Palmer Leisure Coolum Pty Ltd v Takeovers Panel

The reasons for judgment of the Full Court 43 It is not necessary to set out the factual matters relevant to the questions in issue before the primary judge and the Full Court, in any detail. However, it is necessary to identify some matters which give context to the important observations of the Full Court. 44 At [5], the Full Court observes that the Club entity operates a timeshare scheme at what is now known as the Palmer Coolum Resort, formerly known as the Hyatt Regency Coolum. The Club entity is the tenant under two leases both dated 21 December 1988 and each for a term of 80 years over all the lots in The President's Club Golf Community Titles Scheme and The President's Club Tennis Community Titles Scheme described by the Full Court as the community titles schemes. The Constitution of the Club entity contemplated that each holder of ordinary shares in the company would hold one or more parcels of 13 ordinary shares and would own an associated one quarter interest as tenants-in-common in a lot described as a "Villa Interest" in either of the community titles schemes. Under the relevant agreements, a purchaser of one timeshare interest must become both a member of the Club entity holding 13 shares and the registered proprietor of a corresponding one quarter interest in either of the community titles schemes. Purchasers of timeshare interests were required to execute a deed poll binding them, if they sold their Villa Interest, to sell the corresponding shares in the Club entity to the same person; and, an assignment of a letting pool agreement under which their Villa Interest was made available with others as part of a pool: [6], [7]. 45 On 31 January 2005, ASIC granted a conditional exemption to the Club entity and Investments from registration of the timeshare arrangements as a managed investment scheme under the Act. The exemption was granted on the basis that Investments entered into a deed poll whereby it covenanted that it would not exercise more than 10% of the voting rights attaching to shares on any resolution other than in circumstances consented to in writing by ASIC or in relation to a resolution to wind up the relevant scheme. 46 By cl 4.2 of the deed poll, Investments was entitled to revoke the deed poll upon providing ASIC and the Club entity with at least 180 days prior written notice: [9], [10]. 47 In July 2011, QNA acquired 98% of the shares in Holdings from Lend Lease. Closeridge acquired the remaining 2%: [11]. 48 On 15 September 2011, by letter, Investments gave notice to ASIC and the Club entity that it intended to revoke the deed poll. The revocation took effect on or about 13 March 2012, more than two months prior to the Club entity's application to the Panel for a declaration under s 657A: [12]. 49 In or around March 2012, QNA acquired another 2.9% of the issued shares in the Club entity taking QNA's (now PLC's) direct and indirect interest in the Club entity to approximately 44.3%. 50 On 12 April 2012, QNA lodged a bidder's statement with ASIC proposing a bid for all shares in the Club entity and the corresponding Villa Interests: [15]. On 20 April 2012, ASIC wrote to QNA raising a number of concerns about the bidder's statement including inadequate disclosure and a suspected ongoing contravention of s 606 of the Act. On 24 April 2012, QNA's solicitors wrote to the Club entity advising it that QNA did not intend to proceed with the bid. ASIC was notified of that matter on the same day. On 26 April 2012, ASIC took the position that QNA could not withdraw its bid, as a matter of law. On 11 May 2012, QNA sought an extension of time within which to lodge a replacement bidder's statement. ASIC granted that extension of time. On 21 May 2012, QNA lodged a replacement bidder's statement proposing an acquisition of all of the issued shares in the Club entity and all Villa Interests. On 1 June 2012, QNA advised the Club entity, through solicitors, that the bidder's statement would not be despatched and a further statement would be provided on 4 June 2012. QNA said that it would seek an extension of time to the despatch period from ASIC until 12 June 2012: [12] to [23]. 51 By 26 June 2012, no replacement bidder's statement had been provided. The Club entity lodged its application to the Panel under s 657A on 26 June 2012: [24]. 52 The first Panel made a declaration of unacceptable circumstances on 24 July 2012. 53 The circumstances, put simply, were: the status of the Club entity; the ownership share structure between Holdings, Investments and the Club entity; ordinary shares in the Club entity are voting shares; the operation of the deed poll; the position of Investments as the holder of shares in July 2011; QNA's acquisition of 98% of the shares in Holdings and Closeridge's acquisition of 2% of the shares in Holdings in July 2011; QNA's acquisition of a "relevant interest" in the shares in the Club entity by operation of s 608(3)(a) of the Act; the contravention by QNA of s 606 of the Act in making the July 2011 acquisition; the acquisition by QNA in March 2012 of a "substantial interest" in the Club entity by acquiring an additional 2.9% of the issued shares; the contravention by QNA of s 606 in making the second acquisition: [50]. 54 At [51], the Full Court observes that the substance of the circumstances was that each of the first and second acquisitions (as defined) was made in contravention of s 606 of the Act. At [50], the Full Court observes that there is a clear delineation between the circumstances and the effect that those circumstances have had, are having, will have or are likely to have on the control or potential control of the company or the acquisition, or proposed acquisition, of a substantial interest in the company: see s 657A(2)(a)(i) and (ii). 55 Also at [50], the Full Court observes that relevantly it is the effect of the circumstances which renders them unacceptable circumstances. 56 At [52], the Full Court gives emphasis to those propositions having regard to the statutory language of s 657A(2)(a). Sections 657A(1) and s 657A(2)(a) are in these terms: 657A Declaration of unacceptable circumstances (1) The Panel may declare circumstances in relation to the affairs of a company to be unacceptable circumstances. Without limiting this, the Panel may declare circumstances to be unacceptable circumstances whether or not the circumstances constitute a contravention of a provision of this Act. Note: Sections 659B and 659C deal with court proceedings during and after a takeover bid. (2) The Panel may only declare circumstances to be unacceptable circumstances if it appears to the Panel that the circumstances: (a) are unacceptable having regard to the effect that the Panel is satisfied the circumstances have had, are having, will have or are likely to have on: (i) the control, or potential control, of the company or another company; or (ii) the acquisition, or proposed acquisition, by a person of a substantial interest in the company or another company. … [emphasis added] 57 Section 657A also provides that the Panel may declare circumstances to be unacceptable circumstances if it appears to the Panel that the circumstances satisfy the description in s 657A(2)(b) or (c). The section also provides that the Panel may only make a declaration under subsection (2) (or only decline to make such a declaration), if it considers that doing so is not against the public interest after taking into account any policy considerations that the Panel considers relevant. 58 Section 657A(2) operates, relevantly, on the footing that the Panel may declare circumstances to be "unacceptable circumstances" if it appears to the Panel that the circumstances are unacceptable having regard to the effect the Panel is satisfied the circumstances have had, are having, will have or are likely to have on the relevant subject matter of s 657A(2)(a)(i) and (ii). Thus, that which appears to the Panel and the Panel's state of satisfaction are central to the section. 59 At [49], the Full Court warns against the danger of conflating that which constitutes the circumstances with the matters the Panel may have regard to in deciding whether those circumstances constitute "unacceptable circumstances". Rather, circumstances may be unacceptable under s 657A(2)(a) having regard to the effect of those circumstances whether past, present or their effect or likely effect in the future: [53]. 60 The effect or likely effect of circumstances does not constitute part of the circumstances capable of being declared unacceptable: [54]. 61 At [57], the Full Court recognises that matters such as: PLC and its associates continuing to maintain a relevant interest in the shares; a continuing state of affairs in respect of which the remaining shareholders in the Club entity were faced with a situation where QNA had achieved and could continue to exercise effective control of the Club entity without shareholder approval or without the advantage of shareholders receiving an open bid; and, a state of affairs where a takeover bid by QNA would have ameliorated the situation facing the shareholders but no such bid had been made by QNA, were, properly understood, some of the effects which arose for consideration by the Panel under s 657A(2)(a)(i) and (ii) but did not form part of the circumstances. 62 In the declaration, it appeared to the Panel that the circumstances were unacceptable having regard to recited effects noted at paras 10 and 11 of the declaration. 63 At [61], the Full Court recognises that the circumstances were the first and second share acquisitions made in July 2011 and March 2012 each made in contravention of s 606 of the Act. 64 The Full Court also observes at [61] that those circumstances were declared unacceptable having regard to the effect which the Panel was satisfied those circumstances "have had, are having, will have or are likely to have on the control or potential control of TPC, or the acquisition or proposed acquisition, by a person of a substantial interest in … TPC". 65 At [65], the Full Court notes that the first and second acquisitions in contravention of s 606 of the Act occurred on identifiable dates. The circumstances had a beginning and an end. At [69], the Court observes: "That the effects of the circumstances (the acquisition of the shares in breach of s 606) are continuing does not render the circumstances as continuing to 'occur' or as continuing to 'have occurred'" [bold emphasis added]. 66 In other words, the recognition that the effects of circumstances may be enduring does not render the circumstances enduring. The circumstances are finite. The effects of circumstances may or may not endure or be ongoing. 