Supreme Court New South Wales Medium Neutral Citation: In the matter of Australian Water Holdings Pty Limited [2016] NSWSC 254 Hearing dates: Monday, 7 March 2016 Date of orders: 16 March 2016 Decision date: 16 March 2016 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Order that the proceedings be transferred to the Federal Court of Australia Catchwords: CORPORATIONS – compulsory acquisitions and buyouts – compulsory acquisition by 90% holder – valuation – meaning of "fair value" – whether market or "true, intrinsic" value – held, true value - date of valuation – approach to valuation – whether post-valuation events may be taken into account – held, post-valuation date events may be taken into account CORPORATIONS – Jurisdiction and procedure of courts – civil jurisdiction – transfer of proceedings – between Supreme Court and Federal Court – where no relevant jurisdictional or geographical factor – where related litigation pending in Federal Court – where preferable that Federal Court proceedings be determined first – desirable that single court manage the whole of the litigation – held, proceedings transferred PROCEDURE – miscellaneous procedural matters – transfer of proceedings – desirability of a single court managing whole of related litigation WORDS AND PHRASES – "fair value" Legislation Cited: (CTH) Corporations Act 2001, s 236, s 237, s 664C, s 664E, s 664F, s 667C, s 1337H Cases Cited: Bromley Investments Pty Ltd v Elkington (2003) 47 ACSR 273; [2003] QCA 407 Broome v Speak [1903] 1 Ch 586 Bwllfa & Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co [1903] AC 426 Capricorn Diamonds Investments Pty Ltd v Catto (2002) 5 VR 61; [2002] VSC 105 Davidson v Tulloch (1860) 3 Macq 783 Dolby Australia Pty Ltd v Catto (2004) 52 ACSR 204; [2004] NSWSC 1196; [2004] NSWSC 1222 HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 Kizbeau Pty v W G & B Pty Ltd (1995) 184 CLR 281 Peek v Derry (1887) 37 Ch D 541 Plastream Pipe Technologies Pty Ltd, Re; CCPI Holdings Pty Ltd v Hose [2011] VSC 34 Potts v Miller (1940) 64 CLR 282 Ragless v IPA Holdings Pty Ltd (in liq) (2012) 91 ACSR 560; [2012] SASC 203 Swansson v Pratt (2002) 42 ACSR 313; 20 ACLC 1594; [2002] NSWSC 583 Ted Brown Quarries Pty Ltd v General Quarries (Gilston) Pty Ltd (1977) 16 ALR 23 Teh v Ramsay Centauri Pty Ltd (2002) 42 ACSR 354 TSDack Pty Ltd v Australian Water Holdings Pty Ltd [2015] FCA 931 Category: Procedural and other rulings Parties: BG&E Management Pty Limited (plaintiff/respondent) Patricia De Aboitiz (first defendant/applicant) Angie Stavrides (second defendant/applicant) Danny Koutsogiannis (third defendant/applicant) Eliana Koutsogiannis (fourth defendant/applicant) Conca D'Oro Holdings Pty Ltd (fifth defendant/applicant) TSDack Pty Ltd (sixth defendant/applicant) JMG Corp Pty Ltd (seventh defendant/applicant) Representation: Counsel: R. Scruby (plaintiff/respondent) P. Kulevski (first to sixth defendants/applicants) Solicitors: Kemp Strang (plaintiff/respondent) Henry Davis York (first to sixth defendants/applicants File Number(s): 2015/224094 Judgment 1. HIS HONOUR: On 1 June 2015, the plaintiff BG&E Management Pty Limited ("BG&EM"), having ostensibly acquired more than 90% of the issued share capital in the company Australian Water Holdings Pty Limited ("AWH"), issued and gave to the other shareholders ("the Minority Shareholders") compulsory acquisition notices under (CTH) Corporations Act 2001, s 664C, specifying a price of 1.30 cents per share. The notice was accompanied, in accordance with s 664C(2)(b)(ii), by an independent expert's report ("the IER") of Crowe Horwath, which opined that the value of the shares was in a range from nil, or nominal, up to 1.24 cents. The wide range was occasioned by uncertainty associated with legal disputes involving AWH. The IER concluded that the terms of the notice were fair and reasonable, as they exceeded the upper end of the range. The defendants are those of the Minority Shareholders who, having received such notice, objected under s 664E to the compulsory acquisition. In these proceedings ("the compulsory acquisition proceedings"), BG&EM applies pursuant to Corporations Act, s 664F, for approval of the acquisition. The defendants – other than the 7th defendant, who has not appeared – oppose the relief sought, and seek the court's confirmation that the acquisition will not take place. 