Australian Agricultural Co Ltd v AMP Life Ltd [2003] FCA 1038

FEDERAL COURT OF AUSTRALIA

AUSTRALIAN AGRICULTURAL COMPANY LTD v AMP LIFE LTD

N 1444 of 2003 SUMMARY In accordance with the practice of the Federal Court in cases of public interest, the Court has prepared this brief summary to accompany the reasons for judgment, delivered today. It must, of course, be emphasised that the only authoritative pronouncement of the Court's reasons is that contained in the published reasons for judgment. This summary is intended to assist in understanding the principal conclusions reached by the Court, but is necessarily incomplete. In April 2003, AMP Life Ltd ("AMP Life") commenced a tender process in order to dispose of its 100 per cent shareholding in Stanbroke Pastoral Company Ltd ("Stanbroke"), which is said to be the world's largest cattle producer. AMP Life carries on life insurance business in Australia and is a registered insurer under the Life Insurance Act 1995 (Cth). Its shareholding in Stanbroke ("the Stanbroke Shares") was held as an asset of AMP Life's Statutory Fund. AMP Henderson Global Investors Ltd ("AMP Henderson") is a funds manager. Like AMP Life, it is ultimately a wholly owned subsidiary of AMP Ltd. AMP Henderson was the agent for AMP Life for the purpose of managing the latter's assets, including the Stanbroke Shares. The successful tenderer was Nebo Holdings and Investments Ltd ("Nebo") which bid $417.5 million for the Stanbroke Shares. Australian Agricultural Co Ltd ("AACo") bid $420 million, but its bid was not accepted. Each bid was subject to somewhat different conditions. According to AMP, Nebo's bid was superior, or at least equivalent, when completion risks and other factors relating to the respective bids were taken into account. AACo seeks an interlocutory injunction in order to restrain AMP Life from transferring the Stanbroke Shares to Nebo. In order to make out a claim for an interlocutory injunction, AACo must show that: (i) there is a serious question to be tried to relation to the allegations it has made against AMP; (ii) it will suffer irreparable injury for which damages will not be adequate compensation unless an injunction is granted; and (iii) the balance of convenience favours the granting of an injunction. AACo does not seek any relief directly against Nebo. However, an injunction would affect Nebo's rights as the purchaser of the Stanbroke Shares under a contract between it (Nebo) and AMP Life. AACo's major claim is that AMP engaged in misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) by falsely representing that the achievement of a maximum return on investment for its policy holders would be given priority over other considerations. AACo says that it wants an opportunity to participate in a fresh tender process. It is important to stress that the Court determines an application for an interlocutory injunction on the evidence given at the hearing. If the matter proceeds to a final hearing, the evidence may well be different in scope and effect. The Court has reached the following conclusions: (i) AACo has failed to establish that there is a serious issue to be tried as to whether AMP engaged in misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth); (ii) independently of (i), it would be inappropriate to grant an interlocutory injunction which adversely affects the rights of Nebo, which has an interest in the Stanbroke Shares as the result of its contract with AMP Life and is to be regarded as an innocent third party; and (iii) in any event, the balance of convenience is against granting an interlocutory injunction as sought by AACo. Accordingly, the application for an interlocutory injunction is dismissed. The full text of the Court's judgment, reported as Australian Agricultural Co Ltd v AMP Life Limited [2003] FCA 1038, will shortly be available on the Court's website at www.fedcourt.gov.au. The full text of the Court's judgment, reported as Australian Agricultural Co Ltd v AMP Life Limited [2003] FCA 1038, will shortly be available on the Court's website at www.fedcourt.gov.au.