Legal database - View: Cases: Visy Board Pty Ltd v Attorney-General (Cth)

Visy Board Pty Ltd v Trade Practices Commission
(1984) 2 FCR 113
[1984] ATPR 40-448

(Decision by: Sheppard J)

Re: Visy Board Pty Ltd
And: Trade Practices Commission

Court:

Federal Court of Australia

Judges: Sweeney J
Lockhart J

Sheppard J

Subject References:
Administrative Law
Practice and Procedure

Judgment date: 15 March 1984

Decision by:
Sheppard J

Introduction

In these matters I have had the advantage of reading the judgment to be delivered by Sweeney J. I am thus saved the necessity of referring to the history and background of each of the appeals. I propose first of all to consider the appeal brought by A.P.M. Investments Pty. Limited ("A.P.M.") against the granting of leave to the Trade Practices Commission ("the Commission") to discontinue proceedings brought by it against A.P.M. to restrain threatened breaches of s.50 of the Trade Practices Act ("the Act"). I shall hereafter refer to that appeal as the A.P.M. appeal.

I shall then turn to the appeal brought by Visy Board Pty. Limited ("Visy Board") against the dismissal of an application for the judicial review of the decision of the Commission to discontinue the proceedings. I shall refer to that appeal as the Visy Board appeal. Next, I shall deal with the appeal brought by S.C.I. Operations Pty. Limited ("S.C.I.") and a related company against the refusal of Woodward J. to release the respondents in the application brought by the Commission against A.P.M. from undertakings given by them not to acquire or dispose of shares held by companies and persons on behalf of Amatil Limited ("Amatil") in Fibre Containers Limited ("F.C.L."). That appeal will be referred to as the S.C.I. appeal.

Finally, I shall give my reasons for the decision that the appeal brought by Visy Board against the dismissal of an application made by it for the review of a decision of the Attorney-General not to institute proceedings against S.C.I. for a threatened breach of s.50 of the Act be dismissed.

The A.P.M. Appeal

Appearance of bias

At the commencement of the hearing of this appeal senior counsel for A.P.M. made an application that the members of the Court disqualify themselves from hearing the A.P.M. appeal and also from continuing to hear the part-heard S.C.I. appeal. The ground of the application was said to be an appearance of bias on our part. The matters upon which counsel relied were statements made by the members of the Court on 13 December 1983 during the hearing of the S.C.I. appeal. It is to be emphasised that the application was based, not on actual bias, but, to use the words of the High Court in Livesey v. The N.S.W. Bar Association (1983) 57 A.L.J.R. 420, on the contention that words used by us on 13 December 1983 "created a situation in which a party (that is, A.P.M.) or a fair-minded observer might reasonably doubt that the question involved" in the appeal could be dealt with by us "without bias by reason of pre-judgment."(p.421)

The Court said that the principle to be applied was that laid down in the majority judgment in Reg. v. Watson; Ex parte Armstrong (1976) 136 C.L.R. 248 at pp. 258-263. In Livesey's case the Court stated the principle thus (pp. 421-422):

"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."

The submission made on behalf of A.P.M. was not supported by any other party to the appeals. Counsel for all other parties to the A.P.M. and S.C.I. appeals opposed it.

At the conclusion of the argument we rejected the submission and said we would publish our reasons for our decision in due course. What follows are my reasons for it.

The submission requires some account of the proceedings before us on 13 December 1983. Senior counsel for S.C.I. opened the appeal by giving the Court an extensive account of the somewhat complicated history of the matter down to that time. The account included reference to the firmly expressed attitude of the Amatil interests that they would not sell to A.P.M. There followed discussion as to whether this made the proceedings futile or academic. This in turn led to my raising the question of how the Amatil attitude could have legal effect; no suggestion was made then or later that it could. My thought in this regard was not original. It came from statements in the judgment under appeal which I had had the benefit of reading before the hearing of the appeal commenced.

But that was only the starting point. What soon became clear was that the Commission, which is the first respondent to the S.C.I. appeal, did not oppose the application made by S.C.I. that all parties, including A.P.M., be released from the undertakings earlier given to the Court. That had been made clear to Woodward J. to whom senior counsel for the Commission had said:

"The Commission would consent to an order in the terms of paragraph 1 of the notice of motion, that is the paragraph to the effect that all undertakings be lifted. I say nothing as to the others at this stage because they are consequential type of applications. But may I say this, your Honour, that whilst on the one hand the Commission expresses consent as to the general lifting of the freeze, as it has been termed, I desire to indicate that if the lifting of the undertakings were to result in the purchase of the shares - by A.P.M. companies - then the question of divestiture proceedings would be in issue. If A.P.M. were to acquire shares and perhaps to retain all of the assets of F.C.L., then the Commission would seek divestiture."

That attitude was maintained before us, counsel for the Commission saying that it would consent to the S.C.I. appeal being allowed. It was then pointed out to counsel for the various parties that the undertakings had been given at the behest of the Commission. I said, "If you (the Commission) do not want them, what are we doing here? Nobody else has an interest in them." The discussion then moved to the question of whether the Commission wished to maintain its claim for final relief. The sole relief sought was a permanent injunction restraining A.P.M. from acquiring the shares held by the Amatil interests in F.C.L. Counsel for the Commission was asked the purpose of the proceedings being continued. No satisfactory answer to this question was then given, and it was in this context that members of the Court made reference to the situation being Gilbertian or something from the works of Lewis Carroll.

The fact was that the Commission no longer wanted the undertakings which had been given. This was no doubt because of the expressed attitude of the Amatil interests that under no circumstances would they sell to A.P.M. But the situation which led to the comments which came from the members of the Court was one in which the Commission was prepared to lose the benefit of the interlocutory restraints which it had obtained and yet wanted to keep the proceedings on foot. I emphasize that its only claim for relief was for a permanent injunction to restrain the acquisition of the F.C.L. shares by A.P.M. If the undertakings were released, the proceedings must have become academic or futile. Once they were released, a course which the Commission advocated, the parties were free to deal in the shares. The Amatil interests might maintain their expressed intention or they might not. If they did not and the shares were sold to A.P.M., proceedings for a final injunction were academic - the horse would have bolted. If, on the other hand, the shares were sold to S.C.I. or another party, or not sold at all, the proceedings would also be academic. To me, at any rate, there was a question as to whether they had not lost their purpose. The moving party, the Commission, did not want them any more.

At this stage it should be said that the proceedings had commenced in May 1983. They had been the subject of extensive directions hearings. A number of interlocutory applications had been made, many of them disputed. There had been one earlier appeal to a Full Court in relation to the question of the release of undertakings. The proceedings involved three separate representations of respondents. Estimates of the length of the hearing were of the order of two to three months. The costs already incurred and to be incurred were substantial. The Court, whose list is becoming increasingly congested, was to be faced with the fixing of a hearing to last two to three months and the making available of a judge for this purpose. Thus the proceedings as a whole involved the expenditure of substantial time and money, a good deal of it public time and money. In my opinion it is not surprising that upon the basis of what we were told on 13 December 1983, the Court would make remarks designed to elicit what really was an issue in the case in an endeavour to find out if there really was any further purpose in the proceedings.

I return to the course of the proceedings on 13 December 1983. Discussion took place as to the possible termination of the proceedings. Our attention was drawn by senior counsel for the Amatil interests to a discussion which Woodward J. had had with senior counsel for the Commission on this matter. What counsel for the Commission said is lengthy but I feel it necessary to set it out in full in this judgment:

"Your Honour, the proceedings are instituted on a particular basis, of course, and the Commission was obviously of the view that circumstances adequately justified the taking of that course and indeed in its view compelled the taking of that course, that is the institution of proceedings, A.P.M. having given its part A statement in relation to its deed of acquisition. The point that has arisen now, of course, is whether more recent circumstances have caused the proceedings with the Commission's application to be futile, initially A.P.M.'s actual amendment and subsequently the view that has been put so far by Mr. Becker (of Amatil).

