FEDERAL COURT OF AUSTRALIA

Suzlon Energy Ltd v Bangad (No 4) [2012] FCA 350

SECOND CROSS CLAIM

THE COURT ORDERS THAT:

1.    The order made by Rares J on 2 March 2012 be varied pursuant to Rule 39.04 of the Federal Court Rules 2011 by adding:

1A.    Prayer 1 in the notice of motion of the fourteenth second cross-defendant filed on 21 June 2011 be dismissed.

1B    Prayer 1(a) and (b)(i) in the interlocutory application of the thirteenth second cross-defendant filed on 9 September 2011 be dismissed .

2.    The costs of the second cross-claimants of today be paid by the fourteenth second cross-defendant. Those costs may be set off against the costs ordered on 2 March 2012.

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

SECOND CROSS CLAIM

REASONS FOR JUDGMENT

(REVISED FROM THE TRANSCRIPT)

1         On 24 February 2012 I published reasons for judgment in which I concluded that the applications by Frankfurter Bankgesellschaft (Schweiz) AG, known as LB Swiss at the relevant times, Merrill Lynch Bank (Suisse) SA and Credit Suisse Group for, among other things, a stay of the proceedings against them should be granted: Suzlon Energy Ltd v Bangad (No 3) [2012] FCA 123. In the course of those reasons I rejected the applications of Merrill Lynch and LB Swiss to set aside service of the proceedings on them in Switzerland and the order authorising that to be done that I had made on 4 March 2011. On 24 February 2012, I also ordered that on or before 1 March 2012 the parties provide to my associate short minutes of orders to give effect to the reasons for judgment and listed the matter for the making of orders on 2 March 2012.

2        Then, on 2 March 2012 I made orders for a stay of the proceedings so far as they concerned the three banks and for Suzlon parties to pay the costs of the banks.

THE ISSUE

3        Merrill Lynch now seeks that an additional order be made, on its earlier interlocutory application, namely an order that formalises my decision to dismiss its application to discharge the orders for service out of the jurisdiction made on 4 March 2011 and to refuse to set aside service on it. Merrill Lynch seeks this order to enable it to seek leave to appeal from the adverse finding in my reasons that such an order would reflect. By reason of r 35.13 of the Federal Court Rules 2011 (Cth), the time in which to seek leave to appeal from the orders made on 2 March 2012 expired on 16 March 2012.

4        LB Swiss does not seek leave to appeal against the similar findings against it, but seeks, if I were to make the order sought by Merrill Lynch, that I formalise the record of the Court to reflect a similar result on its interlocutory application.

BACKGROUND

5        When the matter came on before me on 2 March 2012 the parties debated the form of the orders that each contended would give effect to those reasons and the terms of the undertakings to be given by each of the banks. At no point did any of the proposed orders or the debate deal with the parts of Merrill Lynch’s and LB Swiss’ interlocutory applications seeking to set aside the orders of 4 March 2011 for service outside the jurisdiction or the actual service of the proceedings on them.

6        Predictably, the Suzlon parties sought leave to appeal from my orders and did so promptly on 9 March 2012. Then, at 8.43 pm on 14 March 2012, Merrill Lynch’s solicitors emailed to the Suzlon parties’ solicitors, suggesting that it had become apparent to them that the Court had not disposed of its application to set aside service outside the jurisdiction. The email suggested this may have been overlooked in formulating orders to give effect to the reasons. Subsequently, at 3.48 pm the next day, Merrill Lynch’s solicitors followed that email up, saying they intended to provide a copy of the draft order that they sought, namely, one to give effect to the application to set aside the authorisation, and effecting, of service on them be made. The email sought to know whether, by 5 pm that afternoon, there were any comments which the Suzlon parties’ solicitors had about that matter.

7        About 15 minutes later, the solicitor for the Suzlon parties responded, saying that they had not yet received instructions and expected to be able to get back to Merrill Lynch’s solicitors the next day. This email concluded with a request that Merrill Lynch’s solicitor hold fire from contacting the Court pending receipt of the instructions awaited from their overseas clients. At 7.35 pm that night Merrill Lynch’s solicitors responded, saying that they could hold off until the next day. In this email, for the first time Merrill Lynch’s solicitors informed the Suzlon parties’ solicitors that they had instructions to file an application for leave to appeal from the order once it was made, if it were.

8        At about 5 pm on 16 March 2012, the Suzlon parties’ solicitors wrote back, saying that they were of the view that the orders as made on 2 March were sufficient to dispose of Merrill Lynch’s application to set aside service and the Suzlon parties did not consent to the proposed additional order.

