Centre for Corporate Law and Securities Regulation
Faculty of Law, The University of Melbourne
with the support of
The Australian Securities Commission,
the Australian Stock Exchange
and the leading national law firms:
Allens Arthur Robinson Group
Blake Dawson Waldron
Clayton Utz
Corrs Chambers Westgarth
Freehill Hollingdale & Page
Mallesons Stephen Jaques
Editors: Kenneth Fong, Dr Elizabeth Boros and Professor Ian Ramsay
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CONTENTS
1. RECENT CORPORATE LAW DEVELOPMENTS
(A) Company Law Review Bill Update
(B) Waterfront Dispute
(C) ALP Proposes Legislation to Support Job Security
(D) Overseas Futures Exchanges Approved
(E) Recent UK Corporate Law Reform Developments
(F) Managed Investments Bill
2. RECENT CORPORATE LAW DECISIONS
(A) Kerol Pty Ltd & Noel Ross Edge v
Vergeld Engineering Pty Ltd (in voluntary liquidation), Tom Eldic &
Gordon Ralph Vergelius
(B) Jageev Pty Ltd v Francis Mervyn Deane
(C) Boral Energy Resources Ltd v TU Australia
(Queensland) Pty Ltd
(D) Coles Myer Ltd v Commissioner of State
Revenue
3. RECENT ASX DEVELOPMENTS
(A) Demutualisation Changes
(B) Listing Rule Amendments
4. RECENT ASC DEVELOPMENTS
(A) Corporate Governance Instrument
Permits Collective Action by Institutional Investors
(B) Warning on Investor Schemes
(C) Senior NSW Appointment
(D) AAT Affirms ASC Cash-Box Prospectus Refusal
5. RECENT CORPORATE LAW JOURNAL ARTICLES
7. ARCHIVES
9. MEMBERSHIP AND SIGN-OFF
10. DISCLAIMER
(A) COMPANY LAW REVIEW BILL UPDATE
Below is the text of a letter, released on 20 May 1998, which Senator
Ian Campbell, Parliamentary Secretary to the Treasurer, has been sending
to interested persons regarding the status of the Company Law Review Bill:
'I am writing to keep you informed about the Government's consideration
of the Company Law Review Bill.
You will be aware that the Bill has been passed by the House of Representatives
and that on 1 April 1998 the Parliamentary Joint Committee on Corporations
and Securities recommended that, subject to any minor or technical amendments,
the Bill be passed in its current form. Senator Murray made a minority
report on the Bill raising a number of corporate governance issues.
The opposition has since indicated that it will be moving amendments
to the Bill in the Senate addressing a number of corporate governance issues
for listed companies. I understand that these amendments would, for example:
- Allow a single director to call a general meeting.
- Require 28 days notice to be given of a general meeting.
- Require companies to specify in notices of a general meeting a fax
number to which proxies may be sent.
- For resolutions decided on a show of hands, require disclosure of
how the proxies were directed to vote.
- For resolutions decided on a poll, require disclosure of the number
of votes cast for, against and abstaining on the resolution.
- Require disclosure to the ASX of information disclosed to the US
SEC, the New York Stock Exchange and a prescribed stock exchange.
- Require the inclusion of a management discussion and analysis in
the directors' annual report to members.
- Require disclosure of the company's policy for remunerating directors
and senior executives of the company, the relationship between the policy
and the company's performance, and the remuneration (by component) paid
to the directors and the 5 most highly remunerated officers.
Senator Murray has also indicated that he will be proposing amendments
addressing similar issues.
The Government has previously indicated that it would like the Bill
to commence on 1 July 1998. This would allow the Bill to commence at the
same time as the proposed commencement of a number of Bills implementing
recommendations of the Wallis Report and also the establishment of the
Australian Securities and Investment Commission. Commencement on this date
would also permit companies to take advantage of long awaited reforms including
on-line company registrations and the preparation of concise financial
reports.
Accordingly, for some of the measures proposed by the opposition, particularly
those for which the Government has previously indicated its position, any
reconsideration of the issues by the Government could involve a deferral
of the Senate's consideration of the Bill until later in 1998 and therefore
a later commencement date.
The Government is considering amendments to the Corporations Law in
relation to directors' duties as part of the Corporate Law Economic Reform
Program. The Parliamentary Joint Committee on Corporations and Securities
is currently undertaking an inquiry into draft legislation exposed for
public comment as part of this initiative.
Any measures changing the rules concerning corporate governance would
require careful consultation with the interested parties to ensure that
the changes appropriately balance the competing interests.
In the interest of achieving early passage for the Company Law Review
Bill, I would prefer that the proposed amendments be considered in the
context of the Parliamentary Joint Committee on Corporations and Securities
hearings on the Corporate Law Economic Reform Program draft legislation.
This course has the advantage of giving all the interested parties an opportunity
to consider the proposals and the text of any draft amendments to the Corporations
Law.
Yours sincerely
Senator the Hon. Ian Campbell'
(Contributed by Nicholas Le Mare, Solicitor, Corrs Chambers Westgarth)
Editor's Note: A major seminar on the legal issues arising from the
Waterfront Dispute will be held in Melbourne on 24 June 1998; see Item
6 of this Bulletin for details.
(a) Background
Prior to September 1997, the companies within the Patrick Stevedoring
Group (Patricks) which owned the stevedoring businesses also employed the
unionised workforce and held significant assets.
In September 1997, Patricks implemented a restructure whereby the functions
of employing its unionised workforce and owning its stevedoring business
were divided into different companies. The stevedoring businesses and assets
previously held by the employer entities were transferred to other companies
within the Patricks Group. In addition, the employer entities entered into
various labour supply agreements with the owner entities to supply Patricks
with labour. As a consequence, the labour supply agreements became the
major asset of the employer entities.
Significantly, the labour supply agreements were terminable by the owner
entities without notice in circumstances of industrial action. Also, the
details of the corporate restructure were not made known to Patricks' employees
or the Maritime Union of Australia (MUA).
In late 1997 and early 1998, Patricks' employees engaged in industrial
action, most notably at Melbourne's No 5 Webb Dock.
On 6 April 1998, the MUA and the Patricks' employees formed the view
that Patricks was about to dismiss its entire unionised workforce. As such,
on 6 April 1998, the MUA and the employees applied to the Federal Court
for interlocutory orders to prevent Patricks from dismissing its unionised
workforce until such time as the matter could be heard in full.
The Court listed the hearing in relation to the interlocutory orders
for 8 April 1998.
Meanwhile, on 7 April 1998, the owner entities, in response to the spate
of industrial action, terminated the labour supply agreements with the
employer entities. As the major asset of the employer entities was lost,
they were placed into administration on the ground that they were insolvent.
