ba JUDGMENT No. ASVp mv TRADE PRACTICES - misleading and deceptive conduct - attempted takeover of building society - new members including solicitors yolning to vote for party seeking to takeover - supplied with qualifying funds - letter to new members from Chairman - requiring statutory declaration funds not held in trust ~ letter suggests beneficial ownership condition of right to vote - injunctions sought relate to contractual cause of action - serious question to be tried - balance of convenience favours society - member has no personal interest in funds or vote - claim for interlocutory relief dismissed. CONSTITUTIONAL LAW - corporations power - whether limited to trading or financial activities of trading or financial corporations - relationship of trading or financial activities to conduct in trade or commerce. Trade Practices Act 1974 s.4 Judiciary Act s.78B Building Societies Act 1976 (WA) s.28 Orison Pty Ltd v Strategic Minerals Corporation NL (unrep. French J. 12/8/87) Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 Commonwealth v State of Tasmania (1983) 46 ALR 625 Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 40 ALR 609 Huddart Parker & Co. Pty Ltd v Moorehead (1909) 8 CLR 330 JUDITH MAY WATSON V BRITISH BUILDING SOCIETY NO. WAG 81 of 1987 FRENCH J. 7 AUGUST 1987 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION www ww No. WAG 81 of 1987 BETWEEN: JUDITH MAY WATSON Applicant and BRITISH BUILDING SOCIETY Respondent MINUTE OF ORDER JUDGE MAKING ORDER: FRENCH J. DATE OF ORDER: 7 AUGUST 1987 WHERE MADE: PERTH THE COURT ORDERS THAT: l. The claim for interlocutory relief is dismissed. 2. Costs reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION No. WAG 81 of 1987 BETWEEN: JUDITH MAY WATSON Applicant and BRITISH BUILDING SOCIETY Respondent CORAM: FRENCH J. 7 August 1987 REASONS FOR JUDGMENT On 29 April 1987 Mrs Judith Watson opened an account with the British Building Society and deposited the sum of $9,800.00 in a Fixed Term Share Cash Dividend account, bearing interest at a rate of 15% per annum for a period of 6 months. She thereby became a member of the Society with an apparent entitlement of up to 10 votes at its Annual General Meeting to be held on Monday, 10 August. The timing of her deposit was significant 1n two ways. It was the day before the last day of the Society's financial year. Under the Society's rules the entitlement to vote in its Board election at the Annual General Meeting depends upon the amount of principal standing to the credit of the member's shares in the books of the Society on the last day of April preceding the 2. election. The minimum qualifying amount for the maximum entitlement of 10 votes is $9,001.00. Her deposit also coincided with an unusually high number of new accounts, opened about that time and involving deposits in excess of $9,001.00. Many of the new account depositors had something in common, namely, a connection with an unlisted public company called Capital Hall Limited. The company is, it is said, endeavouring to get control of the Society by the election of new directors at the Annual General Meeting. Seven of the new depositors were partners in the law firm Messrs.Parker & Parker, which acts for Capital Hall Limited and persons associated with it. Mrs Watson herself 1s married to Francis Grant Gordon Watson, who is a senior management employee of Capital Hall Limited. The money she deposited belongs to that company and she has signed a Deed to say that she holds it in trust. She will derive no benefit from, nor entitlement to use, the money. Her husband asked her to attend the Annual General Meeting of the Society on Monday, 10 August, and she told the Court that she intended to do so. 3. It is the possible thwarting of that intention by the Society's directors that led to the present litigation and her claim for interlocutory relief. I gave a decision dismissing that claim on 7 August and indicated I would publish my reasons subsequently. On 24 July Mrs Watson was sent a letter signed by the Chairman of the Society, Mr K. Mallabone. The letter was in the following terms:- "Dear Member, MEMBERSHIP IN BRITISH BUILDING SOCIETY A review of the Society's accounts shows that a number of deposits including your deposit, were received at the end of the Society's financial year. The Society's Annual General Meeting is to be held on the 10th August, 1987. If you propose to attend the Annual General Meeting and vote at the meeting, the Board of Directors and myself, pursuant to Rule 68(b), require you to complete and return to the Society by no later than Monday, 3rd August, 1987 the' enclosed Statutory Declaration. If you do not propose attending the Annual General Meeting, there 18 no necessity for you to complete the Declaration. If you have any queries concerning this requirement, please do not hesitate to contact the Society's Acting General Manager, Mr Vince Sinagra (Tel:3277171)." The form of statutory declaration accompanying the letter was as follows:- "I of in the State of Western Australia, do solemnly and sincerely declare that:- 4. 1. The account with British Building Society annexed hereto was opened by myself for and on my own behalf. 2. No other person or company 18 beneficially entitled tos (a) the funds standing to the credit of that account; (b) the rights privileges and benefits attaching to the account or shares in the Society held pursuant thereto. And I make this solemn declaration by virtue of Section 106 of the Evidence Act 1906." After receiving the letter Mrs Watson consulted her husband, and then rang the Society's Acting General Manager, Mr Vince Sinagra on 29 July. She had a prepared list of questions for him. A conversation took place which she recorded in shorthand and her record of it was as follows:- "Mrs Watson: Why do I have to sign this statutory declaration? Mr Sinagra: Mrs. Watson unfortunately we have had to exercise Rule 68(b) of the Act, as the letter states, to ascertain the exact ownership of funds being deposited. If you are a bona fide shareholder then we apologise for any inconvenience but if you don't intend attending the Meeting then as the letter states just ignore the statutory declaration. Mrs Watson: I do not understand what Rule 68(b) is? Mr Sinagra: Just a minute Mrs. Watson, I'll read it to you. (Mr. Sinagra read out Rule 68(b)). Mrs. Watson I do not know why you deposited the money with British Building Society but as you may be aware there 1s a takeover bid being made for British Building Society. 5. Mrs Watson: I had a sum of money and the terms you were offering seemed attractive. Anyway I don't see that 1t is any of your business. Mrs Watson: Can I go to the meeting if I do not sign? Mr Sinagra: No you cannot go to the meeting. enly those people who sign and return the~ statutory declaration by 3 August will be permitted to vote, except for corporate members. Mrs Watson: What do you mean by "corporate members"? Mr Sinagra: Proprietary Limited companies. Mrs Watson if you are not eligible to vote then you will be screened before entering the annual general meeting, as will everyone else. I should warn you very strongly however, that if you intend signing the statutory declaration then you be made fully aware of the consequences of signing. That statutory declaration 1s to be signed under oath of a Justice of the Peace or Commissioner of Declarations. That document could be enforced in a Court of law and you could be in a great deal of legal trouble if you acted incorrectly in this Matter. So I would advise you to think very carefully about what you are doing. Mrs Watson: Can I vote if I do not sign? Mr Sinagra: No Mrs Watson. As I have told you you must sign that statutory declaration if you are intending to come along to the meeting. Mrs. Watson can I ask you a question, and you do not have to reply 1f you do not wish to. Are you connected with Capital Hall? Mrs Watson: No I am not. Mr Sinagra: Well then why would you want to attend the meeting? Mrs Watson: I hadn't intended attending the meeting but now that I have received this letter I am curious as to what 18 going on with the Society. Mrs Watson: Can I give you a proxy to vote for me? Mr Sinagra: No you may not. No proxies will be allowed at the meeting. Mrs Watson: Will proxies be permitted at the meeting. Mr Sinagra: No. As I said the meeting will not allow proxies. Mrs Waton we could go on with the conversation for the rest of the day but I am not going to because I 6. firmly believe that you are connected to someone in Capital Hall so you know about the takeover bid being mounted." Mrs Watson does not agree that her right or that of any other member to participate in the Annual General Meeting 1s conditional upon a willingness to sign the statutory declaration. She says that the Society has misrepresented to its members the effect of r.68(b) and their riqht to participate in the meeting. She instituted proceedings in this Court' seeking injunctive and declaratory relief against the Society. It 18, she alleged, a trading or financial corporation formed within the limits of Australia as that expression is used in s.4(1) of the Trade Practices Act 1974. Referring to the letter sent by Mallabone on 24 July 1987 she said in her statement of claim that:- "By the letter the respondent represented in trade or commerce and as conduct within the meaning of section 52 of the Trade Practices Act that: (a) in order to vote at the Annual General Meeting the applicant was obliged by law or by the Rules of the British Building Society to sign and return the statutory declaration; (b) the matters to which the statutory declaration referred were properly matters that the respondent was empowered or entitled to require a member of the respondent to verify by statutory declaration." 7. She further alleged that these representations were false or misleading or deceptive to members of the Society who received like correspondence and that:- 1. She and members of the Society are not obliged by law or by the Rules of the Society to sign and return the statutory declaration as a prerequisite to an entitlement to vote at the Annual General Meeting. 2. The matters to which the statutory declaration refers are not matters to which the Society is or was empowered to require its members to verify by statutory declaration. The representations, she said, were repeated by Sinagra in his telephone conversation with her on 29 July 1987. The statement of claim and the accompanying application were filed on 3 August and an amended application filed in Court on 5 August. On the application Mrs Watson sought interlocutory relief in the form of an injunction restraining the Society from preventing her from attending and voting at the next Annual General Meeting by reason of the fact that she has not completed the statutory declaration in question. The application also sought mandatory orders:- 1. Requiring the Society to notify those of its members to whom a form of statutory declaration was sent, that they were not obliged to complete and return the declaration as a prerequisite to voting at the Annual General Meeting. 8. 2. Requiring the Society to announce at the Annual General Meeting to all present, that it was not a prerequisite to the entitlement to vote that a Statutory declaration should be completed. Although not expressed as interlocutory relief, Mrs Watson's counsel sought interlocutory orders in these terms. The claim for interlocutory relief came on for hearing initially on 4 August. At the same time a motion was filed by the respondent seeking to dismiss the proceedings on the basis that no reasonable cause of action is disclosed and that, in the alternative, they are frivolous and vexatious. Further, in the alternative, the respondent asked for an order that the claims for final and interlocutory relief should be dismissed as being beyond the power of the Court to make. It was also sought to strike out para.8 of the statement of claim on the basis that it tended to cause prejudice, embarrassment or delay in the proceedings. Contemporaneously, the respondent filed a notice of a constitutional matter under s.78B of the Judiciary Act. That notice was in the following terms:- "1. The Respondent gives notice that the above proceeding involves a matter arising under the Constitution or involving 1ts interpretation within the meaning of Section 78B of the Judiciary Act 1903. 2. By an Application dated 30th July 1987 (a copy of which 1s annexed) the Applicant seeks a declaration and an injunction in the terms set forth therein. ae a 9. 3. By a Statement of Claim filed in the Perth Registry of this Honourable Court on 3rd August 1987 (a copy of which 1s annexed) the Applicant has alleged that the Respondent has made false, misleading or deceptive representations in trade and commerce and is conduct within Section 52 of the Trade Practices Act 1974. 4. To the extent that Section 52 of the Trade Practices Act purports to apply to the alleged conduct 1t is beyond the power conferred by the Constitution upon the Commonwealth Parliament because: (a) if the representations were made in trade or commerce (which 1s denied) they were not part of, nor incidental to, trade and commerce with other countries or among the States within Section 51(i) of the Constitution; (b) if the representations constitute conduct within the meaning of Section 52 of that Act (which is denied) the conduct pertained to Matters concerning rights of members to vote at the annual general meeting of the Respondent which matters are not within Section 51(xx) of the Constitution; (c) the law is not authorised by any other legislative power of the Parliament." I was informed that copies of the notice had been sent to the Attorney General of the Commonwealth and the Attorneys General of each of the States and the Northern Territory. At the time that the matter came on for hearing on the afternoon of 4 August only one response had been received, namely from the Attorney General to the Northern Territory who indicated that he did not wish to intervene. The application was adjourned to 2.15 pm on 5 August, by which time letters had been received from the Attorneys General for the Commonwealth, for the States of Western Australia, New 10. South Wales and Queensland. All indicated they did not wish to intervene at this stage. Argument proceeded on both the claim for interlocutory relief and the strike out motion. As indicated earlier, a decision was given on 7 August dismissing the claim for interlocutory relief and reserving judgment on the strike out motion. Since that time the Court has been advised by the solicitors for the applicant that the proceedings are to be discontinued. No decision 1s necessary therefore on the strike out motion. These reasons relate only to the claim. for interlocutory relief. Before turning to the substance of that claim it is necessary to refer to the relevant Rules of the Society. Rules of the British Building Society Membership of the Society is dealt with in r.5 which provides:- "5. Every person shall be a member who: (a) holds a share or (b) without holding any share has been accepted by the Board as a member in respect of an advance made by another building society which has subsequently transferred its engagements to the Society." Rule 6 provides that each member and "all persons claiming through him or on his account" shall be bound by the Rules. ll. Shares may be held jointly by two or more persons but only the first named on the register 1s