FEDERAL COURT OF AUSTRALIA Australian Securities & Investments Commission v Hallmark Gold NL [1999] FCA 360 CORPORATIONS LAW – application for declarations that persons not validly appointed as directors – persons appointed to fill casual vacancies – no election of directors to fill vacated offices at general meeting – whether persons continued as directors – construction of articles. Australian Securities and Investments Commission Act 1989 (Cth) ss 1, 11(7), 13, 30, 232, 615 Corporations Act 1989 (Cth) s 56 Federal Court of Australia Act 1976 (Cth) s 21 Trade Practices Act 1974 (Cth) Corporations Law ss 2, 128, 129, 135, 224D(3), 243H, 249HA, 250R, 1324 Corporations (New South Wales) Act 1990 s 42(3) Brien v Australasian Memory Pty Ltd (1997) 149 ALR 393 cited Munster v Cammell Company (1882) 21 Ch D 183 cited Imperial and Grant Hotels Co Ltd v Christchurch Guardians [1905] 2 KB 239 cited West Riding of Yorkshire County Council v Parish Council of Middleton [1906] 2 KB 157 cited Spencer v Kennedy [1926] Ch 125 cited Grundt v Great Boulder Pty Mines Ltd [1948] Ch 145 cited Holt v Catterall (1931) 47 TLR 332 cited Robert Batcheller & Sons Ltd v Batcheller [1945] Ch 169 cited Petsch v Kennedy [1971] 1 NSWLR 494 cited Jones v Money Mining NL (1995) 17 ACSR 531 cited Re QCT Resources Ltd [1992] 1 Qd R 417 cited Stephen v Southern Cross Exploration NL (1976) CLC 40-253 cited Re Morris (1994) 15 ACSR 490 cited RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164 cited Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89 cited Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 cited Peek v New South Wales Egg Corporation (1986) 6 NSWLR 1 cited Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 distinguished AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION v HALLMARK GOLD NL ACN 000 817 023 and WILLIAM ARTHUR FORGE and DAVID JOHN MUIR and PETER JOHN CLARK WG 3034 OF 1998 LEE J 1 APRIL 1999 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WG 3034 OF 1998 BETWEEN: AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION Applicant AND: HALLMARK GOLD NL ACN 000 817 023 First Respondent WILLIAM ARTHUR FORGE Second Respondent DAVID JOHN MUIR Third Respondent PETER JOHN CLARK Fourth Respondent JUDGE: LEE J DATE OF ORDER: 1 APRIL 1999 WHERE MADE: PERTH THE COURT ORDERS AND DECLARES THAT: 1. As at the end of the annual general meeting of the first respondent held on 22 October 1998 the second and third respondents ceased to be directors of the first respondent. 2. The fourth respondent was not validly appointed as a director of the first respondent. 3. There be liberty to apply with respect to costs. 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 WG 3034 OF 1998 BETWEEN: AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION Applicant AND: HALLMARK GOLD NL ACN 000 817 023 First Respondent WILLIAM ARTHUR FORGE Second Respondent DAVID JOHN MUIR Third Respondent PETER JOHN CLARK Fourth Respondent JUDGE: LEE J DATE: 1 APRIL 1999 PLACE: PERTH REASONS FOR JUDGMENT 1 In these matters the applicant ("ASIC") seeks declarations that the second, third and fourth respondents ("Forge, Muir and Clark") were not validly appointed as directors of the first respondent ("Hallmark") at material times. On the hearing of the application Hallmark supported the order sought by ASIC, Forge and Clark opposed them and Muir did not appear. 2 Pursuant to s 2 of the Corporations Law ("the Law") ASIC has the general administration of the Law and under s 1 of the Australian Securities and Investments Commission Act 1989 (Cth) ("the ASIC Act") in performing that function ASIC must strive to, inter alia, "promote the confident and informed participation of investors and consumers in the financial system". 3 On 27 and 30 October 1998 ASIC received complaints from two shareholders of Hallmark, a listed public company, and advice from the Australian Stock Exchange Limited ("ASX") that it had received complaints from two shareholders of Hallmark, concerning the validity of the appointment of Forge, Muir and Clark as directors of Hallmark and in respect of dealings with the assets of Hallmark undertaken by those directors on behalf of Hallmark. 4 On 3 November 1998, pursuant to s 13 of the ASIC Act, ASIC determined that it had reason to suspect that contraventions of the Law that concerned the management or affairs of Hallmark may have been committed and that it was expedient for due administration of the Law that ASIC make an investigation thereof. In particular, the investigation commenced by ASIC had regard to possible contravention of s 232 (duty of an officer of a corporation to act honestly and with reasonable care and diligence in the exercise of powers and the discharge of duties of that office), s 243H (impermissible financial benefit given by a public company to a related party) and s 615 (acquisition by a person of more than the prescribed percentage of shares in a corporation). 5 Pursuant to notices directed to Hallmark and ASX under s 30 of the ASIC Act, ASIC obtained the production of books relating to the affairs of Hallmark. 6 On 5 November 1998, under s 1324 of the Law, ASIC applied to this Court for injunctions to restrain Forge, Muir and Clark acting as directors of Hallmark unless and until they were validly appointed to those offices. Further, ASIC sought declarations that the three had not been validly appointed as directors and an order appointing a Receiver and Manager to the property of Hallmark. 