2. In such proceedings, the essential if not only issue is whether the terms set out in the notice give a fair value for the securities. [1] For that purpose, the value of the subject shares is to be ascertained by first assessing the value of the company as a whole, then allocating it among the classes of issued securities (in this case, there is only one relevant class), and then allocating the value of each class pro rata among the shares in that class without any premium or discount. [2] The value is to be determined at the date of the notice [3] ("the valuation date"); thus, in this case the valuation date is 1 June 2015. [4] 3. The plaintiff's evidence in chief, which comprises the IER of Crowe Horwath and the documents on which they relied, is complete, having been served by 31 August 2015. The defendants have served "limited scope" valuation evidence, from which it appears that the Crowe Horwath valuation will be impugned inter alia on the basis that it has not taken into account that the consideration paid for shares acquired by BG&EM from Mr Di Girolamo and Mr Rippon, in transactions to which Crowe Horwath had regard, included collateral benefits and, in particular, releases of AWH's former directors from potential claims against them. The argument will apparently be that those releases were valuable, and thus that the true consideration for the transactions was greater than appeared merely from their cash component, and that this analysis should have informed a higher valuation of the shares. The defendants' evidence is however not complete, because their valuer is awaiting legal advice as to, inter alia, the prospects of success and probable damages in the Federal Court proceedings described below; it is for this reason that their evidence so far is described as a "limited scope" valuation. 4. There are pending in the Federal Court of Australia, New South Wales District Registry, proceedings instituted in January 2014 ("the Federal Court proceedings") by some of the Minority Shareholders ("the Federal Court applicants") – who comprise some but not all of the present defendants, and some who are not among the present defendants – against AWH, its former and present directors, and BG&E Pty Limited (a related corporation of BG&EM) ("the Federal Court respondents"). Those proceedings arise out of an investment of $2.5 million made by the Minority Shareholders in AWH and a related corporation in 2007/08. As at the valuation date, there was pending an undetermined application by the Federal Court respondents for security for costs in those proceedings. Since then, an order for security – to be provided in three tranches – has been made, and the proceedings were stayed from 25 August 2015 for nearly four months until the first tranche was provided. In December 2015, the Federal Court applicants indicated that they propose to amend their pleading by withdrawing some of their claims, repleading others, and seeking leave to bring derivative proceedings on behalf of AWH against some of the Federal Court respondents. The proposed derivative claims involve: (1) a claim against AWH's former directors Messrs Rippon, MacGregor-Fraser and Di Girolamo ("the original directors") and Skehan (together, "the former directors") for damages for contravention of their directors' duties by causing, permitting or allowing certain conduct (called "the SWC Conduct") which is said to have resulted in AWH incurring loss and damage through loss of commercial opportunities, contractual rights, exposure to investigation and diminution of commercial goodwill; (2) a claim against the original directors for damages for contravention of their directors' duties by causing, permitting or allowing AWH to make loans to a related corporation which were unrecoverable; (3) a claim against AWH's current directors (some of whom are also directors of BG&EM, and including BG&E as a de facto director) for damages for contravention of their directors' duties by causing, permitting or allowing certain conduct (called "the Legacy Director Inaction Conduct") which is said to have resulted in AWH potentially having become unable to recover some or all of the loss claimed under (1) and (2); and (4) a claim against the current directors for damages for contravention of their directors' duties by causing, permitting or allowing AWH to issue 1,562,000 shares in July 2014 to Mr Rippon contrary to the interests of AWH, and to release him from any claims it had against him, which is said to have resulted in AWH incurring loss and damage through the loss of the value of any claim it might have had against Mr Rippon, and diminution in value through the share issue. 5. By interlocutory process filed in these proceedings on 1 March 2016, the active defendants apply for an order under Corporations Act, s 1337H, transferring the compulsory acquisition proceedings to the Federal Court. It is not suggested that there is any relevant geographical or jurisdictional factor that renders that Court "more appropriate" than this. Both the Federal Court and this Court have the same jurisdiction in Corporations matters, and the compulsory acquisition proceedings, while entirely appropriately instituted in this Court, could just as appropriately have been instituted in the Federal Court. The only geographical difference in venue will be between the 20th and the 7th floor of the Law Courts Building, which cannot have any significance. The defendants' case is that the Federal Court is the more appropriate forum given the pendency of the Federal Court proceedings, the overlap of the issues in those proceedings with those in the compulsory acquisition proceedings, and the desirability of all the proceedings being managed by the one court. 