FEDERAL COURT OF AUSTRALIA

Hastie Group Limited (in liq) v Multiplex Constructions Pty Ltd (Formerly Brookfield Multiplex Constructions Pty Ltd) [2020] FCA 1824

ORDERS

THE COURT ORDERS THAT:

1.    The parties confer and thereafter by 4.00pm on 22 January 2021 file and serve any agreed minutes of orders reflecting the reasons of the Court, or in default of agreement, separate minutes of orders and short written submissions (of no longer than five pages).

2.    The further case management hearing be adjourned to 10.15am on Friday 29 January 2021.

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

REASONS FOR JUDGMENT

MIDDLETON J:

INTRODUCTION

1    In this proceeding, the Applicants (including the Second to Fourth Applicants (the ‘Liquidators’) and the First and Fifth to Twentieth Applicants (the ‘Hastie entities’)) apply for leave to extend the period of time to amend and file a Second Further Amended Originating Process (‘SFAOP’) and Points of Claim for which leave to amend was granted on 7 June 2019.

2    At the hearing before me on 15 November 2019, the Applicants also sought leave to file amended Concise Statements dated 14 October 2019 against two groups of Respondents, being Grocon and Watpac.

3    A number of Respondents have filed written submissions and some have sought their own interlocutory relief. I will refer to each group of Respondents compendiously, other than in circumstances where an individual company requires specific attention. The description of each group of Respondents is evident from the schedule of the parties to the proceeding. There were many submissions made by each Respondent which were the same or to similar effect, and it is convenient to deal with those submissions globally and not by reference to each Respondent. Where there are relevant differences or nuances, I will address these separately.

4    Most Respondents oppose the leave sought by the Applicants and some make separate applications in relation to the future conduct of this proceeding. The main issues in dispute are:

(a)    whether leave ought to be granted to the Applicants to extend the period of time to file a SFAOP and proposed Points of Claim against individual Respondents;

(b)    whether the Respondents ought to be paid forthwith certain costs including costs thrown away as a result of the Applicants’ earlier amendments as well as the costs of their applications; and

(c)    whether a number of other orders sought by some Respondents ought to be granted including cross-vesting the proceeding or part thereof to the Supreme Court of New South Wales, and the filing of separate proceedings against each Respondent; and

(d)    whether there is an improper joinder of certain Respondents.

5    Other issues that were raised initially by some Respondents relating to the standing of the Liquidators and security for costs are not required to be determined by the Court (at least at this stage).

6    The basic complaint of the Respondents in relation to the leave sought by the Applicants is that the Applicants are impermissibly seeking to amend the Further Amended Originating Process filed 18 December 2018 (‘FAOP’) and the Points of Claim filed 13 July 2018 after the end of various limitation periods by adding new claims for relief in relation to additional construction projects that do not arise out of the same facts or substantially the same facts as those already pleaded. The Respondents accept that whether the added facts are substantially the same as the facts already pleaded will be a question of degree, and will depend on the nature and extent of the existing pleaded case, the facts sought to be added in and the relief already sought. Yet in the present case, the Respondents contend that the added facts relating to the additional projects are neither ‘the same’ nor ‘substantially the same’ as the facts relating to the originally pleaded projects: see Camilleri v The Trust Company (Nominees) Ltd (2015) ACSR 191 (‘Camilleri’) at [11]-[12]. The Respondents contend that the initial Points of Claim contained no allegations of fact that would support the current proposed amendments, and similarly the initial Concise Statement filed 23 November 2017 was worded too broadly and vaguely to have raised any identifiable cause of action in relation to the additional projects now sought to be agitated in the proceeding.

7    There are four originating processes on file:

(a)    the Originating Process filed 23 November 2017;

(b)    the Amended Originating Process files 19 February 2018;

(c)    the FAOP filed 18 December 2018; and

(d)    the SFAOP filed 21 August 2019, which is the subject of the leave application.

8    There are 12 Points of Claim on file:

(a)    initial Points of Claim filed 13 July 2018;

(b)    Points of Claim against Multiplex filed 1 October 2019;

(c)    Points of Claim against Scentre filed 2 October 2019;

(d)    Points of Claim against Badge filed 3 October 2019;

(e)    Points of Claim against Thiess filed 3 October 2019;

(f)    Points of Claim against John Holland filed 4 October 2019;

(g)    Points of Claim against CPB filed 4 October 2019;

(h)    Points of Claim against Baulderstone filed 4 October 2019;

(i)    Points of Claim against Abigroup filed 4 October 2019;

(j)    Points of Claim against Lendlease filed 10 October 2019;

(k)    Points of Claim against Laing O’Rourke filed 10 October 2019; and

(l)    Points of Claim against Hansen Yuncken filed 14 October 2019,

with items (b)-(l) being the subject of the leave application.

