Visy Board Pty Ltd v Trade Practices Commission

(1984) 2 FCR 113
[1984] ATPR 40-448

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(Decision by: Lockhart J)

Re: Visy Board Pty Ltd
And: Trade Practices Commission

Court:

Judges: Sweeney J

Lockhart JSheppard J

Subject References:
Administrative Law
Practice and Procedure

Judgment date: 15 March 1984

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Decision by:
Lockhart J

These four appeals are part of a bewildering array of multifarious applications, motions and appeals, all relating to two competing attempts to gain control of Fibre Containers Limited ("FCL"). There has been no hearing on the merits of the matter. Although each appeal is brought to this Full Court from separate judgments of a single judge of the Court I propose to consider them all in the one set of reasons. It is convenient to do so because much of the relevant material is common to more than one appeal.

FCL carries on the business of converting paperboard into cardboard boxes which it sells as containers for various commodities. APM Investments Pty. Limited ("APM"), which is a subsidiary of Australian Paper Manufacturers Limited, and S.C.I. Packaging Pty. Limited ("SCI") each carries on the business of producing raw materials from which cardboard boxes are made. APM is a larger producer than is SCI. APM supplies a substantial part of the raw material used by FCL in the manufacture of the boxes it sells. Of the paperboard which is consumed in Australia about 72% is supplied by APM and 23% by SCI.

In May 1983 SCI and APM each publicly announced that it proposed to make a takeover offer for all of the issued shares in the capital of FCL. Litigation ensued. The curial history of the matter is set out in the reasons for judgment of Sweeney J., so I need not refer to it in any detail. Presently before us at this stage of the takeover battle there are four appeals.

The first appeal is from a judgment of Woodward J. dismissing an application by Visy Board Pty. Ltd. ("VB") for an order of review under the Administrative Decisions (Judicial Review) Act (1977) ("the Judicial Review Act") of a decision of the Trade Practices Commission to discontinue proceeding VG 84 of 1983 against APM. VB carries on the business of converting paperboard into containers and is a competitor of FCL.

The second appeal is from a judgment of Woodward J. dismissing an application by VB seeking an order of review under the Judicial Review Act of the decision of the Commonwealth Attorney-General not to institute proceedings against SCI under s. 50 of the Trade Practices Act 1974 ("the Act") in respect of the announcement in May 1983 of its intention to make a takeover offer for the shares in FCL.

The third appeal is by APM from the judgment of Woodward J. granting leave to the Commission to discontinue proceeding VB 84 of 1983, ordering the Commission to pay APM's costs and making an order for costs (including those payable by the Commission to APM) in favour of the Commission against FCL and other respondents. Those orders were made upon the Court's accepting an undertaking by the Commission. The undertaking and the orders are in the following terms:

"UPON THE TRADE PRACTICES COMMISSION UNDERTAKING to the Court that it will not, prior to the expiration of twelve (12) months after the date upon which it files a notice of discontinuance herein and thereafter, until further order, institute any further proceedings seeking injunctions restraining the acquisition by A.P.M. Investments Pty. Limited or any company related thereto (hereinafter referred to as 'APM') of shares in Fibre Containers Limited and will not otherwise seek to prevent such an acquisition, save that the Trade Practices Commission does not hereby give any undertaking not to institute proceedings seeking orders in the event that such an acquisition takes place, for the divesture by APM of any shares acquired by it, directly or indirectly, in Fibre Containers Limited,

THE COURT ORDERS THAT:

1.

The Applicant have leave to file a Notice of Discontinuance of the Application herein.

2.

The costs of the firstnamed Respondent of and incidental to the Application herein and Application No. VG 150 of 1983 and No. VG 249 of 1983 in this Honourable Court, (including all reserved costs) be taxed and when taxed paid by the Applicant.

3.

The costs of the Trade Practices Commission of and incidental to the Application herein and Application No. VG 150 of 1983 and No. VG 249 of 1983 in this Honourable Court (including all reserved costs) be taxed (if not otherwise agreed) and when taxed (or so agreed) paid by the second, third, fourth, fifth, sixth, seventh and eight Respondents together with any costs which the Applicant may have to pay to the firstnamed Respondent pursuant to paragraph 2 of this Order."

VB filed a notice of motion seeking to be joined as a party to this appeal or to be allowed to intervene in the appeal or to be heard as amicus curiae .

The fourth appeal is part heard before us. We commenced hearing it on 13 December 1983, but then adjourned it. This appeal is from another judgment of Woodward J. dismissing an application by SCI for release from certain undertakings of various parties given to the Court on 23 May 1983. Two notices of motion were filed in that appeal. The first is a motion by VB seeking an order that it be added as a respondent to that appeal or given leave to intervene or be heard as amicus curiae . The second motion is by FCL and other respondents, to whom for reasons of convenience I shall refer collectively as "Amatil", seeking judgment against Amatil by way of injunction to restrain the sale of their shares in FCL to APM. In the end these motions were not proceeded with.

I propose to consider the four appeals in the order in which I have already referred to them.

Proceeding No. VG 303 of 1983: appeal by VB from Woodward J's judgment dismissing VB's application for an order of review of the decision of the Commission to discontinue proceeding VG 84 of 1983 against APM and other respondents

There is an initial problem in considering this appeal namely, the difficulty of identifying the relevant decision of the Commission under challenge. The description of the decision in VB's application for an order of review differs from the description given in the course of argument before Woodward J., differs again from its description in the notice of appeal to this Court and again from the description in argument before us. The cimmerian obscurity which surrounds the identification of the decision was deepened by the Commission's submission before us that it did not concede that there was any evidence of the terms of the decision. The difficulty of identifying this elusive decision does not set the stage favourably for VB in the appeal. Doing the best I can and getting as close to common ground as possible, I am prepared to assume for the purposes of dealing with this appeal that the Commission's decision was to take such steps as were necessary to discontinue proceeding VG 84 of 1983 against all respondents on terms that:

(a)

FCL and Amatil pay the costs of the Commission and indemnify it against any costs it may be ordered to pay, as those respondents had offered to do during the course of the hearing of the appeal in VG 249 of 1983 before us on 13 December 1983; and

(b)

the Commission gives an undertaking to the Court that it would not, until further order of the Court, commence proceedings for injunctive relief that had the effect of restraining APM from acquiring shares in FCL.

