Winpar Holdings Limited and Australian Securities and Investments Commission and Ors - [2000] AATA 980

DECISION AND REASONS FOR DECISION [2000] AATA 980

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N1998/1554

GENERAL ADMINISTRATIVE DIVISION       )
           Re      WINPAR HOLDINGS LIMITED
  Applicant
           And    AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
  Respondent
           And    BATOKA PTY LIMITED
  Party Joined  Respondent

And MARROD PTY LIMITED
Second Party Joined
DECISION

Tribunal Mr B.J. McMahon (Deputy President)

Date10 November 2000
PlaceSydney

Decision       The decision under review is affirmed.
  ..............................................
  BJ McMahon
  Deputy President
CATCHWORDS
CORPORATIONS – acquisition of shares – takeover – untraceable shareholders – whether reasonable diligence exercised in searching for shareholders - untraceable shareholders relief – change in value of shares between time of takeover and time of final decision – price of shares different for dissenting shareholders to price for other shareholders – omission of subsection 701(9) – delays taken into account in exercising discretion.

Administrative Appeals Tribunal Act 1975 – s 42D
Corporations Law – ss 701, 730
Interpretation Act (NSW) 1987 – ss 36(3), 48(1)
Safety, Rehabilitation and Compensation Act 1988 – s 66
Therapeutic Goods Act 1989 – s 60A

Administrative Review Tribunal Bill 2000 – clause 124

Australian Securities and Investments Commission v DB Management Pty Ltd and Others (2000) 169 ALR 385
Nicron Resources Limited v Catto (1992) 8 ACSR 219
Winpar Holdings Limited v Goldfields Kalgoorlie (2000) 34 ASCR 737

REASONS FOR DECISION

10 November 2000 Mr B.J. McMahon (Deputy President)

By a Part A Statement dated 27 August 1997 and offers dated 16 September 1997, Marrod Pty Limited (Marrod) made a takeover bid for all the ordinary shares in Goldrim Mining Australia Limited (Goldrim) which it did not then own. The offer closed on 31 October 1997.
In 1976 Goldrim's capital had been reduced to reflect lost capital and the remaining shares were consolidated on a one for ten basis. This resulted in the creation of many shareholders with less than a marketable parcel of shares. As at 30 November 1997, there were 554 such shareholders. As at 16 September 1997, the date of dispatch of Marrod's takeover offer, 640 of the shareholders of Goldrim were untraceable and Marrod was entitled to approximately 67.5% of the shares in Goldrim. The fact that there were many shareholders holding less than marketable parcels and the fact that many of the shareholders were untraceable, were connected. Marrod's Part A statement disclosed that it intended to apply for the untraceable shareholders relief.
On 19 December 1997, an application was made to the then ASC for relief under the then section 730 of the Law to vary chapter 6 of the Law to exclude untraceable shareholders from the compulsory acquisition tests in section 701 of the Law and to permit Marrod to acquire outstanding Goldrim shares compulsorily on or before 17 February 1998.
At the relevant time, subsection 701(2) provided as follows:
"701(2) Where:
(a)takeover offers have been made under a full takeover scheme, or a takeover announcement has been made, in respect of a class of shares;
(b)during the takeover period the number of shares in that class to which the offeror is entitled has become not less than 90% of the shares in that class (notwithstanding that that number of shares may subsequently become less than that percentage as a result of the issue of further shares in that class); and
(c)if the shares subject to acquisition constitute less than 90% of the shares in that class:
(i)three-quarters of the offerees have disposed of to the offeror (whether under the takeover scheme or by acceptance of offers made by the takeover announcement, as the case may be, or otherwise) the shares subject to acquisition that were held by them; or
(ii)at least three-quarters of the persons who were registered as the holders of shares in that class immediately before the day on which the Part A statement was served on the target company or the takeover announcement was made are not so registered at the end of one month after the end of the offer period;
the offeror may, before the end of 2 months after the end of the offer period, give notice, as prescribed, to a dissenting offeree to the effect that the offeror desires to acquire the outstanding shares held by the dissenting offeree."