9    There are three Concise Statements on file:

(a)    initial Concise Statement filed 23 November 2017;

(b)    Concise Statement against Grocon filed 16 November 2018; and

(c)    Concise Statement against Watpac filed 16 November 2018.

10    Then there are two further Concise Statements that have been proposed but not filed:

(a)    amended Concise Statement against Grocon dated 14 October 2019; and

(b)    amended Concise Statement against Watpac dated 14 October 2019,

with both being the subject of the leave application.

11    Then the Respondents contend that in any event, even if the new claims for the additional projects do arise out of the same facts or substantially the same facts as those already pleaded, the Court has a discretion whether to allow the amendment out of time. Undoubtedly, it is open to the Court to refuse the amendment in the exercise of its discretion because of case management concerns arising from the stage in the proceeding in which the amendment is sought, taking into account the fact that the time of the court is a publicly funded resource, and any potential lessening of public confidence in the judicial system. In addition, the absence of any satisfactory explanation for seeking the amendment is a relevant although not determinative consideration.

12    At the outset it is useful to make a few observations.

13    First, the Applicants’ Originating Process and initial Concise Statement were filed as against all of the Respondents in the proceeding. Claims have now been resolved in respect of seven Respondents. One part of the relief sought (as a separate and preliminary question) by the Liquidators were orders determining the “no mutuality proposition” and the “set-off argument” based on Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (in liq) (receivers and managers appointed) (2017) 320 FLR 259 (‘Hamersley First Instance’) (the ‘set-off question’). Therefore, part of the relief originally sought in the proceeding entailed the determination of the separate and preliminary set-off question, premised upon the correctness of the decision in Hamersley First Instance. On 21 September 2018, the Court of Appeal of the Supreme Court of Western Australia allowed an appeal against Hamersley First Instance in Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (In Liquidation) (Receivers And Managers Appointed (2018) 337 FLR 420 (‘Hamersley Appeal’), and the matter did not proceed on appeal to the High Court of Australia.

14    Secondly, the proceeding is brought by the Applicants relying upon ss 5-30 and 90-20 of the Insolvency Practice Schedule (Corporations) to the Corporations Act 2001 (Cth) (the ‘Corporations Act’), r 1.34 of the Federal Court Rules 2011 (Cth) (the ‘Rules’) and ss 23, 37M and 37N of the Federal Court of Australia Act 1976 (Cth) (the ‘FCA Act’). In effect, the Liquidators themselves seek directions (and initially the determination of the separate and preliminary set-off question) to determine the future conduct of the liquidation. Otherwise, the proceeding was brought on behalf of the Hastie entities to collect the assets of those companies. Part of the function of the Liquidators is to take proceedings in the courts to recover property or assert rights held by the Hastie entities in order eventually to benefit the creditors (s 477(2)(a) of the Corporations Act).

15    Thirdly, the Applicants provided to the Court and the parties Annexure C to the Applicants’ submissions dated 28 February 2020 (‘Annexure C’). Significantly, Annexure C refers to each Respondent by reference to each project, debt and bank guarantee. Where a claim is “not pressed” by the Applicants this is indicated in Annexure C. I have treated this annexure as the final position of the Applicants as to the claims going forward. To the extent that no claim at all is made against a Respondent and recorded in Annexure C, the proceeding will be dismissed against that Respondent with costs. This will include Badge Constructions (SA) Pty Ltd (the Ninth Respondent) (‘Badge SA’) and Lendlease Funds Management Limited (the Sixth Respondent) (‘Lendlease Funds’). In addition, any abandonment of any claim from the initial Concise Statement will occasion an order that any costs incurred in relation to that claim and wasted will be paid by the Applicants to the relevant Respondent (but not forthwith). I do not consider that the fact the Liquidators are Applicants alters the position that in the case of the abandoned claims the relevant Respondent is entitled to costs.

