Leta ere Be eet 1 han et aye nee ne Be a ale te tl ee ite Mit aan re rt thee ees a ee rE ee RN NY SR a Rt ree - — een! hae eer ereee —_ renee eases mtn nate mo — te nee ee ne CATCHWORDS Administrative Law - judicial review - appeal from the dismissal of an application for an order of review - whether Minister abdicated 'responsibility to consider taking proceedings for alleged breach of s-50 of the Trade Practices Act - whether appeal court should interfere with exercise of discretion by primary judge not to make the order sought. Trade Practices Act 1974 ss. 29, 50, 77, 80, and 81 Administrative Decisions (Judicial Review) Act 1977 ss. 5 and 16. VISY BOARD PTY LTD v THE HONOURABLE GARETH EVANS THE ATTORNEY GENERAL OF THE COMMONWEALTH "OF AUSTRALIA and ANOR. No. VG302 of 1983 p86 SVL, Sweeney, Lockhart and Sheppard JJ. Melbourne - QSAI3944u 15 March 1984. Administrative Law - judicial review - appeal from the Bae ek ele ee wea rr een teh mT Bd LO i ne Nn a aR | ashe Ae dismissal of an application for an order of review of decision of Trade Practices Commission to discontinue its proceedings - whether decision amounted to an unlawful fetter or abdication by the Commission of its duty under the Trade Practices Act. Trade Practices Act 1974 ss. 80 and 81 Administrative Decisions (Judicial Review) Act 1977: ss. 5 and 16 Federal Court Rules: Order 22 Rule 5(1) VISY BOARD PTY LTD v TRADE PRACTICES COMMISSION and ORS No. VG303 of 1983 Sweeney, Lockhart and Sheppard JJ. Melbourne 15 March 1984 Practice and Procedure - whether court as _ presently constituted should hear appeal - whether a fair-minded observer might entertain a reasonable apprehension of bias by reason of pre-judgment. Practice and Procedure - principles to be taken into account in an appeal against the exercise of a discretion by primary judge in granting leave to discontinue. Trade Practices Act 1974: ss. 80 and 81 Federal Court Rules: Order 22 Rule 2(1){d); Order 35 Rule 6(1), A.P.M. INVESTMENTS PTY LTD v TRADE PRACTICES COMMISSION and ors 'No. VG308 of 1983 Sweeney, Lockhart and Sheppard JJ. "8 Melbourne 15 March 1984. - _ Practice and Procedure - appeal against refusal of primary judge to release undertakings - third such application for release - whether circumstances had arisen to justify the fresh exercise of a discretion by the primary judge. Trade Practices Act 1974: 5.50 Orme eta dette rt = anata te oe eh a are a Te tt een ii a te emt OP tae eet her nal e oe Nhs eee eae S.C.I. OPERATIONS PTY LTD and ANOR v TRADE PRACTICES COMMISSION and ORS No. VG249 of 1983 Sweeney, Lockhart and Sheppard JJ. Melbourne 15 March 1984 ~ IN THE FRDERAT: COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY 1. GENERAL DIVISTON ) ) ) No. VG 249 of 1983 ) ) On appeal from a single judge of the Federal Court of Australia. Between: S.C.I. OPERATIONS PTY. LTD. and S.C.I. PACKAGING PTY. LTD. Appellants and TRADE PRACTICES COMMISSION, First Respondent A.P.M. INVESTMENTS PTY. LTD., Second Respondent FIBRE CONTAINERS LIMITED, LEIGH-MARDON PTY. LTD., _ ASSOCIATED NOMINEES PTY. LTD., FRANCIS JAMES BURKE, PETER BECKER, WILLIAM GIBSON, JOHN FRANCIS ELFVERSON (Sixth to Ninth Respondents as Trustees for Leigh-Mardon Pty. Ltd.) and Third to Tenth ARTHUR KEVIN SMITH Respondents cen oe a te es © eee IN THE FEDERAL COURT OF AUSTRALIA VG. No. 302 of 1983 VICTORIAN DISTRICT REGISTRY GENERAL DIVISION On appeal from a single judge of the Federal Court of Australia. Between: VISY BOARD PTY. LTD. Appellant and THE HONOURABLE GARETH EVANS THE ATTORNEY GENERAL OF THE - COMMONWEALTH OF AUSTRALIA Respondents and S.C.I. OPERATIONS PTY LTD RL n, nk enon wee oe ee et ee IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION ) ) ) VG. No. 303 of 1983 ) ) On appeal from a single judge of the Federal Court of Australia. Between: VISY BOARD PTY. LTD. and TRADE PRACTICES COMMISSION, FIBRE CONTAINERS LIMITED, LEIGH MARDON PTY. LIMITED, ASSOCIATED NOMINEES PTY. LIMITED, FRANCIS JAMES BURKE, PETER BECKER, WILLIAMS GIBSON, JOHN FRANCIS ELFVERSON and ARTHUR KEVIN SMITH Appellant Respondents -* ee ee ee ee ee eee ee IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) No. VG 308 of 1983 ) ) GENERAL DIVISION On appeal from a single judge of the Federal Court of Australia. Between: A.P.M. INVESTMENTS PTY. LIMITED Appellant and 5 TRADE PRACTICES COMMISSION First Respondent ° and _ FIBRE CONTAINERS LIMITED, LEIGH-MARDON PTY. LTD., ASSOCIATED NOMINEES PTY. LTD., FRANCIS BURKE, PETER BECKER, WILLIAM GIBSON, JOHN FRANCIS ELFVERSON (Fifth to Eighth Respondents as Trustees for Leigh- Mardon Pty. Ltd.) and ARTHUR KEVIN Second to Ninth SMITH Respondents ee ee ee eae - we ee a re ee ee et tae on and S.C.I. OPERATIONS PTY. LTD. (S.C.I. PACKAGING PTY. LTD.) Tenth Respondent - ee ee ee a et rt ee Coram: Sweeney, Lockhart & Sheppard JJ. Place: Melbourne Date : Reasons for Judgment Sweeney, J. There are four appeals presently before the Court and it will be helpful to a separate consideration of each of them to set out the history of the events which have given rise to them. History Fibre Containers Ltd (FCL) is the target company for two competing takeover bids made in May 1983, the first by SCI Packaging Pty Ltd (SCI) and the second by APM Investments Pty. Ltd. (APM). The APM bid gave rise to two applications to the court pursuant to s. 50 of the Trade Practices Act 1974 (the Act), one of which, application VG84 of 1983 was commenced by the Trade Practices Commission (the TPC) on 20 May 1983, seeking injunctions to prevent the takeover of FCL by APM, alleging that it would represent a breach of s. 50 of the Act because of the addition it would make to the a tee Tee ee ee es oe ot 7. substantial power already enjoyed by APM in the relevant markets in which APM, SCI and FCL are alleged to operate. In the second such application (VG82 of 1983) issued on 19 May 1983, SCI sought declarations that the acquisition by APM of the FCL shares would constitute a contravention of s. 50 and that the pricing policy adopted by APM constitutes a contravention of s. 46 of the Act, and other consequential relief including damages. Before commencing application VG84 of 1983, the TPC obtained undertakings to it by SCI and from APM to produce the effect of maintaining the status quo until the matter "could be brought before the Court. In an affidavit sworn on 20 May 1983 Mr Krascum, an officer of the TPC, said that enquiries on behalf of the TPC indicated that FCL was seriously considering each of the proposed offers, so that there was a serious prospect of a take-over of FCL by either SCI or APM. On 17 May 1983 the TPC had decided that APM should be notified that it considered APM's proposed acquisition of FCL would breach s.50 of the Act. There have been fluctuations in the attitudes of the parties from time. to time but that opinion of the TPC has remained constant. When the application came on for directions on 23 May 1983, before Mr Justice Northrop, undertakings were given to ee Ca ee ne ee ee ce 8. the Court on behalf of APM, SCI, SCI Operations Pty Ltd, and FCL, and also on behalf of: Leigh-Mardon Pty Ltd; Associate Nominees Pty Ltd; Francis James Burke, Peter Becker, and William Gibson (as trustees for Leigh-Mardon Pty Ltd); and Arthur Kevin Smith; all of whom are substantial shareholders in FCL and all but the last of whom are closely connected with Amatil Ltd. I will follow the course adopted by Mr Justice Woodward in referring to these substantial shareholders in FCL, who are closely connected with Amatil Limited, as Amatil. The recital to the corrected order of 23 May 1983 was in the following terms: "Upon the following undertakings being given by the First Respondent, S.C.I. Operations Pty. Ltd. and S.C.I. Packaging Pty. Ltd.:- A.P.M. Investments Pty. Ltd., S.C.I. Operations Pty. Ltd. and S.C.I. Packaging Pty. Ltd. each by their respective Counsel undertake to the Court that they and any related corporations will not, prior to the hearing or determination of Application No. VG84 of 1983 or until further order, acquire or take any further steps to acquire any shares in the capital of Fibre Containers Ltd. AND upon the following undertakings being given by the Second to Ninth Respondents:- + that until the determination of these proceedings or further order - 1. The Third to Ninth Respondents will not sell to or accept any offer from A.P.M. INVESTMENTS PTY. LTD. (A.P.M.) (or any related corporation of A.P.M.) or S.C.I. PACKAGING PTY. LTD. (S.C.I.) or any related corporation of S.C.I.) to purchase any shares held by them or ee ee ot, 9. on their behalf in FIBRE CONTAINERS LTD. 2. The Second to Ninth Respondents will not aid, abet, counsel or procure A.P.M. (or any related corporation of A.P.M.) or S.C.I. (or any related corporation of S.C.I.) to acquire directly or indirectly any shares in FIBRE CONTAINERS LTD. or in any way be knowingly concerned in or a party to any = such acquisitions. AND subject to the making of an appropriate Declaration by the National Companies and Securities Commission to enable effect to be given to the undertakings herein pursuant to the Companies (Acquisition of Shares) (New South Wales) Code." The order then set out the directions which were given. (The first respondent was APM, the second respondent was FCL, and the third to eighth respondents were Amatil. The ninth respondent was Arthur Kevin Smith. ) The directions given on 23 May 1983 were designed to enable the trial of the application to commence on 18 July 1983. Various other directions hearings and interlocutory applications took place, and appeals were instituted, with the result that the trial has not commenced. In its amended statement of claim the TPC gave particulars of the markets which it said were involved and alleged, amongst many other things, that 1. APM owns 18 1/2% of the issued capital of FCL. ee ee ee eee -- - - _ ate ee on en gn en ee a ne re ee cree rn nee ee fe rere ee ee wee oe oe 2. 10. APM owns 40% of the issued capital of James Hardie Containers Limited, a consumer of approximately 25% of the paperboard supplied in Australia. APM owns the whole of the issued capital of Containers Limited, a consumer of approximately 2.2% of the paperboard supplied in Australia. ° APM owns 6 of the 8 mills which produce paperboard in Australia, which 6 mills represent approximately 72% of the paperboard manufacturing capacity in Australia. Between approximately 1953 and the date of the application APM engaged in conduct: (a) in the paperboard market; (ob) ain the fibre container market; as a result of which APM; (i) strengthened its existing power and acquired further power in each of those markets, or alternatively, {ii) demonstrated the nature and extent of its power by the exercise thereof in each of ee ened ee ee a ee ll. the said markets. Detailed particulars of these allegations were set out under the headings, "Distribution", "Pricing Policies" and "Acquisitions". APM is in a position to control or dominate the paperboard market. v APM proposes to acquire all of the issued shares in the capital of FCL. That acquisition would, or would be likely to substantially strengthen the power of APM to control or dominate the paperboard market in contravention of s. 50(1)(b) of the Act and/or result in APM being, or being likely to be in a position to control or dominate the paperboard market in contravention of s. 50(1)(a) of the Act. Further or in the alternative, the acquisition of the FCL shares would result in APM being, or being likely to be in a position to control or dominate the fibre container market in contravention of s.50(1)(a). FCL threatens and unless restrained intends to recommend to its shareholders that they accept sep en~ 12. APM's offer. 12. Amatil own approximately 71% of the issued capital of FCL. In its defence, which, as will be seen, has been otherwise amended, APM admitted that it proposed to make : : offers to the shareholders of FCL to acquire their shares, and this intention on its part has never wavered. It is unnecessary for present purposes to give details of its stated willingness to increase the amount offered for each share. In their amended defence dated 29 July 1983, Amatil stated that if and when APM made offers to acquire all of the issued capital of FCL they would consider whether or not they would accept those offers in respect of the shares in FCL which they owned or held, which amounted to 74% of its 1ssued capital. By leave, given by consent on 31 January 1984, Amatil changed this plea to read, as follows: "The AMATIL Respondents admit that the Firstnamed Respondent... [A.P.M.] . . . has made an offer to purchase all the issued shares in the capital of Fibre Containers, but neither they nor any one of them intend to accept such offer or any other offer by the Firstnamed Respondent to purchase the said shares or by any other means to permit the Firstnamed Respondent to acquire all or any of the said shares held or beneficially owned by any of the AMATIL shareholders." topes Oe ene mee ates ata ee ee me ge ee ee ene ee ee ee eee aoe 13. This amendment reflected the changed attitude of Amatil to the APM offer, of which more anon. The change in turn led, as we shall see, to the TPC indicating 1ts abandonment ef its allegation that FCL threatened and intended to recommend to its shareholders that they accept APM's offer. On 20° July 1983 Woodward J had before him a notice of motion, in VG84 of 1983, by FCL, seeking that it be released from paragraph 2 of the undertaking which it had given to the court on 23 May 1983 insofar as 1t related to SCI, to enable it to "sound SCI out" about the possibility of a revised offer to it by SCI. FCL's application was opposed, for aiffering reasons, by the TPC, APM and SCI, and it was refused on 20 July 1983. On 27 and 28 July S.C.I's application for a joint hearing of VG82 of 1983 and VG84 of 1983 was heard by Woodward J and refused on 4 August 1983. By further notice of motion dated 11 August, which was heard by Woodward J. on 17 August, FCL and Amatil sought orders that they be released from their undertakings in relation to SCI, and that SCI and its related corporations be released from the undertakings given by them to the court on 23 May 1983. The TPC stated that it did not oppose these releases, provided that FCL and Amatil remained bound by their undertakings not to negotiate with APM until the TPC's co ome i ee ete 8 ee 14. s. 50 proceedings had been determined. SCI supported the application, and APM opposed it. His Honour published reasons for judgment on the motion on 22 August 1983 but postponed making any orders until 24 August 1983 when he ordered the release of all parties from the undertakings given on 23 May 1983, and accepted a fresh undertaking from FCL and Amatil not to finalize any proposed oe sale of shares to APM. APM appealed against the order made on 24 August 1983, and on 21 September 1983 a Full Court of this court constituted by Smithers, Fitzgerald & Jenkinson JJ allowed the appeal and set aside the order of 24 August 1983. On 10 October 1983 APM was given leave to amend its defence filed in VG84 of 1983. The substance of the amendment, as set out in paragraph 17A, was to foreshadow that, if it were successful in acquiring the shares in FCL, APM would dispose of about half of FCL's productive capacity. This idea of splitting FCL was first considered by APM in early September as a course to be pursued 1f the Full Court were to dismiss the appeal against the order of 24 August 1983 and release all undertakings. APM had discussed the proposal with the TPC and had been encouraged by the TPC reaction, although the TPC had indicated that, before a ee a ee et te cent eee Ven een ee oe Aer tcmn i nt we Re Re eee 15. expressing any approval, it would need to know who was to acquire the other half of FCL's business. APM did not tell FCL, Amatil, or SCI of the splitting proposal and in the event the Full Court allowed the appeal. However APM then decided that it would seek from FCL and Amatil their reaction to its proposal to split the company after acquisition. APM's object was to secure a generally agreed release from all undertakings, and enable a prompt result to be achieved by a free bidding match in the market place, thus avoiding the necessity for further protracted litigation. The proposal was eventually totally rejected by Amatil, and APM applied to amend its defence again by deleting all reference to such a proposal. This amendment has since been allowed. Amatil reacted strongly to the news of APM's plan to split FCL's capacity, if its offer were accepted. In his affidavit of 12 October 1983, Mr Peter Becker, Chairman of Directors of FCL and of Leigh-Mardon Pty Ltd anda director of Amatil Limited deposed as follows:- "8. Paragraph 16 of the said Part A Statement of the First Respondent [APM] including the heading thereto 1s in the following terms: 'INTENTIONS OF INVESTMENTS REGARDING THE BUSINESS OF THE COMPANY It is the present intention of Investments - (a) to continue the business of the Company in its present basic form; ree en ren ae ee ge ne ere tee -- - es --- wee ewe eee If whemew ae Oe ae A Re oe ee Be ee ee oe a ee 16. (b) not to make any major changes to the business of the Company, including any redeployment of the fixed assets of the Company; (c) not to close any of the existing operating plants of the Company; and (dad) to continue the employment of the present employees of the Company.' 9. The intentions of the First Respondent, as expressed in paragraph 17A of its Amended Defence are directly contrary to the intentions of the First Respondent as expressed in sub-paragraphs 16(a) and (b) of the said Part A Statement and represent a significant and fundamental change in the intentions of the First Respondent as -originally expressed. 10. In my opinion publication of the intentions of the First Respondent as expressed in its Amended Defence will have an extremely serious adverse effect on the business of the Second Respondent [FCL], upon the morale of its employees and upon the relations of the Second Respondent with its customers and consequently its ability to compete effectively in its market. In this regard I have read the affidavit of George Castan, a Director of S.C.I. Operations Pty. Limited and S.C.1I. Packaging Pty. Limited dated 7th October, 1983 and filed herein and agree with the opinions expressed therein as to the impact which the publication of the intentions of the First Respondent is likely to have on the business of the Second Respondent, the value of that business and upon its employees. 11. In all of the circumstances and having regard to the intentions of the First Respondent as expressed in paragraph 17A of its Amended Defence and to the contents of the affidavit of Stanley David Martin Wallis sworn on 28th September, 1983, the Third to Eighth Respondents have now decided not to sell their shares in the Second Respondent to the First Respondent. That decision has been made with the knowledge of the contents of an affidavit of Stanley David Martin Wallis which I am informed and verily believe the First Respondent intends to file in this Honourable Court tomorrow. 12. I say further that when on 23rd May, 1983, the Second to Ninth Respondents gave to this Honourable Court the undertakings more particularly set out in the Order of the Honourable Mr. Justice Northrop of the same date, they did so having regard, inter alia, to the circumstances then prevailing which circumstances included the intentions of the First oc wm onset 17. Respondent as expressed in its Part A Statement identified in paragraph 8 of this my Affidavit. The intentions of the First Respondent as now expressed are such that, when added to the circumstances referred to in my affidavit of 1lith August, 1983, filed herein and in the affidavit of Francis James Burke sworn on the same date and filed herein, the overall circumstances have now so changed that had they been known to or reasonably foreseeable by the Second to Ninth Respondents on 23rd May, 1983, which they were not and could not be the said undertakings would not have been given." Mr Wallis the managing director of APM, in his affidavit of 28 Septembér 1983, had set out APM's decision to sell about half of FCL's business. Mr Castan, a director of SCI, in his affidavit of 7 October 1983 referred to a letter dated 28 September from the solicitors for APM to those of FCL advising them of the proposed amendments to APM's defence, setting out the plan to dispose of about haif of FCL's business and continued as follows:- "11. 2.0.2. + « « « The application foreshadowed in that letter was the first time there had been any indication by APM that it proposed that if it acquired the whole of the shares in FCL it would break up or dismember FCL's business. 12. I consider that the implications of the aforesaid statement of intention by APM are enormous. The nature of the cardboard container industry is such that if the proposed amendment, setting out as it does APM's intentions, becomes a matter of public knowledge the business of FCL will suffer immediate and irreparable damage as it would lose customers who would wish to ensure that their contracts for future purchases were made with a company which was going to continue carrying on business in the form Known to and accepted by the customer. In my opinion the ways in which FCL will suffer damage if en ete ee a --= we > ee eg ee ee ee ee ee ee ee rt i ee et ee eee ) we meer eee ae 13. 14. 15. 18. this publicity occurs are many and various and I have no doubt that the loss of trade by FCL will be massive and quick. I estimate that within six months the trade of FCL will have been substantially reduced and that this reduction will probably occur progressively over that period. In addition I believe that many employees will seek other employment because of the necessary uncertainty as to the future of the business of FCcL. When the undertakings were given to the Honourable Mr. Justice Northrop on the 23rd May, 1983, and at the time SCI made uts previous application to be joined as a party in these proceedings the factual basis underlying the proceedings was much different from that which will exist when APM's intentions are made public. At that time SCI and APM were proposing to bid for the whole of the issued capital in FCL on the basis that FCL would continue in the form and carry on 1ts business as it had hitherto. The proposed amendment by APM contemplates a dismembering of FCL which has significance not only in relation to the attractiveness of FCL to a bidder, but also in relation to the effect of section 50 of the Trade Practices Act in such circumstances. Whilst a target company (the business of which will be carried on by the acquirer) will suffer substantial damage "if it so remains a target company for a lengthy period a target company in respect of which a potential acquirer states 1t will be cut in half will suffer a much greater loss of trade very quickly. _ At the time of giving the said undertakings SCI had assumed that if APM acquired the FCL shares it would retain the whole of the business of FCL and I believe that was the assumption of most people in the paperboard industry. Had SCI know at the time at give its undertakings that APM would announce its intentions to break up and dismember FCL's business this would have been a vital factor in SCI's consideration in relation to its offer to acquire shares in FCL and the giving of the undertaking. In consequence of the amendment I am informed by SCI's legal advisers and do verily believe that the evidence which will need to be called in the application and the issues which will need to be canvassed will be substantially increased as it will be necessary for the matter to proceed on the basis of alternative analyses, namely: at ne ~e ee Re ee 19. {a) The identification of the market and the position in it if APM acquires the whole of the issued capital in FCL and maintained its business in its present form. (ob) The identification of the market and the position in it where 50% of the business of FCL is) in some way dismembered and 'sold' to an as yet indeterminate and unidentified purchaser. 16. As SCI 1s not only the proprietor of a paper mill, put also. through an interest in Cargo Newpak, a company with an interest in the converting industry tn which FCL operates, SCI not only has an interest in the issues which arise from the proposed amendment but also may be affected if any decision or determination of the Court is made on the basis of the proposed amendment. 17. Further, having regard to the change in circumstances brought about by the proposed amendment, SCI submits that it 1s appropriate and, indeed necessary, for the parties who gave the undertakings on the 23rd May, 1983, to be released from those undertakings as the factual substratum which brought about those undertakings has now changed significantly." > A third application for release of the undertakings given to the court on 23 May 1983 was made by SCI by notice of motion dated 7 October 1983. Whereas the TPC had opposed the first application for release, and had not opposed the second application for release so long as FCL and Amatil remained suitably bound by undertakings not to negotiate with or sell to APM, it consented to SCI's application for all undertakings to be lifted. However senior counsel for the TPC stated that if APM were to acquire the FCL shares, the TPC would seek divestiture. Woodward J began hearing the motion on 13 October 1983. The application was supported by all parties except APM. & te ee Re ee ee en ee Ad eters ene ene eee en cee ee ee a. na 20. On 17 October 1983, while the third application for release was proceeding before Woodward J, the board of directors of Amatil Limited passed the resolution "that the Company will not sell its shares in Fibre Containers Ltd to APM Investments Pty Ltd or to any of its related corporations at any time or in any circumstances or for any price." In the course of the hearing of the third application for release, it was submitted on behalf of SCI and FCL that the TPC should discontinue VG84 of 1983 since Amatil's decision not to sell its shares to APM had rendered the application unnecessary and academic. Mr Williamson OC., for TPC, indicated to his Honour that his client would not take this course. He said: "The view of the Commission is that the question of futility is something to be- judged by the court. The Commission can have its own views, whatever they may be, but its own views may well be wrong. If there were a decision by this Court arising out of the present application which indicated futility, well that of course is something which the Commission must then respond to. Indeed, if there are any indications by the Court in terrorem one way or the other the Commission would clearly have to give the most' serious consideration to any such indications. That is not to say that the Commission wishes to avoid making a decision if one is called for but its position is that its overwhelming desire is to do what seems to be fair to ali the interests that are involved. But within the context of the main application, that is certainly if it is taking the initial proceedings and certain things follow from that, and that means inevitably the Commission 1s opposed to APM so long as APM proposes to proceed, but in that context wants to follow such course as is fair to APM, as is fair to ce ee ee ete soe ore ae = Pee oe ee Re tee ee ee ee ee 21. Smorgon, as is fair to FCL, 1t appears that is insoluble to them." FCL and Amatil indicated a willingness to consent to judgment. for injunctions in the terms sought by the TPC in its application in VG84 of 1983, but the TPC declined to move for that relief. Prior to reserving judgment on 19 October 1983 his Honour had said that if, having had a chance to study the material that had been put to the court the TPC wished to take any different stand from the one it had so far indicated "and to firm up its position one way or the other", he would not regard it as discourteous to the court if an indication of that were given, so that the court could be reconvened. The TPC re-stated its position in a telex addressed to several parties, including Visy Board Pty Ltd (VB) and dated 27 October 1983, when the hearing of the third application for release had been completed but before his Honour had delivered judgment. The major field of VB's operation was the conversion of paper board into fibre containers. It stated, inter alia: "As you are aware, the Commission has not opposed the release of all parties from their undertakings in the proceedings recently before Woodward J. The Commission did however state that if the judge were minded to release the parties 1t would wish to ep et ee ee —_——— eee - -- we ee ee ee ee a er ee ee ee ee wee = en we, 22. preserve its option to proceed for divestiture if APM were successful in acquiring FCL. The judge has reserved his decision on the question of the undertakings. You may be aware also that during the course of these recent proceedings the suggestion was made that the Commission should discontinue its proceedings against APM because FCL had resolved not to sell to APM and discontinuance would be followed by immediate sale to SCI. The Commission stated to the court and confirms with you that it is not its intention to discontinue its proceedings against APM and that 1f APM is released from its-undertaking and proceeds to acquire FCL it will proceed for divestiture pursuant to section 81 6£f the Act. The Commission would not institute similar proceedings against SCI." Woodward J dismissed SCI's notice of motion on 15 November 1983. In his reasons for judgment his Honour said: "Although the role of the TPC has now been adverted to in open court, I do not believe that I should say anything to influence it in the performance of its statutory functions, and nothing I have said should be read as having that intention." VG249 of 1983, the appeal" by SCI from Woodward J's judgment of 15 November 1983, came on for hearing on 13 December 1983. On 12 December 1983 FCL and Amatil filed in VG249 of 1983 a notice of motion returnable before the Full Court on 13 December 1983. It sought the following orders: "lL. That pursuant to Order 3 Rule 3 of the Federal Court Rules time for service of this notice of motion be abridged. . 2. An injunction restraining the fourth to tenth ' respondents -- [Amatil and Arthur Kevin Smith] -- by themselves, their servants or agents or otherwise howsoever from entering into a contract to sell, directly or indirectly any aN re et ee eee mee ee ee me te ee me ct te re ee tne ee Be en ee Re nn sneer e © 23. shares registered in their names ar the names of one or more of them in the capital of Fibre Containers Limited to the second respondent. -- [ie. APM] --. 3. An injunction restraining the third respondent -- [FCL] -~ by itself, its servants or agents or otherwise howsoever from aiding, abetting, counselling or procuring or in any way being directly or indirectly, knowingly concerned in or a party to:- (a) the acquisition by the second respondent of any shares in its capital or any of its assets; (b) the sale by the fourth to tenth respondents or any of them of any shares in its capital to the second respondent. 