Your Honour, the Commission finds itself in a position where it would approach with enormous diffidence the proposal it should be the one to determine whether proceedings are futile. It has been reminded of something which in fact it was fully conscious of previously, that it is an ordinary litigant. It is not here or anywhere else to play God. That came out very clearly, from inference at least, from the judgment of the Full Court. The Commission was always conscious of that and is doubly so now. One of the difficulties it feels in the present situation is that if it were to discontinue proceedings then whatever it did would be to take a course which would be set to prejudice one party and if it did not discontinue that would be a course which prejudices other parties, as Mr. O'Callaghan (for S.C.I.) has indicated. It is perhaps something of a paradox that Mr. O'Callaghan has said that application should not be dealt with and the Commission should deal with that decision. The view of the Commission is that the question of futility is something to be judged by the Court. The Commission can have its own views, whatever they may be, but its own views may well be wrong. If there were a decision by this Court arising out of the present application which indicated futility, well that of course is something which the Commission must then respond to. Indeed, if there are any indications by the Court in terrorem one way or the other the Commission would clearly have to give the most serious consideration to any such indications.

That is not to say that the Commission wishes to avoid making a decision if one is called for but its position is that its overwhelming desire is to do what seems to be fair to all the interests that are involved. But within the context of the main application, that is certainly if it is taking the initial proceedings and certain things follow from that, and that means inevitably the Commission is opposed to A.P.M. so long as A.P.M. proposes to proceed, but in that context wants to follow such course as is fair to A.P.M., as if fair to Smorgon (S.C.I.), as is fair to F.C.L., it appears that is insoluble to them.

If there were some indication from the Court as to what were thought to be the proper course for the Commission to take then the Commission would certainly welcome the opportunity to give consideration to any such indication."

In our opinion, counsel for the Amatil interests correctly summarised what counsel for the Commission had said by saying that it amounted to the Commission leaving it to the Court to decide what to do. At that point, Sweeney J. said, "How can you leave it to the Court as to whether a party will move a motion for judgment?" In my opinion it must always be for a party to determine when and in what circumstances it will seek to bring litigation which it has instituted to an end. This was presumably the view of Woodward J. who declined to give the Commission any indication as to what it should do.

Further discussions took place in which we were informed by counsel for the Amatil interests that there had been taken out a motion for judgment, the judgment being one which would be for an injunction permanently restraining the Amatil interests from selling their shares in F.C.L. to A.P.M. Some surprise was expressed by members of the Court at this suggestion. There was discussion as to whether there should be an adjournment to allow the parties to consult with one another. In the end the matter was not adjourned until the lunch hour was reached. During the lunch hour we were asked not to resume at the usual time. When the Court reassembled we were asked to adjourn the matter to enable an application to be made for the foreshadowed judgment and for leave to be given the Commission to discontinue the proceedings against A.P.M. We acceded to this application.

Before we did so we heard counsel for A.P.M. as fully as he desired to be heard on the whole matter. It was made clear to him that the Court had determined nothing and that all issues remained completely open.

As I understood his primary submission it was, at least as originally put, that certain statements made by members of the Court and its attitude taken as a whole would lead a fair-minded observer to think that the Court had pre-judged the question of whether the proceedings had become academic or futile because of the expressed attitude of the Amatil interests that they would in no circumstances sell the shares to A.P.M. It was said that this was an issue in the appeal and a matter upon which the primary judge had expressed a conclusion. The matter upon which the primary judge expressed a conclusion was the ineffectiveness, from a legal point of view, of the various resolutions and statements made on behalf of the Amatil interests. It was really that matter, which counsel for A.P.M. asserted we had pre-judged.

I have earlier referred to my own questions which demonstrated, I would have thought, that I could not see how what Amatil had said could be binding on it. But that is not all. Towards the close of the proceedings after we had been addressed by counsel for A.P.M. I said, "I would not have thought there would be much doubt his Honour's finding was right, but whether that is the end of it all, I do not know." After some further discussion between the Court and counsel for A.P.M., Sweeney J. said, "If it is of any assistance to you (counsel for A.P.M.), as at present advised I do not for a moment subscribe to the view that the offer was irrevocable. I simply have no view, I make no finding of any kind on it." Earlier his Honour had said, "... we do not adopt any of what is put to us. We are simply asked to adjourn the hearing of the appeal. If we do so and if you are able to persuade a single judge that the motion should be denied..., the appeal will come back to us."

In our concluding remarks we made it clear that by adjourning the proceedings we were not to be taken as having formed any views as to the issues raised in the appeal. We said categorically that we had not formed any such views.

In my opinion the submission that we had taken the view that the proceedings were futile because of the Amatil attitude is without foundation. To the extent that that view was expressed, it had nothing to do with the resolutions passed by Amatil; it was because the Commission no longer wanted the interlocutory relief but nevertheless wished to continue with proceedings in which it sought no more by way of final relief than a permanent injunction restraining the acquisition of the shares in F.C.L.

I confess to having had difficulty in understanding any other basis for the submission that we should disqualify ourselves because of apparent bias. But as best I can follow it it was said that the fair-minded observer would know that the Commission, at the time the hearing of the S.C.I. appeal commenced, was minded to continue with the proceedings for an injunction. If he had read the transcript of the proceedings before the primary judge, he would also know that the Commission was hoping to obtain some indication from the Court which would guide it in its future course of action. That was not something which the primary judge was prepared to give. In the submission of counsel for A.P.M. the Commission came away from the hearing on 13 December 1983 having made up its mind to bring the proceedings to an end. Therefore, so counsel submitted, the fair-minded observer would conclude that we had given the Commission an indication that if it wanted to discontinue the proceedings it would probably be given leave to do so. We had therefore prejudged or pre-determined, at least in the eyes of the fair-minded observer, the outcome of an application for leave to discontinue.

I have read the transcript of what occured on 13 December 1983 a number of times. With respect to the argument of counsel, I can find in it no more than firm statements by members of the Court which indicated to the Commission and to the other parties that if the proceedings were indeed academic they should be brought to an end. Whether they were academic or not was not a matter for the Court; it was a matter for the applicant Commission to determine for itself. So much was indicated by myself when I observed after reading the statement of counsel for the Commission that the view of the Commission was something to be judged by the Court, "On what evidence? The Court cannot lead evidence itself."

The reality of the matter was that the discussion which took place on 13 December 1983 crystallised the problem for the Commission in a way in which it had not been crystallised before. In essence it was forced to come to terms with reality. It was reminded of the continuing cost of the litigation, the possible wasteful expenditure of public time and money and the general desirability of bringing litigation which has no purpose to an end. Those being the circumstances, what all members of the Court were concerned to do was to emphasize to the parties, especially the Commission, that it was for them to take such steps as were appropriate to bring the litigation to an end if they were themselves of the view that it had no purpose.

When the matter was adjourned there was no intention to seek leave to discontinue without more. What was to be attempted was the obtaining of a judgment which would irrevocably bind the Amatil interests not to sell the shares to A.P.M. The fact that we had misgivings about such a course was not to the point. It was for the parties to make such application to a single judge as they thought fit. The application which was eventually made to Woodward J., and which has become the subject of the A.P.M. appeal, was different from any foreshadowed on 13 December 1983. That circumstance was of course by no means conclusive of the outcome of the application that we disqualify ourselves. But it served to show in what an open state the matter was when we adjourned and how inconclusively all had been left at that time.

A matter relied upon by counsel for A.P.M. was a remark made by me in the course of the argument of the Visy Board appeal. I said:

"I had the distinct impression, it seemed they (the Commission) were washing their hands of it. I could not understand this when I found out Mr. Williamson had previously said that he wanted to discontinue, but he was troubled about what had been said by the other Full Court in the judgment. I think the discussion then began in earnest. It might not be unfair to say that he and his client were placed under a certain amount of pressure. I may be wrong."

I reject the submission that the statements there made are capable of indicating to a fair-minded observer an appearance of having predetermined the outcome of the Commission's application for leave to discontinue. What I was referring to was the fact that the Commission, on 13 December 1983, was made to realise that it had to act without a nod from the Court and to take the responsibility for what it had done and what was involved in terminating the proceedings. It seemed to me, when I read what its counsel had said to Woodward J., that it wanted to stand on the sidelines. It wished to be seen to be fair to all the parties and to be able to leave it to the Court to tell it what it should do. What occurred on 13 December 1983 made it realise that it was not a matter for the Court but a matter entirely for the Commission itself. Really, counsel for the Commission had no justification for endeavouring, as he appears to me to have done, to implicate the Court in the ultimate decision which was to be made. If, as I believe was the case, he attempted to do this and was wrong in so doing, it cannot be the proper basis for an application of this kind to say that judges should disqualify themselves because they made it clear that the Commission must face up to its own problems. That was the pressure which was put upon the Commission and to which I refer in the above quoted remark.