It was common ground before this Court on the hearing of the appeal that the Commission's decision was of an administrative character made under the Act and that VB was a person aggrieved by the decision. I propose therefore to say nothing about these matters except that I regard them as open questions should they arise in the future.

VB attacked the Commission's decision on three grounds which I shall consider in turn. The first ground was that the decision was said to be "improper and unlawful" because the Commission had relied upon or taken into account the offer made by FCL and Amatil to pay its costs and to indemnify it against costs which it may be ordered to pay ("the costs offer"); and that was said to be an improper matter for the Commission to consider.

The Commission submitted that there was no evidence as to what matters were considered or taken into account by it when making its decision to discontinue.

I propose to consider VB's submission on the assumption that the costs offer was in fact taken into account by the Commission in deciding to discontinue. I do so because the decision was not simply to discontinue the proceeding, but to discontinue it on certain terms including a term involving the costs offer. There was no real dispute before us that the decision and the costs offer were inevitably intertwined, although there was dispute as to whether and, if so to what extent, the Commission took the costs offer into account in deciding to discontinue. The definition of the decision is itself a difficult question for the reasons mentioned by me earlier; but once it is assumed that the decision to discontinue and the costs offer are inevitably related then to submit that the decision to discontinue did not take into account the costs offer seems to me to have a flavour of unreality.

Notwithstanding that the Commission took the costs offer into account when deciding to discontinue, in my view it is not possible to draw any inferences or come to any conclusions about the extent to which that decision was influenced by the costs offer. Certainly it cannot be said that the Commission would not have decided to discontinue in the absence of the costs offer. Accepting that it was during or after the luncheon adjournment of the hearing before us of the last heard appeal on 13 December 1983 that the Commission became aware of the costs offer, the evidence nevertheless suggests that the Commission probably believed at some earlier time that, in the event of its seeking to discontinue proceeding VG 84 of 1983 or submitting to a consent judgment against it, it would be paid its costs and indemnified against any liability for costs which it may be ordered to pay.

We were referred by counsel for VB to various cases which he relied on as supporting his argument that it was improper for the Commission to rely upon the costs offer in making its decision. The cases included R. v. Boston (1923) 33 CLR 386 , Kranz v. Duffy (1913) 77 JP, R. v. Clarke (1954) ALR 312, and Sean v. MacKellar (1981) 38 ALR 363 . Counsel also relied on a passage from de Smith's Judicial Review of Administrative Action 4th Ed. Chapter 5 (p. 258).

I do not intend to discuss these cases or the passage from de Smith as they deal with quite different matters to those involved in this appeal and are essentially concerned with corruption of public officials or tribunals.

In my opinion it was not improper for the Commission to take the costs offer into consideration when making its decision to discontinue. Doubtless there are circumstances in which it would be improper for the Commission to allow a question of costs to influence its decisions in respect of legal proceedings, but this is not such a case. The Commission is a statutory body charged with public functions and duties. It is for certain purposes under the Act the guardian of the public interest. The Commission or the Attorney-General, and no others, may institute proceedings for injunctive relief to restrain contraventions of s. 50. But decisions by the Commission to institute, terminate or compromise a proceeding before a court must inevitably involve consideration of a wide range of matters including the strength of the Commission's case against the respondent, the availability of funds from the public purse, competing claims on those funds by other proceedings, and assessments of the comparative importance of the various proceedings in which the Commission may be involved. Not only do I see nothing wrong with the Commission considering questions of costs when deciding whether it should commence, compromise or terminate proceedings, but failure to do so could in some circumstances be a dereliction of its duty. It is not ipso facto wrong for the Commission to take into account questions of costs including offers such as the costs offer in the present case. That is all that the Commission appears to have done in this case. I reject the argument that it acted improperly in taking into account the costs offer when deciding to discontinue.

The second ground on which the Commission's decision to discontinue was attacked was that it was said to have a statutory duty to prevent APM from acquiring shares in FCL but abdicated that duty by seeking to discontinue proceeding VG 84 of 1983.

I do not accept the base premise of VB's argument that the Act imposed a duty upon the Commission to prevent APM's proposed acquisition of shares in FCL. No such duty is imposed by specific provision of the Act, nor can it be implied. Even if this duty could be gleaned from the Act, matters such as the Commission's assessment of the strength or weakness of its case against APM when it commenced proceeding VG 84 of 1983, any changes to that assessment as the litigation proceeded, competing claims on the Commission's resources from other litigation or prospective litigation in which the Commission is a party or prospective party, and the availability of funds and staff are but some of the matters which would bear on the question of the alleged duty of the Commission. No conclusion could safely be reached, on the material before the primary Judge and this Court, that the Commission was under a duty to restrain APM's proposed acquisition of shares in FCL. Even if it be assumed that the Commission was under such a duty it could not be said that it abrogated that duty by seeking to discontinue the proceeding.

In my opinion the Commission was plainly entitled to decide to discontinue the proceeding. When the Commission commenced proceeding VG 84 of 1983 it doubtless considered that APM would proceed to seek to acquire further shares in FCL and that it was likely that the FCL shareholders would accept APM's offer to acquire them. That position changed. The relevant events are stated fully in the judgment of Sweeney J. and need no repetition by me. The Amatil resolution of October 1983 (Amatil controls about 74% of the FCL shares) not to sell to APM may or may not be valid or enforceable; but that is not the relevant question for present purposes. The relevant question is that the Commission took the view that as a practical matter it would be most unlikely that Amatil would in fact sell its shares in FCL to APM and therefore, in those circumstances, APM would not be in a position where it could infringe the Act. In my opinion the Commission was not abdicating any statutory duty in making the decision.

The third ground of attack on the Commission's decision to discontinue was that the decision involved the Commission in undertaking to the Court to fetter itself in the future exercise by it of its statutory powers, functions and duties under ss. 50 and 80 of the Act.

