Tinkerbell Enterprises Pty Limited as Trustee for The Leanne Catelan Trust v Takeovers Panel

AND: PETER DAY, JOHN KEEVES AND ANDREW SISSON IN THEIR CAPACITY AS MEMBERS OF THE TAKEOVERS PANEL

DAVID BENNETT AC QC, CATHERINE BRENNER AND KATHLEEN FARRELL IN THEIR CAPACITY AS MEMBERS OF THE TAKEOVERS PANEL

JUDGE: COLLIER J DATE: 16 NOVEMBER 2012 PLACE: BRISBANE

REASONS FOR JUDGMENT 1 This proceeding arises from an amended application for an order of review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("ADJR Act") of two decisions of the Takeovers Panel ("the Panel") involving the applicant. 2 The applicant ("Tinkerbell") is a trustee company, controlled by Ms Leanne Catelan. In summary, Tinkerbell acquired shares ("the Farallon shares") in a second company, CMI Limited ("CMI"), from Farallon Capital Pty Ltd ("Farallon"). At that time a substantial parcel of shares in CMI was already owned or controlled, either directly or indirectly, by Mr Raymond Catelan (Ms Catelan's father). Mr Raymond Catelan gifted Ms Catelan $2.35 million to purchase the Farallon shares. Two shareholders applied to the Panel for a declaration of unacceptable circumstances in relation to Tinkerbell's acquisition of the Farallon shares. 3 The first decision ("First Decision") of the Panel, made pursuant to s 657A and s 657D of the Corporations Act 2001 (Cth) ("Corporations Act"), resulted in: a declaration of unacceptable circumstances on 22 February 2011; and associated orders. 4 The second decision ("Second Decision") of the Panel pursuant to s 657EA of the Corporations Act was that it would not conduct a review of the First Decision. 5 It is convenient to distinguish the respective Panels by referring to the Panel which made the First Decision as "the Initial Panel", and the Panel which made the Second Decision as "the Review Panel". 6 The applicant seeks the following orders from the Court: 1. An order that the First and Second Decisions be quashed. 2. Further and alternatively, a declaration that the First and Second Decisions are invalid and of no effect. 3. Such other orders as the Court considers fit. 4. Costs. 7 Before turning to these grounds of review it is appropriate to consider the background facts to this application. A copy of each decision of the Panel is annexed to affidavits of Mr James Peterson, the solicitor with carriage of the matter for the applicant.

Background facts 8 At all relevant times CMI was a company listed on the Australian Stock Exchange. Mr Raymond Catelan was the managing director of CMI. CMI had on issue 33,752,634 ordinary shares and 28,005,311 Class A shares. 9 The M&L Trust was a discretionary trust, of which the trustee was RP Prospects Pty Ltd, an entity wholly owned by Mr Raymond Catelan ("RP Prospects"). Mr Raymond Catelan and his daughter Ms Catelan were beneficiaries of that discretionary trust. RP Prospects as trustee held a relevant interest (within the meaning of the Corporations Act) in 36.8% of CMI ordinary shares. 10 The trustee of the LJ Catelan Superannuation Fund was a corporation, LJ Catelan Superannuation Fund Pty Ltd ("LJ Catelan Co"). LJ Catelan Co was wholly owned by Ms Catelan, and held a relevant interest in 2.16% of CMI. 11 Mr Richard Catelan is Mr Raymond Catelan's nephew. At all relevant times he was also a director of CMI. 12 Farallon was a shareholder in CMI, holding 3,112,422 of the ordinary shares in CMI, (which constituted 9.22% of the share capital of CMI). At the relevant times Farallon was controlled by Mr Greg Nunn. 13 In May 2010 Mr Richard Catelan met Mr Nunn to discuss the possible acquisition by Mr Richard Catelan of the Farallon shares. Farallon put a price of $1.73 per share on its holding against a market price at the time of 62 cents. It appears that Mr Richard Catelan considered this price too high. 14 Ms Catelan claimed that it was only at this time that she became aware of the opportunity to acquire the Farallon shares. 15 In or around October 2010 Mr Richard Catelan again engaged in discussions with Farallon officers concerning the Farallon shares. Further, Mr Richard Catelan had discussions with Mr Colin Ryan, the Chairman of CMI, about the possibility of an approach to Farallon about the sale of the Farallon shares. It appears that Mr Ryan contacted Mr Lindsay Somerville, who was advising Mr Nunn in relation to business issues and asset disposal, and who informed Mr Ryan that the Farallon shares were to be sold. Mr Ryan was informed by Mr Daniel McCullough (Farallon's equity manager) that the Farallon shares were for sale for not less than 75 cents per share. Mr Ryan, in turn, informed Mr Richard Catelan of these communications. 16 It appears that Mr Richard Catelan was not in a position to acquire the Farallon shares. He informed Ms Catelan of these events, and of the share sale price proposed by Farallon. The total cost of the Farallon shares, on the basis of 75 cents per share, was $2,334,316.50. 17 Ms Catelan was interested in acquiring the Farallon shares. She claimed that she decided to acquire them before approaching Mr Raymond Catelan for money to assist in purchasing them. 18 Mr Raymond Catelan gave Ms Catelan $2.35 million for the purchase of the Farallon shares ("the financial gift"). 19 Mr Danny Herceg, a director of CMI, contacted Mr McCullough, apparently for the purpose of ensuring appropriate steps were taken to ensure that the sale transaction of the Farallon shares to Ms Catelan was completed. Mr Herceg may have informed Mr McCullough that the actual purchaser of the Farallon shares would be Tinkerbell Enterprises Pty Ltd as trustee for the Leanne Catelan Trust ("Tinkerbell"). 20 The Leanne Catelan Trust was a discretionary trust, of which Mr Raymond Catelan and Ms Leanne Catelan were beneficiaries. Ms Catelan was the sole director and sole shareholder of Tinkerbell. 21 Lawyers acting for Ms Catelan forwarded an off-market transfer form to Farallon's lawyers. The form was signed by Farallon on 23 November 2010. 22 On 24 November 2010 Tinkerbell lodged a substantial shareholding notice (dated 23 November 2010) showing the acquisition on 23 November 2010 of 3,112,422 ordinary shares in CMI (9.22%). No associates were listed in the notice. On the same date Farallon lodged a notice of ceasing to be a substantial holder of shares in CMI.

Application by Mr Pauley and Dr Elkington 23 By application dated 6 January 2011 Mr Gerry Pauley and Dr Gordon Elkington sought a declaration of unacceptable circumstances in relation to the purchase the Farallon shares by Tinkerbell. Mr Pauley had, unsuccessfully, stood for election to the CMI Board of Directors on 19 November 2010. I understand that at all material times Mr Pauley and Dr Elkington were shareholders of CMI. 24 Pursuant to their application, Mr Pauley and Dr Elkington submitted that Mr Raymond Catelan and his family members had been increasing their holdings of shares in CMI by a combination of measures which were unacceptable, and that, in summary, Ms Catelan and Mr Raymond Catelan were associates within the meaning of s 12 of the Corporations Act. Mr Pauley and Dr Elkington also made submissions concerning other transactions however the Panel declined to conduct proceedings in relation to those other transactions. 25 The final orders sought from the Panel by Mr Pauley and Dr Elkington were: (a) Ms Leanne Catelan be declared to be an associate of Mr Raymond Catelan in relation to CMI and (b) The Leanne Catelan Trust be required to sell so many of the shares as were acquired on 24 November 2010 in excess of the "creep" provisions in s 611 item 9.