Late in the same evening, Patricks published a press release indicating
that all displaced employees would be eligible to receive their full leave
and redundancy entitlements. Also on 7 April 1998, the owner entities entered
into new arrangements with other entities affiliated with the National
Farmers Federation (NFF) to provide non-unionised labour.
(b) Justice North's Decision At First Instance
The essence of the application made by the MUA and the employees before
Justice North was to preserve the pre-7 April 1998 position pending determination
of the matter at a full trial of an alleged illegal conspiracy to perform
an illegal act in breach of the Workplace Relations Act.
The respondents to the application were the employer and owner entities,
other group companies, their holding company, the NFF affiliated companies,
the directors of the various companies, the Commonwealth of Australia and
the Minister for Industrial Relations, Mr Peter Reith.
In deciding whether to grant temporary relief, Justice North had regard
to two issues:
- whether the MUA had raised a serious question to be tried; and
- whether, on the balance of interests, it was appropriate that temporary
orders be made.
In relation to the first issue, the MUA alleged, among other things,
conduct in breach of section 298K(1) of the Workplace Relations Act. Under
section 298K(1):
'An employer must not, for a prohibited reason, or for reasons that
include a prohibited reason, do or threaten to do any of the following:
- dismiss an employee;
- injure an employee in his or her employment;
- alter the position of an employee to the employee's prejudice.'
The prohibited reasons are set out in section 298L. Under section 298L:
'Conduct referred to in subsection 298K(1) is for a prohibited reason
if it is carried out because the employee:
- is, has been, proposes to become or has at any time proposed to become
an officer, delegate or member of an industrial association; or
- is entitled to the benefit of an industrial agreement or an order
of an industrial body; or
- in the case of an employee who is a member of an industrial association
that is seeking better industrial conditions - is dissatisfied with his
or her conditions.'
In dealing with the alleged breach of section 298K(1), Justice North
found that there was a serious question to be tried that one reason why
Patricks implemented the corporate restructure and entered into the labour
supply agreements in September 1997 and then appointed administrators on
7 April 1998 was that the employees were members of a union and that Patricks
wanted to dismiss them and employ non-unionised labour.
Justice North also found that there was a serious question to be tried
that there was a conspiracy by the employer companies and other respondents
to perform an unlawful act, in particular to breach section 298K(1).
In dealing with the second issue, Justice North had regard to a number
of factors. These included:
- the relevant company accounts for the years ended 30 September 1995
and 1996 showed significant after-tax profits;
- although the employees had engaged in industrial action at various
docks in late 1997 and early 1998, the MUA proffered an undertaking that
if temporary orders were made, the MUA would not take further industrial
action;
- although the owner entities had entered into onerous labour supply
agreements with other entities to provide non-unionised labour, there was
provision in at least one such agreement that could apply to prevent a
party from incurring liability where failure to perform obligations was
caused by an injunction granted by the Court;
- although an injunction, if granted, would have the effect of requiring
the employer entities to carry on business, and do so whilst insolvent
(thus imposing significant personal liability upon the Administrators),
the MUA proffered an undertaking that the MUA would not hold the Administrators
personally liable for the employees' wages during the course of administration;
and
- although Patricks alleged that employees could be compensated with
damages, the effect of not granting the interlocutory orders would be to
deny the employees the possibility of reinstatement, given that the passage
of time and events to the full hearing would make this remedy 'practically
impossible'.
On the balance of the above factors, Justice North granted the following
Orders:
Order 1 - the owner entities were restrained from acting upon the purported
termination of the labour supply agreements with the employer entities;
Order 2 - the labour supply agreements were to be regarded as remaining
on foot;
Order 3 - the labour supply agreements could not be terminated without
first giving 14 days written notice to the MUA;
Order 4 - the owner entities were prevented from acquiring labour services
from any other source;
Order 5 - the companies in administration were restrained from doing
anything that would result in the termination of the Patricks employees;
Order 6 - other companies in the Patricks Group were prevented from
disposing of their assets other than in the normal course of business;
and
Order 7 - the MUA was granted leave to proceed against the companies
in administration.
(c) Appeal to the Full Court of the Federal Court
On 23 April 1998, the Full Court of the Federal Court granted Patricks
leave to appeal against the Orders of Justice North but proceeded to uphold
Justice North's Orders in their entirety.
(d) Appeal to the High Court
Patricks subsequently sought leave to appeal to the High Court, and
on 4 May 1998, the High Court handed down its decision.
With respect to the terms of the September 1997 restructure, the High
Court found that the security of the employer entities' businesses was
made 'extremely tenuous' and, as a result, ' the security of the employees'
employment was altered to their prejudice'. The High Court then noted that
the reasons given by Patricks for the restructure were not inconsistent
with the reasons alleged by the MUA, and on this basis, there was a serious
issue to be tried.
In relation to the terms of the Orders, the High Court, by a majority
of 6-1, upheld Justice North's Orders, though in a modified form.
The most significant modification to Justice North's Orders made by
the High Court majority was the variation of Orders 2, 3 and 5 and the
insertion of a new Order 5A. Orders 2, 3 and 5 were made subject to Order
5A. Order 5A provides that Orders 2, 3 and 5 are made without prejudice
to the powers of the Administrators during the period of administration.
In practical terms, the insertion of Order 5A allows the Administrators
increased flexibility in their application of Justice North's Orders. Specifically,
the implementation of Orders 2, 3 and 5 is made subject to the rights and
duties of the Administrators under the Corporations Law.
The insertion of Order 5A has a number of practical implications. For
example, under the Corporations Law, an administrator is required to act
in the best interests of the company under administration. On this basis,
the Administrators would not be obliged to continue to employ all of the
pre 7 April 1998 unionised workforce. If it is in the best interests of
the companies under administration to effect redundancies, the Administrators
can do so provided the same are implemented in accordance with applicable
law. Applicable law in this context would mean consultation with the MUA
and decisions on redundancies and the quantum of redundancy payouts to
be in accordance with relevant industrial instruments and the Workplace
Relations Act.
Significantly, the High Court did not modify Justice North's Order 4.
Accordingly, if Patricks decide to maintain the business of providing stevedoring
services, they must acquire labour from the companies under administration
and not from any other source. The High Court then, in upholding the Orders
of the Full Court of the Federal Court, and in essence, Justice North's
Orders, has preserved the pre 7 April 1998 status quo (pending determination
of the matter at a full hearing), subject to the powers and duties of the
Administrators under the Corporations Law.
(C) ALP PROPOSES LEGISLATION TO SUPPORT JOB SECURITY
In reaction to the Patricks Waterfront Dispute, analysed in 1(B) above,
the Federal Opposition on 26 May 1998 introduced into the Senate its Employment
Security Bill. Shadow Parliamentary Secretary for Employment, Training
and Industrial Relations, Senator Sue Mackay, said in her press release
that the Bill 'amends the Workplace Relations Act and the Corporations
Law to prohibit the type of organisational and financial trickery utilised
by Patricks to sack their entire workforce'.
