Edensor Nominees Pty Ltd v Australian Securities and Investments Commission

[2002] HCATrans 219

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry  
  Melbourne  No M44 of 2002

B e t w e e n -

EDENSOR NOMINEES PTY LTD

Applicant

and

AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION

First Respondent

YANDAL GOLD PTY LTD

Second Respondent

YANDAL GOLD HOLDINGS PTY LTD

Third Respondent

NORMANDY MINING LIMITED

Fourth Respondent

NORMANDY MINING FINANCE LIMITED

Fifth Respondent

NORMANDY CONSOLIDATED GOLD HOLDINGS PTY LTD

Sixth Respondent

NORMANDY MINING HOLDINGS PTY LTD

Seventh Respondent

Application for expedition

HAYNE J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON THURSDAY, 6 JUNE 2002, AT 9.33 AM

Copyright in the High Court of Australia

_________________

MR S.D. RARES, SC:   If your Honour pleases, I appear with my learned friend, MR R.D. STRONG, for the Australian Securities Investments Commission, the applicants on the summons.  (instructed by Australian Securities Investments Commission)

MR P.R. HAYES, QC:   If your Honour pleases, I appear with MR I.D. MARTINDALE for the applicant, the respondent on the application.  (instructed by Schetzer Brott & Appel)

MR D.J. BATT:   May it please the Court, I appear for the second to seventh respondents.  (instructed by Freehills)

HIS HONOUR:   Yes, Mr Rares.  I have read the material.  Other than saying that it is now a long time since the takeovers were made and that these are by their nature matters that ought to be dealt with promptly, what is the basis for the application for expedition?

MR RARES:   Your Honour, there are something like 3,000 shareholders who have now been held out of their money through no fault of their own if the orders are ultimately upheld, for something over just about three years.  Most of the delay has unfortunately occurred since the Full Court reserved judgment on 1 September 1999, the Full Federal Court.  What we would submit is that there is also in the orders for a stay an interest rate that is applicable to the money that has now been held on deposit that is far less than that provided in the Federal Court Rules.

HIS HONOUR:   Well, that is very much a matter for the parties, is it not, since those orders for stay were made by consent?

MR RARES:   Well, that was something that was done quite some time ago on the basis that, as had happened up until then, everything that had been done had been done for expedition, including the applications for special leave that ultimately were – ASIC’s application for special leave was allowed in August 2000, your Honour. 

So that what we would submit is that because so many people are affected by, or potentially affected by, the order and the fact that this is a matter that ought in the ordinary course to have been, as your Honour observed earlier, dealt with with expedition.  The circumstances of the impact on this large number of shareholders for a long time, all of whose circumstances cannot be ascertained or taken into account, we would submit it would be an appropriate matter that your Honour might regard as meriting expedition so that certainty could be achieved in the event that there is either a grant or refusal of leave.

HIS HONOUR:   Would you wish to be heard against the propositions that Justice McHugh stated in the SDN Case recently?

MR RARES: No, your Honour. We see ourselves as falling within the concept that his Honour was talking about at one point of saying that a lot of people are – one reason for leave being granted is where the result might affect a considerable number of people. ASIC acting in the public interest is seeking to do that to represent, in effect, the interests of the at large number of small in monetary terms individuals ‑ the orders on average are about for $10,000 for the 3,000 shareholders effectively.

HIS HONOUR:   Yes.

MR RARES:   So that that is one reason why we saw what Justice McHugh said as being relevant to the grant.

HIS HONOUR:   Well, 21 June is full, 9 August is full.  Why should I make any order that would displace any case from those lists?

MR RARES:   Your Honour, I think that is quintessentially a matter for your Honour to decide as to the relative importance and pressing nature of this and the other business of the Court.  As we had understood it, however, we would not even be looking at sort of the next date in September.

HIS HONOUR:   Well, 13 September is not yet fixed.  It may be, depending on what else ought to have higher priority than this, that 13 September could be available, but the difficulty I feel about it is this:  to make an order that would require fixture on 13 September must begin from the premise that this is more urgent than the other cases that would ordinarily enter the list for that day and that is a premise that is not self‑evidently true.

I can understand the force in what you say, that this is a commercial matter involving a lot of people which has now been delayed much longer than one might ordinarily expect, but for my own part I am very hesitant about making orders for expedition in special leave applications, save in the clearest case.  Now, I can see there would be considerable advantage if we could fit you in on 13 September.  At the moment I am not persuaded that it would be sensible to attempt to bump anyone out, whether of 21 June or 9 August, but more than that at the moment I am not minded to do.

MR RARES:   Well, is it possible for your Honour to make an order for expedition and to leave that in the hands of the management of the list and the matter be given the priority that the order gives it when the Court see a potential for a vacancy, because, as we have said, if something drops out of a list somewhere, the Commission sees this as being a matter of such importance and through no fault of any of the parties it has been delayed for so long that we would submit it could be heard anywhere in the Commonwealth, video link if need be or attendance in person, and if the Court has other vacancies in the lists, if it has an order for expedition, it might be able to be slotted in when something comes up, if that is a sensible ‑ ‑ ‑

HIS HONOUR:   Vacancies in the list seem to be a luxury to which we are not very often given the pleasure.

MR RARES:   Yes.  I notice Justice McHugh had seen two pop up, so I thought it might happen occasionally, but those are our submissions.

HIS HONOUR:   Yes, thank you, Mr Rares.  Now, Mr Batt, you are in the same interests, are you not, as – no, you are in the same interests as Mr Hayes, are you not?

MR BATT:   Yes, your Honour, that is correct.

HIS HONOUR:   Yes.  Perhaps I should hear Mr Hayes first.

MR BATT:   If your Honour wants.

