Mesa Minerals Limited v Mighty River International Limited

GILMOUR J: 2 I agree with the reasons for judgment given by Katzmann J and the orders which her Honour proposes. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

KATZMANN J: 3 Section 247A of the Corporations Act 2001 (Cth) permits the Court to make an order authorising an applicant to inspect books of a company provided that it is satisfied that the applicant is acting in good faith and that the inspection is to be made for a proper purpose. 4 On 14 May 2015 the primary judge made orders under the section authorising Mighty River International Limited to inspect and take copies of a number of the books of Mesa Minerals Limited, a company listed on the Australian Securities Exchange (ASX). Since at least 2010, Mighty River has been a substantial (though minority) shareholder in Mesa. At the time of its application, Mighty River held over 97 million ordinary shares in Mesa, representing about 15% of its share capital. Indeed, Mighty River is the second largest shareholder in the company, the largest being Mesa's parent company, Minerals Resources Limited (MRL), which holds 67% of the shares. In this appeal Mesa contends that the orders should not have been made, that the statutory preconditions for the exercise of the Court's discretion were not established, and, in the alternative, that there were errors in the exercise of the discretion and in the orders themselves. 5 On 5 June 2015 Gilmour J granted a stay of the primary judge's orders pending determination of the appeal and reserved the question of costs to the Full Court. For the following reasons I consider that the stay should be lifted and the appeal dismissed with costs.

The proceeding before the primary judge 6 In its originating application Mighty River sought an order authorising its sole director, Yuzheng Xie, and representatives of Gilbert + Tobin, Mighty River's solicitors, to inspect and make copies of certain of Mesa's books. Those books comprised: (1) documents relating to the use by third parties during the period December 2010 to November 2014 of Mesa's port capacity at Utah Point, Port Headland, the right to stockpile ore at the Utah Point ore stockyard and to export the stockpile ore through the ore loader (access right), and the general purpose lease 45/265, situated at the Boodarie Industrial Estate (Boodarie Lease); (2) the agreement (referred to as the Multi-User Agreement), together with any amendments, variations or agreements relating to it, between Mesa, the Port Headland Port Authority (Port Authority) and others in relation to the granting of port capacity to Mesa; and (3) the Utah Point Facility Agreement, being the agreement between Mesa, the Port Authority and others in relation to the granting to Mesa of the access right. 7 The application was supported by an affidavit affirmed by Mr Xie on 19 December 2014. 8 In his affidavit Mr Xie stated (at [43]) that his purpose in making the application was to enable him to decide whether the terms of use of the port capacity, access right and Boodarie Lease were "fair and reasonable" and whether the decision of the Mesa directors to allow others to use Mesa's rights was in the interests of Mesa shareholders. Pointing to the annual reports from 2010 to 2014 inclusive, Mighty River submitted that there was insufficient detail concerning Mesa's third party arrangements for an interested shareholder, as Mighty River certainly was, to satisfy itself that those arrangements were in the shareholders' best interests. Indeed, it argued that it was not clear from the available information that Mesa had received any benefit at all for some years. Mighty River submitted that it wished to see the documents in order to protect its investment and interests as a shareholder. 9 Mesa claimed that Mr Xie (and therefore Mighty River) was not acting in good faith and that the application was not made for any proper purpose. In other words, Mesa's position was that Mr Xie should not be believed. 10 Mr Xie was cross-examined extensively before the primary judge. Mesa submitted that he gave evidence which alternated between being evasive and candidly detrimental to Mighty River's application. Mesa submitted that when regard was had to the relevant context the application was not being made by Mighty River as a member of a company with a genuine concern to protect its investment or with any concern at all as to the use of the port rights. Rather, Mighty River's true or dominant purpose was to use s 247A as an instrument to usurp the powers of Mesa's board to control decisions of the company by obtaining a de facto seat at the board table and/or to extract financial gain from MRL or the directors of Mesa. Mesa submitted that the application should be seen as "contrived and artificial". It argued that, as Mighty River continued to buy shares in the company, its putative concern about its shareholding was either not genuine (or, if genuine, had been allayed) or Mighty River anticipated a buyout at a premium, and the recent purchases were "an arbitrage". 11 The primary judge nonetheless accepted Mr Xie's evidence. He was satisfied that the application was brought bona fide and for a proper purpose and ought to be granted, albeit on terms.

