McCann v Pendant Software Pty Limited (ACN 008 602739) (with Corrigendum dated 29 August 2006) [2006] FCA 1129 (21 August 2006)

FEDERAL COURT OF AUSTRALIA
McCann v Pendant Software Pty Limited (ACN 008 602 739) [2006] FCA 1129

IN THE MATTER OF TOWER SOFTWARE ENGINEERING PTY LTD (ACN 008 602 739)
KEVIN McCANN & ORS v PENDANT SOFTWARE PTY LIMITED (ACN 117 040 525) and BEREND JOHN PHILIP HOFF

VID 899 OF 2006

FINKELSTEIN J
21 AUGUST 2006 (CORRIGENDUM 29 AUGUST 2006)
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 899 OF 2006

BETWEEN:	KEVIN MCCANN (AND OTHERS AS SET OUT IN THE ATTACHED SCHEDULE) Plaintiffs
AND: AND:	PENDANT SOFTWARE PTY LIMITED First Defendant BEREND JOHN PHILIP HOFF Second Defendant
JUDGE:	FINKELSTEIN J
DATE:	21 AUGUST 2006
PLACE:	MELBOURNE

I certify that the preceding four (4) numbered paragraphs are a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Finkelstein.

FEDERAL COURT OF AUSTRALIA
McCann v Pendant Software Pty Limited (ACN 008 602 739) [2006] FCA 1129

CORPORATIONS – Takeovers Panel – application for declaration of unacceptable circumstances – undertaking given pursuant to s 201A of the Australian Securities and Investments Commission Act 2001 (Cth) – meaning of undertaking - enforcement.

ADMINISTRATIVE LAW – Takeovers Panel – hearing concluded on undertaking being given - decision to accept undertaking made by mistake – whether Panel has power to make later decision.

Australian Securities and Investments Commission Act 2001 (Cth): s 201A
Corporations Act 2001 (Cth): ss 657A, 657B, 657D

ACCC v Collings Construction (Unreported, NSWSC, 2 July 1997) distinguished
Chandler v Alberta Association of Architects [1989] 2 SCR 848 applied
Comptroller-General of Customs v Kawasaki Motors Pty Ltd (1991) 103 ALR 661 cited
Kabourakis v Medical Practitioners Board of Victoria [2005] VSC 493 applied
Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; (2002) 209 CLR 597 applied
Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 considered
Ridge v Baldwin [1963] UKHL 2; [1964] AC 40 cited
Saraswati v The Queen [1991] HCA 21; (1991) 172 CLR 1 considered
Steward v Director of Public Prosecutions [2004] 1 WLR 592 cited
Yates Property Corporation Pty Ltd v Boland (1998) 89 FCR 78 cited

IN THE MATTER OF TOWER SOFTWARE ENGINEERING PTY LTD (ACN 008 602 739)
KEVIN McCANN & ORS v PENDANT SOFTWARE PTY LIMITED (ACN 117 040 525) and BEREND JOHN PHILIP HOFF

VID 899 OF 2006

FINKELSTEIN J
21 AUGUST 2006
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 899 OF 2006

BETWEEN:	KEVIN McCANN (AND OTHERS AS SET OUT IN THE ATTACHED SCHEDULE) Plaintiffs
AND: AND:	PENDANT SOFTWARE PTY LIMITED First Defendant BEREND JOHN PHILIP HOFF Second Defendant

JUDGE:	FINKELSTEIN J
DATE OF ORDER:	21 AUGUST 2006
WHERE MADE:	MELBOURNE

1. Berend John Philip Hoff be joined as the second defendant and the title of the proceeding be amended accordingly.

2. The time within which the plaintiffs, comprising the sitting panel of the Takeovers Panel, may, on the application of Mr Hoff dated 25 May 2006, make a declaration under s 657A of the Corporations Act 2001 (Cth), in relation to the affairs of Tower Software Engineering Pty Ltd, be extended to 5 September 2006.