Relevant legislation 26 The Panel and its associated powers have a long and complex history. A helpful and succinct summary of the statutory framework in which the Panel operates (and which is of particular relevance to the current proceeding) may be found in Levy R, Takeovers Law & Strategy (4th ed, Lawbook Co, 2012) at pp 3-4. It is useful to quote the learned author's summary: [1.30] Chapter 6 contains a central rule which has two aspects: • A person must not acquire control of more than 20% of the voting shares in a company unless the acquisition is in accordance with the legislation. The threshold of 20% is regarded as the point just below where a person has sufficient voting power to control or influence the activities of the target company. • A person who has control of more than 20% of the voting shares (but less than 90%) must not acquire control of more shares unless it is done in accordance with the legislation. When determining how many shares a person can control, any shares controlled by his or her associates are also counted… "Associate" has a broad definition designed to catch persons who have formal relationships (such as related bodies corporate and persons with whom particular agreement has been entered into) and informal relationships where persons are acting in concert in connection with the relevant entity. To avoid breaching the central rule, a person wishing to increase his or her shareholding must do so under one of the exceptions contained in s 611 of the legislation. The main four exceptions are: • formal takeover bids; • acquisitions of not more than 3% in a six-month period; • acquisitions approved by independent shareholders; and • acquisitions resulting from a court-approved scheme of arrangement. … The Takeovers Panel's main role is to resolve disputes relating to takeover bids. It has broad power to declare circumstances "unacceptable" if it considers the Eggleston principles have been contravened, even if there is no illegality… (Footnotes omitted.) 27 The powers of the Panel in relation to a declaration of unacceptable circumstances are found in s 657A and s 657D of the Corporations Act. Section 657A provides: Section 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; or (b) are otherwise unacceptable (whether in relation to the effect that the Panel is satisfied the circumstances have had, are having, will have or are likely to have in relation to the company or another company or in relation to securities of the company or another company) having regard to the purposes of this Chapter set out in section 602; or (c) are unacceptable because they: (i) constituted, constitute, will constitute or are likely to constitute a contravention of a provision of this Chapter or of Chapter 6A, 6B or 6C; or (ii) gave or give rise to, or will or are likely to give rise to, a contravention of a provision of this Chapter or of Chapter 6A, 6B or 6C. The Panel may only make a declaration under this subsection, or only decline to make a declaration under this subsection, if it considers that doing so is not against the public interest after taking into account any policy considerations that the Panel considers relevant. (3) In exercising its powers under this section, the Panel: (a) must have regard to: (i) the purposes of this Chapter set out in section 602; and (ii) the other provisions of this Chapter; and (iii) the rules made under section 658C; and (iv) the matters specified in regulations made for the purposes of paragraph 195(3)(c) of the ASIC Act; and (b) may have regard to any other matters it considers relevant. In having regard to the purpose set out in paragraph 602(c) in relation to an acquisition, or proposed acquisition, of a substantial interest in a company, body or scheme, the Panel must take into account the actions of the directors of the company or body or the responsible entity for a scheme (including actions that caused the acquisition or proposed acquisition not to proceed or contributed to it not proceeding). (4) The Panel must give an opportunity to make submissions in relation to the matter to: (a) each person to whom a proposed declaration relates; and (b) each party to the proceedings; and (c) ASIC. (5) The declaration must be in writing and published in the Gazette. (6) As soon as practicable, the Panel must give each person to whom the declaration relates: (a) a copy of the declaration; and (b) a written statement of the Panel's reasons for making the declaration. (7) This section does not require the Panel to perform a function, or exercise a power, in a particular way in a particular case. 28 Section 602 of the Corporations Act, to which reference is made in s 657A(3)(a)(i), describes the purpose of Ch 6 in respect of takeovers as follows: The purposes of this Chapter are to ensure that: (a) the acquisition of control over: (i) the voting shares in a listed company, or an unlisted company with more than 50 members; or (ii) the voting shares in a listed body; or (iii) the voting interests in a listed managed investment scheme; takes place in an efficient, competitive and informed market; and (b) the holders of the shares or interests, and the directors of the company or body or the responsible entity for the scheme: (i) know the identity of any person who proposes to acquire a substantial interest in the company, body or scheme; and (ii) have a reasonable time to consider the proposal; and (iii) are given enough information to enable them to assess the merits of the proposal; and (c) as far as practicable, the holders of the relevant class of voting shares or interests 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 the company, body or scheme; and (d) an appropriate procedure is followed as a preliminary to compulsory acquisition of voting shares or interests or any other kind of securities under Part 6A.1. Note 1: To achieve the objectives referred to in paragraphs (a), (b) and (c), the prohibition in section 606 and the exceptions to it refer to interests in "voting shares". To achieve the objective in paragraph (d), the provisions that deal with the takeover procedure refer more broadly to interests in "securities". Note 2: Subsection 92(3) defines securities for the purposes of this Chapter. 29 Section 657D provides for orders to be made by the Panel following a declaration, in the following terms: Orders that Panel may make following declaration (1) The Panel may make an order under subsection (2) if it has declared circumstances to be unacceptable under section 657A. It must not make an order if it is satisfied that the order would unfairly prejudice any person. Before making the order, the Panel must give: (a) each person to whom the proposed order would be directed; and (b) each party to the proceedings; and (c) ASIC; an opportunity to make submissions to the Panel about the matter (2) The Panel may make any order (including a remedial order but not including an order directing a person to comply with a requirement of Chapter 6, 6A, 6B or 6C) that it thinks appropriate to: (a) 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; or (b) ensure that a takeover bid or proposed takeover bid in relation to securities proceeds (as far as possible) in a way that it would have proceeded if the circumstances had not occurred; or (c) specify in greater detail the requirements of an order made under this subsection; or (d) determine who is to bear the costs of the parties to the proceedings before the Panel; regardless of whether it has previously made an order under this subsection or section 657E in relation to the declaration. The Panel may also make any ancillary or consequential orders that it thinks appropriate. Note: Section 9 defines remedial order. (3) The Panel may vary, revoke or suspend an order made under this section. Before doing so, it must give an opportunity to make submissions in relation to the matter to: (a) each person to whom the order is directed; and (b) each party to the proceedings in which the order was made; and (c) ASIC. (4) If the Panel makes an order under this section, the Panel must give a copy of the order, and a written statement of its reasons for making the order, to: (a) each party to the proceedings before the Panel; and (b) each person to whom the order is directed if they are not a party to the proceedings; and (c) for an order relating to specified securities of a company-the company; and (d) ASIC. The Panel must also publish the order in the Gazette. The order takes effect as soon as it is made and not when all the requirements of this subsection are met. (5) If the Panel makes an order of the kind referred to in paragraph (j) of the definition of remedial order, the exercise of rights attached to shares is to be disregarded as provided in the order. (6) If the Panel makes an order of the kind referred to in paragraph (k) of the definition of remedial order, then, by force of this subsection, the agreement or offer specified in the order is cancelled, or becomes voidable, as from the making of the order or any later time that is specified in the order. 30 Further, s 657EA of the Corporations Act allows an application to be made by either a party to the original Panel decision, or by ASIC, for review of that decision. 31 It is not in dispute that the Panel may have regard to whether parcels of shares owned or controlled by different persons should be considered as one single parcel because those persons are "associated". It is also not in dispute that, for the purposes of these proceedings, the relevant definition of "associate" is in s 12 of the Corporations Act. So far as relevant, s 12 provides as follows: References in Chapters 6 to 6C, and other references relating to voting power and takeovers etc. (1) Subject to subsection 16(1), but despite anything else in this Part, this section applies for the purposes of interpreting a reference to an associate (the associate reference), in relation to a designated body, if: (a) the reference occurs in a provision of Chapter 6, 6A, 6B or 6C; or (b) … (2) For the purposes of the application of the associate reference in relation to the designated body, a person (the second person) is an associate of the primary person if, and only if, one or more of the following paragraphs applies: (a) the primary person is a body corporate and the second person is: (i) a body corporate the primary person controls; or (ii) a body corporate that controls the primary person; or (iii) a body corporate that is controlled by an entity that controls the primary person; (b) the second person is a person with whom the primary person has, or proposes to enter into, a relevant agreement for the purpose of controlling or influencing the composition of the designated body's board or the conduct of the designated body's affairs; (c) the second person is a person with whom the primary person is acting, or proposing to act, in concert in relation to the designated body's affairs. … … (5) In this section: "designated body" means: (a) a body; or (b) … 32 Importantly, s 16 provides for exclusions in relation to the meaning of associate, as follows: Exclusions (1) A person is not an associate of another person by virtue of section 12 or subsection 15(1), or by virtue of subsection 15(2) as it applies in relation to section 12 or subsection 15(1), merely because of one or more of the following: (a) one gives advice to the other, or acts on the other's behalf, in the proper performance of the functions attaching to a professional capacity or a business relationship; (b) one, a client, gives specific instructions to the other, whose ordinary business includes dealing in financial products, to acquire financial products on the client's behalf in the ordinary course of that business; (c) one had sent, or proposes to send, to the other an offer under a takeover bid for shares held by the other; (d) one has appointed the other, otherwise than for valuable consideration given by the other or by an associate of the other, to vote as a proxy or representative at a meeting of members, or of a class of members, of a body corporate. (2) … 33 In light of this background, I now turn to the First Decision of the Panel.