The effect of the undertaking is that prior to the expiration of twelve months after the date on which it files a notice of discontinuance of proceeding VG 84 of 1983 and thereafter until further order, the Commission will not seek to prevent APM acquiring shares in FCL by instituting proceedings or otherwise. I accept that it would be necessary for powerful considerations to be put to the Court before the Commission would be released from its undertaking, but nevertheless the Court's power to release is preserved.

It is not permissible to view the Commission's undertaking in isolation from the circumstances in which it was given. Duties, whether statutory or otherwise, do not exist in vacuo. When all the circumstances surrounding the Commission's decision to discontinue are considered, in my opinion the Commission cannot be said to have fettered the future exercise by it of any statutory powers, functions and duties which may arise under ss. 50 and 80 of the Act. The Commission obviously concluded that in all the circumstances, including the Amatil resolution of October 1983 not to sell their shares in FCL to APM, it was highly unlikely that Amatil would sell those shares to APM. It is not the legal effect, if any, of the resolution itself but the attitude which underlies it that is the important consideration. The Commission's view was that it should discontinue proceeding VG 84 of 1983 because events which occurred after the commencement of the proceeding had in its view rendered the proceeding unnecessary, time consuming and unduly expensive, an expense which could only increase whilst the proceedings remained alive and which might ultimately be borne entirely by it, including the costs of the respondents, if the case should proceed and ultimately be dismissed.

Counsel for VB relied on certain cases in support of his argument including Watson's Bay and South Shore Ferry Company Limited v. Whitfield (1919) 27 CLR 268 ; Avr Harbour Trustees v. Oswald 8 App. Cas. 623; Cudgen Rutile (No. 2) Pty. Limited v. Chalk [1975] AC 520 . He also cited a passage from de Smith at p. 317. I would add for myself Birkdale District Electric Supply Co. v. Southport Corporation [1926] AC 355 ; Mulliner v. Midland Railway Co. (1879) 11 Ch. D. 611; and York Corporation v. Henry Leetham & Sons (1924) 1 Ch. 557. See also Mitchell, Contracts of Public Authorities (pp. 57 to 65). These cases refer to the well established principle of law that if a person or public body is entrusted with certain statutory powers or duties expressly or impliedly for public purposes, those persons or bodies cannot divest themselves of those powers and duties.

Assuming the existence of the relevant statutory duties, powers or functions of the Commission under the Act relied on by counsel for VB, in my opinion the Commission has not fettered itself in the exercise of them.

I express no views on the primary Judge's finding that ss. 80 and 81 of the Act offer alternative remedies to the Commission except to say that it would be wrong for the Commission to assume, in the discharge of its high public duties, that the mere presence of s. 81 and the fact that it may be resorted to if an acquisition of shares in fact takes place should inhibit the Commission, in an appropriate case, from commencing proceedings under s. 80 to restrain a threatened unlawful acquisition. It is no answer to say that, because an unlawful acquisition may be undone, the Commission would necessarily be justified in standing by and allowing the acquisition to take place. Such an attitude would deny the Commission's duty to uphold the public interest.

I would dismiss this appeal.

Proceeding No. VG 302 of 1983: appeal by VB from Woodward J's judgment dismissing VB's application for an order of review of the Attorney-general's decision not to institute proceedings against SCI under s. 80 of the Act in respect of the announcement in May 1983 of its intention to make a takeover offer for shares in FCL in circumstances which would constitute an infringement of s. 50 of the Act

On 20 January 1984 the Court dismissed this appeal, ordered VB to pay the Attorney-General's costs of the appeal, reserved the costs of other parties and said that its reasons for judgment would be given later. I now give my reasons.

It is common ground that the decision of the Attorney-General under challenge in this appeal was of an administrative character made under the Act and that VB is a person aggrieved by that decision within the meaning of sub-s. 3(4) of the Judicial Review Act. I express no opinion on the question whether the decision is properly characterised as one made under the Act within the meaning of sub-s. 3(4). I regard it as an open question.

The relevant facts, in particular the letter of 25 October 1983 from VB to the Attorney-General and the telex in reply of 27 October 1983, are set out in the reasons for judgment of Sweeney J.. I will not repeat them.

I summarise the arguments of VB as follows:-

(i)

In making his decision:

(a)

the Attorney-General did not direct his own mind to the question whether or not he should institute proceedings under s. 80 against SCI:

(b)

the Attorney-General did not make his own decision on the question whether or not such proceedings should be instituted; and

(c)

the Attorney-General simply adopted the decision of the Commission as his own decision without giving any independent consideration to the question whether or not such proceedings should be instituted against SCI.

(ii)

In making his decision the Attorney-General took into account irrelevant considerations namely that:-

(a)

the primary responsibility for the enforcement of the Act lies with the Commission; and

(b)

VB could itself institute proceedings against SCI pursuant to s. 81 of the Act.

(iii)

The primary Judge erred in his construction of the Attorney-General's telex, in particular:-

(a)

in drawing inferences from the telex adverse to VB:

(b)

in construing the telex liberally in favour of the Attorney-General:

(c)

in refusing to give effect to the plain and natural meaning of the words of the telex; and

(d)

in refusing to give effect to the principles stated in Jones v. Dunkel (1959) 101 CLR 278 .

The answer to this appeal lies essentially in the construction of VB's letter and the Attorney-General's telex. VB wrote to the Attorney-General asking him to make and to communicate a decision to VB, all within 48 hours, whether he would institute proceedings against SCI to restrain a breach of s. 50. VB had no statutory or other authority to write the letter. It was of course perfectly at liberty to do so as was any other citizen, but the Attorney-General was under no statutory or, so far as I can discern, any other duty to reply to the letter or act in response to it. The fact that the Attorney-General and the Commission are the only persons entitled to bring proceedings for injunctive relief under s. 80 to restrain breaches of s. 50 does not impose upon the Attorney-General some duty to consider a request such as that made in the letter from VB. Nor does it give VB some right that it would not otherwise have to request the Attorney-General to make a decision. It is inconceivable to me how it could be reasonably supposed that the Attorney-General could, within the period of 48 hours, himself or with the assistance of his Department (of which I might add the Commission is a branch in the sense that he is the Minister responsible for it), examine the whole of this complicated matter and all its ramifications and make a decision whether or not to sue SCI. Why should he? Indeed, the fact that the power is vested only in the Attorney-General and the Commission to launch proceedings for injunctive relief to restrain breaches of s. 50 rather reinforces the view that the Attorney-General should not make any such decisions without the most careful consideration.