In her Second Reading Speech, Senator Mackay summarised the two proposed
amendments to the Corporations Law as follows:
(a) Division 6A of the Bill provides that where a company is in receivership,
the Court can make an order requiring a related company to pay the debts
of the other company, including debts owed to employees, such as accrued
entitlements. The matters which the Court will take into account in determining
whether to make an order are:
(i) the extent to which the related company took part in the management
of the employer company;
(ii) the conduct of the related company towards the creditors of the
employer company generally and to the creditor to which the debtor liability
relates, i.e. the employees;
(iii) the extent to which the circumstances that give rise to the winding
up of the employer company are attributable to the actions of the related
company; and
(iv) any other relevant matters.
(b) amended section 1317HD will give creditors the right to bring proceedings
for the recovery of debts against directors of companies acting in contravention
of the Corporations Law. At present, only the company, usually the liquidator
or receiver, has this right.
(D) OVERSEAS FUTURES EXCHANGES APPROVED
On 26 May 1998, the Federal Government amended Schedule 11 of the Corporations
Regulations to extend the list of overseas futures exchanges on which futures
brokers may trade on behalf of Australian citizens. Australian investors
will now be able to explore more overseas investment opportunities following
the approval of these additional six exchanges:
- Bolsa de Derivados do Porto (Portuguese Futures and Options Exchange);
- Italian Stock Exchange;
- Korea Stock Exchange;
- Kuala Lumpur Commodity Exchange;
- Kuala Lumpur Options and Financial Futures Exchange; and
- the Malaysia Monetary Exchange.
The London Commodity Exchange will be removed from Schedule 11 following
its merger with the London International Futures Exchange.
(E) RECENT UK CORPORATE LAW REFORM DEVELOPMENTS
(a) Modern Company Law for a Competitive Economy
The Department of Trade and Industry has recently released a Consultation
Paper titled Modern Company Law for a Competitive Economy in which it is
stated that the Government intends to undertake a fundamental review of
corporate law in the United Kingdom. It is stated in the Consultation Paper
that 'many of the key features of current arrangements were put in place
in the middle of the last century; and although there have been numerous
changes and additions through the years, it is nearly 40 years since the
last broad review of company law. The current framework has as a result
become seriously outdated in key respects, not least as the economy has
become more globalised. In addition, the current pace of change in areas
such as information technology means that in a number of areas the present
arrangements are holding back rather than facilitating competitiveness,
growth and investment'. The Paper refers to a number of particular problems
including over-formal language, excessive detail, over-regulation and the
complex structure of corporate law in the United Kingdom. The Paper also
refers to a number of major reviews of corporate law elsewhere in the world
including Australia. The Government's objectives as stated in the Paper
are to ensure that corporate law:
- supports the creation, growth and competitiveness of British companies
and partnerships;
- promotes an internationally competitive framework for business so
that the UK continues to be an attractive place to do business;
- provides straightforward, cost-effective and fair regulation which
balances the interests of business with those of shareholders, creditors
and others;
- promotes consistency, predicability and transparency and underpins
high standards of company behaviour and corporate governance.
The proposed timetable is to establish a series of working groups in
1998 with a view to publishing a final report by March 2001.
(b) Share Buy-Backs
In May 1998 the Department of Trade and Industry published a Consultation
Paper seeking views on whether there should be any change to the law under
which a company purchasing its own shares is required to cancel them. At
present UK law prohibits repurchased shares being held in 'Treasury' for
resale at some later date. This is also the law in Australia. Allowing
the resale of shares would give companies greater flexibility to adjust
their share capital which might lead to a reduction in companies' overall
cost of capital and therefore could stimulate investment. Responses to
the Paper are sought by 31 July 1998.
The Managed Investments Bill was introduced into the Senate on 28 May
1998. The Second Reading debate commenced. Debate on the Bill has been
adjourned.
2. RECENT CORPORATE LAW
DECISIONS
(A) Kerol Pty Ltd & Noel Ross Edge
v Vergeld Engineering Pty Ltd (in voluntary liquidation), Tom Eldic &
Gordon Ralph Vergelius, No SCGRG-97-1497, Supreme Court of South Australia,
Justice Burley, 30 April 1998
The plaintiff sought, in reliance upon section 509(6) of the Corporations
Law, to defer the dissolution of the defendant company, Vergeld Engineering
Pty Ltd, so that it could maintain proceedings in the District Court against
the defendant. The defendant had gone into voluntary liquidation and the
liquidator had completed the administration. In the course of the liquidation,
the liquidator had assigned to the debtors themselves the company's choses
in action to recover debts owing to the company. These debtors had been
directors of the company. Justice Burley suggested that an alternative
characterisation of the liquidator's action was that, rather than being
an assignment, it was a forgiveness of debt.
Section 509(6) of the Corporations Law empowers the Court, on application
of the liquidator or other interested person, to defer the dissolution
of a company. Justice Burley contrasted the court's power under s 509(6)
with its power under s 571 of the Corporations Law. The latter gives the
court broader discretion, where a company has been dissolved pursuant to
either s 481(6) or 509(5), to 'give directions' as seem just for placing
the company and all other persons in the same position as nearly as may
be if the company had not been dissolved. Given the absence of a power
to give directions under s 509(6), Justice Burley held that the discretion
to defer the dissolution of a company should only be exercised where:
(a) an interested party who has standing under any of the provisions
of the Corporations Law, needs to make an application relating to the administration
of the liquidation; and
(b) the continued existence of the company is necessary in order to
effect some proper purpose.
Moreover, Justice Burley stated that no order would be made to facilitate
the maintenance of the proceedings in the District Court if any judgment
obtained in those proceedings could not be satisfied. The plaintiff's proceedings
in the District Court related to an alleged breach by the defendant company
of a restraint of trade clause contained in a contract for the sale of
a business. However, the plaintiffs contended deferral of dissolution would
also enable the plaintiffs to have the liquidator recover the chose in
action which had been assigned to the debtor directors. Recovery of the
debt would thereby make available funds for the satisfaction of any judgment
obtained in the District Court proceedings.
Thus Justice Burley held the essential question in determining whether
any useful purpose was to be served by deferring the dissolution of the
company was whether the company or the liquidator could now take action
to set aside the assignment or reverse the forgiveness of the debt.
