Ampol Limited v Catto

[1989] HCATrans 210

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S40 of 1989

B e t w e e n -

AMPOL LIMITED

Applicant

and

ROBERT JOHN CHARLES CATTO

First Respondent

and

NATIONAL COMPANIES AND SECURITIES

COMMISSION

Second Respondent

Application for special leave to

appeal

Ampol

MASON CJ

TOOHEY J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 15 SEPTEMBER 1989, AT 10.14 AM

Copyright in the High Court of Australia

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MR A.R. EMMETT, QC:  May it please Your Honours, I appear with

my friend, MR M. OAKES, for the applicant. (instructed

by Allen Allen & Hemsley)

MR T.F. BATHURST, QC:  If it please the Court, I appear with my

learned friend, MR L.G. FOSTER, for the first

respondent. (instructed by Mallesons, Stephen Jaques)

MASON CJ:  Mr Ennnett.

MR EMMETT:  May it please Your Honours. Your Honours, this_

Court has never considered the principles applicable

to granting of confirmation of a reduction of capital.

MASON CJ: There are probably very good reasons for that,

Mr Ennnett.

MR EMMETT:  Indeed, Your Honour, that may be. It is a matter,

no doubt, of practice and something that ought to be

dealt with by a judge familiar with the practice of

the company court and that is something that the

President, of course, observed, that the trial judge

in this case is a very experienced company judge.

The matter of significance, Your Honours, is this, that it was common ground by all of the judges

of the Court of Appeal that when one looked at the
present value of the shares in question, that is,
the shares which are the subject of the proposed
reduction of capital, the price to be paid o/as no less

than the market value. For whatever reason, the

market value was something under $2.78.

What Their Honours did, however, was to determine

the question of fairness under section 123 of the

COMPANIES CODE by reference to notions of fairness

imported by the COMPANIES (ACQUISITION OF SHARES) CODE

and that is something which one finds is imbued in

the judgment of all three - - -

MASON CJ: Well now, first of all, can you demonstrate that to

us, that it is imbued in the judgments of all three

members of the court - - -

MR EMMETT:  Yes. If it please Your Honours, yes.

MASON CJ:  - - - and was not merely one of the factors to which

they had regard or might have had regard?

MR EMMETT:  I think I can do that, Your Honour. I start with

the President at page 31. Can I perhaps start by

pointing out the first point I have made, namely,

that Their Honours assume that the price was fair,

given objective market value. The President, at

page 30, line 25, first of all made the observation:

the Court is not blinkered by considerations

only of the market price of the shares at the

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time of the proposed reduction of capital.

And then at page 34, line 27 and over the page:

I consider that his Honour unnecessarily

narrowed his attention to the suggested

market price of the shares.

Then, as the basis for going beyond that point, the

President, at page 31, lines 14 and following:

Nevertheless, in construing that

provision -

that is section 123 of the COMPANIES CODE -

I regard it as legitimate and appropriate

for a court to keep in mind the provisions

of the (ACQUISITION OF SHARES) CODE.

Leaving out a couple of sentences, going down to

line 21:

So far as the language and apparent

purposes of the Codes permit, a court

should endeavour to provide an

interpretation of them which affords a

harmonious, practical and mutually

supportive operation to each.

Then, going over to page 32 at lines 14 and following:

it is not for courts to fill perceived gaps

in the legislation in order to secure
conceived objectives of harmony favoured

by the court but which Parliament did not

see fit to legislate.

No such errors are involved in the

approach which I consider section 123 .....

requires in the present case.	To the contrary,
it is obviously sensible that the Court should

approach the exercise of the discretion

required bys 123 of the COMPANIES CODE,

keeping in mind the language and legislative

policy of the (ACQUISITION OF SHARES) CODE

as it affects transactions ..... Specifically,

I agree with Priestley JA that in determining what is required by the equity and fairness

to which s 123 ..... directs the attention of
the court, it is entitled to take into account

the principle, reflected in the (ACQUISITION

OF SHARES) CODE, that the buyer of shares

seeking to gain control of a company should

ordinarily, as a matter of fairness, give

all members of that class the opportunity of

sharing equally whatever premium the rights

attached to that particular class of shares brings

into existence.

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Then, line 20:

Particular care must be taken in applying

earlier observations of the courts

concerning the rights of the company with
respect to preferential shareholders where

such observations were made before the

beneficial enactment of the (ACQUISITION OF

SHARES) CODE.

