Wilson Watt Papandrea P/L v Harts Australasia Ltd & Queensland Newspapers P/L

[2001] QCA 179

[2001] QCA 179

COURT OF APPEAL

WILLIAMS JA

Appeal No 4173 of 2001

WILSON WATT PAPANDREA PTY LTD     Applicant

and

HARTS AUSTRALASIA LIMITED         Respondent(Appellant)

and

QUEENSLAND NEWSPAPERS PTY LIMITED  Respondent

BRISBANE

..DATE 10/05/2001

ORDER

HIS HONOUR:  On 2 May this year Wilson Watt Papandrea Pty

Ltd filed an application seeking an order that Harts

Australasia Limited be wound up.  On the same day an

application was filed seeking the appointment of a

provisional liquidator.  The application for appointment of

a provisional liquidator came on late in the afternoon of

that day before the Chamber Judge.  The matter was unable to

be heard then for various reasons and the matter was

adjourned until the morning of 3 May.  At that time the

Chamber Judge made a non‑publication order.

The matter came before the Judge again on the morning of

3 May and was apparently stood down because some discussions

were proceeding between the parties.  Around midday on that

day the Judge was informed that some arrangement had been

reached and the parties were seeking an adjournment of the

application for appointment of a provisional liquidator to a

date to be fixed.  In addition to that order the Judge then

made an order prohibiting publication of the application and
the supporting material.

I should record that at some stage in the course of the

hearing before the Chamber Judge on that day counsel for

Harts indicated to the Court that his client contended that

the applications amounted to an abuse of process.

Subsequently by oral application counsel for Queensland

Newspapers Pty Limited sought the discharge of the order for

non‑publication.  Further argument with respect to the

various matters took place before the Chamber Judge on

4 May.  Apparently by that stage Harts had signed a document

purporting to evidence arrangements reached the previous day

and had given to Wilson Watt Papandrea a bank cheque for an

amount in excess of the debt referred to in the statutory

demand.  However, counsel for Wilson Watt Papandrea

indicated to the Chamber Judge that it did not regard the

matter as settled.  The Chamber Judge invited Wilson Watt

Papandrea to immediately proceed with its application for

the appointment of a provisional liquidator, but counsel

indicated that he was not then in a position to proceed

because necessary witnesses were not available.

As a consequence of that the application for appointment of

provisional liquidator stood adjourned to a date to be fixed

and the Chamber Judge became primarily concerned with the

issue whether or not he should vacate the order prohibiting

publication.  Ultimately he reserved his decision on that

matter and published reasons for his decision on 10 May.  He

concluded that in the circumstances the non‑publication

order made on 3 May should be vacated.  He gave, as I say,

extensive reasons and it should be noted that in those

reasons he indicated some concern with the material on which

the applicant, Wilson Watt Papandrea, was relying and

expressed a tentative view that it may not be sufficient to

justify the Court making an order for the appointment of a

provisional liquidator.  He also referred to the fact that

Harts contended that the proceedings were an abuse of

process and he indicated some matters which might be seen as

supporting that contention.  He also referred reasonably

extensively to the fact that Harts was a publicly listed

company and that there was still trading in its shares on

the Stock Exchange; the public, and shareholders in

particular, being in ignorance of these proceedings in the

Court.

From that decision the present applicant, Harts, has today

filed a notice of appeal and also filed an application to

the Court of Appeal seeking an order pursuant to rule 761(2)

of the Uniform Civil Procedure Rules that the order vacating
the non‑publication order be stayed pending the hearing of

the appeal.  It is that application with which I am

currently concerned.

The point should immediately be made that the issue in

question is a procedural one only.  It involves an exercise

by the Chamber Judge of a discretion.  The grounds of appeal

challenge that and assert that the learned Chamber Judge

failed to give sufficient weight to the damage which may be

caused to the appellant company by the vacating of the

order.  Indeed, it is the alleged irreparable harm to the

appellant company which forms the basis of the specific

application before me this afternoon.

I must say that having read the reasons for judgment of the

Chamber Judge, I cannot discern any significant error in the

exercise of his discretion such as would indicate to me that

the applicant had strong prospects of succeeding on the

appeal.  However, the current application requires me to

have regard to a number of matters which are dealt with in

the material which has been read on the hearing of the

application.  As I have said, Harts is a listed company, and

there has been since 2 May, when the initial application was

filed, extensive trading in its shares.  The material

suggests that the share price has been as low as five cents,
and during that period has risen to some 18 cents.

It is also in my view of some significance that much of the

material on which each party relies in making assertions as

to solvency comprises financial records available to the

public through records held by the Australian Securities &

Industries Commission.  It is also significant, in my view,

that the records of the Australian Securities & Industries

Commission refer to a winding‑up order against Harts on

2 May.  That is an error.  No order was made on that day;

there was merely the filing of the application for such an

order.  Whether or not the records of the Commission have

been corrected is not clear from the material currently

before me, but it is significant that anyone actually

searching those records would at least be put on notice that

there was some step with respect to winding up before the

Court with respect to Harts.