Justice Burley accepted the plaintiffs' argument that section 477(2)(a)
of the Corporations Law enabled a liquidator to bring an action in the
name of the company. The basis of any such action here was an alleged breach
of fiduciary duty on the part of the defendant company's directors, founded
upon the assertion that the company was put into voluntary liquidation
so as to avoid any claim that the plaintiffs might bring for alleged breach
of the restraint of trade clause. Justice Burley allowed the plaintiffs'
application for deferral of the dissolution to enable the District Court
proceedings to be maintained, and required the plaintiffs to indemnify
the liquidator's costs and expenses in bringing an action in the name of
the company for recovery of the surplus assets. Such proceedings were to
be delayed pending the outcome of the District Court proceedings.
(B) Jageev Pty Ltd v Francis Mervyn Deane,
No NG 3302 0f 1996, Federal Court of Australia, Justice Davies, 15 May
1998
The applicant, Jageev Pty Ltd, sought to set aside a statutory demand
served on it by the respondent on 1 August 1995. The demand was based on
a default judgment that had been entered against the applicant in favour
of the respondent in December 1991.
The respondent, Deane, a solicitor, had acted for the applicant and
two if its directors for many years. The default judgment of $4,800 related
to an amount claimed for work done and services provided by the respondent
to the applicant in 1991.
On 1 August 1995, a statutory demand for $6,328 (being for the amount
of the default judgment plus interest and costs) was served on the applicant.
On 22 August 1995, the applicant sought an order that the statutory demand
be set aside pursuant to section 459G of the Corporations Law. The application
was heard by the Deputy Registrar in February 1996. At the time of the
hearing, the Registrar was advised that the applicant had filed a notice
of motion to set aside the default judgment, but that it had not yet been
heard. On 30 April 1996, the Deputy Registrar dismissed the application
to set aside the statutory demand; in the interim the court had dismissed
the motion to set aside the default judgment.
Then in May 1996, the applicant filed an application seeking to have
the decision of the Deputy Registrar reviewed. Also, the applicant filed
a second notice of motion to set aside the default judgment. This motion
was heard in February 1997 with the magistrate finding in favour of the
applicant. Deane then successfully appealed to the Supreme Court of New
South Wales, which remitted the matter to the Local Court to be reconsidered.
There, in April 1998, the magistrate gave judgment in favour of Deane for
the amount of $6,263, less $900 which the applicant had already paid to
Deane in claimed full satisfaction of the debt.
The court was now hearing the application for review of the Registrar's
decision which had been filed in May 1996. That decision related to the
statutory demand for payment of the default judgment of December 1991,
which had subsequently been set aside and substituted by the judgment of
April 1998.
The setting aside of a statutory demand is governed by section 459H
of the Corporations Law. Justice Davies looked carefully at the wording
of the section and determined that the question before the court was whether
it 'is satisfied ... that there is a genuine dispute' between the applicant
and the respondent as to the existence or amount of the debt to which the
statutory demand relates. The issue was what was meant by 'is satisfied'
in this context. Justice Davies held that, if the statutory demand is to
be set aside, the court must be satisfied as at the time of the re-hearing
that there is a genuine dispute, thus 'is' refers to the time when the
decision of the re-hearing is given and is not concerned with whether there
may have been in the past a dispute about the debt, including such time
as when the statutory demand was initially served.
As there was no present dispute about the original debt, which had been
merged into the magistrate's judgment of April 1998, the application failed
on that ground.
Justice Davies then examined whether the application should succeed
because the statutory demand referred to a judgment debt which had been
set aside. Again the applicant failed. Justice Davies looked at the wording
of section 459E of the Corporations Law which provides, inter alia, that
a person may serve on a company a demand relating to a single debt that
the company owes to the person, or two or more debts that the company owes
to the person. Section 459E(2) continues by stating that where the demand
relates to 2 or more debts, it must specify the total of the amounts of
the debts. Therefore Justice Davies held that these provisions did not
require such particularity in description that a reference to a judgment
debt would not also encompass the underlying debt or a description of the
underlying debt would not encompass any judgment obtained for the debt
prior to the hearing of the application to set aside. Justice Davies stated
the court was not concerned with technicalities such as the description
of the amount due but with ascertaining how much was indisputably due to
the person who served the statutory demand by the corporation which had
received it.
Since the debt as it stood at the time was accurately described, that
description was sufficient to now encompass the underlying debt in the
judgment of April 1998 and it did not matter that the original judgment
had been set aside and a subsequent judgment for another amount obtained.
(C) Boral Energy Resources Ltd v TU Australia
(Queensland) Pty Ltd, Supreme Court of New South Wales (Equity Division),
6 May 1998, Santow J
This judgment concerns the interpretation of sections 698(1) and 739
of the Corporations Law. The background to the judgment is given by Santow
J:
'A bidding war continues between Boral Energy Resources Ltd ('Boral')
and TU Australia (Queensland) Pty Ltd ('TU') to take over the Queensland
company Allgas Energy Ltd ('Allgas'). Each have formal takeover offers
outstanding. The TU offer (and indeed the Boral offer) cannot succeed while
the Queensland Gas Suppliers (Shareholdings) Act 1972 continues to apply,
as it limits acquisitions above 12.5 per cent of Allgas and other proclaimed
gas companies. The proclamation which captures Allgas in its reach expires
1 July 1998 unless renewed. Hence the TU offer is subject to a condition
precedent, as yet unfulfilled, that Allgas cease to be subject to that
Act. It is also subject to a number of other conditions. These are conditions
subsequent, most importantly a 51 per cent minimum acceptance condition.
There are also standard conditions subsequent triggered by the happening
of certain events or 'proscribed occurrences' concerning the target Allgas.
They are basically directed at defensive manoeuvres or disaster events.
What has triggered the present litigation is that, on 2 April 1998 with
both bids outstanding, TU made a cash purchase from Guinness Peat Group
Allied Services BV ('GPG') of 12.49 per cent of Allgas at $19.50 per share.
While made outside the TU offer, the TU takeover price was immediately
adjusted to match the cash price paid for the GPG shares.'
Boral claimed that the purchase of the GPG shares breached section 698(1).
The court was required to answer two questions:
(1) Had any 'benefit' been given by TU purchasing the GPG shares in
circumstances proscribed by section 698(1) of the Corporations Law and,
if so,
(2) Could and should any order be made under section 739 of the Corporations
Law and, if so, what order?
Section 698(1) provides that:
'Subject to sub-section (5), if a Part A Statement is served on the
target company, the offeror, or an associate of the offeror, shall not,
during the takeover period, give, offer to give or agree to give to a person
whose shares may be acquired under the takeover scheme, or to an associate
of such a person, any benefit not provided for under the takeover offers
or, if the takeover offers are varied in accordance with Division 5 of
Part 6.3, under the takeover offers as so varied.'
TU argued that in construing the reference to 'a person whose shares
may be acquired under the takeover scheme' a distinction should be drawn
between a takeover scheme that gives rise to an immediately binding contract
and a takeover scheme which does not. This was rejected by the court on
a number of grounds including that it would undermine the fundamental Eggleston
principle of equal treatment reflected not only in section 698 but elsewhere
in the Corporations Law takeover provisions.