For the above reasons I reached the conclusion that the members of the Court were not disqualified from hearing the A.P.M. appeal or from continuing with the hearing of the S.C.I. appeal.

In conclusion on this point I should say that I have endeavoured to understand and give the fullest weight to the submissions which were made on behalf of A.P.M. I have no reason to doubt that they were made in good faith and after due reflection. I am also conscious that a submission of this kind places judges in a difficult position. In a sense they become judges in their own cause. They may be inclined to give their own words a beneficial reading or a reading which they know their words were intended to have.

But the question must always remain an objective one. It is one of appearances. As best one can one has to place oneself in the shoes of a fair-minded observer who stands apart from the proceedings. The exercise is not an easy one and I hope I am conscious of this. But having endeavoured to perform it to the best of my ability, I feel bound to say that I have not been able to perceive any justification for the submission which was made.

Those being my reasons for the decision that the members of the Court were not disqualified, it is now appropriate to come to the substance of A.P.M.'S appeal against the grant by his Honour of leave to discontinue.

A.P.M.'s Case

Fundamentally the case which A.P.M. makes is that it is manifestly unjust to give the Commission leave to discontinue unless it gives up not only any right to bring further proceedings for an injunction, but any right to bring proceedings, in the event of the acquisition taking place, for an order of divestiture or for a penalty. A.P.M. should be free to enter the market without the taint of possible further Commission action against it attending it. Primarily it seeks dismissal but it would accept discontinuance if conditions were imposed preventing the bringing, not only of injunction proceedings, but of the other proceedings which I have mentioned. The main reasons why A.P.M. seeks to achieve this position are as follows:-

(1): It has always contended that its acquisition of the shares will not involve it in a breach of s. 50 of the Act.
(2): Prior to the Commission's action commencing, the Amatil interests were prepared to sell their shares to A.P.M., it being the highest bidder. If the Commission had not intervened the transaction would have been completed.
(3): A.P.M. believes that the reason why the Amatil interests have resolved not to deal with A.P.M. is partly at least because of possible future Commission action, particularly in the form of an action for divestiture. In A.P.M.'s submission the evidence amply supports its belief.
(4): If the threat of any further proceedings by the Commission is removed, A.P.M. has, as it sees the position, a greater chance of persuading the Amatil Board to resile from its firm statement that it will not deal with A.P.M. under any circumstances.
(5): In other words, its chances of persuading the Amatil Board to change its mind are substantially reduced if the Commission may bring a further proceeding for an order for divestiture if the acquisition takes place.
(6): The determination of the proceedings by discontinuance has, in a practical way, deprived A.P.M. of the opportunity of having it established that its proposed acquisition would not be in breach of s.50.
(7): A.P.M. nevertheless recognises that the Commission may bring the proceedings to an end. But in its submission it should only be permitted to do so by causing them to be dismissed. In that way, so it is submitted, an issue will be established which will prevent the Commission bringing any further proceedings for divestiture, penalty or any other relief. If leave to discontinue is granted, it should only be given on terms that the Commission is forever prevented from bringing any action, whether for injunction, divestiture, penalty, or otherwise, in respect of the proposed acquisition. Only in that way can justice be done to A.P.M.

In short, it is A.P.M.'s contention that manifest injustice will be caused to it unless the proceedings are brought to an end in such a way as to make it impossible for the Commission ever to bring proceedings against it again in respect of the acquisition of the shares.

Estoppel

Much of the argument concerned the question of whether, in the event of the action being dismissed, the Commission would be barred in a later proceeding from contending that acquisition of the shares held by Amatil in F.C.L. by A.P.M. would constitute a breach of s. 50 of the Act. In the submission of senior counsel for A.P.M. the Commission would be so barred. His primary submission was that the bar would arise by reason of the doctrine of res judicata or cause of action estoppel as it has been described in a number of recent authorities; see, inter alia, Thoday v. Thoday (1964) P. 181 per Diplock L.J. (as he was) at p. 197; Carl Zeiss Stiftung v. Rayner & Keeler Limited [1967] 1 A.C. 853 , amongst other places, per Lord Reid at pp. 912-913 and per Lord Wilberforce at p. 966.

Counsel's secondary submission was that there would arise an issue estoppel. In his reply he contended that if was of no consequence whether dismissal involved res judicata or issue estoppel; the position was the same in either case. Any further action by the Commission against A.P.M. in respect of the acquisition of the shares, whether proposed or actual, would be barred.

In the submissions of counsel for the various respondents, no bar was created. There was no room for the operation of cause of action estoppel and there would be no issue estoppel.

In the view that I take of the matter it may not be strictly necessary to reach a conclusion upon which of these competing contentions is correct. However, I think the better view is that, unless one does attempt to resolve the question which they raise for decision, one may not properly assess the strength or weakness of the overriding submission made on behalf of A.P.M. that the granting of the application in question by the learned primary judge worked a manifest injustice on his client. But I emphasise my use of the expression, "attempt to resolve." In my view the law in relation particularly to issue estoppel is not settled.

The starting point for the analysis and resolution of the competing contentions is to identify the cause of action which the Commission has relied upon in the principal proceedings. Its action is pursuant to s. 80 of the Act to restrain A.P.M. from engaging in conduct, which if carried through, would constitute a contravention of s. 50. In particular the injuction which the Commission would seek if the proceedings were to continue would be one which would restrain A.P.M. from attempting to contravene s. 50, from aiding, abetting, counselling or procuring a person or persons to contravene s. 50, and from inducing, or attempting to induce a person or persons to contravene s. 50. It is only where a person is engaging in conduct of this kind that, for relevant purposes, the Court has jurisdiction to grant an injunction.

From this it follows, in my opinion, that the cause of action which the Commission has is a cause of action for an injunction to restrain A.P.M. from, to use a compendious expression, engaging in conduct that would constitute a breach of s. 50 if it resulted in the acquisition of the shares. The relief sought is an essential part of the cause of action. It is only if the conduct amounts to an attempt, to aiding and abetting or to an inducement that the Court will have jurisdiction to grant the injunction. The analogous position in the common law is a case where damage is the gist of the action. An essential element in a cause of action for negligence is proof of actual damage. If that is not alleged and proved, there is no cause of action; Fleming on Torts, 5th Ed., p. 104.

It follows that in an action for divestiture pursuant to s. 81 of the Act a different cause of action is involved. The Court has jurisdiction to make an order of divestiture where there has been a breach of s. 50. Threatened breaches are of no consequence obviously because there can have been no transfer of the shares or assets. I am therefore of the opinion that there is no room here for the operation of res judicata or cause of action estoppel; if there is a bar it must arise by reason of issue estoppel.

Plainly enough, if the Commission proceeded and, after a hearing on the merits, lost on the question of whether by acquiring the shares A.P.M. would be in breach of s. 50, an issue would be established with the result that an action under s. 81, once the acquisition had taken place, would be barred because the issue of whether the acquisition would infringe s. 50 had been determined adversely to the Commission in the earlier proceedings; see Blair v. Curran (1939) 62 C.L.R. 464 per Dixon J. (as he was) at pp. 531-2; Thoday v. Thoday (supra at p. 198); Spencer Bower and Turner, Res Judicata, 2nd Ed., p. 150. But what is the position where there is no determination on the merits but the proceedings are simply dismissed perhaps after the Commission has said to the Court that it proposes to offer no evidence. If upon a reading of the pleadings and any other relevant material, it is perceived that there are a multiplicity of issues between the parties there will not be any issue estoppel because it is impossible to say upon what grounds the proceedings were dismissed. To say that they should be treated as having been resolved against an applicant or plaintiff on every issue is not correct. To take that view would be to equate issue estoppel with cause of action estoppel. The two are distinct; see, for example, the judgment of Fullagar J. in Jackson v. Goldsmith (1950) 81 C.L.R. 446 AT P. 466. His Honour's judgment was a dissenting one but his treatment of the law on the subject was unquestionably correct; see Spencer Bower and Turner (ibid. at p. 150).

