Chapmans Ltd v Australian Stock Exchange Ltd [1995] FCA 508

CATCHWORDS

Practice and Procedure - Declaration - utility - discretion - whether premature. Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 - cons. CHAPMANS LIMITED v AUSTRALIAN STOCK EXCHANGE LIMITED No. NG 20 of 1994 BEAUMONT J. SYDNEY 10 JULY 1995

IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 20 of 1994 ) GENERAL DIVISION ) BETWEEN: CHAPMANS LIMITED Applicant AND: AUSTRALIAN STOCK EXCHANGE LIMITED Respondent CORAM: BEAUMONT J. DATE: 10 JULY 1995 PLACE: SYDNEY

MINUTES OF ORDER

THE COURT ORDERS:

That the separate question be answered as follows:

Q. Whether a declaratory order should be made to the effect that the decision evidenced by the respondent's letter to the applicant dated 26 November 1993 is (a) void ab initio or (b) voidable or (c) invalid in some other sense? A. In exercise of its discretion the Court refuses to grant the declaration sought at this stage. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 20 of 1994 ) GENERAL DIVISION ) BETWEEN: CHAPMANS LIMITED Applicant AND: AUSTRALIAN STOCK EXCHANGE LIMITED Respondent CORAM: BEAUMONT J. DATE: 10 JULY 1995 REASONS FOR JUDGMENT (No. 4)

The next separate question set aside is as follows: Whether a declaratory order should be made to the effect that the decision evidenced by the respondent's letter to the applicant dated 26 November 1993 is (a) void ab initio or (b) voidable or (c) invalid in some other sense? The letter dated 26 November 1993 referred to in the separate question is in the following terms: "Thank you for your letter dated 23 November 1993. Having given consideration to your submission Australian Stock Exchange Limited (`ASX') has resolved that Chapmans Limited be removed from the Official List of ASX at close of trading on Friday, 3 December 1993 unless an appeal against this decision is received on or before Wednesday, 1 December 1993. Chapmans Limited has the right to request that this decision be reviewed by the National Listing Committee. Upon receipt of your written request to this effect on or before Wednesday, 1 December 1993 the matter will be referred to the Committee together with the relevant documentation to date and any further submission you wish to make in writing." It is common ground that although the letter refers to an appeal and further refers to a right in the applicant to request a review of the decision by the National Listing Committee, no such right of appeal and no such right of review are mentioned in the Listing Rules. However, by Article 6 of the respondent's Articles of Association, provision is made to the effect that the Exchange is empowered to delegate some of its functions to, inter alia, a committee. It seems clear then, that although the respondent was empowered to delegate the decision, whether to remove the applicant from the Official List, to the National Listing Committee, there was no contractual right of appeal, and no contractual right of review vested in the applicant. The meaning of the letter of 26 November 1993 is not, on its face, clear beyond argument. However, one matter does emerge with clarity from its terms and that is that any decision, or purported decision, that was made by the respondent at that time was conditional; that is, was liable to defeasance in the event that an appeal against the decision was received by 1 December 1993. By letter dated 1 December 1993 the applicant purported to exercise the right of review mentioned in the respondent's letter. It is common ground that the right of appeal was exercised by the applicant on 1 December. This is confirmed by the respondent's defence filed on 3 March 1995 (see para. 12(a)) and has been repeated in submissions put on behalf of the respondent. When the terms of the letter of 26 November 1993 are read as a whole, it is clear that, provided the appeal is lodged within the prescribed time, it is the intention of the respondent that the whole issue of removal, including a determination that the applicant not be removed, should be referred to the National Listing Committee for determination on behalf of the respondent. On behalf of the applicant it is submitted that the decision to remove purportedly made in the letter of 26 November was void for several reasons. It is said, inter alia, that the decision was made in breach of para. 15 of Listing Rule 3J of the respondent's Listing Rules which is in the following terms: "(15) When a company's securities have been suspended from trading and the Exchange has made requisitions upon the company and the requisitions have not been answered satisfactorily, the Exchange may advise the company that if the requisitions are not met to the satisfaction of the Exchange within a further period of 3 months, the company may be removed from the Official List." Independently of this provision, it is contended for the applicant that, in other respects, the applicant was denied procedural fairness in the present connection, with the consequence, it is said, that the decision was void ab initio, Although the settled course of authority would now indicate that only in special circumstances should a court make a declaration that a decision was void ab initio, I do not find it necessary to consider whether the present case falls within one of those exceptional categories. In my opinion, it is not appropriate, in the exercise of the Court's discretion, that the declaratory order sought should now be made. It is, of course, well established that the making of a declaration as a form of relief is a discretionary power (see, for instance, Ainsworth v Criminal Justice Commission, (1992) 175 CLR 564 at 581-2, 596). In my view, when the letter dated 26 November is taken in context and when regard is had to the whole process which is there foreshadowed, there is no practical utility in granting declaratory relief at this stage, even if it be assumed in the applicant's favour that a substantive cause of action could otherwise be made out. As I have said, I express no opinion on that substantive question. Another way of expressing my reservations in the present connection is to say that, in my view, it is premature to rule on the matter now raised. I have, however, taken into account two special considerations to which I should now refer. In the first place, I have noted an undertaking given to the court on behalf of the respondent that, in the event that the applicant were later to commence proceedings alleging a lack of procedural fairness in connection with any decision that may be made by the respondent, or by its National Listing Committee, the respondent undertakes that it will not seek in those proceedings to assert that, within the expanded "Anshun" principle of estoppel (see Port of Melbourne Authority v Anshun Pty. Ltd. (1981) 147 CLR 589), the applicant acted unreasonably in the present proceedings in failing to contend that the events to date disclosed a failure on the part of the respondent to accord procedural fairness to the applicant in any decision to remove it from the Official List. The second matter to which I should refer is that, in para.12 of its defence and in submissions made on its behalf orally on a number of occasions, the respondent accepts that its purported decision conveyed in the letter dated 26 November 1993 to remove the applicant from the Official List was not operative in the event that an appeal against that decision was received by it on or before 1 December 1993; and that, as I have said, this appeal has been lodged. In those circumstances, it seemed to me to be proper to infer that there was no present threat made on behalf of the respondent to proceed to remove the applicant from the Official List unless and until its National Listing Committee had so determined. The formal answer I give then to the question is that in exercise of its discretion the court refuses to grant the declaration sought at this stage.