Australian Securities Commission v Deloitte Touche Tohmatsu

(1996) 70 FCR 93
136 ALR 453

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Australian Securities Commission v
Deloitte Touche Tohmatsu (formerly known as Deloitte Haskins & Sells & Deloitte Ross Tohmatsu)

Court:

Judges: Beaumont
Drummond
Sundberg JJ

Subject References:
Administrative Law
judicial review of decision by the Australian Securities Commission to cause proceedings against former directors and auditors to be taken in the name of the company under s.50 of the Australian Securities Commission Act 1989
matters relevant to the exercise of discretion in the public interest to commence proceedings
rule in Foss v Harbottle
whether policy of the common law that the directors (alone) of a wronged company should determine whether to commence proceedings in the company's name a relevant consideration
whether failure to take such a consideration into account vitiates ASC's decision to litigate
opposition of current directors to commencement of proceedings against former directors
no evidence of opposition to commencement of proceedings against former auditors
nothing in language of provision indicating requirement for importation of Foss v Harbottle consideration
whether correspondence exchanged after decision was made relevant
whether possibility of proceedings resulting in double benefit to shareholders a relevant consideration
whether impact of litigation upon current partnership of auditors not involved in impugned audit a relevant consideration
discretion of ASC essentially unconfined
Corporations
actions by and against corporations
decision by the Australian Securities Commission to cause proceedings to be begun and carried on in the name of a company under s.50 of the Australian Securities Commission Act 1989
rule in Foss v Harbottle
policy of the common law that the directors (alone) of a wronged company should determine whether to commence proceedings in the company's name
whether Foss v Harbottle consideration a relevant consideration under s.50 of the Act
where it appears to [the ASC]
intention to confer an extremely wide discretion
obligation only to take honest...view of the facts or law which could reasonably be entertained
the public interest
considerations not closely confined
evaluation of the public interest a question essentially one of fact and degree... not easily susceptible to judicial review
technical approach to statutory construction to be eschewed

Legislative References:
Australian Securities Commission Act 1989 - 50
Administrative Decisions (Judicial Review) Act 1977 - the Act

Case References:
Minister for Aboriginal Affairs v Peko-Wallsend Ltd - (1986) 162 CLR 24
Somerville v Australian Securities Commission - (1995) 60 FCR 319
Neate v Australian Securities Commission - (1995) 60 FCR 518
Minister for Aboriginal Affairs v Peko-Wallsend Ltd - (1986) 162 CLR 24
Re Excel Finance Corporation Ltd; Worthley v England - (1994) 52 FCR 69
Robinson v Sunderland Corporation - [1899] 1 QB 751
Smith v Browne - [1974] VR 842
Secretary of State for Employment v Associated Society of Locomotive Engineers and Firemen (No. 2) - [1972] 2 QB 455
O'Sullivan v Farrer - (1989) 168 CLR 210
Re Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia - (1987) 72 ALR 1
Right to Life Association (NSW) I v Secretary, Department of Human Services and Health - (1995) 128 ALR 238

Hearing date: 17 July 1996
Judgment date: 28 August 1996

Sydney

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THE COURT ORDERS:

1.

Appeal allowed, with costs.

2.

Set aside the orders made at first instance on 4 April 1996; in lieu thereof, order that the application be dismissed, with costs, other than costs dealt with by orders for costs made before 4 April 1996.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.