FEDERAL COURT OF AUSTRALIA

Oswal v Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed)

[2011] FCAFC 117

THE COURT ORDERS THAT:

1.    The application for leave to appeal from the order of the Court made on 29 April 2011 refusing to stay the proceeding in WAD 66 of 2011 is refused.

2.    The applicant pay to the respondent costs of the application.

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

THE COURT ORDERS THAT:

1.    The application for leave to appeal from the order of the Court made on 29 April 2011 refusing to stay the proceeding in WAD 66 of 2011 is refused.

2.    The applicants pay to the respondent costs of the application.

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

REASONS FOR JUDGMENT

MANSFIELD & FOSTER JJ

1    These applications seek to challenge the orders of a judge of the Court that proceedings in this Court instituted by the respondent against the applicants should not be stayed. One of the applicants had earlier instituted proceedings against the respondent and others in the Supreme Court of Victoria, and the applicants claimed that the proceedings in this Court should be stayed until the Victorian proceedings were resolved.

2    For the reasons given below, the applications should be refused with costs. It is now clear enough that the issues in the two proceedings overlap, so that one should ultimately not proceed whilst all the issues between the parties are resolved in the other, or that by cross vesting the two actions they may be heard together. The best means of achieving that objective in the interests of justice is not determined simply by selecting the proceeding which was first commenced.

INTRODUCTION

3    On 10 March 2011, Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) (BFPL) started proceedings in this Court in the Western Australia District Registry against Pankaj Oswal (PO), Radhika Oswal (RO) and Comical Ali Militant Vegetarian Pty Ltd (CAMV) (the WA Action). It was a substantial claim against PO for $A95,764,912 for payments caused to be made by BFPL in breach of his duties owed to BFPL, and against RO and CAMV for lesser amounts to the extent to which they benefited from those payments. The WA Action was commenced following the appointment (by a financier of BFPL) of Receivers and Managers to BFPL on 17 December 2010, and their subsequent investigation into the affairs of BFPL.

4    Shortly before that date, on 15 February 2011, RO commenced proceedings in the Supreme Court of Victoria to have the appointment of the Receivers and Managers to BFPL declared invalid (the Victorian Action).

5    On 13 April 2011, RO applied to this Court for the WA Action to be stayed pending the hearing and determination of the Victorian Action. On the same date PO made a similar application, even though at that time he had not challenged the validity of the appointment of the Receivers and Managers to BFPL. CAMV did not make a similar application. Apparently, it was said at the hearing of the stay applications that CAMV had been intended to be joined in the application by RO.

6    On 29 April 2011, a judge of this Court (McKerracher J) refused the two stay applications: Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) v Oswal [2011] FCA 424 (the primary decision).

7    These are two applications for leave to appeal the primary decision and if leave to appeal is granted, to appeal pursuant to the Federal Court of Australia Act 1976 (Cth) (the FCA Act). Observing that the decision to be challenged is an interlocutory decision, an appeal under s 24(1)(a) can only be brought by leave: s 24(1A) of the FCA Act . Under s 25(2), it has been directed that the application for leave to appeal be heard and determined by the Full Court. It is not clear how CAMV has the status to seek leave to appeal, as it did not apply for a stay of the WA Action, but nothing will turn on its status.

8    The primary decision was a discretionary decision made on a matter of practice and procedure. The character of the two applications imposes a heavy burden on PO and RO. As was said in House v The King (1936) 55 CLR 499 at 505, an appeal from a discretionary judgment should not be allowed unless the Court is persuaded that the decision was made in error involving the primary judge acting upon a wrong principle, allowing extraneous or irrelevant matters to guide or affect the decision, by mistaking the facts, or by failing to take into account some material consideration. There are good reasons for that cautious approach. It avoids the risk of the pre-trial processes becoming fragmented, and so causing lengthier and more expensive litigation than is necessary. It avoids the risk of deferring or delaying the postponement of the final decision of the dispute between the parties. It avoids inappropriate intrusion into appropriate case management of cases by the primary judge, with a view to bringing the matter to a speedy, efficient, effective and just resolution. More generally, therefore, it may interfere with the proper administration of justice, as now reflected in s 37M of the FCA Act. For instance, in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564, French J at [42] said:

The time and resources of the Court and the parties should not be lightly taken up with appeals about decisions in connection with proceedings which do not finally determine the rights of the parties.

9    There are many judicial observations to the same effect.

10    Generally speaking, whether leave to appeal should be given from an interlocutory decision is determined upon the two principles referred to by the Full Court (Sheppard, Burchett and Heerey JJ) in Décor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-399 (Décor Corp). Counsel for PO, and RO and CAMV accepted that those principles applied to their present applications. Those principles require the Court to determine:

(1)    whether in all the circumstances the decision is attended by sufficient doubt to warrant it being reconsidered by the Full Court; and

(2)    whether substantial injustice would result if leave were refused supposing the decision to be wrong.

11    Where the matter concerns a discretionary interlocutory ruling on a matter of practice and procedure, rather than in relation to a substantive right, leave to appeal is less often given. In Hogan v Australian Crime Commission (2010) 267 ALR 12, the High Court (French CJ, Gummow, Hayne, Heydon and Kiefel JJ) at [34] said:

Appellate intervention in matters of practice and procedure, where no questions of general principle are at stake, has been said to require the exercise of particular caution.

12    That approach reflects the approach of the High Court in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, and in particular in the joint judgment of the plurality (Gibbs CJ, Aickin, Wilson and Brennan JJ) at 177 where their Honours cited with approval the well known passage of Jordan CJ in Re Will of FD Gilbert (dec.) (1946) 46 SR (NSW) 318 at 323. There his Honour said:

… I am of opinion that, … there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight reign were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.

13    In Bomanite Pty Ltd v Slatex Corp Aust Pty Ltd (1991) 32 FCR 379 at 387, Gummow J said:

It is not a matter of saying that the discretion miscarried because the result strikes one as perhaps harsh or because one might have exercised the discretion differently. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course.

14    Hence, there must be some error of law or logic which is apparent on the face of the reasons or which is implicit in the result, and which would cause substantial injustice if the Full Court refused leave to appeal.

THE WA ACTION AND THE VICTORIAN ACTION

15    The background to the WA Action is not apparently contentious. PO is a director and shareholder of BFPL. BFPL owns and operates a liquid ammonia plant in Western Australia. It produces a significant percentage of the total world output of tradeable ammonia. Its head office is in Perth, as are its executive directors. At the time of the events material to the action, both PO and RO lived in Perth.

16    BFPL is a wholly owned subsidiary of Burrup Holdings Ltd (BHL). The shares in BHL have been held as 35% by Yarra Australia Pty Ltd (Yarra), 30% by PO and 35% by RO. At material times until the appointment of receivers to BFPL, PO was the managing director of BFPL.