TU also argued that there was no 'benefit' within the meaning of section
698(1) resulting from the purchase of the GPG shares. The court stated
that 'benefit' is to be construed broadly but so as to exclude merely speculative
benefits or ones which do not constitute a profit, benefit or advantage.
The term does include non-pecuniary benefits, such as the right to immediate,
unconditional payment, as compared to a bid providing for merely conditional
payment, deferred until an extendable closing date for the offer, and where
the conditions (as in this case) are by no means certain of fulfilment.
All that section 698(1) requires according to the court is that the non-bid
transaction confer at least one benefit not replicated in the takeover
scheme. This interpretation requires taking into account whatever rights
or benefits are conferred by each transaction, to be netted off against
whatever rights or benefits are thereby given up, to the extent such benefits
are commensurable at least in an approximate sense. The resultant net benefit
is compared under each transaction and only if there is overall disparity
in favour of the party to the non-bid transaction is section 698(1) contravened.
Applying this test, the court found that the cash purchase of the GPG shares
by TU conferred a benefit and thereby contravened section 698(1).
The court then answered the question whether an order should be made
under section 739 of the Corporations Law. This section empowers the court
to 'Š make such orders as it thinks necessary or desirable to protect the
interests of a person affected by the takeover scheme Š' The court held
that the purpose of any order under section 739 is to protect the interests
of shareholders in the target company, Allgas. This includes their interest
in retaining their shares, if they choose, but also in maximising any benefits
to them under the available takeover schemes. The court then made a series
of orders directed to:
- removing the right of TU to retain any dividends or other distributions
prior to successful closure of the TU offer;
- providing an incentive to Boral to maximise the price it offers,
by requiring TU to divest by a defined date unless the Boral offer, upon
that date, is not then the highest offer available for acceptance or is
not then free of all conditions (that defined date being the expiry of
a reasonable time after 1 July 1998 when the Queensland Act is no longer
applicable to Allgas);
- any divestiture by TU must be to persons not associated with TU (which
would allow TU to sell its shares if it wanted to Boral by accepting its
offer or to sell in the ordinary course of trading on the stockmarket).
The court concluded that these orders best serve the interests of Allgas
shareholders. To require TU to simply divest its shares because it had
breached section 689(1) would only diminish TU's incentive to maximise
its bid price for the benefit of Allgas shareholders, without any guarantee
that this would produce the highest bid price overall. The court stated
that its alternative of making divestiture depend on Boral offering the
highest price is guaranteed to maximise the bid price of each offeror in
the bidding competition, for the benefit of the Allgas shareholders.
It is also to be noted that Justice Santow provides, in an Appendix
to his judgment, a useful summary of general principles and specific rules
in a number of overseas jurisdictions concerning equal treatment of shareholders
during a takeover. In particular, his Appendix summarises the principles
and specific rules in England, Ireland, Germany, and the European communities
proposed directive on takeovers.
(D) Coles Myer Ltd v Commissioner of State
Revenue, No 7694 of 1995, Court of Appeal of Victoria, Winneke P, Ormiston
and Phillips JJA, 30 April 1998
This was an appeal from a decision at first instance which required
the appellant, Coles Myer Ltd (Coles Myer), to pay stamp duty in respect
of its buy-back of some 129,000,000 shares in the appellant from K-Mart
Overseas Corporation (K-Mart). Following their buy-back, the shares were
cancelled.
The selective buy back scheme had been proposed in July 1994. It received
the necessary approval of the Coles Myer shareholders, and the required
agreement between Coles Myer and K-Mart was entered into on 31 October
1994. Completion of the agreement occurred on 4 November; therefore the
transaction was regulated by the Stamps Act 1958 (Vic) (the Act) and the
Corporations Law (the Law) as they stood at the time; both have since been
amended.
As it stood at the time, the obligation to pay duty was imposed by section
18(1) of the Act which in turn referred to other provisions of the Act
including the Headings in the Third Schedule. Heading IV and Part (A) thereof
imposed duty 'upon the transfer of any marketable security or right in
respect of shares of any corporation, company or society that ... has a
register in Victoria'.
The appellant's principal argument was that the selective buy-back of
its own shares from K-Mart did not result in a 'transfer of marketable
securities' within the meaning of Heading IV of the Act and so did not
attract stamp duty. This was despite the fact the agreement between Coles
Myer and K-Mart provided that 'beneficial ownership in the buy-back shares
shall pass to the issuer immediately upon completion' and that the instrument
of transfer executed by K-Mart took a conventional 'standard transfer form.'
Coles Myer argued it was necessary to look at the substance of the transaction.
At first instance, the judge had held that the substance of the buy-back
scheme was a transfer in accordance with the Law which led to the registration
of the shares by Coles Myer, and it was not until the transfer of those
shares had been registered that the shares were cancelled and the rights
therein were extinguished. Thus there had been a transfer of beneficial
ownership of the shares from K-Mart to Coles Myer prior to their extinguishment
upon registration, so a transfer of a marketable security within the meaning
of the Act had been effected, and so stamp duty was payable.
On appeal, the majority (Winneke P and Ormiston JA; Phillips JA dissenting)
agreed that it was necessary to look at the substance of the transaction,
but overturned the trial judge's conclusion. The majority held that, for
a 'transfer' to have been effected, this required that the transferee should,
at the end of the transaction, have substantially the same right or interest
in the subject matter as did the transferor before the transfer took place.
The majority found judicial support for this definition of 'transfer' in
a number of US cases. The majority noted that on first impression, the
buy-back here at issue had the necessary constituents of a transfer: 'On
paper there is both a transferor and a transferee and the act of transmission
purports to give Coles Myer as transferee of such shares as K-Mart formerly
held and Coles Myer in turn agrees to accept those shares'. But looking
at the substance of the transaction, the majority held that 'no interest
properly characterised as that of a share was ever held by Coles Myer as
a result of the execution of [the transfer] instrument'. As there was no
transfer of interest, property or right, the share buy back did not attract
stamp duty. Hence the majority characterised the 'transfer' as a 'statutory
sham' intended as a means of divesting K-Mart of its interest.
The majority provided several bases for their finding. First, the majority
affirmed the common law principle derived from Trevor v Whitworth (1887)
12 App Cas 409 that 'it is inconsistent with the essential nature of a
company that it should become a member of itself'.