Counsel for A.P.M. acknowledged this to be the law, but claimed that where there was only one issue in question between parties to a proceeding the result was different. Then it could be seen that the dismissal, although no hearing had taken place, did involve the determination as between the parties of that issue. Counsel for A.P.M. contended that an analysis of the pleadings led to the conclusion that, notwithstanding the complexity of this case, there was only one issue, namely, whether the acquisition of the shares by A.P.M. would involve it in a contravention of s. 50. It was for that reason that in his submissions in reply he equated, for the purpose of this case, res judicata and issue estoppel. For his case, it did not matter which was the applicable doctrine.

The essential paragraphs of the amended Statement of Claim are paragraphs 17 and 18. These are as follows:-

"17.: The firstnamed Respondent proposes to acquire all the issued shares in the capital of Fibre Containers.
18.: The acquisition of all the issued shares in the capital of Fibre Containers by the firstnamed Respondent would, or would be likely to, substantially strengthen the power of the firstnamed Respondent to control or dominate the paperboard market in contravention of section 50(1) (b) of the Act."

In its amended defence, A.P.M. has pleaded to those two paragraphs as follows:-

"17.: It admits that it proposes to make offers to the shareholders of Fibre Containers Limited to acquire their shares in that company on the terms set forth in a Part A Statement approved by the National Companies and Securities Commission on 4th May 1983. Save as aforesaid it does not admit paragraph 17 thereof.
18.: It denies each and every allegation contained in paragraph 18 thereof."

Although paragraph 17 of the defence at first sight might be thought to make a qualified answer in relation to the allegation made in paragraph 17 of the amended Statement of Claim, there can be no question but that A.P.M. does intend to endeavour to acquire the shares in F.C.L. The qualification which is made seems to me to have been made only to make it clear that A.P.M. intends only to act in accordance with the various provisions of the companies legislation. In other words, it will only acquire the shares if it can acquire them according to law. For that reason there is no issue concerning its intention to acquire the shares. It must follow that the only issue is whether the acquisition, if carried through, will constitute a breach of s. 50.

The question then is whether dismissal without a hearing on the merits can, in these circumstances, lead to an issue estoppel effectively barring the Commission from bringing further proceedings. We were not referred to any authority which is directly in point. In support of his submission counsel for A.P.M. relied on Lockyer v. Ferryman L.R. (1877) 2 App. Cas. 519 and South American and Mexican Company, Ex parte Bank of England (1895) 1 Ch. 37. But those are authorities which are concerned with res judicata, not issue estoppel. The same may be said of a passage cited from Daniell's Chancery Practice, 7th Ed., at p. 628; 8th Ed. at p. 686.

The authorities relied upon by counsel for the Commission do not go to the particular point relied upon by counsel for A.P.M. They are no more than statements of the principle or instances of its application unhelpful to the resolution of the present problem. It is necessary only to note them. They were Reg. v. Haughton Inhabitants (1853) 1 E. & D. 501; 118 E.R. 523; Reg. v. Hutchings L.R. (1881) 6 Q.B.D. 300 ; North Eastern Railway Company v. Dalton Overseers [1898] 2 Q.B. 66 ; James v. The Commonwealth (1935) 52 C.L.R. 570 at pp. 584 and 590-591; and Penn - Texas Corporation v. Murat Anstalt (No. 2) [1964] 2 Q.B. 647 . Reference was also made to Spencer Bower and Turner (ibid. at p. 152).

Some support for the proposition advanced by counsel for A.P.M. may perhaps be found in the judgment of Diplock L.J. in Thoday (supra at p. 198). His Lordship there said:-

"If in litigation upon one such cause of action any of such separate issues as to whether a particular condition has been fulfilled is determined by a court of competent jurisdiction, either upon evidence or upon admission by a party to the litigation, neither party can, in subsequent litigation between one another upon any cause of action which depends upon the fulfilment of the identical condition, assert that the condition was fulfilled if the court has in the first litigation determined that it was not, or deny that it was fulfilled if the court in the first litigation determined that it was."

It is his Lordship's use of the words "upon admission" which leads me to say what I have. On the other hand, I would hesitate before concluding that his Lordship intended to treat dismissal of a proceeding on the application of the moving party as necessarily involving the admission by that party of facts or matters pleaded, even by way of denial, by his opponent.

In Carl Zeiss Stiftung (supra) Lord Reid discussed a number of the authorities concerning issue estoppel (pp. 913-916). Amongst other things his Lordship said (pp. 915-916):-

"A case which has given rise to some difficulties is Hoystead v. Commissioner of Taxation [1926] A.C. 155 . There an appeal with regard to income tax for an earlier year had been decided on an assumption that certain beneficiaries under a will were joint owners. Then in a case as to liability to tax in a later year the commissioner tried to maintain that that assumption had been wrong but he was held to be estopped. Lord Shaw in delivering the judgment of the board, after citing numerous authorities, including the judgement of Lord Ellenborough C.J. in Outram v. Morewood , 3 East 346, said [1926] A.C. 155 at p. 170:

'It is seen from this citation of authority that if in any court of competent jurisdiction a decision is reached, a party is estopped from questioning it in a new legal proceeding. But the principle also extends to any point, whether of assumption or admission, which was in substance the ratio of and fundamental to the decision.'

Comments were made on that passage in New Brunswick Railway Co. v. British and French Trust Corporation Ltd. [1939] A.C. 1 by Lord Russell (at p. 28) and Lord Romer (at p. 42) and in Society of Medical Officers of Health v. Hope [1960] A.C. 551 at p. 566 by Lord Radcliffe. And there may well be a difference between a case where an issue was in fact decided in the earlier case and a case where it was not in fact decided because the earlier judgment went by default or was founded on an assumption. Indeed, I think that some confusion has been introduced by applying to issue estoppel without modification rules which have been evolved to deal with cause of action estoppel, such as the oft-quoted passage from the judgment of Wigram V.-C. in Henderson v. Henderson (1843) 3 Hare 100. But it is unnecessary to pursue that matter because in the present case the issues with regard to which the respondents plead estoppel were fully litigated in the West German court."

In the context of the case before him his Lordship went on to discuss the matter of issue estoppel, pp. 916 et seq. Amongst other things he said (p. 917),

"It seems to me that there is room for a good deal more thought before we settle the limits of issue estoppel."

In the course of his speech Lord Guest said (p. 934),

"The law on the matter is not altogether clear, but I am prepared to assume that, at any rate in relation to estoppel founded on an English judgment there may be issue estoppel."

Lord Upjohn said (p. 947):-

"Recently in Thoday v. Thoday (1964) P. 181 and in Fidelitas Shipping Co. Ltd. v. V.O. Exportchleb [1966] 1 Q.B. 630 the Court of Appeal applied to issue estoppel the full breadth of the observations of Wigram V.-C. in Henderson v. Henderson 3 Hare 100. While in this case it is not necessary to decide whether that is right, because for the reasons given in the answer to the first question that I posed for myself it does not arise, I should be reluctant to support that view. As my noble and learned friend, Lord Reid, has already pointed out there may be many reasons why a litigant in the earlier litigation has not pressed or may even for good reason have abandoned a particular issue. It may be most unjust to hold him precluded from raising that issue in subsequent litigation and see Lord Maugham's observations in the New Brunswick case [1939] A.C. 1 at p. 21. All estoppels are not odious but must be applied so as to work justice and not injustice and I think the principle of issue estoppel must be applied to the circumstances of the subsequent case with this overriding consideration in mind."

