Orison Pty Ltd v Strategic Minerals Corporation N/L

In the Federal Court of Australia, Orison Pty Ltd brought an action against Strategic Minerals Corporation N/L. The dispute centered around the takeover of Orison, a proprietary limited company, by Strategic, a public listed company. Orison alleged that Strategic engaged in misleading and deceptive conduct by forwarding a memorandum and independent valuation report to shareholders, contrary to the requirements of a special resolution. This allegedly constituted misleading and deceptive conduct under the Trade Practices Act 1974. Orison sought injunctive and declaratory relief against Strategic and its directors.

The court had to determine several legal issues, including whether the pleading of adoption of the valuation report by the directors was supportable, whether the conduct of the Board or the company constituted the misleading and deceptive conduct, and whether the conduct was "in trade or commerce" as required by section 52 of the Trade Practices Act. The court also had to decide whether the applicants needed to provide security for the respondents' costs.

The Federal Court found that the forwarding of a notice of extraordinary general meeting along with an explanatory memorandum and report to shareholders was conduct in trade or commerce. The court held that the pleading of adoption of the valuation report was supportable and that the conduct of the Board constituted misleading and deceptive conduct. The court also determined that the conduct was "in trade or commerce" and that the applicants needed to provide security for the respondents' costs. The court ordered that the motion to dismiss the action was dismissed, and the costs of the motion were to be borne by the first respondent. The preliminary issue regarding the conduct being "in trade or commerce" was to be determined between the applicant and the first respondent, with the costs of the preliminary issue to be borne by the parties equally. The application to strike out certain relief sought by the applicants was dismissed, except to the extent of the relief sought in paragraph 5, which was struck out. The applicants were ordered to provide security for the respondents' costs, with proceedings to be stayed until the security was provided or further order. The applicants were given liberty to apply to set aside the order if they could demonstrate their ability to pay the costs of the application if unsuccessful. The costs of the motion were to be borne by the second respondent.