The proper analysis of the telex is that the Attorney-General was saying that, as VB had sought a decision and the communication thereof to it within 48 hours, then he would make a decision; but that he could not possibly do so by giving his own close and undivided attention, and that of his departmental advisers, to the complicated questions involved in deciding whether to sue SCI. As he was the Minister responsible for the Commission which itself had examined this question earlier, received senior counsel's advice and decided not to institute proceedings against SCI, doing the best he could within the period of 48 hours and taking into account the attitude of the Commission, he decided that he would not sue SCI for breach of s. 50. It does not follow that the Minister would not have come to a different conclusion weeks or months later if he had sufficient time to fully and carefully consider all relevant matters. It simply means that within the limited time requested for the making of the decision he did the best he could.

There is no substance in the submissions made by VB in this appeal. In my opinion the primary Judge correctly concluded that the appeal should be dismissed. I need not consider the submissions made by VB challenging his Honour's finding that in any event he would exercise his discretion under s. 16 of the Judicial Review Act against VB by refusing relief on the assumption that the statutory preconditions to a grant of relief had been satisfied. For these reasons I was a party to the dismissal of this appeal on 20 January 1984.

Proceeding No. VG 308 of 1983: appeal by APM from the judgment of Woodward J granting leave to the Commission to discontinue proceeding VG 84 of 1983, ordering the Commissione to pay APM's costs and ordering FCL and Amatil to pay to the Commission its costs and the costs of APM which the Commission was itself ordered to pay

Before turning to the issues raised in this appeal, which is the main appeal in the quartet, I shall deal with an application made by senior counsel for APM at the commencement of the hearing of the appeal on 20 January 1984 that the Court, as presently constituted, should not hear it. Senior counsel foreshadowed an identical submission in relation to the part heard appeal by SCI. Senior counsel did not submit that the Court, as presently constituted, had prejudged the appeal. Rather he relied on the principle expounded by the High Court in Livesey v. The New South Wales Bar Association (1983) 57 ALJR 420 (at pp. 421-422) in these terms:-

"That principle is that a judge should not sit to hear a case if in all the circumstances the parties or the public might entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it."

Senior counsel submitted that the Court had acted on 13 December 1983 in such a way that:

"A fair-minded person could apprehend that the Court had predetermined the outcome of the appeal and also real and significant issues in the appeal."

In particular, senior counsel submitted that a fair-minded person might reasonably think first, that the Court had concluded that the Commission's proceeding for injunctive relief against APM (VG 84 of 1983) was futile and second, that the Court suggested to the Commission that it should take the necessary steps to discontinue that proceeding.

This application by senior counsel for APM was opposed by counsel for all other parties to this appeal and the SCI appeal proceeding No. VG 249/83. I do not propose to state in detail the events of 13 December 1983 as they appear sufficiently from the transcript of proceedings of that day. I summarise them as follows:-

Senior counsel for SCI, the appellant in the appeal then before us, opened the appeal and embarked upon an explanation of its complicated history and relevant circumstances. In the course of his address the Court, not surprisingly, asked questions and made observations. One of the matters discussed by counsel with the Court was why the Commission was seeking to continue with its proceeding VG 84 of 1983 when the holders of 74% of the shares in FCL (Amatil) had resolved that they would not sell their shares in FCL to APM at any time or in any circumstances or for any price". Indeed, Amatil had joined with FCL in filing a notice of motion seeking judgment against Amatil to bar them from selling their shares in FCL to APM. Senior counsel for Amatil told the Court that their clients were prepared to submit to a final order of the Court restraining them from ever selling their shares in FCL to APM. It is hardly a matter for wonder that in those circumstances there was discussion between the Bench and Bar as to what purpose was being served by the continuance of proceeding VG 84 of 1983; but all the discussion was by way of inquiry and, to the extent that there was any expression of view by any member of the Bench, it was of the kind that frequently occurs in argument, designed to ascertain the questions in issue and to promote a proper understanding of relevant matters by the Bench. At one stage during argument senior counsel for the Commission seemed to be asking the Court for some judicial advice about whether the Commission should itself take steps to bring proceeding VG 84 of 1983 to an end. The Court informed senior counsel that this was a matter not for it but for the Commission to decide.

Later in the day senior counsel for SCI asked the Court to adjourn the further hearing of the appeal to enable the Commission to apply to a single Judge of the Court for a permanent injunction against Amatil to restrain them from selling their shares in FCL to APM, for a permanent injunction against FCL to restrain it from doing anything to aid any such sale and for leave to discontinue proceeding VG 84 of 1983 against APM. The Court heard senior counsel for APM fully on this application for adjournment. After retiring for a short time the Court returned and announced that it acceded to the adjournment application. The Court said that by taking this course it did not indicate that it had formed any views about the issues raised in the appeal; indeed, it had not formed any such views.

In considering the application that the Court should not hear the appeal or continue to hear the part heard appeal we must exercise great care because in a sense the Court is the Judge in its own cause. Also, the question is not whether the Court had in fact prejudged the case, and this was never suggested by senior counsel for APM, but whether a fair-minded person could think that the Court had done so. Nowithstanding the submissions of senior counsel for APM on this question and my careful reading of the transcript of proceedings on 13 December 1983 I came to the conclusion on 24 January 1984 that the application must fail. It was without substance and foundation. Questions of costs were reserved on 24 January 1984. In my opinion the appropriate order is that APM should pay the costs of all respondents to this appeal of the application by APM for disqualification.