This was reinforced by section 205 of the Law which prohibited a company
from dealing in its own shares as that would effectuate an unauthorised
reduction of capital. The statutory exception introduced in the Law (Division
4B of Part 2.4, since substituted in 1995) to permit a company to buy back
its own shares was subject to section 206PB which provided that a company
could not resell or otherwise dispose of the shares which it had bought
back; and section 206PB(2) provided that any purported disposition was
void. Thus, the majority stated that in permitting buy-backs, 'the end
result was not to permit some form of statutory holding of shares; rather
it was to see the extinguishment of all relevant rights in them'. So section
206PC(2) effectuated, immediately after registration of the transfer, a
cancellation of all shares transferred and the extinguishment of all rights
attached to the shares'. Further, prior to their registration and cancellation,
there was no transfer of the rights attached to the shares as section 206PA
suspended all rights from the moment the agreement to buy back the shares
was executed. As those rights were suspended on execution of the agreement
and then extinguished upon Coles Myer's registration of the transaction,
there had been no transfer of those rights from K-mart to Coles Myer.
The majority found it conceptually impossible for Coles Myer to have
those rights, it being 'ridiculous to contemplate the company owing obligations
to itself, just as it is beyond contemplation that a company should be
a member of itself in the sense of exercising membership rights'. The majority
questioned that, 'if dividends are to be paid to all members, what purpose
would be served by having the dividend paid by Coles Myer to itself. If
one were to contemplate what would happen on winding up, such distribution
as is required would not only be laughable but largely impracticable'.
It is to be noted that the Stamps Act 1958 (Vic) was amended on 20 December
1994 to exempt from duty all transfers pursuant to buy-back schemes. New
South Wales has a similar exemption. However, in light of this decision,
the Western Australian Government has announced its intention to amend
its stamp duty laws to make it clear that share buy back schemes are subject
to stamp duty. Ernst and Young stamp duty expert, Mr Richard Cant, has
said he expected other States to follow Western Australia's lead. (Australian
Financial Review, 'WA Ensures Duty on Share Buybacks' 14 May 1998, page
5).
(Contributed by David Cullen and John Williamson-Noble, Gilbert and
Tobin)
Two recent changes announced by ASX as part of its rationalisation prior
to the proposed demutualisation later this year are:
- the Companies Division has been renamed the Listings Division to more
correctly reflect the various types of entities listed on ASX; and
- the ASX Investor Centres are to close on 30 June 1998.
Practitioners who access company announcements directly from the Investor
Centres will need to secure other means of obtaining announcements. These
may include purchasing announcements directly from information vendors
or accessing appropriate Internet sites. The benefits of the Investor Centres
in this context are the ability to obtain immediate access to announcements
the instant they are released to the market and the ability to apply search
criteria across listed entities and types of announcements. It is hoped
that ASX's Company Announcements Platform (the image-based system through
which announcements for listed entities are electronically processed, released
and stored) will, at some point in time, be extended to external users.
Practitioners can expect to receive the Listing Rule amendments which
will become effective on 1 July 1998 by the second or third week of June.
Depending on the timing of their release, an analysis of the amendments
will appear in the next edition of the Bulletin.
(A) CORPORATE GOVERNANCE INSTRUMENT
PERMITS COLLECTIVE ACTION BY INSTITUTIONAL INVESTORS
On 8 May 1998, the ASC announced that it had executed the class order
which it had presaged in its collective action media release of January
this year.
The class order will now allow institutional investors, which hold shares
in a company, to enter into an agreement in relation to their voting intentions
at a forthcoming meeting of that company. The ASC had advised of its intention
to issue the class order when it released its Policy Statement 128, 'Collective
Action by Institutional Investors' on 14 January 1998. That Policy Statement
set out the ASC's views on how institutions can discuss issues, which may
be the subject of a vote at a company's meeting, without entering into
an agreement that would make them 'associates' under sections 12 or 15
of the Corporations Law or that would breach the Corporations Law.
The ASC advised that the policy had been settled and published earlier
but had been awaiting an application because of the technical wording of
the class order power in the Corporations Law.
Consistent with the policy that 'public' disclosure of the collective
action is paramount, institutions do not need to advise the ASC of the
agreement before gaining the relief. The ASC noted that, although the relief
was always likely to be granted close to the time of the parties entering
into a particular agreement, the ASC did not consider the intentions of
any particular institution or company before executing the instrument.
The ASC is of the view that the Corporations Law should not have the unintended
consequence of preventing institutions from actively participating in corporate
governance issues. The class order is limited to institutional investors.
The ASC has defined 'institution' for these purposes as a body corporate
whose primary functions are to:
(a) pool the funds of persons to whom the institution owes a fiduciary
duty; and
(b) invest the funds in any of the following:
(i) a prescribed interest scheme for which there is an approved deed
under Division 5 of Part 7.12 of the Law;
(ii) a superannuation fund, an approved deposit fund or a pooled superannuation
trust within the meaning of the Superannuation Industry (Supervision) Act
1993; or
(iii) a statutory fund of a registered life insurance company within
the meaning of the Life Insurance Act 1995.
The terms and conditions of the class order require full and timely
disclosure. At least one of the parties to the agreement must make a public
announcement no later than 9.30 am on the day following the agreement which
sets out:
(a) the names of the institutions which have entered into the voting
agreement;
(b) the name of the company which is the subject of the voting agreement;
(c) the date and time of the meeting if known at the time of the announcement;
(d) if it is not known at the time of the announcement, a description
sufficient to identify the meeting;
(e) a description of the matter to be voted upon at the meeting to which
the voting agreement relates;
(f) a summary of the objective of the collective action and how the
institutions propose to vote on that matter;
(g) the relevant interests in the company held by:
(i) each institution; and (ii) the institutions collectively.
The institutions must make the announcement at least one week before
the meeting is to be held to allow the market time to consider the information.
This also provides the board of the company, or other shareholders, adequate
time to consult with the institutions or issue statements to shareholders
and the market if they consider the proposed action is based on incorrect
information. The institutions must also keep the market informed of changes
in their relevant interests in the company and announce any of these changes
the next business day.
(B) WARNING ON INVESTOR SCHEMES
The ASC NSW Regional Office has boosted its investor protection efforts
in reining in illegal schemes which put retail investors at risk.
During the past six months, 23 fundraising schemes have come under the
scrutiny of the NSW unit which was set upto investigate schemes offering
inappropriate investment opportunities to people in NSW.
NSW Regional Commissioner Bill Coad said ASC officers had found some
worrying investment trends in NSW and urged investors to be vigilant about
investing in schemes which promise unrealistic rates of return, as well
as unusual, speculative, high risk investments, often promoted as tax effective
schemes. Mr Coad said ASC officers recently became concerned about a number
of high risk and high return offers centred upon reputed bank based financial
schemes in England and the USA.
Bond scams, in particular, which offer the equivalent of 1000% per annum
and promise overseas bank guarantees looked highly complex but were accompanied
by meaningless documentation and resulted in investors' money leaving the
country with no chance of recovery. These schemes were often promoted over
the Internet and the ASC recommends that anyone contemplating investing
should get independent financial advice from a licensed securities adviser
first.
