He certainly did not appear to favour any prima facie rule and Bugle Press was not discussed in this context.
(e) Analysis of relevant textbooks - Australian
544 The Australian textbooks available at the relevant time were, with one exception, not as clearly condemnatory of expropriation as Gower or Pennington, or so it seems. None of the earlier detailed annotations to companies legislation, Spender & Wallace on Company Law and Practice (1937), based on the N.S.W. Companies Act 1936, O'Dowd & Menzies on Victorian Company Law and Practice (1940) and Wallace & Young on Australian Company Law and Practice (1965, with 1970 supplement), could be said to have been current at the relevant time, the latter work consisting of detailed and valuable annotations to the uniform Companies Acts of 1961. It is sufficient to say that none had suggested that expropriation was in itself a ground for invalidating a resolution of shareholders. Bugle Press was cited by Wallace & Young It is referred to on p.563 of the text but not in the table of cases. (and in its supplement) but only in relation to takeovers. Although Wallace & Young were aware of Gower and referred to it on occasions, their discussion of Allen v. Gold Reefs did no more than briefly summarise the leading cases and refer the reader to Dixon, J.'s judgment in Peters. Peters at 502-513. See the authors' annotation of s.31 at 124-126. Sidebottom and Shuttleworth were preferred and Dafen was noted as "disapproved". At 125.
545 Although originally (1974) only a students' text, Professor Ford's Principles of Company Law (now "of Corporations Law") has expanded over the years to become the leading textbook on corporations law in Australia and has since 1995 also taken the form of a two-volume loose-leaf service under similar but not always identical editorial control to that of the continuing one-volume student text. At the relevant time the 6th edition (1992) was still current, edited by Ford & Austin and entitled "Ford's Principles of Corporations Law".
546 In that edition, as in earlier editions, although the alteration of articles was discussed in para.[212], the reader was referred to Chapter 17 on "Members Remedies" for the author's detailed discussion of the limitations on the voting power of the majority. See paras.[1703]-[1708]. Of course, in the 8th and 9th editions and in the loose-leaf edition these matters have been substantially rewritten since Gambotto, especially as to expropriation: see now esp. para.[11,070]. General law and statutory remedies were clearly distinguished. It was then said that the majority are not under any fiduciary obligation with respect to voting on alterations, referring to the judgment of Dixon, J. in Peters Para.[1703] at pp.590-591. and concluding At 591. that: "The essential notion is action beyond the scope of the power. The terms of the power imply an obligation not to use it for an ulterior purpose."
547 In dealing with abuse of power Ford first noted that "the onus of showing an abuse of power rests on the person alleging it", relying on Winthrop Investments. Para.[1703] at 592. There followed a relatively detailed discussion of the authorities, especially the appellate decisions in Sidebottom, Shuttleworth, Peters and Greenhalgh. As to expropriation the author cautiously used these terms: At 593. "Alteration of articles to permit a majority to expropriate the shares of a minority would normally be an abuse of the power of alteration … But not every alteration to introduce expropriation is invalid." The first sentence had been altered from what appeared in the 4th ed. (1986) where it commenced (at p.468): "At first sight the clearest misuse of majority power occurs when the majority seek to expropriate the shares of the minority." For the first proposition Brown and Palazzo were relied on but thereafter there was detailed consideration of the qualifications discussed in Sidebottom, Shuttleworth and Crumpton. Moreover, in a section headed "Testing the validity of resolutions" At 594-596., there was further analysis of Allen v. Gold Reefs, Peters and the other authorities, particularly as to the meaning of the expression "bona fide for the benefit of the company as a whole". After referring to Dixon, J.'s belief that the test should be regarded as a single negative test rather than a positive test, Ford, while appearing to believe that that simple solution had been disregarded, discussed the proposition in Shuttleworth that the single test is directed to requiring the shareholders honestly to have regard to the benefit of the company. At 594. So, as to whether an alteration can be said to be for the benefit of a company, he concluded Ibid. that: "It became settled … that the court was not to substitute its opinion on that question for that of the members [and] would only interfere … if the decision of the members 'though honest, is such that no reasonable people could have come to it upon proper materials'". Adapting Scrutton, L.J. in Shuttleworth at 24. That test, so Ford said, At 594-595. was adopted by Latham, C.J. in Peters as "stating the prima facie general rule", but he noted that s.260 gave another means whereby the courts could intervene. Thereafter it would seem Ford preferred the test laid down in Peters, especially that of Dixon, J. at 513, At 513. See above at para.[507]. requiring that there be no oppression, no appropriation of an unjust or reprehensible nature and that the resolution not be for a purpose outside the scope of the power. At 595-596.