6. Although the defendants pointed to other respects in which issues in the present proceedings were said to "overlap" those in the Federal Court proceedings, the question turns on the proposed derivative claims: the claims against AWH (as distinct from the proposed claims on behalf of AWH) could not result in the subject shares having a higher value, but could only reduce their value still further; and despite submissions that there was a claim in the Federal Court proceedings that the AWH share register does not reflect the true state of the shareholding, and even that BG&EM might not be entitled to 90%, I can find no such claim in the proposed further amended statement of claim. While it may become necessary in the Federal Court proceedings to establish the value of AWH in 2011 and/or 2012, that predates the events which are said to have resulted in a subsequent enormous loss of value and would have limited relevance to a valuation as at the valuation date, though it may have some. And although it is conceivable that it may be necessary to establish the current value of the defendants' shareholdings, that would be so only if it becomes necessary to assess damages, in which event a different date of valuation would be applicable and a different valuation approach (particularly as to application of a discount or premium) might apply, although again there might well be some common aspects. 7. However, the proposed derivative claims have the potential to affect the value of AWH as at the valuation date. In this respect, it is to be noted that AWH was valued by PricewaterhouseCoopers in 2009 at between $101.3m and $106.9m, and in 2011 at between $152.7m and $272.0m; other firms valued it in 2010 at between $34.7m and $43.3m, and in 2011 at between $57.9m and $70.6m. These are to be compared with the IER which values AWH at between $2.7m and $3.1m (before the impact of any legal matters, which potentially reduce it to nil or nominal). The proposed derivative claims would visit on the former directors (or alternatively the current directors) substantial responsibility for the loss of value in AWH between 2011 and 2014. It is manifest that recovery from the directors of even a relatively small proportion of the lost value could have a significant impact on the value of AWH, and thus the shares in it. 8. Valuation of equity – which involves ascertaining the current value of future economic benefits – necessarily involves predicting what those future economic benefits will be. A claim which an entity has against another party is an asset to be taken into account in a valuation of the entity, even if the claim is disputed. The challenge for the valuer is to assess the present value of the future economic benefits to be derived from the claim, when its outcome will often be uncertain. 9. For the plaintiff, Mr Scruby submitted that the proposed derivative claims were irrelevant to the value of AWH at the date of valuation, and that the IER rightly did not take into account any such claims, because (a) they had not been identified as at the date of valuation, (b) there was not and could not be any suggestion that Crowe Horwath erred in this respect, as at the date of valuation there was not in existence any claim that a hypothetical purchaser or vendor would take into account, and (c) to take into account in the valuation as at the valuation date the ultimate determination of the derivative claims, would be contrary to valuation principle, which eschews hindsight. 10. These submissions require consideration of what is involved in the valuation exercise required by s 664F and s 667C, and, in particular, whether regard can be had only to matters known at the valuation date. Section 664F, like s 667C, refers to "fair value". "Fair value" is a term used in the same sense as "true value", "real value" and "intrinsic value". [5] In HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd, the High Court recognised a distinction which is "sometimes difficult to draw, but…is old and fundamental" between 'real', 'true' or 'intrinsic' value on the one hand, and 'market value' on the other. [6] Thus, 'market values' that "are 'delusive or fictitious' because they are the result of 'a fraudulent prospectus, manipulation of the market or some other improper practice on the part of the defendant" may be disregarded in ascertaining true value. [7] One reason why