4. Such other order as the Court deems fit." Paragraphs 2 and 3 were in the same terms as the final relief sought by the TPC in VG84 of 1983 against FCL, Amatil and Arthur Kevin Smith. During the course of opening the SCI appeal on 13 Decenber 1983, Mr O'Callaghan Q.C., for SCI, referred to the Amatil resolution of 17 October 1983 and again submitted that if it was firm it had rendered VG84 of 1983 futile and the TPC should withdraw the application. After the luncheon adjournment on 13 December 1983 Dr Griffith Q.C. for FCL and Amatil referred to the statements made before Woodward J that FCL and Amatil would submit to judgment by way of injunctions in the terms sought by the TPC in its application 1f£ the TPC would so move. Pe an on ne ee wate ee ee eee ae ae Le ee es 24. Dr Griffith said: "But the difficulty is the commission up until the time we proceeded to court this morning has still not indicated either it was prepared to make terms of settlement with us whereby we bound ourselves -not to sell to APM - and I indicated as a matter of open offer to the commission we are prepared to do that." Dr Griffith went on to say that his clients were prepared to give an undertaking to the TPC "not to sell to APM ever". Alternatively, they were prepared to give an undertaking that they would not sell to APM without giving to the TPC whatever notice was stipulated. He then referred to the notice of motion filed on 12 December 1983 in which FCL and Amatil sought to move for judgment against themselves because of the TPC's reluctance to so move. He stated that if the TPC were to move for judgment against his clients, his clients would consent to such a judgment and would pay the TPC's costs, including any costs which the TPC may be ordered to pay in favour of another party. He desired to "tender a letter written yesterday by the Crown Solicitor to the Trade Practices Commission which states what is in effect my submission now to the court." Mr Williamson responded by indicating that the TPC desired to move for judgment against FCL and Amatil with the orders for costs proposed by Dr Griffith and for leave to discontinue against APM. Mr O'Callaghan then applied for an MN me ag tg ee ee ee eee eee eee — -_——- . , . 25. adjournment of the hearing of the appeal to enable the forshadowed motion by the TPC to be brought before a single judge. The adjournment was granted over APM's opposition. On 14 December 1983 the TPC took out two notices of motion in VG84 of 1983 both made returnable on 15 December. In the first notice it sought the relief which Mr Williamson had foreshadowed to the Full Court on 13 December 1983 that he proposed to seek. The second notice of motion sought leave to discontinue against all parties with the same order for costs against FCL and Amatil. On 14 December 1983 when it was realised that s. 80(1) of the Act aid not permit a consent judgment unless the court could be satisfied that the facts justifying it had been established, which was not possible without an extensive hearing, the TPC decided to seek leave to discontinue against all parties as set out in the second notice of motion. When the matter came before Woodward J on 15 December 1983 the TPC proceeded only on its second notice of motion. Discontinuance of proceedings is dealt with by Order 22 of the Federal Court Rules, the relevant rules of which provide that, at the stage reached in VG 84 of 1983, after the close of pleadings, a party making a claim for relief may " aiscontinue a proceeding so far as concerns the whole or any part of any part of any claim for relief made by him at any time, with the leave of the Court. Re re ee. en wee wee ne eee eee ey ee ae eet te cel ee en i de en a se nae te ee ee ee 26. On 15 December 1983, before Woodward J, Mr Williamson ' referred to the Amatil resolution of 17 October and to the statements made to the Full Court by Dr Griffiths on 13 . December, and informed the Court that in recognition of what the TPC perceived to be the commercial reality of the " situation, it no longer wished to continue its proceedings to ' restrain APM, which will not, by reason of Amatil's attitude, be in a position where it can infringe the Act. APM opposed the application arguing that leave to |- discontinue should not be granted or only granted on the most stringent terms. Mr Shaw Q.C. submitted that if leave were to be granted to the TPC it should be on the condition, inter } alia, that the TPC undertook not to take any fresh action against APM if APM succeeded in acquiring FCL shares. Counsel for the TPC informed his Honour such a condition nee eee ee TLS ORL la would not be acceptable to the TPC. It was prepared to surrender any right to pursue an injunction to prevent the an acquisition of FCL shares or assets by APM but it was not prepared to give up the right to bring an action for Givestiture of shares or assets so acquired. see ee ee ee Woodward J, in his judgment on the application for Leave to discontinue delivered 22 December 1983, said: - wie Ss *. a te ee rte ce oh ee he 27. "I am satisfied that the application should be granted, on terms that TPC pay APM's taxed costs and undertakes not to institute any further proceedings for injunctions, or otherwise seek, to prevent the purchase of shares in FCL by APM. The words 'or otherwise seek' are within the spirit, though not the words, of the undertaking offered by TPC. I think some such addition is necessary. Such an undertaking would not prevent a later application for divestiture if TPC saw fit to bring it. I shall make the agreed order for costs against the second to eighth respondents. Because I believe the parties should have an opportunity to consider the precise wording of the undertaking to be given by TPC as a condition of "leave to discontinue, I shall make no formal order now. I shall sit again at a time convenient to the parties." Later on 22 December 1983, after the parties had agreed upon the precise wording of the undertaking to be given by the TPC, Woodward J made the following order: "UPON THE TRADE PRACTICES COMMISSION UNDERTAKING to the Court that iat will not, prior to the expiration of twelve (12) months after the date upon which it files a notice of discontinuance herein and thereafter, until further order, institute any further proceedings seeking injunctions restraining the acquisition by A.P.M. Investments Pty. Limited er any company related thereto (hereinafter referred to as ''APM') of shares in Fibre Containers Limited and will not otherwise seek to prevent such an acquisition, save that the Trade Practices Commission does not hereby give any undertaking not to institute proceedings seeking orders in the event that such an acquisition takes place, for the divesture by A.P.M. of any shares acquired by it, direcly or indirectly, in Fibre Containers Limited, THE COURT ORDERS THAT: 1. The Applicant have leave to file a Notice of Discontinuance of the Application herein. 2. The costs of the firstnamed Respondent of and incidental to the Application herein and mea eat eens RP ane Ae a ee alle le nt Ne an ae Re 28. Applications No. VG 150 of 1983 and No. VG 249 of 1983 in this Honourable Court, (including all reserved costs) be taxed and when taxed paid by the Applicant. 3. The costs of the Trade Practices Commission of and incidental to the Application herein and Applications No. VG 150 of 1983 and No. VG 249 of 1983 in this Honourable Court (including all reserved costs) be taxed (if not otherwise agreed) and when taxed (or so agreed) paid by the second, third, fourth, fifth, sixth, seventh and eighth Respondents together with any costs which the Applicant may have to pay to the firstnamed Respondent pursuant to paragraph 2 of this Order." APM has appealed against this judgment of Woodward J. and that appeal (VG308 of 1983) as one of the four appeals with which we have to deal. By order of Woodward J, this judgment was stayed until the hearing and determination of the appeal or until further order. In the course of the hearing before Woodward J on 15 December 1983 VB sought leave to intervene, which was refused. However, his Honour heard VB as amicus curiae. At the same time VB served and filed an application (VG281 of 1983) pursuant to s. 5 of the Administrative Decisions (Judicial Review) Act 1977 ("the ADJR Act") for an order of review in respect of the decision of the TPC to seek leave to discontinue its action against APM in which it sougnt, inter alia, an order that the decision to do so be quashed or set aside. (A NE nN NG A Tt ee A A MI A ee me ge ee ee = — wee te aan pee, i enn we a ee en ee te ee ee ee en ee te ee ee ee 29. On 20 December 1983 Woodward J heard VG281 of 1983 and reserved judgment, which was delivered on 22 December 1983, dismissing VB's application, with costs. VB has appealed against this judgment, and that appeal (VG303 of 1983) is another of those four appeals. In the meantime, on 20 December 1983, Woodward J. had delivered judgment in VG232 of 1983 dismissing an application dated 9 November 1983 in which VB, pursuant to s. 5 of the ADJR Act, had sought an order of review of the decision of the Attorney-General of the Commonwealth of Australia ("the Attorney General"), not to institute proceedings against SCI under s. 50 of the Act in respect of its take-over bid for FCL in May 1983. VB has appealed against this judgment and that appeal (VG302 of 1983) is another of those appeals. The four appeals (VG249 of 1983, VG302 of 1983, VG303 of 1983 and VG308 of 1983) were listed for hearing on 18 January 1984. The four appeals have been heard separately. This outline of the history of the matters will be helpful in considering each of them separately. I turn first to the appeal VG302 of 1983 'instituted by VB and naming as respondents the Attorney General and scl. er aes tere err a ek ek ee er ee ee eee oe a ~t 30. VB v The Attorney General & SCI(VG No.302 of 1983) On 20 January 1984 the court announced that this appeal was dismissed with the costs of the Honourable The Attorney-General to be paid by the appellant and the costs of any other party to be reserved and that reasons for judgment would be given in due course. In its application, VB sought a review of the decision of the Attorney-General not to institute proceedings against SCI under s. 50 of the Act in respect of SCI's proposed acquisition of shares in FCL. VB sought an order quashing or setting aside that decision and an order requiring the Attorney-General to make the decision the subject of these proceedings in accordance with law. In August 1983 VB had a meeting with the TPC at which 1t unsuccessfully endeavoured to persuade the TPC to institute s. 50 proceedings against SCI. On 19 October 1983 Woodward J reserved his judgment on SCI's application for release of the undertakings given to the court on 23 May 1983. The TPC had consented to that application. On 25 October 1983, before the delivery of judgment on SCI's application, VB wrote a letter to the Attorney-General. It also wrote to the TPC in similar terms. At about the same time VB issued its own proceedings pursuant to s. 81 of the Act against both SCI and a ; APM. 31. The letter from VB to the Attorney-General of 25 October 1983 was in the following terms: te ee et ee Sa eceeeta ae en caren meine aoe "Dear Sir, Re: Proposed Acquisition of the Share Capital of Fibre Containers Limited ("FCL") by A.P.M. Investments Pty. Ltd. ("APM") or Smorgon Consolidated Industries ("SCI") -The conversion of paper board into fibre containers is the major field of operation of Visy Board Pty. Ltd. ("Visy"). A major competitior in that activity is FCL. Unless relief 1s granted on the basis of a contravention of Section 50 of the Trade Practices Act 1974 ("the Act"}, FCL will be acquired by either APM or SCI. It is the clearly held view of Visy that a takeover by either company will contravene Section 50 of the Act. Substantially all paper board used by Visy and other companies engaged in the manufacture of fibre containers in Australia is supplied by APM or SCI. Both APM and SCI are already associated with companies engaged in the conversion of paper board into fibre containers. The Trade Practices Commission ("the Commission") has recognised the dangers inherent in the proposed acquisition by APM of FCL and has proceeded accordingly under Section 50 of the Act ain the Federal Court to restrain the takeover exercising its power to do so under Section 80 (1A). Identical proceedings have not been instituted against SCI yet it appears to us that the consequences of a SCI takeover of FCL in both the paper board and fibre container markets will be no different to an APM takeover. The company which acquires FCL will thereby put itself in a position to control or dominate both the supply of paper board in Australia, and the manufacture and supply of fibre containers made from paper board. The acquirer will be in a position to control or dominate each market because it will be able to control prices and take its profit from which-ever activity (paper board manufacture or the ee ee mech a ee ee A ea nee nn a ee renrete terrence emmnneanee oe tne ends —enrhemeraneines co et et ee te ee wae ee one are rt 32. manufacture of fibre containers) it chooses. It will also be able to dictate the prices in each market which will necessarily be followed by competitors. In either case Visy and all other converters which are reliant on SCI and APM for their supply will be at an extraordinary price disadvantage as the acquirer, whether it be APM or SCI, will have the capacity to control and dictate prices for the supply of paper board, and also for containers. That development will stifle real competition, not only to the detriment of competitors in the fibre containers market such as Visy, but also to the detriment of the public. Whether an economist would describe the likely outcome of the proposed FCL acquisition by APM or SCI as a dqduopoly or monopoly does not matter, because the acquisition would give the acquirer control or dominance of the relevant markets to an extent which will contravene Section 50 of the Act. Put simply, each and every reason that APM's acquisition of FCL would breach Section 50 of the Act applies with equal force to an acquisition of FCL by SCI. The Commission is a statutory body responsible for the administration and enforcement of the Act. Indeed that is its sole purpose. The Minister had both a supervisory and an independent enforcement function in relation to the administration and enforcement of the Act. Pursuant to Section 80 (1A) only the Minister or the Commission can obtain an injunction against APM and SCI to prevent them proceeding with the proposed acquisition of FCL; and Likewise pursuant to Section 77 only the Minister or the Commission can institute penaity proceedings for a contravention of Section 50. In these circumstances, in each matter involving Section 50, the Commission and the Minister have a duty under the Act to make a decision as to whether Section 50 proceedings should be instituted and if so, against whom. The duties of the Commission and the Minister arise from the conferral of exclusive power upon them in relation to Section 50 proceedings which is to be exercised for the public benefit and for the purposes of enforcement of the Act. The duties must be performed according to law, bearing in mind the purpose for which the power was conferred and the reasons why it was entrusted to the Minister and the Commission and denied to private litigants. We therefore request and require that the Minister, in exercise of his statutory power, make a decision rc a ne ee eee et ene ns eee ie Fen et i oe eatin RS bin He? ek —_ 33. that he will or will not: (a) institute proceedings against SCI in relation to its proposed contravention of Section 50 of the Act; (bo) apply under Section 80(1) and (1A) of the Act for an injunction restraining SCI from acquiring, directly or indirectly any shares in the capital, or any assets of FCL. This matter raises important and fundamental questions relating to the efficacy and enforcement of the Act. The matter is also one of urgency. There is a real risk that a takeover of FCL by SCI may occur if SCI and FCL are released from their respective undertakings which may occur by reason, inter alia, of there being no proceedings against SCI by the Minister or by the Commission. If this occurs, SCI will then be free to proceed to acquire FCL. We therefore request that a response by telex or in writing advising us of the minister's Gecision be given, on or before 5.00 p.m. on Thursday, 27th October, 1983. If no response has been received by that time, the writer will endeavour to telephone the Secretary to the Attorney General at 10.00 a.m. on Friday morning, 28th October, 1983 to ascertain the Minister's decision in this matter. The Chairman of Visy, Mr Richard Pratt, has specifically requested and authorised the forwarding of this letter. We enclose a copy of the letter which we have this day sent to the Commission. We have instructed our Solicitors to forward copies of our letter to you and to the Commission, to the Solicitors' acting for APM and SCI. Yours faithfully,. VISY BOARD PTY. LTD. M.W. NAPHTALI, Secretary" - On 27 October the Attorney-General replied by telex:- "Re: Acquisition of the share capital of Fibre Containers Ltd. by APM Investments Pty. Ltd. or 34. Smorgon Consolidated Industries I refer to your letter dated 25 October 1983 requesting me to institute proceedings against Smorgon alleging a contravention of Section 50 of the Trade Practices Act, and applying for and injunction restraining Smorgon from acquiring, directly or indirectly, any shares in the capital, or any assets of Fibre Containers. I note that you have sent a similar letter to the Trade Practices Commission. Whilst injunction proceedings alleging breaches of Section 50 of the Trade Practices Act can be taken by either the Attorney-General or the Trade Practices Commission, the prime responsibility for enforcement of the Act lies with the Commission. Although private litigants may not seek injunctions to restrain acquisitions allegedly in breach of Section 50, divestiture applications pursuant to Section 81 of the Act may be made py any interested party. Accordingly, your company, if it felt it could establish a contravention of Section 50, could indicate to Smorgon that 1£ Smorgon proceeded to acquire Fibre Containers, your company could institute proceedings pursuant to Section 81. I could not.make any decision whether to institute proceedings against Smorgon as you request without having adequate opportunity to consider the very complex factors relating to such proceedings. It would certainly not be possible for me to reach such a conclusion within the strict time Limits you have indicated. However, I understand that the Commission has very carefully considered the position of Smorgon in this matter, and has concluded that the acquisition by Smorgon of Fibre Containers, if it occurred, would not contravene Section 50. I understand the Commission's decision 1s based on advice from senior counsel. In the absence of compelling reasons to the contrary I would adopt the same view as that taken by the Commission. Accordingly, I do not propose to institute proceedings against Smorgon in respect of its possible acquisition of Fibre Containers. Since you have forworded copies of your letter to the solicitors acting for APM and Smorgon I have done likewise with this reply. Gareth Evans a er er Oe Ey I ee ne -- =e . - weet ee » ete tree, — = a ee rt tee mow pnt ee ne ne The 1 Attorney-General" After setting out the letter and telex Woodward J began his consideration of the application before him, as follows: er "The complaint made by the applicant about this ' reply of the Attorney-General is that it represents an abdication of responsibility. It 1s said that the Minister relied entirely upon a decision made i by a subordinate body, the Trade Practices Commission, ('the TPC'), and failed to address his own mind to the problem placed before him. It was readily conceded that the Attorney-General was entitled to give as much weight as he chose to any material or opinions advanced by the TPC or other subordinates, but it was urged that, once the matter was drawn to his attention, he was required by law to direct his mind to 1t and make his own decision upon it. 2 ee This result was said to, flow from the combined effects of the TP Act and the ADJUR Act. The relevant parts of the TP Act provide: "29. (1) The Minister may - (a) sees (b) give directions to the Commission in connexion with the performance of its functions or the exercise of its powers under this Act .... and the Commission shall comply with any directions so given. (2) Any direction given to the Commission under sub-section (1) shall be 1n writing and the Minister shall cause a copy of the direction to be published in the Gazette as soon as practicable after the direction is given. 80. (1) Subject to sub-section (1A), where, on the application of the Minister, the Commission or any other person, the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute ne le a ae ae Se tate MA ol te ee ee ee we a en eee ae. ae ee — ~- fee ne ee eee ee — a nee tee ag ee ee te ee a ee ee ee ee tet ram ee 8 ee ' 36. (a) a contravention of a provision of Part IV Or Vi sees the Court may grant an injunction in such terms as the Court determines to be appropriate. (1A) A person other then the Minister or the Commission is not entitled to make an application under sub-section (1) for an injunction by reason that a person has contravened or attempted to contravene or is proposing to contravene, or has been or is proposing to be involved ain a contravention of, section 50.' So far as the ADJR Act is concerned, the applicant sought to rely on several parts of s. 5, but none of the others added anything to the scope of paragraphs (1)(e) and (2)(a) and (b). These are in the following terms '5. (1) A person who is aggrieved by a decision to which this Act applies .... may apply to the Court for an order of review in respect of the decision on any one or more of the following grounds: (e) that the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made; eee ee eesee (2) The reference in paragraph (1)(e) to an improper exercise of a power shall be construed as including a reference to (a) taking an irrelevant consideration into account in the exercise of a power; (ob) failing to take a relevant consideration into account in the exercise of a power; Section 16 of the ADJR Act is also relevant for present purposes. It provides, '16. (1) On an application for an order of review in respect of a decision, the Court may, in its discretion, make all or any of the following orders; eR REE ER RRR E Serene Sere rene ema an oo ~_- - =e ee ee ee ee eee Owe an te ere ee ee ee ee ee ee ee ee Se telex, telex. 37. (a) an order quashing or setting aside the decision ..... (b) an order referring the matter to which the decision relates to the person who made the decision for further consideration, subject to such directions as the Court thinks fit ....' Counsel for the applicant argued that the Attorney-General had made a decision not to take action under s. 80(1) of the TP Act without addressing his mind to the matters in issue at all. He had simply adopted tne decision of the TPC without giving it any independent consideration. This, they said, was clearly an abdication of his - function under the TP Act, and thus an improper exercise of the power conferred on him by s. 80 of that Act in that he had failed to take into account all relevant considerations other than the TPC's decision. Counsel for the Attorney-General did not argue that the applicant was not an aggrieved person within the meaning of s. 5 of the ADJR Act. Nor did they argue that the Attorney~General's telex of 27 October 1983 did not record a decision within the meaning of that section. What they did contend was that the decision contained in the telex, when properly understood, was a perfectly proper decision. Alternatively, they argued that if the decision was defective in any way, then the Court, in the exercise of its discretion under s. 16 of the ADJR Act, should make no orders." His Honour then proceeded to a detailed analysis of the construed as an answer to the letter, and sent, with great courtesy, within the drastic time limit set out in the He concluded in these words: "The Minister is saying in effect - 'You have asked for an urgent decision. I could not make a decision in your favour in the time you have given me and, in any event, the TPC has carefully considered your request and has ruled against you. I can see no reason in the material you have put before me, or in what I otherwise know of the rr tee at DR Re ee ee He Et er a Rl ea —_~ sae: oF A ne a nt en Mae et fe a a ee ee ae 38. matter, to lead me to a different conclusion. I therefore refuse your request'. I believe that, on a fair reading of the Attorney-General's telex, that is the substance of his decision. I believe it was a proper decision and provided no grounds of review under s. 5 of the ADJR Act. Even if I am wrong in that conclusion, and the Minister's telex meant just what was contended by the applicant, I would exercise my discretion against making any order in this case. That I have such a discretion to 'refuse relief notwithstanding , that the statutory preconditions to a grant of relief are satisfied', is clear from the decision of a Full Court of this Court in Lamb v Moss and Brown (unreported, 12 October 1983)." I see no basis on which this appeal should succeed. Indeed, I respectfully agree with his Honour's conclusions that no ground had been established for review under s. 5 of the ADJR Act. If contrary to that finding, any ground had been established, I would see no reason to challenge his Honour's exercise of discretion to make no order, bearing in mind the tests appropriate to a_review of the exercise of judicial discretion. (see House v The King (1936) 55 CLR 499; Adam P. Brown Male Fashions Pty Ltd v Philip Morris Incorporated and Philip Morris Ltd (1981) 55 ALJR 548 and cases cited therein). To hold otherwise, in the circumstances of this case, would be to put a premium on audacity and add an unwarranted terror to the holding of ministerial office. The Court will hear counsel at a time to be arranged on en ee ere res wwe en eee ee ee ee —- eae se wet ee en ee en ne ee e ba ° v 2 ere neon Ae en ney ee pre ee 39. the question of the costs of any party other than the Attorney General. VB v TPC, FCL and Amatil (VG 303 of 1983) This is an appeal by VB from the judgment of Woodward J delivered on 22 December 1983, dismissing an application by VB for an order of review, in respect of a decision of the TPC, pursuant to s. 5 of the ADJR Act. Although the application filed by VB on 15 December 1983 described the decision differently, and no formal leave to amend was sought or obtained, it was common ground between the parties to the appeal that the matter had proceeded before Woodward J on the basis that the decision in respect of which an order of review was sought was a decision of the TPC: "to take such steps as were necessary to discontinue its proceedings ... Lie. VG84 of 1983] -e. against all parties on terms, inter alia, that:- (a) the second to eighth respondents [FCL and Amatil] pay the costs of the TPC and indemnify it against any costs it is ordered to pay ~- as they had offered to do during the Full Court hearing ---[in VG249 of 1983, on 13 December 1983, before the Court as presently constituted]; (b) the TPC would not issue injunction proceedings that had the effect of restraining APM from acquiring shares in FCL ---." ee ee ee ee a ae ee - 40. Before the learned trial judge VB sought, by way of relief, an order quashing or setting aside the decision of the TPC and an order "restraining the TPC from further acting upon or doing any further act or thing to give effect to the said decision." The relevant sections of the ADJR Act provide: _"5(1) A person who is aggrieved by a decision to (2) 16(1) which this Act applies that is made after the commencement of this Act may apply to the Court for an order of review in respect of the decision on any one or more of the °following grounds: (e) that the making of the decision was an improper exercise of the power conferred by "the enactment in- pursuance of which it was purported to be made; (£) that the decision involved an error of law, whether or not the error appears on the record of the decision; (j} that the decision was otherwise contrary to law. The reference in paragraph (1)(e) to an improper exercise of a power shall be construed as including a reference to - (a) taking an irrelevant consideration into account in the exercise of a power; On an application for an order of review in res Jes ne an ten = ate ee matin J a a As nee a ey orl ee ee ee ee ee At ee oe oe ° 41. respect of a decision, the Court may, in its discretion, make all or any of the following orders: (a) an order quashing or setting aside the decision, or a part of the decision, with effect from the date of the order or from such earlier or later date as the Court specifies; (a) an order directing any of the parties to - do, or to refrain from doing, any act or thing the doing, or the refraining from the doing, of which the Court considers necessary to do justice between the parties." The hearing proceeded on the concessions that VB was a person aggrieved by the decision and that the decision was of an administrative character made under an enactment. Counsel for VB attacked the validity of the decision the subject of review on three grounds:- 1. In making the decision the TPC had improperly relied upon or taken into account the offer made by FCL and Amatil to pay its costs and to indemnify it against costs which it may be ordered to pay. - 2. The decision to give the undertaking in relation to the seeking of an injunction against APM to restrain it from acquiring FCL shares amounted to an unlawful fetter by the TPC of its statutory powers, functions and duties under the Te ern nn ener ne ao s- — o- ---- a mw ee == -— — ee ee J. ALA ak Tr ek Ge ee nen ee A Tt, tn A te eee NT oe rr 42. Act. 3. The decision in the circumstances of the present case amounted to an abdication by the TPC of its statutory duty under the Act to prevent APM's proposed acquisition of ' shares in FCL. Part *of the relief which VB sought before the learned trial judge was an order "restraining the TPC from further acting upon or doing any further act or thing to give effect to the said decision." S.16(1)(d) of the ADJR Act was relied upon as the source of the court's power to make such an order. The effect of such an order would be, inter alia, to restrain the TPC from filing a notice of discontinuance, so that if the appeal VG 308 of 1983 failed and the order of Woodward J of 22 December 1983 remained, the TPC would have leave to discontinue, but would be restrained from giving effect to such leave by filing a notice of discontinuance in accordance with Order 22 Rule 5(1) of the Rules. Counsel for VB in the present appeal did not place any reliance upon the precise wording of the undertaking given by the TPC on 22 December 1983, nor did he attack the decision of the TPC made on that day to give the undertaking in that particular form. What he did rely upon was the decision made on 14 December 1983, that as a necessary step to discontinue its proceedings, the TPC would undertake in general terms not yo g ee ee ee ee —-.-. -~ - a te ee a a ee ee ee Se ee eRe ope een ee: Ao ee ee ee oe re ee re ee ee 43. to issue further injunction proceedings that may have the effect of restraining APM from acquiring FCL shares in the present take-over battle. In his reasons for judgment, the learned trial judge said: ° : "Having carefully considered all the evidence, and the inferences IL am asked to draw from that evidence, I find that I am left quite uncertain as to whether the offer to pay costs played any part in the decision of the commission. However I am inclined to the view that it did not. Certainly the offer was made at a critical time in the course of the Full Court hearing, when the Court, having indicated some reactions to the facts put before it, adjourned at lunch-time in the understanding that the parties would be considering their positions. I have little doubt that the offer was made in the hope that it would impress the Commission (and perhaps the Court) with the strength of feeling of FCL and Amatil about the matter, and also with the thought that it might just sway the balance of the TPC's judgment on the matter. I am not, however, satisfied that it was in fact taken into account by the TPC." If, for any reason, one were not to adopt the view of the facts to which his Honour was inclined but were to conclude that the costs element in the global offer had some effect on the TPC's decision, I do not think that it was either critical to that decision or that it was an improper consideration to take into account. His Honour dealt with VB's second point as follows: ae 8 me ee ee eee ee Wha tae ewe woo wn ee ee - 44. "This second point can be disposed of quickly. in my view it has no substance because under ss. 80 and 81 of the TP Act the TPC has a clear choice whether to proceed by way of application for an injunction to prevent a threatened takeover or to wait and see what happens in the market place and then move to secure appropriate divestiture. There is no reason in principle why it should not begin the former action, change its mind and discontinue, relying upon its right to sue for divestiture Later if necessary. It would be a normal incident of leave to discontinue in such a case that a Court would impose the condition that the applicant would not recommence the same action for an injunction. To offer such an undertaking does not represent a fettering of discretion when the matter is looked ~at within the overall scheme of the TP Act, and I believe that is the proper way to approach the issue." The third submission to this Court was that the TPC had abdicated its statutory duty under the Act to prevent APM's proposed acquisition of shares in FCL. In my opinion the TPC was entitled to make the choice to which his Honour referred. The TPC began its proceedings in VG 84 of 1983 because it then considered, amongst other things, that it was likely that the holders of the shares in FCL would accept APM's offer to acquire them. In the fullness of time, on 15 December 1983, the TPC informed the learned trial judge that, in recognition of what it perceived to be the commercial reality of the situation, it no longer wished to continue its proceedings to restrain APM, which would not, by reason of Amatil's refusal to sell to it be in a position where it could infringe the Act. In ee eee —— - _ mae me. awe eee -- ----— - - sap | eee Tt A rn Ao Rae re ee ee St eto So eae ae an a. 2 - 45. doing so it was not, in my opinion, abdicating any "statutory duty", but was making a decision which was entirely open to it. I respectfully agree with his Honour's conclusions that no ground had been established for review under s. 5 of the ADJR Act. I would dismiss the appeal, and order that VB pay the costs of the TPC. The Court will hear counsel at a time to be arranged on the question of the costs of any party other than the TPC. APM v TPC, FCL, Amatil and Arthur Kevin Smith (VG No. 308 of 1983) When the court sat on 20 January 1984 to begin the hearing of this appeal Mr Shaw Q.C., senior counsel for AFM, submitted that the court, as presently constituted, should not hear it. He foreshadowed an identical submission in relation to SCI's part heard appeal. (VG249 of 1983). It was submitted that the court had acted on 13 December in such a way that "a fair-minded person could apprehend that the court had predetermined the outcome of the appeal and also real and significant issues in the appeal". « A ee ee a A I Ne et le Rr la ee i Es ne nt ee te or Ne en ee ee ete ed em en ee 4. Ne NR RN et eet en ed a a me tre 46. Those matters were said to be whether or not the TPC's application (VG84 of 1983) was futile. Mr Shaw then cited as the authorities on which he relied: The Queen v Watson (1976) 136 CLR 248; In the matter of an application for prohibition against Justice Margaret Lusink (1981) 55 A.L.J.R. 12, Livesey v The New South Wales Bar Association (1983) 57 A.L.J.R. 420. He submitted that the appropriate test to be adopted was to be found in the judgment of the court in Livesey's case at p.424, in these words, whether "a fair-minded observer might entertain a reasonable apprehension of bias by reason of pre-judgment if a judge sits to hear a case at first instance after he has in a previous case, expressed clear views either about a question of fact which constitutes a live and significant issue in the subsequent case or about the credit of a witness whose evidence is of significance on such a question of fact." Mr Shaw took the court through the transcript of the hearing in VG249 of .1983 before the court as presently constituted on 13 December 1983. The members of the court certainly asked questions of, and made comments to Mr O'Callaghan Q.C. in the course of ' ! et ae ene ee ee tl i ee a a te er ee tt ee ee ee kk rt ee ne te ere te att 4, ee te Nn el EEN le ale ee i ge ee a Me ar meen a ce tt ee ee Pa en eb ah ete 47. his opening of the appeal VG249 of 1983 on behalf of SCI. Some of those questions and comments indicated wonder as to why it was that the TPC was seeking to proceed with its application in VG84 of 1983 for an injunction, in view of the attitude of the holders (Amatil) of 74% of the shares in the target company (FCL). Amati] had resolved that they would not sell their shares in FCL to APM or to any of its related corporations at any time or in any circumstances or for any price. With FCL they had taken out a motion seeking judgment against themselves to preclude them from selling to APM. MThey had, on 24 August 1983, given an undertaking to the court that, until the determination of proceedings in VG84 of 1983 or further order, they would not sell their shares to APM. The order made on the basis of this undertaking was set aside in the Full Court, as stated in the earlier history of this case and related matters. Counsel for Amatil and FCL stated that they were prepared to accept a final order of the court binding them never to sell to APM, which he said would accord with the commercial reality that the possibility of buying FCL (which the TPC was seeking to prevent by VG84 of 1983) is foreclosed to APM. If the TPC wished, the shareholders were prepared to give an undertaking to it that they "will not sell to APM ever". Soerenenay vt aae rn mer nt, Penne en te tt ee ee ee ee - mane f ee eee HH eee ne — — pe See ne er eR OR ee A ee eel ee eR een een SY RET EA MEE date we 48. In support of his application that the court should disqualify itself, Mr Shaw submitted that a fair-minded observer could apprehend that the court had prejudged the question whether the TPC's application was futile. He submitted that the application to Woodward J on 15 December was made on the court's suggestion, and "a fair-minded person would reasonably say it could only have been made on the * court's suggestion if the court had formed the conclusion that the application ought not only be made but ought to succeed". One may contrast with these submissions Mr Shaw's own words, on the afternoon of 13 December, that he took it that the reason for the proposed application by the TPC was "the indication which the members of the court have given in the course of the morning's proceedings that it may be that the proceedings are futile or academic" (underlining supplied). The court on 13 December was hearing the beginning of Mr O'Callaghan's opening of a case with a long and detailed history. When the possibility was mentioned of the TPC seeking leave to discontinue its application for an injunction against APM, the presiding judge pointed out that "if a course of this general character were adopted the loser in commercial terms would be APM and it should be perhaps made clear that if there were any question of the court a aoe —e — ne aan wos oe, me A a a i a ee tee ee ee re ttt ee ee es ee er ete a 49. adopting any attitude in relation to the matter, whether by the grant of leave or not we should only consider that after giving Mr Shaw all due apportunity to be heard in relation to it." Shortly afterwards, just before the luncheon adjournment the presiding judge said to Mr Shaw: » "I was merely wanting to say that before any question of leave was discussed that you should have the fullest opportunity and whether you wanted it to begin now or deal with it later it should be preserved for you." Mr Shaw replied: "I am indebted to your Honour for that indication. It was quite unnecessary for your Honour to say so, since your Honour always acted in that way." It was after the luncheon adjournment that Dr Griffith made his announcement of the attitude of his clients and Mr Williamson stated that the TPC in the light of what Dr Griffith had said would seek leave to discontinue its proceedings against APM generally, once the judgment to which FCL and Amatil were prepared to consent was in place. Mr Shaw was then heard in opposition to the application that the appeal should be adjourned to permit the TPC to issue a notice of motion returnable before a single judge and tins © eh entt ina adie oer dimen dete nenen ainda aemaeine tamieainententenetemnetenel metnamteltenteietenetentaetehend wen taediiaiialemtatntatahetemmneemnematendiiatendions war) wee oe A et EE a er ca a a a a Ll kn eR on cer ET 50. for a hearing of that motion to take place. In the course of his submissions, the transcript records the following discussion: "Mr Shaw: So the first thing we would say is that it is wrong in our submission, at this stage at any rate, without looking at what the learned judge found and why he found it on the evidence he had available to him, to proceed on the e basis that: indeed, this is a resolution of the board of Amatil which ought to be treated simply at its face value. Sweeney J: But this court is not proceeding on the basis of any such finding. The most this court has been asked to do at this moment 1s to adjourn the hearing of the appeal as to the merits of which it has expressed no opinion. Mr Shaw: I understand that. Sweeney J: It would be wrong, if I may say so without unkindness, to impute to this court some interim findings because none have been made. Mr Shaw: I was not— suggesting that. It was merely that the matter has been put to the court on-a particular basis - - - Sweeney J: And we do not adopt any of what 1s put . to us. We are simply asked to adjourn the hearing of the appeal. If we do so and if you are able to persuade a single judge that the motion should be denied when it is eventually produced, the appeal will come back to us. Mr Shaw: As I understood it, the reason that the adjournment was being sought was, and Dr Griffith said so innumerable times, (a) that the resolution was irrevocable and (bj), that there is now this proposed notice of motion. Sweeney J: If it is of any assistance to you, as at present advised I do not for a ee en Cet ee Ne I at ene amet ee Aa RN tS a ee ree Fea H * — fe a -L. Mr Shaw: oJ Sweeney J: 51. moment subscribe to the view that the offer was irrevccable. I simply have no view, I make no finding of any kind on it. The proposed adjournment is based, as I apprehend it, on the indication to the court arising out of what Dr Griffith and then Mr Williamson have said to the court; namely, that Mr Williamson proposes to move a notice of motion. If that notice of motion is successful then the further hearing of the appeal will be - - - I share one thing with you and I appreciate your problem in relation to it, I do not know myself yet what the notice of motion contains, nor do I know what the order of the single judge in point will be yet. But look at the alternatives. If we continue with this hearing you will have possibly all the other parties shut out from the chance of approaching a single judge with a view to getting judgment by consent and leave to discontinue. If we adjourn "the appeal and you are able to persuade the single judge all you lose is time. If it were appropriate an order for costs would be considered. I am very happy to hear anything you want to put; but it seems a very strong submission to make that we should deny the other parties the opportunity to submit that motion to the court." When granting the adjournment, the court said that the course it had taken "does not indicate we have formed any views as to the issues raised in the appeal; indeed, we have not formed any such views." In my opinion it cannot be concluded that a fair minded observer might entertain a reasonable apprehension that "the court had predetermined the outcome of the appeal and also ee rt re we ee wo tere eee wn TO ee ee a ee eat ee tert tt er ee ee en ee a ty Na ot 52. real and significant issues in the appeal" After the conclusion of Mr Shaw's submission on 24 January 1984, and very brief replies by other counsel the court announced, after a short retirement, that it did not propose to accede to Mr Shaw's application that it should not hear this appeal (VG308 of 1983) and that it would publish its reasons in due course. Questions of costs were reserved. In my opinion, the appropriate order is that APM should pay the costs of the TPC, FCL, Amatil and SCI of and incidental to this application by APM. Those parties opposed the application. The application did not effect any saving in time in the hearing of the appeal, a consideration which might have been appropriate to found a limitation on the order for costs. Counsel for VB moved that his client be made a party to the appeal, or be granted leave to intervéne or that it be heard as amicus curiae. The court announced that it would hear his submissions on the merits of the appeal, without at that stage deciding the capacity in which he should be heard. In my opnion it is more apropriate to make an order granting leave to be heard as amicus curiae, rather than to grant leave to add VB as a party or give it leave to intervene. The appeal by APM is brought against the order of Nt I ee ee rt ee ee ee i a---po— ee ee et ee ee A ae St A te em PR en ee Le en ee me Nae ee nee a oe Mel eth ll Anat a I RARE Pate tat an es eee A A AN te ey ee Ne -— -—- ~~ a en tee pt me ek ne Re ee a - ~~ ~=— ~ ed 53. Woodward J of 22 December 1983 granting leave to the TPC to file a notice of discontinuance in VG84 of 1983, upon the undertaking by the TPC and with the orders in relation to costs which have been set out in full in the history of these cases. As there recounted, a stay of operation of that order was granted by Woodward J until the determination of this appeal, or further order. In the judgment under appeal, Woodward J was dealing only with the TPC's motion seeking leave to discontinue VG84 of 1983 pursuant to Order 22 Rule 2({1)(d) of the Federal "Court Rules. His Honour observed that the whole purpose of the TPC's application had been to prevent a sale of shares in FCL to APM and as the TPC had reached a clear view that Amatil would not sell its shares in FCL to APM, it no longer saw the need to pursue its application, which would be long and costly. In these circumstances, where the hearing had not yet commenced, and the merits of the application had yet to be determined and APM's costs would clearly have to be paid as a condition of discontinuance, the TPC's motion would seem, his Honour said, at first sight to be irresistible. His Honour then set out APM's contentions that the motion should not be granted, or only granted on the most ee ner -- a len ae Daim one Hh ere lh a aah nntnn te Bed ner. ne tee i. | —~ + we --- — _ te te ee ne oe 8 ee ee ee ee ee ee stringent 54. terms. APM submitted that the TPC was seeking to have the fruits of its application without having to establish its case and that it should not be permitted to discontinue unless it undertook to the court not to bring any fresh application under the Act, including a claim for divestiture, if APM succeeded in acquiring FCL shares, and unless the court ordered that it should pay APM's costs on a solicitor and client basis. . ' Mr Shaw for APM, had relied upon the passage from the judgment of Graham J in Covell-Mathews v French Wools Ltd -(1977 1 follows: W.L.R. 876 at 879), which his Honour quoted as "The principles to be culled from these cases are, in my judgment, that the court will, normally, at any rate, allow a plaintiff to discontinue if he wants to, provided no injustice will be caused to the defendant. It is not desirable that a plaintiff should be compelled to litigate against his will. The court should therefore grant leave, if it can, without injustice to the defendant, but in doing so should be careful to see that the defendant is not deprived of some advantage which he has already gained in the litigation and should be ready to grant him adequate protection to ensure that any advantage he has gained is preserved." His Honour then went on to say: "I would respectfully adopt Graham J's formulation of principles so far as 1t goes, but it leaves open the question as to what should be done in a case where leave cannot be granted without some injustice to the respondent, or in which it may not be possible or appropriate to ensure that every + ee teen pn ee ee ce ene ees we ee en en eee ec TT : ~~ tm e ° . ' © . 55. advantage which the respondent may have gained in in the course of litigation is preserved. ' In my view the matter must remain one for the exercise of the Court's discretion in each case, 7 even if the interests of the respondent cannot be fully protected. I do not believe that Graham J. was suggesting that, unless the respondent's rights can be completely protected, an application for discontinuance must be refused. If he was implying that, then I must respectfully decline to follow his Honour to that extent." a2 o ewe . In my opinion, his Honour made no error in dealing with the question of the principles relating to the exercise of his discretion in the present case. The observations of Graham J are not to be treated as fettering that discretion, which are not subject to any legislative fetter. His Honour then set out the considerations which be took into account in favour of the applicant as follows: "(a) it should not Be compelled to litigate, against its will, at great length, and with considerable expenditure of public monies, an action which 1t believes, on reasonable grounds, to be pointless; (ob) the circumstances which have arisen, and which appear to make further Litigation by it ; unnecessary, were not designed by it; nor could they readily have been foreseen when the Litigation was instituted; - atl ee ne ee et (c) the merits of the action have not been entered into; there is nothing to suggest that the applicant's case is lacking in good faith or in merit; de tet (dad) the applicant is prepared to surrender any i right to pursue the remedy which it 1s presently seeking, namely an injunction to prevent the acquisition of certain shares or assets; (however ' TI a ere eet acme geen eee ee sr enn ame eee ee eres me Tn mene mene emma ma eee ree a gy « 2 ins F etatenet eee = ~~ I a teed a En dnl i A Ne Te Ae NN AN tn et Aan Meh te Ch Aah carne tO ne ee Sd 56. it reserves the right, if it ever becomes appropriate, to bring an action which would probably be based on substantially the same material, seeking a divestiture of shares or assets so acquired); and (e) the applicant is prepared to submit to an order for those costs which it would be obliged to pay 1£ its action were being dismissed on its merits at this stage." All of these considerations seem to_me to have been open * to his Honour on the evidence and none of them is irrelevant. The main consideration which seemed to his Honour to point against giving leave to discontinue was that "APM's apparently remote chance of bidding successfully for FCL" was further reduced by the fact that APM was subject to the TPC's continuing right to institute proceedings for divestiture, if that apparently remote chance came to pass. His Honour observed that there was already an action on foot by SCI (VG82 of 1983) designed to prevent an APM takeover of FCL. Even the dismissal of VG84 of 1983, if the TPC decided not to prosecute it, would not rid APM of the threat of the proceeding by SCI and, one might add, of the proceeding which VB had issued pursuant to s. 81 of the Act against APM. His Honour refused to accept the submissions that costs should be awarded to APM on a solicitor and client basis and that he should require the TPC to undertake not to seek divestiture in any event. mea 8 thee Tennis Oe nn Sep ee — _- -_ -- en ee ere poe a ee a ee ar Oo Fae re te ete ee ' a ee ee a A SOE ee ee ee nen me - we eee eee i 57. The TPC had informed the trial judge that the suggested undertaking by it that should not bring any future action against APM for divestiture was unacceptable to it. His Honour did not regard such an undertaking as appropriate. The TPC had indicated that it was prepared to give an undertaking in relation to any later proceedings for an injunctions His Honour regarded the further conditions of discontinuance which APM had suggested, that unless the TPC could obtain assurances from Amatil that they will not regard themselves "as bound in any way not to sell" to APM and that they will be "willing to consider any offer" APM may make, as conditions which the court had no power to impose, and which he would not consider imposing, as a matter of discretion, 1f the power existed. No motion for dismissal of VG84 of 1983 had been brought before his Honour, but he was of opinion that it was not an acceptable alternative to discontinuance. His Honour then expressed his conclusions, as follows: "I can only say that, in my opinion, both common sense and legal principle are in favour of granting leave to discontinue. I say that for the reasons set out in paragraphs (a) to (e) above. I recognize that some hardship will thereby be done to APM and that it will lose some of the advantage y! a ne ee ee 8 tt ee ee hs — i as en tn en a ee weN ke tt ane ete SN ert Ae a hl Ma Rca Aa 9 8 SC NAc ee en ee Neat A a ete aaron eat - 58. it gained by entering into interlocking undertakings at the outset of this action. However most of the loss of advantage has been created by the commercial decision reasonably reached by Amatil over which the applicant and the Court have no control. For reasons given above in discussing the 'shadow of illegality', APM would only be Marginally better off in the market place if this action were now dismissed,- and that is the best result it is entitled to argue for in the circumstances that have arisen. Before concluding these reasons I should say something about APM's contention that the other parties to the action are, by seeking leave to discontinue, achieving indirectly the result that they have so far been denied by the Court - release from undertakings, There is enough merit in this contention to call for a consideration of the matter on that basis. In my view the application to discontinue has introduced an entirely fresh element to this case requiring me (to use the language of my earlier judgment of 15 November) 'to reconsider the whole discretionary issue for myself and, while giving proper respect to the views of the Full Court [which dismissed the earlier appeal on 21 September 1983.] as to what matters are material and how much weight each should be given, I must make up my own mind on these matters'. In what I have already said I have had constantly in mind the issues dealt with in that earlier judgment. I was there concerned in particular to compare the relative rights and entitlements of FCL and Amatil (those of SCI being derivative and comparatively less significant) with those of APM. When the rights of the TPC on an application for discontinuance are thrown into the existing discretionary balance, I am satisfied that the application should be granted, on terms that TPC pay APM's taxed costs and undertakes not to institute any further proceedings for injunctions, or otherwise seek, to prevent the purchase of shares in FCL by APM. The words 'or otherwise seek' are within the spirit, though not the words, of the undertaking offered by TPC. I think some such addition is necessary. Such an undertaking would not prevent a later application for divestiture if TPC saw fit to bring it. I shall make the agreed order for costs against the second to eighth respondents." re ee ner nT en nme de - 59. The principles governing the consideration on appeal of an order made in the exercise of a judicial discretion are well known (see House v The King (1936) 55 CLR 499; Adam P Brown Male Fashions Pty Ltd v Philip Morris Ltd (1981) 148 CLR 170 and cases cited therein). In House v The King, Dixon Evatt McTiernan JJ said (at p-504-5): "The manner in which an appeal against an exercise ef discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, 1f he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate - court may exercise. its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may aot be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred." In my opinion, the learned trial judge did not act upon a wrong principle, allow extraneous or irrelevant matters to guide or affect him, mistake the facts, or fail to take into - - - - tet ee ee ee pe - 60. account any material consideration. The result embodied in his order is not "unreasonable or plainly unjust." APM was and is faced with problems arising from the TPC's conception of the markets in which APM was said to be operating and APM''s position in those markets, and the view which the TPC took of APM's activities in those markets and of the effect which an APM acquisition of FCL would have. There is no basis for the proposition which underlay APM's submissions that VG84 of 1983 having been commenced, and the various undertakings having been given, APM was entitled as a Matter of justice to insist that VG 84 should proceed to trial, or that there should be judgment in favour of APM. APM's decision to split the capacity of FCL and to seek the approval of its plan by the TPC, FCL and Amatil was an attempt to bring VG84 of 1983 to an early and relatively inexpensive end, and was predicated on the view that it was open to a party, who had given an undertaking, to rely on changed circumstances and attitudes of parties, so as to avoid long and costly Litigation. APM was not entitled to immunity from an application for divestiture which the TPC might seek to bring under the Act, if events were to take a course different from the TPC's present and reasonable anticipation, which was the foundation of its application to discontinue. An ret ne rn _ nem ne = mere em ee = —— — nen ' [ene natin el NN a SR at ee te ct ie Leet ie eee hie a ene ti A Ree et atten eee wena Ft é I |if t d } t anaea Aa i on en dh dann an tiah., ene ete cee th 61. Had there been a motion before Woodward J seeking an order that VG 84 of 1983 be dismissed, his Honour would have had available to him the powers set out in Order 35 Rule 6(1), which reads as follows: "Where the Court makes an order for the dismissal of proceedings or for the dismissal of proceedings so far as concerns any cause of action or the whole or any part of any claim for relief, the Court may order that such dismissal shall be without prejudice to any right of the applicant or claimant to bring fresh proceedings or to claim the same relief in fresh proceedings." It seems clear from his Honour' s reasons for judgment, that, had he made an order for dismissal, it would have been expressed to be without prejudice to the right of the TPC to pring proceedings for divestiture. In these circumstances, I find it unnecessary to consider the many cases on res judicata and issue estoppel to which we were referred. I would dismiss the appeal, and direct that the TPC submit minutes of orders to give effect to that dismissal. The stay of operation of the order under appeal would remain in force until those minutes had been considered and the appropriate orders made. I would hear the parties on the question of costs at a time to be arranged. SCI v TPC, APM, FCL, Amatil and Arthur Kevin Smith et ee ee res a a i ee OE te me Se ee me ee et en — er wee = Ar eA Nk te ee eee ee, we ey ett at el ee ancl Een eet ene 62. , (VG No.249 of 1983) This is an appeal by SCI against the judgment of Woodward J. delivered on 15 November, 1983, dismissing its notice of motion dated 7 October 1983, in which it sought to be wholly released from its undertakings given to the court on 23 May, 1983, or alternatively that it be released « therefrom "(a) To enable S.C.I. Packaging Pty. Ltd. to seek the approval of the National Companies and Securities Commission to vary its Part A Statement dated the 4th May, 1983, in relation to a proposed acquisition of shares in the secondnamed Respondent and its proposed offers to be despatched in pursuance of the said Part A Statement to increase the offer price per share from $3.50 to $4. (ob) To enable S.C.I. Packaging pty. Ltd. to seek to obtain from the said National Companies and Securities Commission variation of the Declaration dated the 29th June, 1983, in relation to the said Part A Statement, or alternatively a further Declaration in relation to the said Part A Statement." Woodward J. began his reasons for judgment by observing that this was the third time the court had been asked to grant releases from undertakings given at the commencement of these proceedings in May 1983. He then briefly sketched the history of the Litigation. His Honour said: a ee pea ae em. tn tt en et ed hE ney cnanemnenions <add pre en ow eel ee ne ne Ae tent aH a ne ae ae tee Co rs 63. "A further notice of motion was heard on August 17. This time FCL and Amatil sought release from all parts of their undertakings so far as negotiations with SCI were concerned. To quote from my judgment of 22 August, 'They also make it clear that they have no wish or intention to negotiate with APM while the TPC maintains that a takeover by APM would constitute a breach of s. 50 of the Act and the Court has made no contrary finding. They therefore say that it 1s unnecessary that they be bound by undertaking or by injunction not to negotiate with APM, but they offer such an ~ undertaking if 1t is required. I should make it plain that this unwillingness to negotiate with APM in present circumstances was also clearly indicated by Mr. McComas in his July application.'" Later in his reasons his Honour said of his judgment of 22 August: - "I accepted the argument that there could be no compulsion on FCL to consider a takeover bid from APM and, since I was satisfied that Amatil had reached a firm conclusion that it would not consider such an offer, I believed it should be free to deal lawfully with its own property." His Honour pointed out that in the event, he had ordered the release of all parties from their undertakings, but went on to accept a fresh undertaking from FCL and Amatil not to finalize any sale of shares to APM. On appeal to a Full Court this order was quashea on 21 September 1983. His Honour then proceeded to set out his understanding of the nature of the Full Court's findings. It saw the fresh undertaking as amounting, in effect, to an injunction against « a x - a 1 a a en eo 4e coer eenetnmmter it an tem etelealinan Se o~ Rete ke Pa some eee NE en et ee nN Ree cate a me one 64. APM, which had not been heard on that issue. If a hearing had occurred there could have been no certainty as to its outcome. The Full Court also observed that, although the original undertakings were offered and accepted "until further order", they should only have been released if new and unforeseeable circumstances had arisen since they were accepted, and if the interests of 'justice required their release. This was particularly so because the undertakings, being reciprocal, had a strong contractual element in them. The Full Court found that there were in fact no new and unforeseeable circumstances, and the interests of justice were strongly in favour of the undertakings being maintained. His Honour said: — . 6 "Each member of the Full Court, in deciding that the order must be quashed, made clear his views as to the possible alternative that all parties could be released unconditionally from their undertakings, thus leaving the two contestants for FCL free, for the time being, to pursue their bids in the market place. Their Honours were clearly opposed to such a course (which is the one I am now being urged to follow) because of the importance they placed on the contractual nature of the undertakings agreed to by the parties at' the outset of the case, the ability of the parties to foresee the type of developments which had in fact occurred, and the injustice which would be done to APM if it were forced to bid for FCL shares at a time when it still had the TPC's action hanging over its head. It is clear that I must, in this present a ae ba ee —_— 7; — te a al 65. application, take the Full Court's decision as my starting point. Insofar as it involves a ruling on a question of law, I am of course bound by that ruling. Insofar as it involves the exercise of a discretion, in place of my exercise of discretion, I believe that I can only reopen the matter if it .is shown that substantial new considerations have emerged which the Full Court did not have before it and which are sufficiently cogent to justify such a reopening. If I am satisfied that such new considerations exist, then I think I must reconsider the whole discretionary issue for myself and, while giving proper respect to the views of the Full Court as to what matters are material and how much weight each should be given, I must make up my own mind on those matters. In other words, "if the occasion is one for the fresh exercise of discretion, then I must exercise my own discretion, after carefully considering the views of the Full Court; I should not merely ask myself, 'What would the Full Court have decided if these new considerations had been before it?'" His Honour then turned to consider whether there were sufficient new considerations to justify the fresh exercise of a discretion. The first new circumstance which had been relied upon by SCI was APM's amendment of its defence to the TPC's application, to foreshadow that if it were successful in acquiring the shares in FCL, it would retain no more than half of that company's productive capacity. Mr O'Callaghan ac, for SCI, described this as the most significant development. His Honour reviewed the evidence relating to this issue, and made his findings of fact on the basis of the evidence before him, including the cross-examination of a number of Pn ene Se a Sr oo eh te nwa ne LGR an Mn Re ere tem Ral Seen —_ ek, yo NP at Rr Can Na A Bm ER Pn Ne EY ~All as atten ne ne me a et a ee a Bek: Relea A Re PIR ee een ae — —_— ---- 66. deponents. He was unable to accept the predictions of Mr Becker, Managing Director of FCL and Mr Castan, a director of SCI to the effect that FCL was likely to suffer grave and irreparable damage as a result of APM's proposal, noting that "these predictions were given before APM had unequivocally withdrawn its proposal". His Honour also set out his view of the effect of the evidence of Mr Wallis of APM, who was cross-examined upon his affidavit, on the likely effect on FCL of APM's proposal. ; . His Honours' conclusion was:- : "However I am unable to find that the risk of such damage to FCL has been so greatly increased by the announcement of the abortive proposal as to amount to a new circumstance which would justify me in releasing FCL from its undertakings." His Honour dad not believe that "the publication of the abortive proposal will add significantly to the damage which would otherwise have been suffered by FCL, arising from the mere facts of conflicting takeover offers and a delayed outcome of that conflict." For those reasons he did not believe that he could treat the APM proposal as a new circumstance, arising since the judgment of the Full Court, enabling him to depart from the discretion exercised by the Full Court. . *} TS ee et ae ie Nee ae ecm tee mete ene hel Reet se ate Baler bate bed Meme" AeA? AEA te we Hie ek et weet re ee ee. Oa ate ae een a te nl St! 67. The findings of fact made by his Honour after seeing and hearing the witnesses are to be considered on appeal in accordance with the principles set out in Mace v Murray (1954-1955) 92 C.L.R. 370 where the High Court said at p.378: "The case was pre-eminently one for the application of well-known words originally used by Lord Shaw and since approved by other learned lords: 'In my opinion, the duty of an ~appellate court in those circumstances is for each judge of it to put to himself ... the question: Am I - who sit here without those advantages, sometimes broad and sometimes subtle, which are the privilege of the judge who heard and tried the case - in a position, not having those privileges, to come to a clear conclusion that the judge who had them was plainly wrong? If I cannot be satisfied in my own mind that the judge with those privileges was plainly wrong, then it appears to me to be my duty to defer to his judgment' :" a When these principles are applie°d to the findings of fact made by his Honour, I see no reason to do other than defer to his judgment. On those findings it was open to his Honour to form the view that APM's proposal should not be regarded as a new circumstance justifying the release of the undertakings, and I would not feel justified in imputing error to his Honour in forming that view (see Adam P Brown Male Fashions Pty Ltd v Philip Morris Incorporated and Philip Morris Ltd (1981) 55 ALJ 548. ° c oo ET dee Seat ne ener AEE: AMR AML ae Set a oe lee A ae eee eta Cate rnnnt inte ds — ae nee oan ee Seana ean tacetth ate mien ate 2 a ee tine ee | 68. i 'T , The other new circumstance relied upon by SCI was ' the resolution of Amatil Limited's board of directors that the company would not sell its shares in FCL to APM or to any of its related corporations "at any time or in any circumstances or for any price". . His Honour was satisfied that the resolution was entirely genuine and that if there were some way in which Amatil could bind itself even more firmly to the stand indicated, it would do so. His Honour went on to say: "However, in spite of my satisfaction as to the genuineness of the Amatil resolution, I do not believe that it can be accepted without reservation. Company directors cannot bind themselves or their successors, merely by a resolution as to future intent, to a course of conduct which may, when the time comes, prove to be not in the best interests of shareholders. If the undertakings are not released, and APM were to resist the TPC case successfully on the basis of it retaining the whole FCL operation, and if it were then, on the same basis, to make the highest bid for FCL shares, Amatil would have no commercial or legal reason not to accept that bid. For this reason, and in spite of Amatil's adoption of language suggested by Fitzgerald J., I am unable to find that the hardening of Amatil's attitude to an APM bid (given that 1t arises solely from the circumstances of these proceedings) represents such a new circumstance, since the situation with which the Full Court dealt, as to justify me in re-opening the question of the undertakings." note a at In my opinion, it was open to his Honour having heard the evidence of Mr Becker, Chairman of Directors of FCL and re a I RI ~—— a ee ae = — Pee Te OS ene ae Dn cv a eg ee we eater ce eterna named tent danse ne. A ante rt we eee nb hen ot 69. of Leigh Marden Pty Ltd and a director of Amatil Limited, and being familiar with the detailed history of the matter, not to regard the resolution, which represented in his opinion a hardening of Amatil's attitude to an APM bid, as such a new circumstance justifying him in re-opening the question of the undertakings. It was a nice question to determine, and, without his Honour's advantages, and applying the principles earlier set out, I do not feel justified in concluding that his Honour's finding should be set aside on appeal. I would dismiss the appeal and hear the parties on the question of costs at a time to be arranged. I certify that this and the sixty eight (68) preceding pages are a true copy of the Reasons for Judgment herein of The Honourable Mr Justice Sweeney. sy) vee Fee Coke. * Associate. Dated: 15 March 1984. ee = eee t Be oe ee ee te eee be ete ne en HE te ee ete tne a ate meee em ail alt ee Fe en ee Rou ol. CATCHWORDS Administrative Law - judicial review - appeal from the dismissal of an application for an order of review - whether Minister abdicated responsibility to consider taking proceedings for alleged breach of s.50 of the Trade Practices Act - whether appeal court should interfere with exercise of discretion by primary judge not to make the order sought. Trade Practices Act 1974 ss. 29, 50, 77, 80, and 81 Administrative Decisions (Judicial Review) Act 1977 ss. 5 and 16. VISY BOARD PTY LTD v THE HONOURABLE GARETH EVANS THE ATTORNEY GENERAL OF THE COMMONWEALTH OF AUSTRALIA and ANOR. No. VG302 of 1983 Sweeney, Lockhart and Sheppard JJ. Melbourne 15 March 1984. Administrative Law - judicial review - appeal from the Aen er rer gee ern - eee en a ——: os ——. mt wes ae a Sa ee su =. pean Surv ven CNS OO SDE OO ok eat eae Tne Pern Wane dismissal of an application for an order of review of decision of Trade Practices Commission to discontinue its proceedings - whether decision amounted to an unlawful fetter or abdication by the Commission of its duty under the Trade Practices Act. Trade Practices Act 1974 ss. 80 and 81 ° Administrative Decisions (Judicial Review) Act 1977: ss. 5 and 16 Federal Court Rules: Order 22 Rule 5(1) VISY BOARD PTY LTD v TRADE PRACTICES COMMISSION and ORS No. VG303 of 1983 Sweeney, Lockhart and Sheppard JJ. . Melbourne 15 March 1984 Practice and Procedure - whether court as presently constituted should hear appeal - whether a fair-minded observer might entertain a reasonable apprehension of bias by reason of pre-judgment. Pe ae re rs ee we eee wee - ~ nn oe pe ie ee oe — a re ee one er Practice and Procedure - principles to be taken into account in an appeal against the exercise of a discretion by primary judge in granting leave to discontinue. Trade Practices Act 1974: ss. 80 and 81 Federal Court Rules: Order 22 Rule 2(1)(d); Order 35 Rule 6(2), A.P.M. INVESTMENTS PTY LTD v TRADE PRACTICES COMMISSION and ORS No. VG308 of 1983 Sweeney, Lockhart and Sheppard JJ. Melbourne 15 March 1984. — Practice and Procedure - appeal against refusal of primary judge to release undertakings - third such application for release - whether circumstances had arisen to justify the fresh exercise of a discretion by the primary judge. Trade Practices Act 1974: s.50 tee re - =p a —--- _ eae nee. —--- Sore re " Fm ret Om let alan ete, —o Re en be Rete tad we Be tenet Tet hate in he At eel IN a ett f o3 ist fas Ly ae be S.C.I. OPERATIONS PTY LTD and ANOR v_ TRADE PRACTICES COMMISSION and ORS No. VG249 of 1983 Sweeney, Lockhart and Sheppard JJ. Melbourne 15 March 1984 IN THE FEDERAL COURT OF AUSTRALIA VICTORTA DISTRICT REGISTRY GERERAL DIVISION On appeal froma single judge Australia BETWEEN : VISY BOARD PTY. LTD. AND: TRADE PRACTICES COMMIESTON, FIBRE CONTAINEPS LIMITED, "LEIGH-MARDON PTY. LIMITED. ASSOCISTED NOMINEES PY. LIMITE of FRANCIS JAMES BURKE, PETER BECKER, WILLIAM GIBSON, JOHN PRANCIS ELFVERSON and - ARTHUR KEVIN SMITH the Federal Court of A 'G pellant Respondents tJ IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIAN DISTRICT REGISTRY ) ) GENERAL DIVISTON } On appeal from a single judge Australia Between: VISY BOARD PTY. LTD. and THE HONOURABLE GARETH EVANS THE ATTORNEY GENERAL OF THE COMMONWEALTH OF AUSTRALTA and S.C.T. OPERATIONS PTY. LID. VG. No, 302 of 1983 of the Federal Court of Appellant Respondents IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIAN DISTRICT REGISTRY ) VG. NO. 308 of 1983 ) GENERAL DIVISION ) On appeal from a single judge of the Federal Court of Australia Between: A.P.M. INVESTMENTS PTY. LIMITED Appellant and TRADE PRACTICES COMMISS TON First Respondent and FIBRE CONTAINERS LIMITED, LEIGH-MAPDON PTY. LTD. . ASSOCIATED NOMINEES PITY. LTD. . FRANCIS BURKE. PETER BECKER. WILLIAM GIBSON, JOHN FRANCIS ELFVERSON (Pifth to Eighth Respondents as Trustees for Leigh-Mardon Pty. Ltd.) and 'ARTHUR KEVIN SMITH Secend to Ninth Respondents and $.C.T, OPERATIONS PIV. LTD. (S.C.1. PACKAGING PTY. LTD. * Tenth Respondent IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIAN DISTRICT REGISTRY ) ) ) GENERAL DIVISTON On appeal from a single judge Australia y Between: §.C.2. OPEPATIONS PITY. LTD. ($.C.1, PACKAGING PTY. LTD. and TRADE PRACTICES COMMISSION, A.P.M. SNVESTHENTS PTY. LTD. . FIBRE CONTAINERS LINITED, LETGH-MARDON PTY. LTD... ASSOCIATED NOMINEES PTY. LTD. ,. FRANCIS JAMES BURKE. PETER BECKER. WILLIAM GIBSON, JOHN FRANCIS ELFVERSON (Sixth to Ninth Respondents as Trustee for Leigh-Mardon Pty. Ltd.) and ARTHUR KEVIN SMITH VG. NO. of the 249 of 1983 Federal Court of Appellants First Respondent Second Respondent s Third to Tenth Respondents Coran: Sweeney, Lockhart & Sheppard JJ. Date: 15 March 1984 Place: Melbourne REASONS FOR JUDGMENT LOCKHART J. These four appeals are part of a bewildering array of multifarious applications, motions and appeals, all relating to two competing attempts to gain control of Fibre Containers Limited ("FCL"). There has been no hearing on the merits of the matter. Although each appeal is Drought to this Full Court from separate judgments of a single judge of the Court I propose toa consider them all in the one set of reasons. It is convenient to dado so because much of the relevant material is common to more than one appeal. FCL carries on the business of converting paperboard into cardboard boxes which 1t sells as containers for various commodities. APM Investments Pty. Limited ("APM"), which is a subsidiary of Australian Paper Manufacturers Limited, and §.C.I. Packaging Pty. Limited ("SCI") each carries on the business of producing raw materials from which cardboard boxes are made. APM is a larger producer than is SCI. APM supplies a substantial part of the raw material used by FCL in the manufacture of the boxes it sells. Of the paperboard which 15 consumed in Australia about 72% is supplied by APM and 23% by SCI. in May 1983 SCI and APM each publicly announced that it proposed to make a takeover offer for all of the 1ssued shares in the capital of FCL. Litigation ensued. The curial history of the matter 15 set out in the reasons for judgment of Sweeney J., so I need not refer to it in any detail. Presently before us at this stage of the takeover battle there are four appeals. The first appeal is froma judament of Woodward J. dismissing an application by Visy Board Pty. Ltd. ("VB") for an order of review under the Administrative Decisions (Judicial Review) Act (1977) ("the Judicial Review Act") of a decision of the Trade Practices Commission to discontinue proceeding VG 84 of 1983 against APM. VB carries on the business of converting paperboard into containers and is a competitor of FCL. The second appeal is from a judgment of Woodward J. dismissing an application by VB seeking an order of review under the dudicial Review Act of the decision of the Commonwealth Attorney-General not to institute proceedings against SCI under s. 50 of the Trade Practices Act 1974 ("the Act") in respect of the announcement in May 1983 of its intention to make a takeover offer for the shares in FCL. The third appeal is by APM from the judgment of Woodward J. gcanting leave to the Commission to discontinue proceeding VG 84 of 1983, ordering the Commission to pay APM's costs and making an order for costs (including those payable by the Commission ta APM) in favour of the Commission against FCL and other respondents. Those orders were made upon the Court's accepting an undertaking by the Commission. The undertaking and the orders are in the following terms: "UPON THE TRADE PRACTICES COMMISSTON UNDERTAKING to the Court that it will not, prior to the expiration of twelve (12) months after the date upon which it files a natice of discontinuance herein and thereafter, until further order, institute any further proceedings seeking injunctions restraining the acquisition by A.P.M. Investments Pty. Limited or any company related thereto (hereinafter referred to as 'APM') of shares in Fibre Containers Limited and will not otherwise seek to prevent such an acquisition, save that the Trade Practices Commission does not hereby give any undertaking not to anstitute sroceedings seeking orders in the event that such an acquisition takes place, for the divesture by APM of any shares acquired by it, directly or indirectly, in Fibre Containers Limited, THE COURT ORDERS THAT: 1. The Applicant have leave to file a Notice of Discontinuance of the Application herein. a. The costs of the firstnamed Respondent of and incidental to the Application herein and Applications No. VG 150 of 1983 and No. VG 249 of 1983 an this Honourable Court, (including ail reserved costs) be taxed and when taxed paid by the Applicant. 3. The costs of the Trade Practices Commission of and incidental to the Application herein and Applications No. VG 150 of 1983 and No. VG 249 of 1983 in this Honourable Court (including all reserved costs) be taxed (if not otherwise agreed) and when taxed (or so agreed) paid by the second, third, fourth, fifth, sixth, seventh and eighth Respondents together with any costs which the Applicant may have to pay to the firstnamed Respondent pursuant to paragraph 2 of this Order." VB filed a notice of motion seeking to be joined as a party to this appeal or to be allowed to intervene in the appeal or to be heard as amicus curiae. The fourth appeal is pact heard before us. We commenced hearing it on 13 December 1983, but then adjourned it. This appeal is from another judgment of Woodward J. dismissing an application by SCI for release from certain undertakings of various parties given to the Court on 23 May 1983. 'Two notices of motion were filed in that appeal. The first is a motion by VB seeking an order that it be added as a respondent to that appeai or given leave to intervene or be heard as amicus curiae. The second motion is by FCL and othec respondents, to whom for reasons of convenience I shall refer collectively as "Amatil", seeking judgment against Amatil by way of injunction to restrain the sale of their shares in FCL to APM. In the end these motions were not proceeded with. I propose to consider the four appeals in the order in which I have already referred to them. PROCEEDING WO. VG 303 OF 1983: APPEAL BY VB FROM WOODWARD J.'S JUDGMENT DISMISSING VB'S APPLICATION FOR AN ORDER OF REVIEW OF THE DECISION OF THE COMMISSION TO DISCONTINUE PROCEEDING VG 84 of 1983 AGAINST APM AND OTHER RESPONDENTS There is an initial problem in considering this appeal namely, the difficulty of adsatifying the relevant decision of 9. the Comaission under challenge. The description of the decision in VB's application for an order of review differs from the description given in the course of argument before Woodward J., differs again from its description in the notice of appeal to this Court and again from the description in argument before us. The cimmerian obscurity which surrounds the identification of the decision was deepened by the Commission's submission before us that it did not concede that there was any evidence of the terms of the decision. The difficulty of identifying this elusive decision does not set the stage favourably for VB in the appeal. Doing the best I can and getting as close to common ground as possible, I am prepared to assume for the purposes of dealing with this appeal that the Commission's decision was to take such steps as were necessary to discontinue proceeding VG 84 of 1983 against all respondents on terms that: (a) FCL and Amatil pay the costs of the Commission and indemnifv it against any costs it may be ordered to pay, as those respondents had offered to do during the course of the hearing of the appeal in VG 249 of 1983 before us on 13 December 1983; and (b) the Commission gives an undertaking to the Court that it would not, until further order of the Court, commence proceedings for injunctive relief that had the effect of restraining APM from acquiring shares in FCL. It was common ground before this Court on the hearing of 10. the appeal that the Commission's decision was of an administrative character made under the Act and that VB was a person aggrieved by the decision. I propose therefore to say nothing about these matters except that I regard them as open questions should they arise in the future. VB attacked the Commission's decision on three grounds which I shall consider in turn. The first ground was that the decision was said to be "improper and unlawful" because the Commission had relied upon or taken into account the offer made by FCL and Amatil to pay ats costs and to indemnify it against costs which it may be ordered to 'pay ("the costs offer"); and that was said to be an improper matter for the Commission to consider. The Commission submitted that there was no evidence as to what matters were considered or taken into account by it when making its decision to discontinue. I propose to consider VB's submission on the assumption that the costs offer was in fact taken into account by the Commission in deciding to discontinue. I do so because the decision was not simply to discontinue the proceeding, but to discontinue 1¢ on certain terms including a term involving the costs offer. There was no real dispute before us that the decision and the costs offer were inevitably intertwined, although there was dispute as to whether and, if so to what ll. extent, the Comaission took the costs offer into account in deciding to discontinue. The definition of the decision is itself a difficult question for the reasons mentioned by me earlier; but once it is assumed that the decision to discontinue and the costs offer are inevitably related then to submit that the decision to discontinue did not take into account the costs offer seems to me to have a flavour of unreality. Notwithstanding that the Commission took the costs offer into account when deciding to discontinue, in my view it is not possible to draw any inferences or come to any conclusions about the extent to which that decision was influenced by the costs offer. Certainly it cannot be said that the Commission would not have decided to discontinue in the absence of the costs offer. Accepting that it tas during or after the luncheon adjournment of the hearing before us of the last heard appeal on 13 December 1983 that the Commission became aware of the costs offer, the evidence nevertheless suggests that the Commission probably believed at some earlier time that, in the event of its seeking to discontinue proceeding VG 84 of 1983 or submitting to a consent judgment against it, it would be paid its costs and indemnified against any liability-~ for costs which it may be ordered to pay. We were referred by counsel for VB to various cases which he relied on as supporting his argument that it was umproper for the Commission to rely upon the costs offer in 12. making its decision. The cases included R. v. Boston (1923) 33 CLR 386, Kranz v. Duffy (1913) 77 JP, R. v. Clarke £19541 ALR 312, and Sean v. MacKellar (1981) 38 ALR 363. Counsel also relied on a passage from de Smith's Judicial Review of Administrative Action 4th Ed. Chapter 5 (p. 258). I do not intend to discuss these cases or the passage from de Smith as they deal with quite different matters to those involved in this appeal and are essentially concerned with corruption of public officials or tribunals. In my opinion it was not 1mproper for the Commission to take the costs offer into consideration when making its decision to discontinue. Doubtless there are circumstances in which it would be improper for the Commission to allow a question of costs to influence its decisions in respect of legal proceedings, but this is not such a case. The Commission is a_ statutory body charged with public functions and duties. It is for certain purposes under the Act the guardian of the public interest. The Commission or the Attorney-General, and no others, may institute proceedings for injunctive relief to restrain contraventions of 8. 50. But decisions by the Commission to institute, terminate or compromise a proceeding before a court must inevitably involve consideration of a wide range of matters including the strength of the Commission's case against the respondent, the availability of funds from the public purse, competing claims on those funds by other proceedings, and assessments of the comparative ' 13. importance of the various proceedings in which the Commission may be involved. Not only do I see nothing wrong with the Commission considering questions of costs when deciding whether it should commence, compromise or terminate proceedings, but failure to do so could in some circumstances be a dereliction of its duty. It is not ipso facto wrong for the Commission to take into account questions of costs including offers such as the costs offer in the present case. That 15 all that the Commission appears to have done in this case. I reject the argument that it acted improperly in taking into account the costs offer when deciding to discontinue. The second ground on which the Commission's decision to discontinue was attacked was that it was said to have a statutory duty to prevent APM from acquiring shares in FCL but abdicated that duty by seeking to discontinue proceeding VG 84 of 1983, I do not accept the base premise of VB's argument that the Act imposed a duty upon the Commission to prevent APM's proposed acquisition of shares in FCL. No such duty is imposed by specific provision of the Act, nor can it be implied. Even if this duty could be gleaned from the Act, matters such as the Commission's assessment of the strength or weakness of its case against APM when it commenced proceeding VG 84 of 1983, any changes to that assessment as the litigation proceeded, competing claims on the Commission's resources from other litigation or prospective litigation in which the Cowmission is a party or 14. prospective party, and the availability of funds and staff are but some of the matters which would bear on the question of the alleged duty of the Commission. No conclusion could safely be reached, on the material before the primary Judge and this Court, that the Commission was under a duty to restrain APM's proposed acquisition of shares in FCL. Even if it be assumed that the Commission was under such a duty it could not be said that it abrogated that duty by seeking to discontinue the proceeding. In my opinion the Commission was plainly entitled to decide to discontinue the proceeding. When the Commission commenced proceeding VG 84 of 1983. it doubtless considered that APM would proceed to seek to acquire further shares in FCL and that it was likely that the FCL shareholders would accept APM's offer to acquire then. That position changed. The relevant events are stated fully in the judgment of Sweeney J. and need no repetition by me. The Amatil resolution of October 1983 (Amatil controls about 74% of the FCL shares) not to sell to APM may or may not be valid or enforceable; but that is not the relevant question for present purposes. The relevant question is that the Commission took the view that as a practical matter it would be most unlikely that Amatil would in fact sell its shares in FCL to APM and therefore, in those circumstances, APM would not be ina position where it could infringe the Act. In my opinion the Commission was not abdicating any statutory duty in making the decision. 15. The third ground of attack on the Commission's decision to discontinue was that the decision involved the Commission in undertaking to the Court to fetter itself in the future exercise by it of its statutory powers, functions and duties under ss. 50 and 80 of the Act. The effect of the undertaking is that prior to the expiration of twelve months after the date on which it files a notice of discontinuance of proceeding VG 84 or 1983 and thereafter until further order, the Commission will not seek to prevent APM acquiring shares in FCL by instituting proceedings or otherwise. I accept that it would be necessary for powerful considerations to be put to the Court before the Commission would be released from its undertaking, but nevertheless the Court's power to release is preserved. "Zt is not permissible to view the Commission's undertaking in isolation from the circumstances in which it was given. Duties, whether statutory or otherwise, do not exist in vacuo. When all the circumstances surrounding the Commission's @ecision to discontinue are considered, in my opinion the Commission cannot be said to have fettered the future exercise by it of any statutory powers, functions and duties which may arise under ss. 50 and 80 of the Act. The Commission obviously concluded that in all the circumstances, including the Amatil resolution of October 1983 not to sell their shares in PCL to APM, it was highly unlikely that Amatil would sell those shares 16. to APM. It is not the legal effect, if any, of the resolution itself but the attitude which underlies it that 1s the important consideration. The Commission's view was that it should discontinue proceeding VG 84 of 1983 because events which occurred after the commencement of the proceeding had in its view rendered the proceeding unnecessary, time consuming and unduly expensive, _an expense which could only increase whilst the proceedings remained alive and which might ultimately be borne entirely by it, including the costs of the respondents, if the case should proceed and ultimately be dismissed. Counsel for VB relied on certain cases 1n support of his argument including Watson's Bay and South Shore Ferry Company Limited v. Whitfield (1919) 27 CLR 268; Ayr Harbour Trustees v. Oswald 8 App. Cas. 623; Cudgen Rutile (No. 2) Pty. Limited v. Chalk (19753 AC 520. He also cited a passage from de Smith at p. 317. I would add for myself Birkdale Dastrict Electric Suoply Co. v. Southport Corporation £19267 AC 355; Mulliner v. Midland Railwav Co. £18791 11 Ch. D. 611; and York Corporation v. Henry Leetham & Sons £19241 1 Ch. 557. See also Mitchell, Contracts of Public Authorities (pp. 57 to 65). These cases refer to the well established principle of law that if a person or public body is entrusted with certain statutory powers or duties expressly or impliedly for public purposes, those persons or bodies cannot divest themselves of those powers and duties. Assuming the existence cf the relevant statutory duties, 17. powers or functions of the Commission under the Act relied on bv counsel for VE, in my opinion the Commission has not fettered itself in the exercise of them. I express no views on the primary Judge's finding that gs. 80 and 81 of the Act offer alternative renedies to the Commission except to say that it would be wrong for the Commission to assume, in the discharge of its high public duties, that the mere presence of 5. 81 and the fact that it mav be resorted to if an acquisition of shares in fact takes place should inhibit the Commission, i1n an appropriate case, from commencing proceedings under s. 80 to restrain a threatened unlawful acquisition. {It is no answer to say that, because an unlawful acquisition may be undone, the Commission would necessarily be justified an standing by and allowing the acquisition to take place. Such an attitude would deny the Commission's duty to uphold the public interest. I would dismiss this appeal. PROCEEDING NO. VG 302 cf 1983: APPEAL BY VB FROM WOODWARD J.'S JUDGMENT DISMISSING VB'S APPLICATION FOR AN ORDER OF REVIEW OF THE ATTORNEY-GENERAL'S DECISTON NOT TO INSTITUTE PROCEEDINGS AGAINST SCI UNDER S. 80 OF THE ACT IN RESPECT OF THE ANNOUNCEMENT IN MAY 1983 OF ITS INTENTION TO MAKE A TAKEOVER OFFER FOR SHARES IN FCL IN CIRCUMSTANCES WHICH WOULD CONSTITUTE AN INFRINGEMSUT OF S. 50 OF THE ACT. wee eee ee were ee a - -- - . -- . "eo wae Ree 18. On 20 January 1984 the Court dismissed this appeal, ordered VB to pay the Attorney-General's costs of the appeal, reserved the costs of other parties and said that 1ts reasons for judgment would be given later. I now give my reasons. It is common ground that the decision of the Attorney-General under challenge in this appeal was of an administrative character made under the Act and that VB isa person aggrieved by that decision within the meaning of sub-s. 3(4) of the Judicial Review Act. I express no opinion on the question whether the decision is properly characterised as one made under the Act within the meaning of sub-s. 3(4). I regard it as an open question. The relevant facts, in particular the letter of 25 October 1983 from VB to the Attorney-General and the telex in reply of 27 October 1983, are set out in the reasons for judgment of Sweeney J.. I will not repeat them. I summarise the arguments of VB as follows:- (i) in making his decision: (a) the Attorney-General did not direct his ow mind to the question whether oc not he should institute proceedings under s. 80 against SCI; {b) the Attorney-General did not make his ow decision on the question whether or not such ee ee - Ct oat ott —--+oe - on (11) (iii) (c) 19. proceedings should be instituted; and the Attorney-General simply adopted the decision of the Commission as his own decision without giving any independent consideration to the question whether or not such proceedings should be instituted against SCI. In making his decision the Attorney-General took into account irrelevant considerations namely that:- (a) (b) the primary responsibiiity for the enforcement of the Act lies with the Commission; and VB could itself institute proceedings against SCI pursuant to s. 81 of the Act. The primary Judge erred in his construction of the Attorney-General's telex, in particular:- (a) (b) (c) (d) in drawing inferences from the telex adverse to VB; in construing the telex liberally in favour of the Attorney-Genéral; in refusing to give effect to the plain and natural meaning of the words of the telex; and in refusing to give effect to the principles stated in Jones v. Dunkel (1959) 101 CLR 278. ee ie ed ee eee oe 20. The answer to this appeal lies essentially in the construction of VB's letter and the Attorney-General's telex. VL wrote to the Attorney-General asking him to make and to communicate a decision to VB, all within 48 hours, whether he would institute proceedings against SCI to restrain a breach of s. 50. VB had no statutory or other authority to write the letter. It was of course perfectly at liberty to do so as was any other citizen, but the Attorney-General was under no statutory or, so far as I can discern. any other duty to reply to the letter or act in response to it. The fact that the Attorney-General and the Commission are the only persons entitled to bring proceedings for injunctive relief under s. 680 to restrain breaches of a 50 does not impose upon the Attorney-General some duty to consider a request such as that made in the letter from VB. Nor does it give VB some right that 1t would not otherwise have to redquest the Attorney-General ta make a decision. It is inconceivable to me how it could be reasonably supposed that the Attorney-General could, within the period of 48 hours, himself or with the assistance of his Department (of twhich I might add the Commission is a branch in the sense that he is the Minister responsible for it), examine the whole of this complicated matter and all its ramifications and make a decision whether or not to sue SCI. Why should he? Indeed, the fact that the power is vested only in the Attorney-General and the Commission to launch proceedings for injunctive relief to restrain breaches of $s. 50 rather reinforces the view that the Attorney-General should not make any such ai. decisions without the most careful consideration. The proper analysis of the telex is that the Attorney-General was saying that, as VB had sought a decision and the communication thereof to it within 48 hours, then he would make a decision; but that he could not possibly do so by giving his own close and undivided attention, and that of his departmental advisers, to the complicated questions involved in deciding whether to sue SCI. As he was the Minister responsible for the Commission which itself had examined this question earlier, received senior counsel's advice and decided not to institute proceedings against SCI, doing the best he could within the period of 4@ hours and taking into account the attitude of the Commission, he decided that he would not sue SCI for breach of s. 50. It dees not follow that the Minister would not have come to a different conclusion weeks or months later if he had sufficient time to fully and carefully consider all relevant matters. It simply means that within the limited time requested for the making of the decision he did the best he could. There is no substance in the submissions made by VB in this appeal. In my opinion the primary Judge correctly concluded that the appeal should be dismissed. I need not consider the submissions made by VB challenging his Honour's finding that in any event he would exercise his discretion under s. 16 of the Judicial Review Act against VB by refusing relief on the assumption that the statutory preconditions to a grant of relief 22. had been satisfied. For these reasons I was a party to the dismissal of this appeal on 20 January 1934. PROCEEDING NO. VG 308 OF 1983; APPEAL BY APM FROM THE JUDGMENT OF WOODWARD J. GRANTING LEAVE TO THE COMMISSION TO DISCONTINUE PROCEEDING VG 84 OF 1983. ORDERING THE COMMISSION TO PAY APM'S COSTS AND ORDERING FCL AND AMATIL TO PAY TO THE COMMISSION ITS COSTS AND THE COSTS OF APM WHICH THE COMMISSION WAS ITSELF ORDERED TO PAY. Before turning to the issues raised in this appeal, which is the main appeal in the quartet, I shall deal with an application made by senior counsel for APM at the commencement of the hearing of the appeal on 20 January 1984 that the Court, as presently constituted, should not hear it. Senior counsel foreshadowed an identical submission in relation to the part heard appeal by SCI. Senior counsel did not submit that the Court, as presently constituted, had prejudged the appeal. Rather he relied on the principle expounded by the High Court in Livesey v. The New South Wales Bar Association (1983) 57 ALJR 420 (at pp. 421-422) in these terms:- "That principle 1s that a judge should not sit to hear a case if in all the circumstances the parties or the public might entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it." Senior counsel submitted that the Court had acted on 13 en ee ee ee eee ee - - ae - - ey 23. December 1983 in such a way that: "A fair-minded person could apprehend that the Court had predetermined the outcome of the appeal and also real and significant issues in the appeal." In particular, senor counsel submitted that a fair-minded person might reasonably think first, that the Court had concluded that the Commission's proceeding for injunctive relief against APM (VG 84 of 1983) was futile and second, that the Court suggested to the Commission that it should take the necessary steps to discontinue that proceeding. This application by senior counsel for APM was opposed by counsel for all othec parties to this appeal and the SCI appeal proceeding No. VG 249/83. I do not propose to state in getail the events of 13 December 1983 as they appear sufficiently from the transcript of proceedings of that day. I summarise them as folloty:- Senior counsel for SCI, the appellant in the appeal then before us, opened the appeal and embarked upon an explanation of its complacated history and relevant circumstances. In the course of his address the Court, not surprisingly, asked questions and made observations. One of the matters discussed by counsel with the Court was why the Commission was seeking to continue with its proceeding VG 84 of 1983 when the holders of 74% of the shares in FCL (Amatil) had resolved that they would not sell their shares in FCL to APM "at any time or in any 24. circumstances or for any price". Indeed, Amatil had joined with FCL in filing a notice of motion seeking judgment against Amatil to bar then from selling their shares in FCL to APM. Senior counsel for Amatil told the Court that their clients were prepared to submit to a final order of the Court restraining them from ever selling their shares in FCL to APM. It is hardlv a matter for wonder that ain those circumstances there was discussion between the Bench and Bar as to what purpose was being served by the continuance of proceeding VG 84 of 1983; but all the discussion was by way of inquiry and, to the extent that there was any expression of view by any member of the Bench, it was of the kind that frequently occurs in argument, designed to ascertain the questions in issve and to promote a proper understanding of relevant matters by the Bench. At one stage during argument senicr counsel for the Commission seemed to be asking the Court for some judicial advice about whether the Commission should itself take steps to bring proceeding VG 84 of 1983 to an end. The Court informed senior counsel that this was a matter not for it but for the Commission to decide. Later in the day senior counsel for SCI asked the Court to adjourn the further hearing of the appeal to enable the Commission to apply to a single Judge of the Court for a permanent injunction against Amatil to restrain them from selling their shares in FCL to APM, for a permanent injunction against FCL to restrain it from doing anything to aid any such sale and for leave to discontinue proceeding VG 84 of 1983 against APM. The Court heard senicr counsel for APM fully on this application for adjournment. After 25. retiring for a short time the Court returned and announced that it acceded to the adjournment application. The Court said that by taking this course it did not indicate that it had formed any views about the issues raised 1n the appeal; indeed, it had not formed any such views. In considering the application that the Court should not hear the appeal or continue to hear the part heard appeal we must exercise great care because in a sense the Court is the Judge in its own cause. Also, the question is not whether the Court had in fact prejudged the case, and this was never suggested by senior counsel for APM, but whether a fair-minded person could think that the Court had done so. WNowithstanding the submissions of senior counsel for APM on this question and my careful reading of the transcript of proceedings on 13 December 19683 I came to the conclusion on 24 January 1984 that the application must fail. It was without substance and foundation. Questions of costs were reserved on 24 January 1984. In my opinion the avpropriate order is that APM should pay the costs of all respondents to this appeal of the application by APM for disqualification. Before considering the issues raised in this appeal I shall deal with another preliminary matter namely, a motion by VB to be joined as a respondent to the appeal or permitted to intervene in the appeal. Counsel for VB submitted that VB should be joined as a party to the appeal pursuant to Order 52 Sub-Rule 14(2) of this Court's Rules for the purpose of submitting that 26. the undertaking given by the Commission to the Court on 22 December 1983 should not have been given by the Commission or accepted by the Court, was contrary to the Commission's duties and functions under the Act and constituted an improper fetter upon the exercise by the Commission of its discretionary powers and duties to enforce the Act. In support of this motion counsel for VB submitted that VB was directly and adversely affected by the Court's,order of 22 December 1983 and by the undertaking then given and accepted. In such circumstances leave to intervene should be granted. Counsel relied upon Cretanor Maritime Co. Limited v. Irish Marine Management Limited £19781 1 WLR 966 per Buckley DJ (at p. 978) and Thomson Australia Holdings Pty. Limited v. Prade Practices Commission (1981) 148 CLR 150 (Hidh Court), (1979-80) 27 ALR SS1 (Pull Court of this Court) and (1978) 168 ALR 17 (Franki g.). He submitted that courts have recognised the locus standi of a party in the position of VB to bring its own proceeding where 1t is affected by a decision of a statutory body made in breach of its statutory duty. He referred to Day v. Pinglen Pty. Limited (1981) 148 CLR 289 per Mason, Murphy, Aikin, Wilson and Brennan Jd. (at pp. 299-300); R. v. Commissioner of Police of the Metropolis Ex Parte Blackburn (1968) 2 QB 118. He submitted that where a statute is concerned with the public interest a wide approach to locus standi has been adopted by the courts: see Attorney-General of New South Wales v. The Brewery Emplovees Union of New South Wales (1908) 6 CLR 469; and Onus v. Alcoa (1981) 36 ALR 425. ~ 27. Counsel for VB submitted that VB was adversely affected by the order and undertaking of 22 December 1983 for various reasons relating to VB's business, its share of the paperboard and container markets in Australia, its competitive position in both markets and what was asserted as being its special and direct interest in the undertakings and in the enforcement by the Commission against APM of s. 50 of the Act. It was submitted that the Commission has, by giving its: undertaking, precluded itself from taking proceedings in the future for injunctive relief against APM to prevent it acquiring shares in FCL in contravention of s. 50. This was said to be a fetter that was inconsistent with the policy of the Act and which had the effect of frustrating that policy. Reliance was also placed by counsel upon the Court's inherent power to add persons as parties to appeals. He referced ~ to the judawent of Bowen C.J. in Hughes Motor Service Pty. Limited v. Wang Computer Ptv. Lumited (1978) 35 PLR 346 (at p. 351). No separate argument was addressed to the Court on the application of VB for leave to intervene. Alternatively it was submitted that VB should be given leave to appear as amicus curiae. After hearing this application by counsel for VB the ° 28. Court announced that it would hear him on his. substantive submissions on behalf of VB relating to the undertaking given by the Commission to the Court on 22 December 1983 and that the Court would announce in due course the particular capacity in which it heard the submissions. In my opinion VB did not establish that it should be joined as a party to or permitted to intervene in the appeal. I am not satisfied that VB is directly and adversely affected by the orders of Woodward J. of 22 December 1983 or by the undertakings given by the Commission to his Honour. It is appropriate however that VB be giyen leave to appear as amicus curiae. VB's submissions were not put by any other party to the appeal and they related to an important aspect of the appeal involving questions of the public interest. .I turn now to the issues raised in the appeal itself. The submissions made by counsel for APM may be summarised as follows: 1. The order made by Woodward J. on 22 December 1983, after accepting the undertaking by the Commission, works an injustice to APM. It deprived APM of an advantage which it gained in the litigation namely, the restraint of its vival bidder SCI for shares in FCL until the Court determined whether APM would contravene s. 50 if it were 29. to acquire shares in FCL. Before 23 May 1983 APM could have bought the shares in FCL owned by Amatil if Amatil had been willing to sell those shares for the price offered by APM. At that time Amatil was willing to entertain an offer by APM. APM gave up this freedom in return for the advantage of an arrangment of interdependent undertakings to the Court given on 23 May 1983, the consequence of which was that if and when APM again became free to buy the shares, there tould be no further threat from the Commission because the action brought by the Commission would have been decided in favour of APM. The Commission now says that 1t does not wish to pursue 1ts action to stop APM buying shares in FCL because it believes that APM '7111 not be able to buy those shares in view of the Amatil resolution that they will not sell them to APM. That decision was made for commercial reasons and essentially because of the existence of the undertakings of 23 May 1983, which the Commission sought and obtained, and because it appeared that the action would continue' for a considerable time and at considerable expense. Having thus procured the result which it sought from fee ep ee oe 30. instituting the proceeding, without having to establish its assertion that APM''s acquisition would contravene the Act, the Commission now seeks to discontinue the action. But in case it be wrong and does not stop APM from acquiring shares, the Commission wishes to be free to start a fresh proceeding alleging that the acquisition would contravene s. 50, APM submitted that the Commission must elect in these circumstances. Tf it believes that there is no chance that APM will acquire the shares it should surrender the chance of instituting fresh proceedings against APM. If it does not think that it has achieved what it wants it should proceed with action VG 84 of 1983. Otherwise APM is deprived both of the possibility of buying the Amatil shares in FCL, which existed before the undertakings were given on 22 May 1983 and which it gave up in return for those undertakings, and of the benefit which it obtained from the bargain of 23 May 1983 encapsulated in those undertakings; yet on the other hand the Commission keeps all the benefits it received and more, suffering no loss at all. - The Commission asserts that there is now no likelihood of APM contravening the Act because there is no likelihood of APM acquiring the shares in FCL held by Amatil. If there is no likelihood of APM contravening 31. the Act then the action should be dismissed against ail respondents. Alternatively, if leave is to be given to discontinue, 1t should be on terms that bar future action by the Commission against APM and against FCL and Amatil. If the Commission will not submit to dismissal of the action or to terms that bar future action this evidences a view of the Commission that APM may acquire the shares in FCL which are held by Amatil. If that is so, then proceeding VG 84 of 1983 1s not futile or academic and the Commission must elect whether to abandon its claim or prosecute it. The application for leave to discontinue was no more than another way in which it was sougnt to achieve what had been refused by Woodward J. on 15 November 1983 when his Honour dismissed the application by FCI for release from the undertakings given to the Court on 23 May 1983. Both the application for leave to discontinue and the application for release from undertakings sought to bring the undertakings to an end whilst leaving APM under the disability of the threat of continued or renewed action by the Commission alleging contravention of the Act if APM succeeded in outbidding SCI for the FCL shares. The earlier application for release was refused as release would have been unjust to APM. 32. If leave to discontinue is granted then the question of what terms should be imposed should be answered by reference only to what is just to APM and perhaps the other respondents to proceeding VG 84 of 1983. Although Woodward dg. said that the Commission's belief that its action was now pointless was reasonably held, his Honour framed the terms to be imposed on the grant of leave to discontinue by reference to the conclusion that dismissal of the proceeding was "unacceptable" because it was now hypothetical. The consequences of a dismissal of the proceeding are irrelevant if the proceeding 1s now hypothetical. The proceeding is not hypothetical. Woodward J. found that the proceeding was not hypothetical in his judgment of 15 November 1983 and that finding is correct. The proposition from which Woodward J.'s judgment proceeds namely, that the proceeding 1s now hypothetical, is wrong. What I have said sufficiently summarises APM's submissions. The Commission's motion seeking leave ta discontinue proceeding VG 84 of 1983 was made pursuant to Order 22 Para. 2(1)(a) of this Court's Rules which vrovides: ee me pest neta 8 oe ree eee ere et wr ee wae Oo 33. | "2(1) Subtect to Sub Rule (2) a party making a claim for relief may discontinue a proceeding so far as concerns the whole or any part of any claim for relief made by him - {d) at any time - with the leave of the Court." Woodward J. referred to the judgment of Graham J. in Covell Matthews & Partners v. French Wools Limited [£19771 1 WLR 876 and in particular to the following passage (at p. 879):- ° "The principles to be culled from these cases are, in my : judgment, that the court will, normally, at any rate, ' allow a plaintiff to discontinue if he wants to, provided no injustice will be caused to the defendant. It is not desirable that a plaintiff should be compelled to litigate against his will. The court should therefore grant leave, if 1t can, without injustice to the defendant, but 1n doing so should be careful to see that the defendant is not deprived of some advantage which he has already gained in the Litagation and should be ready to grant him adequate protection to ensure that ' any advantage he has gained is preserved." The principles to which Graham J. referred were approved on appeal by the Court of Appeal £19723 1 WLR 477. After citing this passage from the judgment of Graham J. Woodward J. said:- "I would respectfully adopt Graham J's formulation of principles so far as it goes, but it leaves open the question as to what should be done in a case where leave cannot be granted without some injustice to the respondent, or in which it may not be possible or appropriate to ensure that every advantage which the respondent may have gained in the course of litigation is preserved. In my view the matter must remain one for the exercise of the Court's discretion in each case, even if the interests of the respondent cannot be fully protected. I donot believe that Graham J. was suggesting that, unless the respondent's rights can be completely protected, an application for discontinuance must be refused. If he was implying that, then I must 34. respectfully decline to follow his Honour to that extent." I vespectfully agree with those observations of Woodward J. Paragraph 2(1)(d) of Order 22 does not specify the matters which the Court must take into account when considering an application for leave to discontinue; nor does the paragraph impose any fetter upon the exercise by the Court of its discretion. It is for the Court in the exercise of its discretion in. each case to decide whether leave to discontinue should be granted and, if so, on what terms. The Court must consider all the relevant circumstances including any injustice that may be sustained by any party if leave to discontinue is granted or refused as the case may be. Woodward J. specified certain matters which he took into account in the following terms:- "(a) Cthe applicant] should not be compelled to litigate, against its will, at great length, and with considerable expenditure of public monies, an action which ait believes, on reasonable grounds, to be pointless; (b) the circumstances which have arisen, and which appear to make further litigation by it unnecessary, were not designed by it; nor could they readily have been foreseen when the litigtion was instituted; {c) the merits of the action have not been entered into; there is nothing to suggest that the applicant's case is lacking in good faith or in merit; (d) the applicant is prepared to surrender any right to 35. pursue the remedy which it is presently seeking, namely an injunction to prevent the acquisition of certain shares or assets; (however it reserves the right, if it ever becomes appropriate, to bring an action which would probably be based on substantially the same material, seeking a divestiture of shares or assets so acquired); and {e) the applicant is prepared to submit to an order for those costs which it would be obliged to pay if its action were being dismissed on its merits at this stage." In my opinion each of these considerations was fairly open to his Honour on the material before him and it has not been shown that his Honour fell into error in taking them ainto account. One of the matters that weighed heavily with his Honour was whethec any remaining prospect of APM's bidding successfully for the shares in FCL was further diminished by the fact that APM could still be sued by the Commission under s. 81 of the Act for divestiture. His Honour said that there was already on foot a proceeding by SCI (VG 82 of 1983) seeking to prevent APM taking over FCL. His Honour mentioned that, even if VG 84 of 1983 were dismissed, APM would still be subject to the threat of SCI's proceeding. It must also be borne in mind that there 15 a further proceeding namely, the proceeding by VB against both APM and SCI seeking injunctive relief pursuant to s. 80 to restrain breaches of s. 50. His Honour considered whether, if leave to discontinue were qranted in favour of the Commission, it should be on terms 36. that the Commission undertake not to seek divestiture of any shares Which APM might subsequently acquire in FCL in any event. The Commission informed his Honour that any such undertaking was unacceptable to it. His Honour did not regard such an undertaking as appropriate. APM suggested to his Honour that a further condition be impcsed if leave to discontinue were granted namely, that the Commission obtain assurances from Amatil that it will not regard itself as bound in any way not to sell to APM and that it would be willing to consider any offer which APM may make for the purchase of the Amatil shares in FCL. Woodward J. concluded that the Court did not have power to impose any such conditions and, even if it did have such pover, he would not in the exercise of his discretion impose them. 'His Honour recognised that APM may suffer some hardship if leave to discontinue were granted and that it would Jose some of the advantage gained by it from having entered intc the interlocking undertakings on 23 May 1983. His Honour said, however, that most of the loss of advantage had been created by the commercial decision of Amatil over which the Commission and the Court had no control. His Honour said that APM would only be marginally better off in the market place if the proceeding were now dismissed and that was the best result to which APM would be entitled. Pr yo . 37. His Honour rejected the argument of APM that the other parties to the proceeding were, by seeking or supporting leave to discontinue, achieving indirectly the result that had thus far been denied by the Court namely, the release from the undertakings of 23 May 1983. The principles governing the approach to be taken on appeal from a discretionary order such as that involved here are well known and need not be elaborated: see House v. King (1936) 55 CLR 499, especially per Dixon, Evatt and McTiernan J.J. (at pp. 504-5); Lovell v. Lovell (1950) 81 CLR 515; Mace v. Murrary (1955) 92 CLR 370; and Adam P. Browm Male Fashions Pty. Limited v. Philip Morris Inc. (1981) 148 CLR 170. In my opinion, it has not heen established that the primary Judge erred in exercising his discretion or acted upon a wrong principle or allowed extraneous or irrelevant matters to affect his judgment or otherwise so acted as to lead this Court to intervene on appeal. It has not been demonstrated that the primary Judge fell into error which would lead this Court to substitute its discretion for that of Woodward J. In my opinion the order granting leave to discontinue and the acceptance of the Commission's undertaking does not in the circumstances result in a relevant injustice to APM. APM relied strongly on uts assertion that the - reer an ee ee ee ee 38. undertakings given to the Court on 23 May 1983 by the parties to VG 84 of 1983 and by SCI went beyond undertakings to the Court frequently given to avoid the necessity of a contested hearing for interlocutory injunctive relief pending the final hearing. It was asserted that they were interdependent undertakings which imposed an obligation upon the Commission to ensure that the question whether APM would contravene s. 50 if it were to acquire shares in FCL was heard and determined as a quid pro quo for the giving of mutual undertakings by APM and the other respondents to the proceeding and SCI. Reliance was placed upon certain observations of members of the Full Court, differently constituted, which heard another' appeal from a judgment of Woodward J., the judgment of the Fuil Court having been given on 21 September 1983. I asked counsel for APM ta refer the Court to the evidence'which supported this construction of the undertakings; but, although reference was made to certain evidence, none of it in my opinion supports the assertion. Wo obligation was imposed upon the Commission by the undertakings of 23 May 1983, or the circumstances in which they came to be given, to ensure that the issues in VG 84 of 1983 are heard-and determined by the Court, whether as a quid pro quo for APM and other respondents and SCI giving their undertakings or otherwise. There is no evidence to support the argument that the undertakings were to remain in existence necessarily until a trial of the issues. I am satisfied that when the undertakings were given they were a nn 39. simply intended to freeze the rival bidders (APM and SCI) from acquiring further shares in FCL until the final hearing of the proceeding or further order. APM cannot in my view obtain support for its construction of the undertakings from the judgments of the Full Court given on 21 September 1983. Those judgments must be read in their proper perspective. The matter being considered by their Honours was whether there should be a general release of the undertakings of 23 May, but on the basis that fresh undertakings were given which would, in effect, prevent APM from acquiring shares in FCL thus putting it at a substantial disadvantage to its rival bidder SCI. The hypothesis on which the Full Court's judgment proceeded was that VG 84 of 1983 was then continuing, a hypothesis which has now changed in view of the Commission's decision to discontinue the proceeding. The Commission commenced VG 84 of 1983 to restrain APM from acquiring further shares in FCL in contravention of s. 50. The circumstances changed thereafter when it became clear that Amatil would not sell their 74% shareholding in FCL to APM. It ig doubtless true to say that this. decision is not irrevocable. Indeed, there was no particular offer from APM before it when the Amatil resolution of October 1983 was passed. Whether the resolution is valid or enforceable is beside the point. But the Amatil resolution is cagent evidence of an attitude of Amatil, expressed as forcefully as one could imagine, that i1t will not 4g. treat with APM. It was not a decision of the Court, the Commission of anyone except Amatil. Although the litigation may have led or contributed to the making of the decision it is in truth a decision made outside the litigation by Amaril representing its assessment of APM as a potential buyer of Amatil's shares in FCL and reflecting Amatil's perception of APM's position under the Act. Any injustice which APM may suffer if the orders and undertakings stand is a consequence of APM's position in the paperboard market. APM relied strongly on the proposition that it was being deprived of benefits which it would receive if VG 84 of 1983 were dismissed either after a trial on the merits culminating in its favour or if the Commission called no evidence and in effect submitted to dismissal of the proceeding. The benefits were said to be first, that the Commission would thereafter be barred from suing APM again for injunctive relief under s. 80 for an alleged breach of s¢. 50 and second, the Commission would be barred from taking divestiture proceedings against it under s. 81 based on the breach of s. 50 alleged in VG 84 of 1983. There was considerable -argument before us on the doctrine of res judicata and estoppel. I do not find it necessary to consider these matters. It is true that the undertaking recognises that the Commission may after twelve months seek release from its undertaking not to institute fresh proceedings for injunctions to restrain APM from acquiring shares ", 41. in FCL but, if any such application were made, the Court would have the advantage of knowing and considering all the then relevant circumstances before deciding whether to take the serious step of releasing the Commission from its undertaking. I see no ground for complaint by APM against this. If APM were correct in its argument that a dismissal would be a bar to a subsequent action for divestiture it would be in my view a ground for preferring discontinuance to dismissal. APM should not gain immunity from a proceeding (for divestiture under s. 81) which would involve some issues never before in fact heard and determined and questions of public importance. The fundamental difference between s. 80 and s. 81 proceedings, based on a contravention of s. 50, is that in the former there has been no acquisition of shares and in the latter an acquisition has necessarily taken place. APM's submissions assume that if the Court was considering an application for dismissal of VG 84 of 1983 rather than for leave to discontinue it, the Court would simply either grant or dismiss the application. But Order 35 Sub-rule 6(1) is relevant. It provides:- "Where the Court makes an order for the dismissal of proceedings or for the dismissal of proceedings so far as concerns any cause of action or the whole or any part of any claim for relief, the Court may order that such . Gismissal shall be without prejudice to any right of the applicant or claimant to bring fresh proceedings or to claim the same relief in fresh proceedings." Oe ee ee er me me re ren re en ne ne ee ee ee a eee ' e 42. If the application here was for dismissal, not leave to discontinue, it would have been competent for the Court to dismiss the proceeding but preserve the Commission's right to bring fresh proceedings against APM pursuant tos. 680 for injunctive relief. Whether the Court would in fact exercise its discretion in this way is of course a different question and not one which I need consider. I prefer to express no view on whether the Court could invoke Order 35 Sub-Rule 6(1) to dismiss the proceedings but without prejudice to the right of the Commission to bring proceedings for divestiture under s. 8l. Finally, there remains the submission of counsel for VB that the undertakings given by the Commission to the Court on 22 December 1983 should not have been given or accepted because those undertakings are contrary to the Commission's duties and functions under the Act and constitute an improper fetter upon the exercise by the Commission of its discretionary powers and duties to enforce the Act. I have already considered the substance of these submissions when dealing with the appeal proceeding VG 303 of 1983 by VB against Woodward J's judgment Gismissing VB's application for an order of review of the Commission's decision to discontinue proceeding VG 84 of 1983, and need not deal with them further. I would dismiss this appeal. PROCEEDING NO. VG 249 OF 1983: APPEAL BY SCI FROM THE 43. JUDGMENT OF WOODWARD J. DISMISSING SCI'5 APPLICATION FOR THE RELEASE OF ALL PARTIES FROM THEIR UNDERTAKINGS GIVEN TO THE COURT ON 23 MAY 1983. In view of my conclusion that the lastmentioned appeal fails it is probably unnecessary, except on the question of costs, to consider this appeal because 1t is common ground that the discontinuance of VG 84 of 1983 would bring to an end the undertakings given to the Court on 23 May 1983. However, as the appeal was fully argued and the question of costs remains I shall proceed to consider this appeal part heard from 13 December 1983. The Commission adheres to its attitude expressed before the primary Judge that it concedes that this appeal should be allowed. FCL and Amatil also contend that the appeal should be allowed. APM opposes the appeal. In their reasons for judgment given on 21 September 1983 the Full Court of this court, differently constituted, in their separate reasons for judgment said, in effect, that although the original undertakings given on 23 May 1983 were to operate until the hearing of the proceeding or further order, they should only have been released if new and unforeseeable circumstances or substantial new considerations were shown to have arisen since they were accepted and if the interests of justice required their release. me mn erie ee te eee me ere «im ee cm ew wee eaae 44. The Full Court found that there was in fact no new and unforeseeable new circumstance or consideration and that the interests of justice strongly required the maintenance of the undertaking. Woodward J. in the judgment appealed from took the judgments of the Full Court as his starting point and said that he would reopen the matter if, and only if, substantial new considerations were shown to have emerged. All parties agreed that the primary Judge was correct in approaching the matter this way. His Honour considered whether there were sufficient new considerations to justify the fresh exercise of the Court's discretion and he concluded that there were no such considerations. It is necessary to assume that the undertakings given on 23 May 1983 were properly given and received. As the Full Court held on 21 September 1983 that the undertakings should not be released it must also be accepted that on 24 August 1983 (being the date of Woodward J's order, the subject of the appeal to the Full Court determined: on 21 September 1983) the then circumstances did not entitle the parties to an order releasing them from the undertakings. SCI submitted to his Honour that there were two new 45. circumstances which had arisen since the date of the Full Court's judgment. First, the proposal by APM to sell part of FCL's plant if it were successful in acquiring the shares in FCL so that it would retain no more than half of FCL's productive capacity, and the embodiment of that proposal in APM's amendment of its defence to the Commission's statement of claim in VG 84 of 1983. Second, the resolutions in October 1983 by the directors of the subsidiaries of Amatil that they would not sell their shares in FCL to APM or to any of its related corporations "at any time or in any circumstances or for any price". Turning first to APM's proposal to sell part of FCL's plant, his Honour considered the evidence relating to this question and made findings of fact on the basis of the evidence before him including the cross-examination of various deponents of affidavits. He did not accept the evidence of the managing director' of FCL and a director -of SCI to the effect that FCL would be likely to suffer grave and irreparable damage as a result of APM's proposal. His Honour said "However I am unable to-find that the risk of such damage to FCL has been so greatly increased by the announcement of the abortive proposal as to amount toa new circumstance which would justify me in releasing FCL from its undertakings." His Honour concluded that APM had reverted to its original position that if it acquired the shares in FCL it would et me ee rc eee ee er "-- --- - meee » 46, not dispose of any of FCL's plant. His Honour said that he did not believe that publication of APM's proposal would add significantly to the damage which would otherwise have been suffered by FCL arising from "the mere facts of conflicting takeover offers and a delayed outcome of that conflict". Accordingly, his Honour did not believe that he could consider the APM proposal as a new circumstance arising since the judgment of the Full Court. In my opinion it has not been shown that his Honour fell into error in his treatment of this first alleged new circumstance and the conclusions which he expressed with respect to it. The second matter relied upon by SCI in support of its application for a release of all parties from their undertakings was the Amatil resolution of October 1983 not to sell to APM. His Honour held that the resolution was genuine, but that nevertheless its purpose was to achieve a release of the undertakings. His Honour said that he did not believe that the resolution could be accepted without reservation in that it must be seen in the light of the purpose for which it was passed and the duties which must be observed by company directors. His Honour said:- "Company directors cannot bind themselves or their successors, merely by a resolution as to future intent, to a course of conduct which may, when the time comes, prove to be not in the best interests of shareholders." ee roe es tre ose - =e ye 47. His Honour characterised the October resolution of Amatil as a "hardening of Amatil's attitude to an APM bid (given that it arises solely from the circumstances of these proceedings)" and concluded that it did not represent such a new circumstance since the Full Court's judgement as justified his Honour in reopening the question of the undertakings. In August 1983, weil before the appeal to the Full Court which culminated in its judgment of 21 September 1983, Amatil's attitude was well known namely, that it would not deal with APM whilst the case was on foot and while some sort of cloud hung over APM. Although there may be some support for the view that the October resolution of Amatil was more than a mere hardening of attitude, JI do not think that it has been established that Woodward J. fell anto error in his analysis of the evidence relating to this resolution and the significance which he placed upon it. It must be remembered that his Honour approached the questions involved in this appeal on the footing that VG 84 of 1983 was proceeding in due course toa final hearing. There was no application by the Commission at that stage for leave to discontinue the proceeding. Yet the undertakings of May 1983 were given on the assumption that they would continue until the final hearing or further order. The fact that the October resolution of Amatil may have cast serious doubt on the reality of continuing VG 84 of 1983 was not regarded by his Honour as constituting a substantial departure from the circumstances that existed when the Full Court gave judgment in September 1983. In ce an ee \ 48. my opinion it was open to his Honour to reach the conclusions which he did about this resolution. His Honour's judgment should not be upset. I would dismiss this appeal. In my opinion no orders should be made now. The parties should have some time to consider the reasons for judgment of this Court and address further argument on any remaining questions including costs. I] certify tnat tus and the SORTT SEVEN preceding pors 2+ a in cory cf the Reasons fer voc ytton! hercaa cf tis Honour Mr Juctice Loce. +? IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY Net ee ee ee GENERAL DIVISION No. VG 249 of 1983 BETWEEN S.C.I. OPERATIONS PTY. LIMITED and ANOR. Appellants AND TRADE PRACTICES COMMISSION and ORS. Respondents No. VG 302 of 1983 BETWEEN VISY BOARD PTY. LIMITED Appellant AND THE HONOURABLE GARETH EVANS, THE ATTORNEY GENERAL OF THE COMMONWEALTH OF AUSTRALIA Respondent No. VG 303 of 1983 BETWEEN VISY BOARD PTY. LIMITED Appellant AND TRADE PRACTICES COMMISSION and ORS. Respondents No. VG 308 of 1983 BETWEEN A.P.M. INVESTMENTS PTY. LIMITED Appellant AND TRADE PRACTICES COMMISSION and ORS. Respondents CORAM: Sweeney, Lockhart and Sheppard JJ. REASONS FOR JUDGMENT SHEPPARD J. 15 March 1984 Introduction In these matters I have had the advantage of reading the judgment to be delivered by Sweeney J. I am thus saved the necessity of referring to the history and background of each of the appeals. I propose first of all to consider the appeal brought by A.P.M. Investments Pty. Limited ("A.P.M.") against the granting of leave to the Trade Practices Commission ("the Commission") to discontinue proceedings brought by it against A.P.M. to restrain threatened breaches of s.50 of the Trade Practices Act ("the Act"). I shall hereafter refer to that appeal as the A.P.M. appeal. I shall then turn to the appeal brought by Visy Board Pty. Limited ("Visy Board") against the dismissal of an application for the judicial review of the decision of the Commission to discontinue the proceedings. I shall refer to that appeal as the Visy Board appeal. WNext, I shall deal with the appeal brought by §.C.I. Operations Pty. Limited ("S.C.I.") and a related company against the refusal of Woodward J. to release the respondents in the application brought by the Commission against A.P.M. from undertakings given by them not to acquire or dispose of shares held by companies and persons on behalf of Amatil Limited ("Amatil") in Fibre Containers Limited ("F.C.L."). That appeal will be referred to as the S.C.I. appeal. Finally, I shall give my reasons for the decision that the appeal brought by Visy Board against the dismissal of an application made by it for the review of a decision of the Attorney-General not to institute proceedings against §.C.I. for a threatened breach of s.50 of the Act be dismissed. The A.P.M. Appeal Appearance of bias At the commencement of the hearing of this appeal senior counsel for A.P.M. made an application that the members of the Court disqualify themselves from hearing the A.P.M. appeal and also from continuing to hear the part-heard §.C.I. appeal. The ground of the application was said to be an appearance of bias on our part. The matters upon which counsel relied were statements made by the members of the Court on 13 December 1983 during the hearing of the §.C.I. appeal. It is to be emphasised that the application was based, not on actual bias, but, to use the words of the High Court in Livesey v. The N.S.W. Bar Association (1983) 57 A.L.J.R. 420,on the contention that words used by us on 13 December 1983 "created a situation in which a party (that is, A.P.M.) or a fair-minded observer might reasonably doubt that the question involved" in the appeal could be dealt with by us "without bias by reason of pre-judgment."(p.421) The Court said that the principle to be applied was that laid down in the majority judgment in Reg. v. Watson; Ex parte Armstrong (1976) 136 C.L.R. 248 at pp. 258-263. In Livesey's case the Court stated the principle thus (pp. 421-422): "That principle is that a judge should not sit to hear a case if in all the circumstances the parties or the public might entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in at. " The submission made on behalf of A.P.M. was not supported by any other party to the appeals. Counsel for all other parties to the A.P.M. and S.C.I. appeals opposed it. At the conclusion of the argument we rejected the submission and said we would publish our reasons for our decision in due course. What follows are my reasons for 1t. The submission requires some account of the proceedings before us on 13 December 1983. Senior counsel for $.C.I. opened the appeal by giving the Court an extensive account of the somewhat complicated history of the matter down to that time. The account included reference to the firmly expressed attitude of the Amatil interests that they would not sell to A.P.M. There followed discussion as to whether this made the proceedings futile or academic. This in turn ied to my raising the question of how the Amatil attitude could have legal effect; no suggestion was made then or later that it could. My thought in this regard was not original. It came from statements in the judgment under appeal which I had had the benefit of reading before the hearing of the appeal commenced. But that was only the starting point. What soon became clear was that the Commission, which 1s the first respondent to the S.C.I. appeal, did not oppose the application made by S.C.I. that all parties, including A.P.M., be released from the undertakings earlier given to the Court. That had been made clear to Woodward J. to whom senior counsel for the Commission had said: 5. "The Commission would consent to an order in the terms of paragraph 1 of the notice of motion, that is the paragraph to the effect that all undertakings be lifted. I say nothing as to the others at this stage because they ace consequential type of applications. But may I say this, your Honour, that whilst on the one hand the Commission expresses consent as to the general lifting of the freeze, as 1t has been termed, I desire to andicate that if the lifting of the undertakings were to result in the purchase of the shares - by A.P.M. companies - then the question of divestiture proceedings would be in issue. If A.P.M. were to acquire shares and perhaps to retain ali of the assets of F.C.L., then the Commission would seek divestiture." That attitude was maintained before us, counsel for the Commission saying that it would consent to the S.C.I. appeal being allowed. It was then pointed out to counsel for the various parties that the undertakings had been given at the behest of the Commission. I said, "If you (the Commission) do not want them, what are we doing here? Nobody else has an interest 1n them." The discussion then moved to the question of whether the Commission wished to Maintain its claim for final relief. The sole relief sought was a permanent injunction restraining A.P.M. from acquiring the shares held by the Amatil interests aun F.C.L. Counsel for the Commission was asked the purpose of the proceedings being continued. No satisfactory answer to this question was then given, and it was in this context that members of the Court made reference to the situation being Gilbertian or something from the works of Lewis Carroll. The fact was that the Commission no longer wanted the undertakings which had been given. This was no doubt because of the expressed attitude of the Amatil interests that under no circumstances would they sell to A.P.M. But the situation which led to the comments which came from the members of the Court was one in which the Commission was prepared to lose the benefit of the interlocutory restraints which 1t had obtained and yet wanted to keep the proceedings on foot. I emphasize that its only claim for relief was for a permanent injunction to restrain the acquisition of the F.C.L. shares by A.P.M. If the undertakings were released, the proceedings must have become academic or futile. Once they were released, a course which the Commission advocated, the parties were free to deal in the shares. The Amatil interests might maintain their expressed intention or they might not. If they did not and the shares were sold to A.P.M., proceedings for a final injunction were academic - the horse would have bolted. If, on the other hand, the shares were sold to §.C.I. or another party, or not sold at all, the proceedings would also be academic. To me, at any rate, there was a question as to whether they had not lost their purpose. The moving party, the Commission, did not want them any more. At this stage it should be said that the proceedings had commenced in May 1983. They had been the subject of extensive directions hearings. A number of interlocutory applications had been made, many or them disputed. There had been one earlier appeal to a Full Court in relation to the question of the release of undertakings. The proceedings involved three separate representations of respondents. Estimates of the length of the hearing were of the order of two to three months. The costs already incurred and to be incurred were substantial. The Court, whose list is becoming increasingly congested, was to be faced with the fixing of a hearing to last two to three months and the making available of a judge for this purpose. Thus the proceedings as a whole involved the expenditure of substantial time and money, a good deal of it public time and money. In my opinion it 1s not surprising that upon the basis of what we were told on 13 December 1983, the Court would make remarks designed to elicit what really was an issue in the case in an endeavour to find out if there really was any further purpose in the proceedings. I return to the course of the proceedings on 13 December 1983. Discussion took place as to the possible termination of the vroceedings. Our attention was drawn by senior counsel for the Amatil interests to a discussion which Woodward J. had had with senior counsel for the Commission on this matter. What counsel for the Commission said is lengthy but I feel it necessary to set it out in full in this judgment: "Your Honour, the proceedings are instituted on a particular basis, of course, and the Commission was obviously of the view that circumstances adequately justified the taking of that course and indeed in its view compelled the taking of that course, that is the 2znstitution of proceedings, A.P.M. having given its part A statement in relation to its deed of acquisition. The point that has arisen now, of course, 1s whether more recent circumstances have caused the proceedings with the Commission's application to be futile, initially A.P.M.'s actual amendment and subsequently the view that has been put so far by Mr. Becker (of Amatil). Your Honour, the Commission finds itself in a position where it would approach with enormous diffidence the proposal it should be the one to determine whether proceedings are futile. It has been reminded of something which in fact it was fully conscious of previously, that it 1s an ordinary litigant. It is not here or anywhere else to play God. That came out very clearly, from inference at least, from the judgment of the Full Court. The Commission was always conscious of that and 1s doubly so now. One of the difficulties it feels in the present situation is that if it were to discontinue proceedings then whatever it did would be to take a course which would be set to prejudice one party and if it did not discontinue that would be a course which prejudices other parties, as Mr. O'Callaghan (for S.C.I.) has indicated. It 1s perhaps something of a paradox that Mr. O'Callaghan has said that application should not be Gealt with and the Commission should deal with that decision. The view of the Commission is that the question of futility is something to be judged by the Court. The Commission can have its own views, whatever they may be, but its own views may well be wrong. If there were a decision by this Court arising out of the present application which indicated futility, well that of course is something which the Commission must then respond to. Indeed, if there are any indications by the Court in terrorem one way or the other the Commission would clearly have to give the most serious consideration to any such indications. That 1S not to say that the Commission wishes to avoid making a decision if one is called for but its position is that its overwhelming desire 1s to do what seems to be fair to all the interests that are involved. But within the context of the Main application, that 1s certainly 1f it ius taking the initial proceedings and certain things follow from that, and that Means inevitably the Commission 15 opposed to A.P.M. so long as A.P.M. proposes to proceed, but in that context wants to follow such course as is fair to A.P.M., as if fair to Smorgon (S.C.I.}), as is fair to F.C.L., it appears that is insoluble to them. If there were some indication from the Court as to what were thought to be the proper course for the Commission to take then the Commission would certainly welcome the opportunity to give consideration to any such indication." In our ooinion, counsel for the Amatil interests correctly summarised what counsel for the Commission 10. had said by saying that it amounted to the Commission leaving it to the Court to decide what to do. At that point, Sweeney J. said, "How can you leave it to the Court as to whether a party will move a motion for judgment?" In my opinion it must always be for a party to determine when and in what circumstances 1t will seek to bring latigation which it has instituted to an end. This was presumably the view of Woodward J. who declined to give the Commission any indication as to what it should do. Further discussions took place in which we were informed by counsel for the Amatil interests that there had been taken out a motion for judgment, the judgment being one which would be for an injunction permanently restraining the Amatil interests from selling their shares in F.C.L. to A.P.M. Some surprise was expressed by members of the Court at this suggestion. There was discussion as to whether there should be an adjournment to allow the parties to consult with one another. In the end the matter was not adjourned until the lunch hour was reached. During the lunch hour we were asked not to resume at the usual time. When the Court reassembled we were asked to adjourn the matter to enable an application to be made for the foreshadowed judgment and for leave to be given the Commission to 11. discontinue the proceedings against A.P.M. We acceded to this application. Before we did so we heard counsel for A.P.M. as fully as he desired to be heard on the whole matter. It was made clear to him that the Court had determined nothing and that all issues remained completely open. As I understood his primary submission it was, at least as originally put, that certain statements made by members of the Court and its attitude taken as a whole would lead a fair-minded observer to think that the Court had pre-judged the question of whether the proceedings had become academic or futile because of the expressed attitude of the Amatil interests that they would in no circumstances sell the shares to A.P.M. It was said that this was an issue in the appeal and a matter upon which the primary judge had expressed a conclusion. The matter upon which the primary judge expressed a conclusion was the ineffectiveness, from a legal point of view, of the various resolutions and statements made on behalf of the Amatil interests. It was really that matter, which counsel for A.P.M. asserted we had pre-judged. I have earlier referred to my own questions which demonstrated, I would have thought, that I could not see how what Amatil had said could be binding on ut. 12. But that is not all. Towards the close of the proceedings after we had been addressed by counsel for A.P.M. I said, "I would not have thought there wouid 22 much doubt his Honour's finding was right, but whether that 1s the end of it all, I do not know." After some further discussion between the Court and counsel for A.P.M., Sweeney J. said, "If it 1s of any assistance to you (counsel for A.P.M.), as at present advised I do not for a moment subscribe to the view that the offer was irrevocable. I simply have no view, I make no finding of any kind on it." Earlzer his Honour had said, "... we do not adopt any of what is put to us. We are simply asked to adjourn the hearing of the appeal. If we do so and if you are able to persuade a single judge that the motion should be denied ..., the appeal will come back to us." In our concluding remarks we made it clear that by adjourning the proceedings we were not to be taken as having formed any views as to the issues raised in the appeal. We said categorically that we had not formed any such views. In my opinion the submission that we had taken the view that the proceedings were futile because of the Amatil attitude is without foundation. To the extent that that view was expressed, it had nothing to 13. do with the resolutions passed by Amatil; 1t was because the Commission no longer wanted the inter- locutory relief but nevertheless wished to continue with proceedings in which it sought no more by way of final relief than a permanent injunction restraining the acquisition of the shares in F.C.L. I confess to having had difficulty in understanding any other basis for the submission that we should disqualify ourselves because of apparent bias. But as best I can follow it it was said that the fair-minded observer would know that the Commission, at the time the hearing of the §.C.I. appeal commenced, was minded to continue with the proceedings for an injunction. If he had read the transcript of the proceedings before the primary judge, he would also know that the Commission was hoping to obtain some 1ndication from the Court which would guide it in its future course of action. That was not something which the primary judge was prepared to give. In the submission of counsel for A.P.M. the Commission came away from the hearing on 13 December 1983 having made up its mind to bring the proceedings to an end. Therefore, so counsel submitted, the fair-minded observer would conclude that we had given the Commission an indication that if it wanted to discontinue the proceedings it would 14. probably be given leave to do so. We had therefore pre- judged or pre-determined, at least in the eyes of the fair-minded observer, the outcome of an application for leave to discontinue. I have read the transcript of what occurred on 13 December 1983 a number of times. With respect to the argument of counsel, I can find in it no more than firm statements by members of the Court which indicated to the Commission and to the other parties that 1£ the proceedings were indeed academic they should be brought to an end. Whether they were academic or not was not a matter for the Court; it was a matter for the applicant Commission to determine for itself. So much was indicated by myself when I observed after reading the statement of counsel for the Commission that the view of the Commission was something to be judged by the Court, "On what evidence? The Court cannot lead evidence itself." The reality of the matter was that the discussion which took place on 13 December 1983 crystallised the problem for the Commission in a way in which it had not been crystallised before. In essence it was forced to come to terms with reality. It was reminded of the continuing cost of the litigation, the possible wasteful expenditure of public time and money and the general desirability of bringing litigation which has no purpose to an end. Those being the circumstances, what all members of the Court were concerned 15. to do was to emphasize to the parties, especially the Commission, that it was for them to take such steps as were appropriate to bring the litigation to an end if they were themselves of the view that it had no purpose. When the matter was adjourned there was no intention to seek leave to discontinue without more. What was to be attempted was the obtaining of a judgment which would irrevocably bind the Amatil interests not to sell the shares to A.P.M. The fact that we had misgivings about such a course was not to the point. It was for the parties to make such application to a single judge as they thought fit. The application which was eventually made to Woodward J., and which has become the subject of the A.P.M. appeal, was different from any foreshadowed on 13 December 1983. That circumstance was of course by no means conclusive of the outcome of the application that we disqualify ourselves. But it served to show in what an open state the matter was when we adjourned and now inconclusively all had been left at that time. A matter relied upon by counsel for A.P.M. was a remark made by me in the course of the argument of the Visy Board appeal. I said: "I had the distinct impression, it seemed they (the Commission) were washing their hands of 1t. I could not understand this when I found out Mr. Williamson had previously said that he wanted to discontinue, but he was troubled about what had been said by the other Full Court in the judgment. I think the discussion then began in earnest. It might not be unfair to say that he and his client were placed under a certain amount of pressure. I may be wrong." 