4. The first defendant’s application for a stay be dismissed with liberty reserved to make any further application.
AND THE COURT DIRECTS THAT:

the plaintiffs shall not make an order under s 657D of the Corporations Act 2001 (Cth) which has the effect of cancelling the contract between the first defendant and Equity Partners One Pty Ltd for the sale of shares in Tower Software Engineering Pty Ltd.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 899 OF 2006

BETWEEN:	KEVIN MCCANN (AND OTHERS AS SET OUT IN THE ATTACHED SCHEDULE) Applicant
AND: AND:	PENDANT SOFTWARE PTY LIMITED First Respondent BEREND JOHN PHILIP HOFF Second Respondent

JUDGE:	FINKELSTEIN J
DATE:	21 AUGUST 2006
PLACE:	MELBOURNE

1 This application raises several difficult questions in the context of rival bids to acquire shares in a company. The bids are governed by the takeover provisions in the Corporations Act 2001 (Cth). The application was brought on last Thursday and, for good reason, the parties requested that my decision be handed down today. That I am in a position to do so is in no small measure due to the comprehensive submissions by counsel. Necessarily, however, my reasons will be brief.

2 Pendant Software Engineering Pty Ltd, whose associate Pendant Properties Pty Ltd holds 30.54 per cent of the shares in Tower Software Engineering Pty Ltd (an unlisted company which has more than 50 members), has made an off-market bid to acquire all of the remaining shares and all of the options for shares in Tower. It sent its bidder’s statement (which contained the terms of its offer) to Tower. Tower’s board immediately resolved that Pendant could send the statement to shareholders and option holders as soon as it chose. Item 6 of s 633 of the Corporations Act provides that a bidder’s statement is to be sent to all relevant security holders within 14 to 28 days after the statement is sent to the target but that the directors may shorten the period. Following the receipt of the bidder’s statement Equity Partners One Pty Ltd, which held 14.43 per cent of the capital, accepted the offer in relation to its shares.

3 Mr Hoff, a major shareholder of Tower, applied to the Takeovers Panel for a declaration under s 657A of the Corporations Act that the board’s resolution and the acceptance by Equity Partners of Pendant’s offer were unacceptable circumstances. The Panel was minded to make a declaration of unacceptable circumstances but for the fact that Pendant agreed to give the Panel certain undertakings.

4 The Panel contends that Pendant has breached its undertaking and seeks an order under s 201A of the Australian Securities and Investments Commission Act 2001 (Cth) directing Pendant to comply with the terms of the undertaking. On this application, none of the facts are in dispute. The parties are, however, at loggerheads as to the requirements imposed on Pendant by the undertaking and whether it has satisfied those requirements. The resolution of this dispute depends upon the meaning to be given to the undertaking.

5 There is an alternative order sought by the Panel. If the construction of the undertaking goes against it, the Panel seeks an order extending the time within which to make a declaration of unacceptable circumstances. Section 657B of the Corporations Act sets out the time within which a declaration may be made. That time has passed. The section goes on to provide that the court may extend the period on the application of the Panel. That application may be made after the prescribed time has elapsed. The assumption that underlies the application for an extension of time is that the Panel has power to further consider, or to reconsider, the application. Whether that assumption is correct is in issue.

6 The problem has come about in the following way. The Constitution of Tower provides (by r 120) that shares may not be sold to a person who is not a member if a member is willing to purchase them (r 120.1). A member wishing to sell his shares must give notice to Tower to that effect and nominate the price he is willing to accept for his shares (r 120.2). Members have one month within which to purchase the shares at the nominated price (r 120.3). If the shares are not purchased by a member within that time then they may be sold to a non-member at any time during the next three months at a price not less than the nominated price (r 120.6).

7 On 23 December 2005, Equity Partners gave notice to Tower that it wished to sell its stake in the company for $1.45 per share. Because it was near Christmas, Equity Partners and Tower agreed to treat the notice as having been received by Tower on 1 January 2006. For the purposes of this application I will assume, as have the parties, that this agreement was effective. On the deemed day of notification, 1 January 2006, Tower shareholders were notified of Equity Partner’s offer to sell its shares. No shareholder took up the offer. Consequently, Equity Partners was free, until 1 May 2006, to sell its shares to a non-member for $1.45 per share or more.

8 Pendant made its off-market bid on 18 April 2006, being the day on which it lodged a copy of its bidder’s statement with the Australian Securities and Investments Commission. The bidder’s statement contained the offer. It was a cash offer: the offer price was $1.45. The closing date was 18 July 2006. In the ordinary course the offer would have been sent to shareholders within 14 to 28 days of the receipt by Tower of the bidder’s statement. At a meeting of the Tower board held on 18 April a director, Mr Frost, who was also a director of Pendant, tabled a copy, or a draft, of the bidder’s statement and moved a resolution that Pendant be permitted to immediately distribute the bidder’s statement to shareholders. The board passed the resolution. The result was that if it acted quickly Equity Partners could accept the Pendant offer without first offering to sell its shares to other shareholders. If accepted, there could be no rival bids for the control of Tower. All other shareholders could only accept the Pendant offer after having first offered to sell their shares to other shareholders in accordance with r 120.