On 24 December 1997, Marrod applied to the ASC for a variation of the two month period referred to in subsection (2) to enable the application for untraceable shareholders relief to be considered and decided before the expiry of the time for compulsory acquisition set out in that subsection.
There were objections to the application from dissenting shareholders, including the present applicant and persons associated with Batoka Pty Limited. The application for relief was refused on 5 January 1998.
Marrod then applied to this Tribunal to review that decision. In the course of preparation for the Tribunal hearing, an affidavit of Mr McIntosh sworn on 8 July 1998 was filed and served. It outlined the steps taken by Marrod between 18 December 1997 and 30 June 1998 to trace the previously untraceable Goldrim shareholders. When this information became known, ASC requested the Tribunal to remit the matter back pursuant to section 42D of the Administrative Appeals Tribunal Act 1975 for reconsideration. This was duly done and further objections were sought and received in relation to the reconsideration.
On 1 October 1998, a form of untraceable shareholders relief was granted to Marrod. The first Tribunal proceedings were dismissed and the present application was brought in this Tribunal to review the decision of 1 October 1998. The application for review was filed on 29 October 1998. Since then, there have been a number of conferences and successive adjournments granted. It was thought at the time that other litigation intended to illuminate the scope of the power in section 730 might determine the outcome of this application. Although that litigation was ultimately concluded, the applicants were not satisfied that the review could be limited only to examining the power of ASIC. The application proceeded on the basis that the form of relief was not the preferable decision, even though its legality could not be impugned.
The relief given by way of a section 730 declaration was in the following terms:
"Pursuant to section 730 of the Corporations Law ("Law") the Australian Securities and Investments Commission declares that Chapter 6 of the Law applies to the person referred to in Schedule A in the case referred to in Schedule B as if:
1.Paragraph 701(2)(c) of the Law was varied by omitting sub-paragraphs (i) and (ii) and substituting the following:
"(i)three-quarters of the offerees, excluding untraceable shareholders, have disposed of to the offeror (whether under the takeover scheme or by acceptance of offers made by the takeover announcement, as the case may be, or otherwise) the shares subject to acquisition that were held by them; or
(ii)at least three-quarters of the persons who were registered as holders of the shares in that class immediately before the takeover period, excluding untraceable shareholders, are not so registered at the end of one month after the end of the offer period;".
2.Subsection 701(2) was modified by deleting the words "before the end of 2 months after the end of the offer period, give notice, as prescribed" in the last paragraph, and substituting the words "within one month of the date of this instrument give notice in the prescribed form with such adaptations as are necessary";
3.Section 701 were modified by inserting the following subsections after subsection (2):
"(2A)A notice under subsection (2) must set out the cash sum for which the offeror proposes to acquire the shares, which sum must be:
(a)the cash sum specified in the offer under the takeover scheme; or
(b)the value of the shares as assessed in the report referred to in subsection (2B);
whichever is higher.
(2B)A notice under subsection (2) must be accompanied by a copy of a report by an expert (other than an associate of the offeror or of the target company) made within 6 months before the date of the notice, setting out:
(a) the particulars referred to in subsection 703(7);
(b)an opinion as to the fair value of the shares and giving the reasons for forming that opinion; and
(c)an opinion as to whether the terms on which the offeror proposes to acquire the shares are fair and reasonable and giving the reasons for forming that opinion.
(2C)If the offeror has obtained 2 or more reports, each of which could be used for the purposes of complying with subsection (2B) at the date of the subsection (2) notice, the notice must be accompanied by a copy of each report."
4.Subsection 701(5) were modified by omitting all the words after "on the terms" and substituting "set out in the notice"
5.Section 701 were modified by omitting subsections 701(7), 701(7A), 701(8) and 701(9).
6.the following definition was inserted in section 603:
"untraceable shareholder" means a shareholder whose current address the offeror has been unable to determine after reasonable diligence:
Schedule A
Marrod Pty Limited (CAN 000 311 955)
Schedule B
The takeover scheme by the person named in Schedule A in relation to ordinary shares in Goldrim Mining Australia Limited (CAN 004 803 203) in respect of which a Part A statement was registered by the Commission on 29 August 1997."
Dated this 1st day of October 1998."

