Mg Constructions Pty Ltd v Radroc Pty Ltd
[2013] FCA 519
FEDERAL COURT OF AUSTRALIA
MG Constructions Pty Ltd v Radroc Pty Ltd [2013] FCA 519
Citation: MG Constructions Pty Ltd v Radroc Pty Ltd [2013] FCA 519 Parties: MG CONSTRUCTIONS PTY LTD v RADROC PTY LTD File number: WAD 274 of 2008 Judge: GILMOUR J Date of judgment: 18 March 2013 Date of hearing: 18 March 2013 Place: Perth Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 8 Counsel for the Applicant: Mr M Levitan Solicitor for the Applicant: Melvyn Levitan Counsel for the Respondent: Mr R Sandover Solicitor for the Respondent: Jackson McDonald
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 274 of 2008
BETWEEN: MG CONSTRUCTIONS PTY LTD
PlaintiffAND: RADROC PTY LTD
Defendant
JUDGE:
GILMOUR J
DATE OF ORDER:
18 MARCH 2013
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.Pursuant to the supplementary reports of Mr Jeffrey Herbert of PPB Advisory dated 11 October 2012 and 15 March 2013 and the report of Mr Herbert dated 31 August 2009:
(a)the defendant, having made the election referred to in paragraph 6 of the Orders his Honour Justice Gilmour made 23 March 2009 (2009 Orders), shall procure that Danehill Nominees Pty Ltd (ACN 008 867 623) purchase all of the shares registered in the name of the plaintiff in the defendant for $4,920.00 per share; and
(b)the defendant shall hold on trust for the plaintiff 10% of any interest of the defendant arising from:
(i)the proceedings described as Lime Industries Pty Ltd v The Executors of the Estate of Mr Reading, Joanne Matich & Ors - Supreme Court of WA CIV 2020 of 2007 (“Reading Proceedings”) in accordance with the terms of the Share Buy Back Agreement dated 28 May 2008;
(ii)the proceedings described as Lime Nominees Pty Ltd v Adelaide Brighton Cement Limited - Supreme Court of WA CIV 2063 of 2001 (“Cockburn Cement Dispute”) in accordance with the terms of the ACBL Deed dated 26 June 2008,
and account to the plaintiff in respect of any such interest.
2.The parties shall sign (and in the case of the defendant, procure that Danehill Nominees Pty Ltd (ACN 008 867 623) signs) a share transfer in the form of the share transfer annexed hereto and marked annexure “A” (“Share Transfer”) and carry out all acts and do all things necessary to give effect to the sale and purchase of the shares including signing any further necessary documents to give effect to the share transfer.
3.The plaintiff pay the defendant’s costs, including both any reserved costs and the costs of and incidental to obtaining the amended supplementary report of Mr Jeff Herbert dated 15 March 2013.
4.Paragraph 10 of the 2009 Orders be discharged and in lieu thereof payment of the purchase price for the shares registered in the name of the plaintiff shall be paid by the defendant into Jackson McDonald’s trust account pending:
(a)agreement or taxation of costs and disbursements in these proceedings; and
(b)payment of such costs and disbursements by Jackson McDonald to the defendant by way of set off against the purchase price,
and thereafter Jackson McDonald shall pay any balance of purchase price (if any) to the plaintiff.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 274 of 2008
BETWEEN: MG CONSTRUCTIONS PTY LTD
PlaintiffAND: RADROC PTY LTD
Defendant
JUDGE:
GILMOUR J
DATE:
18 MARCH 2013
PLACE:
PERTH
REASONS FOR JUDGMENT
I made orders in this matter on 18 March 2013, and gave ex tempore reasons at that time for doing so. These are my reasons, edited but not such as to alter the substance of those reasons.
In this matter, I made a set of orders on 23 March 2009. These included, as Order 6, that by way of an alternative to orders set out in Order 1, that at the election of the defendant, a shareholder of the defendant (or its nominee) may purchase the shares in the defendant, registered in the name of the plaintiff, at the acquisition price determined by the experts. I also ordered, by Order 8, that the costs of the experts be paid by the defendant. Mr Jeffrey Herbert was appointed, with agreement of the parties to this proceeding, as the independent expert to provide a report as to the acquisition price to be paid by the defendant for those shares.
Mr Herbert provided a very extensive report in 2009. The plaintiff impugned a number of matters in relation to that report.
As a result of the concerns raised by the plaintiff, I directed the parties late last year toward the obtaining of a supplementary report from Mr Herbert in respect of which both parties were permitted to make submissions to Mr Herbert for the purposes of that report. A supplementary report was provided by Mr Herbert and filed with the Court on 15 March 2013. It had been expected that the plaintiff, following upon the making of the directions to which I have referred, was to have provided a list of its complaints concerning the original report, and any matters that were necessary for consideration in relation to the supplementary report. That did not occur, and although unusual, it is the fact that the solicitors for the defendant wrote to Mr Herbert by letter dated 18 February 2013 setting out those issues.
Those issues included a number of matters which have been revisited before me today by counsel for the plaintiff as continuing concerns, despite the content of the supplementary report. I refer particularly to his expressed concerns regarding the value of the mining tenements, and the value of the kilns. Those matters were brought to the attention of Mr Herbert, and in that sense, procedural fairness, as I intended would occur, did occur. The plaintiff engaged its own accountant, a Mr Lindsay Stagoll, who it appears is an accountant with Parkinson Chartered Accountants & Business Advisors, which sought to impugn Mr Herbert's valuation and as to whether it was fair and reasonable as to value, as well as an analysis, and indeed critique, of Mr Herbert's methodology.
I declined to receive the report in question because Mr Herbert was appointed, not in an inter partes contest between experts, but as an independent expert appointed by the Court upon the consent of both parties, and it would completely render useless the objective of so doing if the Court were to now descend into a contest as to the matters which are raised by Mr Stagoll. I am satisfied that Mr Herbert has provided the report ordered by the Court, and that in particular, the plaintiff has been given every opportunity to put matters to him as to its concerns for the purposes of his supplementary report. For those reasons, this very long-running matter ought be determined.
I propose to make a set of orders, using as the template for those orders the minute of proposed orders filed by the solicitors for the defendant and dated 15 March 2013. I propose to make orders in terms of paras 1, 2 and 4 of that minute. As to the question of costs, I ordered in March 2009 that the defendant pay the costs of the experts and that order stands. I am, however, satisfied that the defendant has been, in almost every respect, substantially successful in its defence of these proceedings brought by the plaintiff.
Counsel appearing for the plaintiff submitted that it would be fair if I were to order that each party pay its own costs, and supported that submission as to fairness on the grounds that the defendant was somehow responsible for some delays, although there was no specificity as to what those delays were. I am satisfied that in those circumstances the defendant should have its costs of the proceeding. There will be an order that the plaintiff pay the defendant's costs, including any reserved costs, and the costs of and incidental to obtaining the amended supplementary report of Mr Jeffrey Herbert.
I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. Associate:
Dated: 29 May 2013
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