Before considering the issues raised in this appeal I shall deal with another preliminary matter namely, a motion by VB to be joined as a respondent to the appeal or permitted to intervene in the appeal. Counsel for VB submitted that VB should be joined as a party to the appeal pursuant to Order 52 Sub-Rule 14(2) of this Court's Rules for the purpose of submitting that the undertaking given by the Commission to the Court on 22 December 1983 should not have been given by the Commission or accepted by the Court, was contrary to the Commission's duties and functions under the Act and constituted an improper fetter upon the exercise by the Commission of its discretionary powers and duties to enforce the Act. In support of this motion counsel for VB submitted that VB was directly and adversely affected by the Court's order of 22 December 1983 and by the undertaking then given and accepted. In such circumstances leave to intervene should be granted. Counsel relied upon Cretanor Maritime Co. Limited v. Irish Marine Management Limited (1978) 1 WLR 966 per Buckley LJ (at p. 978) and Thomson Australia Holdings Pty. Limited v. Trade Practices Commission (1981) 148 CLR 150 (High Court), (1979-80) 27 ALR 551 (Full Court of this Court) and (1978) 18 ALR 17 (Franki J.). He submitted that courts have recognised the locus standi of a party in the position of VB to bring its own proceeding where it is affected by a decision of a statutory body made in breach of its statutory duty. He referred to Dav v. Pinglen Pty. Limited (1981) 148 CLR 289 per Mason, Murphy, Aikin, Wilson and Brennan JJ. (at pp. 299-300); R. v. Commissioner of Police of the Metropolis Ex Parte Blackburn [1968] 2 QB 118 . He submitted that where a statute is concerned with the public interest a wide approach to locus standi has been adopted by the courts: see Attorney-General of New South Wales v. The Brewery Employees Union of New South Wales (1908) 6 CLR 469 ; and Onus v. Alcoa (1981) 36 ALR 425 .

Counsel for VB submitted that VB was adversely affected by the order and undertaking of 22 December 1983 for various reasons relating to VB's business, its share of the paperboard and container markets in Australia, its competitive position in both markets and what was asserted as being its special and direct interest in the undertakings and in the enforcement by the Commission against APM of s. 50 of the Act. It was submitted that the Commission has, by giving its undertaking, precluded itself from taking proceedings in the future for injunctive relief against APM to prevent it acquiring shares in FCL in contravention of s. 50. This was said to be a fetter that was inconsistent with the policy of the Act and which had the effect of frustrating that policy.

Reliance was also placed by counsel upon the Court's inherent power to add persons as parties to appeals. He referred to the judgment of Bowen C.J. in Hughes Motor Service Pty. Limited v. Wang Computer Pty. Limited (1978) 35 FLR 346 (at p. 351).

No separate argument was addressed to the Court on the application of VB for leave to intervene.

Alternatively it was submitted that VB should be given leave to appear as amicus curiae .

After hearing this application by counsel for VB the Court announced that it would hear him on his substantive submissions on behalf of VB relating to the undertaking given by the Commission to the Court on 22 December 1983 and that the Court would announce in due course the particular capacity in which it heard the submissions.

In my opinion VB did not establish that it should be joined as a party to or permitted to intervene in the appeal. I am not satisfied that VB is directly and adversely affected by the orders of Woodward J. of 22 December 1983 or by the undertakings given by the Commission to his Honour. It is appropriate however that VB be given leave to appear as amicus curiae . VB's submissions were not put by any other party to the appeal and they related to an important aspect of the appeal involving questions of the public interest.

I turn now to the issues raised in the appeal itself.

The submissions made by counsel for APM may be summarised as follows:

1.

The order made by Woodward J. on 22 December 1983, after accepting the undertaking by the Commission, works an injustice to APM. It deprived APM of an advantage which it gained in the litigation namely, the restraint of its rival bidder SCI for shares in FCL until the Court determined whether APM would contravene s. 50 if it were to acquire shares in FCL.

Before 23 May 1983 APM could have bought the shares in FCL owned by Amatil if Amatil had been willing to sell those shares for the price offered by APM. At that time Amatil was willing to entertain an offer by APM.

APM gave up this freedom in return for the advantage of an arrangment of interdependent undertakings to the Court given on 23 May 1983, the consequence of which was that if and when APM again became free to buy the shares, there would be no further threat from the Commission because the action brought by the Commission would have been decided in favour of APM.

The Commission now says that it does not wish to pursue its action to stop APM buying shares in FCL because it believes that APM will not be able to buy those shares in view of the Amatil resolution that they will not sell them to APM. That decision was made for commercial reasons and essentially because of the existence of the undertakings of 23 May 1983, which the Commission sought and obtained, and because it appeared that the action would continue for a considerable time and at considerable expense.

Having thus procured the result which it sought from instituting the proceeding, without having to establish its assertion that APM's acquisition would contravene the Act, the Commission now seeks to discontinue the action. But in case it be wrong and does not stop APM from acquiring shares, the Commission wishes to be free to start a fresh proceeding alleging that the acquisition would contravene s. 50.

APM submitted that the Commission must elect in these circumstances. If it believes that there is no chance that APM will acquire the shares it should surrender the chance of instituting fresh proceedings against APM. If it does not think that it has achieved what it wants it should proceed with action VG 84 of 1983. Otherwise APM is deprived both of the possibility of buying the Amatil shares in FCL, which existed before the undertakings were given on 23 May 1983 and which it gave up in return for those undertakings, and of the benefit which it obtained from the bargain of 23 May 1983 encapsulated in those undertakings; yet on the other hand the Commission keeps all the benefits it received and more, suffering no loss at all.

2.

The Commission asserts that there is now no likelihood of APM contravening the Act because there is no likelihood of APM acquiring the shares in FCL held by Amatil. If there is no likelihood of APM contravening the Act then the action should be dismissed against all respondents. Alternatively, if leave is to be given to discontinue, it should be on terms that bar future action by the Commission against APM and against FCL and Amatil.

3.

If the Commission will not submit to dismissal of the action or to terms that bar future action this evidences a view of the Commission that APM may acquire the shares in FCL which are held by Amatil. If that is so, then proceeding VG 84 of 1983 is not futile or academic and the Commission must elect whether to abandon its claim or prosecute it.

4.

The application for leave to discontinue was no more than another way in which it was sought to achieve what had been refused by Woodward J. on 15 November 1983 when his Honour dismissed the application by FCI for release from the undertakings given to the Court on 23 May 1983. Both the application for leave to discontinue and the application for release from undertakings sought to bring the undertakings to an end whilst leaving APM under the disability of the threat of continued or renewed action by the Commission alleging contravention of the Act if APM succeeded in outbidding SCI for the FCL shares. The earlier application for release was refused as release would have been unjust to APM.