548 Two other shorter, but well-known, works were available to the profession at the relevant time although one was 15 years old and the other over 20. The first, by F.H. Callaway (as he then was) was published in 1978 entitled "Winding Up on the Just and Equitable Ground". It was a specialist work, but it was introduced by a most succinct and useful summary of the general law relating to breaches of duty by controlling shareholders and directors. At 26-32. After stating, in relation to directors' duties, that an act cannot be impugned "unless a reasonable person in the position of the directors could not have believed that the exercise of power impugned would be for the company's benefit", he said: "Members are in an even stronger position". At 29. After citing the relevant passages from Dixon, J.'s judgment in Peters as reflecting some qualification on shareholders' powers, he concluded: At 30. "In practice, alterations of articles have seldom been found to constitute a fraud on the minority even when they have been directed to the expropriation of undesirable members".
549 The other work, which, although published in 1970, was not infrequently cited, is "Company Directors and Controllers" by Allen B. Afterman. Although primarily directed to directors' duties, there is a useful Chapter III on "Controlling Shareholders' Duties under the Common Law". After a brief reference to the "benefit of the company as a whole" test, the absence of fiduciary duty At 136. and the rule in Foss v. Harbottle, (1843) 2 Hare 461; 67 ER 189. the shareholders' duties were examined in some detail. At 145-157. Turning to the subject of "expropriation of the minority shares by alteration of the articles", Afterman's discussion At 151-154. was largely an analysis of the cases and of Gower's argument against expropriation, especially the contention that good faith is here irrelevant. In a footnote At 152. he noted Gower's concession that Brown and Dafen had been "somewhat blown upon" by the Court of Appeal; nor was he impressed by the argument that the formal statutory power permitting takeovers impliedly recognised the general law rule. As he concluded: At 153. "Although this argument is appealing, the conclusion does not appear to be supported by the cases." The authorities supported only the proposition that it is "within the power of the controllers to compel the minority to sell their shares and quit the company", although this was again qualified by the requirement of good faith. Nevertheless, with some prescience, he suggested that, because of the difficulties of proof, "it is expected that the courts will be more receptive to the complaint of the minority shareholders in expropriation cases than in others because the effect of the majority's actions is to extinguish their relationship with the company" (emphasis added). At 153. However, nowhere did he suggest that there was support in the authorities for any blanket proposition condemning expropriation. Again, Bugle Press was not discussed. One may also note Lipton & Herzberg: Understanding Company Law, 5th ed. 1993, a textbook primarily for accountancy and commerce students. Lord Lindley's test is discussed at pp.100-106, with perhaps undue emphasis on Brown, Dafen and Shears, but concluding with one-and-a-half pages of Dixon, J.'s judgment in Peters.
550 Finally it is necessary to look at the loose-leaf services published by CCH and Butterworths. As luck would have it, I have had access to versions of each of those services updated only to the first half of 1994 when the subscriptions were terminated. In the Australian Corporations and Securities Law Reporter (ed. Baxt; a loose-leaf service first published under that name in December 1990) the discussion of the relevant subjects was in conventional terms, making reference to amendment of articles to effect expropriation only in the context of a brief mention of the decision of the Court of Appeal in Gambotto. See para.37-700, as at February 1994. Both the Allen v. Gold Reefs test and some of its criticism were briefly described together with some quotations from Latham, C.J. and Dixon, J. in Peters. Thus fraud or oppression was seen to be the primary qualification on shareholders' powers. There was also a brief reference to Palazzo but only in the context that the plaintiff should not have stood by. Neither Brown nor Dafen were discussed and Bugle Press was referred to only in the context of the statutory provisions for arrangements and takeovers. So far as I can ascertain the CCH monthly update Bulletin did not contain any reference to the grant of special leave in Gambotto or to the subsequent argument.
