Merim Proprietary Limited v The Oaktower Partnership Proprietary Limited (No 2)
[2007] FCA 1440
•12 September 2007
FEDERAL COURT OF AUSTRALIA
Merim Proprietary Limited v The Oaktower Partnership Proprietary Limited (No 2) [2007] FCA 1440
Trade Practice Act 1974 (Cth) s 52
MERIM PTY LTD & ANOR v THE OAKTOWER PARTNERSHIP PTY LTD & ANOR (No 2)
VID 641 OF 2007HEEREY J
12 SEPTEMBER 2007
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 641 OF 2007
BETWEEN:
MERIM PTY LTD & ANOR
ApplicantsAND:
THE OAKTOWER PARTNERSHIP PTY LTD & ANOR
Respondents
JUDGE:
HEEREY J
DATE OF ORDER:
12 SEPTEMBER 2007
WHERE MADE:
MELBOURNE
Upon the applicants by their Counsel undertaking:
(a)to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of this interlocutory order or undertaking or any continuation (with or without variation); and
(b)to pay the compensation referred to in (a) to the person there referred to.
THE COURT ORDERS:
1.The respondents by their servants or agents be restrained until 25 September 2007 or the conclusion of any adjournment of the general meeting of Golden Circle Limited whichever is the later from representing to shareholders of Golden Circle Limited that the applicants caused Sunbeam Foods to:
(a) cease to buy produce from Australian fruit producers; or
(b) only buy sultanas from overseas producers.
2.The applicants have leave to file and serve an amended statement of claim on or before 19 September 2007.
3.Costs reserved.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 641 OF 2007
BETWEEN:
MERIM PTY LTD & ANOR
ApplicantsAND:
THE OAKTOWER PARTNERSHIP PTY LTD & ANOR
Respondents
JUDGE:
HEEREY J
DATE OF ORDER:
12 SEPTEMBER 2007
WHERE MADE:
MELBOURNE
THE COURT ORDERS:
1. That the respondents motion by notice dated 6 September 2007 be dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 641 OF 2007
BETWEEN:
MERIM PROPRIETARY LIMITED & ANOR
ApplicantAND:
THE OAKTOWER PARTNERSHIP PROPRIETARY LIMITED & ANOR
Respondent
JUDGE:
HEEREY J
DATE:
12 SEPTEMBER 2007
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
I will grant an injunction in the limited form now sought by the applicants: the respondents by their servants or agents will be restrained until 25 September 2007 or the conclusion of any adjournment of the extraordinary general meeting of Golden Circle Limited, whichever is the later, from representing to shareholders of Golden Circle Limited that the applicants caused Sunbeam Foods to:
a. cease to buy produce from Australian fruit producers; or
b. only buy sultanas from overseas producers.
It is true that the applicants’ case as to what was said at the meeting on 1 June 2007 has changed substantially. That is not surprising when one has regard to meetings of this sort; differing recollections result from different persons regarding different things as being of importance. However, it remained central to the applicants’ case, that Mr Klotz was alleging that Mr Yunghanns had used his powers at Sunbeam Foods to the disadvantage of fruit growers who supplied fruit to Sunbeam. The prospect that Mr Yunghanns would do the same thing to pineapple growers, selling fruit to Golden Circle, should he gain control of that company, was clearly of great significance to a Golden Circle fruit grower shareholder, contemplating selling shares.
Counsel for the respondents analysed the evidence about the actual misleading of persons and made the valid point that most of the five people at the meeting of 1 June 2007 are now allied with the Yunghanns camp. Counsel also pointed out that Mr Yunghanns had subsequently campaigned at larger meetings of shareholders and there was no evidence that anybody at those meetings still believed what Mr Klotz had said. Nevertheless, the statutory prohibition in section 52 of the Trade Practice Act 1974 (Cth) is – not only conduct which misleads or deceives, but also conduct which is likely to mislead or deceive. There remains that significant potential for other shareholders of Golden Circle to be mislead or deceived in the time leading up to the proposed extraordinary general meeting on 24 September.
It is true that the particulars of loss and damage, once one removes the highly speculative and contended claims for loss of opportunity, amount to only approximately $30,000. There is no doubt that the first respondent has the capacity to pay such amount. However, as senior counsel for the applicant pointed out, the possibility of repetition of misleading statements that may affect the outcome of the meeting is not something which can be compensable by way of damages.
It would also appear that the role of Mr Klotz is somewhat beyond that of dispassionate advisor to the existing board of Golden Circle. While he has deposed in his affidavit that he has no intention of repeating the specific allegations in the statement of claim, he admits saying at the meeting on 1 June (emphasis added):
The outcome at Sunbeam from a shareholder point of view was very positive. I understand that the management team installed by Mr Yunghanns and his directors was strong and that they made changes and introduced efficiencies that helped turn the company around. Sunbeam’s ownership and control was significantly divorced from the growers and its behaviour was driven to maximise shareholders’ interests, for example, one of the changes introduced by Mr Yunghanns’ team was to source more fruit offshore.
The clear meaning of this statement was that Mr Yunghanns was instrumental in benefiting shareholders at Sunbeam, to the disadvantage of growers, by obtaining fruit from outside Australia. This is essentially the sting of the statements of which the applicants complain.
The injunction will be on the usual undertakings.
The applicants’ will have leave to file and serve an amended statement of claim within seven days. The costs of today will be reserved. The respondents’ motion by notice dated 6 September 2007 is dismissed.
I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate:
Dated: 12 September 2007
Counsel for the Applicant: L Glick SC and P Corbett Solicitor for the Applicant: Strongman & Crouch Counsel for the Respondent: D Forbes Solicitor for the Respondent: Holman Webb Lawyers Counsel for Golden Circle C Lethlean Solicitor for Golden Circle Minter Ellison Date of Hearing: 12 September 2007 Date of Judgment: 12 September 2007
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