recovery is not limited by reference to market value is that the plaintiff is not bound to sell; another is that there may not be a market; and a third is that the market may be mistaken or misled. [8] 11. The purpose and context of s 667C, which involves compulsory expropriation of property upon fair terms – including the exclusion of any discount for minority interest – suggests that the shareholder should receive the true (not some artificially deflated) value of the shares. As a matter of policy, the section is directed to ensuring that the minority shareholders receive fair compensation for being deprived of their property. It would be inconsistent with such a policy to allow the majority to benefit, to the detriment of the minority, from a market that was uninformed, or an underlying asset that existed but was unknown at the valuation date. In my view, the task of the plaintiff under s 664F to establish that the terms of the notice give a fair value directs attention to the true or intrinsic value of the shares at the date of the notice. While s 667C(3) requires that the market for the last six months be taken into account, it is only one consideration, which may be of little weight if, for example, the market was misled or uninformed, because while the price paid for securities of the same class within that period is an indicator, it is not necessarily a reliable guide to their fair value. [9] 12. Thus, I do not accept that it is relevant, let alone decisive, that the derivative claims had not been identified as at the date of valuation, if they then existed as causes of action which had accrued. The potential derivative claims existed, if at all, at the valuation date, even though they may not have been identified. If AWH had an asset as at the valuation date, albeit that it did not know it, that asset is relevant to its true value at the date of valuation. Moreover, the defendants' valuer expresses the view, in his summary (at 7.e), that the IER does not acknowledge that the transactions with Di Girolamo and Rippon involved collateral benefits. This is a reference to the releases, which were in effect releases of the derivative claims. In my view, attribution of a value to the proposed derivative claims is an essential element of determining the value of the subject shares at the valuation date. 13. Attribution of value to a contingent asset such as the proposed derivative claims often – indeed usually – proceeds as a valuation of the contingency. Because the outcome is usually uncertain, the potential quantum of the claim will be discounted for the risk that it will not succeed, the risk that even a favourable judgment may prove irrecoverable, and the cost and delay involved in recovery. Nonetheless, essential integers include the potential quantum of the claim, and the prospects of success. In those respects, valuing the claim involves considering – albeit typically in less detail and less conclusively – facts and issues that also arise in ultimately determining the claim. Thus, although additional questions arise in valuing a claim which are irrelevant to the claim itself, such as the defendant's capacity to satisfy a judgment, there is nonetheless an overlap, particularly in considering the issues in the claim and its potential quantum. 14. In this case, in order to persuade the court that the IER undervalues AWH, the defendants will contend that the proposed derivative claims are viable – indeed strong – and thus valuable. Those claims are complex, and the defendants will legitimately seek to adduce evidence which supports them, so as to found arguments that the claims are likely to succeed and that substantial damages will be awarded. In this way, what will be a central issue in the compulsory acquisition proceedings will significantly overlap the issues in the proposed derivative claims. 15. Moreover, I do not accept that it would be contrary to valuation principle to take into account, in the valuation as at the valuation date, the ultimate determination of the derivative claims. Mr Scruby cited the following observation of the High Court in HTW Valuers v Astonland: [10] In carrying out valuations, he had to take account of risks so far as the market perceived them to be present realities at the date at which value was to be fixed. The task of valuation is to be conducted without hindsight – that is, without knowledge of events which have not happened by the date at which the value is to be ascribed, though they have happened by the date on which the valuation takes place. That task is different from the task of assessing loss, because the latter task is to be conducted with hindsight. 