7 On 6 November 1998 an application for interim relief by ASIC, including the appointment of a Receiver and Manager, came on for hearing. Forge, Muir and Clark appeared by counsel and opposed the application. An order was made that Forge, Muir and Clark cause Hallmark to convene a general meeting at which directors of the company were to be appointed by election by shareholders and that undertakings be given by them to maintain the status quo in the affairs of Hallmark until such a meeting had taken place. The undertakings were duly given. 8 Pursuant to that order a meeting of members of Hallmark was held on 18 December 1998. At that meeting van Noort and Biddle were elected as directors by shareholders. No other directors were elected. 9 After the meeting Muir asserted that he continued in office as a director. On 20 January 1999 ASIC commenced another proceeding in this Court seeking an order restraining Muir from purporting to act as a director of Hallmark and a declaration that he had not been appointed to that office. On 18 February 1999 Muir purported to resign as a director. 10 Directions were made for the preparation and hearing of that application and for it to be heard at the same time as the first application brought by ASIC. The applications were heard on 15 March 1999. 11 According to the affidavits received in evidence the relevant facts were as follows. 12 Hallmark was incorporated in approximately 1970 as Lightning Ridge Mining NL, later known as Sirius Corporation NL. The place of incorporation was New South Wales and, therefore, the Law which applies to it is the Law of New South Wales. (See: Brien v Australasian Memory Pty Ltd (1997) 149 ALR 393 at 430.) According to that part of the corporate record in evidence Hallmark had one director between July 1982 and May 1983, two directors between May 1983 and February 1984, three directors between February 1984 and March 1988, four directors between March 1988 and July 1991, and between August 1991 and September 1998. For the period of one month between July and August 1991 there were five directors. 13 In August 1998 the directors according to date of earliest appointment, were Smith (1983), Judge (1984), Corp (1991) and Bunting (1997). On 19 August 1998 those directors resolved that the annual general meeting of Hallmark be held on 15 October 1998 and that at the annual general meeting Smith and Judge, who it was said were due to retire according to the Articles of Association of Hallmark ("the Articles"), be proposed for re-election. On 21 September 1998 notice that the annual general meeting would be held on 22 October 1998 was forwarded to members of Hallmark. Members were informed that Smith and Judge would retire at that meeting and offer themselves for re‑election. 14 The Articles relevant to the election of directors read as follows: "11.1 Convening of General Meetings of Shareholders The Directors may, whenever they think fit, convene a general meeting of Shareholders provided that, in the event that there are no Directors holding office, the Secretary shall convene a general meeting for the purpose of electing Directors. A general meeting shall also be convened on requisition as is provided for by the Corporations Law, or in default, may be convened by such requisitionists as empowered to do so by the Corporations Law. 11.2 Notice A notice of a general meeting shall be given in accordance with the requirements of Section 247 and Section 250(5) of the Corporations Law and Article 26, and shall specify the place, the day and the time of the meeting and state the general nature of the business to be transacted at the meeting. The non-receipt of a notice of a general meeting by a Shareholder or the accidental omission to give such a notice to a Shareholder shall not invalidate any resolution passed at any such meeting. It is not necessary for a notice of an annual general meeting to state that the business to be transacted at the meeting includes the declaring of a dividend, the consideration of accounts and the reports of directors and auditors, the election of directors in the place of those retiring or the appointment and fixing of the remuneration of the auditors. 11.3 Notice to Home Exchange The Company shall notify the Home Exchange: (a) of any general meeting at which Directors are to be elected at least 20 Business Days before the earliest intended date for the general meeting and that notice shall state that nominations for election to the office of Director is [sic] to be received not later than 5 Business Days after the date that the notice to the Home Exchange bears, or any extended time as the Directors shall determine; (b) of any general meeting (other than a meeting to pass a special resolution) at least 10 Business Days before such meeting is held; and (c) of any general meeting convened to pass a special resolution, at least 15 Business Days before such meeting is held. All notices convening general meetings shall specify the place, date and hour of the meeting. 