FEDERAL COURT OF AUSTRALIA

Harding Investments Pty Ltd v PMP Shareholdings Pty Ltd (No 4) [2011] FCA 1406

THE COURT ORDERS THAT:

1.    The first applicant forthwith execute a transfer of half of its shares in Lotic Pty Ltd in favour of the first respondent and deliver that transfer to its solicitors.

2.    The first applicant forthwith execute a transfer of half of its shares in Lotic Pty Ltd in favour of the third respondent and deliver that transfer to its solicitors.

3.    The applicants’ solicitors hold the executed transfers referred to in Orders 1 and 2 above (collectively, the Transfers) until the first and third respondents have complied with Order 4 below, or otherwise until further order.

4.    On or before 9 January 2012, the first and third respondents pay into the trust account of the applicants’ solicitors the sum of $585,000 being the purchase price for the first applicant’s shares in Lotic Pty Ltd (the Sum).

5.    Upon the Sum being received by the applicants’ solicitors in clear funds, the applicants’ solicitor deliver the Transfers to the solicitors for the first and third respondents.

6.    Upon compliance with Order 5 above, the applicants’ solicitors release the Sum to the applicants.

7.    The respondents pay the applicants’ costs of the proceeding from 28 May 2011, such costs to be taxed in default of agreement.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    On 27 May 2011, the first respondent, PMP Shareholdings, and the third respondent, Jashtra Holdings, were ordered to purchase the shares in Lotic Pty Ltd (ACN 116 609 851) held by the first applicant, Harding Investments Pty Ltd (ACN 118 130 402) (Harding Investments): Harding Investments Pty Ltd v PMP Shareholding Pty Ltd (No 2) [2011] FCA 567. The other orders on that day may be put to one side.

2    On 30 November 2011, further reasons for decision were published: Harding Investments Pty Ltd v PMP Shareholding Pty Ltd (No 3) [2011] FCA 1370. Those reasons for decision addressed the price to be paid to Harding Investments for the shares it held in Lotic Pty Ltd. Unsurprisingly, the parties cannot agree on orders to give effect to those reasons for decision. I say unsurprisingly because throughout this litigation the parties have been unable to agree on the most basic of matters.

3    The Orders proposed by the applicants were as follows:

1.    That first applicant (sic) forthwith execute a transfer of half of its shares in Lotic Pty Ltd in favour of first respondent and deliver that transfer to its solicitors.

2.    That the first applicant forthwith execute a transfer of half of its shares in Lotic Pty Ltd in favour of the third respondent and deliver that transfer to its solicitors.

3.    That the applicants’ solicitors hold the executed transfers until compliance by the first and third respondents with the following order, or otherwise until further order.

4.    That on or before 9 January 2012, the first and third respondents pay into the trust account of the applicants’ solicitors the sum of $585,000 being the purchase price for the first applicants’ (sic) shares.

5.    That upon that sum being received by the applicants’ solicitors in clear funds, the applicants’ solicitor deliver the transfers to the solicitors for the first and third respondents.

6.    Upon compliance with Order 5 above, the Applicants’ solicitors shall release the sum of $585,000 referred to in Order 4 above to the Applicants.

7.    The Respondents pay the Applicants’ costs of the proceeding from 28 May 2011 such costs to be taxed in default of agreement.

4    The respondents agree with Orders 1-3. They dispute the timing of Order 4 and do not accept Orders 6 and 7. In addition, the respondents seek a stay of Orders 4 and 5. The costs order the respondents seek is limited to an Order that the applicants pay the respondents’ costs of and incidental to the production of the report of Mr Blashki, a valuer (the Blashki Report).

5    I will make Orders 1 to 6 in the terms sought by the applicants.

6    That leaves two issues to be addressed – the application for a stay and the question of costs.

Application for a stay

7    The respondents sought leave to appeal from a number of the Orders made on 27 May 2011. At present, there is nothing before me to suggest that a stay of the Orders the Court will make today is appropriate or necessary.

8    The application for leave to appeal from the Orders of 27 May 2011 has been adjourned until 16 December 2011. If the respondents wish to renew their application for a stay they may do so on that day on proper material.

Costs

9    There are two aspects to the question of costs – the applicants’ costs since 28 May 2011 and the respondents’ costs of the Blashki Report.

10    In relation to the applicants’ costs of the proceeding from 28 May 2011, costs should follow the event. The respondents should pay those costs, such costs to be taxed in default of agreement. I will therefore make Order 7 in the terms sought by the applicants.

11    In relation to the respondents’ costs of and incidental to the Blashki Report, I reject the respondents’ submission that those costs should be paid by the applicants. It is true that the first hearing dealt only with the substantive issue of whether there was oppressive conduct and not the question of value because the applicants’ expert withdrew his Expert Report as to value. However, that did not mean that the Blashki Report was not useful or used. The Blashki Report was provided to the Court-appointed expert by the respondents, for the purpose that the expert would (and did) refer to it. Secondly, at the hearing as to value, the respondents withdrew the tender of the Blashki Report. In part, the tender was withdrawn because the respondents did not seek to cross examine the Court-appointed expert and had not made any arrangements for Mr Blashki to be available for cross examination. In all the circumstances, the costs of and incidental to the Blashki Report should be borne by the respondents.

Associate:

Dated:    8 December 2011