camel JUDGMENT No. S81. IN THE FEDERAL COURT ) NOT INTENDED FOR GENERAL DISTRIBUTION OF WESTERN AUSTRALIA ) WESTERN AUSTRALIA ) ) ) DISTRICT REGISTRY GENERAL DIVISION NO. WAG 42 OF 1987 BETWEEN: ORISON PTY LTD Applicant and STRATEGIC MINERALS CORPORATION NL First Respondent PETER GULLAN CROSS and JON SWIRE-THOMPSON Second Respondents ASHA CAPITAL CORPORATION LIMITED Third Respondent ASHA ENERGY CORPORATION LIMITED Fourth Respondent NO. WAG 52 OF 1987 BETWEEN: PETER GULLAN CROSS and JON SWIRE-THOMPSON First Applicants LEONAS REISGYS Second Applicant PETER RUTTLEDGE Third Applicant and DENIS DEVENISH-MEARES First Respondent RICHARD J. TANNER iy fos Second Responde Fic. . - ANOY {987 FEES cour off! AGSTRAIL A Peyic et REGS, & aE ces ee WALTER ARTHUR CHARLES MARTIN Third Respondent MINUTE OF ORDER JUDGE MAKING ORDER: PRENCH J. DATE OF ORDER: 14 OCTOBER 1987 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The actions in WAG 42 and 52 of 1987 be tried at the same time. 2. The applicants' costs of these directions be paid by the respondents 1n any event. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. oe halle anil IN THE FEDERAL COURT OF WESTERN AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION BETWEEN: BETWEEN: NOT INTENDED FOR GENERAL DISTRIBUTION NO. WAG 42 OF 1987 ORISON PTY LTD Applicant and STRATEGIC MINERALS CORPORATION NL First Respondent PETER GULLAN CROSS and JON SWIRE-THOMPSON Second Respondents ASHA CAPITAL CORPORATION LIMITED Third Respondent ASHA ENERGY CORPORATION LIMITED Fourth Respondent NO. WAG 52 OF 1987 PETER GULLAN CROSS and JON SWIRE-THOMPSON First Applicants LEONAS REISGYS Second Applicant PETER RUTTLEDGE Third Applicant and DENIS DEVENISH-MEARES First Respondent RICHARD J. TANNER Second Respondent WALTER ARTHUR CHARLES MARTIN Third Respondent CORAM: FRENCH J 14 October 1987 REASONS FOR JUDGMENT On 23 July 1986 an extraordinary general meeting of shareholders of Strategic Minerals NL ("Strategic") passed a special resolution authorising the acquisition by the company of the issued capital of Asha Mining Finance Pty Limited ("AMF")on terms set out in the resolution. Orison Pty Ltd ("Orison"), a shareholder of Strategic controlled by Denis Devenish-Meares, a former director of Strategic, now complains that the passage of the resolution was procured by misleading information circulated by the directors of Strategic as to the asset backing of the AMF shares. The conduct is said to be conduct of Strategic which was misleading and deceptive, or likely to mislead or deceive in trade or commerce in contravention of s.52 of the Trade Practices Act 1974. Orison has instituted proceedings in No. WAG 42 of 1987 against Strategic and 2 of its directors, Messrs. Cross and Swire-Thompson, and claims against them various forms of declaratory and injunctive relief. Two other parties, Asha Capital Corporation Limited ("Asha Capital") and Asha Energy Pty Ltd ("Asha Energy"), have also been joined and injunctive relief is sought in relation to them. 3. The proceedings, which were commenced on 10 April 1987, have reached the stage where discovery has been given by all but Asha Capital and Asha Energy. A preliminary issue has been heard and determined on the question of whether Strategic's conduct was 1n trade or commerce, and strike-out motions have also been heard and determined. An amended statement of claim was filed on 25 August 1987. An order for security for costs in the amount of $20,000 has been made against Orison and that sum paid into court. On 7 May 1987, Cross, Swire-Thompson, Leonas Reisgys and Peter Ruttledge, all directors of Strategic, instituted proceedings in this court in WAG 52 of 1987 against Messrs. Denis Devenish-Meares, Richard J. Tanner and Walter A.C. Martin, Devenish-Meares was, it 18 said, Chairman of Directors of Strategic from 1983 until November 1985 and a Director of Strategic until 5 January 1987 when, he alleges, he was removed from the Board by interests associated with Cross and Swire-Thompson. Martin was Managing Director of Strategic from May 1985 until November 1986. He also says he was removed from the Board by interests associated with Cross and Swire-Thompson on 5 January 1987. 