11.4 Annual General Meeting An annual general meeting shall be held in accordance with the requirements of Section 245 of the Corporations Law. … 13.1 First Directors The names of the first Directors shall be determined in writing by the subscribers to the Memorandum or a majority of them. 13.2 Number of Directors The Company shall at all times have at least 3 Directors. The number of Directors shall not exceed 10. The Company may, by ordinary resolution, increase or reduce the number of Directors and may also determine in what rotation the increased or reduced number is to go out of office. 13.3 Rotation of Directors At the Company's first annual general meeting, all the Directors shall retire from office, and at the annual general meeting in every subsequent year, one-third of the Directors for the time being, or, if their number is not a multiple of 3, then the whole number nearest one-third, shall retire from office. The Directors to retire at an annual general meeting other than the first annual general meeting are those who have been longest in office since their last election, but, as between persons who became Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by drawing lots. A retiring Director is eligible for re-election. 13.4 Automatic Re-appointment of Directors The Company may, at the general meeting at which a Director so retires, fill the vacated office by electing a person to that office by resolution. Subject to sub-section 225(3) of the Corporations Law, if the vacated office is not so filled, the retiring Director shall, if offering himself for re-election and not being disqualified under the Corporations Law from holding office as a Director, be deemed to have been re-elected unless at that general meeting: (a) it is expressly resolved not to fill the vacated office, or (b) an ordinary resolution for the re-election of that Director is put and lost. 13.5 Election of Directors No person other than a Director seeking re-election shall be eligible for election to the office of Director at any general meeting unless he or some Shareholder intending to propose him has not later than 5 Business Days after the date shown on the notice to the Home Exchange referred to in Article 11.3(a), left at the Registered Office a notice in writing duly signed by the nominee giving his consent to the nomination and signifying his candidature for the office or the intention of such Shareholder to propose him. Notice of each and every candidature for election as a Director shall be given to each Shareholder with or as part of the notice of the meeting at which the election is to take place. The Company shall observe the requirements of Section 225 of the Corporations Law with respect to the election of Directors. Where the number of nominations for election as a Director exceeds the number of Directors who have or are to resign at the general meeting, the order in which the nominations are to be voted on shall be determined by drawing lots and once the relevant vacancies have been filled, no further nominations shall be voted on. 13.6 Casual Vacancies and Additional Directors The Directors may at any time appoint a person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors, but so that the total number of Directors does not at any time exceed the maximum number specified by these Articles. Any Director so appointed holds office only until the next following general meeting and is then eligible for re‑election but shall not be taken into account in determining the Directors who are to retire by rotation (if any) at that meeting. 13.7 Removal of Director The Company may by resolution remove any Director before the expiration of his period of office, and may by resolution appoint another person in his place. The person so appointed is subject to retirement at the same time as if he had become a Director on the day on which the Director in whose place he is appointed was last elected a Director. 13.8 Vacation of Office The office of Director shall automatically become vacant if the Director: (a) ceases to be a Director by virtue of Section 224 or any other provision of the Corporations Law; (b) becomes bankrupt or makes any arrangement or composition with his creditors generally; (c) becomes prohibited from being a Director by reason of any order made under the Corporations Law; (d) becomes of unsound mind or a person whose person or estate is liable to be dealt with in any way under the law relating to mental health; (e) resigns his office by notice in writing to the Company; (f) is removed from office under Article 13.7; or (g) he is absent for more than 6 months, without permission of the Directors, from meetings of the Directors held during that period. …" 15 It may be assumed that at material times Hallmark had resolved pursuant to Article 13.2 that the number of directors be five. On 24 September 1998 Smith, Corp and Bunting attended a meeting of directors of Hallmark, the business of which was recorded as occurring in the following order: acceptance of the resignation of Judge as a director; appointment of Muir as a director; appointment of Forge as a director; acceptance of the resignation of Smith as a director. At the end of the meeting there were four directors. At the time Forge was appointed there were five. The foregoing suggests that Muir was appointed to fill the "casual vacancy" caused by the resignation of Judge, and that Forge was appointed as an "additional director". However, on the case conducted, it was taken that Muir and Forge had been appointed to fill the casual vacancies created by the resignations of Judge and Smith and that the offices to which Article 13.3 applied, and for which elections were required at the annual general meeting, were those vacated by Smith and Judge. 