So that, in our submission, the President quite clearly
said "These shares are worth no more than is being given

to the shareholders, however, when I look at the

(ACQUISITION OF SHARES) CODE it creates this notion of

equality of opportunity to all shareholders and I
therefore read that into section 123." And it is on
that basis that His Honour then goes, on the bottom of

page 33 and the top of page 34, to indicate why, in

his view, the trial judge got it wrong.	Line 25 on
page 33:

it is not difficult to see why a preferential

shareholder ..... knowing that the respondent

was willing to pay $4 a share to secure

control over the right of such shareholders to

elect a director, should consider that it was
unfair ..... soon thereafter to proceed

effectively to acquire the remaining

preferential shares at but $2.78 each. Indeed,

the unfairness of such a result seems perfectly

obvious, at least within the relatively short

time frame involved in this case -

indicating, in our submission, following inunediately on

from the reference to the (ACQUISITION OF SHARES) CODE,

that but for the principles of that Code, section 123

may have a different meaning.

Mr Justice Priestley, first of all dealt with the

question - - -

MASON CJ: Just before you leave that, if you look at the

paragraph that follows, the paragraph conunencing on

page 34, is His Honour there appealing to history

apart from through the (ACQUISITION OF SHARES) CODE

and the light that it throws on the reduction

provisions?

MR EMMETT:  I am not sure which passage Your Honour is referring

to.

MASON CJ:	"In giving content to those unfathomable words".
MR EMMETT:	The "unfathomable words", I think, are the words which Mr Justice Priestley sets out or the series of
words that Mr Justice Priestley sets out at pages 41
and 42, that is, the traditional language that describes
what the court is doing when it grants its discretion
under section 123.

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MASON CJ:	Yes.
MR EMMETT:

"a just and equitable treatment of

shareholders" ..... "The court should only

refuse its confirmation if what is

proposed to be done is somehow unfair or

shareholders" - inequitable ..... "no injustice to .....

should follow.

the proposal -

must be -

"shown to be unfair or inequitable" -

if confirmation is to be refused.

MASON CJ:  But why do you not look at history and the light that

history shows on fairness, quite apart from the

(ACQUISITION OF SHARES) CODE?

MR EMMETT:  Two things, Your Honour: so far as we have been

able to find, that just has not been the way in which

the English courts or this Court, the Australian

courts, have approached the matter. They have looked

at the question of what is fair as between the

shareholders at the time without having regard to

how the particular set .of circumstances came about.

If something unfair occurred earlier on, then

that is something for which the law either provided

a remedy or it did not.

MASON CJ:  Is there a decision on the question in Australian

courts or in England, that is, a decision excluding
reference to "fairness" as elucidated by history, and

the narration of dealings between the classes

concerned in the company?

MR EMMETT:  So far as I have been able to find, the matter

is just not dealt with one way or the other.

Certainly the cases do not say you cannot look at it.

MASON CJ: They have just not thrown up the question at all?

MR EMMETT:  They just have not thrown the question up and that

is why it is a novel question to that extent.

MASON CJ: Yes, but there is no reason why its novelty should

attract the jurisdiction of this Court to grant special

leave?

MR EMMETT:  The principle is adopted in the context of whether

or not the (ACQUISITION OF SHARES) CODE leads the Court

to look at that history.

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MASON CJ:  I can understand that if the courts below have come

to a conclusion that, as it were, is dictated by

a view that the court entertains of the (ACQUISITION

OF SHARES) CODE, that may be one thing but if, in fact, the Court of Appeal has come to the conclusion that it is proper to have regard to fairness in the general sense, by reference to a number of considerations, one of which is the (ACQUISITION OF SHARES) CODE, then that seems to me to be another matter.

MR EMMETT:  I understand the distinction Your Honour draws.

We would, with respect, submit that that ought not to

mean that the case is still not an appropriate one for

special leave. But what we submit, primarily, is that

when one reads these judgments that the reason why the
court considers it appropriate to go beyond the

objective value at the time of the reduction was the

history and the reason why they thought that was

appropriate was because of the concepts that the

(ACQUISITION OF SHARES) CODE introduces, namely, that

all shareholders should have equality of opportunity

in selling their shares, bearing in mind, of course,

that the lack of equality in this case was some 18 months

before the proposed reduction in question.

MASON CJ:	Yes.
MR EMMETT:	Might I take Your Honours to what Mr Justice Priestley

says with a view to endeavouring to make o~t that

proposition? Mr Justice Priestley, first of all, at

page 44 indicates his view about the value, at line 2:

in February 1987

this is before the $4 acquisition in April 1987

the market price for the preference shares

was less than $2.