The background to Mighty River's application 12 The application has a long history. The background is set out in some detail in the primary judge's reasons. What follows is an abbreviated account drawn from those reasons. 13 For some time, it appears, there have been hostile relations between Mighty River on the one hand and Mesa and its parent company, MRL, on the other, personified in antagonism between Mr Xie and Mr Chris Ellison, a director of both Mesa and MRL. 14 Mighty River was founded in about 2000. Mr Xie has been its only director ever since. For about a year, from 22 January 2009 until 20 January 2010 Mr Xie was also a director of Auvex Resources Limited. In 2010 MRL launched takeover bids of both Mesa and Auvex, which led to MRL acquiring about 67% of Mesa and 100% of Auvex. 15 During the takeover, following an application by Mesa to the Takeovers Panel, Mighty River was found to have contravened the Corporations Act in its dealings with Mesa shares. Mesa also brought proceedings against Auvex in the Supreme Court of Western Australia in which Mighty River sought leave to intervene. 16 After the takeover, Mighty River brought proceedings of its own against MRL and its directors, also in the Supreme Court, relating to an alleged unwritten agreement concerning the acquisition by MRL of Mighty River's shares in Mesa. 17 Then in July 2014 Mighty River's solicitors wrote to Mesa seeking documents "by way of [informal] pre-action discovery" in order to consider whether to bring proceedings against Mesa under ss 232 and 461 of the Corporations Act for statutory oppression and winding up respectively. On 10 November 2014 Mighty River's solicitors informed Mesa's solicitors that it would no longer pursue access to the documents in this way but would instead make an application under s 247A of the Act. The letter advised Mesa that the documents were sought for the purpose of enabling Mighty River to determine the nature and scope of Mesa's port capacity and access rights with the Port Authority, and the terms upon which third parties are using the port rights and the Boodarie lease, so as to enable Mighty River to make a decision on the exercise of its rights as a shareholder of Mesa.

The scope of s 247A 18 Section 247A relevantly provides: 247A Order for inspection of books of company or registered managed investment scheme (1) On application by a member of a company or registered managed investment scheme, the Court may make an order: (a) authorising the applicant to inspect books of the company or scheme; or (b) authorising another person (whether a member or not) to inspect books of the company or scheme on the applicant's behalf. The Court may only make the order if it is satisfied that the applicant is acting in good faith and that the inspection is to be made for a proper purpose. (2) A person authorised to inspect books may make copies of the books unless the Court orders otherwise. 19 "Books" are defined very broadly in s 9 of the Act to include a register, any other record of information, financial reports or records, and a document. 20 If the Court makes an order under s 247A, it may make any other order it considers appropriate, including an order limiting the use that a person who inspects the books may make of the information obtained during the inspection and/or limiting the right of that person to make copies: s 247B. 21 A person who inspects books on behalf of an applicant is prohibited from disclosing information obtained during the inspection to anyone but ASIC and the applicant: s 247C. 22 There was no dispute below or on appeal as to the relevant principles. It is sufficient at this point to note the following matters drawn from the convenient summary given by Debelle J in Acehill Investments Pty Ltd v Incitec Ltd [2002] SASC 344; 223 LSJS 97 at [29] and the additional principles identified by Gordon J in Hanks v Admiralty Resources NL [2011] FCA 891; (2011) 85 ACSR 101 at [32], both of which judgments were referred to by the primary judge at different points in his reasons: (1) The stipulation that an application be made in good faith and for a proper purpose is a composite notion rather than two distinct requirements: Knightswood Nominees Pty Ltd v Sherwin Pastoral Company Ltd (1989) 7 ACLC 536 at 540-541. That is to say, as Brooking J put it in Knightswood at 541: [T]he reference to good faith colours and so reinforces the requirement of proper purpose. Acting in good faith and inspecting for a proper purpose means acting and inspecting for a bona fide proper purpose. It is as if the case was one of hendiadys. (2) Good faith and proper purpose must be proved objectively: Acehill, citing Barrack Mines Ltd v Grants Patch Mining Ltd [1988] 1 Qd R 606 (Full Court) (Barrack Mines Appeal) and Knightswood supra. See also the discussion in C Mantziaris, "The member's right to inspect the company books: Corporations Act, s 247A" (2009) 83 ALJ 621 at 628-9. (3) "Proper purpose" means a purpose connected with the proper exercise of the rights of a shareholder as shareholder and not, for example, as a litigant in proceedings against the company or as a bidder under a takeover scheme: Cescastle Pty Ltd v Renak Holdings Ltd (1991) 9 ACLC 1333 at 1335. (4) The onus of proof is on the applicant: Quinlan v Vital Technology Australia Ltd (1987) 5 ACLC 389 at 393. (5) An applicant who has a significant holding and who has been a shareholder for "some considerable time" will more easily discharge the onus than one who has recently acquired a token holding: Quinlan at 393. (6) It is not necessary that the applicant show that its interests are different to those of other shareholders: Yara Australia Pty Ltd v Burrup Holdings Ltd [2010] FCA 1273; 80 ACSR 641 at [116]. (7) Nor is it necessary that the applicant have sufficient evidence to bring or make out an action (Praetorin Pty Ltd v TZ Ltd [2009] NSWSC 1237; 76 ACSR 236 at [40]); it is enough that the issue raised by the applicant is "substantive and not fanciful", not "artificial, specious or contrived": Re Style Ltd; Merim Pty Ltd v Style Ltd [2009] FCA 314; 255 ALR 63 at [66]-[67]. (8) Pursuing a reasonable suspicion of breach of duty is a proper purpose: McNeill v Hearing & Balance [2007] NSWSC 942 at [17] citing Barrack Mines Ltd v Grants Patch Mining Ltd (1987) 6 