Wilson Watt Papandrea P/L v Harts Australasia Ltd & Queensland Newspapers P/L
[2001] QCA 179
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- Wilson Watt Papandrea P/L v Harts Australasia Ltd & Queensland Newspapers P/L[2001] QCA 179
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Wilson Watt Papandrea P/L v Harts Australasia Ltd & Queensland Newspapers P/L[2001] QCA 179
Wilson Watt Papandrea P/L v Harts Australasia Ltd & Queensland Newspapers P/L[2001] QCA 179
COURT OF APPEAL
WILLIAMS JA
| Appeal No 4173 of 2001 | |
| WILSON WATT PAPANDREA PTY LTD | Applicant |
| and | |
| HARTS AUSTRALASIA LIMITED | Respondent (Appellant) |
| and | |
| QUEENSLAND NEWSPAPERS PTY LIMITED | Respondent |
BRISBANE
DATE 10/05/2001
ORDER
HIS HONOUR: On 2 May this year Wilson Watt Papandrea Pty Ltd filed an application seeking an order that Harts Australasia Limited be wound up. On the same day an application was filed seeking the appointment of a provisional liquidator. The application for appointment of a provisional liquidator came on late in the afternoon of that day before the Chamber Judge. The matter was unable to be heard then for various reasons and the matter was adjourned until the morning of 3 May. At that time the Chamber Judge made a non‑publication order.
The matter came before the Judge again on the morning of 3 May and was apparently stood down because some discussions were proceeding between the parties. Around midday on that day the Judge was informed that some arrangement had been reached and the parties were seeking an adjournment of the application for appointment of a provisional liquidator to a date to be fixed. In addition to that order the Judge then made an order prohibiting publication of the application and the supporting material.
I should record that at some stage in the course of the hearing before the Chamber Judge on that day counsel for Harts indicated to the Court that his client contended that the applications amounted to an abuse of process.
Subsequently by oral application counsel for Queensland Newspapers Pty Limited sought the discharge of the order for non‑publication. Further argument with respect to the various matters took place before the Chamber Judge on 4 May. Apparently by that stage Harts had signed a document purporting to evidence arrangements reached the previous day and had given to Wilson Watt Papandrea a bank cheque for an amount in excess of the debt referred to in the statutory demand. However, counsel for Wilson Watt Papandrea indicated to the Chamber Judge that it did not regard the matter as settled. The Chamber Judge invited Wilson Watt Papandrea to immediately proceed with its application for the appointment of a provisional liquidator, but counsel indicated that he was not then in a position to proceed because necessary witnesses were not available.
As a consequence of that the application for appointment of provisional liquidator stood adjourned to a date to be fixed and the Chamber Judge became primarily concerned with the issue whether or not he should vacate the order prohibiting publication. Ultimately he reserved his decision on that matter and published reasons for his decision on 10 May. He concluded that in the circumstances the non‑publication order made on 3 May should be vacated. He gave, as I say, extensive reasons and it should be noted that in those reasons he indicated some concern with the material on which the applicant, Wilson Watt Papandrea, was relying and expressed a tentative view that it may not be sufficient to justify the Court making an order for the appointment of a provisional liquidator. He also referred to the fact that Harts contended that the proceedings were an abuse of process and he indicated some matters which might be seen as supporting that contention. He also referred reasonably extensively to the fact that Harts was a publicly listed company and that there was still trading in its shares on the Stock Exchange; the public, and shareholders in particular, being in ignorance of these proceedings in the Court.
From that decision the present applicant, Harts, has today filed a notice of appeal and also filed an application to the Court of Appeal seeking an order pursuant to rule 761(2) of the Uniform Civil Procedure Rules that the order vacating the non‑publication order be stayed pending the hearing of the appeal. It is that application with which I am currently concerned.
The point should immediately be made that the issue in question is a procedural one only. It involves an exercise by the Chamber Judge of a discretion. The grounds of appeal challenge that and assert that the learned Chamber Judge failed to give sufficient weight to the damage which may be caused to the appellant company by the vacating of the order. Indeed, it is the alleged irreparable harm to the appellant company which forms the basis of the specific application before me this afternoon.
I must say that having read the reasons for judgment of the Chamber Judge, I cannot discern any significant error in the exercise of his discretion such as would indicate to me that the applicant had strong prospects of succeeding on the appeal. However, the current application requires me to have regard to a number of matters which are dealt with in the material which has been read on the hearing of the application. As I have said, Harts is a listed company, and there has been since 2 May, when the initial application was filed, extensive trading in its shares. The material suggests that the share price has been as low as five cents, and during that period has risen to some 18 cents.
It is also in my view of some significance that much of the material on which each party relies in making assertions as to solvency comprises financial records available to the public through records held by the Australian Securities & Industries Commission. It is also significant, in my view, that the records of the Australian Securities & Industries Commission refer to a winding‑up order against Harts on 2 May. That is an error. No order was made on that day; there was merely the filing of the application for such an order. Whether or not the records of the Commission have been corrected is not clear from the material currently before me, but it is significant that anyone actually searching those records would at least be put on notice that there was some step with respect to winding up before the Court with respect to Harts.