67 At [70], the Full Court addresses elements of the legislative scheme. The Full Court observes: The legislative scheme contemplates applications to the panel being made, as well as the making of declarations by the panel, within relatively short periods of time following the occurring of the particular "circumstances". The policy reasons which underpin the purposes of Ch 6 set out in s 602 and to which we have referred point, together with the limitation periods found in ss 657B and 657C, to the timely disposition, in short compass, of such applications. 68 At [71], the Full Court takes up the importance of the purpose of the legislative scheme underpinning Chapter 6 as set out in s 602 of the Act and particularly its relationship with the time periods found in ss 657B and 657C to observe that, in this context, it cannot be thought that the Parliament intended the expressions "after the circumstances occur" (in s 657B(a)) and "after the circumstances have occurred" (in s 657C(3)(a)) to be capable of being reset on a daily basis with each new day being the starting point for the calculation of the time limits imposed. 69 At [71], the Full Court also said this: Such a construction would strain against the policy objectives and, far from being timely, very long periods of time could elapse between the first "occurring" of the circumstances and their continuing occurrence, without offending the time limits. 70 The Full Court is recognising that, if enduring effects were to be regarded as part of the circumstances, the time limits would be reset, in a practical sense, every day. Rather, the time limits operate by reason of the finality of the circumstances. The circumstances referred to in ss 657B and 657C are, of course, the circumstances that would be susceptible of a declaration of "unacceptable circumstances" if it appeared to the Panel that those circumstances were unacceptable having regard to the effect that the Panel is satisfied those circumstances have had, are having, will have or are likely to have on the relevant matters. 71 At [71], the Full Court also said this: During such extended periods the market would be operating on a basis which might later be the subject of regulatory intervention by the panel. 72 At [72], the Full Court observes that such an approach (as discussed at [60] and [61]) does not meet the commercial imperatives, including timeliness, found in the legislative scheme. 73 At [73], the Full Court makes an observation upon which a large part of the contentions of the applicants rest (taken in conjunction with [109] and [110]). At [73], the Full Court said this: In this case the latest of the share acquisitions occurred in March 2012 and accordingly, time had expired by the time of TPC's application in June [26 June 2012] and the panel's declaration in July [24 July 2012]. The time limits set by ss 657B and 657C(3) cannot be extended by relying on the ongoing effects of the circumstances found to exist or to have existed. [emphasis added] 74 The applicants contend that [73] is an emphatic statement by the Full Court that the time limits recited in ss 657B and 657C cannot be extended (by the Panel or the Court) by any reliance upon the ongoing effects of the circumstances found by a panel to exist or to have existed. The observation of the Full Court at [73] must be understood in the context of the discussion. The extensive discussion leading up to [73] throughout the reasons and the observations at [69], [70] and [71] which immediately lead to [73] is a discussion in which the Full Court is seeking to emphatically delineate between finite circumstances on the one hand and enduring or ongoing effects of those circumstances on the other hand. At [73], the Full Court, in a conclusionary way, is observing that finite circumstances cannot be extended by seeking to characterise ongoing effects as a part of those circumstances. Rather than declaring, in effect, that ongoing effects are not matters of relevance to an extension application under either s 657B or s 657C, the Full Court is making plain that circumstances are not rendered ongoing (that is, extended) by treating ongoing effects as part of the circumstances. 75 Because the circumstances were not ongoing but rather, were finite, with some identified effects ongoing, it was necessary for the first Panel to consider whether the time for making an application under s 657A required an extension. The first Panel fell into error in treating the circumstances as ongoing and the primary judge fell into error in treating some identifiable effects as elements of ongoing circumstances. 76 In the result, the Full Court made this observation at [76]: Accordingly, for these reasons, we have concluded that the primary judge erred in failing to find that the application to the panel and its declaration of unacceptable circumstances were each made out of time. Contrary to her Honour's finding at [48], it was necessary for time to be extended in each case. As her Honour found, the panel decision to extend time was contrary to the rules of natural justice. 77 Thus, the appeal was allowed. 78 As to the contentions in relation to whether QNA indirectly acquired a relevant interest in the voting shares in the Club entity by operation of s 606(1) and s 608 and whether there was an increase in "voting power", the Full Court concluded that QNA's voting power increased from 0% to over 40% as a direct result of one transaction in July 2011 when it acquired the shares in Investments. Notwithstanding the deed poll, Investments (and therefore QNA) had power to exercise or control the voting rights attached to the shares: [78] to [96]. 79 As already mentioned, the Full Court observed that it did not know what had transpired in the market since the events forming the subject of the first Panel hearing had occurred and although the passage of time may suggest that the matter should not be remitted to the Takeovers Panel, it was by no means clear to the Full Court that remitting the matter to the Takeovers Panel would be a futile exercise. The Full Court formed the view that the matter ought to be remitted to the Takeovers Panel to be considered and determined according to law and, having regard to the Full Court's conclusions on the s 606 question, the Takeovers Panel "should now consider whether an extension of time to bring the application should be granted": [110]. 80 At [109], the Full Court is recognising that because ongoing events are not part of the circumstances, it was necessary for the first Panel to consider whether an extension of time to bring the application should have been granted and, upon remitter, the Takeovers Panel would also need to consider, in considering the remitted matter for determination according to law, whether an extension of time to bring the application should be granted. 81 The Panel would need to have regard to the view the Full Court formed "on the operation of s 606" in considering the extension application. 82 Paragraph [109] of the Full Court's reasons, however, is not a statement to be read in conjunction with [73] to bring about the result that in considering whether an extension of time to bring the application should be granted, the Takeovers Panel cannot have regard to the ongoing effects of the finite circumstances in the exercise of its statutory discretionary power under s 657C(3)(b) of the Act. 83 To the extent that the applicants in Matter No. 1075 of 2015 contend that the Panel fell into reviewable error of law by failing to adopt the construction contended for by the applicants deriving from the conjunction of [73] and [109], I am not satisfied that any such error is made good. 84 Before examining the reasons of the Panel, the following grounds of review ought to be noted. They are these. 85 First, the Panel fell into error of law by finding there were ongoing unacceptable circumstances on the evidence before it that would justify the granting of an extension of time. 86 Second, in exercising its discretion under s 657C(3)(b), the Panel failed to give any or alternatively proper consideration to the facts and matters that occurred following the decision of the first Panel. 87 Third, in making the extension of time decision, the Panel failed to have any or alternatively proper regard to the likelihood of whether a final declaration would be made under s 657A of the Act. 88 Fourth, in making the extension of time decision, the Panel failed to have any or alternatively proper regard to the likelihood of whether orders would be made under s 657D of the Act. 89 Fifth, in making the extension of time decision, the Panel failed to have regard to proper considerations in assessing whether the Club entity had justified its delay in making its application for a declaration of unacceptable circumstances. 90 Sixth, in making the extension of time decision, the Panel failed to have any or alternatively proper regard to the passage of time from the circumstances of the alleged contravention. 91 Seventh, the Panel took into account the irrelevant consideration that the Full Court had remitted the matter to be determined by the Panel according to law. 92 Eighth, the Panel took into account the irrelevant consideration as to whether the first Panel would have extended time. 93 Ninth, the Panel fell into error in finding that it was in the public interest for the extension of time to be granted in view of the time of the application and the evidence before it. 94 These errors are said to amount to reviewable errors under the ADJR Act. 95 As to the interim orders decision, the applicants say this. 96 First, the Panel fell into error of law because it was not a proper exercise of the power for the interim orders to be made for the reasons identified. 97 Second, the orders were unnecessary in light of an amendment that had been made to the Club entity's Constitution by members of the Club entity. 98 Third, the effect of the orders was not to preserve the status quo but to further restrict the rights of the applicants in a manner inconsistent with the amendment that had been made to the Club entity's Constitution by members of the Club entity. 99 Fourth, the Panel failed to have any or alternatively proper regard to the likelihood of whether a final declaration would be made under s 6567A of the Act. 100 Fifth, the Panel fell into error because it failed to have any or alternatively proper regard to the likelihood of whether final orders would be made under s 657D of the Act. 101 These errors are said to amount to reviewable errors under the ADJR Act. 102 It is now necessary to consider, against the background of these observations of the Full Court, the summary reasons of the Panel in granting the extension of time under s 657C(3)(b) to 26 June 2012.