CONSIDERATION

9        The principal order made on 2 March 2012 provided that the proceedings be stayed insofar as they concerned each of the banks on conditions that they gave the undertakings set out in the balance of the orders. The present position, therefore, is that these proceedings have been stayed, so far as they concern Merrill Lynch and LB Swiss. Although the orders of 2 March 2012 have not yet been entered, the considerations applicable in respect of those orders are, in the circumstance of this case, in my opinion, akin to, those that would obtain had an application been made under the Court’s inherent or implied jurisdiction to correct accidental errors in or omissions from orders that it has made, under what is known as the slip rule or its equivalent in r 39.05. This is notwithstanding that the power that I am exercising arises under r 39.04, being a power to vary or set aside a judgment or order before it has been entered.

10        The order made on 24 February 2012 required the parties to bring in short minutes of order to give effect to my reasons for judgment. The order that Merrill Lynch seeks to have made is an order that has precisely that effect, namely, to give effect to my reasons for judgment so far as it deals with one aspect of its interlocutory application.

11        It follows that the power of the Court that Merrill Lynch seeks to invoke is, in substance, the power to correct an error arising from an accidental slip or omission, so as to have the court record corrected as at 2 March 2012 to give effect to the reasons for judgment I had pronounced and the order I made on 24 February 2012: cf Burrell v The Queen (2008) 238 CLR 218 at 224-225 [18]-[21] per Gummow ACJ, Hayne, Heydon, Crennan and Kiefel JJ.

12        I am satisfied that the orders I made on 2 March 2012 accidently omitted orders giving effect to my dismissal of the applications by Merrill Lynch and LB Swiss to set aside the order for service out made on 4 March 2011 and the service consequently effected on each of them in Switzerland. However, that does not involve reconsidering or altering the substance of the result that I reached, and that ought to have been recorded, on 2 March in consequence of the order I made on 24 February. In my opinion, the appropriate order that should be made is an order varying the orders made on 2 March 2012 to add a further order to that effect.

THE DATE FOR MAKING THE ADDITIONAL ORDER

13        Merrill Lynch asked that I make that order with effect from today by reason of what it says is an apparent oversight in failing to apply earlier than it did. It asserts that it was lulled into a false sense of security by the Suzlon parties’ solicitors’ email sent in the afternoon of 15 March 2012 into not filing an application seeking to vary the order earlier and then seeking leave to appeal from it. It intends to seek leave to appeal and says that I should not vary the order I made on 2 March 2012 so as to truly reflect my reasons, but make a new order today. Merrill Lynch contends that this can be achieved by a partial lifting of the stay and by making the new order effective today. It asserts that this will create less difficulty for it because it will not need to seek an extension of time in which to seek leave to appeal. Rather, it will be able to file an application for leave to appeal within the time limited by r 35.13 directly from an order only made today.

14        In my opinion, the purpose of the power that I am exercising will be achieved by correcting the order I should have made and the parties failed to apply for on 2 March 2012, with effect from that date. To the extent that what occurred subsequently provides a good reason to justify an extension of time, no doubt that will be considered by a judge on Merrill Lynch’s application for an extension of time in which to seek leave to appeal.

15        LB Swiss merely wishes to have the record corrected to reflect my decision. Accordingly, it does not assert that it would suffer any prejudice by my correcting the record of the Court in the way that I have proposed.

Associate:

Dated:    4 April 2012

SCHEDULE

SECOND CROSS CLAIM

NSD 1670 of 2008

BETWEEN:

SUZLON ENERGY LTD

First Cross Claimant

SUZLON ENERGY AUSTRALIA PTY LTD

Second Cross Claimant

SUZLON INFRASTRUCTURE LIMITED (NOW KNOWN AS SYNEFRA ENGINEERING & CONSTRUCTION LTD)

Third Cross Claimant

SUZLON WIND ENERGY CORPORATION, USA

Fourth Cross Claimant

SUZLON STRUCTURES LTD

Fifth Cross Claimant

SE SHIPPING PTE LIMITED

Sixth Cross Claimant

AND:

SANJEEV BANGAD

Third Cross Defendant

SS OCEANWIND PTE LIMITED

Fifth Cross Defendant

GENUS SHIPPING SERVICES PVT LIMITED

Sixth Cross Defendant

RAJAGOPALAN SRIDHAR

Seventh Cross Defendant

BLUEWIND ENTERPRISES (UK) PTY LTD

Eighth Cross Defendant

SUNSHINE TRADE SERVICES LIMITED

Ninth Cross Defendant

S RAAM KUMAR

Tenth Cross Defendant

BIP HOLDINGS LIMITED (BC# 1419807)

Eleventh Cross Defendant

MANNING LIMITED (BAHAMAS COMPANY NO 15633)

Twelfth Cross Defendant

FRANKFURTER BANKGESELLSCHAFT (SCHWEIZ) AG (A SWISS COMPANY)

Thirteenth Cross Defendant

MERRILL LYNCH BANK (SUISSE) SA (A SWISS COMPANY)

Fourteenth Cross Defendant

CREDIT SUISSE AG (A SWISS COMPANY)

Fifteenth Cross Defendant