'a , 2X3 CATCHWORDS ADMINISTRATIVE LAW - application for interlocutory injunction pending hearing of application for an order of review - decision of National Companies and Securities Commission to allow cross-examination of witnesses during Commission hearing - whether decision involved a breach eof the rules of natural justice or improper exercise of power - reluctance of Court to interfere with procedural decisions of an administrative tribunal. Administrative Decisions (Judicial Review) Act 1977 ss.5(1)(a) and (e), 5(2)(a),(b) and (c) Companies Code Companies (Acquisition of Shares) Code s.60 National Companies and Securities Commission Act 1979 ss.36, 37 and 38 Securities Industry Code THE BROKEN HILL PROPRIETARY COMPANY LIMITED and NATIONAL COMPANIES AND SECURITIES COMMISSION and BELL GROUP LIMITED and BELL RESOURCES HOLDINGS PTY LIMITED and AMBASSADOR NOMINEES PTY LIMITED VG No. 221 of 1986 AEN, Woodward J. 5 June 1986 Melbourne IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION BETWEEN : THE BROKEN HILL, PROPRIETARY COMPANY LIMITED and NATIONAL COMPANIES AND SECURITIES COMMISSION and BELL GROUP LIMITED and BELL RESQURCES HOLDINGS PTY LIMITED and AMBASSADOR NOMINEES PTY LIMITED MINUTES OF ORDER COURT: Woodward J. DATE: 5 June 1986 PLACE: Melbourne VG No. 221 of 1986 Applicant First Respondent Second Respondent Third Respondent Fourth Respondent THE COURT ORDERS THAT: 1. The application for interlocutory relief be refused. 2. The interim injunction granted by Jenkinson J on 2 June 1986 be discharged. ~ 3. The applicant pay the respondents' costs, including reserved costs, of this application. (NOTE: Settlement and entry of orders is dealt with by 0.36 of the Federal Court Rules). 'o IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) VG No. 221 of 1986 ) ) ) GENERAL DIVISION BETWEEN : THE BROKEN HILL PROPRIETARY COMPANY LIMITED Applicant and NATIONAL COMPANIES AND SECURITIES COMMISSION First Respondent and BELL GROUP LIMITED Second Respondent and BELL RESOURCES HOLDINGS PTY LTD Third Respondent and AMBASSADOR NOMINEES Pry LTD Fourth Respondent COURT: Woodward J. DATE: 5 June 1986 PLACE: Melbourne REASONS FOR JUDGMENT This is an application for an interlocutory injunction, pending the hearing of an application for an order of review pursuant to the Administrative Decisions (Judicial Review) Act 1977 ('the AD(JR) Act') of a decision of the National Companies and Securities Commission ('the Commission'). The decision arose in the course of a public hearing by the Commission into the circumstances of, and conduct relating to, an acquisition of shares in the applicant company ('BHP') by an associated company of Elders IXL Ltd ('Elders') and a contemporaneous acquisition of convertible bonds and preference shares in the Elders group of companies by BHP. The decision challenged is one which would permit counsel for Bell Resources Holdings Pty Ltd and other related companies ('Bell') to cross-examine certain witnesses subpoenaed by the Commission who are officers of BHP or persons otherwise involved on behalf of BHP in the transactions. The matter is one of some importance, but it also requires urgent attention. It was fully argued yesterday and today and I think it best that I give judgment now, dealing with all the issues which appear to me to be significent. The purpose of the hearing was, in summary, expressed to be "to determine whether the Commission should be satisfied that the circumstances and conduct did not contravene the Companies Code, the Companies (Acquisition of Shares) Code and the Securities Industry Code." The Commission also declared its intention to inquire into the conduct of the persons concerned in the transactions in order to determine whether it should exercise its powers under s.60 of the Companies (Acquisition of Shares) Code to declare conduct, or the acquisition of shares, "unacceptable". As the inquiry got under way, the Commission made several rulings on the rights of parties to be represented and to cross~examine witnesses. The historical picture is confused because there have already been proceedings in both the High Court and the Victorian Supreme Court (Fullagar J) to determine whether the Commission should hold its hearings in public and, in so far as any part of the hearings were to be in private, what rights of representation should be accorded. However the upshot of these proceedings has been that the bulk of the hearings are being heid in public and the rulings concerning these hearings, so far as they are relevant for present purposes, have been as follows. On 23 April, in the course of a comprehensive ruling about the rights of various parties to be present during anticipated private sittings and to be represented, the Commission said, "In regard to the application made on behalf of the Beil Group, the Commission rejects the argument that the interests of Bell in the enquiry are the same or equal to the interests of Hiders and BHP. If Bell wishes to adduce evidence it should inform counsel assisting the Commission who, if satisfied by the relevance of the evidence, will ensure that it is brought before the Commission. The Bell Group and its legal advisers will be allowed to be present whilst this evidence is given and to examine and re-examine any witnesses so called. The Commission may also permit Bell to examine specified witnesses where the Commission is first satisfied that there is material not otherwise known by which the witness may be usefully examined. The Commission may impose conditions in this event limited by reference to time or the specific issues. No further right of intervention by Bell shall be allowed at this time." When Bell's application to cross-examine was renewed on 2 June, the Commission began by referring back to and re-reading the middle paragraph of its earlier ruling. It also referred to the judgment of Fullagar J in the Supreme Court of Victoria, delivered on 16 May, dealing with the rights of BHP and Elders to be present at proposed private sittings of the Commission. In