ACLC 97 and the judgment on the unsuccessful appeal: supra. (9) Provided that the applicant's primary or dominant purpose is a proper one, it is not to the point that an inspection might benefit the applicant for some other purpose: Unity APA Ltd v Humes Ltd (No 2) [1987] VR 474 at 480; Barrack Mines Appeal at 615; Cescastle at 1335. (10) Applicants do not necessarily lack a proper purpose merely because they are hostile to other directors: Humes at 480. (11) Neither the fact that an applicant may have had sufficient information earlier nor the fact that an applicant may have other means of obtaining the information is detrimental to an application under the section: McNeill at [23]-[25]. (12) The procedure under s 247A is not intended to be as wide-ranging as discovery so that the general rule is that inspection will be limited to such documents as evidence the results of board decisions, rather than all board papers leading to decisions, but there may be occasions when it is proper to permit inspection of board papers: Acehill at [31]. (13) The Court has a residual discretion whether to order inspection: Humes at 481. 23 Debelle J also said in Acehill at [29] that the section operates to protect a specific or personal right, such as where a shareholder contemplates proceedings under s 233 of the Act (proceedings of the kind foreshadowed in the parties' 2014 correspondence concerning pre-action discovery) and "where a shareholder reasonably takes the view that a transaction could adversely affect his investment and he seeks to investigate the transaction for the purpose of determining what action he should take": Intercapital Holdings Ltd v MEH Ltd (1988) 6 ACLC 1068 at 1074-1075. But in Re Claremont Petroleum NL [1990] 2 Qd R 31 the Full Court of the Supreme Court of Queensland rejected the proposition that a special right or interest was a prerequisite for the grant of the statutory remedy. Connolly J, with whom Thomas and Ambrose JJ agreed, said at 34, speaking of the precursor of s 247A(1) (s 265B of the Companies Code): One can readily understand that it is a relevant consideration that there is a specific dispute rather than general dissatisfaction with management; likewise that the applicant is personally interested, as also the extent and value of his interest; but to insist that his interest be separate and distinct from that of the general body of members is to treat the statutory discretion as confined to one only of the well recognised exceptions to the rule in Foss v. Harbottle [(1843) 2 Hare 461; 67 E.R. 189]. So to restrict the application of s. 265B would be to ignore the very great extent to which the rights of shareholders have been enlarged under the companies legislation and the great inroads which have been made by statute under that famous rule. 24 As Mr Mantziaris observed in 83 ALJ 621 at 632, with the abolition of the rule in Foss v Harbottle and the introduction of the derivative action provisions in the Corporations Act in 1999, "it is hard to find any basis for the observance of a special requirement criterion in applications for the statutory remedy" (emphasis in original). 25 In Rowland v Meudon Pty Ltd [2008] NSWSC 381; 220 FLR 362 at [35]-[36] Bryson AJ discussed the effect of the decision in Re Claremont Petroleum NL. In the course of that discussion his Honour said that, while it is a relevant consideration that the applicant is personally interested, as indeed is the extent and value of that interest: [i]t is not necessary that the applicant's interest be separate and distinct from that of the general body of members … The confinement of the common law remedy to specific disputes or questions in which the party applying was interested, and related restrictions, was the perceived mischief which the legislation remedied. The remedy chosen was to give a broad unfettered discretion to the court … 26 Mesa frequently referred in its submissions to the need to establish "a case for investigation". The expression does not appear in the Act. It is an expression which was used in argument in Intercapital Holdings and which Brooking J deployed in his later judgment in Knightswood. Its utility, as Barrett J put it in Praetorin at [39], is to emphasise the need for an objective basis for intervention.

The primary judge's reasons 27 The primary judge's reasons begin with his account of the background to Mighty River's application. His Honour then set out the legal principles, referring, in particular, to the summaries in Acehill and Hanks. 28 Having considered the submissions of the parties, which the primary judge recited in some detail, his Honour said that he was persuaded, "primarily for the reasons advanced in the submissions and reply submissions of Mighty River" that an order under s 247A should be made. It is unnecessary to recount those submissions here but the primary judge's reasons must be read against that background. 29 At [97] to [111] of the judgment his Honour set out his findings and conclusions on the substantive questions: 97 I am satisfied that Mighty River is a substantial shareholder. Plainly it has not arrived on the scene recently. It has been locked in with its minority shareholding in Mesa since the takeover activities in respect of Auvex were completed. 98 On the face of it, there are proper grounds for Mighty River to be granted access to books so that it can better understand the way in which the port rights, including in connection with the Boodarie lease, have been or are being used and enjoyed. 99 I accept the submissions made on behalf of Mighty River, and set out above, that the disclosure of information by Mesa at this point, in relation to exactly what arrangements are in place in respect of those port rights, is limited and the information ambiguous and incomplete. 100 In my view, on the face of it, it is reasonable for a minority shareholder in the position of Mighty River, especially in light of the drawn out corporate hostilities between Mighty River, on the one hand, and Mesa and MRL, on the other, to be better informed about those matters than it currently is. 101 I have said in these preceding paragraphs that this appears to be the position, on the face of it. 102 The defence to the application put on behalf of Mesa, is that, however it might appear on the face of it, Mighty River, through Mr Xie, is not seeking access to the required documents in good faith, and that inspection will not be for a proper purpose, whether that phrase be seen as a composite notion or with disjunctive qualities. Mesa submits Mighty River is merely pursuing a course of action, disclosed by previous disputation and court proceedings, to force the purchase of its minority shareholding in Mesa and wants to act as a de facto director involving itself in the company's management. 