551 Neither was there any reference to those matters in the more comprehensive fortnightly Butterworths Corporation Law Bulletin which formed and forms part of their service, Australian Corporation Law (first published under that name in 1991). On the other hand, the discussion of the present question by J.P. Hambrook, in Chapter 2.4 of that loose-leaf work under the heading "Memorandum and Articles: The Corporate Constitution", was rather more extensive. The examination of the manner in which articles might be altered extended at the time (June 1994) from para.2.4.0080 to para.2.4.0115, where the principles were summarised. In the first place In para.2.4.0085. the author asserted that relevant propriety is determined by asking whether there has been a fraud on the power. Detailed discussion followed, largely in terms of approval, of the judgments of Latham, C.J. and Dixon, J. in Peters. The author suggested, however, contrary to Dixon, J. At 507., that decisions reached by a majority may be vulnerable "if they are not consonant with general notions of fairness and propriety", although he conceded that the commercial judgement of the majority is not likely to be set aside. At p.24,125 (Service 37: 6/94).
552 In turning to unreasonable or unfair articles the author stated that "arguably, the most severe form of discriminatory article is one which effectively allows majority interests to expel minority members". Para.2.4.0090 (Service 0). In para.2.4.0095 cases such as Brown and Dafen were analysed in detail but by no means uncritically, for the author stated Para.2.4.0095 at p.24,128 (Service 0). that other cases, especially Peters, "have held that the burden of proving that a non-discriminatory article is contrary to the best interests of the company is on the complainant", though "a particular improper exercise of it may be successfully challenged". There was a brief footnote reference here to Gower Fn.60 (Service 32: 11/93). It should be noted that the reference is to the 4th ed., not the more cautious 5th ed., which, it was said, stood for the proposition that expropriation cannot occur "merely to allow the majority to remove minority interests which the majority did not like. The following paragraph 2.4.0100 again discussed Dafen and Brown, as well as Palazzo and Bugle Press In fn.20., but without reference to the Court of Appeal's disapproval of the earlier cases in Sidebottom and Shuttleworth, nor to the discussion of both those and the earlier cases in Peters, so that it is not surprising that the author concluded that, "[i]f an article discriminates between members, the burden is on those supporting the article to justify the discrimination as being fair and reasonable" and, further, that, "[i]n expropriation cases, it is arguable that the company should have to establish the commercial necessity for the exclusion of the relevant minority interests". Para.2.4.0100 (Service 32 11/93). It is surprising that, although Bugle Press was cited, the then recently decided WCP v. Gambotto in this Court, although earlier referred to, was not discussed in that context.
553 One should note, however, that the author in the following para.2.4.0105 drew a contrast as to non-discriminatory changes It seems that this refers to an amendment applicable equally to all members.: "Members will usually find it difficult to upset an alteration to articles if the relevant provision applies equally to all members, and is consistent with the commercial interests of the company", here citing Allen v. Gold Reefs, Greenhalgh, Peters and Shuttleworth. The author's summary of guiding principles In para.2.4.0115 (Service 37: 6/94). was broadly consistent, stating that an alteration to articles may be set aside by a member if (i) it is manifestly contrary to the best interests of the company or its members; (ii) it overtly discriminates between members in a way which is not affirmatively shown to be fair and reasonable; or (iii) it confers a power on a particular member or group of members which could be exercised in an arbitrary, discriminatory or unfair way with no obvious benefit to the company.
554 In addition there have been a considerable number of articles in learned journals on the powers and duties of shareholders, but at the relevant time there had not been nearly as many as have been subsequently published. See para.[457]. I shall mention only four, partly because it would be ridiculous to suggest that practitioners should keep up to date not only with statutes, case law and major text-books, but also with all journal articles expressing opinions on legal subjects. Moreover, very few become sufficiently well known for it to be said that one might expect competent practitioners to have read any specific article. The first is perhaps an exception to that statement, inasmuch as Wedderburn's article on "Shareholder's Rights and the Rule in Foss v. Harbottle" [1957] Cambridge L.J. 194 and [1958] Cambridge L.J. 93., which has been cited in a number of court decisions See e.g., per J.D. Phillips, J. in Shears v. Chisholm [1994] 2 VR 535 at 632, per Mahoney, J.A. in Winthrop at 691 and per Gummow, J. in Scarel Pty. Ltd. v. City Loan and Credit Pty. Ltd. (1998) 17 FCR 344 at 348. and is seen (and known) to have been influential in the formation of the opinions on that subject in later editions of Gower, of which he became joint editor for the third and fourth editions. Unfortunately for present purposes, the article concentrated on the rule in Foss v. Harbottle and, surprisingly, nothing of real significance on the present issues can be found therein.