the course of that judgment, Fullagar J had said, "The requirements of natural justice depend upon inter alia the circumstances of the case and the nature of the enquiry, as well as on the rules under which the tribunal is acting and the subject matter that it is being dealt with; see News Corporation case, (1984) 52 ALR 417 at 427. In the surrounding circumstances of the present case, where BHP is the subject of an extant and fiercely contested takeover offer, larger than any in the nation's history, by a company controlled by Mr Holmes a Court and where the air is thick with allegations and cross-allegations between the raider and the target, it may well be argued that, for example, to call at ae public enquiry or hearing a person such as Mr Holmes a Court himself, without allowing immediate cross-examination by BHP and Elders, is a denial of natural justice for one or other or both of those companies. Likewise, it may be argued that it would be unjust and a denial of natural justice of Mr Holmes a Court and his company to take evidence publicly from some highly placed officer of BHP or of Elders without giving to Mr Holmes a Court or his company the same protection and right. It might be argued, for example, that the rights involved in these circumstances include the legal rights to have the takeover matters freely decided by the shareholders, without influence from untested oral and public declarations by one side or the other. I simply do not' know. I do not decide, at this moment, any such question because it has not been fully argued before me, but I am certainly prepared to reserve liberty to apply and to reserve it to all parties if necessary, despite the fact that the original relief sought by the Plaintiffs must be refused." Against this background the Commission invited and heard detailed submissions, at the end of which it made a ruling in the following terms, "The commission has considered the arguments that were put and believes that since the former ruling which I quoted was given, circumstances have changed to some extent. First of ali a great deal ef additional evidence has appeared which has thrown a somewhat different light on some of the matters. Second,— there has been a strong cross-examination of Mr Holmes a Court by both BHP and Elders in which specifically Mr Samuel was quoted I think by Mr Hayne and ... Mr Sher ..... We think that under those circumstances Bell should be allowed a limited but not unrestricted right of cross-examination. We propose to allocate half an hour to Mr Merkel. If he considers it necessary to go beyond that, we would require a specific justification." {Mr Hayne was counsel for BHP and Mr Sher for Elders]. The time constraint indicated by the Commission was immediately accepted by Mr Merkel for Bell. In the course of further debate, initiated by counsel for BHP, about possible limitations to be placed on Bell's right to cross-examine, the Chairman of the Commission said, "IT think I heard you say before, Mr Merkel, when you made your original submission, that it was your intention to limit yourself to matters strictly relevant to Bell's interest in the matters that have been raised in this inquiry and not to extend beyond. And so some degree of limitation of subject matter was in the commission's mind when it made that brief decision just now." After further discussion the Chairman added, "Well, we do rule that Mr Merkel's cross-examination is to be limited and not unrestricted. It is to be limited to subjects that are relevant to matters that have been raised in the hearing and to matters that are demonstrably within the interest of Bell." On the afternoon of 2 June, shortly after the Commission's ruling, counsel for BHP obtained an ex parte order from Jenkinson J in this Court, suspending the operation of the Commission's decision. On the following day, various Bell companies were added as respondents pursuant to s.12 of the AD(JR) Act, and an application was brought to discharge the ex parte order. That application failed, and the matter came before me for hearing on 4 June. It has been argued by counsel for BHP that the Commission's rulings amounted to giving Bell the right to pursue its commercial interests in the course of a hearing which was not concerned with those interests, and that this amounted to the pursuit of a "purpose other than a purpose for which the power Cwasl conferred" within the meaning of s.5(1)(e) and (2)({c) of the AD(JR) Act. Ido not accept this submission. When the several rulings are read together, as they should be, and construed broadly - as the rulings, and particularly the ex-tempore rulings, of a lay tribunal should be - I can see nothing in them which goes beyond (a) an acceptance that, because of its close involvement in the affairs leading up to the conduct under investigation, Bell may have material for cross-examination of BHP witnesses which would be of interest to the Commission and not be capable of ready transfer to counsel assisting the inquiry; (b) a requirement that such material should be succinctly put to witnesses, so as not to be oppressive to them or wasteful of the Commission's time; and (c) a further requirement that any cross-examination should be limited to matters clearly affecting or involving Bell, being matters which have already been raised before the Commission. _ Looked at in this way, which I believe to be the correct way, the reference in the rulings to "the interest of Bell" is merely another limitation on the right of Bell to cross-examine on matters of which it has knowledge and which are directly relevant to the Commission's inquiry. It gives Bell no licence to delve into extraneous matters, or use the Commission's hearing for any improper purpose. Nor, in my view, was the reference in the rulings to Mr Holmes a Court's cross-examination any evidence of an improper decision. It is not disputed that Mr Holmes a Court is entitled to be represented for the purpose of cross-examination of BHP witnesses about conversations and perhaps other issues on which he himself was rigorously cross-examined on behalf of BHP. The Commission, had it wished, might have limited his or his companies' right to cross-examine to those issues. It apparently believes it would be assisted by a wider-ranging approach. And, in any event, in view of the complex nature of Bell's involvement with BHP in recent months, it would be difficult to confine cross-examination to actual conversations and not become involved in other background matters. This question of Mr Holmes a Court's cross-examination was a matter proper to be considered in the Commission's overall approach to the question whether Bell should be allowed to cross-examine. The Commission may have been encouraged to take a broad and realistic, rather than a narrow and legalistic, approach to its inquiry by the words of FUllagar J in the passage cited above, even though there is now no extant takeover bid as there was at the time of his judgment. It is clear that the National Companies and Securities Commission Act 1979 gives the Commission a wide discretion as to how it should conduct its inquiries (see ss.36, 37 and 38) and it may well believe that it cannot determine the immediate issues before it without a full understanding of the takeover battle which provided the occasion, if not the cause, of the transactions being inquired into. It has been submitted by counsel for BHP that the Commission failed to take into account the fact that it is merely gathering and testing information, not conducting an action between parties. I can see no evidence of any such misunderstanding; indeed there are several passages in the transcript and the rulings which show that members of the Commission were clearly aware of the proper nature of their proceedings. Nor do I believe that the Commission has overlooked the fact that its inquiry could have serious repercussions for BHP and its officers - even, perhaps, leading to prosecutions. It must be remembered that BHP does not allege it has been denied any right to be represented or to cross-examine. It is, at most, complaining that its witnesses may be subjected to a second cross-examination after that of counsel assisting the Commission. The only harm the applicant can point to is an additional series of questions which its witnesses may be asked. If these are repetitive, harassing or irrelevant, they should be disallowed. If they elicit additional information, the inquiry will be assisted. I have thus been able to find no consideration which the Commission wrongly took into account in making its rulings, and no consideration which it was required to take into account and omitted. It is not suggested that there was any denial of natural justice in the way in which the Commission reached its decision - counsel for BHP had every opportunity to put a full argument, and did so. It is, however, suggested that the decision itself constitutes a denial of natural justice, and is thus improper or contrary to law, because it allows two counsel to cross-examine. But this situation arises in many inquiries where both counsel assisting and counsel for opposing interests have the right to cross-examine a witness. This is quite different from the case of two counsel for one party wishing to cross-examine (see Eva_ Pty Ltd v Charles Davis Ltd £1982] -VR 515). In my view there was no impropriety involved in the rulings in the present case. - 10 - I would conclude by saying that the Court should be slow to intervene in a purely procedural decision made by an administrative tribunal in the course of a long and complex inquiry. This is particularly so in cases where the tribunal has been given, by statute, a wide discretion as to how it should conduct its inquiries, subject only to. a requirement to observe principles of natural justice. Where the tribunal has not denied any rights, but can only be alleged to have given some participant a right to which it was not clearly entitled, the Court should be even more reluctant to intervene. I can find no reason in the present case to interfere with the Commission's rulings. The application before me is for an interlocutory injunction. However the circumstances are unusual. The Commission must decide whether to exercise its power to make declarations of unacceptable conduct under s.60 of the Companies (Acquisition of Shares) Code before about 9 July. To do so it must, presumably, conclude its hearings some time before that. There is very little chance of the applicant achieving a further hearing of this matter before then. Nor has the applicant any further arguments to put. It is difficult to see what further evidence it could adduce and its counsel did not point to any when invited to do so. Accordingly this hearing, although formally of an interlocutory nature, has many of the attributes of a final determination. However I turn to consider together the necessary questions in interlocutory cases - whether there is a_ serious question to be tried and the balance of convenience (see Bullock v - ll - Federated Furnishing Trades Society of Australasia (1985) 60 ALR 235 at 241. In my view the applicant's case, though very well argued, is not one which is likely to succeed after any fuller deliberation than I have been able to give it. And in view of the pressures of time, I think the balance of convenience is clearly in favour of allowing the Commission to proceed along the path ~ which it has determined as being most helpful. The application for interlocutory injunctions will be dismissed with costs and the interim injunction granted by Jenkinson J will be dissolved. I certify that this and the ten (10) preceding pages are a true and accurate copy of the Reasons for Judgment herein of The Hon Mr Justice Woodward —a Associate Dated: 5 June 1986 Counsel for the applicant: Mr N.J. Young Solicitors: Arthur Robinson & Hedderwicks Solicitor for the first respondent: Mr G.H. Cantwell Counsel for the second, third and fourth respondents: Mr R. Merkel QC and Mr C.M. Maxwell Solicitors: Arnold Bloch Leibler