interests and interests of overseas parties. The contract executed between Janola and the receiver met the criteria of the IOOF Board and has the full support of the receivers and of that Board. By letter of 29 November 1995 the Victorian Financial Institutions Commission gave its support to the purchase of Dreamworld by Janola noting that it was imperative that a sale be completed before the Commission could agree to lifting of freeze conditions on redemption of investment bonds held by three of the IOOF benefit funds, a freeze which impacted on the ability of in excess of 20,000 members to access their funds. On 6 December Janola responded to reports said to emanate from the Queensland Premier which referred to the extensive marketing of Dreamworld which had occurred both before and after the appointment of the receivers in 1990; which confirmed Janola's intention to retain Australian management and to enhance the Australian theme of Dreamworld; and which confirmed the intentions Janola had in respect of the excess land which forms part of the sale. Importantly, on Wednesday 8 November 1995, the receivers had written to Mr Paul Rogers of InterFinancial Limited who were acting on behalf of Mr Palmer, controlling interest of Leisure. At that time the receivers advised Mr Rogers that IOOF would accept a contract "which is unconditional as to due diligence and finance" and that the first party that could provide the same and meet all other criteria, including payment of a non-refundable 10% deposit, would be the preferred purchaser. On 20 December 1995 the Treasurer, Mr Willis, issued a press release headed 'Foreign Investment Proposal: Dreamworld Theme Park, Coomera Queensland'. It said: " The Government has decided to issue an interim order under subsection 22(1) of the Foreign Acquisitions and Takeovers Act 1975 (FATA) which will extend the examination period for a proposal by Janola Dale Pty Ltd (Janola Dale) to acquire the business known as the Dreamworld Theme Park, Coomera, Queensland. 2. Janola Dale is a Victorian incorporated company ultimately owned by KPL Holdings Private Ltd (KPL) owned by Mr Kua Phek Long, a Singaporean resident. KPL is an investment holding company which is engaged primarily in property development and investments in Singapore, China and Thailand. 3. The proposal by Janola Dale involves the acquisition of Dreamworld which includes the theme Park and 57 hectares of excess land. 4. Dreamworld was placed into receivership in July 1990 by the Independent Order of Odd Fellows of Victoria Friendly Society with Ernst & Young appointed as Receivers and managers. Dreamworld has been extensively marketed both nationally and internationally prior to and subsequent to its receivership in July 1990. 5. The interim order is being issued to allow the Australian interests of Mr Ross Palmer until 29 December 1995 the opportunity to pursue a contract for the purchase of Dreamworld should the sale to Janola Dale not proceed. " That paragraph is particularly important. The press release continues: " 6. However, if Mr Palmer has not entered into a contract by 29 December 1995 to purchase Dreamworld on at least the same terms and conditions as the Janola Dale contract, the Government will approve Janola Dale's proposal to acquire Dreamworld subject to the following, in broad terms, conditions: . Janola Dale completes feasibility studies concerning the development of the excess land by 31 December 1996 and commences continuous development within twelve months of receipt of the necessary planning approvals. Otherwise the excess land, or part thereof, as the case may be, is to be sold within twelve months irrespective of price; and . Janola Dale provides advice on completion of the project notifying the completion date and actual development expenditure. This advice should be provided within three months of completion. " I will refer to the Foreign Acquisitions and Take-overs Act (1975) as 'the Act'. Leisure is an "Australian corporation" for the purposes of the Act, and Janola is a "foreign person" pursuant to ss 19(1)(a) and 21A(1)(a) of the Act. The provisions of ss 19(2) and 21A(2) are central to these proceedings. Section 19(2) provides: " Where the Treasurer is satisfied that: (a) a person proposes, or persons propose, to acquire assets of an Australian business carried on solely by a prescribed corporation or prescribed corporations; (b) the proposed acquisition or acquisitions would have the result that: (i) in the case of a business not controlled by foreign persons - the business would be controlled by foreign persons... and... (c) that result would be contrary to the national interest; the Treasurer may make an order prohibiting the proposed acquisition or all or any of the proposed acquisitions, as the case may be. " Section 21A(2) provides: " Where the Treasurer is satisfied that: (a) a foreign person proposes to acquire an interest in Australian urban land; and (b) the proposed acquisition would be contrary to the national interest; the Treasurer may make an order prohibiting the proposed acquisition. " The Act describes itself as: " An Act relating to the foreign acquisition of certain land interests and to the foreign control of certain business enterprises and mineral rights. " Section 22 provides that: " (1) For the purpose of enabling due consideration to be given to the question whether an order should be made under subsection ...19(2)... or 21A(2), the Treasurer may make an order of the kind that he would be empowered to make under that subsection if it were applicable. (2) An order made under this section has effect for such period, not exceeding 90 days after the coming into operation of the order, as is specified in the order. " Section 23 provides that: " The Treasurer may at any time make an order revoking an order made under section ...19,...21A or 22..." Section 24 provides that: " An order made by the Treasurer under this Part shall be made in writing signed by him, shall be published in the Gazette within 10 days after the date on which it is made, and comes into operation...[except in the case which is not presently applicable]...on the date of the publication. " That provision highlights the difference between orders made under the Act and the contents of press releases which have been issued. Section 25(1A) provides: " Where the Treasurer is empowered to make an order under subsection 18(2), 19(2), 20(2), 21(2) or 21A(2) in relation to the acquisition, agreement, arrangement, issue or alteration specified in the notice, the Treasurer may, instead of making such an order, decide that the Commonwealth Government has no objection to the proposal specified in the notice, provided that the person or corporation complies with conditions that the Treasurer, when making the decision, considers necessary in order that the proposal, if carried out, will not be contrary to the national interest. " The effect of that is that the Treasurer may impose conditions which, in his opinion, he considers necessary so that a proposal will not be contrary to the national interest. Section 25(2) provides that: " If 30 days pass after the day on which the Treasurer receives the notice and by the end of that period: (a) the Treasurer has not: (i) made a decision under subsection (1A) in relation to the proposal specified in the notice, being a decision of which advice is given in writing to the person or corporation before the end of 10 days after the day on which the decision is made; or (ii) made an order under this Part in relation to the acquisition, agreement, arrangement, issue or alteration specified in the notice, being an order published in the Gazette before the end of 10 days after the day on which the order is made; and (b) the person or corporation has not carried out the proposal; the Treasurer is not empowered: