CATCHWORDS JUDGMENTS AND ORDERS - Form of orders - Non-compliance with secondary notices and substantial shareholding disclosure obligations - Costs - Orders pending possible appeal. Corporations Law, ss 613(1), 709, 722, 742(2), 744(6), 1335(2). Federal Court of Australia Act 1976 (Cth) ss 23, 43. Federal Court Rules, O 23 Messiter v Hutchinson (1987) 10 NSWLR 525. AUSTRALIAN SECURITIES COMMISSION v BANK LEUMI LE-ISRAEL & ORS NG 3201 of 1995 Sackville J. Sydney 20 December, 1995 - 2 - IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 3201 of 1995 GENERAL DIVISION ) BETWEEN: AUSTRALIAN SECURITIES COMMISSION Applicant AND: BANK LEUMI LE-ISRAEL First Respondent EBC ZURICH AG Second Respondent A.N.Z. NOMINEES LTD Third Respondent BB NOMINEES PTY LTD Fourth Respondent NATIONAL NOMINEES LTD Fifth Respondent GALAH NOMINEES PTY LTD Sixth Respondent STATTON NOMINEES PTY LTD Seventh Respondent OFFSET ALPINE PRINTING GROUP LTD Eighth Respondent ARKLOW PTY LTD Ninth Respondent Coram: Sackville J. Place: Sydney Date:20 December, 1995 1.In these orders "A.N.Z." means A.N.Z. Nominees Ltd, the third respondent to these proceedings. "ASC" means the Australian Securities Commission, the applicant in these proceedings. "BB" means BB Nominees Pty Ltd, the fourth respondent to these proceedings. "EBC" means EBC Zurich AG, the second respondent to these proceedings. - 3 - "EBC Nominees" means A.N.Z., BB, National, Galah and Statton. "EBC's shares in OAP" means those OAP shares held by any of the EBC Nominees on behalf of EBC, as at the date of these Orders. "Galah" means Galah Nominees Pty Ltd, the sixth respondent to these proceedings. "Leumi" means Bank Leumi le-Israel, the first respondent to these proceedings. "Leumi's shares in OAP" means those OAP shares held by A.N.Z. on behalf of Leumi as at the date of these Orders, excluding 80,000 OAP shares held by Leumi as principal. "National" means National Nominees Ltd, the fifth respondent to these proceedings. "QAP" means Offset Alpine Printing Group Ltd, the eighth respondent to these proceedings. THE COURT DECLARES THAT: 2.Leumi contravened section 722(1) of the Corporations Law, in that Leumi, having received on 20 April 1995 a Secondary Notice dated 18 April 1995 under section 719(1) of the Corporations Law, in relation to shares in OAP, failed to comply with the Secondary Notice before the end of two business days after 20 April 1995. 3.EBC contravened section 722(1) of the Corporations Law in that EBC, having received on 20 April 1995 a Secondary Notice dated 18 April 1995 under section 719(1) of the Corporations Law, in relation to shares in OAP, failed to comply with the Secondary Notice before the end of two business days after 20 April 1995. 4.EBC contravened section 722(1) of the Corporations Law in that EBC, having received on 24 April 1995 a Secondary Notice dated 20 April 1995 under section 719(1) of the Corporations Law, in relation to shares in OAP, failed to comply with the Secondary Notice before the end of two business days after 24 April 1995. 5.EBC contravened section 709(1) of the Corporations Law in that EBC, being a substantial shareholder in OAP, failed to give a written notice to OAP before the end of two business days after the day on which EBC became aware of the relevant interest or interests by reason of which EBC was a substantial shareholder in OAP. THE COURT ORDERS THAT: 6.Leumi dispose of Leumi's shares in OAP in the manner described in paragraph 8 of these Orders. 7.EBC dispose of EBC's shares in OAP in the manner described in paragraph 9 of these Orders. 8. Leumi instruct A.N.Z. to sell Leumi's shares in OAP to the highest bidder on any day up to and including the last remaining date for the acceptance ("the relevant date") of any offer for the shares in OAP ("the shares") current at the date of these Orders (whether or not subsequently varied or extended), or of any other offer made or announced on or before midnight on 24 January 1996 for the whole or any part of Leumi's shares in OAP, such that by the relevant date A.N.Z. has disposed of all of Leumi's shares in OAP. In this paragraph "any other offer" means an offer for all or part of the shares: - (i)whether or not subsequently varied or extended; and (ii)whether by Part A Statement, Part C Statement or by any other bid. 9.EBC instruct each of the EBC Nominees to sell EBC's shares in OAP to the highest bidder on any day up to and including the last remaining date for the acceptance ("the relevant date") of any offer for the shares in OAP ("the shares") current at the date of these Orders (whether or not subsequently varied or extended), or of any other offer made or announced on or before midnight on 24 January 1996 for the whole or any part of EBC's shares in OAP, such that by the relevant date each of the EBC Nominees has disposed of all of EBC's shares in OAP held by it for EBC. In this paragraph "any other offer" means any offer for all or part of the shares: - (i)whether or not subsequently varied or extended; and (ii)whether by Part A Statement, Part C Statement or by any other bid. 10.The Orders made on 4 May 1995 be dissolved. 