Subsections (5), (7), (7A), (8) and (9) which were referred to in the Instrument were, at the relevant time, in the following terms:
"701(5) Where a notice is given under subsection (2), the offeror is entitled and bound, subject to this section, to acquire the shares to which the notice relates on the terms that were applicable in relation to the acquisition of shares under the takeover scheme or pursuant to the takeover announcement immediately before the end of the offer period.
…
701(7) Where alternative terms were offered under a takeover offer to which this section applies, the dissenting offeree may, by notice given to the offeror:
(a)before the end of one month after the day on which the notice was given under subsection (2); or
(b)before the end of 14 days after the day on which the dissenting offeree was given a statement under subsection (9);
whichever is the later, specify which of those terms the dissenting offeree prefers, and the terms so specified shall apply to the acquisition of the outstanding shares held by the dissenting offeree.
701(7A) A notice under subsection (7):
(a)if it relates to shares that are entered on an SCH subregister – must be in an electronic form approved by the SCH business rules for the purposes of this Part; or
(b)if it relates to shares that are not entered on an SCH subregister – must be in writing.
701(8) If a dissenting offeree fails to give a notice before the time applicable under subsection (7), the offeror may, unless the Court otherwise orders, determine which of the terms referred to in that subsection is to apply to the acquisition of the outstanding shares of the dissenting offeree.
701(9) A dissenting offeree may, by written notice given to the offeror before the end of one month after the day on which the notice under subsection (2) was given, ask for a written statement of the names and addresses of all other dissenting offerees and the offeror shall as soon as practicable give a written statement accordingly."

The omission of subsection (9) was to be a matter of some controversy. Marrod stated at the hearing before me that it had not requested this omission and no party was able to point to any statement by ASIC giving reasons for its omission. Another matter of contention in the present proceedings was the challenge mounted to the value of the shares which was based upon a challenge made to one of the items of the company's balance sheet. The right to apply to the Court under subsection (6) where such questions might be expected to be ventilated was specifically preserved by the instrument.
Between 18 December 1997 and 8 July 1998, the following courses of action (summarised in the section 37 statement) were taken by Marrod in relation to searches for untraceable shareholders:
"(a)searches of the electoral rolls of each state, searching the state of the shareholders last known address, resulting in the dispatch of 640 letters by Marrod. Marrod received 52 responses from Goldrim shareholders who all indicated they would accept the offer, but 12 of whom (holding 580 shares in aggregate) had not returned share transfer forms;
(b)ascertained from the Registry of Marriages, that the Registry could not be searched for privacy reasons;
(c)ascertained from the Victorian Registry of Deaths that it would cost approximately $100 per shareholder to ascertain only whether any of the 342 untraceable shareholders in Australia had died, and that further searches of relevant probate registries would need to be carried out to locate the legal personal representative of the person;
(d) ascertained that 7 corporate shareholders have been deregistered by ASIC;
(e)made further telephone enquiries in the UK in relation to the corporate shareholder with a last known address in the UK;
(f)placed further advertisements in The Age, and The Australian newspapers on 27 June 1998 which resulted in one shareholder contacting the company;
(g)one previously untraceable shareholder lodged a proxy form indicating his current address for Goldrim's annual general meeting, but subsequently transferred his shares to Mr Catto; and
(h)a letter from Mr Catto to the ASC forming part of the ASC's section 37 statement in the First AAT Proceedings allowed Marrod to contact one other previously untraceable shareholder (Peter Hollingsworth) who indicated he will accept Marrod's offer to acquire his Goldrim shares."