entitled to vote and to be served with notices. Rule 12 deals with the recognition of equitable interests in the following terms:- "12. The Society shall be entitled to treat the registered holder of any share as the absolute owner thereof and accordingly shall not, except as ordered by a court of competent jurisdiction, or as by statute required, be bound to recognise any equitable or other claim to or interest in such share." The directors have what 1s on the face of 1t an absolute discretion to refuse or terminate any membership:- "13. The Directors may in their absolute discretion and without being required to give reason decline to accept a person as a member and may at any time after the allotment of shares to a person refuse to continue any person as a member and in that event shall pay to such person all principal and interest then due to him after such notice in writing as the Directors shall determine from time to time." "14. (a) (b) (c) Rule 14 deals with the cessation of membership:- A member shall cease to be a member either upon the Directors declining to continue his membership in accordance with Rule 13 or payment to him of all moneys which the books of the Society show to be due to him 1n respect of shares in the Society or the registration of a Transfer of the whole of his shares." 12. The power to issue new shares is vested in the Society by r.19. However there is no express provision in the Rules governing the allotment of shares to new depositors save that r.12 gives the directors a discretion to decline to accept new members. The oral evidence of Mr Sinagra, the Acting General Manager of the Society, 1s that the allotment of new shares 1s in practice automatic upon the issue of a passbook to a new account depositor. Rule 34 reinforces the general lack of concern with beneficial interests evidenced by the Rules:- "34(a) On any member becoming a bankrupt or making an assignment for the benefit of or any arrangement or composition with his creditors, or having any judgement (sic) or execution against his estate and effects, or if his shares or any of them shall be charged in favour of any person by or through the order of a court or otherwise, the trustee, receiver, assignee, execution creditor, or person obtaining such charge shall not by reason thereof and notwithstanding anything contained in these rules become a member of the Society but shall be at liberty to sell or transfer the share or shares or interest of such member to any person acceptable to the Society. (b) This rule shall apply to a member being a corporation which at anytime (sic) becomes subject to any of the insolvency provisions of the Companies Act 1961 and amendments or any Act replacing the same." i ae i = TF " ware 13. Provision 1s made in r.40 for directors to manage the Society and "to do all acts in the name of the Society which they May deem necessary". Rule 49 establishes a shareholding qualification to be a director. The term of a director's office 1s determined by r.56 which provides that at each annual general meeting the longest serving director then in office shall retire. Voting rights in an election to fill a vacancy on the Board are regulated by r.57 which provides:- "S57. $A member entitled to vote in respect of each vacancy shall in the case of a poll be entitled to the following votes which shall be based upon the amount of the principal moneys standing to the credit of that member's shares (either solely or jointly with another or others) in the books of the Society as at the last day of April preceding the election, that is to say - Principal- $50 up to $1000..... $1001 up to $2000... $2001 up to $3000... votes $3001 up to $4000... votes 1 vote3$4001 up to $5000... 5 votes79 votes $5001 up to $6000... votes $6001 up to $7000... votes $7001 up to $8000... votes $8001 up to $9000... votes $9001 up to $10000.. 0 votes No member shall be entitled to more than 10 votes. A member entitled to vote is a member of the Society as at the day when the meeting is held." 14. The general voting entitlement of members 1s covered by r.68 which provides:- "68(a) Subject to these Rules a member shall be entit:ed to vote at any meeting of the Society. In every case not otherwise provided for by the Rules or by Statute, all questions properly before a meeting shall be decided by a majority of votes of the members present and entitled to vote and their votes shall be taken either on the voices or by a show of hands or at a poll by means of voting papers as the Chairman shall determine, and his decision as to the result of the voting shall be final. Every such member shall have one vote but in the event of a poll he shall be entitled to the number of votes as prescribed by Rule 57. Notwithstanding the foregoing provision of this Rule the Chairman at his discretion may determine that the question shall be decided by a poll forthwith. At all meetings of the Society the chairman shall have a casting vote. fb) If at any meeting of the members of the Society, the Chairman shall require proof of membership and qualifications of any person such person may be required by the Chairman before being allowed to vote to make a Statutory Declaration in the form approved by the Directors." The Chairman's Letter of 24 July The background to the issue of the letter and form of statutory declaration sent to Mrs Watson was explained in the evidence of Vincent Paul Sinagra, the Acting General Manager of the Society. He also currently occupies the office of General Manager of the Permanent Investment Building Society, with whom the British Building Society entered into a merger agreement on 5 June 1987. 