11.Each of Leumi and A.N.Z., by itself, its servants and agents, be restrained from dealing with, whether by disposal or otherwise, Leumi's shares in OAP or any interest in those shares, otherwise than in accordance with paragraph 8 of these Orders. 12.EBC and each of the EBC Nominees, by itself, its servants and agents, be restrained from dealing with, whether by disposal or otherwise, EBC's shares in OAP or any interest in those shares, otherwise than in accordance with paragraph 9 of these Orders. - 4 - 13.Each of the cross-claims of Leumi and EBC be dismissed. 14.Subject to paragraph 15 of these Orders, Leumi and EBC pay the costs of the ASC of these proceedings. 15.The ASC pay Leumi's costs of proving that Leumi was a resident of Switzerland and that it carried on business in Switzerland. 16.The costs referred to in paragraph 14 of these Orders, after allowing for the costs referred to in paragraph 15 of these Orders, be paid out of the proceeds of sale of Leumi's shares in OAP and of EBC's shares in OAP. 17.Liberty be granted to the parties to apply on 48 hours notice. 18.Upon completion of any sale of Leumi's shares in OAP pursuant to paragraph 8 of these Orders, the proceeds of sale (net of ordinary expenses incurred in effecting the sale) shall be paid into Court and thereafter invested by the District Registrar, at the direction in writing of the solicitors for Leumi (with the consent in writing of the solicitor for the ASC), in the name of Leumi, to abide further orders of the Court. 19.Upon completion of any sale of EBC's shares in OAP pursuant to paragraph 9 of these Orders, the proceeds of sale (net of any ordinary expenses incurred in effecting the sale) shall be paid into Court and thereafter invested by the District Registrar, at the direction in writing of the solicitors for EBC (with the consent in writing of the solicitor for the ASC), in the name of EBC, to abide further orders of the Court. IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 3201 of 1995 GENERAL DIVISION ) BETWEEN: AUSTRALIAN SECURITIES COMMISSION Applicant AND: BANK LEUMI LE-ISRAEL First Respondent EBC ZURICH AG Second Respondent A.N.Z. NOMINEES LTD Third Respondent BB NOMINEES PTY LTD Fourth Respondent NATIONAL NOMINEES LTD Fifth Respondent GALAH NOMINEES PTY LTD Sixth Respondent STATTON NOMINEES PTY LTD Seventh Respondent OFFSET ALPINE PRINTING GROUP LTD Eighth Respondent ARKLOW PTY LTD Ninth Respondent Coram: Sackville J. Place: Sydney Date:20 December, 1995 REASONS FOR JUDGMENT In the judgment delivered in this matter on 14 December 1995, I directed the ASC to bring in draft minutes of order. I also invited the parties to make submissions on costs. On 18 December 1995, I considered submissions from the parties on the form of the orders that should be made and on costs. I indicated that I would make orders later in the week. Declarations and Orders I consider that the following declarations and orders are appropriate to give effect to the judgment, otherwise than in relation to the issue of costs. 1.In these orders: "A.N.Z." means A.N.Z. Nominees Ltd, the third respondent to these proceedings. "ASC" means the Australian Securities Commission, the applicant in these proceedings. "BB" means BB Nominees Pty Ltd, the fourth respondent to these proceedings. "EBC" means EBC Zurich AG, the second respondent to these proceedings. "EBC Nominees" means A.N.Z., BB, National, Galah and Statton. "EBC's shares in OAP" means those OAP shares held by any of the EBC Nominees on behalf of EBC, as at the date of these Orders. "Galah" means Galah Nominees Pty Ltd, the sixth respondent to these proceedings. "Leumi" means Bank Leumi le-Israel, the first respondent to these proceedings. "Leumi's shares in OAP" means those OAP shares held by A.N.Z. on behalf of Leumi as at the date of these Orders, excluding the 80,000 OAP shares held by Leumi as principal. "National" means National Nominees Ltd, the fifth respondent to these proceedings. "OAP" means Offset Alpine Printing Group Ltd, the eighth respondent to these proceedings. 