16    Fourthly, to grant leave to file the SFAOP in its current form will raise some discrepancy between the documents that together comprise the Applicants’ proposed amendment, in that the SFAOP refers to: the initial Concise Statement which refers to claims that seem not to be pursued in the proposed Points of Claim, and the Concise Statements against Grocon and Watpac filed on 16 November 2018 which the Applicants now seek to amend. As I intend to grant leave to file the SFAOP, it will be conditioned on the amendment of that document to refer to the proposed Points of Claim and the proposed amended Concise Statements against Grocon and Watpac, and not to the initial Concise Statement, so as to ensure there are no extant references to abandoned claims in those documents. In other words, going forward, the SFAOP, the Points of Claim and the amended Concise Statements against Grocon and Watpac should be self-contained, and plead all the material facts necessary to proceed to a hearing.

17    Fifthly, while the question is whether leave ought to be granted to extend the time for the leave granted on 7 June 2019, the issues raised by the Respondents still require consideration as if leave was being sought to amend and file the SFAOP and Points of Claim. I have proceeded on this basis. This is particularly appropriate because, at the time leave was granted on 7 June 2019, the content of the proposed amendments was not known to the Respondents or the Court. I adopt the same approach in relation to leave to file and serve the proposed amended Concise Statements against Grocon and Watpac.

18    Sixthly, contrary to the Respondents’ submissions, r 8.21(1)(g)(i) of the Rules does not arise to be determined in relation to the debt and bank guarantee claims (to which I will come). There is no need for the Applicants to show the same facts or substantially the same facts in relation to the ‘new claims’ the Respondents refer to. In my view, the Originating Process, and the initial Concise Statement and Annexure 1 thereto, covered sufficiently all of the remaining debt and bank guarantee claims against the Respondents.

19    Seventhly, the question of the operation of r 9.02 and r 9.08 of the Rules concerning joinder of parties, which was agitated before me, does not require further investigation. The Respondents were properly joined when the proceedings when initiated, if for no other reason than the raising of the separate and preliminary set-off question. What happens to the proceeding now is a matter of case management, and reliance can and should be placed on r 1.32 to r 1.35 of the Rules (to which I will come). In any event, I do not consider that any Respondent (at least at this stage of the proceeding) has ceased to be a proper or necessary party within the terms of r 9.08 of the Rules.

20    Eighthly, it will be apparent from the reasons that follow that I have come to the view that whatever may have been the position with the initial Points of Claim, the important documents to consider in relation to limitation issues are the Originating Process and the initial Concise Statement filed on 23 November 2017. Once it is found, as I have concluded, that the claims in these documents sufficiently cover the claims now sought to be agitated, the various other submissions of the Respondents in relation to limitation issues become unnecessary to consider. To the extent that any Respondent wishes to preserve its position under any relevant limitation of action legislation, it may do so in response to the proposed Points of Claim or proposed Amended Concise Statements relied upon by the Applicants.

21    Ninthly, this proceeding has been initiated and continued by the use of the Concise Statement, with the Court making directions for various Points of Claim. There has been no application pressed for decision by the Respondents that this process was flawed nor that with the ordering of Points of Claim the process was inappropriate to properly inform the Court and the Respondents of the claims being pursued against them. Of course, as matters progressed, complaints from the Respondents did arise in relation to the adequacy of the content of the Points of Claim and Concise Statements.

22    Tenthly, it is apparent from the Originating Process filed 23 November 2017 that the initial emphasis was upon determination of the separate and preliminary set-off question relating to the Hamersley First Instance decision. However, a fair reading of the Originating Process is that it incorporates by reference the claims referred to in the initial Concise Statement which go well beyond the separate and preliminary set-off question that was said to arise for determination “in the first instance” : see [24] and [26] of the Concise Statement filed 23 November 2017.

23    Eleventhly, this is not a proceeding concerning any proof of debt. No appeal or action has been brought seeking to review any decision of the Liquidators refusing to admit or consider a proof of debt. While Grocon may have lodged a proof of debt, and whatever its status, no question directly arises in relation to the Liquidators’ decision or lack of decision in relation to that proof of debt.

24    Finally, I am mindful in relation to all the issues for determination of the dictates of s 37M of the FCA Act in aid of the just resolution of disputes. This relevantly requires the Court to consider not only the position of the Applicants, but also the position of the Respondents in having to defend the proceeding. Then it is to be recalled that the Rules must be interpreted and applied in a way that best promotes the overarching purpose (s 37N of the FCA Act), and if appropriate the Rules may be waived or varied in their application to the proceeding (see s 37P(3)(f) of the FCA Act). Included within the armoury of the Court to facilitate the overarching purpose in large scale litigation is the use of referees, which may be required depending on how this proceeding progresses.