1. However, that was not really the point of HTW Valuers, in which the High Court explained, [11] with reference to its earlier decision in Kizbeau Pty v W G & B Pty Ltd, [12] that in many fields of law, assessments of value at one date commonly take into account all matters known by the later date when the assessment is being carried out. Their Honours referred to what Dixon J had said, in the context of shares, in Potts v Miller: [13] The real value of what the plaintiff got must be ascertained in the light of events which afterwards happened, because those events may show, for instance, that what the shares might have sold for was not their true value or that it was a worthless company. 1. Reference was also made to what had been said by Sir James Hannen in Peek v Derry: [14] Subsequent events may shew that what the shares might have been sold for was not their true value, but a mistaken estimate of their value. 1. When the passage cited by Mr Scruby is read in context, it is apparent that the Court was referring to the ascertainment of market value, not of true value, pointing out that in a performing a market valuation as at a particular date, a valuer does not have regard to events after the date of valuation, but only to risks so far as the market perceived them to be present realities at that date. This does not mean that a court may not have regard to post-valuation date events for the purpose of ascertaining "true value", as is made clear by the immediately following passage: [15] Thus, in assessing damages in this case, the court is not limited to the assessment of risk as at 28 April 1997, but is entitled to take account of how those risks had evolved into certainties at dates after the date on which the comparison of price and true value was being made. The market values Mr Dodds arrived at may well have been entirely accurate; if so, they demonstrated not that he was in error, but that the market assessment of a risk was erroneous. In short, the market value in 1997 was not a "true value, but a mistaken estimate of … value". 1. Indeed, in the context of compulsory acquisition proceedings, in Dolby Australia Pty Ltd v Catto, [16] Campbell J (as he then was) observed that it was possible for events occurring after the valuation date to throw light on what the value was at that date – although they did not do so in the circumstances of that case. 2. Accordingly, in my view, there is no reason why, in determining the valuation issue that arises under s 664F, the Court could not have regard to events that take place after the date of valuation, and in particular the ultimate outcome of the proposed derivative claims if it be known. This does not mean that in every case it will be appropriate to defer compulsory acquisition proceedings until contingent assets and liabilities have crystallised. More often than not, they will be valued for what they are worth as contingencies, by reference to their potential quantum, their prospects of success, the vicissitudes and costs of litigation, and the risks of a favourable judgment proving irrecoverable. But where there is to be a final resolution of the chose in action in any event, so that the true position can be known with certainty, the dictum of Lord Macnaghten in Bwllfa & Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co [17] – which was referred to by the High Court in HTW Valuers [18] – indicates that knowledge should be preferred to speculation: Why should [the arbitrator] listen to conjecture on a matter which has become an accomplished fact? Why should he guess when he can calculate? With the light before him, why should he shut his eyes and grope in the dark? 1. It follows that the outcome of the proposed derivative claims is of direct and considerable relevance to the true value of the subject shares at the valuation date, although there will be additional considerations (such as recoverability of any judgment) that do not arise in the derivative claims themselves. Nonetheless, there will be a substantial overlap of evidence, argument and judgment between the derivative claims and the compulsory acquisition proceedings. Moreover, the outcome of the proposed derivative claims can directly inform their value for the purpose of the compulsory acquisition proceedings. And if the proposed derivative claims are to be litigated in any event, it is preferable (in order to avoid duplication and the possibility of inconsistent decisions) that the issues in them be litigated once only – not twice as would be the case, at least to some extent, if the compulsory acquisition proceedings were to proceed separately. 