16 The purpose of Article 13.3 is to ensure that directors of Hallmark are elected at regular intervals by members of the company. Article 13.6 delegates a power to the directors to fill a "casual vacancy" in the office of director, or to appoint additional directors where the number of directors set by the company has not been filled, but provides that a director so appointed holds office only until the next general meeting thereby reposing in members ultimate control in respect of appointments to the office of director. The Law provides (s 224D(3)) that the appointment by directors of a person to the office of director must be confirmed by resolution of the company at the next annual general meeting. That provision, however, is a "replaceable rule" (see s 135) and the Articles apply if inconsistent with it, Hallmark not being a company to which the "rule" applies. 17 It may be noted that Article 13.6 does not provide that a director appointed by directors to fill a "casual vacancy" holds office for the period the replaced director would have served before being required to retire under Article 13.3. 18 It is not provided in the Articles that an election be held at the general meeting at which the office of an appointed director expires but such an election appears to be contemplated. It may be expected that if the remaining directors seek to have continue in office a person they appointed to fill a "casual vacancy", or as an additional director, a proposal that the person be elected as a director would be put to the members at that meeting and appropriate notice given. Alternatively, members in general meeting, who have broad powers, may resolve to elect a director to fill such a vacancy or they may leave the position to be filled by a temporary appointment by directors. (See: Munster v Cammell Company (1882) 21 Ch D 183 at 187 – 188.) 19 Pursuant to s 249HA of the Law twenty-eight days notice must be given of a meeting of members of a listed company. Section 250R permits the business of an annual general meeting to include the election of directors "even if not referred to in the notice of meeting". Article 11.2 of the Articles is to like effect. Article 11.3 requires Hallmark to notify the "Home Exchange" of a general meeting at which directors are to be elected and to state in that notice the date by which nomination for election to the office of director is to be received. 20 A copy of that notice was not in evidence. The notice of annual general meeting forwarded to members of Hallmark did not include any notice of "candidature" for election as provided for in Article 13.5 and, therefore, it may be concluded that no nomination was received by Hallmark. The proxy forms forwarded to members with a notice of meeting made provision for the proxy to be directed to vote for or against the election of Smith or Judge as a director. 21 The Articles appear to be deficient in providing appropriate notice to members and opportunity to provide nomination for election in circumstances such as those revealed in this case. The qualification for election prescribed in Article 13.5 is inconsistent with Article 11.3 in that the time for nomination recited in the former to establish qualification for election does not include the extended period referred to in the latter. If members are given notice of the time within which to lodge nominations only through information provided by the "Home Exchange", the period for the lodging of nominations referred to in Article 13.5 would be almost illusory unless extended by the directors pursuant to Article 11.3. 22 The annual general meeting was held on 22 October 1998 without further notice or amended proxy form being provided to members. Muir conducted the meeting as Chairman. No election of directors took place. According to the record of the meeting set out in the Minutes, the meeting commenced at 10.00 am and concluded at 9.06 am [sic]. 23 After the conclusion of the annual general meeting Muir and Forge acted as if they continued in office as directors. They constituted a meeting of directors of Hallmark on 23 October 1998 and purported to appoint Clark as a director before recording acceptance of the resignation of Bunting and Corp as directors. The resignations of Bunting and Corp were conveyed to Hallmark by letters dated 22 October 1998. The letter forwarded by Corp made it clear that he was concerned with the propriety of proposals to deal with the assets of Hallmark to be put by Muir and Forge to that meeting. 24 Counsel for Forge submitted that the words "next following general meeting" in Article 13.6 are to be read as "next practicable general meeting". It was said that the need to give adequate notice to shareholders of the identify of directors "being put up for election or re‑election" is an important matter for members to consider, and that as the notice of the annual general meeting had been despatched three days before Forge and Muir were appointed as directors, it would have been "inappropriate to put Forge and Muir up for re‑election at that meeting". Therefore, it was said, under Article 13.6 Forge and Muir continued in office until the "next practicable general meeting". 