103 In my view, there can be little doubt, as Mr Xie put it in cross examination, and referred to above, that Mighty River would be pleased to consider an offer for the purchase of its minority shareholding in Mesa. That, however, does not mean that, as a minority shareholder, Mighty River is disentitled from making the application that it has made under s 247A(1) to gain access to the required documents. 104 In my view it is reasonable that Mighty River, in seeking to fully protect its investment in Mesa, should be entitled to have access to information that is relevant to its investment and which is presently, in my view, not adequately revealed in the recent annual or interim reporting of Mesa or other information provided, referred to above. 105 That a particular action or court proceeding is not finally identified as a possible consequence of this access is not a bar to the required access order. 106 I do not consider, on the evidence, that Mighty River by requesting the required documents is impermissibly involving itself in the company's management. 107 Nor am I satisfied that any of the forensic challenges to the testimony of Mr Xie identified in the closing submissions of Mesa undermine Mr Xie's credibility in relevant respects, or show Mighty River's application to be in effect a sham or a ruse. I generally accept the characterisation of the manner in which he gave his evidence, provided by Mighty River, as "thoughtful and considered". 108 Mr Xie presented as a witness not unaccustomed to corporate disputation and not unaccustomed to the range of questions that a skilled counsel, such as Mr Bennett, appearing for Mesa, proceeded to ask of him. I do not consider that Mr Xie gave contrived responses. He was quite open and prepared to admit what was obvious. However, he did not admit that his only purpose in bringing the application currently before the Court was, in effect, to "greenmail" Mesa or MRL into buying Mighty River's shareholding in Mesa. 109 As I say, while I have no doubt that Mr Xie and Mighty River would be pleased to receive a reasonable offer to buy out the minority interest in Mesa, the fact that there have been and are corporate hostilities between the relevant parties is not of itself a ground for impugning Mr Xie's evidence, given on behalf of Mighty River. 110 I am satisfied, in all the circumstances, that Mighty River, through Mr Xie, in making this application is acting in good faith and that inspection is to be for a proper purpose. 111 An order therefore should be made enabling Mighty River to have access to the required documents. 30 His Honour then proceeded to consider whether an order should be made in the terms sought, noting Mesa's submission that any such order would be oppressive and excessive because of the potential access it would grant to a wide range of documents over a four year period. His Honour noted, however, that this objection was particularly advanced to emphasise Mesa's submission that Mighty River's application was not made in good faith and for a proper purpose. Having concluded to the contrary, his Honour considered that there were no sensible means by which the order should be narrowed and that it was necessary that Mighty River have access to all documents bearing on the exploitation of Mesa's port rights and the Boodarie lease during the period in question in order to remove "the current ambiguity and incompleteness of the information disclosed on those matters by Mesa to date".

The appeal 31 There are three grounds of appeal. 32 In substance, ground 1 is a complaint that the findings that Mighty River acted in good faith and that the inspection was to be made for a proper purpose were against the evidence. On the other hand, the written submissions appear to go further. They complain that the primary judge failed to set out his reasoning process. In particular, they complain that the reasons do not adequately disclose his Honour's finding as to Mighty River's purpose. The original ground of appeal, that the findings were not open to the primary judge on the evidence, is put in the alternative. 33 In ground 2 Mesa alleges that the primary judge erred in the exercise of his discretion. Once again, however, there is a disconnect between the grounds and the submissions. In its written submissions Mesa contended that his Honour did not separately, or in any detail, consider whether he should exercise his discretion to make the order. Ultimately, Mesa argued that his Honour failed to have regard to several "significant factors which weighed against the making of the orders even if the statutory prerequisites were established". Those allegedly significant factors are said to be: a 5-year delay in making the application, particularly where there is "a lack of sufficient explanation" for the delay; Mighty River's real purpose in pressuring the Mesa board to procure a buy out of its shareholding; Mighty River's admission that the documents it was seeking were the same as the documents the subject of other proceedings, now concluded, pending or abandoned; the circumstance that some "portion" of the books is likely to be in the possession of Mighty River's former solicitors and therefore within its control; Mighty River's admissions that it regarded the application as a means of "engaging" with Mesa "in order to second guess and 'interact' with the Board's management of the company" which, coupled with its admission that it wanted to procure a "buy out" of its shareholding, indicated that it was motivated by a desire to disrupt Mesa's management; and Mighty River's failure to take any professional advice in relation to the information already available to it on the ASX at the time it filed its application. 34 The third ground of appeal relates to the orders, which Mesa claims were too broad.