2. Moreover, determination of the compulsory acquisition proceedings prior to the Federal Court proceedings might adversely impact on the Minority Shareholders' entitlement to relief in the proposed derivative claims. If the compulsory acquisition is confirmed, then the Minority Shareholders will cease to be members of AWH. While Corporations Act, s 236 includes former members among those to whom leave to bring a derivative claim may be granted under s 237, the Court will permit a derivative action to be maintained only by those who would suffer a real and substantial injury if the action were not permitted, and such injury must be dependent on or connected with the applicant's status (whether as a current or former shareholder or director), such that any benefit to be obtained by the applicant must be obtained in the applicant's capacity as a person with standing under s 236(1)(a). In this case, such capacity and status would, following compulsory acquisition, be as a former shareholder. [19] 3. At least at first sight, the injury suffered by Minority Shareholders, as former shareholders following compulsory acquisition, would be the difference between the value of their shares assuming success of the proposed derivative claims, and the value at which they were compulsorily acquired. It is not clear how, following compulsory acquisition of their shares, that loss would be recoverable by them: it is not damage to AWH, which could be recovered in the proposed derivative proceedings. While the nature of their loss rather reinforces the nexus between the proposed derivative claims and the compulsory acquisition proceedings, the potential difficulty in recovering it after compulsory acquisition is another pointer to the desirability of the proposed derivative claims being determined first. 4. Accordingly, both because the outcome of the proposed derivative claims will inform the value of the shares at the valuation date, and because approval of the compulsory acquisition may jeopardise the viability of those claims, it is clearly preferable that they be determined before the compulsory acquisition proceedings. The issues in the compulsory acquisition proceedings comprise a subset of the issues in a larger and more complex dispute concerning the rights of the Minority Shareholders arising from their investment in AWH. The greater parts of those issues – including some which overlap those in the compulsory acquisition proceedings – are in the Federal Court proceedings. The Federal Court is best positioned to manage and determine the whole dispute: if the compulsory acquisition proceedings were to remain in this Court, this Court would likely adjourn them pending the outcome of the proposed derivative claims, and would have to monitor without being able to control the progress of the Federal Court proceedings. Those considerations suggest that, having regard to the interests of justice, the Federal Court is the more appropriate Court for resolution of the compulsory acquisition proceedings. 5. However, the plaintiff submitted that there are countervailing considerations. In this respect, reference was particularly made to the following: 1. The Federal Court proceedings were nowhere near ready for trial: defences were yet to be served, and there were foreshadowed applications for leave to further amend the statement of claim and to bring the proposed derivative claims. They had already been beset by delay, due to a stay while the first tranche of security was provided, and there were another two tranches to come. They would be lengthy – at least six weeks [20] – whereas the compulsory acquisition proceedings would involve only a few days. 2. BG&EM was not a party to the Federal Court proceedings. If the compulsory acquisition proceedings were transferred and heard together with the Federal Court proceedings, BG&EM would be required to incur the costs associated with lengthy proceedings in which its role and interest was limited. 3. Leave to amend and to bring the derivative claim had not yet been sought, let alone granted, and would be opposed, so that it was not at all certain that there would ultimately be a relevant nexus between the compulsory acquisition proceedings and the Federal Court proceedings. 1. There is considerable force in those submissions, but ultimately, I have concluded that they do not outweigh the factors that suggest that the Federal Court is the more appropriate court. First, it is true that if a transfer order is made, the Federal Court is not likely to determine the compulsory acquisition proceedings as soon as this Court could otherwise do so. If leave to bring the derivative claims is granted, there will potentially be a considerable delay until they are readied for trial, heard and determined. Even if leave is not granted, awaiting determination of the leave application – which has not yet been made – will involve delay well beyond when this Court could hear the compulsory acquisition proceedings. However, that is not to say that this Court would hear the compulsory acquisition proceedings before determination of the leave application and, if granted, the derivative claims. To the contrary, for the reasons already given, it is likely that given the nexus between the true value of the subject shares and the derivative claims, and the potential impact of compulsory acquisition on the derivative claims, this Court would, in any event, adjourn the compulsory acquisition proceedings pending their outcome. 