The News Corporation Ltd (A.C.N. 007 910 330)

[1993] FCA 452

IN THE FEDERAL COURT OF AUSTRALIA	)
NEW SOUTH WALES DISTRICT REGISTRY )	No. NG 3134 of 1993
GENERAL DIVISION	1

IN THE MATTER OF
THE NEWS CORPORATION LIMITED

AUSTRALIAN COMPANY NUMBER: 007 910 330

THE NEWS CORPORATION LIMITED

(A.C.N. 007 910 330)

Applicant

CORAM: HILL J PLACE: SYDNEY DATED: 18 JUNE 1993

EX TEMPORE REASONS FOR JUDGMENT

This is an application by the News Corporation

Limited under s.205(11) of the Cor~orations Law for an order

declaring that the provisions of .S. 205 ( 10) have been complied

with in relation to a proposed giving by that company of financial assistance in respect of a proposed option issue to employees.

The company failed to comply with the provisions of s.205(10) in what are, in essence, three respects. First, there was a non-compliance with s.205(10)(c) in that the notice specifying the intention to propose the resolution was not accompanied by a copy of a statement made in accordance with a resolution of the directors, as referred to in that sub-paragraph.

Secondly, and consequential to that was a failure to give a copy of that statement to all members in accordance

wich s .205(10)(£) . Thirdly, the notice required t o be lodged under s.205(10)(e) was not lodged with the Australian Securities Commission ( " t h e Commission") not la ter than the day next following the day o f dispatch t o members o f the company. I t was i n fact only lodged on 9 February 1 9 9 3 , the material being dispatched t o members on 30 October 1992.

I am sat i s f ied that i n a l l other respects the:

company has complied with the provisions o f s.205(10).

The question i s whether I am sa t i s f i ed , i n the

circumstances, that the provisions o f sub-sec.(lO) have been "substantially complied with". As Young J said i n R e U Drive

P t v Limited ( 1 9 8 6 ) 10 ACLR 565 a t 5 6 7 , the t e s t i s :

"What m u s t be considered i s whether it can be s a i d that the interested parties i e the shareholders, the debenture holders, the creditors and the Corporate A f f a i r s Commission, even though they have not received exact ly what they should have received and sub-S ( 1 0 ) being s t r i c t l y

complied with, have b y the time the order

i s made su f f i c i en t material o f almost exact equivalence t o enable them t o make the election a s t o whether or not t o apply t o the court under s 129 (12) o f the Code. "

In the present case the Commission has received a copy o f the relevant notice, albei t not i n time. I t has been served with a copy o f the present application and has responded by indicating it d i d not intend t o appear a t the hearing or make submissions i n relation t o the application.

There is no doubt that the Commission itself has not been prejudiced in any way by the company's failure to comply with s.205(10).

The present is not a case where the company has sought to forward, albeit late, to members of the company material which could be seen to be an equivalent to what they otherwise would have received, so that the actual decision in Re U Drive is not completely applicable. I notice, however, in that case that two of the three failures with which the Court was concerned were similar to those in the present case.

It is clear enough that shareholders, having received a document in the required form, would have been unlikely to have voted against the resolution particularly as, without the notice, the special resolution authorising the option and the potential grant of financial assistance was passed unanimously.

Ultimately, it seems to me the matter is one of degree in a case such as the present, namely whether the compliance is such that it can falrly be said to be a subs tan t ia l compliance. In this respect the solicitor for News Corporation Limited has taken me to each of the requirements relevant in the case of the present company to show that but for the failure to comply in every respect s.205(10) has been complied with and the submission is then made that that compliance was substantial.

On the whole I agree with that submission and would accordingly make the declaration requested. This is not a case where there is any discretionary impediment to so doing.

I make 0.1 in the application as requested.

I certify that this and the
preceding three (3) pages
are a true copy of the Reasons

for Judgment herein of his Honour

Mr Justice Hill.

Associate:	T . [ & M w ~
Date :	9 J U L Y m 3
Solicitors for Applicant:	Allen, Allen & Hemsley
Date of Hearing:	18 June 1993