Another concern is the increasing number of investment programs requiring
investors to borrow large amounts to invest; these are known as leveraged
or geared investments. While the ASC acknowledges the potential for higher
returns from such investments, it has become concerned that investors may
not be fully aware that the higher the interest rate offered, the higher
the risk investors will lose all or some of their money.
These, together with other tax driven schemes such as film and agricultural
schemes, are commonly offered in the months leading to the end of the tax
year.
Mr Dean Jordan, formerly a senior litigation partner of Clayton Utz,
has joined the ASC's Sydney office as a Litigation Specialist. Mr Jordan
will be involved in operational work in the NSW region, in particular providing
high level legal advice in relation to the ASC's law enforcement and regulatory
activities. He will especially be involved in significant markets, securities
and corporations issues, including major litigation and investigations.
(D) AAT AFFIRMS ASC CASH-BOX PROSPECTUS REFUSAL
On 25 May 1998, in a significant decision, the Administrative Appeals
Tribunal (AAT) affirmed an ASC decision to refuse to register a prospectus
for the 'start-up cash-box' investment company Exeter Group Ltd (Exeter).
Exeter sought to raise $2 million from at least 300 small investors
but had not decided where the proceeds would be invested; therefore Exeter
argued that no information or comment should or could be made about the
prospects of the company other than to say that the offer was speculative
in nature. The purpose of the share issue was to fund Exeter to enable
it to search for a target company in which to invest.
The ASC did not accept this reasoning and refused to register the prospectus
in June 1997 on the basis that it failed to deal adequately with the disclosure
requirements of section 1022 of the Corporations Law. The ASC said directors
and promoters had a statutory obligation to include in a prospectus sufficient
information to enable investors to make an informed assessment of the investment
proposal.
The AAT's decision has consequences for directors and promoters seeking
to raise funds in advance of making particular investment decisions. This
is the AAT's first decision on this type of prospectus.
In his decision, AAT Deputy President B J McMahon, rejected Exeter's
submission that the only information required by section 1022 was that
which was known, or that which could have reasonably been obtained, through
making inquiries, and that Exeter did not know the identity of the target
company and could not reasonably ascertain this information by making inquiries.
Exeter submitted that all information known to it was set out in the prospectus.
Deputy President McMahon said a high level of disclosure of information
was required under the Corporations Law and the purpose of section 1022
was to require inclusion of information of such a quality as to ensure
an 'informed assessment' of the stipulated aspects of the issuer:
'In the present prospectus, hardly any factual material has been disclosed.
It is not sufficient for the company to say we know nothing about our future
investments and so we are obliged to disclose nothing beyond the fact that
we know nothing about our future investments. This is no basis upon which
any intending investor could make a rational assessment of the prospects
of the company. The evident purpose of the issue is not, as was submitted
on behalf of the applicant, merely to finance a search for a target company,
but also to provide finance for the acquisition of that target. In effect,
the subscriber is being asked to contribute to a cash box and to take a
ticket in a lucky dip.'
The decision is available at:
http://scaleplus.law.gov.au/html/aatdec/0/98/0/AA003700.htm
5. RECENT CORPORATE LAW JOURNAL ARTICLES
The May 1998 edition of the Company and Securities Law Journal is devoted
to papers delivered at a seminar, 'Contemporary Developments in Corporate
Insolvency Law (A Centenary Celebration of Salomon v A Salomon & Co
Ltd)', held by the Centre for Corporate Law and Securities Regulation,
The University of Melbourne, on 18 September 1997.
(A) Lord Cooke of Thorndon, 'Corporate Identity' (1998) 16 Company and
Securities Law Journal 160
The theme of this article is that, in English-inherited law, the concept
that an incorporated company is a different person from its shareholders
is inevitable and absolute, neither derived from German philosophy nor
qualified by 'lifting the veil'. Attribution to a company of the acts of
persons having its directing mind and will is still useful and should not
be superseded by a purely statute by statute approach. A company may commit
any crime and suffer any libel. Group images are now also being recognised
by the law: the 'McLibel' case is considered. This article is a sequel
to 'A Real Thing', the first of the 1996 Hamlyn Lectures, 'Turning Points
of the Common Law'.
(B) Professor Roy Goode, 'Insolvent Trading Under English and Australian
Law' (1998) 16 Company and Securities Law Journal 170
The problem for law makers in the field of corporate insolvency is how
to maximise the prospects of rehabilitation of companies in financial difficulty,
while discouraging directors of a company from plunging it deeper in the
mire by continuing trading where there is no prospect of a return to profitability.
This article compares and contrasts the approaches of English and Australian
law to these problems, and concludes with a brief comment on the differing
philosophies of Australian, English and American law as to the significance
of corporate failure and the relative merits of external administration
and continued management by the directors.
(C) Professor L S Sealy, 'Modern Insolvency Laws and Mr Salomon' (1998)
16 Company and Securities Law Journal 176
The Salomon litigation was concerned with events which occurred in the
1890s, and was based on insolvency law in force at that time. In this article,
we are invited to imagine that everything has moved on a hundred years
and that litigation on comparable facts takes place under the present day
insolvency law of England and of Australia, The conclusion is that Mr Salomon
might well have lost the case, at least in Australia. But it is also revealed
that under contemporary English law, the Salomon company might not have
been held insolvent after all!
(D) Professor John H Farrar, 'Legal Issues Involving Corporate Groups'
(1998) 16 Company and Securities Law Journal 184
Salomon v A Salomon & Co Ltd predated modern corporate groups which
have led to a system of limited liability within limited liability. This
article examines common abuses of the group relationship and monitors recent
inconsistent trends in the case law. It also reviews Australian and New
Zealand reforms relating to group insolvencies, and considers questions
of principle and policy underlying reform of this area.
(E) Ken Barlow, 'Voidable Preferences and the Running Account - The
High Court Reconsiders' (1998) 26 Australian Business Law Review 82
Business suppliers can take heart from a 1996 decision of the High Court,
Airservices v Ferrier. Suppliers of goods or services to companies or individuals
which are having cash flow problems need no longer be so concerned that
every payment they receive may be clawed back by a liquidator or trustee
in bankruptcy as a preference. This should have positive effects on businesses
in tight economic circumstances.
(F) Robert N Hornick, 'Indonesian Bankruptcy Law Protects Creditors'
(1998) 17 International Financial Law Review 24
The author examines the options open to creditors under Indonesian law:
bankruptcy and moratorium law. The author argues that Indonesian bankruptcy
law, based on Dutch legislation, is the preferred option and is designed
to promote fair treatment of creditors, not to give the debtor a fresh
start. The article outlines the procedure to be followed in petitioning
for bankruptcy, the powers of the receiver, and the liability of directors
of debtor companies.