555 Next, came the article by Dr McPherson (as he then was) on "Oppression of Minority Shareholders" in 36 Australian Law Journal, cited above. See para.[478] fn.59. Part I deals carefully, if I may say so, with the relevant authorities and in general with the concept of the "benefit of the company as a whole", which was viewed critically and confined, so far as possible, to cases of amendment to articles, though conceding that such a view may be inconsistent with authority, especially with Peters. See at 408-409. Bugle Press was cited only in a footnote and there was no undue emphasis on the judgments in Brown and Dafen, Shuttleworth being accurately referred to on several occasions. See especially at p.410 fn.67 where Brown and Dafen are properly stated to "have been discredited by later decisions, including Sidebottom and Shuttleworth. Consequently, expropriation was not treated as a prima facie basis for relief. See esp. at 410-411.
556 The third article, useful for its comprehensive discussion of authority, although I would not agree with all that was said, especially in relation to later cases such as Clemens, is by F.G. Rixon: "Competing Interests and Conflicting Principles: An Examination of the Power of Alteration of Articles of Association". (1986) 49 Modern L.Rev. 446. After careful examination of Brown, Dafen, Shuttleworth, Peters and Greenhalgh the writer submitted At 461. "that the better view is that a power of compulsory transfer of members' shares introduced into altered articles need no more be circumscribed than such a power contained in original articles, though one may reasonably surmise that the fact that the power is unfettered is a circumstance which the court will weigh in determining whether the shareholders who voted in favour of the alteration acted in good faith". Finally, Peters was preferred to Greenhalgh and Bugle Press was one of the few authorities not discussed.
557 It should also be noted that the decision of the Court of Appeal in this State in Gambotto was the subject of a critical case note in the section "Takeovers and Public Securities" in the September 1993 issue of the Companies & Securities Law Journal. (1993) 11 C. & S.L. Jo. 323. The author, K. Yeung, criticised the decision and the "company as a whole" test, saying that the Court failed to address expressly why the majority was seeking to expropriate the plaintiff's shares. I am not entirely sure what the author there means, as the purpose all along was to obtain the relevant taxation benefits and savings of administrative expenses which were not available because of the continued existence of 0.3 per cent of shareholders, but it may have been a reference to the failure to consider the majority's motive, although that would go beyond accepted principles. Nevertheless, the writer stated At 325. that the trial judge leant too heavily in favour of minority holders inasmuch as he had suggested that expropriation was "necessarily oppressive".
3(a) Extent to which appellants should have been aware of matters raised on appeal in Gambotto
558 Before expressing conclusions as to the extent of knowledge that each of the appellants should have had at the time they gave their advice or opinions, it is necessary to deal with a matter primarily of fact Including, importantly, inferences to be drawn as to whether in the circumstances the appellants were in breach of duty in failing to make further enquiries., although it was argued that it had the consequence of extending the appellants' relevant knowledge of the manner in which the appeal in Gambotto might be resolved. As I have earlier said, there is no doubt that the appellants all knew that the Court of Appeal had decided Gambotto in favour of the company. Why they should necessarily see it as relevant to the present case is a matter which will have to be addressed later, but at least one of the parties, Mr Bateman of AAH, thought it appropriate to mention the case in the course of the discussions leading to the briefing of and obtaining advice from Mr Heydon in December 1993. As I would gather, the case was seen primarily relevant to a potential argument that the majority on the Board and their adherents would be accused of oppression in seeking to do away with all membership rights in Association and Insurance and at the same time giving greater shareholdings to certain kinds of members. Although a strong argument was put to the contrary, I did not understand the solicitors' prime concern at the time to be whether the amendments to the articles satisfied the test in Allen v. Gold Reefs, Peters or whichever cases should be seen to lay down proper and binding principles on the power of the majority to amend the articles of association.