5.

If leave to discontinue is granted then the question of what terms should be imposed should be answered by reference only to what is just to APM and perhaps the other respondents to proceeding VG 84 of 1983.

6.

Although Woodward J. said that the Commission's belief that its action was now pointless was reasonably held, his Honour framed the terms to be imposed on the grant of leave to discontinue by reference to the conclusion that dismissal of the proceeding was "unacceptable" because it was now hypothetical. The consequences of a dismissal of the proceeding are irrelevant if the proceeding is now hypothetical.

The proceeding is not hypothetical. Woodward J. found that the proceeding was not hypothetical in his judgment of 15 November 1983 and that finding is correct. The proposition from which Woodward J.'s judgment proceeds namely, that the proceeding is now hypothetical, is wrong.

What I have said sufficiently summarises APM's submissions.

The Commission's motion seeking leave to discontinue proceeding VG 84 of 1983 was made pursuant to Order 22 Para. 2 (1)(d) of this Court's Rules which provides:

"2(1)

Subject to Sub Rule (2) a party making a claim for relief may discontinue a proceeding so far as concerns the whole or any part of any claim for relief made by him -

...

(d)

at any time - with the leave of the Court."

Woodward J. referred to the judgment of Graham J. in Covell Matthews & Partners v. French Wools Limited (1977) 1 WLR 876 and in particular to the following passage (at p.879):-

"The principles to be culled from these cases are, in my judgment, that the court will, normally, at any rate, allow a plaintiff to discontinue if he wants to, provided no injustice will be caused to the defendant. It is not desirable that a plaintiff should be compelled to litigate against his will. The court should therefore grant leave, if it can, without injustice to the defendant, but in doing so should be careful to see that the defendant is not deprived of some advantage which he has already gained in the litigation and should be ready to grant him adequate protection to ensure that any advantage he has gained is preserved."

The principles to which Graham J. referred were approved on appeal by the Court of Appeal (1978) 1 WLR 477 . After citing this passage from the judgment of Graham J. Woodward J. said:-

"I would respectfully adopt Graham J's formulation of principles so far as it goes, but it leaves open the question as to what should be done in a case where leave cannot be granted without some injustice to the respondent, or in which it may not be possible or appropriate to ensure that every advantage which the respondent may have gained in the course of litigation is preserved.

In my view the matter must remain one for the exercise of the Court's discretion in each case, even if the interests of the respondent cannot be fully protected. I do not believe that Graham J. was suggesting that, unless the respondent's rights can be completely protected, an application for discontinuance must be refused. If he was implying that, then I must respectfully decline to follow his Honour to that extent."

I respectfully agree with those observations of Woodward J.

Paragraph 2(1)(d) of Order 22 does not specify the matters which the Court must take into account when considering an application for leave to discontinue; nor does the paragraph impose any fetter upon the exercise by the Court of its discretion. It is for the Court in the exercise of its discretion in each case to decide whether leave to discontinue should be granted and, if so, on what terms. The Court must consider all the relevant circumstances including any injustice that may be sustained by any party if leave to discontinue is granted or refused as the case may be.

Woodward J. specified certain matters which he took into account in the following terms:-

"(a)

(the applicant) should not be compelled to litigate, against its will, at great length, and with considerable expenditure of public monies, an action which it believes, on reasonable grounds, to be pointless;

(b)

the circumstances which have arisen, and which appear to make further litigation by it unnecessary, were not designed by it; nor could they readily have been foreseen when the litigation was instituted;

(c)

the merits of the action have not been entered into; there is nothing to suggest that the applicant's case is lacking in good faith or in merit;

(d)

the applicant is prepared to surrender any right to pursue the remedy which it is presently seeking, namely an injunction to prevent the acquisition of certain shares or assets; (however it reserves the right, if it ever becomes appropriate, to bring an action which would probably be based on substantially the same material, seeking a divestiture of shares or assets so acquired); and

(e)

the applicant is prepared to submit to an order for those costs which it would be obliged to pay if its action were being dismissed on its merits at this stage."

In my opinion each of these considerations was fairly open to his Honour on the material before him and it has not been shown that his Honour fell into error in taking them into account.

One of the matters that weighed heavily with his Honour was whether any remaining prospect of APM's bidding successfully for the shares in FCL was further diminished by the fact that APM could still be sued by the Commission under s. 81 of the Act for divestiture. His Honour said that there was already on foot a proceeding by SCI (VG 82 of 1983) seeking to prevent APM taking over FCL. His Honour mentioned that, even if VG 84 of 1983 were dismissed, APM would still be subject to the threat of SCI's proceeding. It must also be borne in mind that there is a further proceeding namely, the proceeding by VB against both APM and SCI seeking injunctive relief pursuant to s. 80 to restrain breaches of s. 50.

His Honour considered whether, if leave to discontinue were granted in favour of the Commission, it should be on terms that the Commission undertake not to seek divestiture of any shares which APM might subsequently acquire in FCL in any event. The Commission informed his Honour that any such undertaking was unacceptable to it. His Honour did not regard such an undertaking as appropriate.

APM suggested to his Honour that a further condition be imposed if leave to discontinue were granted namely, that the Commission obtain assurances from Amatil that it will not regard itself as bound in any way not to sell to APM and that it would be willing to consider any offer which APM may make for the purchase of the Amatil shares in FCL. Woodward J. concluded that the Court did not have power to impose any such conditions and, even if it did have such power, he would not in the exercise of his discretion impose them.

His Honour recognised that APM may suffer some hardship if leave to discontinue were granted and that it would lose some of the advantage gained by it from having entered into the interlocking undertakings on 23 May 1983. His Honour said, however, that most of the loss of advantage had been created by the commercial decision of Amatil over which the Commission and the Court had no control. His Honour said that APM would only be marginally better off in the market place if the proceeding were now dismissed and that was the best result to which APM would be entitled.

His Honour rejected the argument of APM that the other parties to the proceeding were, by seeking or supporting leave to discontinue, achieving indirectly the result that had thus far been denied by the Court namely, the release from the undertakings of 23 May 1983.