2.DECLARE that Leumi contravened section 722(1) of the Corporations Law, in that Leumi, having received on 20 April 1995 a Secondary Notice dated 18 April 1995 under section 719(1) of the Corporations Law in relation to shares in OAP, failed to comply with the Secondary Notice before the end of two business days after 20 April 1995. 3 ..DECLARE that EBC contravened section 722 (1) of the Corporations Law, in that EBC, having received on 20 April 1995 a Secondary Notice dated 18 April 1995 under section 719(1) of the Corporations Law in relation to shares in OAP, failed to comply with the Secondary Notice before the end of two business days after 20 April 1995. 4 .DECLARE that EBC contravened section 722 (1) of the Corporations Law in that EBC, having received on 24 April 1995 a Secondary Notice dated 20 April 1995 under section 719(1) of the Corporations Law, in relation to shares in OAP, failed to comply with the Secondary Notice before the end of two business days after 24 April 1995. 5 ..DECLARE that EBC contravened section 709(1) of the Corporations Law in that EBC, being a substantial shareholder in OAP, failed to give a written notice to OAP before the end of two business days after the day on which EBC became aware of the relevant interest or interests by reason of which EBC was a substantial shareholder in OAP. 6.ORDER that Leumi dispose of Leumi's shares in OAP in the manner described in paragraph 8 of these Orders. 7.ORDER that EBC dispose of EBC's shares in OAP in the manner described in paragraph 9 of these Orders. 8.ORDER that Leumi instruct A.N.Z. to sell Leumi's shares in OAP to the highest bidder on any day up to and including the last remaining date for the acceptance ("the relevant date") of any offer for the shares in OAP ("the shares") current at the date of these Orders (whether or not subsequently varied or extended), or of any other offer made or announced on or before midnight on 24 January 1996 for the whole or any part of Leumi's shares in OAP, such that by the relevant date A.N.Z. has disposed of all of Leumi's shares in OAP. In this paragraph "any other offer" means an offer for all or part of the shares: - (i)whether or not subsequently varied or extended; and (ii)whether by Part A Statement, Part C Statement or by any other bid. 9.ORDER that EBC instruct each of the EBC Nominees to sell EBC's shares in OAP to the highest bidder on any day up to and including the last remaining date for the acceptance ("the relevant date") of any offer for the shares in OAP ("the shares") current at the date of these Orders (whether or not subsequently varied or extended), or of any other offer made or announced on or before midnight on 24 January 1996 for the whole or any part of EBC's shares in OAP, such that by the relevant date each of the EBC Nominees has disposed of all of EBC's shares in OAP held by it for EBC. In this paragraph "any other offer" means any offer for all or part of the shares: - (i)whether or not subsequently varied or extended; and (ii)whether by Part A Statement, Part C Statement or by any other bid. 10.ORDER that the Orders made on 4 May 1995 be dissolved. 11.ORDER that each of Leumi and A.N.Z., by itself, its servants and agents, be restrained from dealing with, whether by disposal or otherwise, Leumi's shares in OAP or any interest in those shares, otherwise than in accordance with paragraph 8 of these Orders. 12.ORDER that EBC and each of the EBC Nominees, by itself, its servants and agents, be restrained from dealing with, whether by disposal or otherwise, EBC's shares in OAP or any interest in those shares, otherwise than in accordance with paragraph 9 of these Orders. 13.ORDER that each of the cross-claims of Leumi and EBC be dismissed. I make the following comments on these orders: Paragraph 1 The definitions of "Leumi's shares in OAP" and "EBC's shares in OAP" follow the form suggested by the ASC and adopted by Leumi and EBC. The definitions are intended to take account of the increases in the holdings of Leumi and EBC after the ASC received the information in response to the primary notices issued in April 1995. The exclusion of the 80,000 OAP shares held by Leumi as principal refers to the 80,000 shares held by A.N.Z. on behalf of Leumi and beneficially owned by Leumi, being the shares referred to in the letters from Atanaskovic Hartnell to the ASC dated, respectively, 31 May 1995 and 19 June 1995. Paragraph 2 I think it appropriate to make a declaration that Leumi has breached s.722 of the Corporations Law, rather than s.723. On my findings, Leumi contravened s.722, by failing to comply with the secondary notices within two business days of receiving the faxed secondary notice. It is true that I have found that Leumi made a "request" for the purposes of s.721. However, that request was out of