9 Pendant began sending the bidder’s statement to shareholders on 19 April 2006 and completed the distribution within the three days required by s 633. Equity Partners received its copy on 19 April 2006. It signed the acceptance and transfer form and sent it to Pendant the next day by express post. The total consideration payable for Equity Partners’ shares was $6,525,000. With these shares Pendant’s interest (including that of Pendant Properties) in the company would increase to 44.97 per cent.

10 Pendant’s offer was declared to be free of conditions on 1 May 2006. There was a meeting of the Tower board three days later. At that meeting Mr Frost tabled the signed transfer of Equity Partner’s shares and moved that the transfer be registered. The board resolved that all transfers received by Pendant under its take-over bid be registered subject to certain conditions. The conditions included the following: "[that registration] would not otherwise involve a breach of duty on the part of [the] Directors and is not otherwise unlawful; and no higher offer is made for Tower Software Engineering Pty Limited’s shares during the Offer Period (as extended under the Corporations Act)."

11 On 9 May 2006, Pendant commenced an action against the directors in the Federal Court claiming that the resolution amounted to a refusal to register the transfer without just cause. Pendant sought an order correcting the register. The proceeding remains on foot.

12 Mr Hoff’s application to the Panel for a declaration of unacceptable circumstances was made on 25 May 2006. He put forward several bases for making the declaration. They included allegations that the bidder’s statement was misleading in several respects, that there was non-disclosure of material facts and that there was a secret agreement between Pendant and Equity Partners entered into before the take-over bid that Equity Partners would sell its shares to Pendant. Mr Hoff also relied upon the resolution to abridge the time for dispatching Pendant’s bidder’s statement to shareholders. He contended the result of this resolution was to give effective control of the company to Pendant "in an uncompetitive and ill-informed market".

13 The Panel considered the application. It published what it described as its Preliminary Decision on 9 June 2006. In this decision the Panel rejected some of Mr Hoff’s complaints. It did not deal with others. However, the Panel stated that the board’s decision to consent to the early dispatch of the Pendant bidder’s statement "would justify a declaration of unacceptable circumstances, having regard to the effect of that decision on the acquisition by Pendant Software of Equity Partners’ shares in Tower, and on the control, or potential control, of Tower." This was because there was not "an efficient competitive and informed market for voting shares in Tower".

14 Although the Panel said that it was minded to make a declaration as well as to consider an order cancelling Equity Partners’ acceptance of the Pendant offer, it went on to say that there might be scope for the parties to offer undertakings "which may avoid the need for further proceedings and for any declaration or orders". In particular, the Panel said that "Pendant Software may be able to address any concerns that the Panel has (as well as concerns it would be likely to have if Mr Hoff’s allegations were made out after further proceeding)" if it received an undertaking from Pendant.

15 The undertaking which the Panel suggested should be proffered (as amended to take into account comments from the parties) was in the following terms:

16 On 15 June 2006, the Panel handed down its decision on Mr Hoff’s application. The decision was that the Panel would accept Pendant’s undertaking and for that reason found that "it is not against the public interest for the Panel to decline to make a declaration of unacceptable circumstances".

17 The Panel explained that "if it had not been for the Tower Board’s decision to consent to early dispatch, Equity Partners would not have been able to accept the Pendant Software Offer without giving a further notice under Rule 120 of Tower’s constitution. In that event, there would have been a period of at least a month in which any potential rival bidder could have made a bid and had a viable prospect of acquiring control. The truncating of the time that would otherwise have been available to a competitive bidder to make a bid for control of Tower was the fundamental reason for the Panel’s concerns in this matter, as described in the preliminary decision letter. The terms of the Undertaking provide an equivalent opportunity for any potential rival bidder to make a takeover bid and acquire the Equity Partners’ shares if Pendant Software does not match the rival bid. Accordingly, in the circumstances of the current proceedings, the Panel considers that the Undertakings are sufficient to address the unacceptable circumstances arising from the decision to consent to early dispatch and to ensure that there is an efficient, competitive and informed market for control of Tower."