Was there a deficiency in the reasoning process? If not, were the primary judge's findings against the evidence? 35 There is no substance to the allegations made in ground 1 or in the submissions made in support of ground 1. 36 The primary judge's reasoning process is clear. As his Honour explained, he was persuaded by, and so essentially adopted, the submissions made by Mighty River. 37 The primary judge found that Mighty River's purpose was to be better informed about the arrangements Mesa had in place with respect to the port rights (at [98]-[100]) in order to fully protect its investment (at [104]). It does not seem to have been in dispute that, if this were, indeed, Mighty River's purpose (or, at least, its primary or dominant purpose) in seeking to inspect Mesa's books, it was a proper purpose and the power to make the order was enlivened. Indeed, it was a purpose of this very nature which Brooking J held to be a proper one in Intercapital Holdings. See, too, Barrack Mines Ltd v Grants Patch Mining Ltd. 38 One of the reasons his Honour acceded to the application is that he found that Mighty River was a substantial shareholder and had been for some time (at [97]). These findings were not against the evidence. To the contrary, the fact and duration of Mighty River's shareholding were not in dispute. Furthermore, Mesa accepted that they were indicia of proper purpose. 39 The significance of these matters is apparent from what was said in Quinlan (see above at 22). The size of Mighty River's shareholding and the fact that it had not recently been acquired were facts from which the Court could infer good faith and proper purpose. Indeed, in Quinlan at 393, referring to the onus upon the applicant to show good faith and proper purpose, Pidgeon J said that: [i]f the application was being made by a substantial shareholder of long standing those facts in themselves may well be sufficient to discharge the onus. The reason Pidgeon J took this view emerges from the ensuing analysis. There, he pointed out that in the case of a substantial shareholder the inference is open that "he was wishing to protect his investment", an inference that is less likely to be open, or at least to be drawn, where the applicant has only recently acquired a small holding in the company. This is precisely the purpose the primary judge found at [104] of his reasons in the present case. 40 Furthermore, the finding as to purpose reflects the fact that the primary judge accepted Mr Xie's evidence. At [27] his Honour said: Mr Xie says, on behalf of Mighty River, that he has taken an active interest in the business and operations of Mesa and in Mighty River's investment. Mighty River submits that in the course of the hearing Mr Xie gave considered and frank evidence regarding his knowledge of the manganese industry, Mesa's operations and the future prospects for the company's assets. At a general level, considered further below, that broad submission might be accepted. 41 The further consideration signalled in this paragraph is given at [107] (where his Honour, in effect, rejected the challenges to Mr Xie's credibility) and at [108] (where he explained why). 42 Despite all these matters, Mesa submitted that on the facts there was no case for investigation, no valid purpose, and nothing permissible sought to be achieved by the application. 43 The trouble with this submission is that it depends for its acceptance on a wholesale rejection of Mr Xie's evidence. Yet Mesa avoided a direct submission that the credibility findings were erroneous. Indeed, it made no reference to the credibility findings and paid scant regard to the legal principles that apply to appeals from such findings. It merely submitted that findings as to a witness's credibility should not be equated with a finding of good faith or proper purpose of a corporate applicant. There is no merit in his submission. 44 First, Mr Xie was not just any witness. As I have already pointed out, he was the sole director of Mighty River. In all likelihood, the business of the company was and is managed by and under him: Corporations Act, s 198A(1). As such, he was the controlling or "directing" mind and will of the company, which means that his state of mind is treated as the state of mind of the company: H L Bolton (Engineering) Co Ltd v T J Graham & Sons Ltd [1957] 1 QB 159 at 172 (Denning LJ); Bernard Elsey Pty Ltd v Federal Commissioner of Taxation (1969) 121 CLR 119 at 121 (Windeyer J). In other words, his purpose is Mighty River's purpose. If he was acting in good faith, then Mighty River was acting in good faith. No doubt it was for these reasons Mesa tried to discredit him at trial. 45 Second, the submission unfairly characterises the nature of his Honour's reasoning process. The effect of Mr Xie's evidence was that Mighty River's application was made in good faith for the purpose that he identified. If he were to be believed there was, as I understand it, no issue that good faith and proper purpose were established. Through cross-examination Mesa sought to undermine Mr Xie's credibility in order to demonstrate that Mighty River was actuated by an improper purpose. It submitted that the application was "in effect a sham or a ruse". His Honour rejected the submission. He was affirmatively satisfied that Mr Xie's responses to questions in cross-examination were not contrived (at [108]). Once the primary judge was satisfied that Mr Xie was a witness of truth, he was entitled to act on his evidence. Absent proof of "incontrovertible facts" or "uncontested testimony" to demonstrate that the conclusions about Mr Xie and the evidence he gave were wrong, "glaringly improbable", or "contrary to compelling inferences", they cannot be set aside on appeal: Fox v Percy (2013) 214 CLR 118 at [28]-[29] (Gleeson CJ, Gummow and Kirby JJ). 46 Despite Mesa's best endeavours to suggest otherwise, there were no incontrovertible facts or uncontested testimony which undermines the primary judge's conclusions. Nor am I persuaded that those conclusions were glaringly improbable or contrary to compelling inferences. None of the material upon which Mesa relied "points decisively and not merely persuasively to error on the part of the [primary judge] in acting on his [impressions] of the witness …": Fox v Percy at [90] (McHugh J). 