time. I also found that there was no basis for challenging the ASC's refusal of the request. I did not find it necessary to deal with Leumi's application to extend the time for making the request. Had I done so, I would have rejected the application, on the ground that it would be futile to extend the period for making a request. Paragraphs 6 and 7 I think orders should be made in accordance with s.613(1)(d) of the Corporations Law, directing disposal of the relevant shares. Paragraphs 8 and 9 These generally follow the form of orders proposed by Leumi and EBC, save that they incorporate, as suggested by Mr Weber for Arklow, a specific time by reference to which an offer is to be identified for the purposes of each of the paragraphs. I think this makes the orders clearer and does not cut across the statutory scheme governing take-over announcements created by Part 6.4 of the Corporations Law. Mr Lindsay submitted that orders should be made vesting the shares in the ASC and, in effect, giving it the carriage of the disposal of the shares. However, I do not think that such an order is consistent with the judgment. In any event, the purpose of the orders is to ensure that the shares are sold to the highest bidder within the time frame specified. It was not suggested that the orders would be ineffective to achieve this purpose. Paragraph 10 I think it is preferable for the interlocutory orders to be discharged and fresh orders made restraining dealings in the shares, save in accordance with paragraphs 8 and 9. As Mr White pointed out, there may be some unintended consequences if all the interlocutory orders are continued. Dividends I do not think there is any basis in the judgment for requiring OAP to hold all dividends due by it to A.N.Z. or the EBC Nominees. Costs: ASC, Leumi and EBC The ASC submitted that Leumi and EBC should pay its costs and that these should be paid out of the proceeds of sale of the shares. Leumi and EBC each submitted that their costs should be paid by the ASC, at least from the date they made open offers to sell the shares held by them in OAP. On 10 May 1995, Leumi's solicitors sent an open letter to the ASC, containing the following passage: "However, in an effort to settle this matter and achieve a result apparently desired by the Australian Securities Commission, our client would be prepared to consent, next Monday 15 May 1995, to an order along the lines of paragraph 5 to the Commission's Application. Were the Commission to be agreeable to this course of action, obviously the precise terms and conditions of the order would need to be considered. Our client would wish, in this regard, that the order permit the Third Respondent a period of time during which to dispose of the shares at market price. Considering that the shares are quite thinly traded, our client would submit to you that the appropriate period should be six months." Paragraph 5 of the ASC's application sought an _ order, alternatively to other relief, that A.N.Z. Nominees Ltd divest itself of the shares held by it in OAP on behalf of Leumi. On 11 May 1995, EBC's Australian solicitors advised the ASC by means of an open letter that foJur client is prepared to consent to an order that the relevant shares be sold on terms acceptable to you....As discussed, our client's preference is for a sale of the shares to the stockmarket preferably in the hands of a broker and over a relatively short period of time - say 5 to 6 months". On 13 June 1995, EBC's solicitors sent a further open letter to the ASC, containing the following passage: "In the light of the relief that you seek in the Statement of Claim and the consequences of any vesting orders the Court might make in your favour, our client has instructed us to put to you again the following proposal in relation to the settlement of the proceedings. Our client is prepared to consent to an order that the relevant shares be sold by a third party trustee approved by you on terms acceptable to you. Our client will agree to pay your costs of the proceedings including any costs and expenses you may incur relating to the sale process and for the proceeds of the sale to be treated in effect in the same way that is referred to in your letter of 7 June 1995. Our client's proposal provides you with the ultimate relief you are otherwise seeking from the Court in the proceedings." Mr White, who appeared with Ms Wines for Leumi, and Mr Conti QC, who appeared with Mr Kunc for EBC, relied on these letters as warranting an order for costs in favour of Leumi and EBC against the ASC. They submitted that the letters, in substance if not in form, constituted offers of compromise within 