Summary reasons of the Takeovers Panel for its decision to extend time 103 The Panel (described in the summary reasons as the "remittal Panel") is constituted by Mr Peter Day, Ms Michelle Jablko and Mr Ian Jackman SC. 104 The reasons are described as a "summary of the reasons" for the Panel's decision to extend time under s 657C(3)(b) and to seek an extension of time from the Court under s 657B. At para 5, the Panel says that "full reasons" for reaching both decisions will be provided when the proceedings are completed. ASIC contends that because the Panel is not required under the Act to give reasons for these classes of decisions (see s 657A(6)), care must be taken in not subjecting the summary reasons to the degree of analytical scrutiny for error relevant to statutorily required reasons for decision-making. 105 The applicants say that the summary reasons comprise 16 pages and one can infer that the Panel has sought to identify the reasons for reaching its decision to extend time for the application and to apply to the Court under s 657B. 106 As to the facts, the Panel observes that the "detailed facts" are set out in the reasons supporting the earlier declaration of 24 July 2012 although, of course, that declaration was set aside: para 7. 107 The Panel sets out its own brief statement of the relevant facts. It is not necessary in these reasons to recite those facts. They relate to the status of the Club entity and the operation of a timeshare; the shareholding as between Holdings, Investments and the Club entity; the deed poll Investments had executed in favour of ASIC restricting its voting to no more than 10%; the acquisition in July 2011 by PLC of 98% of the shares in holdings and PLC's acquisition in March 2012 of another 2.9% in the Club entity; the revocation of the deed effective 13 March 2012; PLC's lodgement of a bidder's statement in April 2012 with ASIC which was withdrawn and replaced on 21 May 2012; no offers made under either bidder's statement: paras 8 to 12. 108 A diagram of the share ownership structure is set out at para 10. 109 In reciting the circumstances of TPC's application, the Panel at para 4 sets out the final orders made by the first Panel consequent upon its declaration subsequently set aside. Order 4 of those orders provides that Orders 1, 2 and 3 cease to have effect if the requirements of Order 4 are met. Order 4 contemplates the possibility of an offer for all the issued shares in TPC under a takeover bid under Chapter 6. 110 In that context, the Panel notes at para 15 that no bid has ever been made. 111 The Panel notes that the application of 26 June 2012 was remitted to the Panel on 4 September 2015 by the Full Court. 112 At para 18, the Panel notes that TPC sought interim orders on the "original application" from the first Panel which orders were not made. The applicants say the reference to the "original application" is itself odd because the Panel does not seem to realise that the application remitted to it is the very same application. 113 I do not accept that construction. 114 The Panel notes the interim orders made after inviting submissions and the two extension orders (of those orders) made after requests from PLC for extensions to enable it to put on submissions: para 20. 115 In the Panel's "Discussion on Extending Time", the Panel quotes ss 657B and 657C. 116 The Panel then observes that Collier J had decided that the first Panel had denied procedural fairness to PLC when it made its decision, in the alternative, to extend time under s 657C. The Panel then quotes the observations of the Full Court at [37] of its reasons (discussed earlier in these reasons at [35] to [37]) to the effect that Collier J had held the earlier extension decision contrary to the rules of natural justice with the result that the application was out of time and the Panel ought not to have conducted proceedings on the application unless it was unnecessary to extend time because, as the Panel had held, the relevant circumstances were "ongoing". The quoted passage from [37] of the Full Court's reasons notes that the respondents to the appeal did not challenge Collier J's findings "on the extension point": para 25. At para 26, the Panel quotes the Full Court's conclusion at [76] on the "pivotal question" (as the Full Court called it) of whether the primary judge was correct in upholding the first Panel's finding that the circumstances, declared unacceptable, were "ongoing". The quoted passage recognises error in that regard and affirms the primary judge's conclusion that the extension decision was contrary to the rules of natural justice on the assumption, as found by the Full Court, that the circumstances were not ongoing and an extension decision was necessary. 117 These passages of the Panel's reasoning do not purport to be an analysis of the Full Court's full reasoning. They are contained in a section of the Panel's reasons addressing the question immediately before the Panel of whether an extension decision ought to be made and they reflect the Panel's thinking that as consideration of an extension decision is necessary, it is relevant to note that both Collier J and the Full Court recognised that in making the earlier extension decision (on the alternative ground), the first Panel had failed to afford PLC procedural fairness. 118 This, of course, was not the critical question (or even a question in contest if an extension decision was necessary) in setting aside the primary judge's decision and the decision of the Panel and orders. 119 The central matter was error in treating the circumstances as ongoing. 120 Although subjected to criticism, I do not accept that these references suggest a fundamental misunderstanding by the Panel of the Full Court's reasons but rather reflect a focus on the accepted legal error that the first Panel fell into of denying PLC procedural fairness (on the alternative assumption that an earlier extension decision was necessary). 121 At para 27, the Panel recognises expressly that the Full Court determined that "circumstances" were "confined to particular events" (finite to events) and were "distinguished from the effect of them which was ongoing" and in order for ss 657B and 657C to operate effectively, "the relevant circumstances must be capable of being identified as having arisen at a particular time" (quoting the Full Court at [64]). At para 28, the Panel quotes the Full Court's observations about the Panel examining and resolving factual questions and then determining whether to extend time under s 657C(3). 122 At para 29, the Panel refers to Collier J's citing with approval the Panel's reasoning in a decision called Re Austral Coal Ltd (No 3) [2005] ATP 14 ("Austral Coal"). Collier J referred to [18] of that Panel's decision. The Panel in the present proceeding cites [19], [20] and [21] of the Austral Coal decision. In Austral Coal, an application for a declaration under s 657A of the Act was made out of time. The Austral Coal Panel at [18] observed that the Panel is given a discretion to extend the two month time limit to make an application. The Panel said this at [18] to [21]: [18] … The panel considered that it should not lightly exercise that discretion. The time limit was set by the legislature to provide certainty to market participants in the context of takeovers that actions could not be challenged indefinitely. [19] Notwithstanding this, the panel considered that it would be undesirable for Glencore's application to be allowed to go unheard because it was lodged outside the 2 - month time limit, if: (a) essential matters supporting Glencore's case first came to light during the 2 - month period preceding the application; and (b) Glencore's application made credible allegations of clear, serious and ongoing unacceptable circumstances. [20] Unacceptable circumstances in relation to Austral Coal should not go unremedied merely because their existence has been able to be hidden for more than 2 months. [21] The panel, therefore, considered it desirable to review the merits of the application on its face in order to assist in its decision whether or not to grant an extension of time. 123 The matter hidden from view was a contended association relevant to the question of when a participant may have held a relevant interest. When the Austral Coal Panel reviewed the merits it was not satisfied that the contentions were made out and time was not extended. 124 At para 31, the Panel seeks to identify a point of differentiation between the Austral Coal Panel's refusal to extend time and the matters under consideration before the present Panel. At para 31, the Panel says that, in this remittal, the circumstances are different in that "there is a clear breach of s 606, as found by the original Panel and confirmed by the Court at first instance and Full Court" (at [78] to [96] of the Full Court's reasons). 125 The Panel took the view that it was undesirable that the Club entity's application be allowed to go unheard even though lodged out of time in circumstances where an earlier Panel, a primary judge of the Federal Court and the Full Court of the Federal Court had found the foundation facts to give rise to a contravention of s 606 of the Act. Plainly enough, at a factual level, the Club entity's application does not reflect circumstances of a "hidden" association or any other hidden matter. 126 However, it is a point of principle that the Panel refers to in having regard to Austral Coal. 127 Importantly, at para 32, the Panel recognises that the legislation sets time limits so that there will be speedy resolution of matters before the Panel. The Panel recognises that this consideration continues to be "relevant in the remittal". The Panel says, however, that the relevance of that matter is not "determinative" of the application. Plainly enough, making an extension decision involves the exercise of a statutory discretion conferred upon the Panel. 128 The Panel notes at para 32 the reservation expressed by the Full Court at [109] about remittal and the Full Court's lack of knowledge of things that might have transpired in the market since the relevant events. The Panel notes the Full Court's observation that it is by no means clear that remitting the matter to the Panel would be futile. At para 33, the Panel sets out a chronology of events and particularly events from 22 May 2015 to 29 October 2015. It will be necessary to return to some of those events. 