The principles governing the approach to be taken on appeal from a discretionary order such as that involved here are well known and need not be elaborated: see House v. King (1936) 55 CLR 499 , especially per Dixon, Evatt and McTiernan J.J. (at pp. 504-5); Lovell v. Lovell (1950) 81 CLR 515 ; Mace v. Murrary (1955) 92 CLR 370 ; and Adam P. Brown Male Fashions Pty. Limited v. Philip Morris Inc. (1981) 148 CLR 170 .

In my opinion, it has not been established that the primary Judge erred in exercising his discretion or acted upon a wrong principle or allowed extraneous or irrelevant matters to affect his judgment or otherwise so acted as to lead this Court to intervene on appeal. It has not been demonstrated that the primary Judge fell into error which would lead this Court to substitute its discretion for that of Woodward J.

In my opinion the order granting leave to discontinue and the acceptance of the Commission's undertaking does not in the circumstances result in a relevant injustice to APM.

APM relied strongly on its assertion that the undertakings given to the Court on 23 May 1983 by the parties to VG 84 of 1983 and by SCI went beyond undertakings to the Court frequently given to avoid the necessity of a contested hearing for interlocutory injunctive relief pending the final hearing. It was asserted that they were interdependent undertakings which imposed an obligation upon the Commission to ensure that the question whether APM would contravene s. 50 if it were to acquire shares in FCL was heard and determined as a quid pro quo for the giving of mutual undertakings by APM and the other respondents to the proceeding and SCI. Reliance was placed upon certain observations of members of the Full Court, differently constituted, which heard another appeal from a judgment of Woodward J., the judgment of the Full Court having been given on 21 September 1983.

I asked counsel for APM to refer the Court to the evidence which supported this construction of the undertakings; but, although reference was made to certain evidence, none of it in my opinion supports the assertion. No obligation was imposed upon the Commission by the undertakings of 23 May 1983, or the circumstances in which they came to be given, to ensure that the issues in VG 84 of 1983 are heard and determined by the Court, whether as a quid pro quo for APM and other respondents and SCI giving their undertakings or otherwise. There is no evidence to support the argument that the undertakings were to remain in existence necessarily until a trial of the issues. I am satisfied that when the undertakings were given they were simply intended to freeze the rival bidders (APM and SCI) from acquiring further shares in FCL until the final hearing of the proceeding or further order.

APM cannot in my view obtain support for its construction of the undertakings from the judgments of the Full Court given on 21 September 1983. Those judgments must be read in their proper perspective. The matter being considered by their Honours was whether there should be a general release of the undertakings of 23 May, but on the basis that fresh undertakings were given which would, in effect, prevent APM from acquiring shares in FCL thus putting it at a substantial disadvantage to its rival bidder SCI. The hypothesis on which the Full Court's judgment proceeded was that VG 84 of 1983 was then continuing, a hypothesis which has now changed in view of the Commission's decision to discontinue the proceeding.

The Commission commenced VG 84 of 1983 to restrain APM from acquiring further shares in FCL in contravention of s. 50. The circumstances changed thereafter when it became clear that Amatil would not sell their 74% shareholding in FCL to APM. It is doubtless true to say that this decision is not irrevocable. Indeed, there was no particular offer from APM before it when the Amatil resolution of October 1983 was passed. Whether the resolution is valid or enforceable is beside the point. But the Amatil resolution is cogent evidence of an attitude of Amatil, expressed as forcefully as one could imagine, that it will not treat with APM. It was not a decision of the Court, the Commission or anyone except Amatil. Although the litigation may have led or contributed to the making of the decision it is in truth a decision made outside the litigation by Amatil representing its assessment of APM as a potential buyer of Amatil's shares in FCL and reflecting Amatil's perception of APM's position under the Act. Any injustice which APM may suffer if the orders and undertakings stand is a consequence of APM's position in the paperboard market.

APM relied strongly on the proposition that it was being deprived of benefits which it would receive if VG 84 of 1983 were dismissed either after a trial on the merits culminating in its favour or if the Commission called no evidence and in effect submitted to dismissal of the proceeding. The benefits were said to be first, that the Commission would thereafter be barred from suing APM again for injunctive relief under s. 80 for an alleged breach of s. 50 and second, the Commission would be barred from taking divestiture proceedings against it under s. 81 based on the breach of s. 50 alleged in VG 84 of 1983.

There was considerable argument before us on the doctrine of res judicata and estoppel. I do not find it necessary to consider these matters. It is true that the undertaking recognises that the Commission may after twelve months seek release from its undertaking not to institute fresh proceedings for injunctions to restrain APM from acquiring shares in FCL but, if any such application were made, the Court would have the advantage of knowing and considering all the then relevant circumstances before deciding whether to take the serious step of releasing the Commission from its undertaking. I see no ground for complaint by APM against this.

If APM were correct in its argument that a dismissal would be a bar to a subsequent action for divestiture it would be in my view a ground for preferring discontinuance to dismissal. APM should not gain immunity from a proceeding (for divestiture under s. 81) which would involve some issues never before in fact heard and determined and questions of public importance. The fundamental difference between s. 80 and s. 81 proceedings, based on a contravention of s. 50, is that in the former there has been no acquisition of shares and in the latter an acquisition has necessarily taken place.

APM's submissions assume that if the Court was considering an application for dismissal of VG 84 of 1983 rather than for leave to discontinue it, the Court would simply either grant or dismiss the application. But Order 35 Sub-rule 6(1) is relevant. It provides:-

"Where the Court makes an order for the dismissal of proceedings or for the dismissal of proceedings so far as concerns any cause of action or the whole or any part of any claim for relief, the Court may order that such dismissal shall be without prejudice to any right of the applicant or claimant to bring fresh proceedings or to claim the same relief in fresh proceedings."

If the application here was for dismissal, not leave to discontinue, it would have been competent for the Court to dismiss the proceeding but preserve the Commission's right to bring fresh proceedings against APM pursuant to s. 80 for injunctive relief. Whether the Court would in fact exercise its discretion in this way is of course a different question and not one which I need consider. I prefer to express no view on whether the Court could invoke Order 35 Sub-Rule 6(1) to dismiss the proceedings but without prejudice to the right of the Commission to bring proceedings for divestiture under s. 81.