0.23, r.2(1) of the Federal Court Rules and that the ASC had obtained a judgment not more favourable than the terms of the offer. Accordingly, Leumi and EBC were entitled, unless the Court otherwise ordered, to receive their costs from the ASC. Alternatively, they submitted that the offers constituted Caldebank letters which were to be taken into account in exercising the Court's discretion to award costs under s.1335(2) of the Corporations Law or s.43(1) and (2) of the Federal Court of Australia Act 1976 (Cth): Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 (FCA/Spender J.), at 100-101. I do not think that either letter can be regarded as an offer of compromise for the purposes of FCR, 0.23. They do not follow the prescribed form: 0.23, r.3(2). If they were offers of compromise, the fact that they had been made should not have been disclosed to the Court until all questions of relief had been determined: FCR, 0.23, r.8. I am prepared, however, to assume that the letters should be taken into account in the exercise of the Court's discretion on costs, on the principles discussed in Messiter v Hutchinson (1987) 10 NSWLR 525 (S.Ct. NSW/Rogers J.). In my opinion, on this assumption, the letters do not justify making an order for costs in favour of Leumi or EBC. Nor do they justify not awarding costs to the ASC, should it otherwise be entitled to an order for costs against Leumi and EBC. At the time Leumi and EBC made their respective open offers, no take-over offer had been made for the shares in OAP. The first take-over offer was not made until 13 October 1995, some five weeks before the hearing of the matter. Nor did the open letters acknowledge that Leumi and EBC had contravened the Corporations Law. Indeed, the issue of whether they had contravened the Corporations Law was hotly contested throughout the proceedings. In the result, the ASC established that Leumi and EBC contravened s.722 of the Corporations Law and that, in addition, - 12 - EBC contravened s.709 of the Corporations Law by failing to file a substantial shareholder notice. Moreover, I have held that these contraventions should not be excused under s.743 of the Corporations Law. I noted in the judgment (at 122) that, had the take-over offers not been made by Fobiti and Arklow, there would have been much to be said for vesting the shares in the ASC until the information sought in the secondary notices was provided by Leumi and EBC. The existence of the take-over offers was an important, if not critical factor in the decision that Leumi and EBC should be ordered to give instructions to sell the shares, and that an order vesting the shares in the ASC should not be made. The making of the take-over offer, so far as this litigation was concerned, was a fortuitous development for which neither the ASC nor Leumi or EBC was responsible. It follows that the orders that have ultimately been made are substantially different from the offers of compromise made by Leumi and EBC. If it matters, the orders ultimately made are more favourable to the ASC than those proposed in the offer of compromise. Moreover, the ASC may well have obtained even more favourable relief had not fortuitous circumstances (from the perspective of ASC, Leumi and EBC) not intervened shortly before the hearing. The ASC has succeeded on what I consider to have been the major points in issue between the parties, namely, whether Leumi and EBC contravened the Corporations Law and, if so, whether these contraventions should be excused. The ASC did not succeed in - 13 - obtaining all the relief that it sought. However, its failure was, at least to a significant extent, attributable to events which occurred only shortly before the hearing. Furthermore, the argument that an order vesting the shares in the ASC would cause unfair prejudice to the competing bidders, which was important in determining the final form of orders, only emerged at the stage of submissions. This argument was relied on especially (although not exclusively) by OAP and Arklow, the latter only being joined as a party on the day the hearing commenced. Leumi and EBC contended that there were other factors which suggested that an order for costs should not be made in favour of the ASC. They pointed to the absence of bad faith by Leumi and EBC, the fact that the case raised novel issues of considerable difficulty and that, in one sense, the litigation had the qualities of a test case. I do not think that any of these factors detracts from the proposition that the ASC has largely succeeded in the litigation and that the appropriate course, subject to one minor exception, is that its costs should be paid by Leumi and EBC. Nor