It is also of some significance, in my view, that there is

another application filed seeking the winding up of Harts,

and that there are two other applications for the winding up
of companies within the Harts group.  The other application

for the winding up of Harts Australasia is apparently

brought by an employee.  It appears that a large sum of

money is sought; but what is of even greater significance

for present purposes, in my view, is that both the

applications of Wilson Watt Papandrea and that employee are

based on a failure by Harts to comply with a statutory

demand.  Failure to comply with a statutory demand, of

course, gives the creditor a prima facie entitlement to a

winding‑up order and constitutes evidence of insolvency.

It is true that Harts has not had the opportunity of putting

material before the Court this afternoon indicating the

present status of those other three winding‑up applications,

but counsel from the Bar table did indicate that all were in

the process of being resolved prior to the hearing of the

application for winding up.  That can be accepted as an

accurate statement; but the fact still remains, in my view,

that the shareholders, in particular, and the general

investing public, have a right to know that these

applications exist, and are based on a failure to comply

with statutory demands.  If there is an explanation

forthcoming from Wilson Watt Papandrea then that would in

appropriate cases be sufficient to alleviate concerns that

such people may have.

I have difficulty in understanding that a non‑publication

order would put Harts in a better position so far as its

credit providers are concerned.  It seems to me that the

company would, in any event, be under an obligation to

disclose to any credit provider the existence of the

applications in question.

It is clear that ordinarily proceedings in a Court are open

to public scrutiny.  It is only in special circumstances

that orders will be made prohibiting publication of

proceedings before the Supreme Court.  The learned Chamber

Judge in his reasons referred to Mirror Newspapers Ltd v.

Waller (1985) 1 NSWLR 1; Scott v. Scott (1913) AC 417; and

J v. L & A Services Pty Ltd (No 2) (1995) 2 QdR 10. It is

not necessary for me to canvass what is said in those

authorities to any extent this afternoon.  Generally they

support the proposition, in my view, that there is an onus

on the applicant of showing special circumstances justifying

the making of an order prohibiting publication of the

material.

In that context I should say that I also have some concerns

derived from the limits of my jurisdiction.  It is generally

known that trading in shares listed on the Stock Exchange

takes place throughout Australia.  Harts is primarily a

Queensland company, and it may well be that the majority of

its shareholders are Queenslanders, but nevertheless people

in other States can trade in its shares.  If I were to

make a non‑publication order, I am doubtful that it would

have any consequences so far as media outlets in other

Australian States were concerned.  Those media outlets would

be able to make public, information that was otherwise

denied to Queenslanders, notwithstanding my making an order

such as that sought.  That would give some potential

shareholders or shareholders an advantage over others.  That
is something which is not acceptable.  Fairness to

shareholders all‑round is clearly a fundamental principle

recognised in the Corporations Law and the various other

laws dealing with share trading in Australia.

I must say that I do have some concerns about the attitude

taken by Wilson Watt Papandrea.  It appears that no steps

have been taken to advertise the application so that it

could be heard on the return date, namely 16 May.  Also, I

was told that no steps have been taken to have the

application for appointment of a provisional liquidator

brought on for final hearing before a Chamber Judge.  The

matter is clearly one of commercial sensitivity and urgency,

and I have no doubt that the Supreme Court would be able to

respond to that urgency by appointing a Judge to hear the

matter on short notice; but Wilson Watt Papandrea are not

pressing for a hearing.  That cannot be allowed to continue

indefinitely.

Any application such as this must be heard and determined

promptly, so that the investing public and creditors know

precisely where they stand and what their rights are.

Counsel for Wilson Watt Papandrea indicated that his

client's concern was that, though an amount of money

sufficient to satisfy their demand had been tendered, they

were concerned as to whether or not that could lawfully be

accepted, given concerns as to the solvency of Harts.  The

matter, according to him, would be resolved by next Monday

at the latest.  In my view that should be regarded as the

extreme limit.  The matter should either be dismissed or

brought on for hearing within the next week.

I should also say that any publication of any material

associated with the proceedings before this Court to date

must be a fair publication, and that would necessarily

involve references to some of the concerns expressed by the

Chamber Judge in his reasons for judgment.  The public and

the shareholders are entitled to know that these proceedings

have been brought against Harts.  They are also entitled to

know that there is some arguable basis for contending that

the application is an abuse of process, and also the

tentative views expressed by the Chamber Judge that there

are some doubts as to the sufficiency of the material to

support the appointment of a provisional liquidator. 

Having said all that, it is my view that the applicant has

not satisfied the Court that there is sufficient good reason

at this stage for granting a stay of the order of the

Chamber Judge.  In my view, if no stay is granted the

consequence will be that all interested parties have full

and proper knowledge of what has been happening so far as

these proceedings are concerned.  It follows, in my view,

that the application should be dismissed.

I dismiss the application.  I order that the applicant pay

the costs of the respondent, Queensland Newspapers Pty Ltd,

to be assessed.

Those are the orders of the Court.

‑‑‑‑‑