As a result of these efforts, untraceable shareholders were reduced by 117 from 498 to 381. Of those 381 shareholders, 277 held fewer than 100 shares being less than a marketable parcel, as that term was defined on 30 June 1998. The definition was subsequently amended in the ASX Business Rules to mean a parcel of securities worth not less than $500.
Marrod is entitled to 93.1% of Goldrim shares. At the close of the takeover offer, 65.3% of Goldrim shareholders had disposed of their shares to Marrod. If untraceable shareholders were excluded from this calculation of the number who had disposed of their shares to Marrod, 85.1% would have disposed of their shares to Marrod under the takeover offer.
Policy statement 98 issued on 7 August 1995 deals with several matters of principle and practice in relation to compulsory acquisition. Dealing with action prior to the takeover offer, the document sets out in paragraphs 6 and 6A the following principles:
"[PS 98.6] It is assumed that an offeror wishing to proceed to total ownership of a target company will have considered all the difficulties that it may face in achieving this goal prior to making the takeover offer. If it considers that it may require relief from s701(2)(c), it should disclose in its Part A or Part C statement that it intends to apply to the ASC for a modification if such relief is needed. The ASC considers that this is information which might reasonably affect, or tend to affect, the decision of a shareholder whether to accept the offer.
[PS 98.6A] The offeror should also ensure that mechanisms are in place to be able, at the end of the takeover, to count and be able to substantiate the number of shareholders in the target and the numbers of untraceable shareholders and acceptors for compulsory acquisition purposes. If an offeror has announced its intention to apply for relief in its Part A or C statement, the ASC will regard this as a favourable criterion when considering the application."

Paragraphs 11 and 12 set out the policy underlying modification in the case of untraceable shareholders as follows:
"[PS 98.11] The policy behind the ASC's modification of s701 to discount untraceable shareholders when calculating the three-quarters test is based on the fact that most of these shareholders have not received offers. Therefore they have not considered the fairness or otherwise of the terms being offered. Currently, all such shareholders are treated as if they had rejected the offer.
[PS 98.12] However, it is unreasonable to suppose that all shareholders who have not received offers would have rejected them. The fact that they have failed to give the company their current addresses suggests that they have no strong attachment to their shares, and would not be strongly opposed to an offer which satisfied most other shareholders. Modification of s701 as outlined in para 18 and 19 in fact produces the same result as if the untraceable shareholders accepted or rejected the offer in the same proportion as the traceable shareholders."

Criteria for granting relief are set out in paragraphs 20 to 22 as follows:
"[PS 98.20]     The commercial judgement as to the acceptability of the offeror's terms must be made by the offerees, not the ASC. The ASC is mindful that the three-quarters ratio was set by the legislature in the knowledge that there will always be some shareholders unable to be traced. Therefore, when assessing an application, the ASC will take into account various matters including the following:
(a)the methods and diligence used by the offeror to trace those shareholders who have not received offers because they are no longer at their registered addresses. These methods include advertising in appropriate newspapers (see para 23 and 25);
(b)       the proportion of shares and shareholders outstanding;
(c)the number of holders of odd lots. A high proportion of such holders will usually count in favour of the applicant;
(d)the proportion of shareholders who have expressed dissent about the takeover offer to the ASC, the offeror or the target and the proportion of shares they hold; and
(e)the number of shares to which the offeror was entitled prior to the takeover offer.
[PS 98.21]      The application should give particulars of all parcels of shares bought by the offeror and its associates after the close of the bid, whether privately, on market or under s703. Purchases at (or under) bid price, adjusted for dividends and so on, will be assessed as indicating acceptance of that price, but purchases over the bid price indicate rejection of the offeror's terms.
[PS 98.22]      An application for a modification of s 701(2)(c)(ii) must state how many shareholders are associated with the offeror will be counted as no longer being on the register. If the number is so high as to suggest that the register may have been stacked, the ASC will ordinarily refuse relief.