LEGAL PRINCIPLES

25    I have already referred to ss 37M, 37N and 37P of the FCA Act, which need no rehearsal here.

26    Under r 8.21(1) of the Rules, relevantly:

(1)    An applicant may apply to the Court for leave to amend an originating application for any reason, including:

[…]

(g)     to add or substitute a new claim for relief, or a new foundation in law for a claim for relief, that arises:

(i)     out of the same facts or substantially the same facts as those already pleaded to support an existing claim for relief by the applicant; or

(ii)     in whole or in part, out of facts or matters that have occurred or arisen since the start of the proceeding.

27    An application for leave to amend under r 8.21(1)(g)(i) may be made even where a relevant period of limitation has expired following the commencement of the original proceeding. However, there is no scope to amend if a relevant period of limitation has expired and the new claim or foundation in law arises out of different facts to those already pleaded.

28    Justice O’Bryan in Australian Competition and Consumer Commission v BlueScope Steel Limited (No 2) [2020] FCA 625 (‘BlueScope’) made the following observations (which I propose to follow in relation to the application of rr 8.21 and 9.08):

[22]    While rr 8.21(2) and (3) specifically address the circumstance that an amendment might be made after the end of a relevant period of limitation, they too should not be read as an exhaustive statement of rules to be applied and due consideration must also be given to rr 1.32 to 1.35. As the Full Court observed in McGraw-Hill (at [25]):

Rules 1.32 to 1.35 are important weapons in the Court’s armoury to enable the overarching purpose of the “civil practice and procedure provisions” (defined in s 37M(4) of the Court Act to comprise the Rules and “any other provision made by or under this Act or any other Act with respect to the practice and procedure of the Court”) to be achieved as identified in s 37M(1) of the Court Act. The overarching purpose is to facilitate the just resolution of disputes according to law, as quickly, inexpensively and efficiently as possible. Faced with these provisions to construe r 8.21(1)(g) as an exclusive power to permit a statute barred amendment let alone a merely arguably statute-barred amendment (as in the present case) only in the circumstances permitted by r 8.21(2), is inconsistent with the language of the Rules and inimical to the overarching purpose in s 37M of the Court Act. As the present case demonstrates, given the competing arguments about when the cause of action first accrued and the potential operation of s 55(1) of the Limitation Act, if there is a reasonable argument the claim is not statute-barred, there is no reason in principle that an amendment should not be permitted, particularly if all rights are preserved by the date on which the amendment takes effect being determined as part of the final judgment rather than on an interlocutory basis.

[23]    Rules 1.32 to 1.35 are in the following terms:

1.32    The Court may make any order that the Court considers appropriate in the interests of justice.

1.33    The Court may make an order subject to any conditions the Court considers appropriate.

1.34    The Court may dispense with compliance with any of these Rules, either before or after the occasion for compliance arises.

1.35    The Court may make an order that is inconsistent with these Rules and in that event the order will prevail.

[24]    In considering the ACCC’s application for leave to amend, it is also necessary to bear in mind that limitation questions usually involve complex questions of fact and law and, for that reason, it is generally not appropriate for them to be determined at an interlocutory stage of a proceeding: Wardley Australia Limited v State of Western Australia (1992) 175 CLR 514 at 533.

[…]

[34]     The assumption underlying r 8.21 is that the usual position is that an amendment to an originating application takes effect from the commencement of the proceeding. Based on that usual position, rr 8.21(2) and (3) provide that an amendment to an originating process will not be allowed where the effect is that a respondent will lose the protection of an applicable limitation period, unless the new claim arises out of the same facts or substantially the same facts as those already pleaded.

[35]    As stated earlier, rr 8.21(2) and (3) should not be treated as an exhaustive statement of rules to be applied in the case of amendments that may be affected by limitation periods. Rules 1.32 to 1.35 provide ample power to frame orders that are consistent with the underlying principles reflected in rr 8.21(2) and (3) but which address the particular circumstances of this case. The principles reflected in those rules are that a respondent “should not generally lose its right to a successful limitation defence where an amendment arose out of facts which were not substantially the same” as already pleaded: Voxson Pty Ltd v Telstra Corporation (No 7) (2017) 343 ALR 681at [15] per Perram J.

