Cope Allman (Australia) Ltd & Ors v Trade Practices Commission & Ors Ainsworth, Leonard Hastings & Ors v Trade Practices Commission

[1982] FCA 307

T r a d e P r a c t l c e s - c o n t r o l o r d o m i n a t i o n o f m a r k e t -

a c q u i s i t i o n of s h a r e s - w h e t h e r a c q u i s i t i o n b y

i n d i v i d u a l s was i n d i r e c t a c q u i s l t i o n b y c o r p o r a t i o n s -

a p p e a l from i n t e r l o c u t o r y l n j u n c t i o n s - w h e t h e r p r m a

f a c l e c a s e .

T r a d e P r a c t i c e s Act, 1974 - s e c t i o n s 4 5 , 5 0 , S O ( 6 ) .

COPE ALLhIAN (AUSTRALIA) LII'IITED and ORS v.

TrCADE PRACTICES COMAIISSION and ORS.

No. G254 OP 1952

LEONARD HASTINGS AINSWORTH and ORS v .

TRADE PRACTICES COI~IMISSIOM and ORS.

No. G259 of 1952

Fox, LIcGregor, Sheppard JJ

23 and 24 December 1952

Sydney.

'.	I N THE	FEDERAL	COURT	OF AUSTRALIA	)
)

SYDNEY	REGISTRY	1	N o .	G 2 5 4 of	1982.
)	N o .	G 2 5 9 of	1982.

GENERAL -. D I V I S I O N )

N o . G 2 5 4 OP 1982.

BETWEEN :

COPE ALLMAN ( A U S T R A L I A ) L T D .

NUTT & MUDDLE H O L D I N G S P T Y . L T D .

COPE ALLMAN ( M A R R I C R V I L L E )

P T Y . L T D .

COPE ALLh5AN INVESTMENT HOLDINGS

( A U S T R A L I A ) P T Y . L T D .

A p p e l l a n t s

AND :

LEONARD HASTINGS AINSWORTII

GEOPFREY GEORGE AINSWORTI-I

S T E P H E N J O H N A I N S I O R T H

HAROLD MARK AINSWORTH

PAUL LEONARD AINSVORTR

SINON DAVID AINSWORTH

AINSWORTH HOLDINGS PTY . L T D .

AINSIYORTB NOLIINEES PTY. LTD.

TRADE PRACTICES C ~ ~ ~ S S I O N

R e s p o n d e n t s

N o . G 2 5 9 of 1952.

BETWEEN.

LEONARD HASTINGS AINSWORTII

GEOFFREY GEORGE AINSY'ORTH

STEPHEN JOHN AINS\VORTII

HAROLD hlARK AINSWORTH

PAUL LEONARD AINSWORTH

9 2.

SIhION DAVID AINS\VORTR

AINSY'ORTH HOLDINGS PTY . LTD.

AINSWORTH NOMINEES PTY . LTD.

A p p e l l a n t s

TRADE PRACTICES COJlhIISSION

COPE ALLMAN (AUSTRALIA) LTD.

NUTT & MUDDLE HOLDINGS PTY. LTD.

COPE ALLhIAN (MARRICKVILLE) PTY . LTD.

COPE ALLMAN INVESThlENT HOLDINGS

(AUSTRALIA) PTY. LTD.

R e s p o n d e n t s

ORDER

JUDGES MAKING ORDER:	Fox,	McGregor	and	S h e p p a r d	J . J .
WHERE MADE.	Sydney

- DATE : 23 and 24 December 1952

THIS COURT ORDERS THAT'-

1. a p p T h e a l s be allowed.

2 . The o rde r s of S t . J o h n J . be set a s l d e .

3 . I n l i e u thereof , order ( a ) t h a t t he appl icat lon be

dlsrnlssed;

( b ) t h e r e s p o n d e n t s costs i n

t h a t a p p l l c a t l o n	be	t h e i r costs	i n t h e s e
p r o c e e d m g s .

P 3 .

r

4. The o p e r a t i o n of t h e s e o r d e r s be s t a y e d u n t l l

10.30 a . m . on 24 December 1952.

5 . The Trade P r a c t l c e s Commission t o pay t h e a p p e l l a n t s '

costs of e a c h a p p e a l .

' I N THE FEDERAL COURT OF AUSTRALIA )

SYDNEY REGISTRY ) N o . G 2 5 4 of 1982 .