17    The Australian and New Zealand Banking Corporation Ltd (ANZ) holds a share mortgage over all PO’s shares in BHL, and about 82 million of RO’s shares in BHL (approximately 7.5% of the shares in BHL). Consequently, ANZ is the mortgagee of 37.5% of the shares in BHL. The share mortgage secured loans by ANZ to PO amounting to some $US537m. BFPL is also indebted to ANZ in amounts totalling some $US360m. That sum is secured, inter alia, by a Deed of Charge (a fixed and floating charge) dated 18 December 2002 and certain mortgages, registered on 24 January 2003 over the assets and undertakings of BFPL. PO has guaranteed the indebtedness to ANZ to the extent of $US928m, and RO has guaranteed the indebtedness to ANZ to the extent of $US568m.

18    On 3 December 2010, ANZ made demands under those guarantees to PO and RO. No payments were received in response to the demands.

19    By notice dated 17 December 2010, ANZ (through ANZ Fiduciary Services Pty Ltd (ANZFS)) appointed Ian Carson, David McEvoy and Simon Theobald of PPB Advisory as Receivers and Managers (the Receivers) over all the assets and undertakings of BFPL pursuant to the Deed of Charge. Pursuant to cl 6.3(t) of the Deed of Charge, the Receivers and Managers have an express power to commence proceedings in the name of BFPL.

20    That appointment did not prompt any immediate application from either of PO or RO to restrain the Receivers from acting in their capacity as Receivers and Managers of BFPL or otherwise attempt to prevent them from discharging their duties. Indeed, until the commencement of the Victorian Action, neither PO nor RO had expressed any concern either to ANZ or to the Receivers about the validity of the appointment of Receivers.

21    As was notified to PO, RO and CAMV from time to time by the legal advisors to the Receivers, the Receivers following their appointment investigated the alleged improper payments made by PO for the benefit of himself and RO from funds of BFPL, and sought explanations as to the nature of certain transactions and also undertakings (which were not provided) from PO and RO on behalf of BFPL in relation to their assets. The Receivers reserved the right to commence proceedings to recover those funds from PO and RO.

22    That correspondence included letters to PO and to RO on 20 and 28 January 2011 indicating that the Receivers had been investigating a number of payments made to or for the benefit of RO from the funds of BFPL. It also included a letter of 14 January 2011 to solicitors for PO asking whether they had instructions to accept service of proceedings to be initiated against him in respect of allegations of breach of his various duties. No response was given to that request. The WA Action was therefore served personally upon PO on the day it was issued. It was only after that event, of which PO’s solicitors were properly notified, that they confirmed that they had instructions to act for PO. In addition, on 10 February 2011, solicitors for the Receivers sent to PO a notice pursuant to s 430 of the Corporations Act 2001 (Cth) (the Corporations Act) requiring a report as to payments that he had caused BFPL to make. He gave no response to that notice either.

23    Notwithstanding the apparent failure of PO and RO to respond to any of those communications, and without any notice to either BFPL, the Receivers or the solicitors for the Receivers, RO on 15 February 2011 commenced the Victorian Action. She sought a declaratory order that the appointment of the Receivers as Receivers and Managers of the assets and undertakings of BFPL on 17 December 2010 was invalid and of no effect, and orders removing them from that position. Alternatively orders were sought restraining the Receivers from acting in their appointed capacity. The defendants to the Victorian Action were ANZ, ANZFS, the Receivers, BHL and BFPL.

24    On 10 March 2011, the Receivers through BFPL commenced the WA Action. In the WA Action, the Statement of Claim alleges that PO had breached certain statutory and fiduciary duties owed by him to BFPL, and alleged accessorial liability against RO and CAMV. The claim against PO was for $A95,764,912 under s 1317H of the Corporations Act and alternatively by way of equitable compensation, and against RO and CAMV for the payment of compensation. For present purposes, it is not necessary to set out in detail the alleged payments. There are 19 transactions totalling $A95,764,912, set out in the Schedule to the Statement of Claim. On 11 April 2011, RO sought further particulars of the Statement of Claim.

25    On 13 April 2011, both PO and RO separately applied to stay the WA Action pending the hearing and determination of the Victorian Action. The two motions for a stay were heard and determined together.

THE STAY APPLICATIONs

26    It was argued on behalf of PO and RO on their stay applications that the WA Action was an abuse of process, and alternatively that in the circumstances it was appropriate to stay the WA Action until the Victorian Action had been heard and determined.

27    At the time of the two stay applications, the Victorian Action had progressed by the filing of defences by all the defendants other than BFPL, as the relevant Rules of Court required. It will be necessary to refer to the terms of the Defence of the Receivers and BFPL to identify the overlapping issues. The WA Action had not progressed to that point. In accordance with the then Federal Court Rules (the FC Rules), the action was listed for directions on 12 April 2011 when, routinely, the time fixed for the filing of any Defence would have been by 19 April 2011: see the FC Rules, Orders 10 and 11, rules 19 and 20. It appears that both PO and RO pre-empted that obligation as the stay applications were made only the day prior to the directions hearing, and RO also on the same day sought particulars of the Statement of Claim.

28    The reasons advanced in support of the applications for a stay were:

    the Victorian Action was commenced first and was more advanced than the WA Action;

    the determination of the Victorian Action is likely to have a material effect on the WA Action and may result in its withdrawal;

    it is in the public interest that the WA Action be stayed and that the validity of the appointment of the Receivers as controllers of BFPL be determined before the WA Action continues;

    costs and resources will be wasted, including those of this Court, in the event that the Supreme Court of Victoria determined that the Receivers have been invalidly appointed so that the WA Action by BFPL through the Receivers could not continue;

    there is a risk of duplication of issues and inconsistent findings if the WA Action proceeds concurrently with the Victorian Action; and

    the balancing of advantages and disadvantages to each party favours a temporary stay of the WA Action pending the hearing and determination of the Victorian Action.

29    In general terms, there was no dispute about the applicable principles. The primary Judge was asked to, and did, consider and adopt the considerations listed by Lockhart J in Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd (1992) 34 FCR 287 at 291 (Sterling Pharmaceuticals). His Honour there said:

In my opinion relevant considerations to be taken into account in the present case include the following:

•    Which proceeding was commenced first.

•    Whether the termination of one proceeding is likely to have a material effect on the other.

•    The public interest.

•    The undesirability of two courts competing to see which of them determines common facts first.

•    Consideration of circumstances relating to witnesses.

•    Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted.

•    The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues.

•    How far advanced the proceedings are in each court.

•    The law should strive against permitting multiplicity of proceedings in relation to similar issues.

•    Generally balancing the advantages and disadvantages to each party.

