Ryan v Australian Securities and Investments Commission; in the matter of Allstate Explorations Nl (Subject to Deed of Company Arrangement)
[2006] FCA 1391
•18 OCTOBER 2006
FEDERAL COURT OF AUSTRALIA
Ryan v Australian Securities and Investments Commission; in the matter of Allstate Explorations NL (Subject to Deed of Company Arrangement) [2006] FCA 1391
DISCOVERY – judicial review proceedings
Hayes Knight GTO Pty Limited v Australian Securities and Investments Commission (2005) 147 FCR 468 cited
IN THE MATTER OF ALLSTATE EXPLORATIONS NL (SUBJECT TO DEED OF COMPANY ARRANGEMENT) ACN 000 679 023
MICHAEL JOSEPH PATRICK RYAN AND ANTONY WOODINGS v AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, MATTHEW GILL AND MACQUARIE BANK LIMITED
NSD 1879 OF 2006
GYLES J
18 OCTOBER 2006
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1879 OF 2006
IN THE MATTER OF ALLSTATE EXPLORATIONS NL (SUBJECT TO DEED OF COMPANY ARRANGEMENT) ACN 000 679 023
BETWEEN:
MICHAEL JOSEPH PATRICK RYAN AND ANTONY WOODINGS
ApplicantsAND:
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
First RespondentMATTHEW GILL
Second RespondentMACQUARIE BANK LIMITED
Third Respondent
JUDGE:
GYLES J
DATE OF ORDER:
18 OCTOBER 2006
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
The First Respondent is to give discovery of:
(a)all documents that record the impugned decision and the decision maker(s) reason(s) for decision; and
(b)all documents that were before the decision maker(s) and were taken into account by him or her or them in connection with the impugned decision,
on affidavit by 4.00 pm on Monday, 23 October 2006.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1879 OF 2006
IN THE MATTER OF ALLSTATE EXPLORATIONS NL (SUBJECT TO DEED OF COMPANY ARRANGEMENT) ACN 000 679 023
BETWEEN:
MICHAEL JOSEPH PATRICK RYAN AND ANTONY WOODINGS
ApplicantsAND:
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
First RespondentMATTHEW GILL
Second RespondentMACQUARIE BANK LIMITED
Third Respondent
JUDGE:
GYLES J
DATE:
18 OCTOBER 2006
PLACE:
SYDNEY
REASONS FOR JUDGMENT
Because of the imminence of the case it is best that I form and express a view as to this particular discovery application promptly. I will do so without reserving my decision. The power to order discovery in judicial review proceedings is clear. Over the years there has been a plethora of authority dealing with the circumstances under which it ought to be granted. Beyond saying that there is a certain restraint to be observed, in my opinion it is not necessary to encrust a judicial discretion to be exercised as a matter of practice and procedure with all sorts of judge-made rules. Some of the more modern authorities were referred to recently by Siopis J in Hayes Knight GTO Pty Limited v Australian Securities and Investments Commission (2005) 147 FCR 468 and the comprehensive submissions of the parties have identified a number of other relevant authorities.
The issue needs to be focused upon the basis for the judicial review application. In the present case, there are several broad grounds of attack. The first is the natural justice ground and it is said that there should be discovery related to cl 1(a) of the grounds of application. With all respect, I fail to see any basis for discovery in relation to the failure to afford natural justice as alleged. The relevant facts are clear and are within the knowledge of the applicants.
The next broad ground is that the Australian Securities and Investments Commission (ASIC) failed to take relevant considerations into account. That involves three steps. One is the existence of the consideration; secondly, is the relevance of the consideration; and, thirdly, there is the failure to take it into account. The disclosure or discovery of the documents which I have indicated I will order should make clear those circumstances or considerations which were not taken into account or, at least, will do all that can be done to establish that proposition. It is tempting to leave any other aspect of the matter until after consideration has been given to those documents. However, it seems to me that when I go through the individual paragraphs which are relied upon, there is no proper basis for discovery on this issue at this point because of two fundamental factors. The first is that the applicants were the subject of the investigation in question and much of what is alleged is within their own personal knowledge. Secondly, they received communications from ASIC which would establish many of the factual matters, in particular, the letter to which attention was drawn yesterday which was exhibit LMS17 dated 23 February 2004. That has been added to this morning by ASIC indicating a number of facts which it is prepared to admit for the purposes of the proceedings. It may be doubtful whether those admissions carry the letter any further, but they certainly do give formality to that situation.