have I overlooked the fact that the ASC did not succeed on all issues of liability (if they may be so described). For example, the ASC did not succeed in establishing that Leumi had contravened s.709 of the Corporations Law, although it did succeed on that issue against EBC. On balance, however, I do not think that this should alter the outcome, namely, that Leumi and EBC should pay the costs of the ASC. The qualification to which I have referred is that, having regard to a notice to admit facts given by Leumi to the ASC, the ASC should pay Leumi's costs of proving that Leumi was a resident of Switzerland and that it carried on business in Switzerland. Costs: Other Parties Arklow was joined as a party on the condition that it would not seek an order for costs. Although OAP was a party from the outset, I do not think that it should be in any different position in relation to costs. I think that it should bear its own costs. Ms Johnson, on behalf of National, sought an order for costs. On the evidence, its role was simply as a nominee company. National did not play an active part in the proceedings, although it was required to attend court initially, when the ASC sought interlocutory relief. I do not think that any order for costs should be made in its favour. Costs and the Proceeds of Sale The ASC sought an order that the costs payable by Leumi and EBC be paid out of the proceeds of any sale of the shares. Mr White pointed out that, ordinarily, such an order would be sought by relying on the principles applicable to Mareva injunctions. While this may be so, I do not think that the availability of other remedies precludes an order of this kind, if there is power to make it. On the evidence, Leumi and EBC are Swiss corporations, carrying on business in Switzerland. There is nothing in the evidence to suggest that they carry on business in Australia, except by giving instructions to acquire shares on behalf of undisclosed principals, or that they have assets beneficially held by them in Australia. Mr Conti and Mr White asserted that each is a reputable corporation and that it should not be assumed that they would not meet any costs order. However, no suggestion was made as to how the ASC might be able to enforce any costs order, if an order of the kind proposed by Mr Lindsay were not made. In my view, there is power to make the orders sought by the ASC. It is true that s.742(2) permits the Court to make "in relation to any of the shares such order or orders as it thinks just". Leumi and EBC submitted that an order requiring the costs to be paid out of the proceeds of sale of the shares was not an order "in relation to any of the shares". However, I think the necessary power can be found in s.744(6) of the Corporations Law, which states that an order under a "relevant provision" (including s.742(2)) may include such ancillary or consequential provisions as the Court thinks just and reasonable. I think it is ancillary or consequential to orders directing the disposal of shares (s.742(2) and s.613(1)(d) of the Corporations Law) to require the ASC's costs of the proceedings in which such a direction is made to be met out of the proceeds of sale. Alternatively, the power to make such an order can be found in - 16 - s.23 of the Federal Court of Australia Act 1976. Accordingly, I make the following orders as to costs: 14.ORDER that, subject to paragraph 15 of these Orders, Leumi and EBC pay the costs of the ASC of these proceedings. 15.ORDER that the ASC pay Leumi's costs of proving that Leumi was a resident of Switzerland and that it carried on business in Switzerland. 16.ORDER that the costs referred to in paragraph 14 of these Orders, after allowing for the costs referred to in paragraph 15 of these Orders, be paid out of the proceeds of sale of Leumi's shares in OAP and of EBC's shares in OAP. Liberty to Apply I think it appropriate to provide that the parties should have liberty to apply, in the event that any issue arising out of these orders needs to be referred to the Court. Accordingly, the orders will include the following: 17.GRANT liberty to the parties to apply on 48 hours notice. Orders Pending Possible Appeal Mr Lindsay sought a "Stay" of the orders directing Leumi and EBC to give instructions for their shares in OAP to be sold, although he did not dispute that, in conformity with the judgment, a sale of the shares should take place, albeit (as he described it) on an "interlocutory basis". The ASC's draft orders also provide for the proceeds of any sale of the shares to be paid into court pending an appeal. As I understand the ASC's position, its primary concern is to preserve the subject