Going down to line 16:

The only explanation apparent on the

materials in the case for Pioneer's payment
of $4 for each of the prefernece shares it

bought is that article 7(9) provided that

the preference shareholders could elect a

director to the company's board, and that

Pioneer wished to obtain a sufficient

preference shareholding to ensure that any

director elected pursuant to article 7(9)

was a director of its choice. To ensure

this result it was prepared to pay $4 per

share, an amount significantly greater than

the shares were otherwise worth.

Then, on page 45, lines 19 and following:

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Cohen J's decision was based on the

view that the amount to be paid to the

preference shareholders pursuant to the

reduction resolution was sufficiently

close to their market value as to be fair.

I agree with him that the amount was close

to market value at the time of the
reduction resolution. Indeed, I find it
difficult to see why the value of the

preference shares, objectively appraised

would have been as high as $2. The only

value the shares had at the time, so far

as I can see -

going over to page 46 -

was whatever additional value lay in the

fact that the continued existence of a tiny

rump of non Pioneer ·holders caused

administrative expense to the company -

et cetera. Then, line 9:

The issue upon which attention was

concentrated before Cohen J was whether the
amount to be returned to the preference

shareholders was fair in light of current

market value. If that were the only

question, I would agree with his decision.

But then, at page 48, His Honour explained why he thought

it was appropriate to look at the history of the matter.

At line 14:

The COMPANIES (ACQUISITION OF SHARES) CODE -

perhaps I should read from the beginning of the page.

Once the position is reached that events

from February 1987 to November 1988 should be

taken into account, the conclusion that the

Court should not confirm the reduction seems

to me to be a clear one. Pioneer was prepared
to pay $4 a share in order to get control of

the preference shareholders' right to elect a

director. It has become generally accepted in

Australia that buyers seeking to obtain, by

purchase within a limited period, the

advantages that go with the control of a

particular class of shares in a listed public

company should, during that period ..... give

all memebers of that class the opportunity of
sharing equally whatever premium the rights

attached to that particular class of shares

bring into existence. The COMPANIES (ACQUISITION

OF SHARES) CODE ..... shows parliamentary

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adoption of this generally accepted idea.

On the footing that this Code nevertheless

does not deal with the particular situation

that arose in the present case, I do not
think that that circumstance can be used

to support an argument that the various

legislatures intended any areas not covered

by the Code to be dealt with by the courts

in an exactly opposite way. It seems to me

to be safe, and proper, for this Court to

act on the basis that in applying notions of

fairness in the present case, what I have

called the generally accepted view, as

exemplified in the Code, should be taken

into account.

In other words, that the notion of fairness that

the (ACQUISITION OF SHARES) CODE exemplifies is taken

into account simply by reason of it being in the Code.

GAUDRON J: That is not what Mr Justice Priestley said, is it?

He said when you have regard to the whole history

and a generally accepted notion of fairness which has

also been adopted legislatively, does he not?

MR EMMETT:  It perhaps is not totally clear. I accept that that

is one view of what he is saying but when one considers

the way in which he leads to the conclusion that the

history is relevant, having agreed that market value

itself is no greater than the price proposed·on

redemption, he justifies the conclusion, it seems to us,

by reference to the (ACQUISITION OF SHARES) CODE.

GAUDRON J:	But not based on - - -
MR EMMETT:	No, I think I have to concede his judgment is not

based simply on the fact that the (ACQUISITION OF SHARES)

CODE is there and not otherwise but he does suggest

that it is important, in terms of confirming his

view of fairness as he understood it, being a view of

fairness that is different from the experienced trial

that is relevant to the ultimate decision. judge's view and that itself, of course, is something Mr Justice Rogers also referred to the (ACQUISITION

OF SHARES) CODE in similar terms, perhaps to

Mr Justice Priestley, at page 60. Having concluded,

as all judges did, that the (ACQUISITION OF SHARES)

CODE, in fact, had no application to what was seen to
be the unfairness, although Mr Justice Rogers, I think,
got things slightly wrong at the bottom of page 59 and
the top of page 60, I think all parties agreed that

the shares were voting shares, that by reason of the

3 per cent creep, section 11 of the (ACQUISITION OF SHARES)

CODE did not apply but that is perhaps by the way.