I will run through the relevant paragraphs of the application. The first is the fact of ASIC’s lengthy prior investigation into the conduct of the deed administrators and the affairs of the company. That seems to me to be clearly within the knowledge of the applicants supplemented by the communications from ASIC. The second is the examination of, amongst others, one of the deed administrators, and the mine manager in connection with that investigation. That again is a matter of which evidence has been given. The third is the fact that ASIC was assisted during its investigations and those examinations by, and reached its conclusions having regard to, both expert accounting evidence and independent legal advice from senior counsel. The source of that is the ASIC communication. The point has been made today that the content of the expert accounting advice and, in particular, the independent legal advice, may be relevant to the case. I do not prejudge that at the moment, but that has not been alleged in terms. It seems to me that if it is desired to persist in an application to inspect that material, then a particular application should be made for that purpose.
The fourth, the fact that at the conclusion of the investigation and those examinations ASIC reached the view that the prospects of success were insufficient to justify ASIC commencing litigation against the deed administrator, is again established by the letter and admissions. The fifth, the fact of the dislocation, disruption, and expense already experienced and incurred, etc, is a matter within the knowledge of the applicants. To the extent that particulars 9, 10 and 11 are pressed, it seems to me that they are not matters which call for discovery.
The next main heading (ground 2(b)) is ASIC taking an irrelevant consideration into account, namely, the desire by certain minority shareholders of the company to attempt to investigate and challenge past commercial decisions made by the deed administrators of the company in 2001 and 2002, notwithstanding certain particularised matters. That identifies the alleged irrelevant consideration. The initial question here is whether or not ASIC did take that matter into consideration when making the decision. Whether or not it is an irrelevant consideration is essentially a mixed matter of fact and law. I will go on and look at the particulars. First, there is reference in (i) to ASIC itself investigating the matters, and the co-operation provided by the administrators in providing information. Secondly, ASIC decided that it did not intend to take any action. Thirdly, in 2003 to 2005, ASIC raised a number of queries which were answered and there was a decision not to take any action. Insofar as those matters require establishment of those facts, again, it seems to me that they are either covered by the direct knowledge of the applicants themselves or supplemented by the communications and admissions on the part of ASIC.
It is put today that it may be relevant to know whether the certain minority shareholders alleged to have been satisfied by this decision have an identity with those who made earlier complaints called the identity issue. I can see that that might be a relevant matter to take into account in the broad sense, but it seems to me that before any form of discovery be ordered about that, it would be prudent to have the documents relating to the decision scrutinised to see whether there is any credible case of failure to take such a consideration into account. I also suggest that ASIC and those acting for it might give some further consideration to this topic, which was really only raised at the heel of the hunt today, to see whether or not there might not be some appropriate admission to be made or at least some limited discovery made which would bear upon that point. I do not, however, propose to make any order about discovery in relation to that issue today.
The last matter which is relied upon is the exercise of power in accordance with the rule or policy without regard to the merits of the particular case. I do not think that was pressed in oral argument, but even it were, it seems to me to provide no basis at all for discovery going beyond the documents which I have indicated should be provided.
So for those reasons, I do not propose to make any present order about discovery beyond that previously foreshadowed. I do not rule out the possibility that once the other documents have been looked at, there may be scope for making an application for further and particular discovery. That would, or might, also include any application in relation to the advice to which I have referred and perhaps to what has been called the identity issue, which has also been raised today. That is my ruling on discovery at the moment.
I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. Associate:
Dated: 25 October 2006
Counsel for the Applicants: Mr B Dharmananda Solicitor for the Applicants: Mallesons Stephen Jaques Counsel for the First Respondent: Mr AG Bell SC, Mr JS Emmett Solicitor for the First Respondent: Ms K Turner of Australian Securities and Investments Commission Counsel for the Second Respondent: Mr PM Wood Solicitor for the Second Respondent: Henry Davis York Counsel for the Third Respondent: Mr SA Goodman Solicitor for the Third Respondent: Clayton Utz Date of Hearing: 18 October 2006 Date of Judgment: 18 October 2006
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