matter of the proceedings pending an appeal (should one be instituted). Without limiting the ASC, it wishes to be able to argue that, even if the shares held for Leumi and EBC are sold, the proceeds of sale should be held in trust so as to allow the Full Court, should it so decide, to make distribution of the proceeds conditional upon compliance with the secondary notices and (in the case of EBC) conditional upon the giving of a substantial shareholder's notice. The ASC also might wish to argue on appeal that, even if the shares have been sold, they should have been vested in the ASC, pending compliance by Leumi and EBC with the relevant provisions of the Corporations Law. Mr Lindsay stated that he did not yet have instructions to appeal and submitted that those instructions could not fairly be expected until final orders had been made. I think that in these circumstances the appropriate course is to preserve the ASC's position pending a decision whether or not to appeal, so far as that can be done consistently with the judgment I have already delivered. The proceeds of sale of the shares in OAP, held for Leumi and EBC, should be paid into court pending - 18 - further order. If no appeal is instituted, I would expect these orders to be discharged and payment of the proceeds be made to the appropriate nominee company. If an appeal is instituted, it will be open to the parties to apply to vary the terms of the orders, should they be so advised. I appreciate that Mr Conti and Mr White argued that the Full Court has no power to order that the proceeds of sale be withheld from the "rightful owners" pending compliance with the provisions of the Corporations Law. However, that seems to me to be a matter for argument, should an appeal be instituted. The availability of the argument does not prevent the status quo being maintained so far as is possible, having regard to the orders I intend to make. This allows the ASC, if so advised, to proceed with an appeal to the Full Court and to gain practical benefits should its arguments succeed. The ASC, Leumi and EBC, although not consenting to orders in the terms of paragraphs 18 and 19 below, have agreed on the form of orders should I take the view (as I do) that the proceeds of sale should be preserved pending a decision by the ASC (or any other party) whether or not to appeal. I have altered the form submitted by the parties only slightly. 18.ORDER that upon completion of any sale of Leumi's shares in OAP pursuant to paragraph 8 of these Orders, the proceeds of sale (net of ordinary expenses incurred in effecting the sale) shall be paid into Court and thereafter invested by - 19 - the District Registrar, at the direction in writing of the solicitors for Leumi (with the consent in writing of the solicitor for the ASC), in the name of Leumi, to abide further orders of the Court. 19.ORDER that upon completion of any sale of EBC's shares in OAP pursuant to paragraph 9 of these Orders, the proceeds of sale (net of any ordinary expenses incurred in effecting the sale) shall be paid into Court and thereafter invested by the District Registrar, at the direction in writing of the solicitors for EBC (with the consent in writing of the solicitor for the ASC), in the name of EBC, to abide further orders of the Court. I should make two further comments. First, I do not think it appropriate to make any orders restraining the payment of dividends already declared by OAP to A.N.Z. and the EBC Nominees and by them to Leumi and EBC, pending a possible appeal. Secondly, Mr Weber asked me to provide expressly that nothing in the orders is to place any obligation on OAP or Arklow in respect of the net proceeds of sales of the shares after completion of the sales. However, I do not think such provision is necessary. I certify that this and the preceding 19 pages are a true copy of the Reasons for Judgment oof the Honourable Justice Sackville. Associate: Dated: 20 December, 1995 Heard:18 December, 1995 Place: Sydney Decision: 20 December, 1995 Appearances:Mr G. Lindsay SC, instructed by Mr Peter Stepek, Regional General Counsel of the Australian Securities Commission, appeared for the applicant. Mr R.W. White and Ms P.P. Wines, instructed by Atanaskovic Hartnell, Solicitors, appeared for' the first respondent. Mr R.A. Conti QC and Mr F. Kunc, instructed by Freehill Hollingdale & Page, Solicitors, appeared for the second respondent. Ms L. Johnson of Mallesons Stephen Jaques, Solicitors, appeared for the fifth respondent. Mr P. Garde of Landerer & Company, Solicitors, appeared for the eighth respondent. Mr R. Weber, instructed by Minter Ellison, Solicitors, appeared for the ninth respondent.