15. The agreement must be approved by the Registrar of Bu1llding Societies under s.28 of the Building Societies Act 1976 (W.A.) before it can take effect. At about the time of that agreement some events occurred which it 1S not necessary to detail here but which led the Chairman of Directors of the Society to inform Mr Sinagra that Capital Hall Limited was concerned to take control of the Society. Mr Sinagra inspected membership records for April 1987 and observed that the number of new members joining was normal until the last 3 days of the month. On the last 3 days, however, there was a dramatic increase in the number of applications. There were 96, all involving sums deposited in fixed term and dividend share accounts bearing interest at the rate of 15 or 15.5% per annum and the great majority of which were for amounts in excess of $9,001.00. Mr Sinagra recognised some of the applicants as persons connected with Capital Hall Limited or their solicitors. He formed the view that the new members were, in large part, persons who applied for membership at the behest or under the control of Capital Hall Limited. 16. He was cross-examined on his affidavit but this suggestion was not challenged. On the material before me there is a strong inference that it is correct and that is plainly the case in respect of Mrs Watson as emerged from her evidence under cross-examination. Upon Sinagra informing the Board of his conclusions, the Chairman decided that he would require a statutory declaration to be completed by most of the persons to whom new shares in the Society had been issued on the last 3 days of the financial year. The form of statutory declaration adopted was, as required by r.68(b), approved by the Board at its meeting on 17 July. Sinagra explained the objective of the exercise in his affidavit. The Board and the Chairman, he said, were concerned to ensure that there should be no breach of r.57 in circumstances where a large number of members would be claiming an entitlement to 10 votes. The entitlement of each member to vote, he said, might, in fact, be "held" (sic) for the beneficial owner of the funds standing to the member's credit. The Board's concern was, and remains, that Capital Hall Limited might control the membership and voting entitlements of a large number of members. 17. Having due regard to the limitations of interlocutory argument and the urgency with which the matter had to be brought before the Court, I find it difficult to discern in the Rules any suggestion that the qualification of a depositor for membership of the Society is in any way affected by the beneficial ownership of the moneys deposited. This provisional view as to the absence of any such operation of the Rules 1s reinforced by the terms of rules 12 and 34(a). They are concerned to establish, 1t seems to me, that the beneficial owners of funds deposited have no membership rights. The Society 1S not required to recognise the existence of such interests (r.12) nor do persons in whose favour funds may be charged have any membership rights. There 1s nothing in the Rules which provides that a member who holds his funds in trust for another is any less a member for that. Nor does 1t seem that the position 1s affected by the fact that he or she may be one of a number of members whose deposits are subject to trusts in favour of the one person. The remedy in the hands of the directors 1n such a case does not arise from any lack of qualification on the part of such persons to be members. That is not to say that the directors are without remedy, for it appears that under r.13 they may decline to accept a person aS a member, or terminate an existing membership. On doing so the directors have an obligation to repay the moneys deposited with the appropriate interest entitlements. 18. Where a membership recruiting drive has been organised by a third party with a view to getting control of the Society and in such a way as to breach the spirit 1f not the letter of the voting limitation under r.57, then a proper case may have arisen for the exercise of the power under r.13. Whether 1t would be consistent with the directors' duty to exercise the power in that way with a view to defeating this tactic, 1S a matter upon which 1t would not be appropriate for me to express an opinion now. The letter written by the chairman to Mrs Watson did, in My opinion, convey the clear impression that her entitlement to attend and vote at the meeting would depend upon her acceding to the request to execute the statutory declaration. The statutory declaration addresses only the question of the beneficial entitlement to:- (a) The funds standing to the credit of Mrs Watson. (b) The rights, privileges