Line 10 on page 60:

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It may be that the Parliament took a

deliberate decision that the CASC and the

obligation of equal treatment of shareholders

which underlies it should not apply to a

reduction of capital in any case.

And then His Honour goes on at line 21 to refer to the -

profound difference between, for example,

the statutory right of a dissenting
minority to require the purchase of its
shares at the offer price and relying on

the court's discretion under s 123.

Then going over to page 62, at the top of the page:

It may be accepted that, in terms, the
intention of the CASC to afford equality

of treatment to all shareholders does not apply to a reduction of capital where the shares are non voting. Nonetheless, it

seemed a possible view that in determing
what is fair for the purposes of s 123 of
the COMPANIES CODE it is proper to have regard

to the principle which -

it says "informs".	I am not sure that that is the
right word -

which -

perhaps underlies or something -

the CASC.

And going down to line 17:

the whole spirit which animates the COMPANIES
CODE and the CASC is an attempt to ensure
that those who are in a minority get equality

of treatment.

Now, with respect, one does not find that principle in

the COMPANIES CODE, one only finds it in the

(ACQUISITION OF SHARES) CODE so far as the equality of

treatment on acquisition is concerned.

It is not for the courts debate whether that

is appropriate or not. Parliament's

intention is quite clear. Because the

market reflects not the Parliamentary

intention but the commercial assessment

of the value of remaining minority shareholding

interests after control has passed, is it an

appropriate yardstick by which to measure the
fairness of an offer? Is it an appropriate

measure of fairness for the purposes of s 123?

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Now, what His Honour seems to be saying there is

although the market says that these shares are

worth no more than $2.78, bearing in mind the spirit

of, inter alia, the (ACQUISITION OF SHARES) CODE,

that may not now be an appropriate basis for measuring

the exercise of discretion under section 123.

Finally, at page 68, what seems to be the

final basis - and I hope I am not putting that

too highly - at line 18:

I am not satisfied that the terms for

reduction of the capital are fair. I should

say that it seems to me to be a surprising result that an offer in the same amount as constituted the takeover offer in April 1988,

which was rejected by a large percentage of

shareholders and which fell far short of

calling for the compulsory acquisition .....

should be held to be fair in circumstances
where no change in market conditions has

been demonstrated. In the circumstances, it

does not appear fair that by reduction of
capital by returning the same amount of

money as had been previously offered and

rejected, a majority of shareholders should

circumvent the provisions of CASA.

So that His Honour Mr Justice Rogers seems to put it,

really, on the basis that the effect of this arrangement

is to circumvent the (ACQUISITION OF SHARES) CODE and

we should therefore exercise our discretion under

section 123 in stopping that from happening. It

indicates, in our submission, that what the court was

doing was saying, "We think there was a deficiency

in the (ACQUISITION OF SHARES) CODE back in 1987 in

that there was an unfairness for which there was no

remedy. We will now rectify that unfairness by

exercising discretion against the company under

section 123", taking into account, in our submission,

an irrelevant factor to that extent, 6earing in mind,

also, the context which Their Honours really did not

advert to, although the trial judge did, the context

in which these shares are being dealt with.

They are preference shares. Preference shares have, by

the English courts, at least, been treated as being of

a slightly different character from equity shares.

Mr Justice Cohen dealt with the matter at page 8, dealing with RE HOLDERS and dealing with just what the

contractual rights are of the preference shareholders.

Line 25:

Where a company is to be wound up voluntarily

then the preference shareholders are entitled

only to the benefits which they are given

under the articles of association,

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notwithstanding that there may be. some

additional benefits available to shareholders.

Going over the page at line 7:

It is not only when companies are in the

process of being wound up that the preference

shareholders may be limited only to the rights

which they have under the articles.

There is a reference to what was said in RE SALTDEAN.

Going down to line 20, Mr Justice Buckley:

said that the preferred shareholder was

always at risk by the liquidation of the

company or a reduction of capital properly

resolved by a majority of his fellow members.

Line 25, referring to the HOUSE OF FRASER case:

where the contractual rights of the

shareholders, as set out in the articles,

were fulfilled by returning their capital

in priority to other shares then the

capital could be reduced by repaying that
capital.

In other words, Their Honours are applying a wrong

principle, in our submission, in ignoring the nature

of the shares in question, that is, a preference share

which is, in a sense, a type of debt rather than an

equity interest and that, itself, in our submission,

is an issue or is a matter of principle which would

attract the principles for special leave, that is,
whether or not preference shareholders - the nature

of a preference share is such as to attract different

principles when dealing with a reduction of capital

compared with - - -

GAUDRON J:	Was that argument put below?
MR EMMETT: Indeed.