The dicta to which I have referred show that the doctrine of issue estoppel was in some respects in an uncertain state in England in 1966. I have read a great many authorities, some referred to in argument and some not, decided after 1966 in which the doctrine is stated or applied. These include Ramsay v. Pigram (1968) 118 C.L.R. 271 and Co-Ownership Land Development Pty. Limited v. Queensland Estates Pty. Limited (1973) 47 A.L.J.R. 519 per Walsh J. at p. 522. But none of these cases touch the present problem. In the light of the reservations expressed by the members of The House of Lords in Carl Zeiss Stiftung, it would seem to me unsafe to draw upon what Diplock L.J. said in Thoday as sufficient authority for the proposition advanced by counsel for A.P.M. Furthermore, in the absence, so far as I am aware, of any later relevant authority I would be reluctant myself to conclude that the proposition was sound. Nevertheless I do not gainsay that it may not ultimately prove to be correct. But I think it must be said that if one gives to the A.P.M. case the fullest weight which can be given it, the judgment of Woodward J. did no more than deprive it of a chance of persuading an appropriate court, in the event of further proceedings based on a breach of s. 50 of the Act, that those proceedings were barred by the doctrine of issue estoppel.

There are some other matters which should be mentioned. The Commission is the Crown; Thomson v. The Trade Practices Commission (1979) 27 A.L.R. 551 at p. 567; Allied Mills Industries Pty. Limited v. The Trade Practices Commission (1981) 34 A.L.R. 105 at pp. 116-118. At least in England there apparently exists a doubt as to whether issue estoppel can operate against the Crown. So much was stated by a Divisional Court as recently as last year; see Reg. v. Secretary of State for the Environment, Ex parte Hackney London Borough Council (1983) 3 All E.R. 358 per May L.J. (in whose judgment McNEILL J. agreed (p. 359)) at p.367. There is a question as to whether his Lordship was referring only to criminal cases. I refer to Director of Public Prosecutions v. Humphrys [1977] A.C. 1 . I do not pause to express a view on the matter. It is sufficient to say that what has been said in that case throws further doubt on the question of whether the doctrine can apply here.

Another matter is the question of public policy. It may be that the public interest is such as to require that the doctrine have no place in relation to proceedings brought by the Trade Practices Commission for threatened or actual infringements of the Act. Again, I express no view but I refer in passing to Law Society of New South Wales v. Weaver (1977) 1 N.S.W.L.R. 67 at pp. 73-74; cf. Kok Hoong v. Leong Cheong Kweng Mines Limited [1964] A.C. 993 at p. 1016.

Finally, on this topic I wish to say that it seems to me that there may be a question as to whether the doctrine of issue estoppel fits easily into a statutory cause of action such as that relied upon by the Commission in the present case. There may be many reasons why one would hold that in relation to such cause of action the doctrine had no place. Again, I express no view. Discontinuance or dismissal

The primary submission of counsel for A.P.M. was that, if the Commission wished to bring the proceedings to an end, it should seek their dismissal. His secondary submission was that if leave to discontinue was to be granted, it should only be granted on terms that no further proceedings of any kind, that is, for an injunction, divestiture or penalty, should be available to the Commission. He sought dismissal because of his submission that the Commission would be estopped from bringing further proceedings. My analysis of the implications of that submission shows, in my opinion, that it is doubtful to say the least, whether, in the event of dismissal prior to a hearing, any further proceedings by the Commission except proceedings for an injunction (in respect of which there may arise a cause of action estoppel) would be barred. But I do not go so far as to say that that is clearly so.

Those responsible for the drafting of the rules of this Court foresaw the need for the Court to say in an appropriate case what right a party seeking dismissal or leave to discontinue before a hearing on the merits should have to bring further proceedings for the same cause of action. So much is provided for in relation to dismissal in Order 35, Rule 6(1) which is as follows:-

"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."

It is to be observed in passing that the rule does not apply to cases which have been the subject of a hearing on the merits; see Newmont Pty. Limited v. Laverton Nickel NL (No. 2) (1981) 1 N.S.W.L.R. 221, a decision on the comparable, although somewhat different rule of the Supreme Court of New South Wales (Part 40, Rule 8). Some reliance was placed upon that case by counsel for A.P.M. But in my opinion its only effect is to emphasise that the purpose of the rule is to empower the Court to say in advance what further proceedings based on the same cause of action a party should be entitled to bring in the event that his proceedings are dismissed before a hearing on the merits.

Order 22 of the rules of this Court provides for withdrawal and discontinuance. The provision pursuant to which the Commission's application here was made was Order 22, Rule 2(1) (d). The leave of the Court is required. Order 22, Rule 7 provides:-

"A discontinuance under this Order as to any cause of action shall not, subject to the terms of any leave to discontinue, be a defence to a proceeding for the same, or substantially the same, cause of action."

The wording of this rule differs from that of Order 35, Rule 6 in that it refers to "a proceeding for the same, or substantially the same, cause of action." Order 35, Rule 6(1) uses the words, "so far as concerns any cause of action or the whole or any part of any claim for relief." But what both probisions may be said to do is to concentrate attention on the cause of action upon which the proceedings proposed to be dismissed or discontinued are based. It does not seem that the draftsman was concerned with problems which might arise in the future because the termination of the proceedings before hearing might create in favour of a respondent an issue estoppel. That may have been because the draftsman thought that there could be no question of an issue estoppel unless there had been a hearing on the merits, or it may be that his attention was not drawn to the problem. It is of no consequence which is the position.

I have embarked upon this discussion to provide a background for what I next say. It is, in my opinion, highly undesirable for courts in this day and age to leave parties to litigation which is to be terminated before a hearing in an uncertain state as to what further litigation concerning the same subject matter may be brought by one or the other in the future.

Whether the Court is concerned with dismissal before a hearing on the merits or leave to discontinue, the rules direct its attention, and also that of the parties, to what is to be the future position in relation to further reliance on the same cause of action. Thus the Court is empowered, in effect, to say whether there is to be cause of action estoppel or not. The fact that there is uncertainty concerning the creation of an issue estoppel where proceedings are dismissed seems to me to make it highly desirable for the Court to provide, if it is able to do so, for whether any issue estoppel is to exist or not. It cannot do so directly and, in relation to dismissal, the provisions of Order 35, Rule 6 are probably such as to prevent it doing so at all. But if a party, as has the Commission here, has made an application for leave to discontinue, then it seems to me that the Court in deciding whether to grant leave and, if so, upon what terms that leave should be granted, has a wide discretion to do justice between the parties.

Why A.P.M. seeks to force the Commission to bring about dismissal of the proceedings here is because it believes it will then be impossible for the Commission ever to proceed against it again, whether for injunction, divestiture or penalty, insofar as the relevant acquisition of shares is concerned. That will be so in its contention because of the operation of the doctrine of cause of action estoppel or because of the creation of an issue estoppel. But if, as I have concluded it is, A.P.M. is wrong in its submission based on cause of action estoppel, and wrong also, as I have concluded it may well be, in its submission based on issue estoppel, dismissal will not achieve it as much as would discontinuance on all the terms which it seeks to have imposed. Indeed, it is not impossible that it may be in a worse position if the circumstances were to change. It may be, in the event that there were a bare dismissal, that not even an action for further injunctive relief would be barred by cause of action estoppel. Depending on what changes in the future come about, the Commission might be entitled to institute further proceedings for an injunction, a course denied to it by the order under appeal.

I have said what I have in order to emphasise that both principal parties to this litigation will be left in an uncertain state if the Court does not, so far as it can, provide for what the position is to be in relation to further proceedings. It is only in this way that justice to both parties will be done. In an application for leave to discontinue the Court's discretion is at large; the specific words of Order 22, Rule 7 do not, in my opinion, restrict it. The Court is able to impose terms which are just, a course which it may not be able to take if it is dismissal which is sought.

If a party seeks to discontinue proceedings, a court should, in my opinion, lean towards giving him leave unless to do so will cause manifest injustice to his opponent. That is a matter with which I shall next deal. But the starting point for the discussion of it is the court's greater ability to do justice to both parties if the central question is upon what terms leave to discontinue should be granted. It is for that reason that I think that the real question which arises for consideration in this appeal is upon what terms the Commission should be permitted to discontinue the proceedings, not whether leave to discontinue should have been granted at all.

The preservation of the action for divestiture and for a penalty.

The essential problem then is what restrictions, if any, should be placed upon the Commission's ability to bring further proceedings in respect of the same acquisition or proposed acquisition.