) N o . G25Y 01 1Y82.

G E N E R A L D I V I S I O N )

N o . G 2 5 4 of 1 9 S 2 .

BETYEEN:

COPE ALLMAN ( A U S T R A L I A ) L T D .

NUTT MUDDLE HOLDINGS PTY. LTD.

COPE	ALLMAN	( M A R R I C R V I L L E )
P T Y .	LTD.

COPE ALLMAN INVESTMENT HOLDINGS

( A U S T R A L I A ) P T Y . L T D .

Appel lanzs

AND :

LEONARD HASTINGS AINSC'ORTH

GEOPFREY GEORGE AINSWORTH

STEPHEN JOHN AINSWORTH

BAROLD MARK AINSWORTH

PAUL LEONARD AIRSYI'OE1TH

SIMON DAVID AIRSWORTH

AINSWORTII HOLDINGS PTY LTD.

AINSWORTH NOMINEES PTY . L T D .

TRADE PRACTICES COl~ lMISSION

R e s p o n d e n t s

N o . G 2 5 9 of 1932.

BETWEEN

LEONARD HASTINGS AINSWORTH

GEOFFREY GEORGE AINSWORTH

STEPHEN JOHN AINSWORTH

HAROLD MARK AINSWORTH

PAUL LEONARD AINSWORTH

2 .

SIhION DAVID AINSWORTH

AINSWORTH OLDINGS PTY. LTD.

AINSWORTH NOMINEES PTY. LTD.

A p p e l l a n t s

AND :

TRADE PRACTICES COMP~IISSION

COPE ALLFIAN (AUSTRALIA) LTD.

NUTT S: MUDDLE HOLDINGS PTY. LTD.

COPE ALLMAN (MARRICKVILLE) PTY. LTD.

COPE ALLhIBN INVESTMENT HOLDINGS

(AUSTRALIA) PTY. LTD.

Respondents

REASONS FOR JUDGLIIENT

CORAL1 Pox, McGregor, Sheppard JJ.

DATE : December 24 1982

We h a v e h e a r d t o g e t h e r t w o a p p e a l s f r o m a n i n t e r l o c u t o r y

Judgment of S t . J o h n J. g lven on 17 December 1 9 8 2 . I n vlem of

t h e u r g e n c y t h e a p p e l l a n t s saw I n t h e n e e d fo r a d e c i s l o n i n t h e

a p p e a l s , we made f l n a l orders y e s t e r d a y , s t a t l n g t h a t we would

g i v e our reasons tlns m o r n i n g . T h l s we now do . An a p p l i c a t l o n

y e s t e r d a y f o r a s t a y o f t h e o p e r a t l o n of t h e o r d e r s , made on

b e h a l f of t h e r e s p o n d e n t T r a d e P r a c t l c e s C o m m l s s l o n , b u t o p p o s e d

by t h e a p p e l l a n t s , we o r d e r e d a s t a y u n t l l 10.30 a . m . t h l s

mornlng . These reasons are b e l n g d e l l v e r e d a t 11.00 a.m.

One a p p e a l is by a group of f o u r companies, whlch we

wlll c a l l t h e Cope Allman group. They were some of t h e

r e s p o n d e n t s I n p r o c e e d i n g s b r o u g h t b y t h e T r a d e P r a c t l c e s

Commlsslon. The o t h e r a p p e a l is by t h e o t h e r r e s p o n d e n t s I n t h e

3 .

same p r o c e e d m g s . T h e r e are e i g h t o f t h e m , six b e m g

m d l v l d u a l s , all named Alnsworth, and two being companies , and

me s h a l l c a l l t h e l a t t e r the Alnswor th g roup oP companles .

Bls H o n o u r o r d e r e d t h a t l n t e r l o c u t o r y l n J u n c t l o n s

Issue, some a g a i n s t a l l r e s p o n d e n t s t o t h e p r o c e e d m g s , a n d

o t h e r s a g a l n s t some only of them. They were a l l based on s.50

o f t h e Trade P r a c t i c e s Act 1974 ( t h e Act). A t t h e h e a r l n g ,

no u n d e r t a k m g as t o damages was required, o r o f P e r e d (see

s . 8 0 ( 6 ) of t h e Act).

For p r e s e n t p u r p o s e s , t h e Pacts can be s ta ted

shortly. They concern the manuPacture or a s sembly , and t he

s u p p l y , of poker machines. Companles of t h e Cope Allman group

have a large p a r t of the market I n them, and companles of the

Alnswor th group a l so have a large par t o f i t .

