Case: Szencorp Pty Ltd v Clean Energy Council Ltd (2009) 69 ACSR 365
Outcome: followed
was pointed out in Szencorp Pty Ltd v Clean Energy Council Ltd (2009) 69 ACSR 365 at 378-379: "The 'contrary to the interests' provision now contained in subpara (d) of s 232 [of the Corporations Act 2001 (Cth)] has a separate and distinct area of operation from the 'oppression' provisions in subpara (e) of s 232. The manner in which a company is being administered and in which its affairs are conducted may fall within the category of conduct contrary to the interests of the company's members as a whole although it may not be described as oppressive, unfairly prejudicial to, or unfairly discriminatory against members of the company" (Citations omitted) The Housing Associations have made it clear that the reason or, at least the main reason, why they propose to enter into 40 year sub-leases with the Director is to avoid the alternative of the Minister exercising power under s 47 of the NER Act to give notice which will have the effect of extinguishing forever the interests of the Housing Associations in the relevant pieces of land. The attitude of the Housing Associations on this issue was made abundantly clear in a letter from their solicitors to the Minister on 29 July 2009 which was, inter alia, in the following terms: "As you know, and as we are now instructed to make clear, the Housing Associations are prepared to enter into the proposed 40 year subleases notwithstanding your rejection of their many requests for the inclusion of terms and conditions designed to further protect the ongoing interests of the Housing Associations, tenants and residents. The Housing Associations have agreed to enter into the subleases for the simple reason that you have threatened them with compulsory acquisition if they do not enter into the subleases. As you know, the loss of tenure to these lands is something that is abhorrent to the Housing Associations and they could not run the risk that it might occur. It is in the overriding best interests of the Associations and their members that their interests in these lands be maintained rather than completely foregone. Acquisitions of these land would not allow the Associations or members to have any input into protecting their rights or interests. Indeed, this ultimate risk of compulsory acquisition has hovered in the background throughout the protected negotiations. That risk was made abundantly clear when you issued notice that you were considering these compulsory acquisitions. Likewise, your letter to Tangentyere dated 24 July 2009 makes it perfectly clear that unless the subleases are entered into in the terms attached to your letter then you will proceed in relation to the potential compulsory acquisitions." Counsel for the Housing Associations submitted that it was in the overriding best interests of the Housing Associations and the tenants of the Housing Associations to retain their perpetual leases and not to have their titles extinguished by compulsory acquisition. He submitted initially that the Housing Associations were prepared to grant the sub-leases to the Director for two reasons. Firstly, because it appeared that it was the only way that Commonwealth funding would be provided. Secondly, because it was the only way to avoid compulsory acquisition.