129 At para 34, the Panel notes PLC's submission that the power to extend time must be limited to a reasonable and relevant period. PLC developed a submission to the effect that the power to extend time is necessarily bound up with time periods associated with bid requirements. The Panel observed that there is nothing in s 657C to indicate that the Panel's jurisdiction is limited to a bid period (para 36) and the power to extend time under s 657C(3)(b) is not limited to being exercised only within the period of a takeover bid: paras 34 to 37. 130 At para 38, the Panel observed that it agreed with the submission of PLC that it was never intended by the legislature for the power to extend time under s 657C(3)(b) to be "unlimited" such that actions could be considered "indefinitely". The Panel then says: "In this respect we have considered the factors in Austral Coal 03 as well as other factors we consider relevant to whether time should be extended". 131 It seems plain enough that the Panel at this point is making reference to the matters of principle it derived from Austral Coal in conjunction with PLC's observation, as a matter of principle, that time cannot be regarded as unlimited such that things can be considered indefinitely. At para 39, the Panel then says this: "We do not agree with the submission of PLC that 'There are no ongoing circumstances regarding the application of TPC of 26 June 2012, consequently there can be no extension of time'". The applicants say that this paragraph is consistent with the view that the Panel has misunderstood the Full Court reasoning because the Panel seems to be saying that it disagrees with the proposition that there are "no ongoing circumstances" and is thus asserting that there are ongoing circumstances notwithstanding that the Full Court has said that the circumstances are finite and not ongoing. 132 However, the statement at para 39 needs to be read in the context of the Panel's recognition as early as para 27 of its reasons of the essence of the Full Court's decision. Paragraph 39 needs to be read in the context of later paragraphs which make it plain that the Panel entirely understands the point of distinction. Also, at para 39, the Panel is seeking to express disagreement with a proposition put by PLC. In the immediately following para 40, the Panel observes that the Full Court "made it clear" that in order for the time limitations under ss 657B and 657C to operate effectively the "relevant circumstances" must be capable of being identified "as having arisen at a particular time". In the very next sentence, the Panel says that the Full Court "distinguished in this case the circumstances found from their effect". 133 These observations are addressing the rejection of PLC's proposition at para 39. 134 At para 41, the Panel then has regard to the submissions put on by ASIC and the Club entity. 135 As to ASIC, the Panel notes ASIC's contention that there is a basis for extending time. The relevant matters are said to be that a "clear breach" of s 606 has been established and the lengthy passage of time since the events forming the subject of the Panel hearing have not lessened the "effect" of PLC's contravention as compared with the circumstances prevailing at the time the first Panel made its declaration. The reference to that declaration by ASIC is put on the footing that the first Panel's reasons for the declaration continued to be relevant on the footing, it seems, that having regard to the foundation facts, the control of the Club entity had passed to the applicants and the detriment to the other shareholders continued. The Panel then quotes a submission put by ASIC in these terms: PLC's purchase of [Investments] in 2012 [intended we think to read '2011'] occurred in breach of s 606 and in circumstances where TPC's members were not given the opportunity (as would be the case in the event approval under item 7 of section 611 had been sought and obtained) to make a fully informed decision on an acquisition having a significant effect on the control and future direction of their company. Shareholders, and the directors of TPC, were not afforded, the usual opportunity associated with organising an item 7 approval, to seek to negotiate the terms of, or obtain any assurances in connection with, PLC's acquisition of control of TPC. Ultimately this has potentially impacted on TPC's members continued ability to reasonably enjoy their investments. 136 At para 43, the Panel notes the Club entity's submission that it was only after it became evident that members would not have the opportunity to receive and consider the announced bid that the application of 26 June 2012 was made. 137 At para 44, the Panel returns to an observation from Austral Coal that the discretion to extend time should not be exercised lightly. The Panel describes this consideration as the "first factor in Austral Coal 03" although, in truth, the proposition is an important statement of general principle. The Panel then says that it has, for the reasons briefly set out in the summary, exercised the discretion to extend time for the making of the application dated 26 June 2012. The Panel then says this: We have not done so lightly, but weighed the factors and been persuaded that there has been a serious contravention of chapter 6 and the control implications and impact on other shareholders of that remain. The Full Court found that s 606 had been contravened and nothing in the submissions to date would lead us to consider that a different conclusion might be open. [emphasis added] 138 This statement is a rolled up conclusion in a summary form to the effect that the decision has not been reached lightly, the submissions have been weighed in the balance and the Panel has been persuaded that there is a demonstrated serious contravention of Chapter 6 which has given rise to control implications and the effect or impact of those circumstances on the other shareholders remains and endures. 139 At para 45, the Panel makes a reference to what it describes as the "next factor in Austral Coal 03". 140 That factor is that it would be undesirable for a matter to go unheard because it was lodged outside the two month time limit, if essential matters first came to light during the two months preceding the application. The Panel says that this "factor" applies a policy that an applicant should not be disadvantaged because it does not know (and it cannot be said that it ought to know) a relevant fact. 141 The Panel then says that there is "some aspect of this here". The Panel then refers to the Club entity's submission going to contended breaches of ss 631 and 633 of the Act concerning the minimum bid price issue and contended disclosure deficiencies. At para 46, the Panel says that the Club entity was hopeful that the matter would be resolved and TPC made its application on 26 June 2012 when it became apparent to it that the matter was not going to be resolved. The Panel says that TPC could not have known that no offers would be made and the bid "withdrawn". The Panel says that while it encourages parties to seek to resolve matters by negotiation (presumably about offers, despatch of offers and related such matters as may have been relevant as between the Club entity and the proposed offeror), applicants should not delay in making applications to the Panel. 142 At para 47, the Panel notes the submission of TPC that it was not until after PLC announced its intention to make a takeover bid for TPC in April 2012 that it sought and received advice in relation to the matter. The Panel then says this: Given that PLC had argued that it was not in breach when it acquired the shares in July 2011 because of the ASIC Deed [the deed poll], and was not in breach when it revoked the ASIC Deed because there was then no transaction to which s 606 applied, we have some sympathy for this submission by TPC. In our view, while well short of a compelling reason, it weighs in favour of an extension. [emphasis added] 143 In these paragraphs of the Panel's summary reasons from para 45 to para 47, the Panel is not attributing weight to contended breaches of ss 631 and 633 of the Act but rather is giving emphasis to the latter part of the quoted submission which addresses the engagement between PLC and TPC concerning the lodging of a replacement bidder's statement; PLC seeking further relief from ASIC; and TPC's conception that such action would address the effect of the breaches of the Act in respect of the first acquisition. In these paragraphs, the Panel is weighing in the balance the matters just described. 144 I am not satisfied that these considerations are irrelevant. They are matters which the Panel is entitled to take into account. The primary factors are those described at para 44 but nevertheless these other matters were weighed in the balance as well. 145 At para 48, the Panel considers what it describes as the "next factor in Austral Coal 03" which it says is: it would be undesirable for a matter to go unheard because it was lodged outside the two month time limit if the application makes credible allegations of clear, serious and ongoing unacceptable circumstances. 146 Particular emphasis is directed to this paragraph of the Panel's reasons by the applicants especially because of the use of the phrase "ongoing unacceptable circumstances". In the second sentence of para 48, the Panel uses the same phrase again when it says: "In our view, the contravention of s606 is a compelling consideration for an extension of time, and prima facie there appears to be ongoing unacceptable circumstances". 147 Plainly enough, the use of the phrase "ongoing unacceptable circumstances" is an incorrect analytical description. The factual events which occurred were that there were acquisitions in contravention of s 606 of the Act which occurred at a particular moment in time and which gave rise to ongoing effects of the kind described particularly in the ASIC submission and that part of it discussed at para 42 giving rise to the conclusion at para 44. 148 The applicants say that the use of the phrase "ongoing unacceptable circumstances" on two occasions in para 48 makes it plain that the Panel simply did not understand the reasons of the Full Court and that the Panel has fallen into precisely the same error of law into which the first Panel fell. 149 I accept that the use of this phrase is unfortunate. 