559 Nevertheless, WCP v. Gambotto was drawn to the attention of all the appellants and the question is whether they should have been aware of the next stage in that proceeding and of what was the likely result. The learned trial judge held that they were all aware that it was "on appeal" See para.[384] of his judgment., but it does not appear that any of them was truly aware that leave to appeal had been granted. The assumption behind many of the respondents' arguments and, with respect, behind certain of the findings of the learned trial judge, was that this notorious case should have been the subject of common knowledge so far as the appellants were concerned. However, it is one thing to know of a reported case and even that it is subject to an application for leave to appeal, but quite another for its current progress to be known generally within the profession and in particular within that part of the profession which specialised in company law.
560 Perhaps the case was notorious at the Sydney Bar or among the firms of solicitors with the degree of specialisation in company law which the appellants solicitors had, but there was no evidence to that effect. Apart from the note in the Company & Securities Law Journal, the case had been merely noted in the two well-known services published by CCH and Butterworths; indeed, in the latter, which frequently contained more extensive notes of what were perceived to be more important cases, there had been a mere half page note. In the following year, 1994, but after the relevant period, there were three articles, but in academic journals, in which the case had been the subject of some analysis. However, I would not consider that the Company & Securities Law Journal was necessarily essential reading, nor that one should expect busy practitioners to retain in their minds that some case or other had been the subject of a critical note. I have already commented on the vast array of material published each year relating to corporations law and perusing the fortnightly bulletins of the Butterworths and CCH services at the time merely reminds one how obvious that was.
561 Further it was argued, and, so it seems, was partly accepted by the trial judge, that at the time a mere query would have indicated the fate of the application for leave to appeal and the significance of the grant of that leave. So far as the appellant Heydon was concerned, it seems that the only time he was directly asked for advice which might involve the need to have some knowledge of Gambotto, or what Gambotto might eventually decide, was when his urgent advice was sought in December 1993. The special leave application was heard on Friday 10 December and Mr Heydon was first approached on that day. A brief was sent on 13 December and a short conference held the following day, after which he indicated his ability to advise on a limited basis before he went on vacation on 20 December. (A revised brief had been sent on 15 or 16 December.) It seems to have been assumed that he or the solicitors could have discovered the fate of the application and the precise issues it seemed to raise in that brief and hectic period. Counsel was even expected to have made enquiries "down the passage" of counsel who in fact had appeared on the application who, as it turned out, were the same as had appeared before the Court of Appeal. Why that should be common knowledge was never explained, but even if it were, I would not consider it either necessary or appropriate that counsel should be under some implied obligation to seek out and waste the time of fellow counsel, especially at that time of year, to ascertain why that counsel had "lost" the application and what the grant of leave presaged for the future. Even if counsel knew each other well, I would venture to doubt (as it was not thought appropriate to admit expert evidence on these matters, so that this Court is left to its own devices) that with court, conference and other professional commitments, senior counsel of the standing of those in question would necessarily have had any free time which coincided with that of any other. After the event, and with the hindsight of being able to read the transcript, the critical issue on the future appeal might be said to have been sufficiently clear that it could have been communicated briefly. But that is to assume that the inquiry would have been worthwhile. Why counsel, and for that matter the solicitors, should have had sufficient omniscience to believe that an account of the oral, Socratic dialogue between court and counsel at the leave hearing would in all likelihood have given an indication of the High Court's ultimate reasoning in Gambotto is beyond my comprehension, especially having regard to the complex issues which were capable of being raised and which I have sought to analyse above.
562 Then it was said, and seemingly accepted by the learned judge, that the appellants could have obtained the transcripts of the leave application. There was no evidence that that transcript was available at the time Mr Heydon's advice was sought and given, nor indeed as to when transcripts of leave applications were ordinarily available for purchase at the relevant time. No evidence was given as to whether they were the subject of revision or how they were distributed, although one may accept that in due course they could have been purchased. At that time they were not available on the Internet The number of users of Internet in late 1993 was, in comparative terms, minute. I cannot recall if transcripts were available on the Scale database, but I do not believe that that was commonly used by the profession at that time. and even now there is some delay between hearing and availability, certainly at busy times of the year such as the days immediately approaching the Christmas vacation. Even while writing this judgment I have found the delay between the hearing and the availability on-line of a transcript can still be as long as 10 days on occasions (8 to 18 September 2000).