The standard of diligence expected by ASIC in locating untraceable shareholders is set out in paragraphs 24 and 25 as follows:
"[PS 98.24]     The offeror must demonstrate in its application that it has exercised reasonable diligence in attempting to locate untraceable shareholders. It should provide details of the steps it has taken and should retain documentary evidence of the response or lack of response to its inquiries. This evidence can then be produced if requested by ASC.
[PS 98.25]      Reasonable diligence may include the offeror searching the following records in the state or territory where the untraceable shareholders were last known to be located:
(a)       telephone directories;
(b)       electoral rolls;
(c)       Registry of Births, Deaths and Marriages;
(d)brokers' indemnities and share registries associated with the target where appropriate, particularly for details of dispatch of dividend cheques; and
(e)ASC records, especially for offerees that are bodies corporate."

The first application for relief was refused because ASIC was not satisfied that Marrod had exercised reasonable diligence in its searches. In the light of later evidence, it reconsidered the matter and came to the conclusion that between 5 January 1998 and 30 June 1998, reasonable diligence had in fact been exercised and had succeeded in reducing the number of untraceable shareholders by 117. There was no real challenge mounted in these proceedings to the adequacy of the standard of diligence demonstrated by Marrod in relation to its second application. There was a submission (not vigorously pursued) that it was insufficient in that it had not followed up all the avenues in subparagraphs (a) to (e) of paragraph 25 above. However, in my view, these subparagraphs are put forward merely as suggestions. As the evidence showed, in fact it was not possible to carry out extensive searches in Registries of Births, Deaths and Marriages. Paragraph 25 is not an exhaustive statement of the obligations of an applicant for relief. It consists merely of suggestions indicating the degree of diligence which ASIC will expect from any such applicant. Failure to pursue one or other of the suggested avenues will not be fatal provided ASIC decides, upon reasonable evidence, that the applicant has been diligent in its search for hitherto untraceable shareholders.
The reasons given by ASIC for granting the modification were summarised in the section 37 statement as follows:
"To refuse the application would put Marrod in the position where it would have no way at all of attaining the economic benefits of 100% ownership of Goldrim, in circumstances where it was apparent those preventing that attainment of that goal (ie the untraceable shareholders) had evinced a lack of interest in their shares, by not updating the share registry of their current addresses and consequently had not turned their minds to the fairness and reasonableness of Marrod's takeover offer.
To refuse the application would ensure the 'deadlock' of 93.1% ownership of Goldrim would continue into the foreseeable future, in circumstances where all but 4.9% of Goldrim shareholders who had received and considered Marrod's had accepted it.
It is not the case that before granting relief, ASIC ought to be satisfied that 100% of contactable Goldrim shareholders be satisfied with the offer price. This would be contrary to the plain legislative intention of the compulsory acquisition tests. Accordingly, the expression of dissent by holders of 4.9% of Goldrim shares was not given significant weight.
Refusing the untraceable shareholders relief could enable the holders of the 4.9% of Goldrim shares referred to above to receive a benefit not offered to other holders of Goldrim shares, namely, a higher price (than an expert valuation, or the offer price) simply to ensure Marrod could attain the significant economic advantages of 100% ownership of Goldrim. This result would be contrary to the principle in section 731(d) of the Law, whereas the grant of the untraceable shareholders relief would 'as far as practicable' over one year after the close an offer, ensure all Goldrim shareholders had equal opportunities to share in benefits offered under the bid.
Significant weight was given to the fact that all but one of the Goldrim shareholders Marrod did succeed in contacting between 18 December 1997 and 30 June 1998 indicated they would accept Marrod's offer to buy their shares.
The instrument conferring the form of untraceable shareholders relief in October 1998 had regard to the rights of shareholders whose shares would be compulsorily acquired by
(a)ensuring that the price offered by Marrod to affect compulsory acquisition was fair, by requiring an independent expert to value the shares in Goldrim, and for the price offered by Marrod to the higher of that value or the offer price; and
(b)protecting the rights of dissatisfied shareholders to approach the court for orders that compulsory acquisition not apply to their shares.