30    The primary Judge, in our view correctly, remarked of that passage at [16] in these terms:

The parties, mainly the respondents, have presented arguments by reference to the list in Sterling Pharmaceuticals. Judgments on occasions set out a check list of relevant principles gathered from preceding cases and which may guide the exercise of judicial discretion. That approach is often helpful both for the writer and the reader but more often than not, such a list is accompanied by a caveat perhaps to the effect that the list does not purport to be exhaustive. In this case the description given was that the considerations, in his Honour’s view, ‘include the following’. The fact that such a list is a non-exhaustive guide accords with the task of exercising judicial discretion and sets it apart from ‘ticking off’ strictly prescriptive statutory preconditions. There are occasions of which this is one, where few of the elements in such a list have particularly weighty significance in the circumstances. In this case, the infancy of the litigation in both instances is a significant factor.

31    The principal argument for PO and RO was that it was inappropriate to allow the WA Action to continue to finality, given the timing of and the nature of the Victorian Action and the orders sought. It was contended that his Honour should have given effect to the observations of Dixon J in Union Steamship Co of New Zealand Ltd v The Caradale (1937) 56 CLR 277 (Union Steamship) at 281. The primary Judge considered that decision at [17]:

… in relation to situations involving multiple proceedings with respect to the same subject matter in different courts in Australia that ‘[t]he inconvenience and embarrassment of allowing two independent actions involving the same question of liability to proceed contemporaneously in different courts needs no elaboration’.

THE REASONS FOR THE PRIMARY DECISION

32    The primary Judge addressed in sequence the particular considerations addressed by counsel for the parties, as drawn from the observations in Sterling Pharmaceuticals referred to above.

33    As to the fact that the Victorian Action was the first in time, after considering the communications between the parties, the primary Judge remarked at [31]:

I also accept the receivers’ submission that the earlier commencement of the Victorian proceeding is not as important (in this dispute at least) as the question of the relative status of the respective proceedings, another consideration in the Sterling Pharmaceuticals list. The status of the respective proceedings is not dissimilar. The only step which has been taken in the Victorian proceedings since the commencement of the action was the filing of the defence which has been the subject of close examination in the course of argument on this motion. The only correspondence which has been received from Mrs Oswal’s lawyers pertaining to the conduct of the action was a letter of 14 April 2011 (being the day after the stay motion was filed in the Federal Court proceeding) proposing certain directions nearly four weeks after the Victorian Supreme Court wrote to the parties requesting that they confer about the directions to be made.

34    His Honour was not persuaded that there was any real significance in the Victorian Action being the first in time, as neither action was significantly more advanced than the other. His Honour said that both actions were in their infancy at [33].

35    Under the heading “Material Effect”, that is “whether the termination of one proceeding is likely to have a material effect on the other”, the primary judge clearly understood the contention that the resolution of the Victorian Action might determine whether the WA Action would continue at all. He accepted that the determination of the Victorian Action is likely to have a material effect on the WA Action because, if the appointment of the Receivers was found to be invalid, control of BFPL would revert to the directors of BFPL who would then need to determine whether to proceed with the WA Action. He accepted that there will probably be significant commonality in the pleadings and evidence in both actions. He adverted to the fact that neither PO nor CAMV are parties to the Victorian Action, although they may be bound by some form of issue estoppel as privies of RO. He noted that PO had acknowledged in submissions that he had been at all times aware of the proposed WA Action, and of the Victorian Action. He noted that, as the argument was then advanced, the primary issue in dispute in the Victorian Action was whether there was a “material adverse effect” as defined in the relevant finance documents so as to justify the appointment of the Receivers. In the WA Action, the primary issues of fact were said to be whether PO directed or procured the extensive payments about which BFPL complains and if so whether those payments were made in breach of PO’s statutory and fiduciary duties, as well as whether the payments (assuming them to have been made in breach of those duties) constituted a “material adverse effect” on BFPL. He recognised that whilst, at that time, some of the issues differed it was possible that the issues in the two proceedings may increasingly align. Even if the Victorian Action was successful, the primary Judge referred to the prospect that BFPL through its directors might in any event seek to maintain and prosecute the WA Action. He noted that the issue in the Victorian Action was only whether the appointment of the Receivers was valid, and would not (at least as presently formulated) determine any of the rights to relief claimed in the WA Action by BFPL against the PO, RO or CAMV.

36    His Honour concluded at [41] in the following terms:

If both proceedings are pursued it is entirely likely that one would have an effect of some sort on the other. To determine at this stage that there would be a material effect which would be contrary to the interests of justice when each case is in its infancy, has been properly pursued and when both parties can take sensible precautions to avoid adverse consequences of dual proceedings, would be premature and speculative. (Emphasis added.)

37    As to the public interest, after reciting the arguments, the primary Judge said at [44]:

With the exception of the highly undesirable situation that there be a risk of inconsistent judgments, my view is that the public interest factors are neutral.

38    He was not persuaded that, if the stay motions were refused, RO would necessarily pursue the Victorian Action to its ultimate conclusion and he took into account that the existence of the WA Action raised a broader range of matters which could include those to be resolved in the Victorian Action. He considered that that circumstance might indicate against the likelihood of the Victorian Action being fully pursued. He also took into account that, even if RO in the Victorian Action successfully had the Receivers’ appointment set aside, there may be some prospect that BFPL would pursue the balance of the issues in the WA Action. The caveat about avoiding the highly undesirable situation of a risk of inconsistent judgments was not overlooked.

39    Under the heading of “Costs and Resources”, the primary Judge expressed the view that the infancy of each action made it almost impossible to actively predict how the respective actions might eventuate. He observed at [48]:

One critical observation that can be made with some certainty is that it lies within the power of both parties to avoid incurring additional costs by duplicating preparation in two parallel sets of proceedings. It is open to both parties to deal with all matters in one court only. Given the seriousness of the issues and sums in dispute, some sensible negotiation to agree to some such arrangement without cost or other penalty is not beyond imagination and would no doubt be encouraged by both courts.

40    That is a theme to which his Honour returned later in his reasons. In addition, he took into account the possibility of PO seeking to pursue by way of cross-claim against BFPL in the WA Action an order declaring that the appointment of the Receivers was invalid. The associated interlocutory steps, according to PO’s conservative estimate, might cost in excess of $100,000 and might be wasted if the WA Action was not pursued. The primary Judge said that those matters were, at the present time, speculative and did not provide a sufficient basis to shut out BFPL through the Receivers, even on a temporary basis, from pursuing the substantive relief which on the face of the WA Action it is entitled to have determined.