(G) Naoaki Eguchi, Yoshiaki Muto & Jeremy Pitts, 'Japan Offers Debtors
and Creditors Greater Options' (1998) 17 International Financial Law Review
27
The authors analyse the Japanese legal system in relation to insolvency
proceedings. Options available to creditors and debtors range from formal
bankruptcy and liquidation to informal work-outs and restructuring. The
authors examine closely the two most frequently used insolvency proceedings:
bankruptcy and corporate re-organisation.
(H) Y S Oh & Keun Byung Lee, 'Korean Insolvency Laws Protect Foreign
Investors' (1998) 17 International Financial Law Review 30
In recent times a large number of Korean companies have filed for protection
from creditors as a result of their over leveraged expansion, rapid diversification
and the currency crisis. This article focuses on the measures which regulate
Korean companies suffering from financial difficulties. Three statutes
are operative here: the Bankruptcy Act; the Corporate Reorganization Act;
and the Composition Act. The authors examine the main attributes of each
of these Acts.
Note: Abstracts of articles published in the Company and Securities
Law Journal and the Australian Business Law Review are reproduced in this
Bulletin with the permission of LBC Information Services.
(A) SEMINAR ON THE WATERFRONT DISPUTE
PATRICK STEVEDORES v MARITIME UNION OF AUSTRALIA: THE LABOUR LAW, CORPORATE
LAW AND COMMERCIAL LITIGATION ISSUES
THE UNIVERSITY OF MELBOURNE
CENTRE FOR CORPORATE LAW AND SECURITIES REGULATION
in association with
THE CENTRE FOR EMPLOYMENT AND LABOUR RELATIONS LAW
PROGRAM
Speakers: Dr Graham Smith
Partner
Clayton Utz
Mr Andrew Lumsden
Partner
Corrs Chambers Westgarth
Professor Greg Reinhardt
Executive Director
Australian Institute of Judicial Administration
Date: Wednesday 24 June 1998
Time: 5.30 - 7.00 pm (Refreshments to follow)
Venue: Clayton Utz
Level 18, Board Room
333 Collins Street
Melbourne Vic 3000
Admission: $60
SEMINAR TOPIC
One of the most controversial issues in recent years in Australia has
been the dispute between Patrick Stevedores and the Maritime Union. The
judgments of the Federal Court and the High Court of Australia have been
the centre of significant debate and controversy. The judgments raise important
labour law, corporate law and insolvency law issues. They also raise commercial
litigation issues including the use of injunctions.
SPEAKERS
Dr Graham Smith is a Partner with the law firm Clayton Utz where he
specialises in labour law. He was previously Associate Professor at The
University of Melbourne Law School. Since that time Dr Smith has developed
a broad practice as a labour law practitioner, advising large clients including
the Victorian Government, Ansett, Safeway and Esso in a wide range of areas.
He is the General Editor of the Employment Law Bulletin and a member of
the editorial board of the Australian Journal of Labour Law.
Mr Andrew Lumsden is a Partner with the law firm Corrs Chambers Westgarth
where he specialises in corporate law, mergers and acquisitions and securities
offerings. He is a member of the Corporations Law Committee of the Australian
Institute of Company Directors. He has also published widely on corporate
law issues, his most recent work being the Australian Institute of Company
Directors publication titled Managing Proxies and the Role of the Chairman.
Andrew is also the reviewing editor for Australian Corporation Practice
(Butterworths).
Professor Greg Reinhardt is the Executive Director of the Australian
Institute of Judicial Administration. He was previously a Partner with
the law firm Minter Ellison and has taught at The University of Melbourne
Law School. From 1995 to 1997 he was the Academic Secretary of the Victorian
Attorney-General's Law Reform Advisory Council. Professor Reinhardt has
particular expertise in the areas of insolvency law and commercial litigation
including the use of injunctions.
Name:
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Title:
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______________________________________________________
Organisation:
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______________________________________________________
Address:
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Telephone:
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(Cheques made payable to The University of Melbourne Law School)
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Send registration form and payment details by Monday 21 June 1998 to:
Kate Messenger
Law School
The University of Melbourne
Parkville Vic 3052
Tel: 9344 0074
Fax: 9349 4287
E-mail: k.messenger@law.unimelb.edu.au
(B) International Workshop On The Role Of The New Equity
FACULTY OF LAW, UNIVERSITY OF HONG KONG
INTERNATIONAL WORKSHOP ON THE ROLE OF THE NEW EQUITY, 10th - 12th September
1998.
The Hong Kong Court of Final Appeal was established on 1st July 1997.
One of the last Hong Kong Privy Council decisions was that of Union Eagle
Ltd v Golden Achievement Ltd [1997] 1 HKC 173 which concerned the question
of whether or not it was possible for a purchaser, under a contract for
the sale of land who had repudiated the contract, to receive equitable
relief against forfeiture of the deposit. The Judicial Committee cast doubt
on the application of the new unconscionability which has been developed
by the Australian courts in recent years, and suggested instead that the
way ahead for Hong Kong may be through restitution or estoppel.
One matter to be discussed will concern the manner in which the New
Equity has been handled in those regional common law jurisdictions which
also no longer attend the Privy Council; for Hong Kong this is especially
pertinent bearing in mind the Basic Law protection of the common law for
50 years from 1997. Recent decisions from these jurisdictions in the New
Equity have illustrated a robust and exciting approach to equity generally.
At the workshop it is hoped that discussion will cover:
(a) the principles of equity, or the factor in the civil law system
which moderates the strictness of the law;
(b) the application of the new equity/modifying factor to commercial
law; and
(c) the application of the new equity/modifying factor to property law.
It is thought that recent common law developments which will be of interest
will include the role of equity and illegality, the expansion of fiduciary
duties and those who now become fiduciaries, the concurrency of contract/tort/equitable
relief, and restitution.
If you are interested in attending: please reply on this form:
[ ] I intend to register for the Workshop.
[ ] I intend to present a paper at the Workshop.
The topic is ..........
Name:.........................................................................................................................
Address.....................................................................................................................
Fax:................ e-mail:...........................
For further information, please contact:
Judith Sihombing
Faculty of Law
University of Hong Kong, HONG KONG, SAR, PRC
Fax: 852 2559 3543: tel 852 2859 2955
E-mail: sihomb@hkucc.hku.hk
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10. DISCLAIMER
No person should rely on the contents of this publication without first obtaining advice from a qualified professional person. This publication is provided on the terms and understanding that (1) the authors, editors and endorsers are not responsible for the results of any actions taken on the basis of information in this publication, nor for any error in or omission from this publication; and (2) the publisher is not engaged in rendering legal, accounting, professional or other advice or services. The publisher, authors, editors and endorsers expressly disclaim all and any liability and responsibility to any person in respect of anything done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this publication.