The hearing in this Tribunal was adjourned on a number of occasions pending the outcome of appeals in Australian Securities and Investments Commission v DB Management Pty Ltd and Others. This was finally decided in the High Court on 10 February 2000. A report of the decision is conveniently set out in 169 ALR 385. The five judges of the High Court unanimously approved the approach taken by this Tribunal, by the first appellate judge, and by the dissenting judge in the Full Federal Court as to the extent of the legislative power contained in section 730. Their Honours said at 398:
"There is no warrant for giving the words of s 730 a meaning other than their literal meaning. The wide discretionary power which they confer, which operates in the context of legislation regulating acquisition of property and conferring, subject to certain safeguards, rights of compulsory acquisition, cannot be limited in the manner determined by the majority in the Full Court. Whitlam J and Beaumont J were correct in their view of the amplitude of the power".
Although a number of objections were made to ASIC in relation to the second application, on the hearing before me they had been considerably reduced.
It was submitted by Winpar Holdings that ASIC had not complied with its own policy statement. The relief granted was not the simple form of pro forma relief attached to policy statement 98, but was gratuitously more complicated. It was merely necessary in the Instrument to exclude untraceable shareholders for the purpose of making the statutory calculations. ASIC went much further, it was submitted, for no good reason.
Secondly, Winpar Holdings submitted that there had been a long delay between the time of the takeover offer and the final decision. Because of this, the value of the shares may have changed.
Thirdly, it was objected that the price of the shares to dissenting shareholders would, as a consequence, not necessarily be the same price paid to other shareholders. The terms of the relief granted meant that price was to be dependent upon a valuation by an expert.
The fourth objection was to the omission of subsection (9). It was submitted that it was an important matter to enable dissenting shareholders to be able to get in touch with like-minded shareholders so as to facilitate concerted action such as action taken under subsection (6).
The objection by Batoka Pty Limited on the hearing before me related almost entirely to a provision for interest to be found in the relevant balance sheet of Goldrim of approximately $5.1 million. If Goldrim was under an obligation to pay this interest to a related company of Marrod, then the share offer price might have been reasonable. It was the submission of Batoka Pty Limited that there was no such obligation and that consequently, the value of shares even on the balance sheet was more than twice the offer price. Whilst recognising that it was the function of Courts to determine the reasonableness of amounts offered in proceedings taken under subsection (6), it was the submission of Batoka that ASIC knew the item in question was challenged by the objectors and that it should have taken account of the fact that there was some uncertainty, at least so far as the objectors were concerned.
The second principal objection by Batoka Pty Limited was that Marrod had de facto control of the Goldrim register for a considerable period prior to the takeover offer being made. It was because of this control that the register had been allowed to deteriorate. It was submitted that such deterioration and the growth in the number of untraceable shareholders had been to Marrod's advantage.
In response to these objections, ASIC submitted that it was not its function to inquire as to the quantum offered. It was not to be censured because it had taken account of a second report by the same expert whose first report had been queried. It pointed out that the rights of dissenting shareholders to challenge the adequacy of the price offered was preserved.
As to the objections by Winpar, it asserted that the thrust of the modification was not only to preserve shareholder rights, which may have been affected by the passage of time, but in some cases, to enhance them. It was submitted that the modification was appropriate and certainly within power as determined in DB Management. The departure from the pro forma relief was to cover situations which had arisen due to the passage of time.
As to the omission of subsection (9), ASIC asserted that no real prejudice had been demonstrated. As shareholders, Winpar and Batoka could have had access to the register and certainly could have had access to a list of dissenting shareholders if they had commenced court proceedings under subsection (6).
ASIC also submitted that as a matter of discretion, no decision should now be given by this Tribunal affecting the relief granted as three years have passed. As a matter of discretion, the Tribunal, it was submitted, should not try to undo what has been done. It would not be possible to return shares to those shareholders who could not be found. Marrod broadly supported the submission of ASIC.