16. I reject the submission that the statements there made are capable of indicating to a fair-minded observer an appearance of having predetermined the outcome of the Commission's application for leave to discontinue. What I was referring to was the fact that the Commission, on 13 December 1983, was made tc realise that it had to act without a nod from the Court and to take the responsibility for what it had done and what was involved in terminating the proceedings. it seemed to me, when I read what its counsel had said to Woodward J., that it wanted to stand on the sidelines. It wished to be seen to be fair to all the parties and to be able to leave it to the Court to tell at what it should do. What occurred on 13 December 1983 made it realise that it was not a matter for the Court but a Matter entirely for the Commission itself. Really, counsel for the Commission had no justification for endeavouring, as he appears to me to have done, to implicate the Court in the ultimate decision which was to be made. If, as I believe was the case, he attempted to do this and was wrong in so doing, it cannot be the proper basis for an application of this kind to say that judges should disqualify themselves because they made 1t clear that the Commission must face up to its own problems. That was the pressure which was put upon the Commission and to which I refer in the above quoted remark. For the above reasons I reached the conclusion that the members of the Court were not disqualified from hearing 17. the A.P.M. appeal or from continuing with the hearing of the S.C.I. appeal. In conclusion on this point I should say that I have endeavoured to understand and give the fullest weight to the submissions which were made on behalf of A.P.M. I have no reason to doubt that they were made in good faith and after due reflection. I am also conscious that a submission of this kind places judges in a difficult position. In a sense they become judges in their own cause. They may be inclined to give their own words a beneficial reading or a reading which they know their words were intended to have. But the question must always remain an objective one. It is one of appearances. As best one can one has to place oneself in the shoes of a fair-minded observer who stands apart from the proceedings. The exercise is not an easy one and I hope I am conscious of this. But having endeavoured to perform 1t to the best of my ability, I feel bound to say that I have not been able to perceive any justification for the submission which was made. Those being my reasons for the decision that the members of the Court were not disqualified, it is now appropriate to come to the substance of A.P.M.'s appeal against the grant by his Honour of leave to discontinue. 18. A.P.M.'s Case Fundamentally the case which A.P.M. makes is that it is manifestly unjust to give the Commission leave to discontinue unless it gives up not only any right to bring further proceedings for an injunction, but any right to bring proceedings, in the event of the acquisition taking place, for an order of divestiture or for a penalty. A.P.M. should be free to enter the market without the taint of possible further Commission action against it attending it. Primarily it seeks dismissal but it would accept discontinuance if conditions were imposed preventing the bringing, not only of injunction proceedings, but of the other proceedings which I have mentioned. The main reasons why A.P.M. seeks to achieve this position are as follows:- (1) It has always contended that its acquisition of the shares will not involve it in a breach of s.50 of the Act. (2) Prior to the Commission's action commencing, the Amatil interests were prepared to sell their shares to A.P.M., 1t being the highest bidder. If the Commission had not intervened the transaction would have been completed. (3) A.P.M. believes that the reason why the Amatil interests have resolved not to deal with A.P.M. is partly at least because of possible future Commission action, particularly in the form of an 19. (4) (5) (6) (7) action for divestiture. In A.P.M.'s submission the evidence amply supports its beliez. If the threat of any further proceedings by the Commission is removed, A.P.M. has, as it sees the position, a greater chance of persuading the Amatil Board to resile from its firm statement that it will not deal with A.P.M. under any circumstances. In other words, its chances of persuading the Amatil Board to change its mind are substantially reduced if the Commission may bring a further proceeding for an order for divestiture 1f the acquisition takes place. The determination of the proceedings by discontinuance has, in a practical way, deprived A.P.M. of the opportunity of having it established that its proposed acquisition would not be in breach of s. 50. A.P.M. nevertheless recognises that the Commission may bring the proceedings to an end. But in its submission it should only be permitted to do so by causing them to be dismissed. In that way, so it is submitted, an 1ssue will be established which will prevent the Commission bringing any further proceedings for divestiture, penalty or any other relief. If leave to discontinue is granted, it 20. should only be given on terms that the Commission 1s forever prevented from bringing any action, whether for injunction, divestiture, penalty, or otherwise, in respect of the proposed acquisition. Only in that way can justice be done to A.P.M. In short, 1t 18 A.P.M.'s contention that manifest injustice will be caused to it unless the proceedings are brought to an end in such a way as to make 1t impossible for the Commission ever to bring proceedings against it again in respect of the acquisition of the shares. Estoppel Much of the argument concerned the question of whether, in the event of the action being dismissed, the Commission would be barred in a later proceeding from contending that acquisition of the shares held by Amatil in F.C.L. by A.P.M. would constitute a breach of s. 50 of the Act. In the submission of senior counsel for A.P.M. the Commission would be so barred. His primary submission was that the bar would arise by reason of the doctrine of res judicata or cause of action estoppel as 1t has been described in a number of recent authorities; see, inter alia, Thoday v. Thoday [1964] P. 181 per Diplock L.J. (as he was) at p. 197; Carl Zeiss Stiftung v. Rayner & Keeler Limited [1967] 1 A.C. 853, amongst other places, per Lord Reid at pp. 912-913 and per Lord Wilberforce at p. 966. Counsel's secondary submission was that there would arise an issue estoppel. in his reply he contended that it was of no consequence whether dismissal involved res judicata or issue estoppel; the position was the same in either case. Any further action by the Commission against A.P.M. in respect of the acquisition of the shares, whether proposed or actual, would be barred. In the submissions of counsel for the various respondents, no bar was created. There was no room for the operation of cause of action estoppel and there would be no issue estoppel. In the view that I take of the matter it may not be strictly necessary to reach a conclusion upon which of these competing contentions is correct. However, I think the better view is that, unless one does attempt to resolve the question which they raise for decision, one may not properly assess the strength or weakness of the overriding submission made on behalf of A.P.M. that the granting of the application in question by the learned primary judge worked a manifest injustice on his client. But I emphasise my use of the expression, "attempt to resolve." In my view the law in relation particularly to issue estoppel is not settled. to NO The starting point for the analysis and resolution of the competing contentions is to identify the cause of action which the Commission has relied upon in the principal proceedings. Its action 1s pursuant to s. 380 of the Act to restrain A.P.M. from engaging in conduct, which 1= carried through, would constitute a contra- vention of s. 50. In particular the injunction which the Commission would seek if the proceedings were to continue would be one which would restrain A.P.M. from attempting to contravene s. 50, from aiding, abetting, counselling or procuring a person or persons to contravene s. 50, and from inducing, or attempting to induce a person or persons to contravene s. 50. It is only where a person is engaging in conduct of this kind that, for relevant purposes, the Court has jurisdiction to grant an injunction. From this it follows, in my opinion, that the cause of action which the Commission has is a cause of action for an injunction to restrain A.P.M. from, to use a compendious expression, engaging in conduct that would constitute a breach of s. 50 1f it resulted in the acquisition of the shares. The relief sought is an essential part of the cause of action. It is only if 23. the conduct amounts to an attempt, to aiding and abetting or to an inducement that the Court will have jurisdiction to grant the injunction. The analogous position in the common law 1s a case where damage 1s the gist of the action. An essential element in a cause of action for negligence is proof of actual damage. If that is not alleged and proved, there is no cause of action; Fleming on Torts, 5th Ed., p. 104. It follows that in an action for divestiture pursuant to s. 81 of the Act a different cause of action 1s involved. The Court has jurisdiction to make an order of divestiture where there has been a breach of s. 50. Threatened breaches are of no consequence obviously because there can have been no transfer of the shares or assets. I am therefore of the opinion that there is no room here for the operation of res judicata or cause of action estoppel; if there is a bar 1t must arise by reason of issue estoppel. Plainly enough, if the Commission proceeded and, after a hearing on the merits, lost on the question of whether by acquiring the shares A.P.M. would be in breach of s. 50, an issue would be established with the result that an action under s. 81, once the acquisition had taken place, would be barred because the issue of whether the acquisition would infringe s. 50 had been determined ty ~ adversely to the Commission in the earlier proceedings; see Blair v. Curran (1939) 62 C.L.R. 464 per Dixon J. (as he was) at pp. 531-2; Thoday v. Thoday (supra at p. 198); Spencer Bower and Turner, Res Judicata, 2nd Ed., p. 150. But what is the position where there 1s no determination on the merits but the proceedings are simply dismissed perhaps after the Commission has said to the Court that 1t proposes to offer no evidence. If upon a reading of the pleadings and any other relevant material, it 1s perceived that there are a multiplicity of issues between the parties there will not be any issue estoppel because 1t is impossible to say upon what grounds the proceedings were dismissed. To say that they should be treated as having been resolved against an applicant or plaintiff on every issue is not correct. To take that view would be to equate issue estoppel with cause of action estoppel. The two are distinct; see, for example, the judgment of Fullagar J. in Jackson v. Goldsmith (1950) 81 C.L.R. 446 at p. 466. His Honour's judgment was a dissenting one but his treatment of the law on the subject was unquestionably correct; see Spencer Bower and Turner (ibid. at p. 150). Counsel for A.P.M. acknowledged this to be the law, but claimed that where there was only one issue in question between parties to a proceeding the result was different. Then it could be seen that the dismissal, although no 25. hearing had taken place, did involve the determination as between the parties of that issue. Counsel for A.P.M. contended that an analysis of the pleadings led to tne sonciusion that, notwithstanding tne complexity of this case, there was only one issue, namely, whether the acquisztion of the shares py A.P.M. vould involve it in a contravention of s. 50. It was for that reason that in his submissions in reply he equated, for the purpose of this case, res judicata and issue estoppel. For his case, it did not matter which was the applicable doctrine. The essential paragraphs of the amended Statement of Claim are paragraphs 17 and 18. These are as follows:- "17. The firstnamed Respondent proposes to acquire all the issued shares in the capital of Fibre Containers. 18. The acquisition of all the issued shares in the capital of Fibre Containers by the firstnamed Respondent would, or would be likely to, substantially strengthen the power of the firstnamed Respondent to control or dominate the paperboard market in contravention of section 50(1) (b) of the Act." In its amended defence, A.P.M. has pleaded to those two paragraphs as follows:- "17. It admits that it proposes to make offers to the shareholders of Fibre Containers Limited to acquire their shares in that company on the terms set forth in a Part A Statement approved by the National Companies and Securities Commission on 4th May 1983. Save as aforesaid it does not admit paragraph 17 thereof. 26. 18. It denies each and every allegation contained in paragraph 18 thereof." Although paragraph 17 of the defence at first sight might be thought to make a qualified answer in relation to the allegation made in paragraph 17 of the amended Statement of Claim, there can be no question but that A.P.M. does intend to endeavour to acquire the shares in F.C.L. The qualification which is made seems to me to have been made only to make it clear that A.P.M. intends only to act in accordance with the various provisions of the companies legislation. In other words, 1t will only acquire the shares 1f it can acquire them according to law. For that reason there 1s no issue concerning its intention to acquire the shares. It must follow that the only issue is whether the acquisition, 1f carried through, will constitute a breach of s. 50. The question then is whether dismissal without a hearing on the merits can, in these circumstances, lead to an issue estoppel effectively barring the Commission from bringing further proceedings. We were not referred to any authority which 1s directly in point. In support of his submission counsel for A.P.M. relied on Lockyer v. Ferryman L.R. (1877) 2 App. Cas. 519 and South American and Mexican Company, Ex parte Bank of England [1895] 1 Ch. 37. But those are authorities which are concerned with res judicata, not issue estoppel. The same may be said of a passage cited from Daniell's Chancery Practice, 7th Ed., at p. 628; 8th Ed. at p. 686. The authorities relied upon by counsel for the Commission do not go to the particular point relied upon by counsel for A.P.M. They are no more than statements of the principle or instances of its application unhelpful to the resolution of the present problem. It is necessary only to note them. They were Reg. v. Haughton Inhabitants (1853) 1 E. & D. 501; 118 E.R. 523; Reg. v. Hutchings L.R. (1881) 6 Q.B.D. 300; North Eastern Railway Company v. Dalton Overseers [1898] 2 Q.B. 66; James v. The Commonwealth (1935) 52 C.L.R. 570 at pp. 584 and 590-591; and Penn - Texas Corporation v. Murat Anstalt (No. 2) [1964] 2 Q.B. 647. Reference was also made to Spencer Bower and Turner {1bid. at p. 152). Some support for the proposition advanced by counsel for A.P.M. may perhaps be found in the judgment of Diplock L.J. in Thoday (supra at p. 198). His Lordship there said:- "If un litigation upon one such cause of action any of such separate issues as to whether a particular condition has been fulfilled is determined by a court of competent jurisdiction, either upon evidence or upon admission by a party to the litagation, neither party can, in subsequent litigation between one another upon any cause of action which depends upon the fulfilment of the identical 28. condition, assert that the condition was fulfilled if the court has in the first litigation determined that it was not, or in it It is his deny that it was fulfilled 1f the court the first litigation determined that was." Lordship's use of the words "upon admission" which leads me to say what I have. On the other hand, I would hesitate before concluding that his Lordship intended to treat dismissal of a proceeding on the application of the moving party as necessarily involving the admission by that party of facts or matters pleaded, even by way of denial, by his opponent. In Carl Zeiss Stiftung (supra) Lord Reid discussed a number of the authorities concerning issue estoppel (pp. 913-916). Amongst other things his Lordship said (pp. 915-916) :- "A case which has given rise to some difficulties is Hoystead v. Commissioner of Taxation [1926] A.C. 155. There an appeal with regard to income tax for an earlier year had been decided on an assumption that certain beneficiaries under a will were joint owners. Then in a case as to liability to tax ina later year the commissioner tried to maintain that that assumption had been wrong but he was held to be estopped. Lord Shaw un delivering the judgment of the board, after citing numerous authorities, including the judgment of Lord Ellenborough C.J. in Outram v. Morewood, 3 East 346, said [1926] A.C. 155 at p. 170: 'It is seen from this citation of authority that if 1n any court of competent jurisdiction a decision 1s reached, a party 1s estopped from questioning it in a new legal proceeding. But the principle also extends to any point, whether of assumption or admission, which was in substance the ratio of and fundamental co the decision.' 29. Comments were made on that passage in New Brunswick Railway Co. v. British and French Trust Corporation Ltd. [1939] A.c. 1 by Lord Russell (at p. 28) and Lord Romer (at p. 42) and in Society of Medical Officers of Health v. Hope [1960] A.C. 551 at p. 566 by Lord Radcliffe. And there may well be a difference between a case where an issue was in fact decided in the earlier case and a case where 1t was not in fact decided because the earlier judgment went by default or was founded on an assumption. Indeed, I think that some confusion has been introduced by applying to issue estoppel without modification rules which have been evolved to deal with cause of action estoppel, such as the oft-quoted passage from the judgment of Wigram V.-C. in Henderson v. Henderson (1843) 3 Hare 100. But it is unnecessary to pursue that matter because in the present case the issues with regard to which the respondents plead estoppel were fully litigated in the West German court." In the context of the case before him his Lordship went on to discuss the matter of issue estoppel, pp. 916 et seq. Amongst other things he said (p. 917), "It seems to me that there is room for a good deal more thought before we settle the limits of issue estoppel." In the course of his speech Lord Guest said (p. 934), "The law on the matter 1S not altogether clear, but I am prepared to assume that, at any rate in relation to estoppel founded on an English judgment there may be issue estoppel." Lord Upjohn said (p. 947):- "Recently in Thoday v. Thoday [1964] P. 181 and in Fidelitas Snipping Co. Ltd. v. V.O. Exportchleb [1966] 1 0.B. 630 the Court of Appeal applied to issue estoppel the full breadth of the observations of Wigram V.-C. in Henderson v. Henderson 3 Hare 100. While 30. un this case it is not necessary to decide whether that is right, because for the reasons given in the answer to the first question that I posed for myself it does not arise, I should be reluctant to support that view. As my noble and learned friend, Lord Reid, has already pointed out there may be many reasons why a litigant in the earlier litigation has not pressed or may even for good reason have abandoned a particular issue. It may be most unjust to hold him precluded from raising that issue in subsequent litigation and see Lord Maugham's observations in the New Brunswick case [1939] A.C. 1 at p. 21. All estoppels are not odious but must be applied so as to work justice and not injustice and I think the principle of issue estoppel must be applied to the circumstances of the subsequent case with this overriding consideration in mind." The dicta to which I have referred show that the doctrine of issue estoppel was in some respects in an uncertain state in England in 1966. I have read a great many authorities, some referred to in argument and some not, decided after 1966 in which the doctrine is stated or applied. These include Ramsay v. Pigram (1968) 118 C.L.R. 271 and Co-Ownership Land Development Pty. Limited v. Queensland Estates Pty. Lamited (1973) 47 A.L.J.R. 519 per Walsh J. at p. 522. But none of these cases touch the present problem. In the light of the reservations expressed by the members of The House of Lords in Carl Zeiss Stiftung, 1t would seem to me ——————— unsafe to draw upon what Diplock L.J. said in Thoday as sufficient authority for the proposition advanced by counsel for A.P.M. Furthermore, in the absence, so far as I am aware, of any later relevant authority I would be reluctant myself to conclude that the 31. proposition was sound. Nevertheless I do not gaansay that it may not ultimately prove to be correct. But I think it must be said that 1f one gives to the A.P.M. case the fullest weight which can be given it, the judgment of Woodward J. did no more than deprive it of a chance of persuading an appropriate court, in the event of further proceedings based on a breach of s. 50 of the Act, that those proceedings were barred by the doctrine of issue estoppel. There are some other matters which should be mentioned. The Commission is the Crown; Thomson v. The Trade Practices Commission (1979) 27 A.L.R. 551 at p. 567; Allied Mills Industries Pty. Limited v. The Trade Practices Commission (1981) 34 A.L.R. 105 at pp. 116-118. At least in England there apparently exists a doubt as to whether assue estoppel can operate against the Crown. So much was stated by a Divisional Court as recently as last year; see Reg. v. Secretary of State for the Environment, Ex parte Hackney London Borough Council [1983] 3 All E.R. 358 per May L.J. (in whose judgment McNeill J. agreed (p. 359)) at p.367. There 1s a question as to whether his Lordship was referring only to criminal cases. I refer to Director of Public Prosecutions v. Humphrys [1977] A.c. 1. I do not pause to express a view on the matter. It is sufficient to say that what has been said in that case throws further doubt on the question of whether the doctrine can apply 32. here. Another matter 1s the question of public policy. It may be that the public interest 1s such as to require that the doctrine have no place in relation to proceedings brought by the Trade Practices Commission for threatened or actual infringements of the Act. Again, I express no view but I refer in passing to Law Society of New South Wales v. Weaver (1977] 1 N.S.W.L.R. 67 at pp. 73-74; cf. Kok Hoong v. Leong Cheong Kweng Mines Limited [1964] A.C. 993 at p. 1016. Finally, on this topic I wish to say that it seems to me that there may be a question as to whether the doctrine of issue estoppel fits easily into a statutory cause of action such as that relied upon by the Commission in the present case. There may be many reasons why one would hold that in relation to such cause of action the doctrine had no place. Again, I express no view. Discontinuance or dismissal The primary submission of counsel for A.P.M. was that, 1£ the Commission wished to bring the proceedings to an end, 1t should seek their dismissal. Huis secondary submission was that 1f leave to discontinue was to be granted, 1t should only be granted on terms that no further proceedings of any kind, that is, for an 1unjunction, divestiture or penalty, should be available to the Commission. He sought dismissal 33. because of his submission that the Commission would be estopped from bringing further proceedings. My analysis of the implications of that submission shows, in my opinion, that it is doubtful to say the least, whether, in the event of dismissal prior toa hearing, any further proceedings by the Commission except proceedings for an injunction (in respect of which there may arise a cause of action estoppel) would be barred. But I do not go so far as to say that that is clearly so. Those responsible for the drafting of the rules of this Court foresaw the need for the Court to say in an appropriate case what right a party seeking dismissal or leave to discontinue before a hearing on the merits should have to bring further proceedings for the same cause of action. So much is provided for in relation to dismissal in Order 35, Rule 6(1) which is as follows:- "Where the Court makes an order for the dismissal of proceedings or for the dismissal of proceedings so far as concerns any cause of action or the whole or any part of any claim for relief, the Court may order that such dismissal shall be without prejudice to any right of the applicant or claimant to bring fresh proceedings or to claim the same relief in fresh proceedings." It 1s to be observed in passing that the rule does not apply to cases which have been the subject of a hearing on the merits; see Newmont Pty. Limited v. Laverton Nickel NL (No. 2) [1981] 1 N.S.W.L.R. 221, 34. a decision on the comparable, although somewhat different rule of the Supreme Court of New South Wales (Part 40, Rule 8). Some reliance was placed upon that case by counsel for A.P.M. But in my opinion its only effect 1s to emphasise that the purpose of the rule is to empower the Court to say in advance what further proceedings based on the same cause of action a party should be entitled to bring in the event that his proceedings are dismissed before a hearing on the merits. Order 22 of the rules of this Court provides for withdrawal and discontinuance. The provision pursuant to which the Commission's application here was made was Order 22, Rule 2(1)(d). The leave of the Court is required. Order 22, Rule 7 provides:- "A discontinuance under this Order as to any cause of action shall not, subject to the terms of any leave to discontinue, be a defence to a proceeding for the same, or substantially the same, cause of action." The wording of this rule differs from that of Order 35, Rule 6 1n that it refers to "a proceeding for the same, or substantially the same, cause of action." Order 35, Rule 6(1) uses the words, "so far as concerns any cause of action or the whole or any part of any claim for relief." But what both probisions may be said to do is to concentrate 35. attention on the cause of action upon which the proceedings proposed to be dismissed or dis- continued are based. It does not seem that the draftsman was concerned with problems which might arise in the future because the termination of the proceedings before hearing might create in favour of a respondent an issue estoppel. That may have been because the draftsman thought that there could be no question of an issue estoppel unless there had been a hearing on the merits, or 1t may be that his attention was not drawn to the problem. It 1s of no consequence which 1s the position. I have embarked upon this discussion to provide a background for what I next say. It is,in my opinion, highly undesirable for courts in this day and age to leave parties to litigation which is to be terminated before a hearing in an uncertain state as to what further litigation concerning the same subject matter may be brought by one or the other in the future. Whether the Court is concerned with dismissal before a hearing on the merits or leave to discontinue, the rules direct its attention, and also that of the parties, to what 1s to be the future position in 36. relation to further reliance on the same cause of action. Thus the Court 1s empowered, in effect, to say whether there is to be cause of action estoppel or not. The fact that there is uncertainty concerning the creation of an issue estoppel where proceedings are dismissed seems to me to make 1t highly desirable for the Court to provide, if it is able to do so, for whether any issue estoppel is to exist or not. It cannot do so directly and, in relation to dismissal, the provisions of Order 35, Rule 6 are probably such as to prevent it doing so at all. But ifa party, as has the Commission here, has made an application for leave to discontinue, then it seems to me that the Court in deciding whether to grant leave and, 1£ so, upon what terms that leave should be granted, has a wide discretion to do justice between the parties. Why A.P.M. seeks to force the Commission to bring about dismissal of the proceedings here is because it believes it will then be impossible for the Commission ever to proceed against it again, whether for injunction, divestiture or penalty, insofar as the relevant acquisition of shares is concerned. That will be so in its contention because of the operation of the doctrine of cause of action estoppel or because 37. of the creation of an 1ssue estoppel. But if, as I have concluded it is, A.P.M. 18 wrong in its submission based on cause of action estoppel, and wrong also, as I have concluded it may well be, in 1ts submission based on issue estoppel, dismissal will not achieve it as much as would discontinuance on all the terms which it seeks to have iamposed. Indeed, it 1s not impossible that it may be in a,worse position 1f the circumstances were to change. It may be, in the event that there were a bare dismissal, that not even an action for further injunctive relief would be barred by cause of action estoppel. Depending on what changes an the future come about, the Commission might be entitled to institute further proceedings for an injunction, a course denied to it by the order under appeal. I have said what I have in order to emphasise that both principal parties to this litigation will be left in an uncertain state if the Court does not, so far as it can, provide for what the position is to be in relation to further proceedings. It is only in this way that justice to both parties will 38. be done. In an application for leave to discontinue the Court's discretion is at large; the specific words of Order 22, Rule 7 do not, in my opinion, restrict 1t. The Court is able to impose terms which are just, a course which it may not be able to take if it is dismissal which is sought. If a party seeks to discontinue proceedings, a court should, in my opinion, lean towards giving him leave unless to do so will cause manifest injustice to his opponent. That 1s a matter with which I shall next deal. But the starting point for the discussion of it is the court's greater ability to do justice to both parties if the central question is upon what terms leave to dis- continue should be granted. It is for that reason that I think that the real question which arises for consideration in this appeal 1s upon what terms the Commission should be permitted to discontinue the proceedings, not whether leave to discontinue should have been granted at all. 39. The preservation of the action for divestiture and for a penalty. The essential problem then is what restrictions, if any, should be placed upon the Commission's ability to bring further proceedings in respect of the same acquisition or proposed acquisition. Since we sit on an appeal against the exercise of a discretion, the question for us 1S somewhat different from what it was for his Honour. The direct question which we must answer 1s whether his Honour's discretion miscarried. It will not be shown to have done so unless it be demonstrated that he has acted upon a wrong principle, has allowed irrelevant matters to guide or affect him, has mistaken the facts or has not taken into account some material consideration. His discretion will also have miscarried 1f the result which has been reached is unreasonable or plainly unjust; see House v. The King (1936) 55 C.L.R. 499 