and benefits attaching to the account or shares in the Society held pursuant thereto. That question has, as I have already indicated, nothing to do with the qualifications for membership. Under r.68(b) which 1s expressly invoked in the letter, it 1s with respect to "proof of membership and qualifications" that the chairman may require a person to make a statutory declaration as a prerequisite to the exercise of the right to vote. fee ab Nida Staats ial SEE ti RII a il Mca ta 19. There was, in my opinion, a serious question to be tried on whether the letter is misleading in the message it conveys about the member's right to vote. There was also, I think, a serious guestion to be tried that the sending of the letter to Mrs Watson constituted conduct by the Society as a financial corporation and was conduct in trade or commerce. It 1S unnecessary now to rehearse the reasons for those conclusions as they are reflected in the recent consideration of similar issues raised in Orison Pty Ltd v Strategic Minerals Corporation NL (unrep. French J. 12/8/87). The constitutional point foreshadowed in the Judiciary Act notice was canvassed only briefly in argument. In essence, 1t was submitted that while the conduct of the chairman might be conduct of the Society in trade or commerce for the purposes of s.52, it was a class of conduct beyond the reach of the Parliament's power to make laws with respect to "foreign corporations and trading or financial corporations formed within the Commonwealth" (Constitution s.51(xx)). The submission seemed to rest upon the proposition that the reach of the corporations power is limited to the trading and financial activities of trading and financial corporations. 20. The issue of the chairman's letter was, even if attributable to the Society, not a trading or financial activity and therefore, it was said, lay beyond the reach of the power. This 1S a question on which the High Court has been divided. In Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 489-490, Barwick CJ would not accept that any law dealing with foreign corporations or trading or financial corporations formed within the limits of the Commonwealth, was necessarily a law with respect to the subject matter of s.51(xx). He accepted nevertheless that laws made under s.51(xx) would cover a wide range of the activities of such corporations. The Chief Justice was the only member of the Court to expressly propound that limitation, although McTiernan J. agreed with various aspects of his judgment including what he had to say about the scope of s.51(xx). In Commonwealth v State of Tasmania (1983) 46 ALR 625 at 710, Mason J. expressed the view that 2t would be unduly restrictive to confine the corporations power to the regulation and protection of the trading activities of trading corporations:- "After all, the subject matter of the power is persons, not activities." 21. Murphy J. at 736 saild:- "The power under s.51(20) extends to any command affecting the behaviour of a foreign corporation or a trading or financial corporation and 1s not restricted to commands about the trading activities of trading corporations or about the financial activities of financial corporations." Deane J. came to the same conclusion at 814. Gibbs CJ on the other hand at 684 reaffirmed what he had said in Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 40 ALR 609 at 616:- "The authorities in which s.51(xx) has been considered are opposed to the view that a law comes within the power simply because 1t happens to apply to corporations of the kind described in that paragraph... The words of Para.(xx) suggest that the nature of the corporation to which the laws relate must be significant as an element in the nature or character of the laws, if they are to be valid." In this he was supported by Wilson J. at 756:- "To be a law with respect to trading corporations the substance of the law must bear a sufficient relation to those characteristics of such corporations which distinguish them from corporations which cannot be so described: Huddart Parker & Co. Pty Ltd v Moorehead (1909) 8 CLR 330, per Isaacs J. at 397; Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 40 ALR 609; 56 ALJR 366, per Gibbs CJ at 370." 22. Dawson J. also invoked the dictum of Gibbs CJ in the Actors Equity case and concluded at 853:- "For a law to be a valid law with respect to a trading or financial corporation the fact that 1t is a trading or financial corporation should be significant in the way in which the law relates to it." Brennan J. did not find 1t necessary to express any concluded view on the question (see at 790). The Society's submission relying, as I apprehend it, upon the narrow view of the corporations power expressed by Gibbs CJ, Wilson and Dawson JJ, suggests that conduct of a corporation in trade or commerce may not necessarily fall within' the description of the trading activities of a trading corporation or the financial activities of a financial corporation. The proposition is attended, I think, with considerable difficulty. The judges who enunciated the narrower view of the corporations power in the Tasmanian Dam's case did not so restrict 1ts