It is also of some significance, in my view, that there is another application filed seeking the winding up of Harts, and that there are two other applications for the winding up of companies within the Harts group. The other application for the winding up of Harts Australasia is apparently brought by an employee. It appears that a large sum of money is sought; but what is of even greater significance for present purposes, in my view, is that both the applications of Wilson Watt Papandrea and that employee are based on a failure by Harts to comply with a statutory demand. Failure to comply with a statutory demand, of course, gives the creditor a prima facie entitlement to a winding‑up order and constitutes evidence of insolvency.
It is true that Harts has not had the opportunity of putting material before the Court this afternoon indicating the present status of those other three winding‑up applications, but counsel from the Bar table did indicate that all were in the process of being resolved prior to the hearing of the application for winding up. That can be accepted as an accurate statement; but the fact still remains, in my view, that the shareholders, in particular, and the general investing public, have a right to know that these applications exist, and are based on a failure to comply with statutory demands. If there is an explanation forthcoming from Wilson Watt Papandrea then that would in appropriate cases be sufficient to alleviate concerns that such people may have.
I have difficulty in understanding that a non‑publication order would put Harts in a better position so far as its credit providers are concerned. It seems to me that the company would, in any event, be under an obligation to disclose to any credit provider the existence of the applications in question.
It is clear that ordinarily proceedings in a Court are open to public scrutiny. It is only in special circumstances that orders will be made prohibiting publication of proceedings before the Supreme Court. The learned Chamber Judge in his reasons referred to Mirror Newspapers Ltd v. Waller (1985) 1 NSWLR 1; Scott v. Scott (1913) AC 417; and J v. L & A Services Pty Ltd (No 2) (1995) 2 QdR 10. It is not necessary for me to canvass what is said in those authorities to any extent this afternoon. Generally they support the proposition, in my view, that there is an onus on the applicant of showing special circumstances justifying the making of an order prohibiting publication of the material.
In that context I should say that I also have some concerns derived from the limits of my jurisdiction. It is generally known that trading in shares listed on the Stock Exchange takes place throughout Australia. Harts is primarily a Queensland company, and it may well be that the majority of its shareholders are Queenslanders, but nevertheless people in other States can trade in its shares. If I were to make a non‑publication order, I am doubtful that it would have any consequences so far as media outlets in other Australian States were concerned. Those media outlets would be able to make public, information that was otherwise denied to Queenslanders, notwithstanding my making an order such as that sought. That would give some potential shareholders or shareholders an advantage over others. That is something which is not acceptable. Fairness to shareholders all‑round is clearly a fundamental principle recognised in the Corporations Law and the various other laws dealing with share trading in Australia.
I must say that I do have some concerns about the attitude taken by Wilson Watt Papandrea. It appears that no steps have been taken to advertise the application so that it could be heard on the return date, namely 16 May. Also, I was told that no steps have been taken to have the application for appointment of a provisional liquidator brought on for final hearing before a Chamber Judge. The matter is clearly one of commercial sensitivity and urgency, and I have no doubt that the Supreme Court would be able to respond to that urgency by appointing a Judge to hear the matter on short notice; but Wilson Watt Papandrea are not pressing for a hearing. That cannot be allowed to continue indefinitely.
Any application such as this must be heard and determined promptly, so that the investing public and creditors know precisely where they stand and what their rights are. Counsel for Wilson Watt Papandrea indicated that his client's concern was that, though an amount of money sufficient to satisfy their demand had been tendered, they were concerned as to whether or not that could lawfully be accepted, given concerns as to the solvency of Harts. The matter, according to him, would be resolved by next Monday at the latest. In my view that should be regarded as the extreme limit. The matter should either be dismissed or brought on for hearing within the next week.
I should also say that any publication of any material associated with the proceedings before this Court to date must be a fair publication, and that would necessarily involve references to some of the concerns expressed by the Chamber Judge in his reasons for judgment. The public and the shareholders are entitled to know that these proceedings have been brought against Harts. They are also entitled to know that there is some arguable basis for contending that the application is an abuse of process, and also the tentative views expressed by the Chamber Judge that there are some doubts as to the sufficiency of the material to support the appointment of a provisional liquidator.
Having said all that, it is my view that the applicant has not satisfied the Court that there is sufficient good reason at this stage for granting a stay of the order of the Chamber Judge. In my view, if no stay is granted the consequence will be that all interested parties have full and proper knowledge of what has been happening so far as these proceedings are concerned. It follows, in my view, that the application should be dismissed.
I dismiss the application. I order that the applicant pay the costs of the respondent, Queensland Newspapers Pty Ltd, to be assessed.
Those are the orders of the Court.
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