29    The principles relevant to an application under r 8.21(1)(g)(i) were set out by me in Camilleri at [10]-[12] as follows.

(a)    Rule 8.21(1)(g)(i) directs attention to the existing claim for relief, and the facts pleaded to support it, and then directs attention to the question of whether the proposed amendments are properly characterised as a new foundation in law for the relief, arising out of ‘substantially’ the same facts as those already pleaded.

(b)    The Court should not be too pedantic in considering the nature of the facts added to the existing pleading. Whether the added facts are substantially the same as the facts already pleaded will be a question of degree, and will depend on the nature and extent of the existing pleaded case, the facts sought to be added in and the relief already sought.

(c)    The expression ‘substantially the same facts’ does not mean ‘the same facts’.

(d)    If the necessary additional facts to support the new cause of action arise out of substantially the same story as that which would have to be told to support the original cause of action, the fact that there is a changed focus with elicitation of additional details should not of itself prevent a finding that the new cause of action arises out of substantially the same facts.

30    Even if a proposed amendment would satisfy the above principles, the party seeking leave to amend must nonetheless persuade the Court that leave should be given as a matter of discretion: see Bryant (Liquidator) v LV Dohnt & Co Pty Ltd, In the matter of Gunns Limited (in liq) (Receivers and Managers Appointed) [2018] FCA 238 (‘Bryant’) at [84] (Davies J) citing Dye v Commonwealth Security Ltd (No 2) [2010] FCAFC 118 at [17].

31    The discretion is to be exercised having regard to the overarching purpose set out in s 37M of the FCA Act informed by the decision in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175: Camilleri at [37]. As set out by Gleeson J in Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm) [2015] FCA 1098 at [127] the factors relevant to the exercise of that discretion include:

(a)    the nature and importance of the amendment to the party applying for it;

(b)    the extent of the delay and the costs associated with the amendment;

(c)    the prejudice that might be assumed to follow from the amendment, and that which is shown;

(d)    the explanation for any delay in applying for leave;

(e)    the parties’ choices to date in the litigation and the consequences of those choices;

(f)    the detriment to other litigants in the Court; and

(g)    potential loss of public confidence in the legal system which can arise where a court is seen to accede to applications made without adequate explanation or justification.

32    Then rr 9.02, 9.06, 9.07 and 9.08 of the Rules provide:

9.02    Joinder of parties—general

An application may be made by 2 or more persons, or against 2 or more persons, if:

(a)    a separate proceeding could be made by or against each person in which the same question of law or fact might arise for decision; and

(b)    all rights to relief claimed in the proceeding (whether joint, several or alternative) arise out of the same transaction or event or series of transactions or events.

[…]

9.06    Application for separate trials—inconvenient joinder of causes of action or parties

A party may apply to the Court for an order that separate trials be held on the ground that a joinder of parties, or causes of action, in a proceeding may:

(a)    complicate or delay the trial of the proceeding; or

(b)    cause any other inconvenience.

9.07    Errors in joinder of parties

A proceeding will not be defeated only because:

(a)    a party has been improperly or unnecessarily joined as a party; or

(b)    a person who should have been joined as a proper or necessary party has not been joined.

9.08 Removal of parties by Court order

A party may apply to the Court for an order that a party that has been improperly or unnecessarily joined as a party, or has ceased to be a proper or necessary party, cease to be a party.

BACKGROUND

33    The background and relevant facts are not in contention.

Leave granted on 7 June 2019 to file SFAOP and Points of Claim

34    On 7 June 2019, the Court made orders granting leave to the Applicants to file a SFAOP by 31 July 2019 and also:

(a)    granting leave to the Applicants to file Points of Claim on each of the Respondents (other than Grocon and Watpac who had previously been provided with Concise Statements and had filed Concise Statements in Response) by 31 July 2019;

(b)    that each of the Respondents (other than Grocon and Watpac) file Points of Defence by 20 September 2019; and

(c)    that the Applicants file any additional evidence on which they intend to rely at trial by 23 October 2019.

35    Following those orders, the Applicants commenced preparing the claims against each of the Respondents for trial and the amending documentation. The Applicants were delayed in providing the SFAOP and the Points of Claim. I accept that the Applicants were not dilatory in that preparation, and that the Applicants encountered a number of unforeseen difficulties concerning the collation and provision of a substantial volume of evidentiary material. Nevertheless, the Applicants now require the leave of the Court and an indulgence because of the failure to file the documentation in accordance with the Court orders.