150 However, the two references to the phrase in para 48 need to be understood in the context of the reasons taken as a whole. There cannot be any doubt that the Panel understood the Rubicon flowing between circumstances which have a beginning and an end and effects which may be ongoing or enduring. In para 48, the Panel is directing its attention to the quality of character of the contravention. The Panel is saying that, in this case, there is a demonstrated contravention of s 606 and that circumstance, taken together with the effect of it, is a compelling consideration for an extension of time. It seems to me that a proper reading of para 48 taken together with the reasons as a whole and, in particular, paras 27 and 44 is that the Panel is recognising that there is continuing ongoing detriment to shareholders in the Club entity (other than the applicants), that is to say, ongoing effects flowing from the acquisition of the shares in contravention of s 606 of the Act. 151 I accept that para 48 suggests that the Panel might have misunderstood the reasons of the Full Court but when the Panel's reasons are read fairly and reasonably taken as a whole and taken, in particular, with paragraphs which expressly recognise, correctly, the point about circumstance and effects made by the Full Court, I am not satisfied that the Panel has fallen into error by force of para 48 in the way contended for by the applicants. 152 At para 49, the Panel observes that it should take into account the public interest in deciding whether to extend time and at para 58, the Panel says that it has considered whether to extend time from two perspectives. The first is whether the Panel would have extended time had it been the first Panel and the second is whether the passage of time means that the Panel should not now extend time. As to the first, the Panel says that it would have extended time had it been the first Panel and as to the second, it thinks that the passage of time does not mean that time ought not be extended. 153 I accept that the first consideration is odd. It is not clear to me why the Panel would seek to put itself in the position of the first Panel and postulate what it might or might not have done had it been the first Panel. 154 As to the question of whether the passage of time means that the Panel ought not to extend time, the Panel at para 51 considered the submission of PLC in these terms: PLC has been substantially prejudiced by the (now ultra vires) orders of the Panel of August 2012 which prevent PLC from using and enjoying its rights and property again weigh heavily against the granting of the Court's leave such that there can be no guarantee that the Court's leave will be forthcoming should the Panel make such an application. 155 At para 52, the Panel says that on the question of prejudice, a serious contravention of s 606 occurred and the consequence, namely the "control effect of ownership of those shares" has been held effectively in abeyance (by reason of the earlier orders). The Panel says that it has weighed this matter against the prejudice likely to other shareholders if the control effect of ownership is permitted without a consideration of whether it gives rise to unacceptable circumstances. The Panel says that on the question of whether the Court is likely to extend time for the making of a declaration, the Panel agrees that there "can be no guarantee but cannot conclude that it is not likely". At para 53, the Panel says that it is true that approximately four years has now passed. The Panel says that this is not because of any action or inaction on the part of the Club entity. At para 54, the Panel notes TPC's submission to the effect that changes in circumstances since the first Panel made its decision are not relevant otherwise PLC would benefit from its own actions. 156 The Panel does not accept that changes in circumstances, since the first Panel made its decision, are irrelevant. 157 At para 55, the Panel recites a submission from PLC that it cannot act against the principles of natural justice and that an extension of time three years after the application would be contrary to the principles of natural justice. PLC submitted that it would be an abuse of process for the Panel to use the remittal to correct an error made by the first Panel. 158 The application has been remitted by the Full Court to the Panel. The Full Court considered that matter and took the view that it was by no means clear that remitting the matter to the Panel would be futile. No doubt, there are many circumstances which might or might not render consideration of a matter by a Panel futile. The mere passage of time by itself was a circumstance well-known to the Full Court. What was not known to the Full Court was whether events had transpired in the market. In the context of PLC's propositions about the principles of natural justice and a three year period of elapsed time, the Panel said that it rejected that submission as PLC had not explained the content of the natural justice issue as it affects them. The Panel said at para 56 that if PLC's submission is making the point that it is prejudiced by the lapse of time, the Panel did not think that extending time and conducting proceedings "necessarily prejudices" PLC more than not doing so might prejudice the Club entity and the shareholders in that entity. The Panel observes that it had not, at the point in time of the summary reasons, proposed making a declaration of unacceptable circumstances or orders and that a further opportunity for the question of prejudice to be considered particularly in respect of orders under ss 657A(4) and 657D(1) would arise. 159 At para 56, the Panel says this: Secondly, the Full Court remitted the matter. If there was no conceivable basis on which the Panel could extend time, the Court would not have done so. Lastly, we note that PLC submitted to the Full Court that it was content with ASIC's proposed order for the Full Court to remit the matter to the Panel. 160 As to these observations at para 56, the Full Court remitted the matter because it was satisfied that doing so would not be futile. Plainly, the matter was a question for the Panel in the context of the relevant considerations. The Full Court was not engaging in any debate about whether there was or was not a conceivable basis upon which time could be extended. That was entirely a matter for the Panel. All the Full Court was saying was that remitting the matter to the Panel was by no means a futile exercise. 161 It is clear from the passages at paras 51 to 56 that the Panel is giving consideration to the seriousness of the contravention; the consideration that the control effect of ownership of the shares held by the applicants was effectively put in abeyance (as an aspect of contended prejudice); the prejudice to other shareholders if the control effect of ownership is permitted; the possibility that the Court might extend the time for making a declaration and the implications of the passage of time. The Panel is also recognising that changes since the time of the decision of the first Panel are not irrelevant. 162 I am not satisfied that the Panel has fallen into contended error in its summary reasons on the second passage of time point which, at para 51, begins the discussion. Although the first point at para 51 reflects, in my view, a misconceived approach, nothing turns upon it in the end result. The discussion on the extension of time at paras 51 to 56 is concerned with the contravention, prejudice, the passage of time and whether it is plain to the Panel or not that considering an application for an extension would, in fact, be rendered futile because no order from the Court could be obtained for an extension of time for the making of a declaration of unacceptable circumstances. As to that latter matter, the Panel was satisfied that although there could be no guarantee of that matter, the Panel could not conclude that it was "not likely". 163 At para 57, the Panel notes PLC's submission that the bid for shares in the Club entity is over and therefore any action by the Panel would not serve the purposes of Chapter 6 to facilitate an efficient, competitive and informed takeover. 164 The Panel notes, however, that there never was a bid. 165 Bidder's statements were lodged but never despatched with offers and were ultimately withdrawn. 166 The Panel observes that Chapter 6, having regard to ss 602, 611 and 657A is concerned not only with bids but also with control transactions. 167 At para 58, the Panel notes and quotes a proposition put to it in submissions by PLC directed to [109] of the Full Court's reasons. The proposition put in the submission was this: Since the Panel knows what the Full Court of the Federal Court did not know at the time of it handing down its judgment, in that nothing has transpired in the market since the events forming the subject of the Panel hearing occurred, then the facts that nothing has transpired and that there are no ongoing or any new relevant circumstances to give rise to any new "events" in addition to the lengthy passage of time since the original events occurred, the act of [the] Full Court in remitting the matter to the Panel is futile. Consequently, in light of the foregoing facts and of the Court's findings that the original Panel ought not to have conducted proceedings in 2012, the Panel now ought not conduct proceedings on the remittal to undertake any consideration of the application of The President's Club Limited of June 2012. [bold emphasis added] 168 Apart from the use by PLC of the phrase "no ongoing or any new relevant circumstances" which, like the Panel's earlier reference, is no doubt intended to be a reference to ongoing effects, the Panel says at [59] that there has been a serious contravention of s 606 which has not been remedied by PLC "in the intervening period" and "the passing of time does not do so". Thus, the effects of the acquisition continue. The Panel also says that if PLC's proposition is intended to convey the notion that had the Full Court known, as PLC contends, that nothing new had transpired at all in the market, the Full Court would have considered remittal to the Panel a futile exercise, then the Panel does not agree with the proposition. 169 The Panel notes the Full Court's view that the matter should be remitted to the Panel to be considered and determined according to law and, having regard to the Full Court's conclusions about the operation of s 606, the Panel should consider whether an extension of time to bring the application should be granted. 