Since we sit on an appeal against the exercise of a discretion, the question for us is somewhat different from what it was for his Honour. The direct question which we must answer is whether his Honour's discretion miscarried. It will not be shown to have done so unless it be demonstrated that he has acted upon a wrong principle, has allowed irrelevant matters to guide or affect him, has mistaken the facts or has not taken into account some material consideration. His discretion will also have miscarried if the result which has been reached is unreasonable or plainly unjust; see House v. The King (1936) 55 C.L.R. 499 at p. 505 and Adam P. Brown Male Fashions Pty. Limited v. Philip Morris Inc. (1981) 148 C.L.R. 170 at p. 176. So, subject to the question of whether it was appropriate to accept the undertaking by the Commission that it would not again institute proceedings for an injunction, the question is whether it was wrong to grant leave to discontinue unless actions for divestiture and a penalty, as well as a further action for injunction, were given up.

Because the exercise of a discretion may miscarry if the result leads to manifest injustice, I do not feel it desirable in this case to attempt to draw fine lines between appeals against the exercise of a discretion and appeals of other kinds. I think it is better to see whether what has been done is in accordance with the dictates of justice. If it is not, a further question may arise as to whether the Court ought nevertheless not to interfere.

The starting point for the resolution of the problem is the wish of the Commission, firmly expressed by counsel to Woodward J., to bring the proceedings to an end. Amongst other things counsel said:-

"In theory, of course, as has been said on a number of occasions and must be right, that subject to an order of the Court, in theory it must be open to the directors to change their mind, but having regard to the events which I have described, and most especially the events of this week, the steps taken to provide F.C.L. and Amatil before the Full Court, both in relation to the motions which itself offered and the way in which it was put alternatively, or made by the Commission to move of its own motion to the same effect, the Trade Practices Commission accepts that as a matter of commercial reality - and we submit to your Honour that as a matter of commercial reality Amatil will not sell its F.C.L. shares to A.P.M.

....

We are content to leave the situation where A.P.M. would be free to bid for the shares if it chose to do so, but the Commission takes that view in the firm belief that the commercial realities are otherwise. If A.P.M. can persuade the commercial participants otherwise then they will have that opportunity. I speak, of course, in the context of the existing proceedings which are for injunction to restrain A.P.M. from doing that. The point is that we seek discontinuance because of the assessment that has been made of the commercial realities and that is that the shares will not be sold to A.P.M.

...."

At that stage of the proceedings counsel did not offer any undertaking on behalf of the Commission not to take further proceedings against A.P.M. But having heard what its counsel had to say as to the terms upon which the Commission should be allowed to discontinue, he said in his reply:-

"The Commission would not resist a term that no action for an injunction be brought with respect to the acquisition of the shares by A.P.M.; in other words if one takes the substance of that - and we are not seeking to put it in any way that it should be taken as a turn about - what we say is that the Commission would accept the term which would have the effect. It would not come back to the Court seeking injunctive relief of the sort to which the discontinuance relates."

Woodward J. gave effect to what counsel for the Commission offered. In the course of his judgment he said:-

"When the rights of the T.P.C. on an application for discontinuance are thrown into the existing discretionary balance, I am satisfied that the application should be granted, on terms that T.P.C. pay A.P.M.'s taxed costs and undertakes not to institute any further proceedings for injunctions, or otherwise seek, to prevent the purchase of shares in F.C.L. by A.P.M. The words 'or otherwise seek' are within the spirit, though not the words, of the undertaking offered by T.P.C. I think some such addition is necessary. Such an undertaking would not prevent a later application for divestiture if T.P.C. saw fit to bring it."

The question is whether his Honour should have imposed the additional condition sought by A.P.M. In support of his submissions, its counsel relied strongly on what was said by Graham J. in Covell Matthews & Partners v. French Wools Limited (1977) 1 W.L.R. 876 . His Lordship said (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."

I shall mention the cases relied upon by his Lordship for what he there said a little later.

The dictum of Graham J. which I have cited was adopted and applied by Whitford J. in Young, Austen & Young Limited v. British Medical Association (1977) 1 W.L.R. 881 at p. 886. Covell Matthews itself went on appeal of the Court of Appeal ( (1978) 1 W.L.R. 1477 ). The appeal was dismissed. There was no dissent from what Graham J. had said in the passage quoted from his judgment.

The English rule with which Graham J. was concerned is Order 21, Rule 3. It is in somewhat different terms from the corresponding rule here under consideration, Order 22, Rule 2, but nothing turns on the differences which there are between the two provisions.

I am content to adopt what Graham J. said in Covell Matthews as providing a general indication of the way in which the Court should approach an application for leave to discontinue. But I do so on the clear understanding that it provides a guide only. The discretion to grant leave is a wide one. A dictum such as that propounded by Graham J. should not be allowed to so fetter the discretion which the rule confers that it replaces the rule itself. With respect to counsel for A.P.M., I think he endeavoured to take too much from what Graham J. said. He seemed to assert that it warranted the view that leave to discontinue would never be granted unless justice in absolute terms was done to the party opposing the application. I do not take that to be what Graham J. meant to say. His use of the words, "if it can" makes that clear. If, contrary to that view, Graham J. was intending to lay down some absolute rule I would respectfully agree with Woodward J. that the dictum goes too far.

The other matter in what Graham J. said upon which counsel placed strong reliance was his Lordship's reference to the court needing to be careful to see that a defendant is not deprived of some advantage which he has already gained in the litigation. One has to understand that statement in the light of the authorities to which Graham J. referred (supra at p.879) and from which his dictum was distilled. Those authorities were Stahlschmidt v. Walford (1879) 4 Q.B.D. 217 ; Fox v. Star Newspaper Co. Ltd. [1898] 1 Q.B. 636 ; [1900] A.C. 19 , and J.T. Stratford & Son Ltd. v. Lindley (No. 2) (1969) 1 W.L.R. 1547 . There is a question, in my opinion, as to whether the kind of advantage to which Graham J. was alluding could possibly be of the kind which counsel for A.P.M. claimed his client had gained here. But, as will be seen, I do not need to resolve that question.

The advantage which counsel claimed had accrued to A.P.M. was said to arise because of the simultaneous giving of undertakings to the Court by A.P.M. and S.C.I. that they would not, pending the outcome of the proceedings, acquire the shares held by the Amatil interests in F.C.L. Counsel sought to take from this an agreement, which apparently bound or at least affected, the Commission in such a way that it was not entitled to discontinue the proceedings nor seek the release of the undertakings until the proceedings were determined. At first, so it seemed to me, counsel put his case so high as to claim a hearing upon the merits. Later, however, he recognised, rightly in my opinion, that his client could not prevent the proceedings being dismissed, for example, for want of prosecution or because no evidence was offered in support of the Commission's case.

Counsel relied very strongly on a number of dicta in the judgments of the members of the other Full Court which had earlier considered whether the undertakings should be released; A.P.M. Investments Pty. Limited v. The Trade Practices Commission (1983) 49 A.L.R. 475 . Those judgments were delivered in an appeal from the grant of an application made by S.C.I. and the Amatil interests that both S.C.I. and A.P.M. be released from their undertakings. But, unlike what is now foreshadowed, the proceedings for a permanent injunction were to be kept on foot and the Amatil interests offered an undertaking, which Woodward J. accepted, that they would not sell their shares in F.C.L. to A.P.M. until the proceedings were concluded. That was the setting in which the statements relied upon by counsel for A.P.M. were made by the members of the other Full Court.

As indicated, counsel's reliance on the judgments was extensive. I do not refer expressly to all the passages to which we were taken. For the purpose of dealing with the argument, it is enough to set out what Jenkinson J. had to say on the matter, namely (pp. 526-7):-

"Although the undertakings are expressed to endure until the determination of the proceeding or until further order, the circumstances in which each person gave his undertaking were, in my opinion, such that none of those persons could reasonably have contemplated as possible his release from his undertaking before determination of the proceeding, unless circumstances the existence or the significance of which could not reasonably have been foreseen on 23 May 1983 should be demonstrated to make it unjust that such a release be refused, or, possibly unless the court should restrain A.P.M. Investments by interlocutory order from buying the shares. (I express no opinion whether the making of such an order would justify release from any of the undertakings.) The undertaking of each was given upon the condition that the others' undertakings be given. Each suffered a detriment in exchange for the advantages which the undertaking of one or more of the others conferred on him. There is, in my opinion, nothing in the evidence to justify a conclusion that any of the respondents gave his undertaking for any reason but that he conceived the giving of the undertaking to serve his own interests better than the withholding of the undertaking."