41    The risk of duplication of issues and inconsistent findings was a matter to which the primary Judge apparently had particular regard. His Honour accepted that the validity of the Receivers’ appointment necessarily arose in both actions, because he assumed that the Defence to be filed in the WA Action (assuming no stay of that proceeding was granted) would include a challenge to the validity of their appointment. That had been foreshadowed as a response to the plea in the Statement of Claim about the appointment of Receivers. He also made the following comments at [53] and [54]:

As noted a number of times, at this early stage of the litigation, it is by no means apparent that the sort of risks raised under this heading by the respondents are real. It depends very much on how events unfold from this early stage of proceedings. Further, depending on the situation, and as a number of judges have noted including Lockhart J in Sterling Pharmaceuticals (at 292), such risks may be capable of management by the court.

The receivers’ choice of court and venue was proper and reasonable having regard to the place of the numerous transactions, the location of the property affected by the transactions, the place of business of the Burrup companies and the only Australian residence of Mr and Mrs Oswal. In the absence of a clear indication that there is a risk of inconsistent findings (as distinct from a more likely issue estoppel), it would be inappropriate for the reasons expressed by Dixon J in Union Steamship to deprive the receivers of their entitlement to have the Federal Court proceeding for recovery of substantial sums heard and determined where they legitimately instituted them.

42    The comments at [54] attracted particular attention by way of criticism on the part of the PO and RO on these applications.

43    His Honour concluded at [55]:

There is no basis at all to infer from any aspect of argument on this motion that one court is better placed than another to resolve either of the legitimately instituted proceedings. I do not understand any such argument to have been advanced by either party.

44    Under the heading of “Witnesses”, his Honour noted that it was too early to say where most witnesses for a trial would be based, but that the position may become clearer in the future.

45    His Honour accepted that there were proper reasons for the selection by RO of the court in the Victorian action and by the Receivers for the court in the WA Action.

46    There was a further point raised by PO and RO, under the heading “Jurisdictional Consideration”. Reference was made to cl 7.3 of the Deed of Charge, by which the parties purported irrevocably to submit to the exclusive jurisdiction of the courts of Victoria should any issues under that Deed of Charge arise. In addition, it specified the choice of law as Victorian law. His Honour said at [59] and [60]:

What role the clause would now play in the Federal Court proceeding, given that BFPL is controlled by the receivers who were themselves appointed by ANZ, is something on which present speculation would not assist. I accept the possibility that the issue may arise. Just how it will arise and how it will be resolved is not a matter for present conjecture. It will be necessary to address that and other issues referred to in argument as and when they arise.

I would not rule out the possibility of a stay motion being pursued again at an appropriate juncture if there is proper support for it. At present, there is not.

47    By reason of cl 7.3 of the Deed of Charge, BFPL through the Receivers on the hearing of the applications for a stay, and before the Full Court on these applications, accepted that RO was entitled to have challenged the appointment of the Receivers by the Victorian Action.

48    The primary Judge also addressed under the heading of “Abuse of Process” the contention of RO that the issuing of the WA Action was itself an abuse of process. He accepted that the allegations in the Statement of Claim in the WA Action, other than the claim for relief, are substantially identical to the allegations made in the Defence filed on behalf of the Receivers in the Victorian Action. He noted RO’s contention that it is vexatious or oppressive to bring a second action where an existing action is on foot and where the subject matter of those actions is the same or substantially overlaps, relying upon the decision in Henry v Henry (1996) 185 CLR 571. RO contended that, in the absence of a stay, she would need to prepare for the two actions involving the same subject matter at the same time and would incur the costs of meeting the same allegations twice. She also contended that it is the resources of BFPL which the Receivers are expending in the WA Action, as well as in the Victorian Action, and in which she holds a significant interest in given her shareholding in BFPL.

49    As to those contentions, the primary Judge concluded at [64]-[67] as follows:

Much has been written about the long established doctrine of prevention of abuse of the court’s process. Two legitimately instituted cases may give rise (but not in their statements of claim) to similar issues between similar parties. Where they have barely commenced in different courts it would take a powerful argument to conclude (without more) that the party commencing the case in a logical venue but just second in time should for that reason alone, have the proceeding stayed as an abuse. Such an argument (if it was advanced), did not appeal or occur to Dixon J in Union Steamship.

I am unable to accept that there has been an abuse of process. The rule in Henry v Henry is a prima facie rule and is capable of being displaced in an appropriate circumstance.

The prima facie rule referred to in Henry v Henry, in my view, is displaced in the circumstances of this case as the receivers are pursuing substantive relief (the total payments allegedly exceeding AUD115 million) which is not sought in the Victorian proceeding. There can be no suggestion that BFPL is seeking to re-litigate issues on which it has lost in earlier proceedings. The receiver’s reasons, like the reasons in Union Steamship for proceeding in the Admiralty jurisdiction and thus without a jury, were entirely legitimate. If there were any hint that the purpose of issuing this (foreshadowed) proceeding was to gain some strategic advantage which would have a corresponding oppressive or vexatious effect on Mrs Oswal, the position would be different. It is impossible to form such a conclusion either on the direct evidence or by inference.

The receivers have a role and duty in respect of the creditors and shareholders of the company to ensure that the actual recovery of funds is pursued for the benefit of those parties if entitlement to recovery can be established. The receivers foreshadowed this proceeding before the issue of the Victorian proceeding and have subsequently pursued this recovery proceeding. Nothing in Mrs Oswal’s Victorian proceeding which was directed initially to a limited authority point, was designed to deal with recovery of funds. I am not persuaded that there is a good reason for the proceeding to be stayed as an abuse of process.

50    Accordingly, the motions for a stay were refused with costs.

51    As the primary Judge made clear, that was not a final determination for all purposes that a stay of the WA Action should nor or should not ever be granted.. His Honour remarked that, as events unfold, a stay of either the Victorian Action or the WA Action could be seen to be desirable. However, given the early stages of each action, the arguments for a stay of the WA Action were premature.

52    His Honour also returned to the theme of the cooperation of the parties. He said at [69]:

Alternatively as avoidance of duplication difficulties is entirely within the power of the parties, it may be that the problem of two sets of proceedings can be overcome by negotiation.

THE SUBMISSIONS ON THE APPLICATIONS

53    Senior counsel for each of PO and RO and CAMV presented complementary submissions. Necessarily, the detail underlying their separate submissions overlapped.

54    In the written submission of RO and CAMV, the summary of the issues on the appeal were expressed as follows:

(a)    whether there were errors of law and fact made by the primary Judge in his consideration of whether the [WA Action was] an abuse of process, and whether the Full Court should grant a temporary stay on this ground; and

(b)    whether there were errors of law and fact made by the primary Judge in his consideration of the Sterling Pharmaceuticals decision, and whether the Full Court should grant a temporary stay on this ground.

55    It was contended that the institution of the WA Action constituted an abuse of the process of this Court because, at the time that action was instituted the Victorian Action was on foot and there was “a compelling case” to stay the WA Action on that basis.