563 However, even if they were available at the time, and even if one can now assume they are available within a relatively short time, I am firmly of the view that there was and is no obligation for counsel or solicitors to obtain and peruse transcripts of special leave applications to the High Court, unless there are very exceptional circumstances or where some specific issue is directly raised with them. For the present it is not necessary to consider whether it is necessary or desirable to take into account reasons given when leave applications are refused. Nor would I canvass the authorities as to the significance of observations made by the Court on those occasions. No doubt High Court judges are cautious, as are other judges, about expressing themselves too firmly on matters which have not been fully argued before them, so that the well-known methods of advocacy before superior courts, especially courts of appeal and most especially the High Court, make it very dangerous to assume that what is said by a judge to counsel necessarily reflects a final view. Indeed, it would be remarkable if it were, having regard to the Court's obligations to afford a fair hearing to each party. It has always been well known that courts will test the submissions of each party by putting to them contrary views, even expressed in forthright language. To require counsel and solicitors to engage in some form of mind-reading or "psephology" by having regard to the comments so expressed by members of the High Court, or indeed any court, is to take professional duties beyond reason.
564 To that extent, the learned judge's finding and the respondents' submission that the appellants were negligent in failing to make enquiries of that kind should be firmly rejected. That is not to say that they each might have had some inkling of what a grant of special leave might presage. Here one may assume that the difference between the trial judge and the Court of Appeal as to amendments of an expropriatory kind might have been the subject of any ultimate decision in Gambotto. But, as will be seen later, to say that counsel's and the solicitors' advice should have been tempered, or indeed withheld, because some new statement of principle might be made by the High Court a year or so later seems unreasonable.
565 It also follows that the appellants when advising the respondents in relation to the demutualisation of the NRMA companies ought not to have had attributed to them any greater and, in particular, any different understanding of the law and the principles which they should have taken into account because of the events surrounding, or any knowledge to be potentially gained from the hearing of, the special leave application in Gambotto.
566 Further, insofar as it may be relevant, and again the learned trial judge seemed to think that it was at least partly so, I would not consider that any knowledge gained from the transcripts of the hearing of the appeal in April 1994 or from counsel involved in that hearing would be of any real relevance in the circumstances of this case, nor, more importantly, would I require the appellants to have made enquiries to ascertain what had occurred and had been said. The considerations referred to above apply to what was and is ordinarily said during argument on an appeal. Whatever those present might attempt to guess from the questions and comments coming from members of the High Court on such a hearing, that must always be tempered by the firm understanding that, despite any vigorous questioning of counsel, the High Court, like any other court, is bound to give a fair hearing to all parties before giving its judgment.
(b) Summary of the appellants' knowledge and understanding of the law at the relevant time
567 The examination of the authorities and text writers set out above may have seemed tedious and often repetitive, but, to determine what knowledge fairly may have been attributed to competent practitioners in late 1993 and early 1994, it has been important to understand what material was then available and what it suggested as being the principles applicable to the resolution of the kind of matters upon which the appellants were required to advise at the time. What that examination has demonstrated, so I believe, is the range of both primary and secondary materials available and the relative unanimity of those authorities and writers on the questions relating to amending articles which were said to be critical to the advice then sought.