operation as to confine it only to making laws with respect to the trading activities of trading corporations or the financial activities of financial corporations. Their common constraint required that 1n a law made with respect to a trading or financial corporation the fact that it is a trading or financial corporation should be significant in the way in which the law relates to it. 23. It 1s difficult to conceive how 1t could be said that a law regulating the conduct of a trading or financial corporation in trade or commerce could fall outside even that narrower formulation. In any event, three Justices of the High Court support a construction of the power under placitum (xx) which would on any view encompass the propounded application of s.52 1n the present case (provided that the conduct in question 18 properly attributed to the society). I conclude therefore that there was a serious question to be tried as to whether the conduct of the respondent contravened s.52 of the Trade Practices Act. The terms of the interlocutory relief sought by Mrs Watson seemed, however, to have very little to do with s.52. Her interlocutory claim, as expressed in the amended application, was for:- "an interlocutory injunction restraining the respondent by its servants or agents from preventing the applicant from attending and voting at the next annual general meeting of the respondent by reason of the fact that she has not completed the statutory declaration in the form annexed as an exhibit to the affidavit of Judith May Watson sworn herein on 30 July 1987." This is not an injunction relating to a contravention of s.52. It is an injunction desiqned to protect Mrs Watson's contractual rights arising out of the rules of the Society, to attend and vote at the annual general meeting. 24. It may well be that the facts pleaded in the statement ef claim will support a cause of action arising out of contract although Mrs Watson's counsel seemed to disavow anything but a subsidiary reliance upon contract and did not direct his submissions to any such cause of action. It may also be the case that a cause of action in contract falls within the accrued jurisdiction of the Court enabling it to dispose of the entire "matter" arising by reason of the allegation that the Society has contravened s.52. In light of the view that I have expressed about the possible existence of a contravention of s.52 of the Trade Practices Act, it would be difficult to reject a proposition that there is a serious question to be tried on the substantive right to attend and participate in the annual general meeting. However, when it comes to the balance of convenience and the exercise of my discretion, 1t can immediately be observed that the Society, if enjoined as proposed, would be forced to admit the vote of a person whom it sees, controversially but I think bona fide, as a person who may not be entitled to vote. If the admission of that vote were to lead to a change in the control of the Society, that would have a dramatic and no doubt relatively long term effect. 25. On the other hand, if Mrs Watson were denied entrance to the meeting but her claim ultimately vindicated, then her right to participate in a future take over vote would be unimpaired. It is also, I think, proper to take into account that Mrs Watson, although she may be at law a member of the Society, has no personal interest in its affairs beyond exercising a vote at her husband's request to advance interests associated with Capital Hall Ltd. She has no beneficial interest in the funds she has deposited. She stands to derive and seeks no benefit from her membership. While I could not go so far as to say that her membership 1s a sham, it 1S a hollow exercise which advances no interest of hers. In the circumstances the balance of convenience favours the Society and I will dismiss the claim for interlocutory relief as expressed in the amended application. Similar considerations apply to the mandatory injunctive relief which she seeks. To the extent that the injunctions seek to clear up any misconception in the minds of members who have received such statutory declarations, they would seem to serve very little useful purpose. 26. It 1s plain from Mrs Watson's evidence that it 15 Capital Hall Ltd who instructs her solicitors and maintains this action. To the extent that 1t has placed other troops in the field equipped to vote at the annual general meeting, it is quite capable of arranging for them to be advised of their rights. To the extent that 7 of those are its solicitors, they are hardly likely to be benefitted by the notification which 1S sought. For these reasons I will dismiss the claim for interlocutory relief. I certify that this and the preceding twenty five (25) pages are a true copy of the Reasons for Judgment herein of His Honour Mr Justice French. Associate: Deir Ut Date: "| Prusennk 1987 Counsel for the Applicant: Mr M.W. Odes with Ms A. Theron Solicitors for the Applicant: Messrs. Parker & Parker Counsel for the Respondent: Mr M.L. Barker with Ms. C. McLure Solicitors for the Respondent: Messrs. Keall Brinsden Date of Hearing: 5, 6 August 1987 Date of Judgment: 7 August 1987