47 Neither in its notice of appeal nor in its argument in support of it did Mesa acknowledge the obligation of appellate courts to respect the advantages of trial judges, particularly where their decisions might be affected by their impressions about the credibility of witnesses: see, for example, Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179 (McHugh J). Rather, Mesa attempted to side-step the credit findings and proceeded at times as though there had been no trial. 48 The matters relied upon by Mesa as "fatal" to the success of Mighty River's application - whether considered individually or collectively - are insufficient to undermine the primary judge's credit findings or his ultimate conclusions. Nor are they matters which would preclude the making of an order. 49 The first matter Mesa relied upon was delay. 50 Mesa submitted that Mighty River had applied for access to documents previously, based on apparent concerns about Mesa's operations which it had entertained for at least five years before it filed the present application. 51 In fact, the scope of the requests in each case is not the same. In any event, the fact that Mighty River had been concerned about Mesa's operations for some time tends to support the conclusion that it was acting in good faith and its purpose was a proper one. Moreover, as Hammerschlag J said in McNeil at [23]: Section 247A(1) of the Act requires an applicant to be acting in good faith and the inspection to be sought for a proper purpose. There is no principle which stands in the way of such an applicant on the basis that it may have had enough information at an earlier point in time to make a decision on a course it may wish to take. 52 In Hanks Gordon J accepted that this was an accurate statement of the law and followed it at [43]. 53 Second, Mesa submitted that Mighty River had acknowledged that it already knew the state of affairs that it sought to investigate, so there was no genuine case for investigation. The evidence relied upon to support the submission was evidence to the effect that Mighty River was aware that Mineral Resources had been using Mesa's port capacity and access rights since about 2010. Yet, Mr Xie made clear in his affidavit that he did not know the terms upon which those rights were granted, the extent to which any payments were made to Mesa for the use of the rights, whether there were other third parties who were using the rights, and whether the decision by the Mesa directors to allow others to use Mesa's rights was in the interests of Mesa shareholders. Mesa did not contend that this evidence could not be accepted. 54 The evidence clearly showed that Mesa had permitted the use of its assets by its parent company, a company with which it shares common directors, and the information hitherto available to Mighty River left open a number of questions (referred to in Mighty River's submissions set out at [29] of the primary judgment). These circumstances are sufficient to indicate that there was (and is) a genuine case for investigation. 55 Third, Mesa submitted that Mighty River failed to conduct the most basic enquiries to obtain documents or information in relation to its claimed concerns, such as taking advice from an accountant. In oral argument Mr Bennett put it this way: You can't go and knock on the door of a company and say, "I need to invoke, necessarily, an order for the inspection of records," when you don't even check your own records; you don't even read what's on the public domain; you don't have advice from an accountant and a solicitor that says, "There's enough for you to know. We have previously asserted that you need to know who has used it so you can bring action against Mesa under section 232 and 461,"… 56 I do not consider that the failure to make enquiries of this kind necessarily indicates a want of good faith or detracts from the stated purpose. Why should it be fatal to the success of an application in every case, as Mr Bennett submitted, that preliminary steps of the kind referred to be taken? After all, there is no such requirement in the statute. Nor do I see why a shareholder should be denied access to the company's books because the shareholder has not engaged the services of an accountant or a solicitor. Why should the shareholder be put to this trouble and expense? In McNeill Hammerschag J said at [25] "the fact that an applicant may or may not have the means via a relationship with a previous accountant to obtain information is not a good reason why inspection should not be afforded it". 57 The last assertion made by Mr Bennett (referred to at [55] above) is not justified by the terms of s 247A(1). When pressed during argument, he conceded that it was not a statutory requirement that the applicant have an intention to sue the company. Nevertheless, he maintained that a mere suspicion without a formulated cause of action was not enough. The submission flies in the face of the authorities especially those referred to in [22] above and endorsed in Acehill and Hanks. 58 Mesa put considerable emphasis on Mighty River's failure to contact its former solicitors (Bowen Buchbinder Vilensky) when Mr Xie assumed that they had some of the documents the subject of its application. The same submission was made to the primary judge. 59 The evidence in question emerged in the following way. 60 Mr Xie was asked in cross-examination whether as at 15 November 2010 Bowen had a copy of the facilitation agreement entered into between Mesa and the Port Authority and a deed of variation dated 24 September 2009. Mr Xie answered that he presumed they did but he had not seen it and he did not know. At [84] of his reasons the primary judge stated: whether Mighty River's former solicitors had seen the documents mentioned in their letter is speculative, and its former solicitors were not called to give evidence in this matter. 