The First Decision 34 The Initial Panel's reasons for decision are detailed, and the Initial Panel went to considerable length to explain the facts before it. 35 In relation to submissions before the Initial Panel in respect of relevant personal relationships the Initial Panel noted, in summary: Ms Catelan was employed as her father's personal assistant at CMI, had previously worked for RP Data Limited of which Mr Raymond Catelan was managing director, and lived in a property owned by a company controlled by her father (paras 45-46). Submissions by Ms Catelan and Mr Raymond Catelan were to the effect that: o Mr Raymond Catelan offered general views on share investing and CMI to Ms Catelan, perhaps once per month on average; o all discussions were informal; o Ms Catelan also discussed these issues with Mr Richard Catelan and her fiancé; o no written documentation in relation to these issues existed between father and daughter, or companies under their control, other than a deed of gift when Mr Raymond Catelan provided the financial gift to Ms Catelan to purchase the Farallon shares; and o according to Ms Catelan, father and daughter had discussed Mr Nunn's illness and wondered whether Farallon would sell the Farallon shares as a result (paras 47-53). 36 The Initial Panel concluded, in summary, that (paras 54-59): Ms Catelan's submissions were vague, considering that the financial gift was sizeable. The discussions with Mr Raymond Catelan went further than was disclosed to the Initial Panel. It was surprising that Mr Raymond Catelan had made no submissions concerning the speculation in which he and Ms Catelan had engaged in respect of whether Farallon would sell the Farallon shares. The Initial Panel did not accept that Ms Catelan had no discussions with Mr Raymond Catelan concerning the acquisition, particularly in light of the funding, until she had decided to make the purchase, or that she only engaged in general discussions about CMI with Mr Raymond Catelan. Although Ms Catelan submitted that she decided to purchase the Farallon shares without seeking independent advice, the acquisition amounted to a very significant purchase for her. Ms Catelan only engaged lawyers to undertake the mechanics of the transfer, but nothing else. In the view of the Initial Panel this was unusual and not consistent with conduct in which parties engage when acting independently and at arm's length. The Initial Panel concluded that this was, in itself, significant. The Initial Panel inferred that: o Ms Catelan was not acting independently when it came to her investment in CMI through Tinkerbell; o Mr Raymond Catelan had more involvement in relation to the decision to purchase the shares than had been submitted (taking into account the trusts, the financial gift to purchase the Farallon shares and the negotiations); and o there was a shared goal or purpose in Ms Catelan's acquisition (through Tinkerbell), namely consolidation of control of CMI. 37 In relation to submissions before the Initial Panel concerning the financial gift, the Initial Panel noted Ms Catelan's claim that Mr Raymond Catelan had exhibited increased generosity to close family members in recent years, including a larger gift to his wife than the financial gift to Ms Catelan (para 61). However the Initial Panel concluded, in summary, that (paras 61-65): The financial gift was far larger than other gifts provided by Mr Raymond Catelan to either of his daughters in the past. Ms Catelan's submissions barely acknowledged the interdependence of the need for the gift and the timing of the decision to acquire the Farallon shares. It is unlikely that Ms Catelan did not discuss with Mr Raymond Catelan the possibility of Tinkerbell acquiring the Farallon shares until after she had decided to acquire them. The Initial Panel did not accept Ms Catelan's submission that the decision to acquire the shares was based solely on her own assessment. Further, the Initial Panel did not accept that the money was not expected to be provided before Ms Leanne Catelan decided to acquire the shares. The Initial Panel concluded that there was a shared goal or purpose in Tinkerbell's acquisition, namely consolidation of control of CMI, between Mr Raymond Catelan and Ms Catelan. 38 In relation to the conduct of negotiations for the purchase of the Farallon shares the Initial Panel described in detail (paras 67-73) its understanding of relevant events, including that Mr Richard Catelan was first interested in purchasing the Farallon shares, and the contents of the varied and numerous discussions involving, inter alia, Mr Richard Catelan, Ms Catelan, Mr Ryan, Mr Somerville, Mr Herceg and/or Mr McCullough. The Initial Panel concluded in summary that (paras 74-102): The facts demonstrated that negotiations for Tinkerbell's acquisition of the Farallon shares involved Mr Richard Catelan, Mr Ryan and Mr Herceg, which was unusual if Ms Catelan was acting independently. It is surprising that the person funding the acquisition of the Farallon shares, Mr Raymond Catelan, disclaimed involvement in the negotiations. Ms Catelan submitted that she took no part in discussions until she approached her father for the money subsequent to deciding to acquire the shares. It was significant that no-one appeared able to tell the Initial Panel who spoke to Farallon to actually agree the acquisition of the Farallon shares for $0.75 per share. To that extent the Initial Panel was unable to determine conclusively who agreed to the transaction or the price for the shares. The initial submission in which Mr Ryan, Mr Herceg and Mr Richard Catelan participated was not accurate and complete. In the circumstances the most likely course of negotiation was that it was agreed with Farallon that the shares would be acquired by Catelan interests, and that Mr Raymond Catelan had more involvement than was submitted. The lack of accuracy and completeness of the initial CMI response supports an inference that Messrs Ryan, Herceg and Richard Catelan did not want aspects of the transaction under investigation disclosed, and that Mr Raymond Catelan was likely involved in the negotiations or purchase of the Farallon shares beyond merely a gift of the money after Ms Catelan had decided to acquire the shares. 39 In relation to relevant trust arrangements, the Initial Panel concluded, in summary, that (paras 103-107): the trust arrangements suggested that Ms Catelan's investment affairs were not entirely separate from those of Mr Raymond Catelan. the existence of cross-beneficiaries under the existing trust arrangements support an inference of association. 40 Importantly, in relation to the issue of association the Initial Panel concluded as follows: 108. A relevant agreement must exist for the purpose of controlling or influencing the composition of a company's board or the conduct of its affairs. Acting in concert must exist in relation to a company's affairs. "Affairs of a company" are broadly defined and include, among other things, the acquisition and ownership of shares. In our view, Mr Raymond Catelan and Ms Leanne Catelan were acting, or proposing to act, in concert in relation to the acquisition of the 9.22% of CMI acquired from Farallon, or they had or proposed to enter a relevant agreement in relation to the acquisition. With the acquisition of a further 9.22%, the holdings, if aggregated, are almost 50%. In the context of control this is a significant acquisition of a substantial interest in CMI. 109. The submissions of Ms Leanne Catelan and Mr Raymond Catelan seek to establish that each acts independently of the other in their investment affairs and that their investment affairs are separate. In so far as the evidence in relation to Tinkerbell's acquisition of Farallon's CMI shareholding is concerned, we do not accept that. The submissions of others appear to obscure who was involved. 110. Aspects of the transaction were not conducted at arm's length but between family members who were heavily involved in the operations of CMI. Their behaviour was not consistent with the actions of persons acting independently of one another. The transaction was not conducted as one would expect a typical investment portfolio transaction to be conducted. 111. We consider it unusual that three other directors of CMI were participants in discussions concerning, or aspects of the negotiations involving, the acquisition of the shares for Ms Leanne Catelan, who was not involved and who is not a director of CMI. Based on our experience, this is uncommercial behaviour (in the sense it is not what we would expect from parties acting independently and at arm's length). 112. We find it unusual that Mr Herceg, who from the evidence of the other deeds of gift has been Mr Raymond Catelan's solicitor, volunteered to communicate with Farallon. Apparently he did so without instructions from Ms Leanne Catelan. Based on our experience, this is uncommercial behaviour, in the sense mentioned above. 113. Also, in our experience, the sequence of events is unusual. Discussions were held, but acknowledgement of there being "negotiations" was not forthcoming. Information about the actual agreement is vague to the point of almost being nonexistent. Communication of the actual agreement decision is vague. And the approach for the funding of the transaction (through the gift) was said to have come after the decision to acquire the shares. 114. The Panel said in Dromana Estate 01R: … Issues of association frequently need to be decided on the basis of inferences from partial evidence, patterns of behaviour and a lack of commercially viable explanation for the impugned circumstances. 115. We have drawn inferences from partial evidence, the pattern of behaviour here, uncommercial conduct and inadequate explanations. In our view, the inferences are reasonable and definite and not merely conflicting inferences of equal degrees of probability. 116. The Panel also said in Viento Group Ltd, relying on Mount Gibson Iron Limited: Circumstances which are relevant to establishing an association include: (a) a shared goal or purpose (b) prior collaborative conduct (c) structural links (d) common investments and dealings (e) common knowledge or relevant facts and (f) actions which are uncommercial. 117. We think elements of these circumstances have been established in this case. 118. The Catelan family are the major shareholders in CMI. There are structural links in this case including the family links, work relationships and the trusts. The course of negotiations was uncommercial, and the decision to invest such a large gift in one stock is an uncommercial action. 119. Considering the whole of the material, based on our expertise and drawing appropriate inferences, we conclude that Ms Leanne Catelan and Mr Raymond Catelan are not acting independently in relation to the investment by Tinbkerbell in CMI. Either there was an agreement, arrangement or understanding between them for the purpose of the ownership of the 9.22% parcel of shares in CMI or they were acting in concert in relation to the ownership of that parcel or both. In addition, we have no evidence that their relationship has changed since the time the shares were acquired from Farallon. 120. In National Foods, the Panel said: … Section 12 does not, however, require that the agreement or concerted action relate expressly to shares in any way, or to the exercise of votes attached to shares. Rather, the legislature has decided to aggregate the voting power of people who are cooperating in ways which might be advanced by the use of such power. 121. We infer that Ms Leanne Catelan and Mr Raymond Catelan are associated: (a) under s12(2)(b) for the purpose of controlling or influencing the conduct of CMI's affairs, or (b) under s12(2)(c) in relation to the affairs of CMI. 121. The voting power in CMI of the associated parties has therefore increased as a result of Tinkerbell's acquisition other than through one of the exceptions in s611. 123. The association was not disclosed to the market. (Footnotes omitted.) 41 Following this conclusion, the Initial Panel then concluded that the circumstances were unacceptable having regard to the matters in s 657A(3). 42 The Initial Panel made extensive final orders, including that: the Farallon shares vest in the Commonwealth on trust for Tinkerbell; the Farallon shares be sold by the Australian Securities and Investments Commission ("ASIC"), and ASIC account to Tinkerbell for the proceeds of sale net of costs, fees and expenses of sale; ASIC retain and instruct an appointed seller to conduct the sale, being an investment banker or stockbroker; and CMI, Ms Catelan and Mr Raymond Catelan or their associates do everything necessary to give effect to the orders of the Initial Panel.