By deed of sale whlch we are t o l d was e n t e r e d i n t o

on 17 November 1982 o r p o s s l b l y a l l t t l e ear l le r . two companies

of t h e Cope Allman group, (Cope Allman (Australia) L lml t ed and

Nut t & hIudd le Ho ld ings P ty . L iml t ed ) , ag reed to se l l t o t h e s1x

l n d i v l d u a l A l n s w o r t h s s u b s t a n t l a l l y all t h e s h a r e s i n two

operating companies of t h e g r o u p , Cope Allman Investment Holdings

( A u s t r a l i a ) P t y . L m l t e d a n d Cope Allman ( N a r r i c k v i l l e ) P t y .

L t d . , t h e y b e i n g t h e o t h e r WO members of t h e g r o u p w h l c h were

made p a r t i e s t o t h e a c t i o n . T h e s e c o m p a n i e s o p e r a t e d t h e p o k e r

m a c h l n e b u s m e s s e s t o rvhlch w e h a v e r e f e r r e d . The d e e d a l s o

p rov lded for t h e sale b y t h e same v e n d o r s o f t h e s h a r e s i s s u e d

4.

In another owned company, Bouley Inves tments P ty . Limited, which

real es ta te f o r t h e g r o u p b u t d i d n o t d e a l i n p o k e r

m a c h i n e s . I n c l u d e d w i t h t h e sale of t h e s e s h a r e s were o t h e r

r l g h t s , s u c h as t h e r l g h t s t o use c e r t a l n b u s i n e s s n a m e s .

The p u r c h a s e price set o u t i n t h e d e e d is $46,694.00 b u t

u n d e r t h e a g r e e m e n t t h e p u r c h a s e r s were t a k l n g o v e r a ve ry

s u b s t a n t l a l amount of l l ab i l l t l e s a n d c o n t m g e n t l l a b l l l t l e s

The sale document was a l e n g t h y o n e . I t p r o v l d e s

€or complet lon on 20 December 1982. We are t o l d t h a t b y

a g r e e m e n t t h i s d a t e h a s b e e n e x t e n d e d t o 24 December 19S2. I t

1s s a l d , a n d seems n o t t o b e d i sputed , t h a t tune 1s t o b e

regarded as of t h e e s s e n c e o n t h e b a s i s t h a t It 1s a commerclal

a g r e e m e n t d e a l l n g w i t h o n g o i n g b u s i n e s s e s . A p a r t l c u l a r f e a t u r e

o f t h e terms of the ag reemen t t o whlch ou r a t t e n t l o n h a s b e e n

d l r e c t e d by t h e T r a d e P r a c t ~ c e s Commlsslon 1s t h a t t h e

p u r c h a s e r s are t o t a k e as J o m t t e n a n t s . T h l s 1s u n u s u a l .

The reason Commlssion f o r i t was n o t e x p l a m e d . T h e T r a d e P r a c t i c e s

m a m t a l n s t h a t i t 1s i n d l c a t l v e of a pu rchase by

t r u s t e e s f o r c o m p a n l e s of t h e g r o u p . I t seems t o us t h a t

t h e r e are a number of o t h e r p o s s l b l e e x p l a n a t i o n s , a n d a

c o n c l u s l o n as t o the real one must be s p e c u l a t l v e .

C lause 15 is as f o l l o w s :-

“The Purchase r s he reby covenan t and war ran t

with a n d t o t h e V e n d o r s -

( a ) t h a t t h e f u n d s n e c e s s a r y t o e n a b l e t h e

P u r c h a s e r s t o c o m p l e t e t h e p u r c h a s e of

5.

t h e s a l d S h a r e s a n d t o pay the amounts

set ovt I n t h e S e v e n t h S c h e d u l e h e r e t o

are b e l n g p r o v i d e d s o l e l y by themse lves

and from t h e n own resources, and

( b ) t h a t on c o m p l e t i o n t h e s a l d S h a r e s s h a l l

b e h e l d b e n e f l c l a l l y by t h e P u r c h a s e r s

and not on b e h a l f o f o r i n t r u s t f o r a n y

o t h e r p e r s o n f i r m or company."