18 The undertaking had the desired effect, in the sense that it paved the way for a competing bid, a bid that would not otherwise have been forthcoming if effective control of Tower had passed to Pendant. The bid was by Quadrant Private Equity No.1 LP, a company connected to Mr Hoff. Quadrant does not hold any shares in Tower, but by reason of its connection with Mr Hoff, has a relevant interest in his shares in the company.

19 Quadrant lodged its bidder’s statement with ASIC on 30 June 2006. The offer was to acquire all Tower shares for $1.60 per share. The offer is scheduled to close on 22 September 2006. The offer was conditional, the key conditions being that Quadrant receive acceptances for at least 44 per cent of Tower shares and that there be no material adverse change in relation to Tower.

20 The bidder’s statement was sent to shareholders on 14 July 2006. That gave shareholders sufficient time within which to comply with r 120 if any of them wished to accept the offer. The dispatch of the conditional offer to shareholders did not, however, trigger Pendant’s undertaking. Thus, at that point, Pendant was not required to increase its offer or accept the bid for the Equity Partners’ shares. Nonetheless, on 21 July 2006, Pendant varied its offer to match the price offered by Quadrant.

21 Quadrant reacted in the way one would expect an offeror who wished to acquire the shares of a target would react in a competitive market. It immediately (that is on 21 July 2006) varied its offer by increasing the offer price to $1.80. Then, no doubt realising that it could not acquire the Equity Partners parcel unless its own offer became unconditional on or before 28 July 2006, Quadrant declared its offer to be free from all conditions one day earlier (on 27 July 2006).

22 The principal issue between the parties is whether the undertaking requires Pendant to increase its offer to $1.80 per share or to give notice under r 120 that it will sell the Equity Partners’ shares to other shareholders at a price not higher than $1.80 per share, and if the shares are not purchased at that price to accept Quadrant’s offer for the parcel. The Panel contends that this is what Pendant is required to do. Pendant says the opposite. The resolution of their dispute depends only upon the construction to be given to the undertaking.

23 This is a convenient point at which to indicate the approach I will adopt on the construction question. First, I accept as appropriate the Panel’s approach to the drafting of undertakings, which is that they should be "as simple and direct as possible": Takeovers Panel, Guidance Note 4 at para 4.23. This is good common sense. I will adopt the same approach to construction. There will be no pedantic approach.

24 Second, I do not think it appropriate, as Pendant contends and as Bainton J held in Australian Competition and Consumer Commission v Collings Construction Co Pty Ltd (Unreported, Supreme Court of NSW, 2 July 1997) in relation to an undertaking given to the ACCC under a different statute, that the undertaking "should be construed contra proferendum [sic]", the proferend being the person seeking to enforce the undertaking. By this contention I take Pendant to be saying that the undertaking should be strictly construed so that Pendant is not obliged to perform any act unless it is absolutely clear from the terms of the undertaking that the act must be performed. I prefer a different approach. Undertakings of the present kind are given by business people or organisations who are well capable of looking after their own interests. More often than not they are assisted by first rate legal advisors. In such a case it is, in my opinion, wrong to place a strained construction on the words of an undertaking or to prefer the position of one party over another.

25 Third, in deciding what is meant by the words of an undertaking it is permissible to have regard to the reasons given by the Panel for requiring the undertaking and what the Panel perceived to be its effect. This is the position in the case of orders made by a court (as to which see Yates Property Corporation Pty Ltd v Boland (1998) 89 FCR 78) and it should be the same in relation to an undertaking given under s 201A, especially if the undertaking was required by the Panel. Put another way, the meaning of an undertaking is to be determined having regard to its stated purpose.

26 Fourth, if an undertaking is of doubtful meaning and it is possible to give the undertaking a meaning that will avoid unintended consequences or consequences that are unreasonable, that meaning should be adopted. If that results in a construction that it is not necessarily grammatically accurate, so be it. But this approach will not permit a meaning to be given to an undertaking which is different from its clear meaning. In this connection it was not suggested that I should apply by analogy the approach developed for the construction of statutes under which it is permissible to modify the literal meaning of words in order to avoid absurd or unreasonable results: see for example: Saraswati v The Queen [1991] HCA 21; (1991) 172 CLR 1, 21-23.