170 The remittal to the Panel does not mean that a consideration of whether time should be extended might not, in any event, be rendered futile, having regard to whatever matters might bring about that result. However, the Panel took into account PLC's contention to the effect that, on PLC's view, nothing had changed, nothing was new, the facts remained the same and all that had happened which was different was that a long period of time had elapsed. The Panel seems to have taken the same view or at least has, on the face of it, accepted that the relevant circumstances including a serious contravention of s 606 of the Act continues to give rise to the ongoing effects already described especially in terms of the matters mentioned at paras 42 and 44. 171 In other words, the enduring effects of the "circumstances" are unmitigated by any transformative matters at least in the view of PLC, as noted by the Panel. 172 However, at para 60, the Panel does recognise that questions remain for consideration "should the Court extend time for the making of a declaration", regarding what has transpired. The Panel says that that "is a further level of inquiry to be undertaken". 173 In summary, the Panel concludes that it is in the public interest that the time for making the application should be extended. 174 I am not satisfied that the Panel has taken into account irrelevant considerations in reaching its decision and I am not satisfied that the Panel has fallen into error in the way contended for by the applicants in reaching its decision. 175 In reaching that conclusion, I have also had regard to the extensive affidavit of Mr Alan John Bulman sworn 25 November 2015. That affidavit attaches many of the documents relating to engagement between the Panel and the participants. Time does not permit exposing in these reasons the detail of the matters taken into account. However, some mention should be made of particular matters recognising that a number of the documents annexed to Mr Bulman's affidavit are confidential and are subject to a confidentiality order. 176 However, on 4 September 2015, the Panel gave notice to the parties that the Full Court had made final orders and it notified the parties of the steps that would be taken consequent upon the remittal. 177 On 4 September 2015, Investments responded by saying that the Panel did not have jurisdiction to hear the matter. 178 On 4 September 2015, ASIC made an application for interim orders under s 657E(1) of the Act preventing the applicants (in effect) from exercising any voting rights attached to the shares in TPC in respect of which it was said to hold a relevant interest and preventing those parties from making further acquisitions or disposing of shares. The applicants resisted any application by ASIC for a stay of the orders of the Full Court and resisted the making of interim orders by the Panel. 179 On 23 June 2015 (the Full Court having delivered its first judgment on 22 May 2015), PLC asserted that any breach of s 606 of the Act by it was due to "inadvertence or mistake". That proposition was answered by ASIC in a letter dated 30 June 2015 which was the subject of a further response on 8 July 2015. 180 On 7 September 2015, the Panel wrote to all parties referring to the remitter. It asked the parties to express a view on what documents the Panel should consider; what information it should consider; what should it not consider; what factual disputes were alive; what factors ought to be taken into account in deciding whether to conduct proceedings; what factors, both factual and policy, ought to be taken into account by the Panel in considering an extension of time; should the Panel grant an extension of time; any other matters. 181 The Panel sought a response by 9 September 2015 with rebuttals by 10 September 2015. 182 PLC sought an extension to those times on 16 September 2015 to 23 September 2015 with rebuttals by 24 September 2015. 183 On 4 September 2015, the Panel made the interim orders earlier described which were extended on 10 September 2015 and ultimately extended on 25 September 2015. A submission in response to the Panel's request for information was made by TPC on 7 September 2015. 184 PLC put on a submission on 23 September 2015 in which it reasserts in many places that the Panel simply does not have jurisdiction to hear the matter and that doing so would be unconscionable. It asserts the immediacy of the time limits and says that the passage of time since the occurrence of the relevant circumstances is a significant factor weighing heavily against the exercise of the discretion. It also says that a change of circumstances had arisen because the members of the Club entity had passed resolutions at the AGM on 28 April 2015 to establish two formal bodies corporate to manage the Villa Interests and that the establishment of these bodies corporate and an intended commercial settlement between PLC and TPC was intended to result in the voluntary winding up of TPC. 185 Submissions were put on by ASIC on 7 September 2015. In those submissions, ASIC asserted the position that the passage of time had not lessened the effect of PLC's contravention of s 606 and that PLC continued to control 41.4% (44.3%) of TPC; no takeover offer had actually ever been made; and the detriment to shareholders resulting from the contravention of s 606 and the corresponding denial of TPC shareholders to have a say on PLC's acquisition remained unremedied. 186 ASIC also put on rebuttal submissions. 187 On 1 October 2015, the Panel advised participants that it had met and decided to conduct proceedings in relation to TPC's application. A "brief" was attached to the email from the Panel. The Panel sought a response by 6 October 2015 and rebuttal submissions by 8 October 2015. 188 PLC sought extensions of time about that matter. 189 ASIC lodged submissions on the brief on 7 October 2015 in which it continues to assert that TPC's members were not given the opportunity (as would be the case in the event of an approval under Item 7 of s 611) to make a fully informed decision on an acquisition having a significant effect on the control and future direction of the Club entity. 190 Aspects of that submissions are quoted by the Panel. 191 PLC put on submissions on 7 October 2015. It sought extensions of time and raised a number of propositions about the importance of the time constraints and the statutory purposes to be achieved by those time constraints. PLC objected to the Panel conducting proceedings and asserted that it did not have jurisdiction to do so which was a proposition it continued to articulate in the letter of 20 October 2015 to the Panel. 192 On 1 October 2015, ASIC put on rebuttal submissions and addressed the question of prejudice in its submission. On 6 November 2015, the Panel published its summary reasons for the decision as already mentioned. 193 On 6 November 2015, the solicitors for TPC wrote to the Takeover Panel referring to the interim orders made on 4 September 2015 which restrained Investments and related parties from disposing of shares in TPC. In the letter, the solicitors say that the TPC Annual General Meeting is to be held on 23 November 2015, and on 2 November 2015, TPC received from Investments a notice proposing numerous resolutions at that meeting designed to enable Investments and its related parties to assume control of TPC and take other steps in relation to particular monies prior to winding up TPC. 194 The solicitors said that Investments intended to pass resolutions to "spill the TPC board" and other resolutions despite, they say, having refused to pay levies since at least 2013. The solicitors say that Investments refuses to recognise "a 10% cap on its voting rights passed by the members at TPC's 2013 annual general meeting". The solicitors enclosed notice of the 2013 AGM which they say was duly given to Investments and its related members together with minutes of meeting of 28 November 2013 duly lodged with ASIC; notice of member resolutions for the 2015 AGM; and a letter from Investments dated 2 November 2015. 195 The point of the letter was that TPC said it now sought urgent interim orders restraining Investments and its related parties from exercising any voting rights in respect to the shares pending the determination by the Panel of the relevant matters according to law. The solicitors say that the interim orders "will serve to maintain the status quo and prevent [Investments] and its related parties assuming control of TPC and rendering these proceedings futile to the detriment of members who will be exposed to the consequences of the unacceptable circumstances currently being considered by the Panel". The solicitors said that many of the member resolutions proposed by Investments were, in their view, invalid and inappropriate for consideration by members. They also say: "In our view the proposed interim order would serve to avoid the need for the further threatened litigation and the associated costs pending the Panel's consideration of this long running matter". 196 The proposed resolutions included: removal of the current directors; appointment of new directors; appointment of Mr Palmer, Mr Stodart and Ms Anna Palmer as directors of TPC; entry into a settlement deed between Investments, PLC and TPC; payment of monies to PLC; authorisation to take all steps to commence proceedings to de-register TPC; TPC surrender leases and other matters. 197 In a letter dated 2 November 2015 from Investments to TPC (which is attached to the letter from TPC's solicitors to the Panel dated 6 November 2015), Investments said that it had recently discovered when reviewing an extract for TPC that a resolution was passed at a meeting of the company held on 28 November 2013 to modify the Constitution of the company by adding a new Article 38A. 198 Investments observes that in order to amend the Constitution a special resolution is required and notice of it must be given to each member entitled to vote and the resolution must be passed by at least 75% of the votes cast by members entitled to vote on the resolution. Investments says that at material times including November 2013, Investments, PLC and Mr Palmer were members of TPC and were entitled to vote at a General Meeting and that none of them were given any notice of the proposed special resolution nor any notice setting out an intention to propose the special resolution and stating the terms of the resolution. No notice of meeting was given to them and they were not afforded any opportunity to vote. Investments says that as Investments and PLC hold 44.3% of the issued shares in the company, they would have cast their votes against the Special resolution if they had been given notice of it. Investments says that the resolution drastically and adversely affects the voting rights of Investments, PLC and Mr Palmer and other associated companies and persons. Investments concludes that there has been an attempt by the purported resolution to act oppressively and unfairly and in a prejudicial way to Investments, PLC and Mr Palmer. 