St Barbara Mines Ltd v Australian Securities & Investments Commission

EX TEMPORE REASONS FOR JUDGMENT 1 Before the Court is an application brought by St Barbara Mines Limited ("St Barbara") pursuant to the provisions of the Administrative Decisions (Judicial Review) Act 1977 ("the ADJR Act") to review a decision of the respondent Australian Securities and Investments Commission ("the Commission") to refuse to accept for registration bid documents which St Barbara had sought to lodge with the Commission relating to a proposed takeover offer. St Barbara intended to make that offer with respect to ordinary fully paid and partly paid shares in Taipan Resources NL ("Taipan"). 2 The substance of the application is that the Commission erred in law in the view it took of the question whether ordinary and partly paid shares comprised shares of the one class or shares of different classes. St Barbara had apparently prepared to institute proceedings in the Supreme Court of New South Wales but then reached the view that that Court did not have jurisdiction and that the proceedings should be brought under the provisions of the ADJR Act on the basis of which this Court would, at least ordinarily, have jurisdiction. 3 However, the Commission objects to the jurisdiction of the Court and in so doing relies upon s 659B(1) of the Corporations Law. That section reads: "Only: (a) ASIC; or (b) another public authority of the Commonwealth or a State; may commence court proceedings in relation to a takeover bid, or proposed takeover bid, before the end of the bid period." 4 It is common ground that there is a period which satisfies the definition of "bid period" and that this period has not yet ended. Reference should also be made to s 659AA of the Corporations Law which provides: "The object of sections 659B and 659C is to make the Panel the main forum for resolving disputes about a takeover bid until the bid period has ended." 5 The reference in s 659AA to the "Panel" is a reference to the Corporations and Securities Panel referred to, inter alia, in Division 2 of Part 6.10 of the Corporations Law. 6 The evidence shows that St Barbara and the Commission were in dispute as to whether ordinary and partly paid shares in St Barbara were or were not shares of the one class, so that the same offer had to be made to shareholders whether those shareholders held ordinary or partly paid shares but subject to the differential of the partly paid amount. 7 On 2 February 2001, St Barbara made application to the Commission for a modification of the Corporations Law, inter alia, to overcome the dispute which had arisen between it and the Commission. It did so expressing the view that it did not regard the Commission's view as correct and therefore did not concede there was a necessity for modification of the law. Nevertheless it made the application. On 8 February 2001, St Barbara sought to lodge the bid documents with the Commission. 8 The Commission refused to accept the bid documents and it is this refusal which is the subject of the present proceeding. In the meantime, by letter dated 12 February 2001 the Commission refused the request for modification of the Corporations Law giving its reasons for doing so. One of those reasons related to the question of whether the partly paid and fully paid shares in Taipan were of the same class. The Commission maintained its view that they were. 9 By virtue of s 656A(1) of the Corporations Law, jurisdiction is given to the Panel to review a decision of the Commission under s 655A, that being the section which relates to the power of the Commission to exempt from or modify provisions of the Corporations Law. The situation is, therefore, at the moment that St Barbara has the right to apply to the Panel for a review of the decision not to modify provisions of the Corporations Law under s 655A(1). 10 The terms of s 659B(1) of the Corporations Law are very broad. That section speaks of proceedings "in relation to a takeover bid". As the cases clearly show and counsel for St Barbara accepts, the words "in relation to" must take colour from the context in which they appear: see Chief Executive Officer of Customs v AMI Toyota Ltd [2000] FCA 1343 at paragraphs 30-31 (Hill, North and Merkel JJ); First Provincial Building Society Ltd v Commissioner of Taxation (1995) 56 FCR 320 at 333 per Hill J. In some cases they have been said to be so broad as to comprehend any relationship at all that may exist between two subject matters. In other cases, because of the context, a more narrow view has been accepted. 11 Queens Counsel for St Barbara submits that the present proceedings should not be seen to be proceedings in relation to a bid but rather proceedings relating to the act of non acceptance of bid documents by the Commission. With respect, that seems to me rather too narrow a view of the relationship to which s 659B(1) refers having regard to the legislative policy underlying the law. 12 The legislative policy of s 659B, and taking into account the object of the section as set out in s 659AA, is clear enough. If it be necessary, reference can be made to the explanatory memorandum which makes the legislative policy quite explicit. It is that the Panel take the place of the courts as the principal forum for resolving takeover disputes until the bid period has ended. However wide or narrow s 659B(1) may be, and it is not necessary in this case to explore the width of it, it clearly comprehends a proceeding which relates to a bid in the sense also that it is within the jurisdiction of the Panel to determine. 13 The present is an obvious example of such a case. As things stand at the moment, and indeed prior to the application made to the Court, St Barbara has a right to seek to have the Commission's decision on the modification of the Corporations Law reviewed by the Panel. It seems to me that this is the kind of case which parliament contemplated should not be determined by the courts until such time at least as the bid period has terminated. On this view of the matter, the Court would have no jurisdiction at all to deal with the proceedings at this stage. 14 In saying this, I note the position of St Barbara that in its view there is nothing for the Commission to modify because the law should be interpreted as it suggests with the consequence that there could be nothing for the Panel to review. While I understand that is a respectable argument, the issue ultimately comes back to whether the present proceedings could be said to be in relation to a bid and although it is no doubt true in a very direct sense that the proceedings relate to the acceptance or non acceptance by the Commission of documents, one has only to ask the question of documents about what. The answer is clearly enough documents which relate to the takeover bid and in my view s 659B(1) operates to exclude jurisdiction. 15 Might I say that had the Court jurisdiction to deal with the matter an issue would arise as to whether in the exercise of discretion relief should be given in any event under the provisions of the ADJR Act, having regard to the existence of the remedy which St Barbara has to apply to the Panel to have the decision of the Commission reviewed. There is power for the Panel to refer issues of law to the Court and it may well be that that would be an appropriate method by which to proceed having regard to commercial considerations. The issue of exercise of discretion obviously does not arise if the Court has no jurisdiction and accordingly I do not intend to deal with it but see Troy Resources NL v Taipan Resources NL (2000) 35 ACSR 663 at 667-8. 16 I note that Senior Counsel for the competing bidder, Troy Resources NL, which was added as a party but on terms that it was at risk as to costs, does not seek any order for costs and no order will be made against it.