56    Reference was made to the proposed draft Notice of Appeal of RO and CAMV if leave to appeal is given. It runs to seven pages of detailed assertions of error, of which over two pages there are 11 matters said to demonstrate error on the “Abuse of process/vexatious and oppression” topic. There is a page containing six grounds of error under the heading “Overarching matters” and four pages dealing with the application of the “Sterling Pharmaceuticals” factors. As not uncommonly occurs, the submissions ultimately were more focused.

57    The proposed draft Notice of Appeal on behalf of PO, under the heading “Vexation and Oppression” more conveniently sets out the contentions in the following terms:

Having correctly held that the principle in Henry v Henry (1996) 185 CLR 571 (at 591) provides that it is prima facie vexatious or oppressive to bring a second proceeding where an existing proceeding is on foot and the subject matter of those proceedings is the same or substantially overlaps, the judge erred in finding that the rule was displaced (see at [66]) in that:

(a)    each of the matters relied upon by the judge at [66] was an extraneous or irrelevant consideration;

(b)    the overlap between the two proceedings was extensive and nearly complete;

(c)    it was open to the receivers on behalf of BFPL to pursue the relief sought in the Federal Court proceeding by way of counterclaim in the Victorian proceeding;

(d)    the receivers did not provide any, or any adequate, explanation as to why the claims in the Federal Court proceeding were not pursued as a counterclaim in the Victorian proceeding;

(e)    Union Steamship Co of New Zealand Ltd v The Caradale (1937) 56 CLR 277 was distinguishable;

(f)    whatever might be the purpose of the receivers in instituting the Federal Court proceeding rather than pursuing a counterclaim in the Victorian proceeding, there was an oppressive or vexatious effect on Mrs Oswal in that it will cause her to need to prepare for two proceedings involving the same subject matter at the same time.

58    The written submissions of senior counsel for PO conveniently indicate the grounds of appeal on the “Sterling Pharmaceuticals” grounds in the following terms:

(a)    The primary judge erred in his consideration and application of Union Steamship Co of New Zealand v The Caradale (1937) 56 CLR 277, Balescope Pty Ltd v Pegasus Leading Ltd (1994) 125 ALR 483 and Cope Allman (Aust) Ltd v Celrmajer (1968) 11 FLR 488.

(b)    The primary judge erred in not taking into account the criteria identified in Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd (1992) 34 FCR 287 at 290-291.

(c)    The primary judge erred in allowing extraneous or irrelevant matters to guide or affect him.

59    Ground (a) mirrors the first ground in the proposed Notice of Appeal. There follows about three pages of asserted errors under the headings “Victorian Proceeding Commenced First”, “Material Effect”, “Public Interest” and “Costs and Resources”. It will be necessary to address those four broad topics separately to some extent, although each is subordinate to the two principles upon which leave to appeal from an interlocutory decision should be granted. They are uncontentious and are set out at [10] above.

60    It is variously contended within the submissions, although not separately addressed, that substantial injustice would result if leave to appeal were not granted, and a stay of the WA Action was refused.

61    In our view, the issue of whether substantial injustice would result if leave to appeal were refused should first be addressed.

CONSIDERATION

(1)    Substantial injustice?

62    The Victorian Action and the WA Action, when each was instituted, appeared to address different questions. The Victorian Action was a challenge to the validity of the appointment of the Receivers. The WA Action was a claim by the Receivers through BFPL that PO as its managing director had breached his duties to its detriment. When the Receivers (and other defendants) in the Victorian Action filed their Defence, no counterclaim was made against RO, nor any third party claim made against PO or CAMV, so the relief claimed in the two actions remained different.

63    However, closer analysis of the Statement of Claim in the Victorian Action indicates that the assertion by RO as to why the Receivers were not validly appointed involves allegations about matters of fact which, to a significant degree, although not completely, are matters of fact alleged by BFPL in the WA Action. It is important to understand how that overlap occurs.

64    In the Victorian Action the Statement of Claim asserted that the appointment of the Receivers was upon the basis of an “Event of Default” which was the occurrence of an event or series of events which had a “material adverse effect” upon the affairs of BFPL. The relevant Event of Default is expressed in [25(c)] of the Statement of Claim in the following terms:

that payments allegedly made by BFPL, at the direction of Pankaj Oswal as managing director of BFPL, to or for the benefit of Pankaj Oswal in his capacity as trustee for the Burrup Trust, in the period 1 April 2010 to 30 September 2010 which were allegedly not in the ordinary course of BFPL’s business, had had a material adverse effect on the business, assets and financial condition of BFPL (which was alleged to constitute an Event of Default under clause 11.1(bb) of the SBSA).

65    It is then asserted that there was no ground for the appointment of the Receivers because, relevantly, at [29(e)] it was asserted:

no Event of Default within clause 11.1(bb) of the SBSA subsisted because, even if payments were made by BFPL at the direction of Pankaj Oswal as managing director for the benefit of Pankaj Oswal as trustee of the Burrup Trust (which is not admitted), and even if such payments were not in the ordinary course of BFPL’s business (which again is not admitted) any such payments did not result in a material adverse effect on the business, assets and financial condition of BFPL within the meaning of clause 11.1(bb) of the SBSA.

66    Consequently, as already mentioned, a declaration is sought that the purported appointment of the Receivers of BFPL on 17 December 2010 was invalid and of no effect, and consequential orders are sought removing the Receivers from office or restraining them from acting in that capacity.

67    The proceeding may be further complicated by the need for RO to establish her status to have brought the Victorian Action. Her status is said to arise because BFPL had not itself taken steps to challenge the appointment of the Receivers, and, as she contends:

The absence of any challenge to the appointment of the Receivers by BHL and/or BFPL is contrary to the interests of the members of BHL as a whole because:

(a)    BHL owns all of the issued shares in BFPL;

(b)    the Receivers are in possession of those shares without proper authority;

(c)    the Receivers are in a position to sell those shares, to the detriment of BHL;

(d)    further, the Receivers are in a position of control with respect to the conduct of the affairs of BFPL, including (without limitation) being in possession of its property the subject of the BFPL Charge, without property authority;

(e)    the Receivers are in a position to sell that property;

(f)    the Receivers are in a position to exercise control over the conduct of BFPL’s affairs, without power;

(g)    the matters referred to in paragraphs (d) to (f) above are to the detriment of BFPL, particularly in circumstances where BFPL was at the time of the purported appointment of the Receivers, and continues to be, a profitable company; and

(h)    the matters referred to in paragraphs 32(d) to (g) above are also to the detriment of BHL as the owner of the shares in BFPL.

68    It is not necessary to address that particular question further.

69    The pleading in [29(e)] of the Statement of Claim in the Victorian Action involves the assertion that:

(a)    possibly PO caused some payments to be made by BFPL in the period 1 April 2010 to 30 September 2010 (which is “not admitted”);

(b)    the possible payments were not accepted as being in the ordinary course of business of BFPL (the pleading does not positively assert that the possible payments were in the ordinary course of its business); and

(c)    the possible payments did not result in a material adverse effect on the business of BFPL.