25 Counsel for Forge referred to Imperial and Grant Hotels Co Ltd v Christchurch Guardians [1905] 2 KB 239 and West Riding of Yorkshire County Council v Parish Council of Middleton [1906] 2 KB 157 in support of that submission. Those cases, however, concerned the construction of the statutory limitation period in which the appellant was to bring an appeal to "the next quarter sessions" on prescribed notice. If the time between the cause of appeal arising and the next quarter sessions was less than the period of notice prescribed, it was necessary to read "next quarter sessions" as "next practicable quarter sessions". 26 In the instant case the next general meeting was the annual general meeting for which the election of directors was a standing item of business requiring no specific notice to members. Furthermore, according to the notice distributed to members, elections would be required for the two positions formerly held by Judge and Smith. 27 Furthermore, having regard to Article 13.7, which provides that the term of a director appointed by members to fill a vacancy caused by removal of a director from office extends only to the annual general meeting at which the removed director would have been required to retire pursuant to Article 13.3, it should be assumed that an appointment by directors to fill a casual vacancy under Article 13.6 could not extend beyond the next annual general meeting at which the replaced director would have been required to retire pursuant to Article 13.3 and an election held to fill that position. Failure to conduct the election would not in itself have the effect of continuing an office that had expired. 28 Alternatively, counsel for Forge submitted that under Article 13.4 Forge was a "retiring Director" deemed to have been re‑elected as a director in the absence of an election at the annual general meeting to fill an office of director that became vacant at the meeting pursuant to Article 13.6. 29 Accepting for the purposes of this submission that, pursuant to Article 13.3, the offices formerly held by Smith and Judge were positions for which elections were required at the annual general meeting, neither Forge nor Muir was a person to whom Article 13.4 applied in respect of those vacancies. 30 Articles 13.3 and 13.4 draw upon longstanding provisions in company articles of association that have provided for retiring directors to continue in office if not replaced. (See: Spencer v Kennedy [1926] Ch 125; Grundt v Great Boulder Pty Mines Ltd [1948] Ch 145; Holt v Catterall (1931) 47 TLR 332; Robert Batcheller & Sons Ltd v Batcheller [1945] Ch 169; Petsch v Kennedy [1971] 1 NSWLR 494; Jones v Money Mining NL (1995) 17 ACSR 531; Re QCT Resources Ltd [1992] 1 Qd R 417; Stephen v Southern Cross Exploration NL (1976) CLC 40-253; Re Morris (1994) 15 ACSR 490.) It may be noted that the effect of Article 13.4 is a deemed re‑election for a term, not a mere holding over until the position is filled at a later meeting of the company, or by the directors. 31 The words "so retires" used in Article 13.4 refer to a director who retires at an annual general meeting under the scheme for regular retirement described in the preceding paragraph, Article 13.3. The deemed "re‑election" in Article 13.4 is predicated upon the retiring director to whom Article 13.3 applies being available to continue in office as a person previously appointed to the office by members, not a person appointed by the Board to fill a casual vacancy or additional position, whose office expires at the first general meeting thereafter. The deemed "re‑election" is based on an assumption that a person elected by members as a director retains the endorsement of members to continue in office unless there is a resolution by members inconsistent with that assumption. A director appointed by the company under Article 13.7 would be a director to whom Articles 13.3 and 13.4 apply but not a director appointed by the directors under Article 13.6. Although Forge and Muir as persons appointed to fill casual vacancies, may have been eligible pursuant to Article 13.6 to be elected in elections to be held at the annual general meeting in respect of those offices, they did not meet the description of persons to whom Article 13.4 applied, and, therefore, were not capable of being deemed to be re‑elected if the company did not conduct elections for those positions at that meeting. 32 Forge and Muir did not obtain the benefit of the deeming provisions of Article 13.4 merely because they were appointed to fill vacancies created by the earlier resignations of directors who would have been required to retire at the annual general meeting pursuant to Article 13.3 and, if they had not resigned, would have been "retiring Directors" to whom the deeming provisions of Article 13.4 applied at that meeting if they had offered themselves for re‑election. 33 Under Article 13.3 an election should have been conducted for the offices occupied by Forge and Muir until that meeting and made vacant by the operation of Article 13.6. In the absence of that election the positions remained unfilled. Albeit through inadvertence, the meeting left it to the remaining directors, Corp and Bunting, to fill those vacancies temporarily, until the next general meeting. 