199 Investments calls for various things and says that if it does not receive those things it will seek urgent relief from the Courts for a declaration to set aside the modification to the Constitution or other relief including the appointment of a receiver. 200 On 6 November 2015, the solicitors for the applicants sent an email to the Panel attaching a letter dated 6 November 2015 in which the applicants requested the Panel to note the developments concerning the amendment to the TPC Constitution on 28 November 2013. 201 The applicants make the point that when that resolution was passed, the relevant applicants were prevented by interim orders from casting their votes leaving aside the question of whether they were given notice of the proposed meeting and the proposed resolutions. Various exchanges took place between the parties in relation to an application for interim orders as proposed by TPC's solicitors. PLC put on submissions about that matter on 16 November 2015. 202 On 17 November 2015, the Panel gave notice to the participants in these terms: The Panel has considered the request from [TPC] dated 6 November 2015 for an interim order restraining [Investments] and its associates from exercising any voting rights in respect of their TPC shares pending a final determination of the remitted application by the Panel. The Panel has decided to make interim orders. Attached are signed interim orders, and a Media Release that will be published on the Panel's website shortly. The Panel makes no comment on the issue regarding the amendment to TPC's constitution on 28 November 2013 as to the voting rights that may be exercised by [Investments] and its associates. The attached interim orders do not revoke the interim orders in relation to disposal of shares. On the issue of remaking that order, which the Panel invited and has received submissions on, the Panel is still finalising its position. We will communicate on this separately. This email sets out briefly the factors considered by the Panel in making its decision to make interim orders in relation to voting. This email does not constitute the Panel's reasons for making the interim orders and is not for publication. Among other matters, the Panel considered the following factors (although they are not listed in any order of importance): • The Panel had previously advised the parties, when first considering the question of interim orders in relation to voting, that "The Panel considered that it was not necessary, in the absence of any forthcoming vote, to make an interim order about voting of the shares". This position has now changed with the annual general meeting and the member resolutions proposed by [Investments]. • As noted in the summary of the Panel's reasons to extend time under s 657C, the Panel's preliminary view as things stand, and before hearing further submissions and rebuttals, is that there has been a serious contravention of s 606 the effects of which appear to give rise to unacceptable circumstances and warrant a remedy. • If [Investments] and its associates have the ability to exercise their full voting power and the member resolutions proposed by [Investments] are passed, potentially the effect of those resolutions could not be reversed by final orders. An order therefore is justified to maintain the status quo while proceedings are continuing. • [Investments] and its associates will not be unfairly prejudiced by the interim order - which, given the passage [of] time, goes no further than is necessary and allows voting of up to 20% of the shareholding. • TPC made its request for an interim order regarding voting rights in a timely fashion after [Investments] and its associates sent a notice proposing resolutions to be voted on the forthcoming TPC annual general meeting. • A longer than usual time has been allowed for [Investments] and its associates to make submissions. 203 The applicants express strong criticism of the exercise of the power to make interim orders based upon the short form statement of reasons set out in this email. 204 First, they say that the Panel says it makes no comment on the issue regarding the amendment to TPC's Constitution on 28 November 2013 yet that amendment was significant, affected the rights of the relevant applicants and was a Resolution passed at a moment in time when the relevant applicants were restrained by other interim orders from exercising their voting power. 205 Second, the applicants say that the email takes into account a consideration of the Resolutions the relevant applicants seek to have passed at an Annual General Meeting which it is their right to propose and secure in the exercise of their voting power. 206 Third, the applicants say that it forms no part of the proper exercise of the discretionary power to make interim orders to take up and assist TPC in securing, through the vehicle of interim orders, an outcome which would render it unnecessary for TPC to otherwise litigate its contentions against PLC. Taking these matters into account is said to be not a proper purpose for the exercise of the statutorily conferred power. 207 Fourth, the applicants say that the making of interim orders does not preserve the status quo but intervenes to alter the status quo. 208 I have simply put these propositions in summary form. 209 I am not satisfied that the Panel has fallen into error in the exercise of the statutory power in the way contended for by the applicants. First, the Panel says that it makes no comment on the issue regarding the amendment to TPC's Constitution on 28 November 2013 which must be taken to mean that it does not seek to engage upon a debate about the merits of a contentious question as between the applicants and TPC as to whether PLC and its associates were given notice of the 28 November 2013 meeting and whether the passing of the resolutions is valid or invalid. The Panel seems to be saying that it does not want to engage on that question and thus it makes "no comment on the issue". 210 As to the six bullet point reasons, the Panel seems to be saying that it ought to act on the footing that PLC and its associates are proposing to act and exercise powers attached to the voting rights in circumstances where there is a proceeding on foot in which, in the Panel's preliminary view as things stand, there is a serious question of a contravention of s 606 by reason of the circumstances, the effects of which appear to give rise to unacceptable circumstances which would warrant a remedy. 211 Thus, in a forward-looking way, the Panel is looking to the nature of the final orders that might be made should a declaration be made and is asking itself what interim orders would be appropriate to preserve the efficacy of the ultimate orders. In asking itself that question, the Panel is recognising that there is a "present threat" by PLC and its associates to convene a meeting and pass particular resolutions which could not be undone upon final orders being made. It is also recognising that PLC asserts, as a shareholder (through Investments and directly) that no cap applies to its voting power. PLC asserts the invalidity of the resolution to impose the cap and no doubt TPC asserts the validity of the cap. That is a debate the Panel does not wish to enter upon but for the purpose of considering whether interim orders ought to be made it is a reasonable approach on the part of the Panel to take PLC's contentions at their highest and assume that, as PLC contends, the cap is invalid and thus PLC enjoys the right to convene meetings and cast votes unconstrained by the cap. On that footing, the Panel would need to consider whether an interim order ought to be made irrespective of whether, in some forum, at some time a Court might decide whether the cap is good or bad. 212 I accept that on that footing it is appropriate for the Panel to ask itself whether it should exercise the discretionary power to make interim orders to preserve the efficacy of final orders should they be made in the proceeding. 213 I do not accept that making interim orders is an indirect or backdoor way of seeking to assist TPC in achieving the result it would seek to achieve in litigation which it would wish to avoid by invoking the aid of the Panel to make interim orders. I have no doubt that TPC would wish to call in aid the Panel to make interim orders on the basis that making interim orders might have the advantage that TPC does not have to assert, at least in the short term, proceedings for declarations and other relief about the efficacy of the imposition of the cap at the AGM. Similarly, making interim orders might be thought to discourage PLC from testing that question. That, however, is not the purpose exercising the mind of the Panel as reflected in the short email reasons. The Panel is recognising steps PLC seeks to take and contentions it seeks to make about its right to vote and its freedom from the cap. The Panel can properly proceed by taking PLC at its word and accepting, for the purposes of considering whether interim orders ought to be made, that PLC regards itself as entirely free from any constraint imposed by the passing of the resolution on 28 November 2013. 214 Accordingly, I am not satisfied that the Panel has fallen into error in the way contended for by the applicants in relation to the making of the interim orders. 215 It follows that I am not satisfied that error has been demonstrated in respect of the extension of the time for making the application and I am not satisfied that there is error in the making of the interim orders. 216 The remaining question then is the application made by the Panel under s 657B for an order extending the period within which the Panel might make a declaration under s 657A of the Act. 217 The Panel's application raises difficult questions of principle. 218 The respondents to the application who are the applicants in Application No. 1075 of 2015 say that the Panel's application, in this case, can only be regarded as an "absolute outlier". I have been taken to a number of the decisions concerning applications for extensions of time under s 657B. There is little point in reciting the particular details of each of them in these reasons. It is sufficient to say that in all of them very short time periods were sought for the extension having regard to the events which were said to give rise to the unacceptable circumstances. In some cases they are a matter of days and in other cases some matters of weeks. 