HIS HONOUR:   Yes.

MR HAYES:   Your Honour, when we were asked to consent to the order we took the view that we could not see anything that did distinguish this application in such a way as would warrant the order.  We are content to have the earliest practical hearing but we do not advocate any particular circumstance.

HIS HONOUR:   Yes.  Mr Batt.

MR BATT:   If your Honour please, the position of the second to seventh respondents is the same as our learned friend, Mr Hayes, has set out.  If the Court were minded to expedite the application and that did lead to a hearing interstate in person, my clients would seek that the order be on the basis of ASIC agreeing to pay such costs as were occasioned by the interstate hearing of the application.

HIS HONOUR:   Which companies do you appear for, Mr Batt, that are in a position that they find it difficult to travel interstate; find difficulty finding a way to Tullamarine, sorry?

MR BATT:   Your Honour, I do not submit are difficulties in attendance, merely that the order sought would lead to increased costs and we would seek them if the hearing were interstate as a result.  I do not say anything further on that, your Honour.

HIS HONOUR:   Yes, thank you, Mr Batt. 

Edensor Nominees Pty Ltd has made application for special leave to appeal from orders of the Full Court of the Federal Court made on 20 March 2002 by which that court dismissed an appeal brought by Edensor Nominees against orders made by Justice Merkel as long ago as June 1999.  Reference to this Court’s decision in Australian Securities and Investment Commission v Edensor Nominees Pty Ltd (2000) 204 CLR 559 will explain why so long a time has elapsed between the orders of the primary judge and the orders of the Full Court of the Federal Court disposing of the appeal. The Australian Securities and Investment Commission (“ASIC”) now applies for an order that the hearing of the application for special leave be expedited and listed for hearing as a matter of urgency.

One of the orders made by the primary judge in this matter required Edensor to pay to ASIC $28.5 million to be distributed to shareholders of Great Central Mines Limited who had accepted a takeover offer for their shares in that company.  That sum was paid to ASIC but it has not been distributed pending the outcome of the continuing litigation between the parties.  After it was paid other arrangements were made to deal with the sum and to secure its availability for payment to shareholders but the detail of those arrangements does not matter for present purposes.  The money is earning interest at a modest but nonetheless commercial rate in accordance with the arrangements that the parties made.

At the risk of unduly abbreviating the contentions made by ASIC in support of its application for expedition, it contends that resolution of the consequences flowing from takeover offers made for a listed company as long ago as 1999 should not now be further delayed, especially when those consequences affect a large number of shareholders holding comparatively modest holdings in the company.

Yet against that it is to be recalled that ASIC joined in seeking orders from the Full Federal Court which, in effect, stayed the operation of the relevant orders of the primary judge pending the hearing and determination of the application by Edensor for special leave to appeal to this Court and, if needs be, any subsequent appeal.  It is, of course, the order granting that stay which precludes effect being given to the orders made by the primary judge and distribution of the sum that has been secured to provide for that payment.

Recently Justice McHugh dealt with three applications for orders expediting the hearing of applications for special leave to appeal in civil matters.  In his reasons for judgment in SDN Children’s Services Incorporated (formerly known as Sydney Day Nursery Schools Association Incorporated) v Hughes and Another, unreported 14 May 2002, Justice McHugh referred to a number of considerations affecting the exercise of discretion to order expedition of applications for special leave. 

Of course the matters to which his Honour referred are not and were not intended to be an exhaustive list of all matters that might properly be taken into account in considering an application for expedition.  Nonetheless, each of the matters which his Honour mentions bears upon ASIC’s application in the present matter.  In particular, it is important to recall that expediting any application for special leave to appeal means that another application must take a place in the list later than it would if the order for expedition had not been made, and that should not be done unless good reason is shown for doing it.

The lists of applications to be heard on 21 June and 9 August this year have now been fixed and I am not persuaded that any sufficient reason has been proffered to warrant displacing a matter from either of those lists.  The list of cases to be heard on 13 September 2002 is not yet complete and it may be that this application could be heard on that day.

I am not persuaded, however, that I should require that the application be fixed in the list of cases to be heard on that day.  To do so would depend upon deciding that the present application is more urgent than any other that is waiting in the list and that is not self‑evidently true.  Nonetheless, there is obvious force in what is said on behalf of ASIC that would suggest, all other things being equal, that there would be advantage if this application could be heard in the list of cases to be fixed for 13 September 2002.

In all the circumstances, I am not minded to make an order in the terms sought by ASIC.  I have said what I have about the desirability of fixture on 13 September so that when that list comes to be fixed account may be taken of this expression of opinion in determining whether to include this case in a list to be heard on that day.

There is so far as I am aware now no need to give any further direction to the parties that would abbreviate the times otherwise fixed by the Rules and Practice Directions in order to have the case ready for hearing on 13 September 2002.  If at any stage the parties considered that there would be advantage in having directions of that kind, they will no doubt make application.

In all the circumstances, it is, I think, appropriate that I make no order on the summons of ASIC other than an order that the costs of the application be costs in the application for special leave.  I note that counsel for the second to seventh respondents asked that I make an order providing that ASIC should pay the costs incurred by those parties if the application for special leave to appeal were to be heard in a city other than Melbourne.  I am not minded to make an order of that kind.

Accordingly, there will be no order on the summons of ASIC of 13 May 2002 other than an order that the costs of the application be costs in the application for special leave to appeal.  I will certify for the attendance of counsel.

Do counsel wish to be heard, particularly on the question of directions or in any other respect about the form of orders I have indicated I will make?

MR RARES:   No, your Honour.

HIS HONOUR:   Yes.  There will be orders in those terms.  Adjourn.

AT 9.54 AM THE MATTER WAS CONCLUDED