The clrcumstances whlch have glven rise t o the

proceedlngs should be ment loned . John Pa t r lck Krascum, a n

o f f l c e r of t h e Trade Practices Commlssion, I n a n a f f l d a v l t

d a t e d S December 1982. s w o r e t h a t on le November 1952, i . e .

a f t e r t h e d e e d h a d b e e n e x e c u t e d , r e p r e s e n t a t l v e s of h n s w o r t h

R o l d m g s P t y . L t d . , t h e s e v e n t h r e s p o n d e n t I n t h e a c t l o n la ter

commenced by t h e Trade P r a c t i c e s Commlssion c a l l e d a t Its

o f f l c e I n Canberra. The purpose of the v l s l t WLS t o d l s c u s s t h e

p o s s l b l l l t y of acquiring t h e b u s l n e s s of Nutt Huddle g: Sons , a

d l v l s i o n of Cope Allman ( M a r r i c k v l l l e ) P t y . L t d . , one of t h e

a p p e l l a n t s . A Hr. Ne11 F r a n c e y , d e s c r l b e d as a b a r r l s t e r , was

p r e s e n t , as o n e o f t h e p e o p l e r e p r e s e n t l n g A l n s w o r t h H o l d i n g s

F t y . L t d . The purpose of t h e v i s l t was t o a s c e r t a i n t h e l l k e l y

a t t l t u d e of t h e T r a d e F r a c t l c e s Commisslon t o t h e a c q u l s i t i o n

of t h e s h a m s by t h a t company. Mr. Francey , though h e knew O F

t h e exlstence of some sale agreemen t , hav lng l ea rned of It t h a t

mornlng , d id no t ment ion It i n t h e d l s c u s s l o n s . I t seems that

on the Po l lowing day , upon the l n s l s t e n c e o f h i s p r u l c l p a l s , h e

t e l ephoned a Mr. O'Xelll a t t h e T r a d e P r a c t i c e s Commlssion

a d v l s l n g of t h e e x l s t e n c e of an a g r e e m e n t a n d r e e e r r l n g t o It

as having been s lgned on 10 November 1932.

On 24 November 1932, a t t h e o f f i c e of t h e S o l l c l t o r s

€or t h e A l n s w o r t h s , a copy of t h e deed was d e l l v e r e d t o Mr.

6 .

Krascum t o g e t h e r w l t h a document headed "Notes Lor Trade

P r a c t l c e s Commlss lon Pre-Author l sa t lon Appl lca t lon Conference" .

Thls document refers t o -

I , . . . . . p r o p o s e d a c q u i s i t l o n . . .by Ainsmorth

Nomlnees P t y . L l m l t e d of t h e s h a r e s a n d assets

o f N u t t & Muddle H o l d i n g s P t y . L m l t e d . "

T h e r e f o l l o w e d i n t h e d o c u m e n t detalled l n f o r m a t l o n

abou t t he Alnswor th g roup , Its b u s l n e s s a n d Its a f f a l r s a n d

m f o r m a t i o n about t h e m a r l c e t l n g a n d s e l l l n g o f p o k e r m a c h l n e s .

There was lnc luded what was called a P r o J e c t e d P o s t Xerger

hlarket Share of t h e m a n u f a c t u r e of poker machlnes . I t was

c o n t e n d e d , I n t e r a l l a , t h a t t h e " r a t l o n a l i z a t l o n " w h l c h t h e

"merger" would achieve had a number of p u b l l c b e n e f l t s .

On 8 December 1982, t h e T r a d e P r a c t i c e s Commlsslon

b e g a n t h e e n j o l n t h e r e s p o n d e n t s p r e s e n t p r o c e e d i n g s . I t was s o u g h t , I n t e r a l l a , t o

from a c q u l r l n g d l r e c t l y or l n d i r e c t l y

s h a r e s I n t h e Cope Allman group and Bouley Inves tments P ty .

Ltd. (Bouley) and €rom c o m p l e t i n g a n y c o n t r a c t w t h Cope

Allman ( A u s t r a l i a ) L l m i t e d a n d N u t t & Muddle Holdings Pty.