70    The overlap of issues between the WA Action and the Victorian Action exists because the payments totalling $A95,764,912 said by BFPL to have been made or procured by PO in the WA Action, constitutes the same conduct which allegedly triggered the event of default which RO seeks to impugn in the Victorian Action. The claim in the WA Action against RO is confined to her allegedly receiving the benefit of some of those alleged payments, totalling $A13,437,130.

71    Moreover, as the Defence of BFPL and the Receivers in the Victorian Action indicates, they propose to dispute the asserted invalidity of their appointment by establishing the fact of the payments made or procured by PO and that those payments were not made in the ordinary course of business of BFPL, resulting in a material adverse effect on the business of BFPL.

72    The WA Action, when instituted, raised different but related issues. The background to the proceeding was the same. It asserted in one paragraph the appointment of Receivers and Managers. It then at some considerable length framed the nature of PO’s duties as managing director of BFPL, and alleged payments made by him to or for his benefit, and the way in which those payments were invalid or inappropriate. Variously, his making or procuring of those payments was said to constitute contravention of his duties under ss 181 and 182 of the Corporations Act and his equitable duties not to take advantage of his position in BFPL where there was a real and substantial risk that doing so would conflict with his duties to BFPL. There are then extensive pleadings directed separately against RO and against CAMV.

73    The relief claimed against PO is compensation pursuant to s 1317H of the Corporations Act for breach of statutory duty or for equitable compensation for breach of his fiduciary duties as a director for the expressed sum of $A95,764,912. The separate claims are against RO and CAMV are for more limited amounts, dependent upon their involvement in the particular contraventions. In the case of RO, a declaration is sought that she holds certain property procured by those payments for herself and BFPL, and against CAMV, that it should deliver up one of the assets acquired in its name by the payment of those monies to BFPL.

74    It can safely be assumed, given the nature of the Victorian Action, that RO in her Defence in the WA Action (and now PO and probably CAMV by reason of the positions they have adopted) will identify the extent to which they dispute the particular allegations in the Statement of Claim and will, inter alia, be in a position to assert (as RO did in the Statement of Claim in the Victorian Action) that the appointment of the Receivers and Managers was invalid for the reasons stated in the Victorian Action.

75    Equally it may be said that BFPL and the Receivers may apply to cross-claim or counterclaim in the Victorian Action, building upon facts asserted in their Defence to that action, for the relief claimed against RO and may apply to make a third party claim against PO and CAMV for the relief also sought against them in the WA Action.

76    As foreshadowed earlier, the material now before the Court indicates an overlap of factual issues between the two actions such that it is desirable either that one be heard and determined before the other or that, by appropriate orders, they be heard together. That is desirable for the reasons expressed in Union Steamship.

77    It must be noted that the primary Judge recognised that position: [69[-[70]. That is why the primary Judge considered the appropriate and sensible starting point was for discussion between the parties and their legal representatives to occur, rather than that a peremptory stay order be made, before it was clear how that outcome might be best achieved in the interests of justice.

78    There has been no such discussion or negotiation.

79    Counsel for all the parties on these applications accepted that. There is no reason why such discussions should not have taken place. The applications should each be refused, simply because there has been no attempt by the parties yet to agree upon how that outcome in the interests of justice should best be achieved. It involves one or other of RO on the one hand or the Receivers and BFPL on the other agreeing to pursue in the other of the proceeding the claims for relief which either RO in the Victorian Action or BFPL in the WA Action is presently pursuing.

80    There is no substantial injustice shown to RO, or to PO or CAMV (who were not plaintiffs in the Victorian Action at the time of the primary judgment), requiring them and their legal representatives to take that step in conjunction with BFPL and its legal representatives.

81    That is sufficient to refuse the applications.

82    However, there are some further matters which also support the conclusion that the applications for leave to appeal should be refused because, at present, there is no substantial injustice in doing so.

83    In the present circumstances, it seems clear enough that the appropriate venue for the hearing of the issues, whichever action is the vehicle for their resolution is chosen, is Western Australia.

84    Counsel appearing for the BFPL made submissions as to the appropriate venue for the hearing, namely that it should be Western Australia, because:

(1)    neither BFPL, PO, RO, CAMV nor much of the subject matter of the claims have any connection with Victoria;

(2)    the alleged wrongful conduct by PO occurred in Western Australia whilst PO was the managing director of BFPL, whose head office was and is in Perth;

(3)    the real property of Mrs Oswal, which was allegedly improved or purchased by funds of BFPL is situated in Perth and country Western Australia; and

(4)    the luxury launch which is the subject of the claim against CAMV is penned on the Swan River in Peppermint Grove, Perth.

85    Senior counsel for PO and RO was unable to indicate that any of those propositions were incorrect. Nor was their counsel able to suggest that any witness would be more conveniently heard in Victoria than in Western Australia. It may be accepted that the Victorian Action was properly instituted in Victoria by reference to the jurisdiction and choice of law provisions in the Deed of Charge. That is not in dispute. But there is in practical terms on the uncontested material now before the Court nothing substantial to support Victoria as an alternative venue. PO and RO were on notice that such submission referred to in [84] was to be made to this Court. During the course of the hearing, the Court specifically sought a response. The Court was told that the head office of ANZ is in Melbourne, and that two of the three Receivers are in Melbourne. As ANZ through BFPL exercising the power of their Receivers has instituted the WA Action in Western Australia, there does not seem to be any substance in those matters. This is not the occasion to decide the appropriate venue for the hearing of whichever proceeding or proceedings do go ahead. However, on the material before the Court, it seems to be almost irresistible that the appropriate venue for the hearing is Western Australia.

86    It would also seem to be almost irresistible that the legal representatives for the parties should confer, and that in the absence of any other substantial information about the proper venue, should agree that the appropriate venue for the hearing of the issues raised in the WA Action and in the Victorian Action should be heard in Western Australia. That is the level of cooperation which the Court is entitled to expect from the parties. No doubt in the flurry of an urgent application for leave to appeal, given the limited time within which such an application can be made, that step was not taken. There remains no reason why it should not now be taken or indeed why it should not have been taken at an early point.

87    There is some complexity about the onus of proof in relation to the Victorian Action. The nature of the issues pleaded by RO as set out above at [64] indicate that she contends that the payments alleged by BFPL in the WA Action are “not admitted”, as well as disputing the fact that those (alleged) payments were not made in the ordinary course of business of BFPL. How she can advance her case to make out the qualitative assertion that there was no material adverse effect on the business of BFPL without a factual foundation for that assertion is unclear. BFPL, in the WA Action, has the burden of proving those payments and that they were not in the ordinary course of business, as well as that they were made or procured by PO in breach of his duties to BFPL.