27 Turning now to the undertaking itself, relevantly, Pendant’s undertaking in the case of a "Superior bid" (a defined expression) is to increase its offer so that it is "at least equal to that offered under the Superior bid" (cl D(c)) or, if the Superior bid is not made by a member of Tower, to give a notice under r 120.2 offering to sell the Equity Partners’ parcel "to shareholders at a price per share not higher than the price offered in the Superior bid" and if they are not taken up by shareholders to accept the Superior bid (cl D(d)). The question in each case is how does one determine the price of the Superior bid?

28 It is common ground that Quadrant’s off-market bid is a Superior bid. It is a Superior bid because the offer made under the bid was for a cash price of more than $1.45 per share, the offer was sent to shareholders on 14 July 2006 and the offer became free of all conditions before 28 July 2006. That is, all the conditions specified in cl D(a) and (b) were satisfied.

29 The construction question, as I see it, is whether the price (which of course must be more than $1.45) "offered under [or "in"] the Superior bid" is a reference only to the first price offered to shareholders on or before 14 July or to any subsequent increase in the offer price.

30 Mr Glick SC’s submission is that "variations were not the subject matter of the undertaking at all" and that the only price which Pendant has to match is the offer price specified in the offer when first sent to Tower shareholders. I reject without any hesitation the first element of this submission. I will explain why by reference to an example, not necessarily an example which would occur, but one that might have occurred.

31 Let it be assumed that a bidder sends an offer to shareholders before 14 July 2006 and the offer is to purchase Tower shares for $1.45 per share. This is not a relevant offer because the offer price is not "more than $1.45". Let it be further assumed that the offer is varied by increasing the offer price to, say, $1.60 and notice of that variation as required by s 650D of the Corporations Act is sent to shareholders on or before 14 July 2006. I have no doubt that clause D(a) would be satisfied. The reason is that I read the words "offers" when first used in clause D to refer not only to the initial offers to shareholders but also to any varied offers provided the variation increases the offer price to more than $1.45 per share. There is no contextual reason why this construction is not available and to reject this construction would be absurd.

32 The rejection of Mr Glick SC’s submission that variations are to be disregarded does not, however, resolve the dispute. The true question is whether a variation in the offer price made after 14 July is a candidate for the price "offered under [or "in"] the Superior bid".

33 To achieve one of the Panel’s stated objects for the undertaking namely that of creating a competitive market in which a rival bidder has a prospect of gaining control of Tower it would be wrong to exclude post 14 July 2006 variations. This notwithstanding that is not the effect of the undertaking, in my opinion. It is, I think, clear that "the amount offered under [or "in"] the Superior bid" must be a reference to the amount offered to shareholders on or before 14 July 2006. This is the plain meaning of the words and they cannot be rewritten to accord with the Panel’s intention.

34 This anomalous position has come about, I suspect, because another of the stated objects of the Panel for the undertaking was to restore the one month period that would have been available to a rival bidder if the board’s resolution had not been passed. Put another way, and adopting the language of the Panel, it wished to provide a rival bidder with an "equivalent opportunity" to make a rival bid. The problem is that the provision of an "equivalent opportunity" (creating a period of approximately one month between the giving of the undertaking on 16 June 2006 and the date specified in cl D(a) for a rival bidder to make a bid) was not sufficient to establish a competitive market, as subsequent events have shown.

36 It is necessary, therefore, to consider the Panel’s alternative claim for an order for an extension of time within which to make a declaration of unacceptable circumstances. As I have earlier indicated, here the principal issue is whether there is any utility in making such an order. There will be utility only if the Panel is able to proceed with Mr Hoff’s application.

37 In Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; (2002) 209 CLR 597 it was held that if an administrative decision-maker commits a jurisdictional error in reaching his decision, the decision is liable to be set aside but, whether set aside or not, the decision-maker can correct the error in a later decision. So, if the Panel committed a jurisdictional error in arriving at its decision that the undertaking proffered by Pendant rendered it inappropriate to make a declaration of unacceptable circumstances, it could still deal with the application. It would, of course, be necessary, if it went ahead, for the Panel to release Pendant from the earlier undertaking.

38 It is not, however, only in the case of jurisdictional error that an administrative decision-maker can correct error. For example in the Comptroller-General of Customs v Kawasaki Motors Pty Ltd (1991) 103 ALR 661 Beaumont J said (at 667) that "where it appears to a decision-maker that his or her decision has preceded upon a wrong factual basis, it is appropriate, proper and necessary that the decision-maker withdraw his or her decision."