L l m l t e d f o r t h e sa le o f s h a r e s I n c o m p a n l e s I n t h e Cope Allman

g roup . The ac t ion was o n e t o r e s t r a l n a n t i c i p a t e d b r e a c h e s o f

s . 5 0 of t h e Act, and of s . 4 5 o f t h e Act, b u t i n t h e s e p r o c e e d l n g s

o n l y t h e f o r m e r s e c t l o n h a s b e e n r e l i e d u p o n as a. b a s i s f o r

r e l i e f . On t h e h e a r l n g 01 t h e a p p l l c a t i o n v a r l o u s u n d e r t a k l n g s

were o f f e r e d Alnswor th Hold lngs P ty b y t h e A l n s w o r t h s . One was a n u n d e r t a k i n g by

. Ltd. and Alnsworth Nominees Pty . L t d . ,

t h e 7 t h a n d 8th r e s p o n d e n t s r e s p e c t l v e l y , t h a t t h e y w o u l d n o t

" a c q u l r e d l r e c t l y or i n d l r e c t l y a n y s h a r e s i n t h e c a p i t a l o f

7 .

or any asset 01 t h e e l e v e n t h a n d t m e l € t h r e s p o n d e n t s ( w h l c h

mere Cope Allman ( ~ I a r r ~ c l i v ~ l l e ) P t y . L l m l t e d a n d Cope Allman

I n v e s t m e n t I l o l d l n g s ( A u s t r a l l a ) P t y . L l m l t e d r e s p e c t l v e l y ) or

Bouley Inves tmen t s P ty . L lml t ed . " Ano the r was a n u n d e r t a k l n g

by t h e c o n t a c t e d ) l n d l v l d u a l A i n s w o r t h s ( e x c e p t I o r o n e who c o u l d n o t be

t h a t t h e y w o u l d n o t " d i r e c t l y or l n d i r e c t l y t r a n s f e r

o r d l s p o s e o f a n y i n t e r e s t i n a n y of t h e s h a r e s I n t h e c a p l t a l

o r assets I n v e s t m e n t s P t y . of t h e e l e v e n t h a n d t w e l f t h r e s p o n d e n t s or Bouley

L l m l t e d t o or i n f a v o u r o f t h e S e v e n t h o r E lgh th

Respondents . " These , and o the r unde r t ak lngs wh ich were p r o f f e r e d

t o t h e t r l a l judge and before u s , were r e J e c t e d b y t h e Trade

Prac t lces Commlss lon .

T h e l e a r n e d J u d g e f o u n d t h a t t h e r e was a " s t r o n g

prlma facle case t h a t t h e p r e s e n t l n t e n t l o n . . . " of the Alnsmor ths

and two companies of the Ainswor th g roup was t o t a k e t h e

s e c o n d s t e p of t r a n s f e r r m g s h a r e s t o the Amswor th compan les

c o n t r a r y t o s . 5 0 o f t h e Act. He g r a n t e d I n J u n c t l o n s , i n t e r

a l i a , r e s t r a l n l n g t h e A l n s m o r t h s a n d t h e t w o r e s p o n d e n t A l n s w o r t h

c o m p a n l e s f r o m a c q u l r l n g a n y s h a r e s I n t h e Cope Allman group

o r Bouley whlch would give a c o n t r o l l l n g I n t e r e s t t h e r e l n ; or

f r o m c o m p l e t i n g a n y e x l s t i n g c o n t r a c t f o r t h e sale of s h a r e s

I n t h e Cope Allman group.

The p r imary submlss lon o f t he appe l l an t s was t h a t no

prima .facie case had been made o u t a g a l n s t t h e m . I n t h e

subnnss lon of s e n i o r c o u n s e l f o r t h e T r a d e P r a c t l c e s Commlsslon

t h e e v i d e n c e t o whlch we h a v e r e f e r r e d was s u f f l c l e n t t o

8 .

e s t a b l l s h , u p o n a p r i m a f a c l e b a s i s , a p l a n or scheme whereby

t h e A l n s w o r t h i n d i v l d u a l s w o u l d v e s t t h e s h a r e s i n A l n s w o r t h

c o m p a n l e s . A l t e r n a t i v e l y , it was s u b m i t t e d t h a t t h e v i e w

s h o u l d b e t a k e n t h a t , a t t h e least , t h e A i n s w o r t h I n d i v i d u a l s ,

o n c e t h e y h a d a c q u i r e d t h e s h a r e s , m o u l d act as i f t h e shares

were c o n t r o l l e d , i f n o t owned by the Alnswor th companies .

This would a c q u i s i t l o n c o n t r a r y t o be enough, so It was s a i d , t o c o n s t l t u t e an I n d i r e c t

s .50 o f t h e Act.