88    There are also some other procedural issues which will be relevant to determining the better proceeding in which all issues should be ventilated. They are briefly mentioned above. They include:

(1)    in relation to the Victorian Action:

(a)    the need for BFPL and the Receivers to add to their Defence a cross-claim against RO;

(b)    the need for BFPL and the Receivers to add a third party claim against PO and CAMV as third parties, and then the consequential pleadings to occur (potentially to include a cross-claim by PO and CAMV to assert the invalidity of the appointment of the Receivers);

(c)    the complexity produced by RO having to make out her case without a factual foundation for the qualitative finding she seeks that such wrongful conduct as might have been engaged in by PO did not have a material adverse effect on the affairs of BFPL, but PO and CAMV as cross-defendants not having to confront that obstacle as the foundation for those facts forms part of the primary claim by BFPL against them;

(2)    in relation to the WA Action:

(a)    the need for PO, RO and CAMV to cross claim that the appointment of the Receivers was invalid; and

(b)    the need for PO, RO and CAMV to join ANZ, ANZFS, BFPL and the Receivers personally (to the extent they consider that joinder be necessary) to maintain the cross-claim.

89    It is not necessary to do more than to point to those matters, as it is not the role of the Full Court on these applications to resolve such questions. It may be said however that, having regard to the interests of justice, the same factors that point to Western Australia being the appropriate venue for the hearing also point to the proceeding being conducted more conveniently in Western Australia.

90    What is expressed in s 37M of the FC Act about the overarching purpose of civil proceedings in this Court, and in s 37N about the obligations of parties and their legal representatives to conduct proceedings consistently with that prescribed purpose, fortifies those observations. One might rhetorically ask: Is there any benefit to either of the parties in not having all of the issues litigated in the one action? And, if not, why have the parties not yet consulted with a view to determining which is the more convenient action in which that litigation should take place?

91    The answer to the first of those questions is clear. The answer to the second of those questions should not be dictated by a particular action being first in time, or by a particular stay application being first in time. If the parties cannot resolve that question by consultation, it may be appropriate for the Court to appoint a mediator for the purpose of supervising the resolution of which proceeding should continue, assuming the parties accept (as they do) that it is better that all issues should be heard in one proceeding. It would be regrettable if experienced and competent solicitors and counsel require such intervention. Alternatively, it may be appropriate for the judges conducting the pre-trial management of the two actions to have a joint management hearing at which those issues are ventilated. That may avoid the potential inappropriate expense of pre-trial processes to secure what the parties ought to have been able to agree.

(2)    Abuse of Process

92    The issues in the two actions as apparently expressed in their respective Statements of Claim are different. The issues in the WA Action are more extensive. In the Victorian Action, although it is claimed that grounds for the appointment of the Receivers did not exist, it is not apparent what facts are sought to be established by RO about whether PO did or did not engage in any particular behaviour involving procuring the payment of monies by BFPL, or whether any such payments were in the ordinary course of its business, so the facts upon which material adverse effect might be determined are not pleaded. Those facts, as already alluded to, stem from the allegations made by the Receivers of BFPL in the WA Action.

93    In our view, each of the Victorian Action and the WA Action was properly instituted. It cannot be said that there was an abuse of process by the Receivers in commencing the WA Action.

94    In the course of argument, the abuse of process contention was refined. It was not that the WA Action when instituted was an abuse of process, but that it was an abuse of process by the Receivers to seek to maintain that action once the Receivers had, as routinely required by the Rules of the Supreme Court of Victoria, filed their Defence. The Defence exposed the factual overlap in the matters to be ventilated.

95    Moreover, the alleged abuse of process, if the argument is further refined, is said to be that the Receivers have abused the process of one or other of the Courts (it is not clear which) by failing to counterclaim or cross-claim against RO on the basis set out in the WA Action, and presumably by failing to apply to join PO and CAMV as third parties at that time and to bring a third party claim against them on the same basis. It must also be asserted that BFPL should have withheld instituting the WA Action at all. When that was put to Senior Counsel for PO, he accepted that there is no authority to support such a proposition. To reiterate what was said earlier in these reasons, the sensible thing for the legal representatives to do is to have acknowledged that there is, by reason of the coincidence of some issues in the two actions, good reason why all the issues should be heard and determined within one action. But there is no element of an abuse of process in the manner asserted, by BFPL having commenced the WA Action. There was no indication at that time that PO, or CAMV, challenged the validity of the appointment of the Receivers.

96    It is necessary to refer briefly to the contentions asserting misunderstanding or misapplication of the law by the primary Judge when considering the abuse of process argument. It is said that the primary Judge erred in his understanding and/or application of the decision of the High Court in Henry v Henry (1996) 185 CLR 571 and the subsequent decision in Jeffrey & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75 at [28].

97    In Henry v Henry it was said at 591 by the plurality (Dawson, Gaudron, McHugh and Gummow JJ):

It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue. (Emphasis added.)

98    The primary Judge did not apply that prima facie rule because in the WA Action separate and different relief was being claimed from different and more extensive parties. It was argued that those differences were “not a relevant or adequate reason” to maintain the WA Action in the face of inconvenience and embarrassment which might result and which could have been avoided by the claim for recovery of funds being made as a counterclaim and third party claim in the Victorian Action. That proposition shows how removed the present circumstances are from those which were addressed in Henry v Henry.

99    That case involved an application to stay proceedings for dissolution of marriage commenced in the Family Court of Australia when there was already an extant proceeding in Monaco for divorce. The High Court remitted the matter to the Full Court of the Family Court to reconsider its decision. That Full Court had failed to take into account as a “most material consideration” that there were already proceedings on foot in Monaco by which a divorce decree may have been granted which would have been recognised in Australia, and in applying the test referred to in Voth v Manildra Far North Pty Ltd (1990) 171 CLR 538 in determining whether, in the circumstances, the Family Court of Australia was a clearly inappropriate forum.

100    The primary Judge at [22] quoted, and applied, the observations of the plurality judgment (Dawson, Gaudron, McHugh and Gummow JJ) in Henry v Henry at 590:

Parallel proceedings in another country with respect to the same issue may be compared with multiple proceedings with respect to the same subject matter in different courts in Australia. In Union Steamship Co of New Zealand Ltd v The Cradale, Dixon J observed of that latter situation that “[t]he inconvenience and embarrassment of allowing two independent actions involving the same question of liability to proceed contemporaneously in different courts needs no elaboration”. From the parties’ point of view, there is no less – perhaps, considerably more – inconvenience and embarrassment if the same issue is to be fought in the courts of different countries according to different regimes, very likely permitting of entirely different outcomes.