568 One may summarise the essential matters so demonstrated by the case law as follows. Although the Allen v. Gold Reefs test had been seen to have its deficiencies, especially in cases where the dispute was not said to raise the company's own governance and well-being Cf. Peters per Dixon, J. esp. at 511-513 and as summarised in paras.[505]-[507]; Greenhalgh v. Arderne as in para.[493]., it was still the accepted basic principle. See Peters, Ngurli and Greenhalgh v. Arderne. That had a number of consequences. Although shareholders might exercise their voting power as they wished inasmuch as they were under no fiduciary obligations, nevertheless that power was subject to the equitable rule that it should not be used for any improper, unfair or oppressive purpose. Although the latter qualification was known to be vague Cf. per Dixon, J. in Peters at 507., it had been applied with reasonable success in a large variety of circumstances over many years. The forced acquisition by a majority of the minority shares was one circumstance which might attract the Court's attention as having the disqualifying characteristics and purpose described above. Amendments effecting such an acquisition had on only four occasions (all by judges sitting alone) been set aside or restrained without further examination of the facts, but the prima facie opinion in two of these cases, Brown and Dafen, had been almost immediately disapproved by the Court of Appeal in England, which disapproval had clearly been accepted as correct by the members of the High Court in Peters. See per Latham, C.J. at 480 and per Dixon, J. at 509-510. Rich, J. also seems impliedly to have disapproved of Brown and Dafen, not only because of the conclusions he reached in that case, but by reason of the fact that he cited both Sidebottom and Shuttleworth with approval and made no mention of Brown and Dafen: at 495. Clemens had not been so characterised by the English Court of Appeal but no appeal on this issue appears to have been heard in England after Clemens was decided and most writers seemed to treat Clemens as having incorrectly stated principle, whatever might be the correctness of the specific outcome. Palazzo, the only Australian case accepting the more stringent approach as to expropriation, had relied on Bugle Press, but that case was an application for approval of a takeover, not a case argued on the basis of Allen v. Gold Reefs. Though a decision of the Court of Appeal (England), it had not been cited subsequently as standing for any prima facie rule of invalidity when amendments to articles had been challenged, other than in Palazzo itself. Indeed, even if it was merely implicit in the English Court of Appeal cases such as Sidebottom and Shuttleworth that the onus of proof of unfairness rests on the plaintiff in such cases, that had clearly been laid down Per Latham, C.J. at 482. Cf. per Rich, J. at 494-495 and per Dixon, J. at 514-515 where the trial judge's finding of assumed invalidity was overturned in part because the judge had wrongly sought "sufficient ground for [a] positive conclusion" of validity. by the members of the High Court, either explicitly or implicitly, in Peters and so was the binding rule in this country.
569 So far as the text writers were concerned all but three had accepted in general the rules stated above. Gower and Pennington in England and Hambrook in Butterworths' Australian Corporation Law can be said to be the only text writers who favoured a stricter view. All the others, whether in England or Australia, accepted the equitable rule substantially set out above and none of them excepted "expropriation" in a way which would have led to the reversal of the onus of proof. Gower and Pennington were known to be academic books, not necessarily consulted by practitioners, and none of the standard textbooks laid down any such restrictive rules. By the time of his last edition before his death (the 5th in 1992), Gower had become much more cautious, though Pennington's less comprehensive discussion had not changed.
570 Hambrook's chapter in Australian Corporation Law may be said to have taken almost as radical line as Gower but its persuasive force could fairly be seen as affected by his reliance on Gower's more forthright views in his 4th edition, which, by the time of the relevant service, had been replaced by the more cautious 5th edition, and by Hambrook's over-reliance on Brown and Dafen. For present purposes, moreover, it should be remembered that the learned author appeared to treat See at the beginning of para.2.4.0095 (at p.24,127). expropriation as consisting in the compulsory expulsion of minority members by the majority, where the impugned article would entitle the directors or a general meeting to compel one or more members "to sell or transfer [their] shares to the other members or to outsiders", and that, on the other hand, he considered that it would be difficult to upset an amendment where the relevant alteration applied equally to all members. See para.2.4.0105.
571 In short, very little authority pointed to a blanket rule about expropriation and High Court authority, supported almost without exception The one exception, to my knowledge, was the then largely ignored Bugle Press, decided in a different context. elsewhere in appellate courts, had held that the onus rested on those complaining of any unfairness, impropriety or oppression when alleging that the majority's powers had been exceeded. Likewise the standard textbooks, and many others, had been consistent in supporting a conventional view of the rule in Allen v. Gold Reefs, certainly as qualified by Peters, and even those who favoured a more stringent rule were prepared to accept that authority largely pointed against their contentions. It may be doubted how well the new chapter in Australian Corporation Law was known (it was radically different from that in the preceding Butterworths' service on Australian Company Law & Practice (3rd ed.)), but, even to those who confess to having a bias in favour of Professor Gower's work, it would be hard to say that his views represented mainstream authority and the cautious 5th edition could well have been seen by practitioners as recognising the difference between established authority and his preferred principle. Assuming that the appellants were each familiar with the work, they might have accepted that the High Court could well travel some way down the track towards a rule such as Professor Gower and the others preferred, but what the High Court had said in detailed and considered judgments in Peters would have to have been overcome for there to be a radical alteration, or so it might reasonably have been perceived at the time.