219 In this case, the circumstances occurred in July 2011 and March 2012 being the acquisitions in contravention of s 606 of the Act. A long period of time has elapsed since then. The applicants say that TPC could have made its application not long after the July 2011 events or it could have made it promptly after the March 2012 events. I am not satisfied that that is necessarily so. There was some delay on the part of TPC but the chronology of events shows that TPC was engaging with PLC about the bidder's statement, the variation to its, the talked about despatch of offers, the amended bidder's statement, the withdrawal of the bidder's statement and then, ultimately, no despatch of offers which then led TPC to make its application on 26 June 2012 in which it contended that PLC had made an acquisition of a relevant interest in 41.4% of the shares in TPC. 220 Having made that acquisition, TPC did not propose to make an offer for the issues shares in TPC and it seems that PLC was content, having acquired such a substantial shareholding in TPC, to simply hold it and take no further steps to progress a takeover offer more generally. 221 PLC continued to assert that the acquisition did not contravene s 606 and it maintained that position before the primary judge and before the Full Court. It continued to maintain that position after the Full Court's decision. There is nothing in the material to suggest that the acquisition is anything other than a contravening acquisition but I say that on the basis of the material before me on this application which may or may not be all the material before the Panel. In any event, that question is a matter for the Panel. 222 There has been a long delay between the relevant circumstances and the present consideration of the application filed on 26 June 2012, upon remittal from the Full Court. 223 The principal reason for that delay is that the applicants sought judicial review of the first Panel's declaration and orders. It was right to do so, in the legal sense, because the Panel fell into error in failing to understand that the circumstances were not ongoing rather than recognising that the circumstances were finite and the effects were ongoing such that the Panel ought to have turned its mind to whether an extension of time to make the application ought to have been made. 224 The Panel persisted in its view before the primary judge that the circumstances were ongoing and it persisted in that view before the Full Court. 225 Had it not persisted in that view and had it recognised that it had fallen into error, a large part of the intervening delay would not have occurred. 226 In the Full Court's judgment on the question of the form of orders and costs, the Full Court said this about that topic (although it was talking about costs): Nonetheless we accept that in some circumstances, the Court might well take into account the fact that a successful party's conduct has led to proceedings which might otherwise not have been necessary. In this case, it was for the Panel or ASIC to take appropriate steps to deal with any breach of the Corporations Act. Unfortunately, the Panel chose a particular path, but did not proceed in accordance with law. The necessity for the proceeding at first instance and on appeal is attributable to the Panel's conduct, and not to that of Queensland North [QNA, now PLC]. 227 Had the Panel not taken the course it did, there would not have been the substantial delay occasioned by the proceedings before the primary judge and ultimately the proceedings before the Full Court. 228 Thus, the substantial part of the delay is explained but it nevertheless represents a delay which is unfortunate because of the path the Panel took. 229 The exercise of the discretion by the Court under s 657B is not informed by notions of seeking to discipline a participant nor is it informed by questions of general deterrence of conduct. The conduct of parties is, however, relevant, obviously enough, in explaining why there is a period of delay and in a case where there is a substantial period of time between the relevant circumstances and the application before the Court, the delay must be properly explained. In this case, putting to one side for the moment the question of the position adopted by the parties and who was wrong and who was right about that matter, the long period of delay is attributable to the proceedings, the reservation of the judgment, the pronouncement of judgment, the Full Court proceedings and then the pronouncement of judgment in the Full Court proceedings on 22 May 2015 and then the making of orders on 4 September 2015. 230 The Panel acted promptly and quickly after 4 September 2015. 231 The real question to be addressed under s 657B is whether the statutory purpose can be achieved. There are a number of statutory purposes for Chapter 6 of the Act and they are set out at s 602 of the Act. One of them is to ensure that the acquisition or control over the voting shares in a relevant company takes place in an efficient, competitive and informed market: s 602(a). Another is that as far as practicable, the holders of the relevant class of voting shares all have a reasonable and equal opportunity to participate in any benefits accruing to the holders through any proposal under which a person would acquire a substantial interest in a company: s 602(c). 232 PLC contended in the material before the Panel that nothing had changed between the date of the relevant circumstances and the date upon which the Panel embarked upon its consideration under the remittal. 233 The position at the present time is that PLC has, on the face of the material, acquired a relevant interest in a substantial proportion of the shares of TPC and has subsequently acquired further shares in March 2012. 234 It continues to assert control over those shares and there continues to be effects upon other shareholders deriving from the circumstances of acquisition in circumstances of, at least, a strongly arguable contravention of s 606 of the Act. 235 Section 657A does not operate only in the circumstances of a takeover bid. It contemplates circumstances in which might be unacceptable having regard to the effect that the Panel is satisfied the circumstances have had, are having, will have or are likely to have on the control, or potential control, of the company or the acquisition or proposed acquisition, by a person of a substantial interest in the company. 236 PLC continues to assert a position of control in the company which derives from the acquisitions. 237 If a declaration is made under s 657A, the Panel may make any order under s 657D that it thinks appropriate (subject to the qualification in s 657D(2)) to: "if the Panel is satisfied that the rights or interests of any person, or group of persons, have been or are being affected, or will be or are likely to be affected, by the circumstances - protect those rights or interests, or any other rights or interests, of that person or group of persons": s 657D(2)(a). 238 Since the occurring of the events which gave rise to the circumstances which might be the subject of a declaration of unacceptable circumstances, TPC has taken steps to convene a meeting to bring about the amendment to the Constitution which is said to have the effect of capping TPC's voting rights at 10%. As already mentioned, the legality of that resolution is under question and a contest might well emerge between PLC and TPC about that matter. In fashioning any orders under s 657D(2), the Panel would need to take account of the considerations at s 657D(2)(a) and if it were satisfied of the relevant matters it would nevertheless need to frame orders which took into account the particular statutory limitations upon a party which has acquired a relevant interest in shares in contravention of the Act. The Panel has taken a position that it does not wish to engage in the contest or the merits of the contest about the 10% cap. The Panel must focus upon the scope of the orders that are contemplated by s 657D of the Act in the context of the elements of the contravention of s 606 assuming that the Panel is satisfied about that matter. 239 Notwithstanding the passage of time which is, in the main, attributable to the intervention of the litigation and notwithstanding that the Panel must take some responsibility for the accruing of that time by electing to persevere in a view of things which was shown to be unsustainable, I am not satisfied that the statutory purpose of s 657A and the remedial possibilities contemplated by s 657D is unable to be served by an order extending time under s 657B. 240 The simple fact is that other shareholders who were deprived of a relevant opportunity to engage at the time of the material events continue to be affected by an acquisition of a relevant interest in the voting shares of the Club entity by PLC in the continuing assertion of control of the company through the voting shares, the subject of the relevant interest. The applicants say that the Panel is not an appropriate forum for addressing that question. They say that the other shareholders and TPC ought to exercise whatever rights at law they are entitled to exercise to either seek declarations or other relief in respect of shares said to be held in contravention of s 606 of the Act. 241 However, the Panel has a jurisdiction under s 657A in respect of what might loosely be called control acquisitions and it is conferred with power to make remedial orders in respect of that matter if satisfied that relevant persons or a group of persons are being affected in the statutory sense. 242 I am satisfied that the strength of the material in relation to the circumstances which might be the subject of a declaration is compelling. I am satisfied that notwithstanding the long period of time involved, the statutory purpose can be served. I am also satisfied that the Panel is the appropriate forum for considering these questions upon the remittal. I am also satisfied that the very particular circumstances relevant to this proceeding before the Panel warrants an order extending time. I certify that the preceding two hundred and forty-two (242) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

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Judgment (31 paragraphs)

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