Case: Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223
Outcome: cited
CEMEX challenges the orders made by the Panel on grounds that may be summarised as follows: 1. The orders were not authorised by s 657D , as that provision: (a) did not authorise the Panel to order a person to pay an amount of money to another person, either at all or, alternatively, in the absence of satisfaction that the latter person has suffered loss or damage as a result of the circumstances declared to be unacceptable; and (b) did not authorise the Panel to delegate to ASIC the duty to decide whether a person must pay an amount of money to another person. 2. the Panel improperly exercised the power conferred by s 657D by: (a) failing to take into account relevant considerations, being whether CEMEX's conduct constituted a contravention of Chapters 6, 6A, 6B or 6C of the Act; whether any Affected Shareholder relied on or suffered loss as a result of any conduct on the part of CEMEX; and whether the takeover bid would have proceeded differently, if the unacceptable circumstances had not occurred; and (b) making a decision in the context of the absence of evidence concerning the extent to which the rights or interests of Affected Shareholders were actually affected by the unacceptable circumstances, that being unreasonable in the Wednesbury sense. 3. The Panel erred in law within the meaning of s 5(1)(f) of the ADJR Act in various respects, arising out of the above grounds, including by concluding that an order could be made to "protect" rights or interests which no longer existed at the time the orders were made. 45 These grounds raise three issues: (1) whether the Panel had power to order CEMEX to pay each Affected Shareholder $0.25 in respect of each share sold during the Relevant Period in the absence of a finding that each Affected Shareholder had suffered a loss; (2) whether the orders involved an impermissible delegation of power to ASIC; and (3) whether the orders invalidly attempted to "protect" rights or interests that no longer existed. 46 The essence of this complaint is that s 657D(2)(a) while the Panel is authorised to make orders that protect rights or interests affected by the unacceptable circumstances, it is not given power to order that payment be made to individuals who have not shown financial loss. Consequently, where there is no evidence before the Panel that any individual Rinker shareholder suffered financial loss as a result of CEMEX's conduct order for payment is beyond power. The absence of such evidence meant the Panel was not in a position to determine whether there was a "reasonable connection between the extent to which the right/interest has been affected and the extent to which it is sought to be protected". As CEMEX stated in its written submissions: In the absence of such evidence, the Panel lacked the ability to determine whether any person's rights or interests had been affected and whether any order made by it would "protect" the shareholders' rights/interests. This is because individual shareholders may have suffered no loss or may have suffered a loss lesser or greater than the final dividend. 56 It follows that CEMEX's argument that the Panel improperly failed to take into account whether their conduct constituted a contravention of Chapters 6, 6A, 6B or 6C of the Corporations Act must be rejected. It also follows from my findings that the Panel's orders cannot be said to be unreasonable in the Wednesbury sense; Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223. 57 CEMEX alleges that the orders involve an impermissible delegation of power in that they establish, by orders 14-16, a mechanism by which ASIC is given the power to determine authoritatively whether a person is an Affected Shareholder and is therefore entitled to the payment. The mechanism set up by orders 14-16 is as follows: 14. CEMEX may refer a claim to ASIC, within 2 weeks of CEMEX or the ISP receiving the claim form (whichever is earlier). CEMEX must provide to ASIC, with the referred claim form, the reasons it considers that the person submitting the claim form may not be entitled to the payment set out in the claim form because: (a) CEMEX considers that the person submitting the claim form is not an Affected Shareholder; (b) Special Circumstances do not apply; (c) CEMEX dispute some or all of the details, supporting documents or evidence submitted in all with the claim form; or (d) CEMEX considers that payments have already been made or claimed for in respect of some or all of the Rinker shares claimed for. 15. If CEMEX refers a claim form to ASIC under Order 14, ASIC shall within 2 weeks of receipt of that claim form make a determination, after consultation with CEMEX if ASIC considers it desirable, as to whether or not the person submitting the claim form is entitled to be paid in accordance with the Orders and if necessary, for how many Rinker shares. 16. If ASIC is unable to make a determination under Order 15, it shall refer the claim form to the Panel within 2 weeks of receipt by ASIC of that claim form for decision. 58 According to CEMEX, where the power to determine authoritatively whether a person falls within the group is delegated to a third party it is not possible for the review Panel to reach the requisite state of satisfaction that the rights or interests of a group of person have been affected.