Finally, there remains the submission of counsel for VB that the undertakings given by the Commission to the Court on 22 December 1983 should not have been given or accepted because those undertakings are contrary to the Commission's duties and functions under the Act and constitute an improper fetter upon the exercise by the Commission of its discretionary powers and duties to enforce the Act. I have already considered the substance of these submissions when dealing with the appeal proceeding VG 303 of 1983 by VB against Woodward J's judgment dismissing VB's application for an order of review of the Commission's decision to discontinue proceeding VG 84 of 1983, and need not deal with them further.

I would dismiss this appeal.

Proceeding No. VG 249 of 1983: appeal by SCI from the judgment of Woodward J dismissing SCI's application for the release of all parties from their undertaking given to the Court on 23 May 1983

In view of my conclusion that the lastmentioned appeal fails it is probably unnecessary, except on the question of costs, to consider this appeal because it is common ground that the discontinuance of VG 84 of 1983 would bring to an end the undertakings given to the Court on 23 May 1983. However, as the appeal was fully argued and the question of costs remains I shall proceed to consider this appeal part heard from 13 December 1983.

The Commission adheres to its attitude expressed before the primary Judge that it concedes that this appeal should be allowed. FCL and Amatil also contend that the appeal should be allowed. APM opposes the appeal.

In their reasons for judgment given on 21 September 1983 the Full Court of this court, differently constituted, in their separate reasons for judgment said, in effect, that although the original undertakings given on 23 May 1983 were to operate until the hearing of the proceeding or further order, they should only have been released if new and unforseeable circumstances or substantial new considerations were shown to have arisen since they were accepted and if the interests of justice required their release.

The Full Court found that there was in fact no new and unforeseeable new circumstance or consideration and that the interests of justice strongly required the maintenance of the undertaking.

Woodward J. in the judgment appealed from took the judgments of the Full Court as his starting point and said that he would reopen the matter if, and only if, substantial new considerations were shown to have emerged. All parties agreed that the primary Judge was correct in approaching the matter this way.

His Honour considered whether there were sufficient new considerations to justify the fresh exercise of the Court's discretion and he concluded that there were no such considerations.

It is necessary to assume that the undertakings given on 23 May 1983 were properly given and received. As the Full Court held on 21 September 1983 that the undertakings should not be released it must also be accepted that on 24 August 1983 (being the date of Woodward J's order, the subject of the appeal to the Full Court determined on 21 September 1983) the then circumstances did not entitle the parties to an order releasing them from the undertakings.

SCI submitted to his Honour that there were two new circumstances which had arisen since the date of the Full Court's judgment. First, the proposal by APM to sell part of FCL's plant if it were successful in acquiring the shares in FCL so that it would retain no more than half of FCL's productive capacity, and the embodiment of that proposal in APM's amendment of its defence to the Commission's statement of claim in VG 84 of 1983. Second, the resolutions in October 1983 by the directors of the subsidiaries of Amatil that they would not sell their shares in FCL to APM or to any of its related corporations "at any time or in any circumstances or for any price".

Turning first to APM's proposal to sell part of FCL's plant, his Honour considered the evidence relating to this question and made findings of fact on the basis of the evidence before him including the cross-examination of various deponents of affidavits. He did not accept the evidence of the managing director of FCL and a director of SCI to the effect that FCL would be likely to suffer grave and irreparable damage as a result of APM's proposal. His Honour said

"However I am unable to find that the risk of such damage to FCL has been so greatly increased by the announcement of the abortive proposal as to amount to a new circumstance which would justify me in releasing FCL from its undertakings."

His Honour concluded that APM had reverted to its original position that if it acquired the shares in FCL it would not dispose of any of FCL's plant. His Honour said that he did not believe that publication of APM's proposal would add significantly to the damage which would otherwise have been suffered by FCL arising from "the mere facts of conflicting takeover offers and a delayed outcome of that conflict".

Accordingly, his Honour did not believe that he could consider the APM proposal as a new circumstance arising since the judgment of the Full Court. In my opinion it has not been shown that his Honour fell into error in his treatment of this first alleged new circumstance and the conclusions which he expressed with respect to it.

The second matter relied upon by SCI in support of its application for a release of all parties from their undertakings was the Amatil resolution of October 1983 not to sell to APM.

His Honour held that the resolution was genuine, but that nevertheless its purpose was to achieve a release of the undertakings. His Honour said that he did not believe that the resolution could be accepted without reservation in that it must be seen in the light of the purpose for which it was passed and the duties which must be observed by company directors. His Honour said:-

"Company directors cannot bind themselves or their successors, merely by a resolution as to future intent, to a course of conduct which may, when the time comes, prove to be not in the best interests of shareholders."

His Honour characterised the October resolution of Amatil as a "hardening of Amatil's attitude to an APM bid (given that it arises solely from the circumstances of these proceedings)" and concluded that it did not represent such a new circumstance since the Full Court's judgement as justified his Honour in reopening the question of the undertakings.

In August 1983, well before the appeal to the Full Court which culminated in its judgment of 21 September 1983, Amatil's attitude was well known namely, that it would not deal with APM whilst the case was on foot and while some sort of cloud hung over APM. Although there may be some support for the view that the October resolution of Amatil was more than a mere hardening of attitude, I do not think that it has been established that Woodward J. fell into error in his analysis of the evidence relating to this resolution and the significance which he placed upon it. It must be remembered that his Honour approached the questions involved in this appeal on the footing that VG 84 of 1983 was proceeding in due course to a final hearing. There was no application by the Commission at that stage for leave to discontinue the proceeding. Yet the undertakings of May 1983 were given on the assumption that they would continue until the final hearing or further order. The fact that the October resolution of Amatil may have cast serious doubt on the reality of continuing VG 84 of 1983 was not regarded by his Honour as constituting a substantial departure from the circumstances that existed when the Full Court gave judgment in September 1983. In my opinion it was open to his Honour to reach the conclusions which he did about this resolution. His Honour's judgment should not be upset.

I would dismiss this appeal. In my opinion no orders should be made now. The parties should have some time to consider the reasons for judgment of this Court and address further argument on any remaining questions including costs.