4. Tanner 1s a committee member of the Australian Shareholders' Association. Each of these three stood for election as directors at the annual general meeting of Strategic held on 23 April 1987. Prior to doing so, it 1s said, they circulated one joint and three separate statements to shareholders of Strategic on 10 April. The applicants in these proceedings allege that the publication of the statements was misleading or deceptive conduct contrary to s.52 of the Trade Practices Act 1974. Some 34 separate misrepresentations are pleaded as embodied in the statements. The respondents, who are natural persons, are said to be subject to the extended operation of the Trade Practices Act by virtue of their use of Australian postal services to send the statements to shareholders. A graph annexed to Martin's statement showing Strategic's share prices against a stock exchange index is also said to be misleading. On a perusal of the statement of claim and _ the statements to shareholders which are annexed to it, it seems plain that the substance of the message sent out by the respondents 5. related to the acquisition of the AMF shares at an alleged under~value. While the pleadings raise additional issues the essential controversy 1s the same as that in Action WAG 42 of 1987. The applicants in WAG 52 of 1987 now seek an order that this application be tried at the same time as WAG 42 between Orison and Strategic and others. Order 29 r.5 of the Federal Court Rules provides:- "Where several proceedings are pending in the same Division, then, 1f£ 1t appears to the Court - {a) that some common question of law or fact arises in both or all of them; (b) that the rights to relief claimed therein are in respect of, or arise out of, the same transaction or series of transactions; or (c) that for some other reason it is desirable to make an order under this rule, the Court may order those proceedings to be consolidated or may order them to be tried at the same time or one immediately after another or may order them to be stayed until after the determination of any of them." There are common questions of fact in the' two proceedings. Although the causes of action arise out of different transactions, they are ultimately founded upon the acquisition of the AMF shares and representations made in connection therewith. ee ene 6. On the face of it the only common parties in the two proceedings are Messrs. Cross and Swire-Thompson. It 18S, however, clear that the persons named in the Application WAG 52 of 1987 are in substance the persons behind the corporate facades of Orison and Strategic. Reference has been made to pending defamation proceedings in the Supreme Court arising out of the publication of these statements. It is submitted by counsel for the respondents that the appropriate step is to remit the action to the Supreme Court where it can be heard with the defamation action. In my opinion, that would probably aggravate the situation, there being two different courts to deal with what 1s 1n essence the one controversy. I am satisfied that the common questions of fact are sufficient to warrant the making of the order which is sought and I will make an order accordingly. The orders I will make are:- 1. That the actions in WAG 42 and 52 of 1987 be tried at the same time; and 2. That the applicants' costs of these directions be paid by the respondents in any event. 7. I certify that the preceding six (6) pages are a true copy of the Reasons for Judgment of his Honour Justice French. Associate: Bebe w- URS Date: 4.10.87) No. WAG 42 of 1987 Counsel for the Applicant: Mr M. Bennett Solicitors for the Applicant: Keall Brinsden Counsel for the First Respondent: Mr J. Sher Solicitors for the First Respondent: Parker & Parker Counsel for the Second Respondent: Mr R. Ainslie Solicitors for the Second Respondent: Mallesons Stephen Jaques Counsel for the Third and Fourth Respondents: Mr C. Stokes Solicicors for the Third and Fourth Respondents: Warren McDonald French & Harrison No. WAG 52 of 1987 Counsel for the Applicants: Mr R. Ainslie Solicitors for the Applicants: Mallesons Stephen Jaques Counsel for the Respondents: Mr M. Bennett Solicitors for the Respondents: Keall Brinsden Date of Hearing : 13 October 1987 Date of Judgment: 14 October 1987 Pe ior mee