Second Decision 43 By application dated 24 February 2011 Tinkerbell and Ms Catelan sought a review of the Initial Panel's decision. Grounds upon which the review was sought were described in the Second Decision by the Review Panel in summary as follows: (a) there was no "common purpose" or "shared goal", and no evidence of such, in respect of the affairs of CMI between Mr Raymond Catelan on the one hand and Tinkerbell and Ms Catelan on the other; (b) there was no evidence adduced as to the possible effect that Tinkerbell's acquisition of Farallon's shares might have on the control of CMI; and (c) the basis for concluding that an association existed was expressed in the declaration of unacceptable circumstances in the alternative. Consequently, it was uncertain which of s 12(2)(b) or s 12(2)(c) have been satisfied. Further, the initial Panel did not identify what the terms of the relevant agreement were or how the parties were acting in concert. 44 The Review Panel declined to conduct proceedings, and ordered that the First Decision of the Panel should stand. This was because the Review Panel did not think that there was any reasonable likelihood that the review application would result in a different outcome to that in the First Decision. In summary, this view was based on the following reasons. 45 In relation to ground (a): Notwithstanding that there was no direct evidence of an agreement, the evidence before the Initial Panel in the First Decision strongly supported inferences and findings of a common purpose relating to the ownership of the 9.22% parcel. Alternatively, the material strongly supports the inference that the associated parties had an understanding amounting to a relevant agreement (paras 13-15). There were structural links as well as the family relationship involving elements of dependency and other facts indicating association. Relevant facts included: o the course of discussions and negotiations regarding the Farallon shares; o the funding of the acquisition; o the size of the investment for Ms Catelan (representing, on a cost basis, 65.8% of her total share portfolio); o the coincidence of the acquisition at a time when there was agitation for board change; o that the Farallon shares constituted a very significant shareholding in a company of which Ms Catelan's father was the managing director and major shareholder; o Ms Catelan's employment at CMI and her role as assistant to the managing director; and o that the majority of the board of CMI is constituted by family of Ms Catelan, and her father's legal adviser Mr Herceg (para 22). The material before the Initial Panel in the First Decision allowed the Initial Panel to draw inferences which permitted it to conclude that there was a consensual adoption of an understanding common to Ms Catelan and Mr Raymond Catelan concerning the ownership of the Farallon shares (para 25). 46 In relation to ground (b): Tinkerbell's claim that there was no evidence adduced as to the possible effect that its acquisition of the Farallon shares might have on the control of CMI was not substantiated. When aggregated, the holdings of Ms Catelan, Mr Raymond Catelan and their interests amounted to almost 50% of the shares in CMI. The acquisition of the Farallon shares had a significant effect on the control of CMI. Although there was no direct evidence of the terms of the understanding between Ms Catelan, Mr Raymond Catelan, and their respective entities, this was not necessary. The Review Panel inferred that Ms Catelan acquired the Farallon shares on the basis that she would not work against the interests of Mr Raymond Catelan in respect of the holding of those shares. (paras 28-31) 47 In relation to ground (c), the Review Panel observed that there was clear authority concerning the significant overlap between the concepts of "acting in concert" and "relevant agreement" (at para 33). In the First Decision the material was not sufficiently clear to determine definitively where the understanding came to rest in terms of s 12 of the Corporations Act. The Review Panel noted that the understanding was at least "acting in concert" and may well have been a "relevant agreement". While the Review Panel might have expressed the alternatives in the declaration slightly differently, it considered that the meaning of the Initial Panel in the First Decision was sufficiently clear (paras 32-36). 48 Before the Review Panel, Tinkerbell and Ms Catelan also submitted that the decision of the Initial Panel should be set aside because (inter alia): 1. The Initial Panel did not convene a conference which could have resolved many of its concerns. 2. There were fundamental errors in the findings of fact by the Initial Panel, in particular: the finding that Ms Catelan worked for Mr Raymond Catelan, when in fact she worked for CMI. the finding that Ms Catelan was dependent on financial contributions from her father, when in fact she was an independent woman. the finding that Mr Raymond Catelan's gift to Ms Catelan was larger than other gifts by Mr Raymond Catelan to his daughters, which was not true. the finding concerning the preparation of the deed of gift, namely that it had been written formally, which was not true. the fact that the Initial Panel had misunderstood or misconstrued the interest of potential beneficiaries under a discretionary trust, and had failed to recognise that such beneficiaries did not have a proprietary interest in the property subject to the discretionary trust. 3. There were errors of law or policy in the First Decision concerning: the position of beneficiaries under a discretionary trust. the evidence relied on, which suggested that the Initial Panel had not looked at the established criteria for conducting proceedings in association cases. the unfair prejudice exhibited by the Initial Panel against certain parties. 49 All of these grounds were rejected by the Review Panel, because (in summary): 1. In relation to the need for a conference, Tinkerbell itself had submitted in the initial proceedings that a conference was unnecessary. In any event, the Initial Panel had previously made findings of association without the need for a conference. 2. In relation to the alleged fundamental errors in the findings of fact by the Initial Panel: Nothing turns on whether Ms Catelan worked for CMI, or worked for CMI in the capacity of Mr Raymond Catelan's assistant. The Initial Panel made a finding in respect of Mr Raymond Catelan's financial contribution to the acquisition by Tinkerbell of the Farallon shares against a background of evidence concerning Ms Catelan's financial circumstances. The Review Panel considered that this was sufficient evidence of dependency. The Initial Panel's finding that the gift to Ms Catelan to purchase the Farallon shares was larger than other gifts by Mr Raymond Catelan to his daughters, was not an error. The evidence of a larger gift was to Mr Raymond Catelan's wife, as the Initial Panel recognised. The Initial Panel noted Mr Raymond Catelan's submission that he had, in gifting funds to Ms Catelan, used the form of deed of gift he had previously used. The Review Panel noted that the deed appeared to be based on the precedent of Herceg Lawyers. Nothing turns on this issue. The Initial Panel had not misunderstood or misconstrued the position concerning beneficiaries of discretionary trusts. The Initial Panel had referred to the trusts as an example of a structural link between Mr Raymond Catelan and Ms Catelan. 3. In relation to the alleged errors of law in the First Decision: There was no error concerning the position of beneficiaries under a discretionary trust. The Review Panel did not agree that the Initial Panel had drawn unnecessarily negative inferences from the conduct of third parties. The Review Panel did not agree that the Initial Panel had exhibited any unfair prejudice. 50 Accordingly, the Review Panel did not consider that there was any reasonable prospect that the review application would result in a different outcome to that reached by the Initial Panel in the First Decision, and the Review Panel therefore declined to conduct proceedings in relation to the application under reg 20 of the Australian Securities and Investments Regulations 2001 (Cth) ("Regulations").

Application for review 51 The grounds of review raised by Tinkerbell are lengthy and complex. Three of the grounds as set out in the application were not pressed. The grounds that were pressed are as follows: 1. The First Decision involved an error of law within the meaning of s 5(1)(f) ADJR Act in that the First Respondents drew inferences that Leanne Catelan and Raymond Catelan had reached an agreement in relation to the acquisition of 3,112,422 shares (Shares) in CMI Limited (CMI) or were acting, or were proposing to act, in concert in relation to the acquisition of the Shares where such inferences did not arise as reasonable and definite inferences from the circumstances appearing from the evidence. 2. The First Decision involved an error of law within the meaning of s 5(1)(f) ADJR Act in that the First Respondents drew inferences that Leanne Catelan and Raymond Catelan had reached an agreement in relation to the acquisition of the Shares on CMI or were acting, or proposing to act, in concert in relation to the acquisition of the Shares where such inferences were based upon indefinite facts, incomplete evidence, matters of speculation and the First Respondents' unarticulated innuendo rather than upon logical, probative evidence. 3. … 4. The First Decision involved an error of law within the meaning of s 5(1)(f) ADJR Act in that the Respondents inferred that Leanne Catelan was not acting independently from Raymond Catelan based upon the First Respondent's finding that Colin Ryan, Richard Catelan and Danny Herceg were involved by way of discussion or negotiation with Farallon Capital Pty Ltd, where such an inference did not arise as a reasonable and definite inference from the finding. 5. The First Decision involved an error of law within the meaning of s 5(1)(f) ADJR Act in that the First Respondents inferred that Raymond Catelan "was more involved in the transaction than submitted" based upon the First Respondents' findings that Leanne Catelan played no role in the negotiations (which was always the Applicant's case) and the denials by Colin Ryan, Richard Catelan and Danny Herceg, that they negotiated or agreed the transaction with Farallon Capital Pty Ltd, where such an inference did not arise as a reasonable and definite inference from the findings. 6. A breach of the rules of natural justice occurred in connection with the making of the First Decision within the meaning of s 5(1)(a) ADJR Act in circumstances where: a. the First Decision was based upon adverse credit findings made against Leanne Catelan, Raymond Catelan, Richard Catelan, Danny Herceg and Colin Ryan; b. the credit findings were by their nature findings which impugned the honesty and integrity of each of Leanne Catelan, Raymond Catelan, Richard Catelan, Danny Herceg and Colin Ryan; c. the evidence before the First Respondents was materially incomplete; d. there was no oral hearing; e. there was a legitimate expectation and practical fairness required in all of the circumstances that such serious adverse credit findings would not be made without: i. each of Leanne Catelan, Raymond Catelan, Richard Catelan, Danny Herceg and Colin Ryan being given a reasonable and fair opportunity to an oral hearing; ii. the Respondents taking steps to fill the material gaps in the evidence, in particular by obtaining evidence from the vendor of the Shares. 7. A breach of the rules of natural justice occurred in connection with the making of the First Decision within the meaning of s 5(1)(a) ADJR Act in circumstances where: a. the First Respondents drew inferences of fact based upon their collective experience, their subjective notion of "uncommercial behaviour" and their subjective notion of what was "usual" or would be "a usual sequence of events"; b. the First Respondents' collective experience upon which they specifically referred in drawing the inferences was never articulated and did not form part of the evidence; c. the First Respondents' subjective notion of "uncommercial behaviour" upon which they specifically referred in drawing the inferences was never articulated, did not form part of the evidence and was not accepted by the parties as correct; d. the First Respondents' subjective notion of what was "usual" or what would be "a usual sequence of events" upon which they specifically referred in drawing the inferences was never articulated, did not form part of the evidence and was not accepted by the parties as correct. 8. … 9. The Second Decision involved an error law (sic) within the meaning of s 5(1)(f) ADJR Act in that the Second Respondents drew an inference that the Applicant and Mr Catelan shared a common purpose in relation to the ownership of the Shares where such an inference did not arise as a reasonable and definite inference from the circumstances appearing from the evidence. 10. The Second Decision involved an error law (sic) within the meaning of s 5(1)(f) ADJR Act in that the Second Respondents drew an inference that the Applicant and Mr Catelan were "acting in concert" where such an inference did not arise as a reasonable and definite inference from the circumstances appearing from the evidence. 11. The Second Decision involved an error of law within the meaning of s 5(1)(f) ADJR Act in that the Second Respondents drew an inference that "Ms Catelan would have known what was expected of her, namely that she would not work against the interests of her father in respect of the holding of shares" (Understanding) where such an inference did not arise as a reasonable and definite inference from the circumstances appearing from the evidence. 12. The Second Decision involved an error of law within the meaning of s 5(1)(f) ADJR Act in that the Second Respondents drew an inference that Ms Catelan caused the Applicant to acquire the Shares based upon the existence of the Understanding where such an inference did not arise as a reasonable and definite inference from the circumstances appearing from the evidence. 13. …