Paragraph 31 of Policy Statement 98 gives directions to applicants for relief. It then proceeds to state in unequivocal terms "relief will be provided in the form set out in Pro Forma 117". That form follows the text of the policy statement and forms part of it. The relief given in this matter follows the structure of the pro forma, but departs from the words of that document in certain respects. It has to be conceded to Winpar, therefore, that the form of relief granted is not strictly in conformity with the guidelines. It also must be conceded that policy statements, by and large, should be followed. They are usually created after consultation and they act throughout the commercial community as indicators of the way in which discretion will be exercised in certain events. This particular policy statement was issued in 1995 and no doubt has been acted upon many times before now.
Having said this, however, the actual form of relief granted differs only in minor respects from the pro forma. In my view, those differences were necessitated by the reconsideration and the consequent passage of time. It would be a wrong use of policy to apply it blindly to every situation and to have no regard to the surrounding circumstances when determining the form of the declaration. In this case, the departures were appropriate to the circumstances.
There have been two principal delays since the takeover was launched on 16 September 1997. The first delay arose out of the reconsideration leading to the reviewable decision on 1 October 1998. The second delay resulted from the agreement of all parties to await the outcome of the litigation in DB Management. The second delay was unavoidable and was with the consent of all parties. The first delay resulted in some of the controversial aspects of the relief given and the consequent attacks made upon it.
There is no doubt that ASIC had the power to reconsider the application for relief. Sections 36(3) and 48(1) of the (NSW) Interpretation Act 1987 make it clear that legislative power is exercisable from time to time. In my view, it was both desirable and in accordance with policy that this reconsideration took place. It occurred after an application for review had been made to this Tribunal. Section 42D was inserted into the Administrative Appeals Tribunal Act 1975 by Act number 175 of 1995. Clearly, Parliament expected the Tribunal to exercise the new power conferred upon it. The section preserves the existence of the application before the Tribunal and makes provision for the final outcome, depending upon the result of the reconsideration. It must be accepted that a referral back to the original decision maker, in the light of new information, is a desirable procedure. It follows a trend to be found in other areas. If new information is lodged with the Tribunal in support of an application made under the Therapeutic Goods Act 1989, section 60A(5) obliges the Tribunal to remit the matter to the original decision maker or to ignore the new information. Section 66 of the Safety, Rehabilitation and Compensation Act 1988, in effect, excludes new information unless leave is given. This is no doubt to preserve the decision making function of the original decision maker. Clause 124 of the Administrative Review Tribunal Bill 2000 sets out a procedure which the proposed new Tribunal must follow where new information emerges. In deciding whether to remit the new information to the original decision maker with a request for reconsideration, the Tribunal will be bound to take certain facts into account. The policy behind the proposed section is no doubt to continue the trend in administrative review of ensuring that all material before the reviewing body has first been seen by the primary decision maker.
If any objectionable features in the present declaration arose from this reconsideration, they must be looked at in the light of this policy that reconsideration of new information is desirable. Any new decision, prima facie, will therefore be the preferable decision, as it will be in accord with general practice. The delay led to other objections.
It has to be conceded to Winpar that the value of the shares may have changed because of the delay. Nevertheless, one of the departures from the pro forma was intended to address that very problem. The fact that a second expert's report as to value was to be prepared, and the fact that a floor price for the shares was fixed by the declaration, meant that acceptors would not be prejudiced. It is true that the price of acquisition would not necessarily be the same price as that which had been paid to other shareholders. The important point, however, is that it would not have been less.
The omission of subsection (9) from the declaration concerns me, particularly as none of the interested parties (including ASIC) was able to tell me why section 701 had been modified so as to exclude that subsection. I can easily visualise circumstances when recourse to that subsection would be important to a dissenting shareholder. Where it was desired to share the risks of litigation, dissenting offerees would be best served by combined representation. Indeed, this must be the very purpose for the inclusion of subsection (9).