The s t a r t i n g p o i n t f o r t h e Trade P rac t i ces Commlss ion ' s I .

c a s e was t h e c l r c u m s t a n c e t h a t t h e A l n s w o r t h i n t e r e s t s h a d s o u g h t ,

and stlll s e e k , a u t h o r i s a t l o n f r o m t h e Trade P r a c t i c e s

Commlsslon for t h e a c q u l s i t l o n of t h e s h a r e s by the compan ies .

That was and is t h e l r g o a l . The document of 24 November, 19S2,

ear l ler r e f e r r e d t o , c o n t a i n e d a d e t a l l e d a p p r e c i a t l o n o f t h e

w h o l e s i t u a t i o n a n d s o u g h t t o d e m o n s t r a t e t h a t t h e o n l y p r a c t l c a l

way t h e A i n s w o r t h i n t e r e s t s Nut t and Muddle bus inesses could be carried on by the

was by or th rough the Ainswor th companles .

C o n s l d e r a t i o n s t o w h l c h o t h e r p r o v l s l o n s o f t h e Trade P r a c t i c e s

Act, s . 4 5 i n	particular,	gave rlse would	make	It	l m p o s s l b l e t o
d o o t h e r w i s e .

Then reliance was p l a c e d u p o n t h e f a c t t h a t t h e S u b J e c t

a g r e e m e n t f o r t h e sa le o f t h e s h a r e s was e n t e r e d i n t o b e f o r e t h e

a p p l l c a t l o n f o r a u t h o r l s a t l o n was made. A t t h e latest it was

d a t e d 17 November 1982 . The app l l ca t lon €or a u t h o r l s a t i o n was

f l r s t made on 18 November 1982. I t was s a d t h a t t h e A l n s w o r t h s

had n o t b e e n T r a d e P r a c t i c e s f r a n k i n f a i l l n g t o r e v e a l t h e a g r e e m e n t t o t h e

Commlssion and t h a t t h i s lack o f f r a n k n e s s g a v e

9

rise t o t h e i n f e r e n c e t h a t the t r u e p u r p o s e of t he deed was

t h a t It be a s t ep i n t h e implementa t ion of a scheme whereby

t h e shares would be acquired d i r e c t l y o r i n d i r e c t l y by t h e

Ainsworth companles . I t was s u b m i t t e d t h a t t h e p u r p o r t o f Mr.

F r a n c e y ' s e v i d e n c e was t h a t h e had t h o u g h t It unwise t o I n f o r m

t h e T r a d e P r a c t i c e s Commission of the a g r e e m e n t . I n t h e l e t t e r

from 111s i n s t r u c t i n g s o l i c l t o r s I n which t h e y i n s t r u c t e d him

t o d i s c l o s e It t o t h e T r a d e P r a c t l c e s Commission t h e y h a d

s a l d , "You d e p a r t e d from the i n s t r u c t l o n s ( t h a t is t h e

A l n s w o r t h s ' i n s t r u c t i o n s t o d l s c l o s e t h e d o c u m e n t ) t o t h e

e x t e n t tha t t h l s i n f o r m a t i o n was not communicated a t t h e

confe rence because you f e l t t ha t i t may c o n s t i t u t e a n a d m i s s i o n

mhlch could t h e T r a d e P r a c t i c e s be ha rmfu l t o our c l i e n t a t a la te r date. 'I I n

Commission's s u b m i s s i o n t h e s o l i c i t o r s '

fears were well founded. The e x i s t e n c e of the Deed was

c o n t r a r y t o what the Trade Prac t ices Commlss ion had been led

t o b e l l e v e a n d was indeed inconsistent w i t h t h e a p p l l c a t l o n

which was b e i n g made.

I n f e r e n c e s t o t h e e f fec t of t h o s e re l ied upon by t h e

Trade P rac t i ces Commlss ion shou ld , i t is s u b m i t t e d , be the more

r ead l ly d rawn because o f t h e absence of any ev idence from the

Alnsmor ths t hemse lves . In the absence o f any ev ldence f rom them

denylng that t h e rea l pu rpose of the Deed was a f i r s t s t e p I n

t h e i m p l e m e n t a t i o n of a scheme or p l a n t o vest the shares i n

the Ainswor th companles , i t o u g h t t h e m o r e r e a d i l y be i n f e r r e d

t h a t t h l s was its p u r p o s e , p a r t i c u l a r l y i n a n a p p l i c a t i o n f o r

an l n t e r l o c u t o r y i n J u n c t l o n where t h e a p p l i c a n t n e e d make o u t

no more than a prima f a c i e case.