Association 52 So far as concerns the interpretation of "associate" for the purposes of these proceedings, it is common ground that, in both decisions of the Panel, the "primary person" within the meaning of s 12(2) of the Corporations Act was Ms Catelan, and that the "second person" within the meaning of the legislation was Mr Raymond Catelan. Because Ms Catelan is an individual, only s 12(2)(b) and (c) of the Corporations Act are relevant.

Proceedings in the Panel 53 It is not in dispute that decisions of the Panel are administrative in nature and subject to judicial review under the ADJR Act: Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542; Glencore International AG v Takeovers Panel (2006) 151 CLR 77; Cemex Australia Pty Ltd v Takeovers Panel (2009) 177 FCR 98. 54 That the Panel was created to deal with takeover disputes in a relatively informal and expeditious manner is clear from its enabling legislation. So, for example, reg 13 of the Regulations provides: The objects of this Part are to ensure that Panel proceedings are: (a) as fair and reasonable; and (b) conducted with as little formality; and (c) conducted in as timely manner; as the requirements of this Part and the corporations legislation (other than the excluded provisions), and a proper consideration of the matters before the Panel, permit. 55 Proceedings of the Panel are regulated by Pt 10 Div 3 of the Australian Securities and Investments Commission Act 2001 (Cth) ("ASIC Act"), the Regulations, and the Takeovers Panel Procedural Rules 2010 (Cth) made under s 195 of the ASIC Act and registered under the Legislative Instruments Act 2003 (Cth). 56 Regulation 16(2)(c) requires the Panel to exercise its powers in that same manner as described in reg 13. 57 Section 188(1) of the ASIC Act provides that the Panel may conduct proceedings for the purposes of the performance or exercise of any of its functions and powers. Although the Panel is required to conduct its affairs in accordance with the rules of procedural fairness to the extent that they are not inconsistent with the legislation (s 195(4) ASIC Act), legal representation of parties is only permitted by leave (s 194 ASIC Act). In respect of its proceedings: Procedures with respect to applications to the Panel are dealt with under Pt 3 Div 2 of the Regulations. Regulation 20 provides: As soon as practicable after receiving an application, the Panel must: (a) decide whether to conduct proceedings in relation to the application; and (b) if the Panel decides to conduct proceedings - prepare a brief setting out: (i) a general description of the matters to be examined in the Panel proceedings; and (ii) the issues to be addressed in submissions for the proceedings. The President of the Panel may convene proceedings to be held at a time and place he or she determines (s 188(2) ASIC Act). The Panel may, by written summons, require a person to appear before the Panel at Panel proceedings to give evidence, to produce specified documents, or to do both (s 192 ASIC Act). The provision of false evidence is an offence (s 199 ASIC Act). Regulation 22(1) provides that, if the Panel decides to conduct proceedings, it must, after receiving the application, give a copy of the brief to ASIC and each relevant company or person (reg 22(1)(a)). Significantly, reg 22(1)(b) provides that in such circumstances the Panel must: invite each body or person mentioned in paragraph (a) to lodge with the Panel a written submissions addressing the issues identified in the brief. Regulations 23-34 make detailed provision for submissions, including that the Panel may receive submissions from non-parties (reg 23) and may accept submissions from persons expressing interest (reg 24), and in relation to lodgement of submissions (reg 28). Regulation 35(1) of the Regulations provides that: (1) The Panel may conduct a conference during Panel proceedings to: (a) clarify matters arising from documents in the possession of the Panel relating to the proceedings; or (b) resolve inconsistent statements: (i) in documents in the possession of the Panel relating to the proceedings; or (ii) made orally to the Panel; or (c) otherwise inform itself on matters relating to the proceedings. Rule 6.1.1 provides that a party may make preliminary submissions concerning whether the Panel should conduct proceedings in relation to an application. Rule 6.3.1 provides that the Panel is not bound by the rules of evidence and may act on any logically probative material from any source. Rule 6.4.1 provides that the Panel may hold a conference (for all or part of a proceeding) at the request of a party or of its own volition. Note 1 to that Rule provides (inter alia) that a Panel may consider convening a conference if it thinks that it will expedite proceedings or if it requires a better understanding of evidence, issues or arguments.

Grounds of review 58 There is some overlap in respect of the grounds of review. It is convenient to group the grounds of review for examination in the following categories, namely: 1. No reasonable and definite inference - grounds 1, 2, 4, 5 (First Decision) and 9, 10, 11, 12 (Second Decision). 2. Breach of the rules of natural justice - grounds 6 and 7 (First Decision).

1. No reasonable and definite inference 59 The applicant contends that the drawing of an inference that is not reasonable and definite is reviewable as an error of law under s 5(1)(f) of the ADJR Act. The applicant attacks the inference drawn by the Initial Panel that Mr Raymond Catelan was an associate of Ms Catelan within the meaning of s 12(2) of the Corporations Act. The applicant claims that the inference was not reasonable and definite because it was not based on sufficient cogent, proved facts, but rather on a series of neutral facts, and was drawn in circumstances where the inference was unavailable upon proper regard being had to the totality of the evidence. 60 The applicant claims further that the Initial Panel erred in drawing the inference as to association in circumstances where: Five witnesses have provided direct evidence in the form of explanations of the true and proper context in which the Farallon shares were acquired. This includes Ms Catelan, who provided sworn evidence that she alone decided to purchase the Farallon shares and that she approached her father for the money after making this decision. The Initial Panel elected to either disregard this evidence or accept parts only of the evidence. The process of assessing the direct evidence occurred in circumstances where the Initial Panel did not convene a conference to examine any witness. There were no documents proving an agreement or concert. 61 The applicant submits that the following inferences were equally likely: Ms Catelan consulted her family members about the wisdom and means of investing in CMI but did not reach an agreement or act in concert with Mr Raymond Catelan; and Ms Catelan consulted her family members about the wisdom and means of investing in CMI and did reach an agreement or act in concert with Mr Raymond Catelan. 62 In this case, the applicant contends that it was rational and lawful: for Ms Catelan to want to invest in the company that employs her and is operated by people she knows and trusts. It does not follow that because Ms Catelan did not make an independent investment decision that she must have reached an agreement, or was acting in concert, with Mr Raymond Catelan. for Mr Raymond Catelan to gift money to his daughter to invest in a company with which he is very familiar. 63 The applicant submits that if the Court concludes that the two alternative inferences were equally likely, or indeed that some other inference was equally likely as the inference drawn by the Initial Panel, the First Decision was based on an error of law and should be quashed. 64 In my view, these submissions cannot be substantiated because: 1. the inference of association drawn by the Initial Panel (and affirmed by the Review Panel) was open on the facts before the Initial Panel, and that finding of fact is not reviewable pursuant to the ADJR Act; and 2. in any event, the proposition advanced by the applicant, that the drawing of an inference by the Panel that is not reasonable and definite is reviewable as an error of law under s 5(1)(f) of the ADJR Act, is not sustainable. 65 I will now explain my reasons for these conclusions.