GAUDRON J: In the Court of Appeal.

MR EMMETT:  Yes. Their Honours did not deal with it. As

Mr Justice Cohen said at page 12 at line 6:

Looking at the basis of repayment of preference shares in accordance with the

rights under the articles, as was done in

RE SALTDEAN, above, it might be argued

that the holders are only entitled to $2

for each share. That is all that they

would be entitled to on the winding up of

the company.

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I am not quite sure that I necessarily agree with the next sentence in the way it is put but:

Although this was the primary contention

of the plaintiff -

and it certainly was before His Honour -

it was accepted that fairness would require

that the consideration should be what is the

actual value of the s~ares at present.

I think the way in which it was put: primarily, the company said, "These shares are worth no more than $2 intrinsically and that's an end to the matter."

If, however, one is entitled to look at their market

value, well then, that is a different matter and

His Honour found, of course, that the market value was

less than the proposed reduction. So, that matter

was certainly put in the Court of Appeal but it

really was not dealt with having regard to the way in

which Their Honours finally disposed of the matter.

But, that, in our submission, raises a secondary question which, irrespective of whether or not the (ACQUISITION

OF SHARES) CODE guided Their Honours in the Court of

Appeal in their decision, it raises the question of

just what is the proper nature of a preference share

and how a court should deal with that particular type

of interest in considering a section 123 application.

It is a matter which has been dealt with on a

number of occasions in the House of Lords, that is,
the particular treatment given to preference shares.

It arose in a number of cases in the late 1940s,

early 1950s over the COAL MINE NATIONALIZATION legislation

in the United Kingdom.

GAUDRON J:  It does not seem to have been dealt with in your

affidavit in support.

MR EMMETT:  I think it is, with respect, Your Honour. It was

intended to be covered by - - -

GAUDRON J: It is a very general ground of appeal.

MR EMMETT:  At page 77 -

MASON CJ: 9(d).

MR EMMETT:  Yes, 9(d):

If concepts from legislation in the present

national companies .... are applied analogically

to a reduction of capital .... just how much of

any concept -

I am sorry, 9(b):

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Are there any special considerations where

preference share capital is involved -

it is at 9(b), not (d), at line 20 -

given the unique status of that type of

share capital?

MASON CJ:  One must say that that ground is expressed in

the best way possible to disguise what the specific

submission is going to be.

MR EMMETT: Well, for that, we have to accept responsibility

but that is what it was intended to refer to

and it was, as Mr Justice Cohen says, something

that was put below and that is the way it was put,

that preference shares have a special character
different from equity shares which attract different

principles so far as fairness is concerned. In other

words, the contractual arrangement between the

preference shareholder and the company is that in

certain circumstances he can get $2 and no more.	If
the company were wound up then these shareholders
must accept $2 and that is an end to the matter.

Certainly there is no prospect of this company being wound up and for that reason the contractual right

is different. There is certainly no contractual

right that the shareholder will receive no more than

$2 on a reduction of capital except to this extent,

that the articles were amended specially to'provide

for this reduction. Under the articles, the preference

shareholders were entitled to no more than $2 and as

part of the proposed reduction the articles were

amended to give the directors power to pay a premium

on reduction of capital.

The proposition simply is, as a matter of

contract, these shareholders agreed to accept $2
or return of their capital, whatever it was, plus a

very low rate of dividend otherwise, in substance,

interest. And the particular basis upon which that

application under section 123 is, in our submission,	sort of principle has application in considering an
quite apart from the first point, a matter which
should attract special leave, in our submission.
May it please Your Honours.

MASON CJ: Yes, thank you, Mr Emmett. Yes, Mr Bathurst?

MR BATHURST: If the Court pleases. The principles on which a

court should or should not confirm a reduction is

whether a reduction, on the evidence, is fair and

equitable between the shareholders. It is our

submtssion that was the principle that was, in fact,

applied by the courts of appeal.

The difference, we submit, in the approach between

the trial judge and the Court of Appeal was that in

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considering the question of fairness, the court took

into account the events between February 1987 and

November 1988, from the time Pioneer first sought

to acquire the balance of the preference shares.

It was that earlier event, and particularly the

payment of the $4, which motivated the court to uphold

the appeal. It is our submission that in those

circumstances in what was an exceptional case

there is, in fact, no question of public importance

such as would warrant the grant of special leave.