2. Secondly, although BG&EM is not itself a party to the Federal Court proceedings, its directors and a related corporation are. As they will be involved in the Federal Court proceedings in any event, and will be in essentially the same interest as BG&EM, I do not consider that the additional burden on BG&EM, if the proceedings be transferred to and heard with the Federal Court proceedings, will be significant. On the other hand, the duplication involved in analysing the derivative claims in two different courts would be considerable. 3. Thirdly, it is correct that to bring the proposed derivative claims, the Federal Court applicants will require not only leave to amend, but also leave under Corporations Act, s 237. The Federal Court respondents have refused to consent, and have made extensive criticisms of the proposed amended pleading. The Federal Court applicants acknowledge that those criticisms need to be addressed, and propose to do so before filing an application for leave to amend. Thus, at present, not only are the derivative claims themselves not on foot, no application for leave to bring them in the Federal Court proceedings is yet on foot either. Such leave might not be granted, and if leave for the derivate claims is not granted, there will not be such a significant overlap between the compulsory acquisition proceedings and the Federal Court proceedings as would of itself incline me to transfer them. Thus, it might be said that there is little utility in making a transfer order, at least until the outcome of the foreshadowed leave application is known. But in that event, the proceedings would likely remain in limbo in this Court while the leave application is made and determined. The compulsory acquisition proceedings could as properly have been commenced in the Federal Court as in this Court. It is preferable that a single court and judge have management and control of the whole of the litigation. If leave to bring the derivate claims is not granted, then the Federal Court can make directions, if it considers it appropriate to do so, for the early and separate determination of the compulsory acquisition proceedings. 4. Accordingly, in my judgment, having regard to the interests of justice, it is more appropriate that the compulsory acquisition proceedings be determined by the Federal Court. 5. The Court orders that: 1. pursuant to Corporations Act, s 1337H, these proceedings be transferred to the Federal Court of Australia (New South Wales District Registry); 2. costs of the interlocutory process filed on 1 March 2016 be costs in the proceedings. ********** Endnotes 1. Conceivably, there could be issues as to whether preconditions to the giving of the notice had been satisfied, including whether the giver of the notice in fact held 90% of the issued capital. 2. Corporations Act, s 667C. 3. Teh v Ramsay Centauri Pty Ltd (2002) 42 ACSR 354 at [28]-[29] (Barrett J); Capricorn Diamonds Investments Pty Ltd v Catto (2002) 5 VR 61 at [89]-[90]; [2002] VSC 105. 4. Although the IER is as at 30 April 2015, all parties appear content to proceed on the basis that there is no relevant difference between that date and 1 June 2015. 5. Broome v Speak [1903] 1 Ch 586 at 605; Ted Brown Quarries Pty Ltd v General Quarries (Gilston) Pty Ltd (1977) 16 ALR 23 at 31; Potts v Miller (1940) 64 CLR 282 at 299; Davidson v Tulloch (1860) 3 Macq 783 at 790; HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 at 657 [36] (Gleeson CJ, McHugh, Gummow, Kirby and Heydon JJ). 6. (2004) 217 CLR 640 at 657 [36]. 7. (2004) 217 CLR 640 at 657 [37]. 8. (2004) 217 CLR 640 at 658 [37]. 9. Bromley Investments Pty Ltd v Elkington (2003) 47 ACSR 273; [2003] QCA 407 at [27]; Re Plastream Pipe Technologies Pty Ltd; CCPI Holdings Pty Ltd v Hose [2011] VSC 34 at [3]. 10. (2004) 217 CLR 640 at 661 [44]. 11. (2004) 217 CLR 640 at 658 [39]. 12. (1995) 184 CLR 281 at 291-296 (Brennan, Deane, Dawson, Gaudron and McHugh JJ). 13. (1940) 64 CLR 282 at 299. 14. (1887) 37 Ch D 541 at 594. 15. (2004) 217 CLR 640 at 661 [45]. 16. (2004) 52 ACSR 204; [2004] NSWSC 1196 at [6], [7]; [2004] NSWSC 1222 at [67]. 17. [1903] AC 426 at 431. 18. (2004) 217 CLR 640 at 659 [39]. 19. Swansson v Pratt (2002) 42 ACSR 313; 20 ACLC 1594; [2002] NSWSC 583 at [42] per Palmer J; Ragless v IPA Holdings Pty Ltd (in liq) (2012) 91 ACSR 560; [2012] SASC 203 at [43] per White J. 20. As the Federal Court docket judge, Katzmann J, found: TSDack Pty Ltd v Australian Water Holdings Pty Ltd [2015] FCA 931 at [84]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 March 2016