1. Open on the facts 66 It is notable that, on the applicant's own admission, the inference drawn by the Initial Panel in relation to the association between Ms Catelan and Mr Raymond Catelan was based on a very long list of facts before that Panel. It is enlightening to quote those facts from the written submissions of the applicant: (a) RP Prospects Pty Ltd (RP Prospects) was trustee for the M&L Trust, and owned 36.8% of the shares in CMI; (b) RP Prospects was wholly owned by Mr Catelan; (c) Ms Catelan was Mr Catelan's daughter; (d) Ms Catelan resided in a property owned by RPD Qld Pty Ltd which was ultimately controlled by Mr Catelan; (e) ownership of the property would vest in her if she survived her father; (f) Ms Catelan paid no rent; (g) Ms Catelan was employed by CMI and worked for her father; (h) Ms Catelan had previously worked for her ex-husband and RPD Qld Pty Ltd; (i) Ms Catelan and Mr Catelan had generally discussed investing in CMI; (j) in or about June 2010, Ms Catelan first became aware, through Richard Catelan, of an opportunity to buy the Shares; (k) about four months later, when the sale of the Shares came up again, Richard Catelan mentioned it to Ms Catelan; (l) Ms Catelan recalled 'wondering with her father' whether Farallon Capital would be selling its shares in CMI; (m) Mr Catelan omitted to tell the First Respondents about the discussion regarding Farallon; (n) Ms Catelan discussed investing in CMI with Richard Catelan and her fiancé; (o) Ms Catelan did not seek independent advice regarding the investment in CMI despite it being a very significant purchase; (p) Mr Herceg, Mr Ryan and Richard Catelan were involved in negotiations that led to the acquisition of the Shares; (q) Ms Catelan could not afford the Shares from her own resources; (r) on 16 November 2010, Mr Catelan made a gift of $2,350,000 to Ms Catelan which was used to fund the acquisition of the Shares; (s) this gift was 'far larger than other gifts' Mr Catelan had made to his daughters in the past; (t) Ms Catelan played no role in the negotiations with Farallon; and (u) Ms Catelan and Mr Catelan are beneficiaries of the M&L Trust, a family discretionary trust established by Mr Catelan. (Footnotes omitted.) 67 The applicant complains of the adverse "colour" drawn from these facts, however does not appear to dispute the existence of these facts. In this respect, it follows that the Initial Panel drew its inference of association from admitted facts before it. 68 However the applicant also submits that, notwithstanding the facts upon which the Initial Panel made its findings: The Initial Panel rejected the direct evidence of Ms Catelan, Mr Raymond Catelan, Mr Richard Catelan, Mr Herceg and Mr Ryan. The rationale of the Initial Panel in so rejecting this evidence appeared to relate to the credit of those witnesses, in particular in relation to the alleged participation by Mr Richard Catelan and Mr Ryan in a submission that was inaccurate and incomplete. Accordingly the Initial Panel should have conducted an oral hearing. 69 I do not accept these submissions in respect of the approach of the Initial Panel. In fact, the Initial Panel: clearly took into consideration the evidence of these witnesses, including subsequent evidence provided by witnesses at the request of the Initial Panel, as is clear from the detailed recitation of evidence in the First Decision paragraphs 47-79 and 94-102. noted, however, that in its view the evidence of these witnesses was vague and incomplete, for example in paragraph 50 (in relation to evidence of Mr Raymond Catelan), paragraphs 54, 57, 73 and 86 (in relation to evidence of Ms Catelan), paragraph 69 and 96 (in relation to evidence of Mr Richard Catelan), paragraph 76 and 89 (in relation to evidence of Mr Richard Catelan and Mr Ryan) and paragraph 98 and 100 (in relation to evidence of Mr Richard Catelan, Mr Herceg and Mr Ryan). 70 The Panel is not required to accept uncritically the evidence before it before the Panel may reject evidence of a party: cf Minister for Immigration & Multicultural Affairs v Shatku [2001] FCA 1857. 71 In Minister for Immigration & Multicultural Affairs v Al-Miahi [2001] FCA 744 the Full Court considered an application for judicial review of a decision of the Refugee Review Tribunal. In a joint judgment, Sundberg, Emmett and Finkelstein JJ observed as follows: The question whether there is any evidence of a particular fact is a question of law. Likewise, the question whether a particular inference can be drawn from facts found or agreed is a question of law. That is because, before the inference is drawn, there is a preliminary question as to whether the evidence reasonably admits a different conclusion. Accordingly, in the context of judicial review, the making of findings and the drawing of inferences in the absence of evidence is an error of law. On the other hand, there is no error of law simply in making a wrong finding of fact. Even if the reasoning whereby the Court reached its conclusion of fact were demonstrably unsound, that would not amount to an error of law. A party does not establish an error of law by showing that the decision-maker inferred the existence of a particular fact by a faulty process, for example by engaging in an illogical course of reasoning. Thus, at common law, want of logic is not synonymous with error of law. So long as the particular inference is reasonably open, even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place - Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355-6. (Emphasis added.) 72 In this case I am unable to see how the inference of association drawn by the Initial Panel, and affirmed by the Review Panel, was not "reasonably open". 73 There was clearly ample evidence before the Panel - listed earlier in this judgment - to support the finding of association within the meaning of s 12(2)(b) and (c) of the Corporations Act. As Kitto J observed in NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509 at 512: The next question must be whether the material before the Court reasonably admits of different conclusions as to whether the appellant's operations fall within the ordinary meaning of the words as so determined; and that is a question of law. If different conclusions are reasonably possible, it is necessary to decide which is the correct conclusion; and that is a question of fact. (Citations omitted.) 74 This principle has been adopted at the highest judicial level: Williams v Bill Williams Pty Ltd [1971] 1 NSWLR 547 at 557 per Mason JA; Hope v The Council of the City of Bathurst (1980) 144 CLR 1 at 8 per Mason J; Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 at 12 per Davies and Beazley JJ; Minister for Immigration and Ethnic Affairs v Respondent A and B (1995) 57 FCR 309 at 315 per Beaumont, Hill and Heerey JJ; Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at [26]-[27] per Gleeson CJ, Gummow and Callinan JJ; Commissioner of Taxation v Crown Insurance Services Ltd [2012] FCAFC 153 per Lander and Foster JJ at [23]. 75 By way of further confirmation of this principle I note that in the recent decision of the High Court in Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611, Crennan and Bell JJ observed at 648 that: If probative evidence can give rise to different processes of reasoning and if logical or rational or reasonable minds might differ in respect of the conclusions to be drawn from that evidence, a decision cannot be said by a reviewing court to be illogical or irrational or unreasonable, simply because one conclusion has been preferred to another possible conclusion. 76 In support of its contention that both the Initial Panel and the Review Panel erred in law, the applicant relies on Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, in particular at pages 355 and 367, as authority for the proposition that the drawing of an inference that is not reasonable and definite is reviewable as an error of law under s 5(1)(f) of the ADJR Act. In my view that case stands for no such proposition. At 355-356 Mason CJ said: As I have explained, findings of fact and inferences of "fact are not reviewable under the A.D.(J.R.) Act unless jurisdiction is enlivened by the review of a "decision" or "conduct". Findings of fact, including inferences, may be reviewed under the A.D.(J.R.) Act for error of law (s. 5(1)(f)) and on the ground "that there was no evidence or other material to justify the making of the decision" (s. 5(l)(h)). It is not necessary to consider the content of the ground in s. 5(1)(j), "that the decision was otherwise contrary to law". The question whether there is any evidence of a particular fact is a question of law: McPhee v. S. Bennett Ltd.; Australian Gas Light Co. v. Valuer-General. Likewise, the question whether a particular inference can be drawn from facts found or agreed is a question of law: Australian Gas Light; Hope v. Bathurst City Council. This is because, before the inference is drawn, there is the preliminary question whether the evidence reasonably admits of different conclusions: Federal Commissioner of Taxation v. Broken Hill South Ltd. So, in the context of judicial review, it has been accepted that the making of findings and the drawing of inferences in the absence of evidence is an error of law: Sinclair v. Maryborough Mining Warden. But it is said that "[t]here is no error of law simply in making a wrong finding of fact": Waterford v. The Commonwealth, per Brennan J. (Emphasis added.) 77 Further, at 367 Deane J said: If a statutory tribunal is required to act judicially, it must act rationally and reasonably. Of its nature, a duty to act judicially (or in accordance with the requirements of procedural fairness or natural justice) excludes the right to decide arbitrarily, irrationally or unreasonably. It requires that regard be paid to material considerations and that immaterial or irrelevant considerations be ignored. It excludes the right to act on preconceived prejudice or suspicion. Arguably, it requires a minimum degree of "proportionality" (cf. the C.C.S.U. Case). When the process of decision-making need not be and is not disclosed, there will be a discernible breach of such a duty if a decision of fact is unsupported by probative material. When the process of decision-making is disclosed, there will be a discernible breach of the duty if findings of fact upon which a decision is based are unsupported by probative material and if inferences of fact upon which such a decision is based cannot reasonably be drawn from such findings of fact. Breach of a duty to act judicially constitutes an error of law which will vitiate the decision. 78 These passages from Bond do not support the proposition advanced by the applicant in relation to decisions made by an administrative body. 79 Hypothetically, a different conclusion (on the submission of the applicant) could have been reached by the Panel. However simply because the Panel reached the conclusion that it did when another conclusion was available does not mean it erred in law as claimed by the applicant.

2. "Reasonable and definite" 80 Second, the applicant also claims that the inference drawn by the Initial Panel (and affirmed by the Review Panel) was not "reasonable and definite" because it was not based on sufficient cogent, proved facts, but rather on a series of neutral facts, and further was drawn in circumstances where the inference was unavailable upon proper regard being had to the totality of the evidence. The applicant also submits that an inference can only be drawn if it is reasonable and definite and, on the balance of probabilities, more likely than another inference. To that extent, the applicant submits that there is a qualification to the circumstances where a finding is "reasonably open" to the Panel, and that qualification takes the form of the finding being "reasonable and definite". 81 In my view, however, these propositions advanced by the applicant simply do not represent the law in this country in the context of judicial review of administrative decisions, including the decisions the subject of this application. 82 In written submissions the applicant cites as authority Bond at 355 and 367 and Jones v Dunkel (1959) 101 CLR 298 at 305, 310 and 317. I have already considered Bond. At the hearing Mr Kelly SC for the applicant also referred to a number of other High Court cases in which these propositions have been considered. In considering the applicant's claim it is useful to examine these cases.

Bradshaw v McEwans Pty Ltd 83 An early authority for the proposition that, in certain circumstances, a drawn inference must be "reasonable and definite" is Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1. In that case the appellant had commenced proceedings against the respondent in the Supreme Court of New South Wales for damages arising from the death of her husband. The appellant's case was based on circumstantial evidence: that the death of her husband was caused by the negligent driving of a servant or agent of the respondent company using its motor vehicle. After reviewing the evidence, the High Court said at page 5: Of course as far as logical consistency goes many hypotheses may be put which the evidence does not exclude positively. But this is a civil and not a criminal case. We are concerned with probabilities, not with possibilities. The difference between the criminal standard of proof in its application to circumstancial evidence and the civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence while the latter you need only circumstances raising a more probable inference in favour of what is alleged. In questions of this sort where direct proof is not available it is enough in the circumstances appearing in the evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture (see per Lord Robson, Richard Evans & Co Ltd v Astley [1911] AC 674 at 687). But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought then though the conclusion may fall short of certainty it is not to be regarded as a mere conjecture or surmise. (emphasis added.)

Luxton v Vines 84 In Luxton v Vines (1952) 85 CLR 352 the appellant had commenced proceedings in the Supreme Court of Victoria under s 13(1) of the Motor Car (Third-Party Insurance) Act 1939 (Vic) for damages against the respondent as the nominal defendant in respect of injuries arising out of the use of a motor vehicle. The evidence against the defendant was circumstantial. 85 The trial judge had ruled that there was a case to go to the jury, and the jury had found in favour of the plaintiff. The defendant appealed to the Full Court of the Supreme Court of Victoria, which set aside the verdict in the Court below on the basis that there was no sufficient evidence that the bodily injury to the plaintiff was caused by the negligence of the driver of a motor vehicle. All three of their Honours thought that it was open to the jury to infer from the circumstances that the plaintiff was struck by a motor car, but the majority were of the opinion that there was no sufficient evidence to support an affirmative finding that he was so struck owing to the negligence of the driver of the supposed motor car. 86 The plaintiff appealed to the High Court of Australia. As Dixon, Fullagar and Kitto JJ explained: The test to be applied in determining in cases like this whether circumstantial evidence suffices to support a finding that negligence for which the defendant is responsible vicariously or otherwise occasioned the injury complained of was restated recently by this Court in Bradshaw v. McEwans Pty. Ltd. (1951) Unreported, and for the purposes of this case it is enough to set out the following passage from the judgment: "Of course as far as logical consistency goes many hypotheses may be put which the evidence does not exclude positively. But this is a civil and not a criminal case. We are concerned with probabilities, not with possibilities. The difference between the criminal standard of proof in its application to circumstantial evidence and the civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence, while in the latter you need only circumstances raising a more probable inference in favour of what is alleged. In questions of this sort, where direct proof is not available, it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture: see per Lord Robson, Richard Evans & Co. Ltd. v. Astley (1911) AC 674, at p 687. But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought then, though the conclusion may fall short of certainty, it is not to be regarded as a mere conjecture or surmise: cf. per Lord Loreburn (1911) AC, at p 678". 87 In Luxton the Court observed that the appeal turned upon the sufficiency of the evidence adduced at the trial. As their Honours further explained at pages 358-359: In the present case the plaintiff is in the unfortunate position of having to rely upon deduction from circumstances for every element in the conclusion necessary for his success. Only by deduction can the conclusion be reached that his bodily injuries were caused by a motor vehicle and only by further deduction can the additional conclusion be reached that it was owing to the negligence of the driver. 88 In dismissing the appeal, their Honours concluded at page 360 that: The circumstances give rise to nothing but conflicting conjectures of equal degrees of probability and no affirmative inference of fault on the part of a driver of a motor car can reasonably be made.

Holloway v McFeeters 89 In Holloway v McFeeters (1956) 94 CLR 470 the plaintiff's case was that: the death of her husband had been caused by or had arisen from the use of a motor car but the identity of the motor car could not be established; she was a person who could have obtained judgment against the driver of the motor car in respect of such death; and upon making out such a case she would become entitled under s 47 of the Motor Car Act 1951 (Vic) to obtain judgment against the nominal defendant. 90 At pages 480-481 Williams, Webb and Taylor JJ said: Inferences from actual facts that are proved are just as much part of the evidence as those facts themselves. In a civil cause "you need only circumstances raising a more probable inference in favour of what is alleged . . . where direct proof is not available it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference ; they must do more than give rise to conflicting inferences of equal degree of probability so that the choice between them is mere matter of conjecture: see per Lord Robson, Richard Evans & Co. Ltd. v. Astley (1911) AC 674, at p 687 . . . All that is necessary is that according to the course of common experience the more probable inference from the circumstances that sufficiently appear by evidence or admission, left unexplained, should be that the injury arose from the defendant's negligence. By more probable is meant no more than that upon a balance of probabilities such an inference might reasonably be considered to have some greater degree of likelihood". These passages are extracted from the unanimous judgment of this Court (Dixon J., as he then was, Williams, Webb, Fullagar and Kitto JJ.), in Bradshaw v. McEwans Pty. Ltd. (Unreported, delivered on 27th April 1951). We should think that, applying these principles to the present case, inferences sufficiently appear from the circumstances to which we have referred that make it at least more probable than not that the unidentified vehicle was being driven in a negligent manner at the time of the accident and that this was the cause of the accident. (emphasis added.) 91 In that decision their Honours formed the majority, and held that, on the facts, it was reasonably open to the jury to find that the death of the deceased was caused, wholly or in part, by the negligence of the driver of an unidentified vehicle.

Jones v Dunkel 92 Jones v Dunkel is a landmark case, authority for a rule relating to inferences which may be drawn in particular circumstances where evidence is not given. In particular, "the rule in Jones v Dunkel" may be summarised as being that the unexplained failure by a party to call a witness may in appropriate circumstances support an inference that the uncalled evidence would not have assisted the party's case (cf Heydon, Crennan and Bell JJ in Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at 384-385). 93 In this case, however, the applicant points to statements of Dixon CJ at 305, Menzies J at 310 and Windeyer J at 317 in Jones v Dunkel as supportive of the proposition that an inference can only be drawn if it is reasonable and definite and, on the balance of probabilities, more likely than another inference. 94 In Jones v Dunkel the plaintiff was the widow of a truck driver who was killed after the truck he was driving collided with another truck travelling in the opposite direction. The plaintiff commenced proceedings against the owner and driver of the other truck under the Compensation to Relatives Act 1897 (NSW), alleging that the negligence of the driver of the other truck had caused the death of her husband. There were no independent witnesses to the accident, however evidence was produced as to (inter alia) the road conditions at the time, the speed of the truck driven by the deceased shortly prior to the accident, the condition of both trucks in the immediate aftermath of the accident, the relevant topography and the type of trucks involved. The driver of the other truck involved in the collision gave a statement in writing several days after the accident, but did not give evidence at the trial of the proceedings. 95 The majority of the High Court (Kitto, Menzies and Windeyer JJ) held that the facts furnished material from which the jury might legitimately have concluded that the driver of the other truck was negligent and had caused the death of the plaintiff's husband. However, the trial judge had misdirected the jury in respect of the inference they could draw from the absence of evidence given by the driver of the other truck. As Kitto J explained at 308: His Honour told the jury that the fact that Hegedus had not gone into the box left them in this position, that they could accept the facts given by the plaintiff as proved, and that the question for them then was whether they thought that from the proved facts an inference of negligence ought to be drawn. It was right enough to point out, in effect, that the evidence given might be the more readily accepted because it had been left uncontradicted, and that the omission to call Hegedus as a witness could not properly be treated as supplying any gap which the evidence adduced for the plaintiff left untouched. But what should have been added, and not being added was in the circumstances as good as denied, was that any inference favourable to the plaintiff for which there was ground in the evidence might be more confidently drawn when a person presumably able to put the true complexion on the facts relied on as the ground for the inference has not been called as a witness by the defendant and the evidence provides no sufficient explanation of his absence. The jury should at least have been told that it would be proper for them to conclude that if Hegedus had gone into the witness-box his evidence would not have assisted the defendants by throwing doubt on the correctness of the inference which, as I have explained, I consider was open on the plaintiff's evidence. In my opinion what his Honour said on the point amounted to a misdirection. (emphasis added.) 96 Materially for the purposes of these proceedings, Dixon CJ (with whom Taylor J agreed), said at 304-305: In an action of negligence for death or personal injuries the plaintiff must fail unless he offers evidence supporting some positive inference implying negligence and it must be an inference which arises as an affirmative conclusion from the circumstances proved in evidence and one which they establish to the reasonable satisfaction of a judicial mind. It is true that "you need only circumstances raising a more probable inference in favour of what is alleged". But "they must do more than give rise to conflicting inferences of equal degree of probability so that the choice between them is mere matter of conjecture". These phrases are taken from an unreported judgment of this Court in Bradshaw v. McEwans Pty. Ltd. (Unreported, delivered 27th April 1951). which is referred to in Holloway v. McFeeters [1956] HCA 25; (1956) 94 CLR 470, by Williams, Webb and Taylor JJ. The passage continues: "All that is necessary is that according to the course of common experience the more probable inference from the circumstances that sufficiently appear by evidence or admission, left unexplained, should be that the injury arose from the defendant's negligence. By more probable is meant no more than that upon a balance of probabilities such an inference might reasonably be considered to have some greater degree of likelihood." (1956) 94 CLR, at pp 480, 481 But the law which this passage attempts to explain does not authorise a court to choose between guesses, where the possibilities are not unlimited, on the ground that one guess seems more likely than another or the others. The facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied. 97 At 310 Menzies J similarly quoted Bradshaw and Holloway. At 316 Windeyer J observed, inter alia, that, from the evidence, the manner in which the accident occurred could, at best, be only a matter of inference; and whether there could be any rational inference, as distinct from mere conjecture, was debatable and debated.

Girlock (Sales) Pty Ltd v Hurrell 98 In Girlock (Sales) Pty Ltd v Hurrell (1982) 149 CLR 155 the High Court heard an appeal from the Full Court of the Supreme Court of Western Australia, where the Full Court had ruled on a case stated by the Workers' Compensation Board of Western Australia. One of the questions of law posed by the Board was (in summary) whether there was any evidence on which the Board could find that the personal injuries suffered by the applicant were not suffered by him without substantial default and wilful act on his part. Both Stephen J (at 161) and Mason J (at 168) cited Jones v Dunkel, Bradshaw and Holloway as authorities for the proposition that, in civil cases, where direct proof is not available, it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference and they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is a mere matter of conjecture.

Cummins 99 More recently in Trustees of the Property of Cummins v Cummins (2006) 227 CLR 278 the High Court, in an appeal from the Full Court of the Federal Court of Australia, considered (inter alia) the question whether a bankrupt's main purpose in making transfers of property had been to prevent the transferred property becoming divisible among his creditors, thus rendering the transfers void pursuant to s 121(1)(b) of the Bankruptcy Act 1966 (Cth). 100 Citing cases including Bradshaw, Luxton, Jones v Dunkel, and Girlock, at 292 the Court observed: What had been required for the Trustees to succeed at trial was that the circumstances appearing in the evidence gave rise to a reasonable and definite inference, not merely to conflicting inferences of equal degree of probability, that, in making the August transactions, Mr Cummins had the "main purpose" required by the statute. (footnotes omitted.)

Conclusion 101 I have examined at length High Court authorities in which that Court has discussed the principle that circumstances appearing in the evidence must give rise to a reasonable and definite inference. It is clear, however, that this line of authority relates to circumstances where an appellate Court has regard to deliberations by and the decision of a Court below, in civil proceedings, where the Court at first instance had been required to evaluate circumstantial evidence before that Court. In Girlock the High Court considered proceedings involving a statutory board - the Workers' Compensation Board of Western Australia - however the decision of the High Court concerned the ruling of the Supreme Court of Western Australia, not any decision of the Board itself. 102 In all of these cases, the High Court was concerned with the level of satisfaction which the judge or jury must attain in a civil case before a conclusion could properly be reached that the plaintiff's case had been substantiated. These cases clarify the standard of proof required where the only evidence before the Court is circumstantial - in other words to substantiate a civil claim based on circumstantial evidence on the balance of probabilities, the facts proved must form a reasonable basis for a definite conclusion. The facts must do more than merely support the drawing of conflicting inferences of an equal degree of probability. This is a very different context to that before me in these proceedings. 103 In not one case I have examined was the principle applied in relation to a judicial review of an administrative decision, where the only ground of review was an error of law as is required by s 5(1)(f) of the ADJR Act. The proposition advanced by the applicant in the proceedings before me, namely that the drawing of an inference that is not reasonable and definite is reviewable as an error of law under s 5(1)(f) of the ADJR Act, is not supported by any authority advanced by the applicant. The reason for this is obvious - as explained by the High Court in Bond and subsequently SZMDS and applied in many decisions of this Court, as long as the particular inference is reasonably open to the administrative body making the factual findings, then even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place.

2. Breach of the rules of natural justice - grounds 6 and 7 (First Decision) 104 I have already observed that, pursuant to s 195(4) of the ASIC Act, the Panel is required to conduct its affairs in accordance with the rules of procedural fairness to the extent that they are not inconsistent with the legislation. In grounds 6 and 7 the applicant seeks review of the First Decision on the basis that, in summary: the Initial Panel breached the rules of natural justice by making adverse credit findings in the absence of an oral hearing and in view of the incomplete nature of the evidence before the Initial Panel (ground 6); and the Initial Panel breached the rules of natural justice by drawing inferences and reaching conclusions as to what was "uncommercial behaviour" or "usual" based upon the collective experience of the members of the Initial Panel (ground 7). 105 In my view these grounds cannot be substantiated.

Ground 6 106 First, as is made clear by s 195(4) of the ASIC Act, the Panel must apply the rules of natural justice to the extent that they are not inconsistent with the statute. Section 195(4) invites consideration of the statutory framework in which the Panel functions. So, for example: the Panel is required to conduct its proceedings with as little formality as possible, in a timely manner, and as fairly and reasonably as the circumstances allow (reg 16(2)(c) of the Regulations). the legislation contemplates that, as a general rule, the Panel need not conduct its deliberations on the basis of an oral hearing (reg 20 of the Regulations), but rather will conduct them on the basis of written submissions rather than oral evidence (reg 22(1)(b) of the Regulations). Regulation 35(1) of the Regulations provides that the Panel may conduct a conference during Panel proceedings. 107 To that extent, it follows that: the process by which the Initial Panel conducted its deliberations in this case was both usual and consistent with the empowering legislation. as a general proposition, in the context of the relevant legislative framework, it would have been unusual for the Initial Panel in this case to have conducted an oral hearing. 108 Second, in this case it is clear that the Panel repeatedly sought further clarification of evidence from witnesses. In my view witnesses whose evidence was subsequently criticised by the Initial Panel had ample opportunity to present comprehensive evidence in response to Panel inquiries. 109 Third, it is apparent from the Initial Panel's Initial Brief that both the applicant and Mr Raymond Catelan indicated to the Initial Panel that they considered that relevant issues could be dealt with by way of submissions rather than orally. 110 Fourth, the rules of natural justice do not in every case require that an oral hearing be held. As observed by the Full Court in Chen v Minister for Immigration and Ethnic Affairs (1994) 48 FCR 591 at 597: It is beyond argument that the rules of natural justice do not mandate in all cases an oral hearing for the person affected. This was recognised by the House of Lords in Local Government Board v Arlidge (1915) AC 120 at 133. There have been many developments of the law in this area since Arlidge but it remains clear that an oral hearing is not necessary in every case. Thus, in Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487, where the High Court was concerned with a statutory power conferred on the respondent to warn off persons from racecourses, Aikin J said (at 516): "Fairness requires that the person affected should, save in an emergency, be given notice by the Commission of its intention to issue a warning-off notice and of the grounds for that action and should be afforded an opportunity to make representations to the commission on his own behalf, which it must consider before taking action. A notice effective for an indefinite period should not be issued without compliance with at least those procedural requirements. I do not think that fairness requires in this context an oral hearing though in some circumstances the Commission may well find that it cannot resolve inconsistencies between its information and written submissions from the person concerned without such a hearing. It is however for the Commission itself to devise its own procedures in the light of its obligation to act fairly." Stephen and Mason JJ agreed (at 494). 111 While in Chen the Full Court also examined Canadian and US authority on the question whether an oral hearing was required in refugee cases where a serious question of credibility was involved (in particular Singh v Minister of Employment and Immigration (1985) 17 DLR (4th) 422), their Honours clearly preferred the alternative approach adopted by Justice Hugo Black in Goldberg v Kelly 397 US 254 (1970), and subsequently adopted in Matthews v Eldridge 424 US 319 (1976). I am not persuaded that Chen is authority for the proposition that in all cases where credibility of witnesses is an issue, the requirements of natural justice can only be satisfied by an oral hearing.

Ground 7 112 In the Explanatory Memorandum accompanying the Corporate Law Economic Reform Program Bill 1998 (Cth), the following statements appear: 7.14 Takeover disputes are currently principally determined by the courts, with the jurisdiction of the Corporations and Securities Panel (Panel) depending upon referrals from ASIC. There have been only three matters brought before the Panel since it was established in 1991. 7.15 Target companies often resort to litigation in hostile takeover bids, sometimes for tactical reasons. This can result in bids being delayed and, where a final hearing cannot be held within the bid period, the courts having to decide between disrupting the bid by granting an injunction without the benefit of full evidence and allowing the bid to proceed even though it may later be found to be defective. 7.16 To meet these concerns, a reconstituted Panel will take the place of the courts as the principal forum for resolving takeover disputes under the Corporations Law, with the exception of civil claims after a takeover has occurred and criminal prosecutions. This will allow takeover disputes to be resolved as quickly and efficiently as possible by a specialist body largely comprised of takeover experts, so that the outcome of the bid can be resolved by the target shareholders on the basis of its commercial merits. Other benefits of an effective panel for dispute resolution include the minimisation of tactical litigation and the freeing up of court resources to attend to other priorities. (emphasis added.) 113 The status of the Panel as a specialist body, which does not exercise the judicial power of the Commonwealth, was recognised by the High Court in Attorney-General (Cth) v Alinta Ltd and the Full Court of this Court in Cemex. 114 In this case the Initial Panel specifically stated in its reasoning the points at which members drew on their own skill, knowledge and experience. In my view it is appropriate, in light of the nature of the Panel, that the Panel be entitled to draw on those factors in assessing evidence and drawing inferences: Cemex at [134]-[139]. To accept the applicant's submission that the Panel should not be so entitled would be to strip the Panel in large part of its effectiveness as a specialist body established to resolve takeover disputes, as mandated by the legislation.

Conclusion 115 The appropriate order is to dismiss the application with costs. I certify that the preceding one hundred and fifteen (115) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.