Although we accept that each member of

the court -

MASON CJ: Is there a question of principle involved, Mr Bathurst?

MR BATHURST:  We submit not. We submit that the question of

principle that was involved, the question that was

involved before the court below, is whether, as

Mr Justice Cohen did - one could only look at the

market value which subsisted at the time of the which led up, as it were, to the passage of the resolutions pursuant to which the reduction was made. It is not, in our submission, a case where the court,
reduction or the underlying value of the preference
shares or whether, as each member of the Court of

as it were, imported principles from the (ACQUISITION

OF SHARES) CODE and said - although His Honour the

President comes close to it, we accept - that

because of the provisions of the (ACQUISITION OF

SHARES) CODE, new or different principles to those

previously applied by the court should apply.

T3	Mr Justice Priestley, in considering the question of the (ACQUISITION OF SHARES) CODE, in our respectful
submission, does not, as it were, draw on a new series
of principles to support his judgment but, rather,
considers whether the fact that those provisions
relating to consenting shareholders appear in the
(ACQUISITION OF SHARES) CODE but do not appear in
the COMPANIES CODE and the related legislation would
prohibit a court in considering a reduction of capital
from considering earlier events or what was paid by way of a premium for control in the earlier sequence
of events. He does not, in our respectful submission,
at any time, say, nor does he apply a principle that because of what appears in section 42 and section 43
of the (ACQUSITION OF SHARES) CODE, a new or different
regime applies. That appears, in our submission, from
was said by His Honour at page 48 of His Honour's judgment which was read to the Court by Mr Ennnett.

His Honour Mr Justice Rogers, we submit, adopts

a similar approach. He says, at page 68 in the passage

that was read to the Court by my learned friend,

Mr Ennnett, that, again, taking into account

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the previous dealings from February 1987, which he

took the view should be taken into account, the

reduction was unfair. It follows, in our submission,

that the only question of principle which, in fact,

would arise is whether, in this particular case, the

court was in error in taking into account what took
place from the time of the first scheme of arrangement
up to the ultimate resolution proposing the

reduction of capital. Put in that way which, in our respectful submission, is the correct way to put it,

there can be no question of principle such as warrants
the grant of special leave in this case.

The alternative ground which my learned friend, Mr Enunett, suggests there is a question of principle

is that a separate and different principle should apply

to preference shares. The basic principle which governs

a court in considering this, in our submission, is the

question of fairness. One could not lay down any

general principles beyond that even in the category

of preference shares because different preference shares

can, from time to time, carry different rights. For

example, in the present case the preference shares
did not only carry a right to a return of capital
on a winding up but also carried the right to appoint
one director to the company. There are instances, of

course, where preference shares carry other and

different rights. In those circumstances, it is our

submission that no general principle can be laid down

as to how or in what different manner preference shares

should be dealt with as distinct from ordinary shares

or, indeed, any other class of shares in the company.

For those reasons, we submit that there is no

point of principle involved and the application

should be refused.

MASON CJ: Thank you, Mr Bathurst. Yes, Mr Enunett?

MR EMMETT:  Your Honour, I do not really want to say anything

in response to Mr Bathurst but I just refer Your Honours

to another passage in the affidavit in support that

does raise the secondary question: page 78,

paragraph ll(a).which really puts the primary

proposition. That is really the way in which we put it.

May it please Your Honours.

MASON CJ:  Thank you, Mr Enunett.

The applicant submits that the Court of Appeal's

refusal to confirm the reduction of capital miscarried

because the court, it is suggested, wrongly regarded

the COMPANIES (ACQUISITION OF SHARES) CODE provisions
calling for equal treatment of shareholders as

provisions which throw light on the meaning of the

word "fair" in section 123 of the COMPANIES CODE.

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Court of Appeal, the decision did not depend on However, as we read the judgments of the

this consideration, or at least not on this consideration alone.

The decision was supported also by reference to the

history of the relationship between all the parties.

So regarded, the challenge to the decision does not attract a grant of special leave to appeal. It

relates to a matter of practice and procedure

calling for the making of a sound discretionary

judgment.

The application is therefore refused.

MR EMMETT:	May it please Your Honours.
MR BATHURST:	We would seek costs, if the Court pleases.
MASON CJ:	You do not oppose that, Mr Emmett?
MR EMMETT:	I do not wish to say anything.
MASON CJ:	The application is refused with costs.

AT 10.50 AM THE MATTER WAS ADJOURNED SINE DIE

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