The fact, however, is that it was excluded in an instrument dated 1 October 1998. As even Winpar agreed in its submissions, there would be no utility two years later in amending the declaration by reinserting this subsection. The time has long since passed when subsection (6) could have been invoked. None of the dissenting offerees resorted to litigation. Had they done so, information concerning other dissenting offerees may have been forthcoming through interlocutory proceedings in the court, rather than through the operation of the Law. This, however, is mere speculation. As a matter of discretion, the section 730 declaration now under review ought not to be amended only by reason of its omission of subsection (9).
The matter raised by Batoka was explored as far back as 24 December 1997 in a lengthy submission to ASC by Accounting PC Training Pty Limited, one of the original objectors. It pointed out that the consolidated balance sheet of Goldrim showed total assets of $8.945 million or $2.54 per Goldrim share. Accounts payable and borrowings stood at $0.147 million, leaving net assets before provisions of $8.798 million or $2.54 per share. While provisions stood at $5.1 million, the net assets were reduced to $3.695 million or $1.06 per share. The whole of the current provision represented accumulated interest on loans to Goldcrest Motels Pty Limited, which was said to be a wholly owned subsidiary of Marrod. The objection was that in answer to questions at an annual general meeting on 28 November 1997, it was established (at least to the objectors' satisfaction) that at no stage was the loan arrangement between Goldrim and its controller (interests represented by Marrod) approved by shareholders. As a consequence it was submitted that interest was not payable unless approved by minority shareholders. Consequently, the net asset value of the shares was $2.53 and not the stated $1.06. It was submitted that the offer price of $1.15 was therefore clearly inadequate. This lower price was accepted as a justifiable value by Mr Winlaw, the independent accountant whose valuation accompanied the first offer. Marrod chose him to update his report following the granting of relief. According to Batoka, this should not have been acceptable as his independence and, indeed, competence had been questioned.
In my view, this is an irrelevant argument. It is clearly set out in paragraph 20 of the policy statement that the commercial judgement as to the acceptability of the offeror's terms must be made by the offerees and not by the ASC. It would be an extraordinary situation if ASIC were called upon to evaluate each offer. If there are oppressive elements in the offer, including an unrealistic price, then the section provides for rights of appeal to a court, where the question may be judicially decided.
It is no more the function of ASIC to determine the adequacy of an offer price than it is to determine whether a takeover is the appropriate way of gaining control of outstanding shares.
It was submitted (although not seriously pressed at the hearing) that Marrod should have proceeded to acquire the minority by means of a selective reduction of capital. It is not appropriate for ASIC to refuse relevant relief on the grounds that other commercial programs are available to applicants. As was observed in Nicron Resources Limited v Catto (1992) 8 ACSR 219 at 235:
"… there is no indication in the Corporations Law that any particular machinery has priority or greater suitability than any other, or that the purposes of the Corporations Law overall would be better served by impeding the use of one available machinery with the object of compelling resort to another. The Corporations Law is neutral as to this choice of remedies…"

This approach was also followed in Winpar Holdings Limited v Goldfields Kalgoorlie (2000) 34 ACSR 737.
There have been reasons for delays in this matter. No party is principally to blame. Nevertheless, the delays have occurred to such an extent that they must now form a factor to be taken into account in exercising the decision maker's discretion. Having regard to the circumstances, to the continued absence of knowledge of whereabouts of some of the shareholders, to the absence of any evidence of real prejudice and to general market considerations, I am of the view in any event on discretionary grounds that ASIC's decision should remain undisturbed.
The decision under review is therefore affirmed.

I certify that the 47 preceding paragraphs are a true copy of the reasons for the decision herein of Mr B.J. McMahon (Deputy President)
Signed:         .....................................................................................
  Dominika Rajewski, Associate
Date of Hearing  31 October 2000
Date of Decision  10 November 2000
Representative for the Applicant              Dr Gordon Elkington
Counsel for the Respondent  Mr Marcus Pesman
Solicitor for the Respondent               National Co-ordinator Administrative Law (ASIC)

Representative for Party Joined               Mr Robert Catto
Counsel for Second Party Joined   Mr Malcolm Oakes, SC
  Mr Mark Robinson
Solicitor for Second Party Joined             Thomas Mitchell & Partners