Similar conclusions were reached by Smithers J. (p. 486) and Fitzgerald J. (p. 513).

All I would say about these and other statements in the judgments along the same lines is that they were expressed in relation to a very different factual situation from that with which we must deal. Here the proceedings themselves are to be discontinued. No further application for injunctive relief, permanent or otherwise, is to be made. All undertakings will cease to have effect upon the filing of the notice of discontinuance if leave to discontinue be given. All parties will then be free to deal in the shares. In the background will be the threat of an action for divestiture, and perhaps for a penalty, if A.P.M. persuades the Amatil interests to sell to it but that is all. In my opinion it is taking far too much from the judgments of the other Full Court to conclude that the judges there were intending to express the view that the Commission was bound to maintain proceedings, which it considered had no further purpose, until the question of whether the acquisition bt A.P.M., if it took place, would involve it in a breach of s. 50 of the Act was determined. In my opinion A.P.M. has gained no such advantage from the litigation. It is for that reason that I do not need to consider what precisely Graham J. meant by his use of that phrase in Covell Matthews.

I return to what, as I have earlier said, I consider to be the essential question. What in all the circumstances do justice and fairness require? In particular do they require an undertaking from the Commission that it will not initiate proceedings for divestiture or a penalty if A.P.M. acquires the shares. Woodward J. decided that no such undertaking should be required. I respectfully agree with his conclusion and with his reasons therefor. I do not refer to the detail of these. That has been done in the judgment to be delivered by Sweeney J. In saying what I have, I have gone further than I need have done. The appeal being from the exercise of a discretion, it is necessary for A.P.M. to show that his Honour's discretion miscarried. It follows that I am clearly of opinion that it did not.

There is one matter, however, which I would mention specifically. If the Commission had made no application for an injunction but had waited to see whether A.P.M. acquired the shares, it would have been open to it, if it thought it appropriate, to institute proceedings for divestiture and also a penalty. That was something which A.P.M. must always have realised was a possibility. If the judgment of Woodward J. stands, all parties, subject to what I would further say, will be placed in the same position as they were in immediately before the proceedings were commenced and the undertakings given. A.P.M. is free to acquire the shares if it can persuade the Amatil interests to sell to it. The qualification I make to that statement is at the heart of A.P.M.'s resentment at the course of events which has overtaken it. If no proceedings for an injunction had been instituted, it is not improbable that the shares would long since have been acquired by A.P.M. If it fails to acquire them, it will be because between May 1983 when the undertakings were given and the present time, the Amatil interests changed their minds. Thus if it had not been for the proceedings, A.P.M. would have achieved its object albeit that the Commission might have applied for divestiture. A.P.M. feels and will probably always feel that it was the intervention of the Commission and the taint of illegality which its proceedings caused which have placed it in such a difficult position.

I understand fully the resentment which A.P.M. must feel. It is something for which one must have much sympathy. But what has happened is not, in my opinion, due to any wrong conduct on the part of the Commission or any of the other parties to this litigation. It is a consequence of the existence of the Act itself and of its administration by the Commission. As the majority of the High Court in Thomson Australian Holdings Pty. Limited v. The Trade Practices Commission (1981) 148 C.L.R. 150 said (p.164):-

"The appellant is bound to accept any damage to its business which is consequential upon the enforcement by the Commission against the defendants of the provisions of the Trade Practices Act so long as that damage does not constitute an infringement of the appellant's legal rights, if any."

Although what their Honours there said was directed to a somewhat different problem, it is an apt statement of what has happened here. That must be so when one bears in mind that the Act is not concerned with either benefitting or disadvantaging the companies engaged in a takeover battle. Its purview and purpose are to protect the public interest against a takeover or merger which by s. 50 is made unlawful. If companies engaged in a struggle such as the present are hurt because of the administration of the Act, or if the market for shares is held up because of litigation, consequent upon the Commission's view that there is a threatened breach of the law, that is a consequence which the parties must bear. a fortiori is that the case if circumstances change to the disadvantage of a party by reason of the institution by the Commission of proceedings taken in good faith.

It is for reasons such as I have just mentioned that I would respectfully disagree with that which Smithers J. said in his judgment in the earlier case (49 A.L.R. at p. 485) which seems to me to have been intended to persuade the Commission in a situation such as this to act only after an acquisition has taken place. My own respectful view, for what it is worth, is that the matter will always be one for the Commission to act as it thinks appropriate in the public interest. An application for an injunction is one of the weapons the legislature intended it to have in its armoury. It is a matter for it to determine the circumstances under which it will be used. The propriety of the undertaking offered by the Commission not to take proceedings for further injunctive relief.

It remains to consider whether the Commission acted unlawfully in offering the undertaking not to take further proceedings for an injunction. None of the parties was concerned to argue that matter. For that reason counsel for Visy Board sought to be heard. He contended that his client was entitled to be added as a party because, within the words of Order 6, Rule 8 of the Rules, it either ought to have been joined as a party or was a person whose joinder was necessary to ensure that all matters in dispute might be effectually and completely determined and adjudicated upon. Alternatively, he sought leave to intervene; and as a last resort sought to be heard as amicus curiae . We did not think it necessary to determine whether Visy Board should be added as a party or whether it should be permitted to intervene. But in the absence of any submission on the point by any of the parties we thought it desirable to hear what counsel had to say and this we did.

The substance of the matter relied upon by counsel for Visy Board has caused me some concern. In my opinion more is involved than the bare question whether, by acting as it has, the Commission has unlawfully fettered itself in the future exercise of its discretion and powers. That is because the Court itself becomes involved by reason of its acceptance of the undertaking. As an undertaking to the Court is given in lieu of an injunction and is enforceable in like manner, the principles which govern the grant of an injunction by a court must guide it in deciding whether it should accept an undertaking; the Thomson Australian Holdings case (supra at p. 165). The Court added (ibid.):-

"Limitations which affect the court's jurisdiction or power to grant a final injunction must be observed in the acceptance of an undertaking when it is offered as a substitute for a final injunction. The court cannot escape such limitations by the expedient of accepting an undertaking in lieu of an injunction. The court cannot put itself in the position of enforcing conduct which it has no capacity to command or compel.

....

In general the court must, in deciding whether it will accept from a defendant an undertaking to which the plaintiff takes no exception, be guided by the principles which apply to the making of a consent injunction, principles which we have already discussed."

In Thomson's case the High Court was concerned with the powers conferred on the Court by s. 80 of the Act to grant injunctions. Section 80 was amended to overcome the decision (Act No. 39 of 1983, s. 3 and Schedule 1). But in relation to a case such as the present it does not seem to me that the power of the Court to accept an undertaking such as that here in question could derive from s. 80 of the Act, whether in its original or amended form.

No argument was addressed to us on this point, but going as it does to our jurisdiction and power, it is necessary to reach a conclusion concerning it. Elsewhere in the judgment of the majority in the Thomson case it is said (pp. 165-166):-

"Nothing we have said is to be taken as throwing doubt on the practice of the courts in accepting undertakings to publish an apology in defamation cases and in accepting undertakings by a defendant to pay a particular account as a basis for assessing damages. In each of these two instances what the defendant undertakes to do is clearly relevant to the court's function in assessing damages - the publication of an apology mitigates damages and the payment of an account has a similar effect."

I do not read what is there said as an exhaustive statement of the circumstances in which a court may accept undertakings which, if in the form of orders, the court would have no power to make. Furthermore, one needs to bear in mind that in the passage earlier cited the judges were referring only to an undertaking "when it is offered as a substitute for a final injunction." The undertaking here in question is not of that kind notwithstanding that it is given as a condition of leave to discontinue the proceedings.