61 It is unclear from the context whether his Honour was merely repeating a submission put to him by Mighty River or stating his own conclusion. It matters not. He accepted Mighty River's submissions. Moreover, on the basis of the evidence the statement at [84] is plainly correct. 62 This evidence was not challenged and the Court was not taken to any evidence to indicate that the solicitors were in fact in possession of these documents. 63 Mr Bennett referred to a letter from Mesa's lawyers, Lavan Legal, dated 22 September 2010 to Blakiston & Crabb in the Supreme Court litigation between Mesa and Auvex. Blakiston & Crabb acted for Auvex. The letter attached a copy of a document described as "the Facilitation Agreement and Deed of Variation" but did not give a date and promised that other documents concerning "the Port Rights" would be provided in the course of discovery. Mighty River was not a party to the proceeding. Quite properly, no submission was made to the effect that Lavan had passed on this or other documents to Bowen. 64 Two days after this letter Bowen, on behalf of Mighty River, foreshadowed an application by Mighty River under s 237 of the Corporations Act to intervene in the litigation between Mesa and Auvex. That application was vehemently opposed by Mesa. 65 Mr Bennett also referred to a letter from Bowen dated 15 November 2010 addressed to the Chief Executive of Mesa Minerals which mentioned a facilitation agreement entered into between Mesa and the Port Authority as varied by a deed of variation dated 24 September 2009, which, he said, had not been publicly disclosed until the 2011 annual report was published. But all this proves is that the solicitors knew of the deed and its date. Some of the questions they asked Mesa tend to suggest that they did not know any of the details and were therefore unlikely to have the document or that, if they did, the document did not provide the information they wanted. For example, they asked Mesa to tell them "[o]n what commercial terms" the port rights were negotiated between Mesa and Mineral Resources, "[i]n other words", the extent to which Mesa benefited from Mineral Resources' use of its port rights. They also asked for "the basis of computation of the charges paid by Mineral Resources to Mesa". In his reply on behalf of Mesa, Mr Bennett did not suggest that Bowen already had the deed or that the deed would have given Mighty River any of the information it was seeking. Relevantly, he wrote: Mesa Minerals will not be responding to your letter within the timeframe stipulated or at all. Simply put, your client is a shareholder and is not entitled to commercial in confidence information of the nature demanded in your letter … This position is identical to the position taken by my client in previous correspondence. However, without conceding any need to do so, I am instructed that Mesa has allowed temporary use of pad 7 at Utah Point for good consideration. 66 Moreover, Mighty River told the primary judge it did not seek inspection of a document entitled "Facilitation Agreement" His Honour noted at [85]: … Mighty River says it has not sought inspection of a document titled "Facilitation Agreement". It does seek inspection of a document titled "Utah Point Facility Agreement", which is referred to in Mesa's 2010 annual report. Separately, in a letter to Mighty River's solicitors dated 6 August 2014, Mesa's solicitors have identified that Mesa is a party to a "Multi-User Agreement", inspection of which is also requested by Mighty River. Whether the "Facilitation Agreement" referred to by Mighty River's former solicitors is the same agreement as one of these requested agreements is unclear from the evidence before the Court. 67 Mesa made no submission on the appeal to the effect that the "Facilitation Agreement" referred to in the correspondence from Bowen was one of the documents the subject of the order. Nor did it go so far as to suggest that all the documents the subject of the primary judge's inspection order were in Mighty River's actual or constructive possession. Indeed, at the hearing of the appeal Mr Bennett eschewed any such submission. 68 In any case, "it is not the law that because an applicant may have the means of obtaining information elsewhere, it is not acting in good faith, or seeking inspection otherwise than for a proper purpose": McNeill at [24]. A party is not precluded from bringing an application merely because it had the information at an earlier point in time: Hanks at [43]. 69 The final matter Mesa relied upon was that Mighty River continued to acquire shares in Mesa despite its claimed concerns. The submission below (as recorded by the primary judge at [41] of his reasons) was as follows: [T]his is not the case of a genuinely concerned shareholder seeking to protect its investment; Mighty River continues to buy shares in Mesa no doubt with a view to maintaining or increasing its influence and leverage as a significant shareholder. In Mesa's submission, the purchase of additional shares means either the concern as to its shareholding is not genuine (or if genuine, has been allayed) or Mighty River anticipates a buyout at a premium, and the recent purchases are an arbitrage. 70 This submission should also be rejected. 71 In cross-examination Mr Xie was invited to offer an explanation for this behaviour. In substance he had three answers. First, Mr Ellison had given a presentation at a recent investor conference which gave him confidence that it would be a good commercial proposition. Second, with the recent downturn in iron ore prices the value of manganese was likely to rise. Third, he believed that Mesa was heavily undervalued. He said he was keen to continue to invest in the company but with one important rider: "as long as the court protects us", that is, as long as the company's rights as a shareholder were safeguarded. In these circumstances, Mighty River's continuing investment in Mesa is not inconsistent with its claimed concerns and it does not undermine the primary judge's conclusions.