1 0 .

01 c l a u s e 15 01 t h e Deed I t was s a i d t h a t It was

"a self P r a c t l c e s C o m m i s s i o n , n o t o n l y s h o u l d c a r r y n o w e i g h t s e r v l n g w a r r a n t y " w h i c h , as r e g a r d s t h e T r a d e

but

gave t o t h e Deed a s u s p i c l o u s c h a r a c t e r . Its p r e s e n c e , a l o n g

w i t h t h e f ac t t h a t t h e p u r c h a s e r s of t h e s h a r e s were t o

acqu i re them as J o l n t t e n a n t s , a matter we h a v e a l r e a d y

ment loned , should make one a l l t h e more c a u t l o u s o P a c c e p t i n g

t h e Deed a t Its Pace v a l u e , p a r t l c u l a r l y i n t h e a b s e n c e of any

ev idence €rom t h e A i n s w o r t h s .

What we have sa id may n o t be a n e x h a u s t l v e a c c o u n t

of t h e matters advanced by the Trade Prac t ices Commiss ion In

s u p p o r t of its p r o p o s i t i o n t h a t t h e r e was a p r i m a f a c i e case,

but It re f lec ts s u b s t a n t l a l l y t h e matters which were r e l l e d

upon by It .

We h a v e r e a c h e d t h e c o n c l u s l o n t h a t t h e T r a d e

P rac t l ces Commlss ion ' s submiss ions shou ld be reJected, primarily

b e c a u s e t h e r e was n o t , i n our o p m i o n , a n y w a r r a n t €or t r e a t l n g

t h e Deed o t h e r w i s e t h a n i n a c c o r d a n c e w l t h i t s terms. Clause

15 may b e self s e r v l n g , b u t I n t h e l i g h t of t h e c o n c e r n t h e

r e s p o n d e n t s ' a d v l s e r s m i g h t h a v e a b o u t a p o s s i b l e b r e a c h of t h e

T r a d e P r a c t i c e s A c t , its p r e s e n c e o u g h t n o t t o c a r r y s l n i s t e r

o v e r t o n e s . T h e r e are s e v e r a l p o s s l b l e e x p l a n a t i o n s €or I t . We

agree t h a t t h e a c q u l s i t l o n of t h e s h a r e s b y t h e A i n s w o r t h s as

J o i n t t e n a n t s is p u z z l i n g but as we h a v e s a i d , t h l s 1s a matter

wh ich canno t g ive rise t o m o r e t h a n s p e c u l a t i o n .

What I n our mmds mllitates a g a l n s t t h e v l e w t h a t t h e

r e sponden t s con tpmpln t ing or t h rpa ten l -ng a b r e a c h of t h e

Act is t h e v e r y o p e n n e s s 01 the A lnswor ths ' conduc t . I t was

t h e y who p l a c e d t h e w h o l e p o s l t l o n b e f o r e t h e T r a d e P r a c t l c e s

Commission; so far as appears, i t may no t have hea rd of t h e

mat te r , and would not have heard of It I n so much d e t a i l ,

u n l e s s t h e y h a d . I t is t h e n - h o p e u l t i m a t e l y t o be a b l e t o

v e s t t h e s h a r e s I n k n s w o r t h c o m p a n l e s , b u t t h e y h a v e made It

clear t h a t t h e y wlll not do so u n l e s s t h e r e is a n a u t h o r i s a t l o n .

The purpose of t h e document dellvered on 24 November 1982,

was t o s e e k s u c h an a u t h o r i s a t l o n . T h e r e IS no sugges t lon

t h a t t h e document lacks f r a n k n e s s . I n d e e d it a p p e a r s t o have

been most c o m p r e h e n s l v e i n t h e l n f o r m a t l o n It p rov ided .

What made t h e T r a d e P r a c t i c e s Commlssion s u s p l c i o u s

was t h e o r i g i n a l n o n - d i s c l o s u r e of t h e Deed e n t e r e d I n t o o n

or b e f o r e 17 November 1982. But It was s o o n d l s c l o s e d I n t h e

c i r c u m s t a n c e s m e n t l o n e d i n Mr. Francey ' s e v i d e n c e . H e was

n o t c r o s s - e x a m l n e d a n d h l s e x p l a n a t l o n of h i s own p a r t i n t h e

p r o c e e d l n g s s h o u l d , as matters s t a n d , be accep ted . Thus i t

was h e , n o t h l s c l i e n t s , who d e c i d e d n o t t o r e v e a l i t . Mr.