Plainly this Court has power to grant leave to a party to discontinue a proceeding. The very rule pursuant to which that may be done in many circumstances requires the leave of the Court to be obtained before discontinuance may take place. My earlier discussion of the authorities shows that the Court must always be concerned with the terms which ought fairly be imposed upon a party seeking leave. In these circumstances I conclude that Woodward J. had the necessary jurisdiction and power to accept the undertaking in question. To do so was a necessary adjunct to his power to give leave to discontinue. It follows that if the Commission were empowered to give the undertaking, the Court was empowered to accept it.

I turn to the question of the Commission's power. At first sight there appears to be a degree of undesirability in the Commission restricting itself as it has. But that does not assist much in resolving the problem. The question is one of power. The Act is remarkably silent on what the Commission's powers are. By sub-sec. 6A(2) the Commission is constituted a body corporate with perpetual succession. It may acquire, hold and dispose of real and personal property and it may sue or be sued in its corporate name. Section 7 provides for its constitution. Section 28 vests in the Commission certain functions with regard to the dissemination of information, and s. 29 obliges it to comply with certain directions of the Minister. Part VI of the Act is entitled "Enforcement and Remedies." Sections 77, 80 and 81 are to be found in that Part. Section 77 empowers the Commission to recover the pecuniary penalties provided for in s. 76. Section 80 empowers the Commission, amongst others, to apply for an injunction to restrain certain conduct including threatened breaches of the Act. By sub-sec. (1A) no person other than the Minister or the Commission may seek an injunction in respect of a threatened contravention of s. 50. Section 81 empowers the Commission, amongst others, to seek an order of divestiture.

A reading of the Act as a whole, discloses, in my opinion, that the Commission has been constituted along with the Minister, the guardian of the various public interests which the Act is intended to preserve and protect. Furthermore, although the Commission's powers are stated with the economy of language to which I have referred, it seems clear that it was intended to have a wide discretion as to whether it instituted proceedings or not. Nothing in the Act necessarily obliges it to take action in a particular case.

If it has a wide discretion as to whether to institute proceedings or not, it seems to me to follow that it must have an equally wide discretion to decide whether to maintain existing proceedings or to bring them to an end. If in good faith it decides, as it has done here, to bring proceedings to an end, it must also be empowered, again in good faith, to decide upon what basis the proceedings are to be terminated. Once proceedings are instituted by the Commission, it is of course an ordinary litigant. It takes the Court's procedures as it finds them. The rights, obligations and duties which they confer or impose apply to all litigants, whether they be governments or their agencies, corporations or private citizens. All are equal before the law. If justice and fairness dictate that the Commission should in consequence of being given leave to discontinue a proceeding, give up the right to bring further proceedings of a like kind, then it is only right that the Commission, like any other litigant, should have to accept that as a condition of being granted the leave which it seeks.

If the matter is looked at in this way, as in my opinion it should be, then I can see no problem in the Commission giving the undertaking which it has. In his Honour's view the demands of justice required that it be given. It was offered voluntarily by the Commission. I do not see how his Honour's acceptance of it could be said to disclose error. The Commission has not acted unlawfully, in bad faith, or otherwise beyond its powers. In the result I am satisfied that the Commission was empowered to give the undertaking and the Court empowered to accept it. In all the circumstances it was proper that it should have been so given and accepted.

Conclusion

For the foregoing reasons I am of opinion that the A.P.M. appeal should be dismissed. I would order A.P.M. to pay the costs of all other parties in relation to its application that the members of the Court disqualify themselves from hearing the appeal. I would order A.P.M. to pay the Commission's costs of the appeal. I would stand over the question of what other orders for costs should be made for argument in due course.

The Visy Board Appeal

Insofar as the appeal challenged the Commission's decision to seek leave to discontinue the proceedings and to give the undertaking not to institute further proceedings for injunctive relief, I would not wish to add to what I have said in relation to those matters when dealing with the A.P.M. appeal. I did not there deal specifically with the decision to discontinue. But for the reasons given it would seem to me to be impossible to argue that in all the circumstances of this case it was in some way unlawful or improper for the Commission to seek to take that course.

The remaining matter relied upon, which seemed to me to be the real matter upon which counsel for Visy Board based his submissions, was the acceptance by the Commission of the costs offer made to it on behalf of the Amatil interests. It was said that this was what triggered the decision to seek leave to discontinue. Not to put too fine a point on it, the substance of the submission was that the Commission had been bought off with an offer to pay costs on a most generous basis. On this aspect of the case I am in complete agreement with the judgment of Lockhart J. I agree particularly with his approach to the problem which involved him in assuming that the costs offer was a factor taken into account by the Commission in deciding to discontinue. It seems to me that that is the reality of the matter. I see nothing unlawful or improper in the Commission having regard to the costs offer in this way. But I make it clear that, although I think it was one of the factors, it was not the only factor or the most important factor. In those circumstances it was perfectly proper for the Commission to take it into account in determining what it should do.

I would dismiss the Visy Board appeal. It should pay the Commission's costs. The question of whether it should pay the costs of any other party should be stood over for later argument.

The S.C.I. Appeal

In my opinion this appeal should be dismissed. My reasons for that view are, however, different from those of the primary Judge. The considerations to which they give rise have caused me to think at times that the appeal should be allowed; but on reflection I think that they lead to the conclusion that it should be dismissed.

Having read his Honour's judgment, it is my respectful conclusion that he allowed what what had been said by the other Full Court to weigh too heavily with him. The factual situation which confronted his Honour was very different from that with which that Full Court had to deal. No longer was there to be any interlocutory restraint on any party, including A.P.M., preventing dealings in the F.C.L. shares. Notwithstanding that the proceedings were to remain on foot, all interlocutory restraints were to go. That is the starting point. The next factor to be weighed in the balance is that the Commission did not oppose the application for the release of the undertakings. Counsel for the Commission said to Woodward J.:-

"The Commission would consent to an order in terms of paragraph 1 of the Notice of Motion, that is the paragraph to the effect that all undertakings be lifted."

Moreover, in the passage already cited from counsel's submission to Woodward J. (supra at pp. 9-10) it is clear that the Commission was looking for guidance from the Court as to whether it should bring the proceedings to an end. It had lost its enthusiasm for them. But it was not prepared to say categorically that they had no further purpose. So, for the time being, they were to remain on foot.

But (and I have remarked on this before when dealing with the disqualification submission) the release of the undertakings would, in all probability, make the proceedings for a permanent injunction academic. There would be no restraint preventing the sale of the shares. The undertakings were given at the behest of the Commission. It no longer wanted them. True it is that the proceedings were to be kept on foot, but so far as the Commission was concerned, they would become an empty vessel. It must have seemed to all parties at that time that it was highly unlikely that they would ever be prosecuted.

In saying what I have, I have not overlooked the reasons for the Commission's attitude. It was the Commission's firmly held belief that the Amatil interests would never sell to A.P.M. If it had not been for that belief the Commission's attitude would undoubtedly have been otherwise.

All so far would tend to lead one to think that his Honour's decision was an erroneous one and ought to be reversed, unless it could be said, that although one might not oneself agree with it, it was not shown that the exercise of his discretion had miscarried.

But it has to be remembered that the proceedings were to be kept on foot. The Commission had not changed its mind that A.P.M. would be in breach of s. 50 of the Act if it acquired the shares. The interlocutory restraints might no longer be required by the Commission because it was confident that the Amatil interests would not sell to A.P.M. But the proceedings would continue and thus remain as a vehicle available to be used for a further interlocutory application for an injunction if the unexpected happened and the Commission learnt of it in time to seek to stop it. Furthermore, the Amatil interests would know this. That very circumstance would tend to dissuade them from selling to A.P.M. If they were to do so, they would know that there was a very real chance that A.P.M. might again be restrained before any transaction could be completed. Again, their attempt to sell would be frustrated; they would be back where they were. This would tend to drive them to the S.C.I. bargaining table and refuse to have anything to do with A.P.M., notwithstanding that its offer might be more attractive.

It is for those reasons that I am of opinion that it was right to refuse to release the undertakings. The S.C.I. appeal should be dismissed. Questions of costs should be the subject of later argument.

Visy Board - Appeal against refusal to review the decision of the Attorney-General

It remains only to give my reasons for concluding that this appeal should be dismissed. I am in general agreement with the reasons given by Sweeney and Lockhart JJ. and have nothing to add.

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