at p. 505 and Adam P. Brown Male Fashions Pty. Limited v. Philip Morris Inc. (1981) 148 C.L.R. 170 at p. 176. So, subject to the question of whether 1t was appropriate to accept the undertaking by the Commission that 1t would not again institute proceedings for an injunction, the question 1s whether it was wrong to grant leave to discontinue unless 40. actions for divestiture and a penalty, as well as a further action for injunction, were given up. Because the exercise of a discretion may miscarry 1f the result leads to manifest injustice, I do not feel it desirable in this case to attempt to draw fine lines between appeals against the exercise of a discretion and appeals of other kinds. I think it 1s better to see whether what has been done is in accordance with the dictates of justice. If it is not, a further question may arise as to whether the Court ought nevertheless not to interfere. The starting point for the resolution of the problem is the wish of the Commission, firmly expressed by counsel to Woodward J., to bring the proceedings to an end. Amongst other things counsel said:- "In theory, of course, as has been said on a number of occasions and must be right, that subject to an order of the Court, in theory 1t must be open to the directors to change their mind, but having regard to the events which I have described, and most especially the events of this week, the steps taken to provide F.C.L. and Amatil before the Full Court, both in relation to the motions which itself offered and the way in which it was put alternatively, or made by the Commission to move of its own motion to the same effect, the Trade Practices Commission accepts that as a matter of commercial reality - and we submit to your Honour that as a matter of commercial reality Amatil will not sell its F.C.L. shares to A.P.M. to take further proceedings against A.P.M. said:- We are content to leave the situation where A.P.M. would be free to bid for the shares if it chose to do so, but the Commission takes that view in the firm belief that the commercial realities are otherwise. If A.P.M. can persuade the commercial participants otherwise then they will have that opportunity. I speak, of course, in the context of the existing proceedings which are for injunction to restrain A.P.M. from doing that. The point 1s that we seek discontinuance because of the assessment that has been made of the commercial realities and that is that the shares will not be sold to A.P.M. i he said in his reply:- "The Commission would not resist a term that no action for an injunction be brought with respect to the acquisition of the shares by A.P.M.; an other words if one takes the substance of that - and we are not seeking At that stage of the proceedings counsel did not offer any undertaking on behalf of the Commission not But having heard what its counsel had to say as to the terms upon which the Commission should be allowed to discontinue, to put it in any way that it should be taken as a turn about - what we say is that the Commission would accept the term which would have the effect. It would not come back to the Court seeking injunctive relief of the sort to which the discontinuance relates." Commission offered. In the course of his judgment 42. Woodward J. gave effect to what counsel for the he "When the rights of the T.P.C. on an application for discontinuance are thrown into the existing discretionary balance, I am satisfied that the application should be granted, on terms that T.P.C. pay A.P.M.'s taxed costs and undertakes not to institute any further proceedings for injunctions, or otherwise seek, to prevent the purchase of shares in F.C.L. by A.P.M. The words 'or otherwise seek' are within the spirit, though not the words, of the undertaking offered by T.P.C. I thank some such addition is necessary. Such an undertaking would not prevent a later application for divestiture if T.P.C. saw fat to bring it." The question is whether his Honour should have imposed the additional condition sought by A.P.M. In support of his submissions, its counsel relied strongly on what was said by Graham J. in Covell Matthews & Partners v. French Wools Limited [1977] 1 W.L.R. 876. His Lordship said {p. 879):- "The principles to be culled from these cases are, in my Judgment, that the court will, normally, at any rate, allow a plaintiff to discontinue if he wants to, provided no injustice will be caused to the defendant. It 1s not desirable that a plaintiff should be compelled to litigate against his will. The court should therefore grant leave, if 1t can, without anjustice to the defendant, but in doing so should be careful to see that the defendant 1s not deprived of some advantage which he has already gained in the litigation and should be ready to grant him adequate protection to ensure that any advantage he has gained is preserved." I shall mention the cases relied upon by his Lordship 43. for what he there said a lattle later. The dictum of Graham J. which I have cited was adopted and applied by Whitford J. in Young, Austen & Young Limited v. British Medical Association [1977] 1 W.L.R. 881 at p. 886. Covell Matthews itself went on appeal of the Court of Appeal ([1978] 1 W.L.R. 1477). The appeal was dismissed. There was no dissent from what Graham J. had said in the passage quoted from his judgment. The English rule with which Graham J. was concerned is Order 21, Rule 3. It 1s in somewhat different terms from the corresponding rule here under consideration, Order 22, Rule 2, but nothing turns on the differences which there are between the two provisions. I am content to adopt what Graham J. said in Covell Matthews as providing a general indication of the way in which the Court should approach an application for leave to discontinue. But I do so on the clear understanding that it provides a guide only. The discretion to grant leave 1s a wide one. A dictum such as that propounded by Graham J. should not be allowed to so fetter the discretion which the rule confers that it replaces the rule itself. With respect to counsel for A.P.M.,I think he endeavoured to take too much from what Graham J. said. He seemed to assert 44, that it warranted the view that leave to discontinue would never be granted unless justice in absolute terms was done to the party opposing the application. I do not take that to be what Graham J. meant to say. His use of the words, "1f 1t can" makes that clear. If, contrary to that view, Graham J. was intending to lay down some absolute rule I would respectfully agree with Woodward J. that the dictum goes too far. The other matter in what Graham J. said upon whach counsel placed strong reliance was his Lordship's reference to the court needing to be careful to see that a defendant 1s not deprived of some advantage which he has already gained in the litigation. One has to understand that statement in the light of the authorities to which Graham J. referred (supra at p.879) and from which his dictum was distilled. Those authorities were Stahlschmidt v. Walford (1879) 4 Q.B.D. 217; Fox v. Star Newspaper Co. Ltd. [1898] 1 Q.B. 636; [1900] A.C. 19, and J.T. Stratford & Son Ltd. v. Lindley (No. 2) [1969] 1 W.L.R. 1547. There 1s a question, in my opinion, as to whether the kind of advantage to which Graham J. was alluding could possibly be of the kind which counsel for A.P.M. claimed his client had gained here. But, as will be seen, I do not need to resolve that question. The advantage which counsel claimed had accrued to A.P.M. was said to arise because of the simultaneous giving of undertakings to the Court by A.P.M. and §.C.I. that they would not, pending the outcome of the proceedings, acquire the shares held by the Amatil interests in F.C.L. Counsel sought to take from this an agreement, which apparently bound or at least affected, the Commission in such a way that 1t was not entitledto discontinue the proceedings nor seek the release of the undertakings until the proceedings were determined. At first, so it seemed to me, counsel put his case so high as to claim a hearing upon the merits. Later, however, he recognised, rightly in my opinion, that his client could not prevent the proceedings being dismissed, for example, for want of prosecution or because no evidence was offered in support of the Commission's case. Counsel relied very strongly on a number of dicta in the judgments of the members of the other Full Court which had earlier considered whether the undertakings should be released; A.P.M. Investments Pty. Limited v. The Trade Practices Commission (1983) 49 A.L.R. 475. Those judgments were delivered in an appeal from the grant of an application made by §.C.I. and the Amatil unterests that both $.C.I. and A.P.M. be released from their undertakings. But, unlike what is now fore- shadowed, the proceedings for a permanent injunction were to be kept on foot and the Amatil interests offered an undertaking, which Woodward J. accepted, that they would not sell their shares in F.C.L. to A.P.M. until the proceedings were concluded. That was the setting in which the statements relied upon by counsel for A.P.M. were made by the members of the other Full Court. As indicated, counsel's reliance on the judgments was extensive. I do not refer expressly to all the passages to which we were taken. For the purpose of dealing with the argument, it 1s enough to set out what Jenkinson J. had to say on the matter, namely (pp. 526-7) :- "Although the undertakings are expressed to endure until the determination of the proceeding or until further order, the circumstances in which each person gave his undertaking were, in my opinion, such that none of those persons could reasonably have contemplated as possible his release from his undertaking before determination of the proceeding, unless circumstances the existence or the significance of which could not reasonably have been foreseen on 23 May 1983 shouid be demonstrated to make it unjust that such a release be refused, or, possibly unless the court should restrain A.P.M. Investments by interlocutory order from buying the shares. (I express no opinion whether the making of such an order would justify release from any of the undertakings.) The undertaking of each A7. was given upon the condition that the others' undertakings be given. Each suffered a detriment in exchange for the advantages which the undertaking of one or more of the others conferred on him. There is, in my opinion, nothing in the evidence to justify a conclusion that any of the respondents gave his undertaking for any reason but that he conceived the giving of the undertaking to serve his own interests better than the withholding of the undertaking." Similar conclusions were reached by Smithers J. {(p. 486) and Fitzgerald J. (p. 513). All I would say about these and other statements in the judgments along the same lines is that they were expressed in relation to a very different factual situation from that with which we must deal. Here the proceedings themselves are to be discontinued. No further application for injunctive relief, permanent or otherwise, is to be made. All undertakings will cease to have effect upon the filing of the notice of discontinuance if leave to discontinue be given. All parties will then be free to deal in the shares. In the background will be the threat of an action for divestiture, and perhaps for a penalty, 1f A.P.M. persuades the Amatil interests to sell to it but that zs all. In my opinion it is taking far too much from the judgments of the other Full Court to conclude that the judges there were intending to express the view nd co that the Commission was bound to maintain proceedings, which 1t considered had no further purpose, until the question of whether the acquisition by A.P.M., 1£ it took place, would involve it 1n a breach of s. 50 of the Act was determined. In my opinion A.P.M. has gained no such advantage from the litigation. It is for that reason that I do not need to consider what precisely Graham J. meant by his use of that phrase in Covell Matthews. I return to what, as I have earlier said, I consider to be the essential question. What in all the circumstances do justice and fairness require? In particular do they require an undertaking from the Commission that 1t will not initiate proceedings for divestiture or a penalty if A.P.M. acquires the shares. Woodward J. decided that no such undertaking should be required. I respectfully agree with his conclusion and with his reasons therefor. I do not refer to the detail of these. That has been done in the judgment to be delivered by Sweeney J. In saying what I have, I have gone further than I need have done. The appeal being from the exercise of a discretion, it is necessary for A.P.M. to show that his Honour's discretion miscarried. It follows that I am clearly of opinion that it did not. There is one matter, however, which I would mention specifically. If the Commission had made no application 49. for an injunction but had waited to see whether A.P.M. acquired the shares, 1t would have been open to it, 1f 1t thought it appropriate, to institute proceedings for divestiture and also a penalty. That was something which A.P.M. must always have realised was a possibility. If the judgment of Woodward J. stands, all parties, subject to what I would further say, will be placed in the same position as they were in immediately before the proceedings were commenced and the undertakings given. A.P.M. is free to acquire the shares 1f it can persuade the Amatil interests to sell to it. The qualification I make to that statement is at the heart of A.P.M.'s resentment at the course of events which has overtaken it. If no proceedings for an injunction had been instituted, it is not improbable that the shares would long since have been acquired by A.P.M. If it fails to acquire them, it will be because between May 1983 when the undertakings were given and the present tame, the Amatil interests changed their minds. Thus 1f 1t had not been for the proceedings, A.P.M. would have achieved its object albeit that the Commission might have applied for divestiture. A.P.M. feels and will probably always feel that it was the intervention of the Commission and the taint of illegality whach its proceedings caused which have placed it in such a difficult position. 50. I understand fully the resentment which A.P.M. must feel. It is something for which one must have much sympathy. But what has happened is not, in My Opinion, due to any wrong conduct on the part of the Commission or any of the other parties to this litigation. It 1s a consequence of the existence of the Act itself and of its administration by the Commission. As the majority of the High Court in Thomson Australian Holdings Pty. Limited v. The Trade Practices Commission (1981) 148 C.L.R. 150 said (p.164):- "The appellant 1s bound to accept any damage to its business which is consequential upon the enforcement by the Commission against the defendants of the provisions of the Trade Practices Act so long as that damage does not constitute an infringement of the appellant's legal rights, if any." Although what their Honours there said was directed to a somewhat different problem, it is an apt statement of what has happened here. That must be so when one bears in mind that the Act 1s not concerned with either benefitting or disadvantaging the companies engaged in a takeover battle. Its purview and purpose are to protect the public interest against a takeover or merger which by s. 50 1s made unlawful. If companies engaged in a struggle such as the present are hurt because of the administration of the Act,or if the market for shares is held up because of litigation, consequent upon the Commission's view that there is a threatened breach 51. of the law, that is a consequence which the parties must bear. A fortiori is that the case if circumstances change to the disadvantage of a party by reason of the institution by the Commission of proceedings taken in good faith. It 1s for reasons such as I have just mentioned that I would respectfully disagree with that which Smithers J. said in his judgment in the earlier case (49 A.L.R. at p. 485) which seems to me to have been intended to persuade the Commission in a situation such as this to act only after an acquisition has taken place. My own respectful view,for what 1t 1s worth, is that the matter will always be one for the Commission to act as it thinks appropriate in the public interest. An application for an injunction 1s one of the weapons the legislature intended 1t to have in its armoury. It 1s a matter for it to determine the circumstances under which it will be used. The propriety of the undertaking offered by the Commission not to take proceedings for further injunctive relief. It remains to consider whether the Commission acted unlawfully in offering the undertaking not to take further proceedings for an injunction. None of the parties was concerned to argue that matter. For that reason counsel for Visy Board sought to be heard. He contended that his client was entitled to be added as a party because, within the words of Order 6, Rule 8 52. of the Rules,it either ought to have been joined as a party or was a person whose joinder was necessary to ensure that all matters in dispute might be effectually and completely determined and adjudicated upon. Alternatively, he sought leave to intervene; and as a last resort sought to be heard as amicus curiae. We did not think it necessary to determine whether Visy Board should be added as a party or whether it should be permitted to intervene. But in the absence of any submission on the point by any of the parties we thought it desirable to hear what counsel had to say and this we did. The substance of the matter relied upon by counsel for Visy Board has caused me some concern. In my opinion more is involved than the bare question whether, by acting as it has, the Commission has unlawfully fettered itself in the future exercise of its discretion and powers. That is because the Court itself becomes involved by reason of its acceptance of the undertaking. As an undertaking to the Court is given in lieu of an injunction and 1s enforceable in like manner, the principles which govern the grant of an injunction by a court must guide it in deciding whether it should accept an undertaking; the Thomson Australian Holdings case (supra at p. 165). The Court added (ibid.):- 53. "Limitations which affect the court's Jurisdiction or power to grant a final injunction must be observed in the acceptance of an undertaking when it is offered as a substitute for a final injunction. The court cannot escape such limitations by the expedient of accepting an undertaking in lieu of an anjunction. The court cannot put itself in the position of enforcing conduct which it has no capacity to command or compel. Oe In general the court must, in deciding whether it will accept from a defendant an undertaking to which the plaintiff takes no exception, be guided by the principles which apply to the making of a consent injunction, principles which we have already discussed." In Thomson's case the High Court was concerned with the powers 'conferred on the Court by s. 80 of the Act to grant injunctions. Section 80 was amended to overcome the decision (Act No. 39 of 1983, s. 3 and Schedule 1). But in relation to a case such as the present it does not seem to me that the power of the Court to accept an undertaking such as that here in question could derive from s. 80 of the Act, whether in its original or amended form. No argument was addressed to us on this point, but going as it does to our jurisdiction and power, it 1s necessary to reach a conclusion concerning 1t. Elsewhere in the judgment of the majority in the 54. Thomson case it is said (pp. 165-166):- "Nothing we have said is to be taken as throwing doubt on the practice of the courts in accepting undertakings to publish an apology in defamation cases and in accepting undertakings by a defendant to pay a particular account as a basis for assessing damages. In each of these two instances what the defendant undertakes to do is clearly relevant to the court's function in assessing damages - the publication of an apology mitigates damages and the payment of an account has a similar effect." I do not read what is there said as an exhaustive statement of the circumstances in which a court may accept undertakings which, if in the form of orders, the court would have no power to make. Furthermore, one needs to bear in mind that in the passage earlier cited the judges were referring only to an undertaking "when it is offered as a substitute for a final injunction." The undertaking here in question is not of that kind notwithstanding that 1t 1s given as a condition of leave to discontinue the proceedings. Plainly this Court has power to grant leave to a party to discontinue a proceeding. The very rule pursuant to which that may be done in many circumstances requires the leave of the Court to be obtained before discontinuance may take place. My earlier discussion of the authorities shows that the Court must always be concerned with the terms which ought fairly be imposed upon a party seeking leave. In these circumstances I conclude that Woodward J. had the necessary jurisdiction 55. and power to accept the undertaking in question. To do so was a necessary adjunct to his power to give leave to discontinue. It follows that 1f the Commission were empowered to give the under- taking, the Court was empowered to accept 1t. I turn to the question of the Commission's power. At first sight there appears to be a degree of undesirability in the Commission restricting itself as 1t has. But that does not assist much in resolving the problem. The question is one of power. The Act 1s remarkably silent on what the Commission's powers are. By sub-sec. 6A(2) the Commission 1s constituted a body corporate with perpetual succession. It may acquire, hold and dispose of real and personal property and it may sue or be sued in its corporate name. Section 7 provides for its constitution. Section 28 vests in the Commission certain functions with regard to the dissemination of information, and s. 29 obliges it to comply with certain directions of the Minister. Part VI of the Act is entitled "Enforcement and Remedies." Sections 77, 80 and 81 are to be found in that Part. Section 77 empowers the Commission to recover the pecuniary penalties provided for ins. 76. Section 80 empowers the Commission, amongst others, to apply for an injunction to restrain certain conduct including threatened breaches of the Act. By sub-sec. (1A) no person other than the Minister or the Commission may seek an injunction in respect of a threatened contra- 56. vention of s. 50. Section 81 empowers the Commission, amongst others, to seek an order of divestiture. A reading of the Act as a whole, discloses, in my opinion, that the Commission has been constituted along with the Minister, the guardian of the various public interests which the Act is intended to preserve and protect. Furthermore, although the Commission's powers are stated with the economy of language to which I have referred, it seems clear that 1t was intended to have a wide discretion as to whether it anstituted proceedings or not. Nothing in the Act necessarily obliges it to take action ina particular case. If it has a wide discretion as to whether to institute proceedings or not, it seems to me to follow that 1t must have an equally wide discretion to decide whether to maintain existing proceedings or to bring them to an end. If in good faith it decides, as it has done here, to bring proceedings to an end, it must also be empowered, again in good faith, to decide upon what basis the proceedings are to be terminated. Once proceedings are instituted by the Commission, it is of course an ordinary litigant. It takes the Court's procedures as it finds them. The rights, obligations and duties which they confer or impose apply to all litigants, whether they be governments or their agencies, 57. corporations or private citizens. All are equal before the law. If justice and fairness dictate that the Commission should in consequence of being given leave to discontinue a proceeding, give up the right to bring further proceedings of a like kind, then it is only right that the Commission, like any other litigant, should have to accept that as a condition of being granted the leave which it seeks. If the matter 1s looked at in this way, as in my Opinion it should be, then I can see no problem in the Commission giving the undertaking which it has. In his Honour's view the demands of justice required that it be given. It was offered voluntarily by the Commission. I do not see how his Honour's acceptance of it could be said to disclose error. The Commission has not acted unlawfully, in bad faith, or otherwise beyond its powers. In the result I am satisfied that the Commission was empowered to give the undertaking and the Court empowered to accept it. In all the circumstances it was proper that it should have been so given and accepted. Conclusion For the foregoing reasons I am of opinion that the A.P.M. appeal should be dismissed. I would order 58. A.P.M. to pay the costs of all other parties in relation to its application that the members of the Court disqualify themselves from hearing the appeal. I would order A.P.M. to pay the Commission's costs of the appeal. I would stand over the question of what other orders for costs should be made for argument in due course. The Visy Board Appeal Insofar as the appeal challenged the Commission's decision to seek leave to discontinue the proceedings and to give the undertaking not to institute further proceedings for injunctive relief, I would not wish to add to what I have said in relation to those matters when dealing with the A.P.M. appeal. I did not there deal specifically with the decision to discontinue. But for the reasons given it would seem to me to be impossible to argue that in all the circumstances of this case it was in some way unlawful or improper for the Commission to seek to take that course. The remaining matter relied upon, which seemed to me to be the real matter upon which counsel for Visy Board based his submissions, was the acceptance by the Commission of the costs offer made to it on behalf of the Amatil interests. It was said that this was what triggered the decision to seek leave to discontinue. Not to put too fine a point on it, the substance of the 59. submission was that the Commission had been bought off with an offer to pay costs on a most generous basis. On this aspect of the case I am in complete agreement with the judgment of Lockhart J. I agree particularly with his approach to the problem which involved him in assuming that the costs offer was a factor taken into account by the Commission in deciding to discontinue. It seems to me that that is the reality of the matter. I see nothing unlawful or improper in the Commission having regard to the costs offer in this way. But I make it clear that, although I think it was one of the factors, 1t was not the only factor or the most important factor. In those circumstances it was perfectly proper for the Commission to take 1t into account in determining what it should do. I would dismiss the Visy Board appeal. It should pay the Commission's costs. The question of whether it should pay the costs of any other party should be stood over for later argument. The S.C.I. Appeal In my opinion this appeal should be dismissed. My reasons for that view are, however, different from those of the primary Judge. The considerations to which they give rise have caused me to think at times that the 60. appeal should be allowed; but on reflection I think that they lead to the conclusion that it should be dismissed. Having read his Honour's judgment, 1t is my respectful conclusion that he allowed what what had been said by the other Full Court to weigh too heavily with him. The factual situation which confronted his Honour was very different from that with which that Full Court had to deal. No longer was there to be any interlocutory restraint on any party, including A.P.M., preventing dealings in the F.C.L. shares. Notwithstanding that the proceedings were to remain on foot, all interlocutory restraints were to go. That is the starting point. The next £actor to be weighed in the balance is that the Commission did not oppose the application for the release of the undertakings. Counsel for the Commission said to Woodward J.:- "The Commission would consent to an order un terms of paragraph 1 of the Notice of Motion, that is the paragraph to the effect that all undertakings be lifted." Moreover, in the passage already cited from counsel's submission to Woodward J. (supra at pp. 9-10) it 1s clear that the Commission was looking for guidance from the Court as to whether 1t should bring the proceedings to an end. It had lost its enthusiasm for 61. them. But it was not prepared to say categorically that they had no further purpose. So, for the time being, they were to remain on foot. But (and I have remarked on this before when dealing with the disqualification submission) the release of the undertakings would, in all probability, make the proceedings for a permanent injunction academic. There would be no restraint preventing the sale of the shares. The undertakings were given at the behest of the Commission. It no longer wanted them. True it is that the proceedings were to be kept on foot, but so far as the Commission was concerned, they would become an empty vessel. It must have seemed to all parties at that time that it was highly unlikely that they would ever be prosecuted. In saying what I have, I have not overlooked the reasons for the Commission's attitude. It was the Commission's farmly held belief that the Amatil interests would never sell to A.P.M. If it had not been for that belief the Commission's attitude would undoubtedly have been otherwise. All so far would tend to lead one to think that his Honour's decision was an erroneous one and ought to be reversed, unless 1t could be said, that although one might not oneself agree with it, it was not shown that the exercise of his discretion had miscarried. 62. But it has to be remembered that the proceedings were to be kept on foot. The Commission had not changed its mind that A.P.M. would be in breach of s. 50 of the Act 1f it acquired the shares. The interlocutory restraints might no longer be required by the Commission because 1t was confident that the Amatil unterests would not sell to A.P.M. But the proceedings would continue and thus remain as a vehicle available to be used for a further iunter- locutory application for an injunction if the unexpected happened and the Commission learnt of it in tame to seek to stop it. Furthermore, the Amatil interests would know this. That very circumstance would tend to dissuade them from selling to A.P.M. If they were to do so, they would know that there was a very real chance that A.P.M. might again be restrained before any transaction could be completed. Again, their attempt to sell would be frustrated; they would be back where they were. This would tend to drive them to the S.C.I. bargaining table and refuse to have anything to do with A.P.M., notwithstanding that its offer might be more attractive. It is for those reasons that I am of opinion that it was right to refuse to release the undertakings. The S.C.I. appeal should be dismissed. Questions of costsshould be the subject of later argument. Visy Board - Apse 1 against refusal to review the c Gecision of the Attorney-General. It remains only to give my reasons for concluding that this appeal should be dismissed. I am in general agreement with the reasons given by Sweeney and Lockhart JJ. and have nothing to add. {sens rmyettaus arash) L3 preceding Pages 7s AL SU, ne seasons for huocmece hare Tag da» se > : & "¢ [ aoe an obe ' fa ' AcTing Assoclate Dated "S /+haet /78A