Trade Practices Commission v Rank Commercial Ltd

[1994] FCA 506

COURT OF AUSTRALIA	1
1

NEW ~O-Fs	DISTRICT R E G I S m	) NO G 395 of 1994
1

DIVISION	)
1

BETWEEN: m, PRACTICFS CO -

Applicant

Am:

First Respondent

COLES MYER LIMITED

Second Respondent

P

Third Respondent

A U S T R A L I A N	G R O C E R 1
HOLDINGS PTY L-

Fourth Respondent

chralll:	Davies J.
h&:	29 June 1994
m!-&:	Sydney

MILLSTREET	INVESTMENTS
JJmI222

03 AUG 1994 Fifth Respondent

PRINCIPAL RLOIsTRv

HOJ .DINGS LIM-

Sixth Respondent

m Australian Grocery Holdings Pty Lirmted undertaking by its counsel that it will not lodge its Part A statement with the Australian Securities Commission for registration prior to 5 pm. on 8 July 1994.

1. Leave to apply be reserved in case facts occur which render the restraint inappropriate.

2. The costs of the motion be costs in the cause.

3. The applicant is to fde and serve its affidavits, points of claim and notice of the interlocutory orders sought by 5 pm on 1 July 1994, but have liberty to apply with respect to evidence filed after that date.

4. The respondents to fde and serve their affidavits by 2 pm., 5 July 1994, but have liberty to apply with respect to evidence filed after that date.

r!K?lz:	Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.

. " 1

SOUTH m DISTBICTRFA2LSH ,-) -No G 395 ,of -1994

-	)
)

E!Ellmm E PRACTICFS CO-

Applicant

m: -

First Respondent

Second Respondent

Third Respondent

Fourth Respondent

W S T R E E T	INVESTMENU
LIMITED

Fifth Respondent

H O T H F D HOJ nINGS J m

Sixth Respondent

i22mnl:	Davics J.
BUG	29 June 1994
ll?&s	Sydney

The Tmde Practices Commission (the 'WC') has instituted proceedings

seeking injunctions precluding the respondents from acquiring directly or indirectly any

shares in the capital of, or any assets of Foodland Associated Ltd ("Foodland"), a company which is involved in the wholesale retailing of groceries in Australia, particularly

in Wcstcrn Australia and in New Zealand.

The TPC also seeks a declaration that, by entering into a deed entitled 'CO-

operation Deed", dated 23 June 1994, the 2nd respondent, Coles Myer Limited ("Coles

Myer"), has contravened s.50 of the B d e P r a c u 1974 (Cth).

I expect that the Court will be able to arrange for a motion for interlocutory

injunctions to be heard in Melbourne on 6th, 7th & 8th July.

The present motion seeks an order restraining the presentation to the

Australian Securities Commission ("the ASC') for registration under s.644 of the

Cornorations of a Part A statement which the 4th respondent, Australian Grocery

shareholders together with an offer to acquire all the shares in Foodland. Holdings Pty Limited ("Australian Grocery"), proposes to fomard to Foodland and to its The difficulties which confront the parties and the Court in litigation of this

. .

type became apparent in B d e Practices Co m v. -l c& the

decision of which at first instance is reported in (1992) 14 ATPR 741-195 and on appeal at (1992) 38 FCR 382. A court cannot hold the underlying commercial situation in a state of status quo during the lengthy period which preparation for trial might ordinarily be expected to take. In this period the facts, including share values, will invariably

change.

Accordingly, the Judge hearing the motion for interlocutory injunctions will be

faced with very diEicult questions of balance of convenience and public policy.	The
decision on the motion could determine the fate of the takeover now proposed.

My task is merely to consider whether the lodgment of the Part A statement

should be stayed until 5:00 pm on 8 July, by which time the Judge hearing the motion for interlocutory injunctions will have control of the matter and will be informed of the relevant factors to be taken into account.

At this early stage of the proceedings, I would not form any view as to the

strength of the VC ' s case. It is sufficient that, on the material before the Court, the

TPC has an arguable case. The result of the motlon must turn on issues going to the

balance of convenience.

It has been submitted by counsel for Australian Grocery and counsel for Coles

Myer that no hann will result from the furnishing of the Part A statement to the ASC

for registration or to Foodland. Counsel referred to s.637 of the and

submitted that, unless the ASC otherwise authorised an offeror to do so, the offeror would not forward the offer and the Part A statement to shareholders until 14 days had elapsed after service on the target company.

I appreciate this point but it seems to be that the registrabon of the Part A

statement and the s c ~ c e of it upon Foodland would be likely to have some influence

on the value of the shares of Foodland and on the way in which persons dealing with or affected by Foodland would be likely to view that company.

In my opinion, it is preferable to hold the present status quo insofar as that can

be done. It seems to me that, as the period until 5:00 pm on Friday, 8 July is relatively

bricf, there is a reasonable prospect that the status quo can be maintained and that the

delay would be unlikely to cause significant harm to any person.

The TPC does not offer an undertaking as to damages. However, I give effect

. .

to the views which I expressed in thls respect in B d e Practices v. SantPs

38 FCR at 387-390.

It follows that I am of the opinlon that the balance of convenience favours
restraining Australian Grocery from lodging its Part A statement with the ASC for

registration until the motion for ~nterlocutory Injunction can be heard. Leave to apply

should be reserved in case facts occur which render the restraint inappropriate. The

costs of the motion should be costs in the cause.

I certify that this and the 3 preceding pages
are a true copy of the reasons for judgment herein of

the Honourable Mr Justice/Davies.

Associate: + Date: 29 June 1994

Counsel for the applicant:	B. Rayment QC -with.CP,Chmans
Solicitor for the applicant:	Australian Government Solicitor
Counsel for the 1st respondent:	JJ. Spigelman QC
and J. Bartos

Solicito~ for the 1st respondent: Arthur Robinson Heddenvicks

Counsel for the 2nd respondent:	S.P. Charles QC
N. Young QC
and N.J. O'Bryan
Solicitors for the 2nd respondent:
Date of hearing:	28 June 1994
Date of judgment:	29 June 1994