Did the primary judge err in the exercise of his discretion? 72 Ground 2 pleads that the primary judge erred in law in the exercise of the Court's discretion by making the orders in the face of the evidence that: (1) the alleged concerns were the subject of previous litigation in which Mighty River applied to obtain and inspect the books the subject of the present application; (2) Mighty River had failed to ask its previous solicitors whether they were in possession of any of those books although Mighty River presumed that some of them were; (3) Mighty River failed to obtain any accounting or other professional advice concerning the publicly available information Mesa had disclosed through the ASX Announcements platform; (4) there was a significant delay in bringing the application; and (5) Mighty River purchased additional shares in Mesa despite its professed concerns. 73 Items (2)-(5) above were said to be inconsistent with those concerns. 74 These items are largely the same as those relied upon in relation to the first ground of appeal. 75 Mesa contended that the primary judge failed to take these matters into account or, that if he did, he not "set out his consideration" of them. 76 I reject this contention. There is no reason to conclude that the primary judge overlooked this evidence. Each of these matters was raised by Mesa in its submissions below, his Honour referred to those submissions, and, where Mighty River responded to them, to Mighty River's responses, which, given his Honour's statement at [90], he should be taken to have accepted. To the extent that his Honour did not expressly deal with a particular item of evidence, it is to be inferred that his Honour did not regard it as significant. Any failure by the primary judge to "set out his consideration" of these matters would not, without more, give rise to an error of the kind referred to in House v The King (1936) 55 CLR 499 at 505. 77 It is not enough for Mesa to show that the primary judge gave these matters "insufficient weight". As Kitto J observed in Lovell v Lovell (1950) 81 CLR 513 at 533: [E]ven if [an appellate court] considers that insufficient weight has been given to some relevant consideration, it will still not substitute its judgment for that of the primary judge unless it comes clearly to the conclusion for that reason that the discretion has been exercised wrongfully. 78 Besides, I am not of the opinion that the primary judge gave the evidence in question less weight than it was entitled to receive. No new argument was advanced as to why, once good faith and proper purpose were established, the discretion should nonetheless be exercised against Mighty River. While I accept that delay in bringing an application can weigh against the grant of an inspection order, this is not a case where the delay was indicative of acquiescence (cf. Re Industry Education Networking Pty Ltd [2008] QSC 67 at [3], [10]), or where the applicant had sat on its hands, so to speak, or where the delay caused prejudice to the company. 79 It follows that ground 2 must fail.

Did the primary judge err in determining the scope of the order? 80 Ground 3 is equally unmeritorious. 81 Mesa contended that the orders give Mighty River "open-ended and uncontrolled inspection" rights where the Court has no ability to monitor compliance because Mighty River is an entity registered in the British Virgin Islands and beyond the Court's control. This was said to reflect an error of law, although the error of law was not identified either in the notice of appeal or the written submissions. 82 In oral argument Mr Bennett referred to the prohibition in s 247C and the evidence given by Mr Xie in cross-examination that, if his application were successful, he intended to share the information acquired with Mighty River, its shareholders, advisors and others. Yet, the Act does not exclude foreign companies from making an application under s 247A(1). Mr Bennett conceded that there is no authority for the proposition that additional limitations should be placed on foreign investors in Australian companies. Mr Xie's evidence was given before the order was made and Mr Bennett pointed to no evidence to indicate that there was a real risk that Mr Xie would not comply with the order. 83 Mesa drew attention to the following passage in the judgment of Goldberg J in Re Style at [71], which was followed by Robertson J in London City Equities Ltd v Penrice Soda Holdings Ltd [2011] FCA 674; 84 ACSR 573 at [47] and more recently by Markovic J in Engel v National Biodiesel Ltd [2015] FCA 1114 at [10]: In granting an order for inspection under s 247A it is not appropriate to allow a wholesale and general inspection of Style's books. This would cause unnecessary disruption to the company. In any event the books to be inspected should be books that bear on, and be particularly relevant to, the purpose for which the inspection is sought ... 84 But the order the primary judge made in the present case does not allow for "a wholesale inspection" of Mesa's books. To the contrary, the books to be inspected are the books that bear on, and are of particular relevance to, the purpose for which his Honour found the inspection was sought.

Some final observations 85 In effect, Mesa sought to re-run the case it lost below. Yet, the appeal is in the nature of a rehearing; it is not a hearing de novo. The Court's task is to correct error. The determination of the question of whether Mighty River was acting in good faith and the inspection was sought for a proper purpose was largely an evaluative one. The primary judge's decision is entitled to be given some weight. Where, as here, the nature of the issues is such that there cannot be said to be one truly correct answer, the availability of a different view or a preference for a different view, is unlikely to be sufficient: Branir v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 at [25] per Allsop J (as his Honour then was), Mansfield and Drummond JJ agreeing. As Allsop J went on to explain at [30]: The proper approach is not to ask the court to survey all the evidence, directed by the otherwise unassailable findings on credit, and to ask it to arrive at its own conclusions, without "essaying the necessary task of positively demonstrating that the trial judge was wrong" … It is not appropriate to treat the appeal as though it were a new trial on the evidence and constrained merely by the unassailable factual findings. Error must be demonstrated … The views and conclusions of the trial judge ultimately have to be shown to be wrong. They should not be laid to one side and a simple re-argument of the case take place. 86 Mesa paid scant regard to these principles in its conduct of the appeal. 87 The two remaining questions - whether the discretion to refuse to make an order should be exercised and the scope of the order - were discretionary decisions which could only be set aside if attended by error of the kind described in House v The King. No error of this kind has been shown.

Conclusion 88 In my opinion, none of the grounds of appeal is made out. I would therefore dismiss the appeal with costs. I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann.