CATCHWORDS Trade Practices - Conditional contract for acquisition of shares - Authorization granted by Commission - Completion of acquisition in acordance with authorization - Application to Tribunal to review - Whether any "matter" to review - Whether acquisition deferred by sub-ss.50(4) and (5) - Effect of sub-s.88(9) - Whether applicant for review had "sufficient interest" - Powers of Tribunal on review - Application to Court under s.163A. . Trade Practices Act 1974, ss.50, 88, 101, 102 and 163A. THE BROKEN HILL PROPRIETARY COMPANY LIMITED v. THE TRADE PRACTICES TRIBUNAL; THE TRADE PRACTICES COMMISSION; and WYLIE STEEL PTY. LTD. No. N.S.W. G30 of 1980 Coram: Bowen C.J., Franki and Brennan JJ. Sydney 14 August 1980. IN THE FEDERAL COURT OF AUSTRALIA) ) NEW SOUTH WALES DISTRICT REGISTRY) No. NSW G30 of 1980 ) GENERAL DIVISION ) BETWEEN : THE BROKEN HILL PROPRIETARY COMPANY LIMITED Applicant AND: : THE TRADE PRACTICES TRIBUNAL; _THE TRADE PRACTICES COMMISSION; _and WYLIE STEEL PTY. LTD. Respondents ORDER JUDGES MAKING ORDER: Bowen C.J., Franki and Brennan JJ. DATE OF ORDER: 14 August 1980. WHERE MADE: Sydney. THE COURT ORDERS AND DECLARES THAT: l. The acquisition in December 1979 by the Applicant of certain shares in the capital of John Lysaght (Australia) Limited and B.H.P.- G.K.N. Holdings Limited - (a) was carried out in accordance with the authorization granted by the Trade Practices Commission on 3 December 1979 pursuant to sub-s.88(9) of the Trade Practices Act 1974 in respect of the then proposed acquisition of the said shares; and (b) was thereby an acquisition which did not infringe the provisions of s.50 of the Trade Practices Act 1974. The decision of the Honourable Mr. Justice Lockhart (Deputy President), J.A.F. Shipton, Esquire, and Professor Brunt (Members) constituting the Trade Practices Tribunal delivered on 23 March 1980 that it had jurisdaction under sub-s.101(1) of the Trade Practices Act 1974 to review the said determination of the Commission, was wrong in law. The Tribunal has no jurisdiction under sub-s.101(1) of the Trade Practices Act 1974 or otherwise to review the said determination of the Trade Practices Commission upon the application of the lastnamed Respondent or at all. The parties are to be at liberty to apply generally as they may be advised. Wylie Steel Pty. Limited pay to the appellant its costs of the appeal. IN THE FEDERAL COURT OF AUSTRALIA) ) NEW SOUTH WALES DISTRICT REGISTRY) No. NSW G30 of 1980 ) GENERAL DIVISION ) BETWEEN: THE BROKEN HILL PROPRIETARY COMPANY LIMITED Applicant AND: THE TRADE PRACTICES TRIBUNAL; . THE TRADE PRACTICES COMMISSION; and WYLIE STEEL PTY. LTD. Respondents Coram: Bowen C.J., Franki and Brennan JJ. 14 August 1980. REASONS FOR JUDGMENT BOWEN C.J.: Broken Hill Proprietary Limited ("BHP") makes application to this Court pursuant to s.163A of the Trade Practices Act 1974 ("the Act") joining as respondents the Trade Practices Tribunal constituted by the Honourable Mr. Justice Lockhart, J.A.F. Shipton Esquire and Professor M.D. Brunt ("Trabunal"), the Trade Practices Commission ("Commission") and Wylie Steel Pty. Limited ("Wylie Steel"). Its application relates to the parts of the Act dealing with mergers and their authorization by the Commission and the procedure for review by the Tribunal. It sought certain 'declarations set forth in paragraphs 1, 2, 3 and 4 and certain orders 1n the nature of certiorari, prohibition and mandamus set forth in paragraphs 5, 6 and 7. The request for the declarations in paragraph 3, certain of the declarations in paragraph 4 and the orders in the nature of certiorari and Mandamus in paragraphs 5 and 7 were not pressed before us. The terms of the relevant paragraphs are set forth in the reasons for judgment to be delivered by Brennan J. The Act provides that certain acquisitions of shares in the capital, or any assets, of a body corporate are forbidden. Acquisitions which breach the Act are those which place, or are likely to place, the acquiring corporation in a position to control or dominate a market for goods or services or, where the corporation is already in a position to control or dominate a market for goods or services, the target body corporate or one of its related bodies corporate 1S, or 1s likely to be, a competitor of the acquiring corporation and the acquisition would, or would be likely to, substantially strengthen the power of the corporation to control or dominate the market (s.50). The Commission 1s empowered to grant an authorization for an acguisition and, while such an authorization remains in force, s.50 does not prevent the corporation from acquiring shares in the capital, or from acquiring assets, of the body corporate in accordance with the authorization (sub-~s.88(9)}). An authorization is defined as an authorization under Division I of Part VII granted by the Commission or by the Tribunal on a review of the determination of the Commission (s.4). Such an authorization will be granted only where the Commission or the Tribunal, as the case may be, is satisfied that the proposed acquisition would result, or be likely to result, in such a benefit to the public that the acquisition should be allowed to take place (sub-ss.90(9) and 101(2)). A reference to acquisition in the Act 1s to be construed as an acquisition of any legal or equitable interest but in the case of acquisition of assets does not include a reference to an acquisition by way of charge only or in the ordinary course of business (sub-s.4(4)). An authorization may be for a specific period only or may be expressed as an interim authorization which will be revocable at any time. An authorization may be subject to conditions and any authorization may in certain circumstances be revoked (s.91). Part VII ain which these authorization sections appear is not limited to the authorization of mergers. It extends to the authorization of restrictive trade practices involving continuing conduct such as exclusive dealing. The general sections are drafted to cater for all these widely varying types of conduct and must be read in that light. For example, the Commission does not generally issue an interim authorization for a merger; the power to grant interim authorization is used in relation to continuing conduct. However, we were referred to Westralian Farmers Co-operative Limited [1978] A.T.P.R. 16,821 at p.16,848 where the Commission, apparently in reliance upon sub-s.91(3), granted an authorization for the acquisition of shares upon conditions designed to allow for the possibility of an appeal. In summary these conditions were, first, that the acquisition not take place for twenty one days, and, secondly, that if there were an application for review, the acquisition not take place until the review was disposed of. A person dissatisfied with a determination by the Commission in relation to an application for an authorization may as prescribed apply to the Tribunal for a review of the determination. If the person was the applicant or the Tribunal is satisfied the person has a sufficient interest, the Tribunal must review the determination. Such a review 1s a re-hearing. No distinction 1s drawn between applications for review of authorizations of particular types of conduct. Various provisions of the Act which apply to the Commission are to apply to the Tribunal in like manner (ss.101 and 102). The prescribed time for appeal from the Commission to the Tribunal under the regulations 1s twenty-one days after the Commission's determination (reg.20). On 4 June 1979 BHP agreed with Guest, Keen & Nettlefolds Limited ("GKN") of Britain to buy all the shares which GKN held directly or andirectly in John Lysaght (Australia) Limited ("JIA"). These shares were in fact held by G.K.N. (Australia) Lamated ("GKNA"), a wholly owned subsidiary of GKN. This agreement was informal and inexact but was the basis of a later formal agreement dated 22 October 1979. Approximately one month after the making of the agreement of 4 June 1979, BHP applied to the Commission under sub-s.88(9) of the Act for an authorization of the proposed acquisition of the shares. The proposal sent to the Commission outlined the current ownership/ structure Situation in relation to JIA, details of the future purchase, the result and how it would benefit the Australian public. In April 1969, BHP had reached an understanding with GKN which became a Joint Venture and Supply Agreement from July 1970. Under these arrangements ownership and control of JIA was shared equally between BHP and GKN through the joint venture company BHP-GKN Holdings Limited ("Holdings"). Holdings owned the only voting shares in JLA and the issued capital of Holdings was divided into 100 "X" ordinary shares and 100 "Y" ordinary shares held by BHP and GKN respectively. The acquis2ztizon by BHP proposed in June 1979 would result in JLA becoming a wholly owned subsidiary of BHP and the ending of the joint venture. On 19 October 1979 the Commission issued a draft determination indicating that it proposed to authorize the acquisition. The Commission also notified Wylie Steel which had made submissions against the authorization and was considered by the Commission an "interested person" for the purposes of s.90A. Three days later, BHP and GKNA entered into the formal agreement for the purchase by BHP of the 100 "Y" ordinary shares an Holdings, 24,999,999 fully paid non-voting ordinary shares and 25,000,000 non-voting ordinary shares paid up to one cent in JLA. The formal agreement was subject to the condition in clause 1.1 that the purchase would only take place 1f the purchaser was granted an authorization under the Act to acquire the shares. On 20 November 1979 the Commission held a s.90A conference at which BHP and Wylie Steel were represented. On 3 December 1979 the Commission issued a final determination which authorized the acquisition. Five Commissioners considered that the acquisition by BHP of the 50% interest in JLA which 1t did not already hold was likely to result in a benefit to the public and that that benefit would outweigh the likely detriments resulting from the acquisition: one Commissioner dissented. The only condition imposed on the authorization despite the requests from Wylie Steel that BHP give certain undertakings in relation to supply and distribution of its products, was that BHP furnish to the Commission a report at the end of 1980, 1981 and 1982 demonstrating the progress made towards realising rationalisation efficiencies. On 4 December 1979 the agreement for sale of shares between GKNA and BHP was completed, the shares were transferred to BHP and the purchase price of $87,500,000 was paid. On 7 December the share transfers were registered, certificates issued and the Melbourne Stock Exchange informed. However, on 20 December, within the twenty-one days prescribed by Regulation 20(1)(b), Wylie Steel applied to the Tribunal pursuant to s.101 of the Act for a review of the Commission's determination. Before the Tribunal, BHP raised some preliminary points which were decided against it. The Tribunal held that it had jurisdiction to review the "matter" which was before the Commission, such review would not be futile and that Wylie Steel had a sufficient interest for the purpose of applying for a review. I deal now with the various questions arising on the appeal. Effect of sub-s.88(9). The determination of the Commission authorizing the acquisition by BHP was issued on 3 December 1979. It was an authorization not for any continuing course of conduct but for a "once for all" transaction. It contained no condition postponing its operation for any period (contrast Westralian Farmers Co-operative Limited Case [1978] A.'.P.R, 16,821 at p.16,848). The wording of sub-s.88(9) 1s such that protection against the operation of s.50 is given "while such an authorization remains in force". It does not say while it "remains in force and the time for any appeal has expired or, if there be an appeal, such appeal has been disposed of". The first question which arises 1s whether these words or some words to the same effect should be implied. Sub-section 88(9) 18 expressed to be "subject to this Part", 1.e. Part VII un which it appears. But there 1S nothing in Part VII whach, to my mind, would require the implication of any such words in sub-s.88(9). It may be suggested that where the Commission 1s dealing with a "once for all" transaction, then unless some such words are amplied the right to review conferred by s.101 upon some person other than the applicant who has a "sufficient anterest" may be rendered useless by the carrying out of the authorized transaction. It may be suggested that such a right to review having been given by s.101, the legislature should not be taken to have intended it might be rendered useless by the action of the person receiving authorization. However, sub-s.88(9) 1s not expressed to be subject to Part IX in which s.101 occurs. Furthermore, 1t has to be remembered that a determination that a transaction be authorized is an administrative not a judicial decision. It 1s a determination by a body entrusted with safeguarding the public anterest which 1s required by sub-s.90(9) before it grants authorization to be "satisfied 1n all the circumstances that the proposed acquisition would result, or be likely to result, in such a benefit to the public that the acquisition should be allowed to take place". It 1s not a simple adversary procedure. Having regard to the commercial considerations which arise in relation to mergers which often anvolve considerations affecting business and employees, requiring speedy resolution, it 1s not self-evident that the legislature would necessarily have wished action on an authorization to lack the protection of sub s.88(9) pending possible or actual review. Certainly I can find no positive andication in sub-s.88(9) or in other provisions of the Act that this was so or any justification for implying in sub-s.88(9) words which do not appear in the section. To imply such words in the sub-section would be an exercise in reconstruction. It may be suggested that the words "while such an authorization remains in force" read as they stand and without any implied words, are open to two interpretations. One 1s that provided the acquisition was made while such authorization remained in force, it will never infringe s.50. The other 1s that when the acquisition was made 1t was protected against s.50 and that protection continued while the authorization remained in force but when the authorization was no longer in force its protection against s.50 was lost. Leaving for later discussion the possible application of sub-ss.50(4) and (5) which create a "deemed" or notional Situation in some circumstances, I think the first of these interpretations is to be preferred. We are dealing with a section designed to protect against contravention of an Act carrying penal consequences. If one looks at the time when the authorization ceases to remain in force, that 1s, at the date when the Commission's determination 1s set aside, there 1s at that time or afterwards no acquisition. It would be harsh to conclude that an acquisition expressly made Lawful by sub-s.88(9) when made should consequentially be rendered unlawful by a determination of the Tribunal made after the acquisition was completed. -~10- It was argued that having regard to the presence of s.101 an the Act, any authorization by the Commission must necessarily be regarded as ""ainchoate", provisional or conditional until the time for review has expired or any review has been completed. But 1t appears to me that the Act contains no justification for this view. The furthest that it goes towards i1t 1s to provide the Commission may expressly make an authorization conditional. If the Commission does not make its authorization conditional, then it is unconditional. Whether there 1s a "matter" which can be heard by the Tribunal. The matter which came before the Commission was an application by BHP for an authorization to 1t to acquire the shares in JLA. Under sub-s.88(9) the Commission had power to grant an authorization provided it-was saiaisfied tn terms of sub-s.90(9) that the proposed acquisition would result, or be likely to result, in such a benefit to the public that the acquisition should be allowed to take place. The Commission duly made its determination authorizing the proposed acquisition. A person having a sufficient interest who is dissatisfied with the determination may apply to the Tribunal for a review of the determination and the Tribunal shall review the determination (sub-s.101(1)). The review 1S a rehearing of the matter and sub-s.90(9) regarding assessment of the effect of the proposed acquisition on the public interest applies to the Tribunal (sub-s.101(2)). The Tribunal may make a determination affirming, setting aside or varying the determination of the Commission and, for the purposes of the review, may perform all the functions and exercise all the powers of the Commission (sub-s.102(1)). The Tribunal has to determine, not whether the Commission having regard to the material before it came to a correct decision, but whether on the material before the Tribunal (which may be different) the determination of the Commission was the correct one. - Since the determination of the Commission necessarily dealt with authorization of a proposed transaction, it is difficult to see how, once the situation has been reached where there is no longer any proposed transaction, the Tribunal can perform the function required of 1t. In other words 1t appears the relevant matter no longer exists to be considered. However, 1n some circumstances sub-ss.50(4) and (5) may operate to create a notional position, in the sense that acquisition of shares 1s not to be regarded for the purposes of the Act as having taken place in pursuance of the contract for the period prescribed by those sub-sections. Whether sub-sections 50(4) and (5) apply. Where a corporation has entered into a contract to acquire shares, the contract 1s subject to a condition that the provisions relating to acquisition will not come into force unless and until the corporation has been granted an - 12 - authorization and the corporation has applied for a grant of authorization before the expiration of fourteen days after the contract was entered into then sub-s.50(4) provides: ",.. the acquisition of the shares or assets shall not be regarded for the purposes of this Act as having taken place in pursuance of the contract before - (d) the application for the authorization is disposed of; or (e) the contract ceases to be subject to the condition, whichever first happens." In the present case BHP entered into such a contract containing such a condition. In fact at the time of the formal contract, it had already applied for a grant of authorization for the acquisition. This would seem to fulfil the third condition specified. In the Act, a reference to the. acquisition of shares is to be construed as a reference to an acquisition "of any legal or equitable interest in such shares (para.4(4)(a)). The draftsman of sub-s.50(4) appears to have assumed that a contract for the acquisition of shares containing the specified condition would give the purchaser an equitable interest in the shares. When a purchasing corporation enters into such a conditional contract, it gains no direct beneficial interest in the shares. A direct beneficial interest is gained only when the contract 1s specifically enforceable by an order to convey or transfer (Brown v. Heffer (1967) 116 C.L.R. 344; cf. Chang v. Registrar of Titles (1976) 37 C.L.R. 177). In the present case this situation would arise only when the condition was fulfilled. However, 1t 1s true that before fulfilment of the condition, the purchasing corporation would have an equity to go to the court for its assistance to force the selling corporation to do what it must do under the contract to secure fulfilment of the condition (McWilliam v. McWilliams Wines Pty. Limited (1964) 114 C.L.R. 656). It seems this was treated by the legislature as an equitable interest within the meaning of para.4(4)(a). In other words, the purchasing corporation is to be regarded as having an equitable interest sufficient to breach sub-s .50(1) before the condition was fulfilled. In order to give the purchasing corporation time to make application for authorization and if necessary review, acquisition is delayed until the earlier of the two events in paras.(d) and (e) occurs. Where authorization is granted, the specific situation dealt with in sub-s.88(9) has occurred. Sub-section 88(9) provides that while the authorization remains in force, s.50 does not prevent the acquisition. This appears to refer to the whole of s.50 and to have the effect in those circumstances of excluding sub-ss.50(4) and (5). However, i1f this be not so, then it 18 necessary to consider how sub-s.50(4) would operate. In the present case, para. (d) 1s not relevant. By reason of the terms of sub-s.50(5), the application for authorization would not an the circumstances of the present case be regarded as "disposed - 14 - of" until the expiration of fourteen days after the date of the making by the Tribunal of a determination on the review. The relevant provision 1s para.(e). The question here is whether the contract ceased to be subject to the condition when the authorization was granted. This represented fulfilment of the condition in accordance with its terms. The condition had no further operation. In my opinion, the contract was no longer subject to it. If this were not so, the contract nevertheless would have ceased to be subject to the condition when the contract was completed by payment, transfer and registration of the transfer. It follows that, even if sub-s.50(4) at first applied, 21t ceased to apply when the contract ceased to be subject to the condition. It thereafter had no relevant postponing effect so far as the acquisition was concerned. It was argued, that fulfilment of the condition did not mean the contract ceased to be subject to ut; consensual deletion of the condition would have this result. I am unable to accept this argument. In any event the contract would, at the latest, appear to have ceased to be subject to the condition upon completion. In the result, I am of opinion that sub-s.50(4) and (5) do not operate to defer the acquisition and keep the "matter" on foot to be dealt with by the Tribunal on review. -15- Whether Tribunal may set aside determination ab initio. What comes before the Tribunal is the Commission's determination and its statutory duty 1s to review that determination (sub-s.101(1)). A review by the Tribunal is a re-hearing of the matter and sub-s.90(9) applies in relation to the Tribunal in like manner as i1t applies in relation to the Commission (sub-s.101(2)). Having regard to the provisions dealing with review, 1t seems to be clear that the Tribunal must act upon the material before it, which may not be the same as the material before the Commission. It may require the Commission to furnish information (sub-s.102(6)). The Tribunal may, but 1s not obliged, to have regard to material before the Commission (sub-s.102(7)). In the result, the Tribunal may make a determination affirming, setting aside or varying the determination of the Commission; for the purposes of the review, 1t may perform all the functions and exercise all the powers of the Commission (sub-s.102(1)). It follows, the Tribunal might, for example, not only make a determination setting aside a determination of the Commission, but might, 1f it thought fit, do so upon specified conditions. The determination of the Tribunal is, for the purposes of the Act other than Part IX, deemed to be a determination of the Commission (sub~s.102(2)). The question arises whether the power of the Tribunal to set aside a determination of the Commission 18 a power to avoid it and render it a nullity ab initio, or a power only to avoid ait and render it a nullity from the date of the Tribunal's determination on review. -~ 16 - The Shorter Oxford Dictionary 3rd Edition with revised addenda (1974) at p.1954 gives the following meanings of "set aside": "a. To put on one side. b. To discontinue the performance or practice of. c. To dismiss from one's mind, abandon the consideration of. d. To reject or throw over as being of no value, cogency, or pertinence; to over-rule. e. To dascard or reject from use, or service, in favour of another. ff. To annul, quash, render void or nugatory. Chiefly law. g- To separate out for a particular purpose." This is a wide range. Even if the meanings opposite the letter f. are taken as the most cogent for present purposes, this still leaves the question to be determined. The ordinary consequence of exercising a power to "quash" a conviction or order 1s to avoid it ab initio, so that it is "utterly defeated and annulled" and it is as if it had never been (Commissioner for Railways (N.S.W.) v. Cavanough (1935) 53 C.L.R. 220 at pp.225 and 228; Galloway v. Watson [1928] V.L.R. 308). Aithough such powers are statutory their ambit depends upon the particular statute. Thus, it was held the power to quash a sentence conferred by the Criminal Appeal Act 1907 by sub-s.4(3) was not a power to make null and void ab initio, but only for the future (Hancock v. Prison Commissioners [1960] 1 Q.B. 117). It seems that the ordanary consequence of exercising a statutory power to "set aside" a conviction or order as distinct from a statutory power to "quash" it is to avoid it ab initio (Lynch v. Hargrave [1971] V.R. 99). Again, however, 1% must depend upon the wording of -17 - the particular statutory provision and the setting in which it occurs. Some of the problems which may arise in relation to acts done between the time of the original order and determination and the time when it 1s set aside, are discussed by D.M. Gordon in his articles "Effect of reversal of Judgment on acts done between pronouncement and reversal" (1958) 74 L.Q.R. 517 and (1959) 75 L.Q.R. 85 and "Action on a judgment under appeal" (1968) 84 L.Q.R. 318 although unfortunately no easy solution emerges from his discussion. The fact that the statutory power 1S a power vested in an administrative tribunal to set aside a decision of another administrative body, will be a factor to be considered. However, 1t seems generally similar considerations apply in the case of such appeals as apply in relation to courts (Grady v. Commissioner for Railways (N.S.W.) (1935) 53 C.L.R. 229). The power of review conferred by ss.101 and 102 of the Act 1S a power to review a determination by the Commission, the primary body entrusted with safeguarding the public interest under the Act. On that review, which, as has been noted, 1s a rehearing on evidence which may not have been before the Commission, it may appear that the original determination should never have been made. This would tend to suggest the power 1s intended to be a power to set aside ab initio. On the other hand, the determination under review may be one authorizing a continuing course of conduct or one authorizing a "once for all" transaction involving property as in the present case. If an unconditional determination authorizing a continuous course of conduct was issued by the Commission but was later on review set aside ab initio, would this mean the person acting upon it in good faith 1n the mean time would become liable to be proceeded against for contraventions of the Act? Presumably it should not. If a determination, which authorized the acquisition of shares without any condition deferring its operation, was acted upon but was later on review set aside ab initio, would this affect the acquisition with possible consequential results affecting the vendor who was unrepresented upon the review? The logical result of "setting aside" the Commission's determination authorizing the acquisition ab initio so that 1t was "utterly defeated and annulled" and as if it had never been, would be that ultimately the acquisition would stand revealed as an unauthorized acquisition. However. the Act contains sub-s.88(9). The express terms of this sub-section, which I have discussed above, are such that it appears to protect the acquisition against being a breach of the Act, even if the authorization 1s on review set aside ab initio. If I am wrong in the view that sub-s.88(9) would protect the acquisition, nevertheless that acquisition, though unlawful, would stand and property transferred and money paid would remain where they were, unless some further action, such as an application for divestiture under s.81 was made and was successful. Presumably, the vendor, who may well have spent -19 + the money he received, would have an opportunity to be heard on such an application if restitution to him was envisaged. Clearly, the original determination 1s on record and is an historical fact; it must at all events retain sufficient life to support the review proceedings (cf. Collector of Customs (N.S.W.)} v. Braan Lawlor Automotive Pty. Limited (1979) 24 A.L.R. 307). Again, in the case where the Commission has refused an application for authorization of the acquisition of shares and the Tribunal sets this determination aside and authorizes the acquisition, 1t would seem more appropriate that this determination should operate only prospectively. Prior to the time of the Tribunal's decision, there was no authorization. This tends to suggest the power in sub-s.102(1) to set aside should not be anterpreted as exercisable retrospectively to the time of the Commission's determination but rather prospectively from the time of the Tribunal's decision. Because of the view which I have taken on the effect of sub-s.88(9) and on the question whether there would remain a "matter" to be considered by the Tribunal, it 1s unnecessary to express a concluded view on this question. T may say, however, that as at present advised I incline to the view that the Tribunal may only make a determination which will operate prospectively. If this be correct, a determination ot the Tribunal will be deemed to be a determination of the Commission from the time it 1s made. - 20 - Whether Wylie Steel had a "sufficient interest". Where the Commission makes a determination granting an authorization, the standing of an applicant for review under s.101 depends upon such applicant being dissatisfied with the determination and the Tribunal being satisfied that such applicant has a "sufficient interest". The Tribunal heard evidence and argument on the question, treated as a preliminary point, whether Wylie Steel had a "sufficirent interest". In its reasons, 1t stated: "It 1s not necessary to define the various categories of persons who may have a "sufficient interest"; but they include a person who establishes that his business interests or prospects could be adversely affected by the proposed merger." Later it said: "In our opinion, sub~s.101(1) requires that before proceeding with the review of the determination of the Commission, the Tribunal must be satisfied that the applicant, not being the applicant for the authorization, has made out a prima facile case that it has a "sufficient interest". The test 1s not an unduly high one. If it were, it may involve determining the very questions that will loom large an the hearing on the merits of the determination including the allegations of Wylie Steel to which we have referred. These are hardly matters that fall for determination at this stage. If it emerges during the course of the hearing that the applicant in truth may not have a "sufficient interest" the Trabunal may then review the locus standi of the applicant and consider the future course of the application for review." Finally it said: "In our view, the fact that Wylie Steel carries on business in Australia as an importer, stockist and dealer in steel products establishes prima facie that at has a sufficient interest to bring this application for review of the Commission's determination." I would not disagree with these statements or with the Tribunal's approach to the question of "sufficient interest" raised as a preliminary point. It must, however, be observed that one basis of the- Tribunal's consideration of that question was its conclusion that there was a "matter" to be determined on review. Since I have formed the opinion that there is no such "matter", this basis disappears and I am unable to follow the Tribunal to its conclusion that there exists a "sufficient interest" in Wylie Steel. Whether a review by the Tribunal would be futile and for this reason should not be proceeded with In view of the terms of sub-s.101(1) it must be doubted whether the Tribunal has any discretion to decide whether or not it will enter upon the hearing of a review. On the other hand, once it does enter upon a review, it has control of its own proceedings. It can decide to end a hearing upon the ground that it would be futale to continue; 1t can hear argument on a claim as a preliminary point that it should end a hearing on this basis or because the applicant lacks a "sufficient" interest, as occurred in the present case. On appeal this Court might, in appropriate circumstances, hold IN THE FEDERAL COURT OF AUSTRALIA) ) NEW SOUTH WALES DISTRICT REGISTRY) No.G.30 of 1980 ) GENERAL DIVISION ) BETWEEN: THE BROKEN HILL PROPRIETARY COMPANY LIMITED Applicant AND: THE TRADE PRACTICES TRIBUNAL, THE TRADE PRACTICES COMMISSION AND WYLIE STEEL PTY. LTD. Respondents Coram: BOWEN CJ FRANKI J BRENNAN J 14 August 1980 REASONS FOR JUDGMENT FRANKI J. The relevant facts in this application are dealt with by the Chief Judge and Brennan J. and I will not deal with them in any detail. The applicant, The Broken Hill Proprietary Company Limited, ("B.H.P."), relied upon two main submissions, the first being that the acquisition of the relevant shares took place at a time when an authorization was "in force", in the sense in which the words "authorization remains in force" appear in s.88(9) of ~ 22 - that the Tribunal after entering upon the review should have upheld such a preliminary point and ended the hearing. It follows that it 1s open to this Court to hold that the Tribunal should not proceed further with the review, because 1t would be futile. Having regard to the view I have taken on the effect of sub~s.88(9) and on the question wheether there would remain a "matter" to be considered by the Trabunal, 1t appearx to me that 2t would be futile for the Tribunal to proceed wiih the review. This, therefore,-1s another, although not a separate or independent, ground for allowing the appeal. Conclusion In my opinion, BHP has shown it is entitled to the declarations sought in its application in paragraphs 1, 2 and 4(a). I do not consider that an order for piohinitson terms of paragraph 6 1s necessary, assuming chere 1s power ta grant it. The orders I propose are declarations in terms of paragraphs 1, 2 and 4(a); order liberty to all parties to apply: order Wylie Steel Pty. Limited pay to the appellant 1ts costs of the appeal. I am of opinion the Trade Practices Commission should be left to bear its own costs. t I certify Qhat this and the o?/ preceding pages are a true cgpy of the 1 Reasons for IvGG ext herezf/of hzs Honour the Chief Judgg/ Sir Nig Sowan VS the Trade Practices Act 1974, ("the Act"). This being so it was submitted that there was nothing for the Trade Practices Tribunal ("the Tribunal") to review. The second argument of the applicant was that the requirement of s.101(1),that the Tribunal be "...satisfied that he has a sufficient interest..." had not been eStablished by Wylie Steel Pty. Limited ("Wylie Steel"), and so the Tribunal was not entitled to review the determination of the Trade Practices Commission ("the Commission"). Counsel for Wylie Steel argued, inter alia, that 1f the Tribunal set aside the authorization the result would be that the authorization was to be regarded as never having been made and the relevant acquisition was to be deemed not to have taken Place. There was therefore a matter before the Tribunal and any determination by it would not be futile. He also argued in relation to s.50(4)(e) that a contract did not cease to be Subject to a condition because that condition was fulfilled. He also submitted that the equitable interest in the shares being purchased did not pass to the purchaser until the purchase money had been paid. Counsel for the Commission said that he appeared to help the court and he presented some arguments of a general nature. I will deal first with the applicant's second main submission. In my opinion the applicant has not made it out. The Tribunal said: "In our view, the fact that Wylie Steel carries on business in Australia as an importer, stockist and dealer in steel products establishes prima facie that it has a sufficient interest to bring this application for review of the Commission's determination. Accordingly, we overrule the preliminary objections of B.H.P." It 1s clear that the Tribunal was only looking at the matter in the preliminary way appropriate to decide whether the proceedings should continue or not. The Tribunal did state a general test as follows: "It is not necessary to define the various categories of persons who may have a 'sufficient interest'; but they include a person who establishes that his business interests or Prospects could be adversely affected by the proposed merger." I do not consider it is necessary to examine cases which have been decided in other areas of law to determine whether there is any reason to uphold the application on this point. In my opinion it is clear that the Tribunal's approach was not wrong on this question. I pass now to consider the applicant's first main submission. The relevant contract provides in clause 2.1 that "The Vendor agrees to sell the Shares to the Purchaser and the Purchaser agrees to purchase the shares..." and in clause 2.3 that "The Purchaser shall be entitled to beneficial ownership of the Shares upon payment of the whole of the purchase price on completion". Clause 1.1 provides: "It is a condition of this Agreement that the provisions of Clauses 2.1 to 2.3 hereof shall come unto force if and when, and will not come into force unless and until, the Purchaser has been granted an authorization under the Trade Practices Act 1974 ('the Act') to acquire the Shares." The essential facts are that on 3 December 1979, the Commission issued a "final determination", which provided, inter alia, "The Commission therefore concludes that the requirements of section 90(9) of the Act are satisfied, and authorizes the acquisition ". On 4 December 1979 the purchase price was paid and duly executed transfers of the shares, together with the relevant share certificates, were handed to B.H.P. The transfers were duly stamped and on 7 December 1979 the transfers were registered and new share certificates issued in the name of B.H.P. The application for a review of the determination of the Commission by Wylie Steel, purporting to be under s.101(1), was dated 20 December 1979. Apart from the provisions of s.50 of the Act it was common ground that the applicant was entitled to acquire the shares without that acquisition being affected in any way by any provisions of the Act. Section 50(1) proscribes the acquisition directly or indirectly of any shares in the capital of a body corporate in certain circumstances. No question of whether any of these circumstances existed was relevant to the application before us. An authorization to acquire the relevant shares remained in force under the provisions of s.88(9) at the date of the payment of the purchase money, at the date of the execution of the transfers and at the date of their registration. That section clearly provides that in such circumstances "...section 50 does not prevent the corporation from acquiring shares in the capital... of the body corporate in accordance with the authorization". In my opinion, this has the effect of excluding, from the time when an authorization is granted and during the period when it remains in force, the operation not only of s.50(1) but also of s.50(4)and (5). It is thus important to note that whatever be the effect of entering into the contract, events which took place after the authorization of 3 December 1979, and certainly before the application for review was lodged, must have taken place in a period when the relevant authorization was in force and therefore s.50 of the Act could have no effect on transactions within this period, which fell within the words "...-acquiring shares in the capital...". It 1s essential to have regard to the critical matters to which I have just referred to avoid difficulties which may arise from a consideration of s.50(4)and (5). It is also important to notice that the authorization which was granted by the Commission was not one expressed to be in force for any particular period. Section 91(1) makes provision for such an authorization. The authorization was not expressed to be subject to any conditions under s.91(3), nor was it an interim authorization. Section 91(2) makes special provision for an interim authorization in cases where the Commission considers that it is appropriate to grant such an authorization pending the expiration of the time allowed for making an application to the Tribunal for review of a determination by the Commission of an application for an authorization. It is very significant that this specific provision appears in the Act. An examination of s.88 of the Act, which deals with the power of the Commission to grant authorizations, illustrates the variety of circumstances to which that section is applicable. An authorization may authorize an act which is to to be done only once or it may authorize conduct of a continuing nature. The authorization of the acquisition of shares in a company falls into the category of an act which 1s to be done only once. An authorization to make a contract having an exclusionary provision, provided for in s.88(1) (a), would fall into the same category. of a different nature is an authorization, under s.88(1)(b), for example, entitling a person to give effect to a contract containing an exclusionary provision. In appropriate cases, the Act, e.g. in s.88(1)(5)(7)(8) and (9), distinguishes periods when the authorization "remains in force" from other periods. It is quite clear that there is ample scope for a review under ss.101 and 102 by the Tribunal of an authorization where that authorization permits conduct which is of a continuing Nature, e.g. giving effect to the terms of a contract which contains an exclusionary provision, or an authorization qualified under s.9l1 (1)(2) or (3) of the Act. I am satisfied that the acquisition, which took place after the authorization of 3 December 1979 and before the application for a review was lodged, was not a contravention of any provision in the Act. At the date the application for review was lodged, in my opinion, it was impossible to rehear the matter as provided in s.101(2), because the matter which had been before the Commission was an application for authorization. The application had been granted and the acquisition completed. Neither the Commission nor the Tribunal have any power to approve or otherwise deal with an acquisition of shares which has already been made. Sections 88(9) and 90(9) make this clear. The applicant no longer had any application far authorization on foot. The transaction for which it had sought authorization had been completed without offending any provision of the Act. It will be seen that I am of the opinion that the Tribunal had no power to review the determination of the Commission. It therefore follows that the question whether such a review would be futile hardly arises. It is next necessary to examine the provisions of s.50(4) and (5) of the Act. It is important in this regard to bear in mind that because of s.88(9), whilst an authorization remains in force, "... section 50 does not prevent the corporation from acquiring shares in the capital... of the body corporate in accordance with the authorization". It seems clear that s.50 was inserted in the Act to deal with what might be regarded as an acquisition, in some sense, of shares resulting from the mere entering into of a contract to acquire them. Section 4(4) of the Act provides that: "In this Act - (a) a reference to the acquisition of shares in the capital of a body corporate shall be construed as a reference to an acquisition, whether alone or jointly with another person, of any legal or equitable interest in such shares;...". It seems that, strictly, an equitable interest is not acquired by force of a contract for the sale and purchase of shares where there ig a condition in the contract that the acquisition is subject to the consent of another person, (see McWilliam v. McWilliams Wines Pty. Ltd (1964), 114 C.L.R. 656 at pp.660,661 and 662 and Brown v. Heffer (1967), 116 C.L.R. 344 at pp.348 to 352.) It is, however, clear that a Court of Equity will make appropriate orders to ensure that a party to such a contract, takes proper steps to apply for the consent to which Such a contract is subject. In these circumstances, it would appear that the draftsman of s.50(4) and (5) of the Act took the view that upon the signing of a contract to which s.50(4) applies, an interest, which might be considered to fall within the words of s.4(4) as being within the words " any ... equitable interest in such shares", might arise by the force of the contract itself. Section 50(4) deals with the situation where a corporation has entered into a contract to acquire shares in the capital of a body corporate, and the contract is subject to a condition that the provisions of the contract relating to the acquisition will not come into force unless and until the corporation has been granted an authorization to acquire the shares, and the corporation has applied for the granting of such authorization within 14 days after the contract was entered into. These three requirements are satisfied in relation to the contract under consideration in this case. Section 50(4) then proceeds "... the acquisition of the shares ... shall not be regarded for the purposes of this Act as having taken place in pursuance of the contract before..." whichever of the events mentioned in (d) and (e) first happens. I note that the words of s.50(4) do not refer specifically to legal or equitable interests but embrace an "acquisition" of shares which is the same word chosen to identify the acts proscribed by s.50(1). If the entering into the contract does not constitute an acquisition of shares then the contract 1s unaffected by s.50(1). If it does constitute an acquisition of shares within that section then s.50(4) postpones the acquisition until whichever of the events specified in (d) or (e) happens first. Counsel for Wylie Steel, and to some extent Counsel for the Commission, presented an argument that an equitable interest did not arise when the contract was signed. If this be so and the equitable interest only arose upon the grant of authorization or the payment of money after the grant of authorization, no equitable interest arose before an authorization was in force, and, therefore, because of the provisions of s.88(9), s.50 had no application. If, on the other hand, the mere entering into the contract constituted an acquisition of shares for the purposes of the Act, then s.50(4) postponed that acquisition, for the purposes of the Act, until either the application for authorization was disposed of or, the contract ceased to be subject to the condition, whichever first happened. The provisions of s.50(5) deal with the point of time when the application is to be taken to be disposed of under s.50(4) (d). This is either, if an application for review is made, at the expiration of 14 days after the date of the making by the Tribunal of a determination on the review, or, 1f no application for review is made, at the expiration of 14 days after the period in which an application may be made to the Tribunal for a review. Senior Counsel for the applicant argued that the first event to happen in the subject case was that the contract ceased to be subject to the condition as provided in s.50(4) (e) and that this event took place on 3 December 1979 when the authorization was granted. No specific argument was presented to us that, in the circumstances of this case, the application for the authorization should be deemed to be disposed of at the time the authorization was granted because no application for review could be made to the Tribunal where the Commission has granted an authorization of an act which is only to be done once, such as the acquisition of shares. The matter proceeded before us upon the basis that the purpose of s.50(4) was to prevent the entering into a contract within that section being a contravention of the Act where, although the requirements of s.50(4) (a) (b) (c) were complied with, the terms of the contract nevertheless resulted in the acquisition of "any ... equitable interest 1n such shares" having taken place "in pursuance of the contract" and by the act only of entering into the contract. The section provides that the acquisition of shares shall not be regarded for the purposes of the Act; as having taken place in pursuance of the contract before the first of either (d) the application for the authorization being disposed of or (e) the contract ceasing to be subject to the condition happens. Apparently when this time arrives the acquisition of the shares is then to be regarded for the purposes of the Act, as having taken place pursuant to the contract if the contract, on its proper interpretation, does give rise to such an acquisition. Assume the case of a refusal by the Commission to grant an authorization, a subsequent application for review by the original applicant for authorization and a grant by the Tribunal of an authorization. Under s.50(5), 14 days after the Tribunal's grant of an authorization the application for authorization 1s deemed to be disposed of if s.50(4)(d) is satisfied before s.50(4)(e). If the argument of Senior Counsel for the applicant 1S correct, upon the granting of the authorization the contract would cease to be subject to the condition that its provisions relating to acquisition would not come into force unless and until the corporation has been granted an authorization to acquire the shares. If, at the time of the grant of authorization by the Tribunal, the contract ceases to be subject to the condition, the provisions of the contract relating to acquisition then come into force and at that time the authorization operates to remove the restrictions imposed by s.50. If on the other hand the grant of authorization does not cause the contract to cease to be subject to the condition, then the protection of s.50(4) would operate 14 days after the granting of authorization by the Tribunal ie., for 14 days longer than would be necessary. In my opinion the grant of authorization by the Commission or, if the Commission refuses authorization, the grant of authorization by the Tribunal, has the effect of the contract ceasing to be subject to the condition referred to in s.50(4) but the transaction being protected by the authorization. In my opinion it 1s correct to say that, once the authorization to acquire the shares had been granted, the contract ceased to be subject to the condition in clause 1.1 and the provisions of clauses 2.1 to 2.3 then became operative. Whilst it is unnecessary to do so in this case, it is interesting to consider what would happen if the Act permitted a review by the Tribunal and the Tribunal came to the conclusion that authorization should not be granted and in the meantime, at a time when there was no prohibition on so doing, a third party had transferred the shares which it had held and received the purchase price. To give any construction to s.88(9) other than that which I have given to it would be to read down the clear words of that section, that s.50 does not prevent the acquisition of shares in the capital in accordance with the authorization. Section 88(9) is expressed to be subject to Part V1ll of the Act but ss.101 and 102 are in Part 1X of the Act. The only argument which might be advanced that any such reading down should take place appears to depend upon ss.10i and 102. These sections have some purpose even in the case of an application for authorization of an act which 1S only to be done once when that authorization is refused by the Commission, but there cannot be any basis for reading down the clear words of s.88(9) so that an authorization, such as that of 3 December 1979, should be treated as something other than an authorization. It is also relevant to note that by s.90(11), if the Commission fails to determine an application for an authorization under s.88(9) within 4 months from the date on which the application was received by the Commission, it shall be deemed to have granted the authorization applied for at the expiration of that period. It will be seen that I have dealt with the submissions of Wylie Steel in what I have already said. I would make orders in terms of those proposed by the Chief Judge. Icerti*r thet this andthe THiarceonw preceteng> aces area true copy of the Reasons for Judgment herein of his Honour Mr. Justice FRantky Sood OT Dated: /& Avcusr 1980. | We et weer or IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) NSW No. G30 of 1980 ) GENERAL DIVISION ) BETWEEN THE BROKEN HILL PROPRIETARY COMPANY LIMITED Applicant AND : THE TRADE PRACTICES TRIBUNAL, THE TRADE PRACTICES COMMISSION and WYLIE STEEL PTY.LTD, Respondents CORAM : Bowen C.J., Franki and Brennan J. 14 August 1980. BRENNAN J. : Guest, Keen and Nettlefolds Ltd. (GKN), a United Kingdom company, entered into an agreement with the applicant {BHP) on 4 June 1979 to sell to BHP all the shares which GKN held, directly, or indirectly, in John Lysaght (Australia) Limited (JLA) for $87,500,000. GKN Australia Limited (GKNA) was a wholly owned subsidiary of the U.K. company and it held the shares which were to be acquired by BHP. BHP already held a 50% anterest in JLA. The proposed acquisition of the shares by BHP would result in JLA becoming a wholly owned subsidiary of BHP. The proposed acquisition attracted the operation of s.50(1) of the Trade Practices Act 1974 (Cth.) which provides: "(1) A corporation shall not acquire, directly or indirectly, any shares in the capital or any assets, of a body corporate if - (a) as a result of the acquisition, the corporation would be, or be likely to be, in a position to control or dominate a market for goods or services; or {b) in a case where the corporation is in a position to control or dominate a market for goods or services - (1) the body corporate or another body corporate that 1s related to that body corporate is, or 1s likely to be, a competitor of the corporation or of a body corporate that 1s related to the corporation; and (i1) the acquisition would, or would be likely to, substantially strengthen the power of the corporation to control or dominate that market. " On 9 July 1979 BHP made an application to the Trade Practices Commission, pursuant to s.88(9) of the Trade Practices Act, for authorization of the proposed acquisition of the shares. It explained the nature of and the machinery to effect the proposed acquisition: "Forwarded with this submission...1s a copy of a 'Memo of Agreement reached 4/6/79' in London for the sale to BHP by GKN Australia Limited ('GKNA'), a wholly owned subsidiary of a United Kingdom company, Guest, Keen and Nettlefolds, Limited ('GKN') of all the shares GKN holds in JLA directly or indirectly, comprising 100 'Y' ordinary shares being the whole of the issued 'Y' ordinary shares of Holdings, and being half of its total issued capital, and 24,999,999 fully paid non-voting ordinary shares and 25,000,000 non-voting ordinary shares paid to one cent each in JLA, being half of the 1ssued capital of JLA apart from two voting fully paid ordinary shares held by Holdings. The result of completion of the sale and purchase contemplated by this Memo of Agreement will be JLA's becoming a wholly owned subsidiary of BHP. A formal agreement is in the course of preparation. The present ownership structure of JLA arose out of an understanding reached between BHP and GKN in April 1969 which was, in the main, incorporated in two agreements made on 10th July 1970. These are a Joint Venture Agreement between BHP and GKN and a Supply Agreement between Australian Iron & Steel Proprietary Limited ('AIS'), JLA, BHP and GKN for which interim authorization was granted by the Trade Practices Commission under reference Nos. A3403 - A3405 on 29th January 1975. In accordance with these arrangements and agreements, ownership and control of JLA is shared equally between BHP and GKN. The only voting shares of JLA are held by Holdings. The issued capital of Holdings is divided into 100 'X' ordinary shares and 100 ''Y' ordinary shares held by BHP and GKN respectively. Each of BHP and GKN has the right to appoint half of the directors and remove and replace any of 1ts appointees. This shared control has been the position since July 1970. " The Commission prepared a draft determination concluding that the requirements of s.90(9) were satisfied and "that, subject to any pre-decision conference that may be requested under section 90A, the acquisition should be authorized." Wylie Steel Pty.Ltd. (Wylie Steel), a respondent in these proceedings, was notified by the Commission that it was regarded as an "interested person" for the purposes of s.90A and Wylie Steel was accordingly furnished with a copy of the draft determination. The draft determination was issued and Wylie Steel was notified on 19 October 1979. On 22 October, the "formal agreement" to which BHP had referred in 1ts application for authorization was entered into. The parties were GKNA as vendor and BHP as purchaser. The sale agreement was subject to a condition, expressed in Clause 1.1: "It is a condition of this Agreement that the provisions of Clauses 2.1 to 2.3 hereof shall come into force if and when, and will not come into force unless and umtil, the Purchaser has been granted an authorization under the Trade Practices Act 1974 ('the Act') to acquire the Shares." Clauses 2.1 to 2.3 set out the agreement for the sale and purchase of the shares. The condition in cl. 1.1 was no doubt intended to attract the protection of s.50(4), lest it be held that by entering into an agreement to purchase the shares, BHP would acquire an equitable interest in them in contravention of s.50(1): see s.4(4). Conformably with the provisions of cl. 1.1 of the Sale Agreement, it was provided that campletion should take place within 30 days after the provisions of cll. 2.1 to 2.3 came into force, subject to a proviso not now relevant. A conference was convened by the Commission pursuant to s.90A. It was held on 20 November 1979 and it was attended by representatives of BHP and Wylie Steel. Thereafter, on 3 December 1979, the Commission issued its final determination. The Commission concluded that the requirements of s.90(9) of the Act were satisfied and authorized the acquisition of the shares specified in the Sale Agreement, It did not purport to suspend or delay the operation of the authorization which 1t granted. On the following day the purchase price was paid to Messrs. Mallesons, Solicitors for the vendor, and executed transfers of the shares and share certificates were delivered to the purchaser's agent. The transfers were stamped and, on 7 December 1979, the transfers were registered. On the same day, share certificates were issued to BHP in respect of the shares which it had acquired. By virtue of s.101(1), a person "dissatisfied with a determination by the Commission...may, as prescribed and within the time allowed by or under the Regulations, apply to the Tribunal for a review of the determination...". Wylie Steel made such an application on 20 December 1979 which was within the time allowed by the Regulations: reg.20(1) (b) specifies a period of 21 days after the date of the determination as the period within which an application for review 1s to be made. By that time, of course, the Sale Agreement had been completed. BHP had acquired the legal and beneficial title to the shares. Nevertheless, the application for review by the Tribunal of the Commission's determination was persisted in and the Tribunal has held that it has jurisdiction to review the matter which was before the Commission. Wylie Steel contends that, 1£ the Trabunal should set aside the Commission's determination then, for the purposes of the Act, it is as though no authorization had been granted; and if the Tribunal should vary the Commission's determination by imposing conditions, the Tribunal's determination will take effect according to its tenor. It is submitted that, as the authorization which was granted was for an acquisition of shares pursuant to the Sale Agreement, and as the authorization 1s amenable to review by the Tribunal under s.101, a completion of the Sale Agreement before the review is disposed of 1s incapable of being, in the purview of the Act, an acquisition of shares. These contentions fasten on the provisions of ss.101 and 102. Section 101 provides that when an application for review is made by a person dissatisfied with a determination by the Commission, then, if that person "was the applicant for the authorization or the Tribunal is satisfied that he has a sufficient interest, the Tribunal shail review the determination." The exercise of the power to review is not discretionary. The nature of a review and the functions and powers of the Tribunal appear in the following provisions: "101 (2) A review by the Tribunal is a re~hearing of the matter and sub-sections 90(6), {7}, (8) and (9) apply in relation to the Tribunal in like manner as they apply in relation to the Commission. " "102 (1) Upon a review of a determination of the Commission in relation to an application for an authorization, the Tribunal may make a determination affirming, setting aside or varying the determination of the Commission and, for the purposes of the review, May perform all the functions and exercise all the powers of the Commission. (2) A determination by the Tribunal affirming, setting aSide or varying a determination of the Commission in relation to an application for an authorization shall, for the purposes of this Act other than this Part, be deemed to be a determination by the Commission, " 7. When the question of the jurisdiction of the Tribunal came to be argued before it as a preliminary issue, the learned Deputy President (Lockhart J.) held that there was a "matter" to be reheard and determined by the Tribunal. Lockhart J. said: "The 'matter' before the Tribunal 15 the matter that was before the Commission in the sense of the subject matter of the application for authorisation, The characterisation of the 'matter' 18 not determined by the acts of the applicant for authorisation after the authorisation is granted or refused by the Commission. Whatever was before the Commission is what comes to the Tribunal. The incorporation by sub-s.101{2Z) of sub-ss. 90(6), (7), (8) and (9) requires the Tribunal to apply the same tests as the Commission 1S required to apply when considering questions such as benefit and detriment to the public. This says nothing as to the proper characterisation of the 'matter'. " The applicant then instituted these proceedings seeking relief under s.163A of the Act. Not all of the claims made in the application were pressed before us. In the result, the following claims remain for determination by this Court: "1. A declaration that the acquisition in December,1979 by the Applicant of certain shares in the capital of John Lysaght (Australia) Limited (which is hereinafter called "J.L.A.") and BHP-GKN Holdings Limited (which is hereinafter calleé 'Holdings') - (a) was carried out in accordance with the authorization granted by the Trade Practices Commission (hereinafter called 'the Commission') on 3 December, 1979 pursuant to S.88(9) of the Trade Practices Act 1974 (which is hereinafter called 'the Act') in respect of the then proposed acquisition of the said shares; and (b) was thereby an acquisition which did not infringe the provisions of S.50 of the Act. 2. A declaration that the decision of The Honourable Mr. Justice Lockhart (Deputy President), J.A.F. Shipton, Esquire, and Professor Brunt, (members) constituting the Trade Practices Tribunal (which is hereinafter called 'the Tribunal') delivered on 23 March, 1980 that it had jurisdiction under S,101(1) of the Act to review the said determination of the Commission, was wrong in law. 4. A declaration that - (a) the tribunal has no jurisdiction under §$.101(1) of the Act or otherwise to review the said determination of the Commission upon the application of the lastnamed Respondent or at all; 6. An order by way of, or in the nature of, prohibition that the Tribunal be prohibited from continuing with the hearing of the application by the lastnamed Respondent under S.101(1) of the Act for the review of the said determination of the Commission granting the said authorization to the Applicant. " The prohibition against acquisition which s.50(1) expresses 1s directed primarily to the person proposing to acquire the shares; but,for the purposes of s.76 of the Act, the prohibition is directed also to the person proposing to dispose of them. Both parties to a proposed acquisition are affected by the prohibition. The absolute prohibition contained in s.50(1) is modified by the provisions of s.88(9) which empowers the Commissizon to grant an authorization lifting the prohibition upon the acquisition: " Subject to this Part, the Comm2ssion may, upon application by a corporation, grant an authorization to the corporation to acquire shares in the capital, or to acquire assets, eof a body corporate and, while such an authorization remains in force, section 50 9. does not prevent the corporation from acquiring shares in the capital, or from acquiring assets, of the body corporate in accordance with the authorization. " The parties to a proposed acquisition may be in need of protection, however, before an authorization 1s granted if the proposed disponor has conferred upon the proposed acquirer of the shares an equitable interest in them, for s.4(4){a) gives an extended operation to the prohibition expressed in s.50(1): "(a) a reference to the acquisition of shares in the capital of a body corporate shall be construed as a reference to an acquisition, whether alone or jointly with another person, of any legal or equitable interest in such shares;" An unconditional contract for the sale of shares confers an equitable interest in the shares upon the purchaser pending completion if the contract 1s one which would be enforced specifically (see Dougan v. Ley (1946) 71 C.L.R.142 at p.151). It was thought desirable therefore to provide that parties proposing to enter into such a contract for the sale of shares, who might otherwise be prohibited from disposing of and acquiring an equitable interest in those shares, should be able to enter into that contract without contravening s.50(1) pending the outcome (to use a neutral term) of an application for authorization. Section 50(4) provided: 10. "(4) Where - (a) a corporation has entered into a contract to acquire shares in the capital, or assets, of a body corporate; {(b) the contract is subject to a condition that the provisions of the contract relating to the acquisition will not come into force unless and until the corporation has been granted an authorization to acquire the shares or assets; and (c) the corporation applied for the grant of such an authorization before the expiration of 14 days after the contract was entered into, the acquisition of the shares or assets shall not be regarded for the purposes of this Act as having taken place in pursuance of the contract before - (d) the application for the authorization is disposed of; or (e) the contract ceases to be subject to the condition, whichever first happens. " What acquisitions are thus protected? Those which are effected by contracts which, inter alia, are "subject to a condition that the provisions of the contract relating to the acquisition will not come into force unless and until the corporation has been granted an authorization to acquire the shares", Until a contract ceases to be subject to a condition of that kind, there is in point of law no acquisition of an equitable interest by a purchaser under the contract: Brown v. Heffer (1967) 116 C.L.R.344. And so s.50(4) appears supererogatory. Nevertheless, a decree of specific performance of a conditional contract of sale may be made prior to the fulfilment of the condition, moulded to require completion of the contract only when the condition is 1i. fulfilled and, in appropriate cases, to require the doing of what is reasonably necessary to procure the fulfilment of the condition (McWilliams Wines Pty.Ltd. v. McWilliam (1964) 114 C.L.R.656). The draftsman of s.50(4) appears to have assumed that a purchaser's right to such a decree is, or may be held to be, an equitable interest in property. The measure of an interest 1n property being acquired by a purchaser under a contract of sale has been said to be defined "by reference to the relief which the Court would give by way of specific performance" (Central Trust and Safe Deposit Co. v. Snider [1916] A.C.266 at p.272), and thus a purchaser under a conditional contract of sale may have been thought to have an interest in the property equivalent to his right to a decree of specific performance. Such an "interest" must have been taken by the legislature to fall within the statutory description "any equitable interest" in s.4(4) (a), for s.50(4) would otherwise have had no role to play. Clearly enough, the legislature thought that a contract for the purchase of shares, conditioned in conformity with para (b) of s.50(4), 1s capable of creating an equitable interest prior to the time when the contract ceases to be subject to the condition (see para (e)), for s.50(4) expressly relates to an "acquisition of shares" which takes place prior to that time. The sub-section expressly relates also to an "acquisition of shares" whach takes place before the application for authorization is disposed of (see para (d)), and it thus assumes an earlier acquisition of shares under a contract falling within the sub-section. Yet in cases where 12. authorizations are not granted and the condition is not fulfilled, there is in point of law no acquisition of an equitable interest either before or after the application for authorization is disposed of. These considerations tend in favour of construing s.50(4) as relating to the acquisition of a purchaser's rights under a contract for the sale of shares which would be enforced specifically and which is conditioned in conformity with para (b) of the sub- section. So construed, s.50(4) fits easily into the scheme of the Act. The purchaser may lawfully acquire his equitable "interest" in the shares upon the terms set out in s.50(4), and the protection of that sub-section lasts until one of the events mentioned in paragraphs (d) and (e) occurs: " (d) the application for the authorization is disposed of; or (e) the contract ceases to be subject to the condition. " If an authorization 1s granted, the condition is fulfilled and s.88(9) confers its protection when s.50(4) ceases to have effect; if an authorization is refused, s.50(5) takes effect. It provides for two circumstances - an application to the Tribunal, and an opportunity to rescind the contract or otherwise to dispose of the equitable "interest" in the shares which was acquired by entering into the contract. 13. Section 50(5) provides time for both of these steps, so that disposal of an application is taken to occur no earlier than 14 days after the time limited for appealing expires or the Tribunal makes its determination. If the application to the Tribunal results in the granting of an authorization, then again the condition is fulfilled and, by reason of s.50(4) ceases to have effect when s.88(9) confers its protection upon the acquisition, But if the Tribunal should not grant an authorization, or if there should be no application to the Tribunal within 21 days, the effect of s.50(4) terminates after a further 14-day period of grace. (s.50{5)). It was submitted, however, that s.50(4) does not relate to the purchaser's acquisition of rights by entry into a contract for the sale of shares. It was said that 1t related to an acquisition of shares in completion of a contract for their sale, and that s.50(4) delayed, for the purposes of the Act, the time of that acquisition. A construction, presently to be mentioned, was then ascribed to paragraphs (d) and (e), to support the final step in an argument that, for the purposes of the Act, the relevant acquisition in the present case had not yet occurred, and that there was a "matter", namely, the application for authorization, still to be reheard by the Tribunal under s.101(2). 14. The first step in the submission is the proposition that a purchaser who enters into a contract for the sale of shares subject to a condition mentioned in s.50(4) (b) acquires no equitable interest in them. So much may be conceded. Then it is said that s.50(4) must apply to the acquisition of shares in completion of such a contract, and it is the occurrence of that event which s.50(4) delays for the purposes of the Act. Paragraph (e) seems to stand in the way of this construction, for it would seem to terminate the effect of s.50(4) when the grant of an authorization makes the contract unconditional; and that time is logically and chronologically anterior to the coming into operation of the contractual obligations of the parties to buy and seil the shares and therefore anterior to the time of acquisition "in pursuance of the contract". To overcome this difficulty, it was submitted that para (e) - "the contract ceases to be subject to the condition" - does not encompass the case where the contract becomes unconditional by fulfilment of the condition, but 1s restricted to cases where the parties have eliminated the condition by variation of the contract or, perhaps, by waiver. It was argued that para (e) was irrelevant in the present case because the contract remained "subject to the condition", albeit subject toa fulfilled condition. Then, in reliance upon para (d), it was submitted that, for the purposes of the Act, s.50(4) worked a delay 1n the acquisition of shares in the present case, until the expiration of 14 days after the application for authorization 1s finally disposed of by the making by the Tribunal of a 15. determination on the review sought by Wylie Steel (cf. s.50(5) (b)). One cannot reach this result, of course, if para (e) encompasses the fulfilment of the condition as well as its deletion from the contract, for the condition in the instant case was fulfilled by the grant of an authorization. I can see no grounds for reading down the plain meaning of para (e) to exclude the fulfilment of the condition. If para (e) were held not to encompass the fulfilment of the condition by the grant of an authorization by the Commission, the grant of the authorization would nevertheless authorize an acquisition of shares not in pursuance of the contract. So the parties to a contract of the kind described in s.50(4) would then he free to rescind that contract and substitute a new unconditional contract, and to complete the acquisition pursuant to the new contract free from the prohibition contained in s.50(1). Or, invoking the limited operation which the propounded construction would accord to para (e), they might enter into a deed of variation to delete the condition and complete the contract which in that manner had ceased to be subject to the condition. But where an authorization is granted by the Commission, s.50(4), which 1s clearly designed to relieve against the prohibition aun s.50(1), can scarcely have been intended to drive the parties to the execution of a new contract or a deed of 16. variation of their original contract when the contract or deed would have no commercial purpose and no legal effect except securing the release of the parties from the prohibition contained in s.50(1). It was argued that s.50(4) applies only to acquisition of shares in completion of a contract of the kind therein described. If it be assumed that s.50(4) applies to such an acquisition (and in my opinion it does not), the sub- section could so apply only if para (e) relates to the fulfilment of the condition. The sub-section refers to an acquisition which takes place "in pursuance of the contract". If an acquisition completes a contract, the contract is performed by discharging the obligations created or imposed by it, and obligations of purchase and sale bind the parties to a s.50(4) contract only when the condition is fulfilled. If the condition be deleted consensually from a s.50(4) contract, the obligations of purchase and sale bind the parties and are amenable to discharge by performance, but the contract without the condition no longer amswers the s.50(4) description. But in my opinion s.50(4) does not apply to an acquisition of shares in completion of a contract of the kind therein described. The effect of the sub-section is spent 1f£ the condition expressed in para (b) 1s fulfilled by the grant of an authorization. If the Commission grants an 17. authorization and it remains in force (as occurred in the present case), while the contract is completed by payment of the purchase price and acquisition of the legal title to the shares, s.88(9) precludes that acquisition from constituting a contravention of s.50(1). As the party acquiring the shares does not thereby contravene s.56(1), 1t cannot be ordered to divest itself of those shares under s.81. Nor does that acquisition expose the parties to a penalty under s.76, If s.50(4) were thought to apply to such an acquisition, it would have no purpose, for it would neither affect rights nor impose duties or liabilities. It was submitted that if the Tribunal sets aside the Commission's determination to grant an authorization, and refuses an authorization, the Tribunal's decision denies any effect to an authorization in fact granted by the Commission, so that an acquisition in completion of the contract is, for the purposes of the Act, deemed not to have occurred while an authorization 18 in force. If the Act operated in this way, a party to a proposed acquisition which has been authorized by the Commission could not act on the faith of the authorization until the time lamited for application to the Tribunal for review expired, or until the Tribunal affirmed the Commission's decision to grant the authorization. But s.88(9) is quite explicit: if the Commission grants an authorization to acquire shares then, so long as it remains in force, an acquisition of 18. those shares by the corporation to which the authorization has been granted does not contravene s.50. Section 88(9) is not expressed to be subject to s.101, nor is it provided that the effect which it accords to an authorization in force is suspended until the times limited by s.50(5) expire. With great respect to the intricate and ingenious arguments delivered to us by Wylie Steel and the Commission, the provisions of s.88(9) appear to be the rock on which every argument founders. It is sufficient alone to preclude s,50(4) from having the operation which the arguments of Wylie Steel and the Commission would assign to 1t, it prevents ss.76 and 81 from having any application to an acquisition in conformity with an authorization granted by the Commission, and ultimately it denies the possibility of there being a "matter" for rehearing by the Tribunal under s.101(2) if an acquisition pursuant to a s.50(4) contract has been completed. The Act 1s so framed as to limit the freedom which a person might otherwise have to deal with his assets and to carry on his trading activities. The rights of ownership and the right to acquire ownership of shares are affected by s.50(1), but once the prohibition contained in that sub-section is lifted by the grant of an authorization, the ordinary rights exercisable with respect to the acquisition of property may be lawfully exercised. The arguments of Wylie Steel and of the Commission, in reliance on the appeal provisions of the Act, would lead to the conclusion that the ordinary freedom to buy and sell which 19. 1s restored by the grant of an authorization is in some way affected by the prospect of an interested person seeking a review under s.101. Section 88(9) gives no countenance to those arguments. Nor is there any nexus between ss.101 and 102 on the one hand, and the prohibition contained in s.50(1) on the other which would cause an acquisition, authorized at the time when it is effected, to become a contravention of s.50 by reason of a Tribunal decision, The plain meaning and operation of the provisions of the Act which affect the exercise of the ordinary freedom of commerce should not be altered in order to allow an effective right to seek a review of the decision of a regulatory agency. If there be nothing left to regulate because the acquisition has occurred the matter 1s at an end. It would be impossible, indeed, for the Tribunal to apply s.90(9) - which it is directed to do by s.101(2) - if it had any power to review an acquisition completed in pursuance of a contract. Section 90(9) applies not to completed, but only to proposed acquisitions: The Commission shall not make a determination granting an authorization under sub-section 88(9) in respect of a proposed acquisition of shares in the capital, or of assets, of a body corporate unless it is Satisfied in all the circumstances that the proposed acquisition would result, or be likely to result, in such a benefit to the public that the acquisition should be allowed to take place, " 20. Clearly the matter before the Commission is the authorization of an acquisition which has not yet occurred. The function of the Commission is the assessment of what will be the result of a proposed acquisition, not the evaluation of the result of an acquisition which has-occurred. If the acquisition occurs between the time when an authorization 1s granted and an appeal to the Tribunal is instituted, the matter before the Commission is no longer available for consideration. Although it 1s not necessary for present purposes to determine whether s.50(1) precludes the effective acquisition of shares in contravention of its provisions, I incline to the view that it does not. Otherwise I can perceive no need for the divestiture power in s.81, nor any occasion for its exercise. If an acquisition occurs in contravention of s.50(1), the remedies are to be found in Part VI. Neither the Commission nor the Tribunal can, by their respective determinations,turn innocent conduct into a contravention or expunge a liability for a contravention committed. In the present case, an authorization was in force at the time of the acquisition and the acquisition was in accordance with the authorization. BHP were entitled then to acquire the shares. They did so lawfully. The matter was at an end. There was nothing left to regulate, no "matter" which 21. the Tribunal might rehear under s.101(2). As the existence of a "matter" for rehearing under s,101(2} and the question whether an applicant for review under s.101(1) has a "sufficient interest" are correlative issues, the question whether Wylie Steel had a sufficient interest does not present itself for answering in these proceedings. I agree that orders be made as proposed by the Chief Judge. tT certify that this and the ceaing pages ace a true copy of the pre Reasuns for Juugment herein of bis stumeue Me. Justic@ Brennan. rn Tan rr ae * Associate Dated: ¥ August 1980. '