39 Similar statements appear in the judgment of Gillard J in Kabourakis v Medical Practitioners Board of Victoria [2005] VSC 493. There the Medical Practitioners Board of Victoria, a statutory body, conducted an informal hearing into the professional conduct of a doctor and made a finding about that conduct but, by mistake, had overlooked some evidence. There was no express provision in the relevant statute allowing the board to set aside its finding. Nevertheless, Gillard J said at [48] that "if a decision made by a statutory body, which was clearly made in error or as a result of some obvious mistake, it is an offence to common sense to suggest that the only avenue open to correct the error is to appeal, state a case, or seek judicial review." He went on to say that an administrative decision-maker should be entitled "to correct an obvious error by revisiting the process". Gillard J accepted that if the statute under which the administrative decision-maker was acting prevented the decision from being re-opened then of course it could not be.

40 There is a passage in the speech of Lord Reid in Ridge v Baldwin [1963] UKHL 2; [1964] AC 40, 79 which is to a like effect. Lord Reid said: "I do not doubt that if an officer or body realises it has acted hastily and reconsiders the whole matter afresh, after affording to the person affected a proper opportunity to present his case, then its later decision will be valid." In Bhardwaj Gleeson CJ referred (at 603) to this passage with apparent approval but noted that the general proposition stated by Lord Reid "must yield to the legislation under which a decision-maker is acting". To a like effect are the comments of Gummow J in Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 21 FCR 193, 211, 218-219. See also Steward v Director of Public Prosecutions [2004] 1 WLR 592.

41 There is yet another basis upon which an administrative decision-maker might still deal with a matter that appears to have been finalised. In Chandler v Alberta Association of Architects [1989] 2 SCR 848 Sopinka J, who delivered the decision of the Supreme Court of Canada, said (at 862): "If the Tribunal has failed to dispose of an issue which is fairly raised by the proceedings and of which the tribunal is empowered by its enabling statute to dispose, it ought to be allowed to complete its statutory task."

42 In my view the Panel is entitled to proceed with Mr Hoff’s application. Contrary to the Panel’s stated view, the undertaking proffered by Pendant does not in fact dispose of all the matters raised by the application. I mean by this that the undertaking, which has the limited effect I have given it, did not create a situation where there could be competitive bidding for the shares in Tower, and this may be the only appropriate remedy if Mr Hoff can make out some of his complaints.

43 In any event, it is clear that the Panel has made an important mistake in the effect of the undertaking. It is not necessary to determine whether the mistake is one of fact (the meaning of words in the undertaking) or one of law (how the undertaking is to be applied to the known facts). It is enough for me to hold (as I do) that the mistake is of such importance that it warrants the Tribunal pressing ahead with the application.

44 There is nothing in the legislation which precludes the Panel from proceeding with the application in the present circumstances.

45 For this purpose the Panel should be granted an extension of time within which to make a declaration of unacceptable circumstances. It seeks an extension for 14 days. The Panel has indicated that if the extension is given and a declaration is in due course made it will not make an order under s 657D(2) of the Corporations Act cancelling the contract between Equity Partners and Pendant if Equity Partners has already dispersed the purchase price. I will make an order to that effect as the price of obtaining the extension.

46 I will hear the parties on the precise form of orders to be made. One order will be to join Mr Hoff as a defendant. He has indicated his consent to such an order being made.

I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

Counsel for the Plaintiffs:	Mr P. Jopling QC Mr D. Star

Solicitor for the Plaintiffs:	Freehills

Counsel for the First Defendant:	Mr L. Glick SC Mr P. Erlich

Solicitor for the First Defendant:	Septimus Jones & Lee

Date of Hearing:	17 August 2006

Date of Judgment:	21 August 2006

KEVIN McCANN	First Plaintiff
NORMAN O’BRYAN	Second Plaintiff
CHRISTOPHER PHOTAKIS	Third Plaintiff
PENDANT SOFTWARE PTY LIMITED (ACN 117 040 525)	First Defendant
BEREND JOHN PHILIP HOFF	Second Defendant

Federal Court of Australia

McCann v Pendant Software Pty Limited (ACN 008 602739) (with Corrigendum dated 29 August 2006) [2006] FCA 1129 (21 August 2006)