Francey was able t o g i v e f l r s t h a n d e v l d e n c e as t o what was

s a d between Mr. O ' N e i l l and h imse l1 . H e d e n i e s t h a t h e made

any s t a t emen t " I n t e n d e d " t o t h e effect tha t A lnswor th Ho ld ings P ty . L i m l t e d

t o acqulre t h e s h a r e s , I n t h e s e n s e o f a c q u i r m g

them wlth o r wi thout Trade Prac t lces Commlss lon approval, and It

1s h l g h l y i m p r o b a b l e , o n t h e facts a d m l t t e d o r p r o v e d , t h a t h e

would have done so. Nr. O ' N e l l l d l d n o t g i v e e v i d e n c e .

13.

There is f o r c e i n t h e T r a d e P r a c t i c e s C o m m i s s i o n ' s

submlss lon conce rn ing the absence o f t he Alnswor ths f rom the

w l t n e s s b o x , b u t it 1s f o r t h e T r a d e P r a c t i c e s Commission t o

make o u t a case. We c a n u n d e r s t a n d t h a t t h e c o n d u c t of t h e

ma t t e r , v l ewed as a w h o l e , c o u l d a r o u s e s u s p l c l o n , b u t we see

no r e a s o n t o t a k e t h e v l e w t h a t t h e Deed is not what i t

a p p e a r s t o b e , n a m e l y , a t r a n s a c t i o n d e s i g n e d t o v e s t t h e

s h a r e s I n t h e A m s w o r t h i n d l v i d u a l s a n d t h u s a v o l d a n y b r e a c h

o f t h e Act.

I t may well b e t r u e , as c o u n s e l f o r t h e T r a d e

P r a c t l c e s Commlsslon s u b m l t t e d , t h a t t h e r e will b e g r e a t

p r a c t l c a l d 1 f I : l c u l t y i n t h e N u t t and Muddle b u s m e s s e s be lng

o p e r a t e d u n d e r t h e c o n t r o l 01 A l n s w o r t h I n d i v i d u a l s 1rom t h e

p o l n t o f view o f p o s s i b l e b r e a c h e s 01 o t h e r p r o v l s l o n s o f t h e

Act. That , however , is €or t h e f u t u r e a n d 1s a matter upon

mhlch we Cornmlsslon's case, i t is one e x p r e s s no o p i n i o n . A s me see t h e T r a d e P r a c t l c e s

of Iear for what mlght happen

m the f u t u r e , a f t e r t h e p r e s e n t a g r e e m e n t 1s completed, and

not one of a p r e s e n t l y t h r e a t e n e d b r e a c h of t h e Act.

For t h e r e a s o n s we have g iven me c o n c l u d e t h a t no

p r l m s f a c i e case 01 a t h r e a t e n e d b r e a c h of s . 50 o f t h e Act IS

made o u t . T h e T r a d e P r a c t l c e s C o m m i s s i o n s a y s , i n e f f e c t ,

t h a t i f t h e agreement 1s c o m p l e t e d , t h e matter wlll p a s s

from Its c o n t r o l . With a l l t h e p o w e r s g i v e n t o It by t h e

Act, and havlng I n mmd t h e f u l l i n f o r m a t i o n already s u p p l l e d

t o It by t h e Amsworth companles , we f i n d it h a r d t o a c c e p t

this submiss lon . Yor 1s i t l l g h t l y t o be p r e s u m e d t h a t t h e

par t les will a c t , o r c o n t l n u e t o ac t , c o n t r a r y to ~ R W It

is a l s o b e c a r r y l n g o n b u s i n e s s submitted b y c o u n s e l t h a t e v e n now t h e r e s p o n d e n t s may

i l l e g a l l y . O€ thls t h e r e h a s b e e n no

a l l e g a t i o n i n the p l e a d i n g s a n d It is unsuppor t ed by e v i d e n c e .

For t h e r e a s o n s g i v e n t h e a p p e a l s were a l l o w e d , t h e

o r d e r made b y S t . J o h n J. set n s l d e a n d t h e a p p l i c a t l o n made t o

h l m d i s m l s s e d .