34 The facts of this case suggest that the Articles are amendable to manipulation by incumbent directors to secure the re-election, or re-appointment, of colleagues as directors by denying an opportunity for other persons to become eligible to be elected. If so, it is a lacuna in the Articles that should be addressed. 35 It follows, therefore, that from 22 October 1988 Forge and Muir were not validly in office as directors of Hallmark. The meeting of directors purportedly held by them on 23 October 1998, and the purported appointment of Clark as a director, were nullities and Muir was unable to contend that he was a director of Hallmark before, or after, the extraordinary general meeting of members held on 18 December 1998. 36 Counsel for Clark submitted that pursuant to ss 128 and 129 of the Law, Clark was entitled to assume that Forge and Muir had been duly appointed as directors and that they had authority to act as directors when they appointed Clark as a director of Hallmark. Whether Clark may rely upon those provisions to contend that Hallmark may not assert otherwise in any proceeding in relation to Clark's "dealing" with Hallmark is unnecessary to consider. Sections 128 and 129 are provisions to assist persons who deal at arm's length with a company on the assumption that the company has complied with the Law and with the constitution of the company. The provisions do not apply in rem by making valid acts of a company that are invalid. 37 The right of shareholders to vote on the appointment of directors is an important mechanism in making directors accountable to members and, through them, to investors. Proper governance of corporations is a matter of prime concern in maintaining or promoting the "confident and informed participation of investors and consumers in the financial system" assuming that the words "financial system" include the operations and management of foreign and trading corporations as well as the conduct of financial corporations. 38 Counsel for Forge and Clark further submitted that the Court was without "power" to make the declarations sought by ASIC. 39 Under s 42(3) of the Corporations (New South Wales) Act 1990, jurisdiction is purportedly conferred by the States and Territories on the Court with respect to civil matters arising under the Law. Section 56 of the Corporations Act 1989 (Cth)states that the Court may exercise the jurisdiction so conferred "with respect to matters arising under the Corporations Law of a State". 40 Once a matter is before the Court, in this case on the application of ASIC made pursuant to s 11(7) of the ASIC Act and s 1324 of the Law, the powers of the Court and exercise of the jurisdiction so attracted are not limited to those set out in s 1324. In appropriate cases the Court may rely upon s 21 of the Federal Court of Australia Act 1976 (Cth) to make binding declarations if to do so, provides for the better exercise of that jurisdiction. (See: RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164; Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89.) 41 It is a matter of discretion, to be exercised in the appropriate case where it assists the resolution of a controversy. (See: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582.) The party seeking the declaration must have a real interest in the question and there should be a "proper contradictor", a person with a true interest in opposing the declaration. (See: Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 per Lord Dunedin at 448.) As recited above, Forge and Clark had such an interest and opposed the orders sought by ASIC. 42 In this case the party seeking a declaration that persons who have purported to act as directors of a listed company have not, at material times, been validly in office, is a national body obliged to promote the interests of investors and consumers who deal with such companies. In such cases declarations by the Court may be an important aid to the appropriate performance of the functions of such a body. (See: Tobacco Institute (supra); Peek v New South Wales Egg Corporation (1986) 6 NSWLR 1 per Kirby P at 5 – 6.) Furthermore, in the instant case, although events have overtaken the circumstances in respect of which the declarations are sought, such declarations may resolve some of the issues that form part of the controversy and lessen the prospect of further litigation. 43 The instant case is clearly distinguishable from the facts in Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150. The impugned injunctions in that case went to conduct that did not involve contravention of the Trade Practices Act 1974 (Cth), a necessary requirement for the Trade Practices Commission to be able to apply to the Court for an injunctive order and attract the jurisdiction of the Court. The restriction found in the Court's power to make such orders flowed from the absence of jurisdiction. 44 I am satisfied that declarations should be made as sought in items 1 and 2 of the primary application. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee. Associate: Dated: 1 April 1999 Counsel for the Applicant: M J Gething Solicitor for the Applicant: Australian Securities & Investments Commission Counsel for the First Respondent: M J McCusker QC N P Gentilli Solicitor for the First Respondent: Jackson McDonald Counsel for the Second and Fourth Respondents: S G Scott Solicitor for the Second and Fourth Respondents: Stables Scott No appearance for the Third Respondent. Date of Hearing: 15 March 1999 Date of Judgment: 1 April 1999