It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue. And although there are cases in which it has been held that it is not prima facie vexatious, in the strict sense of that word, to bring proceedings in different countries, the problems which arise if the identical issue or the same controversy is to be litigated in different countries which have jurisdiction with respect to the matter are such, in our view, that, prima facie, the continuation of one or the other should be seen as vexatious or oppressive within the Voth sense of those words.

101    The primary Judge did not misunderstand those principles. Nor did his Honour fail to apply them in the circumstances of this case. The contention overlooks the fact that the primary Judge emphasised that both the Victorian Action and the WA Action were at an early stage, and that as the picture further emerged about the issues in each of them and the commonality of parties developed (if it did), the question of potential inconvenience and embarrassment could later be addressed.

(3)    The Sterling Pharmaceuticals factor

102    Even if it were shown that the decision of the primary Judge were to cause a substantial injustice to PO, RO and CAMV if leave to appeal were refused, that enquiry only arises if the circumstances suggest that the decision of the primary Judge is attended with sufficient doubt to warrant its reconsideration by the Full Court.

103    It is plain that the primary Judge considered each of the Sterling Pharmaceuticals factors that were said by the parties to be relevant.

104    His Honour appreciated that the Victorian Action was commenced first. He did not place much weight on that factor in the circumstances. That view was open to him. He had regard to the communications between the solicitors for the parties leading up to the proceedings. It is not inappropriate to describe the attitude of PO through his solicitors as non-responsive. The Receivers had shown their intentions. It is also not inappropriate to describe RO’s claim in the Victorian Action as pre-emptive. It was not preceded by any letter before action. It is not explained why RO, and not PO, chose then to bring that claim. It was certainly not suggested in argument on these applications that RO and PO (who were separately represented) were unaware of each other’s positions. It would be naïve to believe that RO so acted without PO being aware of her proposed action. And the primary Judge had regard to the early stage of each of the actions.

105    His Honour did not misunderstand the substantial factual overlap in the Victorian action and the WA Action, clearly exposed (as counsel for RO said) by the Defence of BFPL and the Receivers filed in the Victorian Action. He recognised that, at some time, it may well be desirable for one of the two actions to be the vehicle for the resolution of those common factual issues. He also recognised that, as a matter of common sense, the issues as to the validity of the appointment of the Receivers should be heard and determined either before, or at the same time, as the claims primarily made against PO and to a lesser extent against RO and CAMV. He anticipated that the better way to proceed would become clearer as the real issues between the parties, and the nature of their proposed evidence, became more apparent. He therefore considered, and appropriately so, the relationship between the two actions, the public interest, in particular in avoiding the expense of common factual issues being litigated in separate proceedings, the risk of inconsistent findings, and the undesirability of two courts competing to see which determines the common facts first. He considered the respective interests of the parties, including the desirability of avoiding unnecessary duplication of legal preparatory work and costs. He recognised that each proceeding was properly instituted, in particular (because it was more the focus in argument) the Victorian Action, so that RO should have the benefit of a venue elected by her.

106    In short, the primary Judge considered all the factors that he was required to consider.

107    In our view, it has not been shown that the decision of the primary Judge is attended by sufficient doubt to warrant its reconsideration by the Full Court. The contentions on behalf of PO, RO and CAMV can properly be described as attempting to show that another conclusion on the discretionary judgment might have been reached. We are far from being persuaded that that is made out. And even if it were, having regard to the principal conclusion of the primary Judge that it was better to allow each of the actions to progress whilst the parties were left to resolve between themselves the better course of action for each of the Victorian Action and the WA Action, the correctness of the decision overall is not shown as being of such doubt as to warrant the grant of leave to appeal.

ORDERS

108    For the reasons given, the two applications for leave to appeal are refused. The applicants on each application are to pay the costs of the application.

Associate:

Dated:    1 September 2011

DOWSETT J

109    I have had the benefit of reading the reasons prepared by Mansfield and Foster JJ. I need not say anything more concerning the facts of the case. I am in substantial agreement with much of what their Honours say concerning the issues in the case and the conduct of the parties to date. Notwithstanding this high level of agreement, I cannot agree with their proposed orders. In my view the proceedings in this Court should be stayed until further order. The treatment by Mansfield and Foster JJ of the authorities and the facts of the case enables me to state my reasons in quite brief form.

110    To my mind, the principle appears from the decision of the High Court in Henry v Henry (1996) 185 CLR 571 at 590-1, which is referred to in the joint reasons. Even if the commencement of a second action with respect to the same subject matter is completely innocent, even if it occurs without knowledge of the earlier action, the continuation of both actions will be an abuse of process in the sense in which that expression is used in Henry v Henry. The continuation of such a situation is unlikely to perform any useful purpose and will generally lead to delay and the incurrence of additional expense. Further, there will always be the potential for embarrassment and inconvenience as explained in Henry v Henry.

111    Where such a situation arises, the Courts must rectify it. Generally, rectification will involve the staying, dismissal or discontinuance of one of the actions. Where the two actions are in the one court, that court will have the luxury of deciding which action is the better vehicle for the resolution of all matters in dispute. Where the actions are in different courts, the matter is not so easy. Not infrequently, the party having carriage of the action first in time will apply for a stay or dismissal in the court in which the later action is proceeding, at least where neither court has superior status in relation to the other. In the event of such an application, the second court will have no way of resolving the abuse of process except by staying, dismissing or discontinuing the action of which it is seised.

112    There is much to be said for the approach which favours continuation of the action which was first in time, at least where there is no clear advantage in doing otherwise. If it is generally accepted that, all other things being equal, the earlier case should proceed, then there will be less prospect of the courts appearing to be involved in unseemly turf wars.

113    In the present case, the primary Judge did not have the luxury of being able to choose the case which should proceed. He could either stay or dismiss the action in this Court or allow the continuation of the abuse of process. It seems that all matters in dispute are capable of resolution in either the proceedings in this Court or those in Victoria although, in either case, some amendment may be necessary. In those circumstances, I consider that the only course open to the primary Judge was to stay or dismiss the action in this Court. A stay was probably preferable. It would have kept open the possibility of future prosecution of the proceedings, should that course become desirable. The Court might have extracted an undertaking from the plaintiffs in the Victorian proceedings that they would prosecute those proceedings with all due diligence. Failure to resolve the problem in hand demonstrated an error of principle in the exercise of the discretion.

114    I should address one other matter. I agree with Mansfield and Foster JJ that the parties should have been able to resolve this matter without intervention by the Court. However the fact that the matter was brought before the Court meant that they had failed to do so. It was, and is, for the Court to resolve the matter.

115    In my view, there should be leave to appeal, the appeals should be allowed and the orders below set aside. Action No WAD 66 of 2011 should be stayed until further order, subject to an undertaking being given in the form previously mentioned.

116    The costs below should be reserved. The applicants for leave to appeal/appellants should have the costs of their applications and appeals.

Associate:

Dated:    1 September 2011