36    As a consequence of the unforeseen difficulties, the Applicants filed:

(a)    the SFAOP on 21 August 2019 rather than by 31 July 2019 as ordered;

(b)    the Points of Claim from 1 October 2019 to 14 October 2019 rather than by 31 July 2019 as ordered;

(c)    affidavits from 24 September 2019 to 12 November 2019 rather than by 23 October 2019 as ordered including:

(i)    an affidavit from one of the Liquidators, Craig Crosbie, concerning general matters relevant to all of the Respondents, sworn 31 October 2019;

(ii)    two affidavits from Michael Meryment (affirmed 24 September 2019 and 30 October 2019) concerning the accounting software, called Pronto, used by the Hastie entities at the relevant times; and

(iii)    at least 13 affidavits from Mr Crosbie directed to the Respondents setting out the claims made against each of them on a project by project basis.

37    It is necessary to set out the procedural history of the proceeding including a summary (where relevant) of the:

(a)    relevant correspondence between the parties;

(b)    pleadings;

(c)    parties’ written submissions in relation to each case management hearing;

(d)    oral submissions at each hearing; and

(e)    orders made following each case management hearing.

Correspondence prior to the commencement of proceedings

38    Prior to the commencement of the proceeding, there was correspondence between the Liquidators and Respondents (or their respective legal representatives) in relation to the outstanding indebtedness recorded in the books and records of the Hastie entities, and called on or held bank guarantees.

39    The correspondence included demands for payment by the Liquidators, and for a justification of any set-off claims. In summary, the majority of the Respondents engaged with the Liquidators and broadly asserted positions including:

(a)    denying they were indebted;

(b)    asserting an entitlement to set off monies owed to the Hastie entities as against claims by the respective Respondent against the Hastie entities; and

(c)    asserting an entitlement to call on bank guarantees.

40    I am satisfied that this correspondence shows that the Respondents were aware that the Liquidators were seeking to collect the assets of Hastie entities, and there is no suggestion that the subject matter of claims now sought to be pursued was or is not readily identifiable by the Respondents. By this I mean that the description of the claims (as referred to in Annexure 1 to the Concise Statement) was sufficient for each Respondent to at least identify the project involved and the amount claimed, and the relevant debt or guarantee involved.

The pleadings

The Originating Process and initial Concise Statement

41    On 23 November 2017, the Applicants filed an Originating Process and a Concise Statement.

42    If not already apparent from my approach, I do not accept that the Originating Process and initial Concise Statement were as confined as the Respondents contend. The whole of these documents need to be addressed in context.

43    The Originating Process commences with details of the application stating:

These proceedings are commenced against each of the Respondents in relation to debts owed to the Hastie Group of companies, as detailed in the concise statement.

44    The Originating Process then goes on to detail three questions on “the facts stated in the concise statement” and related specifically to one Respondent, Multiplex, and to two Hastie entities: Watters Electrical (Aust) Pty Ltd (in liquidation) (‘Watters’) and ACN 008 700 178 Pty Ltd (in liquidation) (formerly Direct Engineering Services Pty Ltd) (‘Desair’). The final question asks whether Multiplex is indebted to those entities as set out in Annexure 1 to the Concise Statement.

45    The Originating Process commences claims against all of the joined Respondents (who other than Multiplex are not referred to in the questions) in respect of the “debts owed to the Hastie Group of companies, as detailed in the [C]oncise [S]tatement.”

46    The Concise Statement contains details concerning the liquidation including that the “assets of the Hastie Group include invoices or progress payment claims issued prior to or in respect of work completed prior to 28 May 2012 to each of the Respondents identified in Annexure 1 in the amount set out therein” and that each of the Respondents has refused to make payment with many asserting an entitlement to set-off.

47    The Concise Statement then refers to the Respondents calling upon or failing to return bank guarantees. It states “the [L]iquidators contend that the bank guarantee creditors are not, and were not, entitled to call upon the bank guarantees until such time as their claims have been admitted in the liquidations, alternatively at all”.

48    There is then detail concerning Watters, Desair and Multiplex. Both the Originating Process and the Concise Statement at this stage make plain that these claims, which are a subset of claims made against Multiplex, are selected as factual examples for the claims against each of the Respondents in the amounts set out in Annexure 1 to the Concise Statement.

49    The Concise Statement then proceeds at [23]:

The liquidators bring these proceedings against each of the Respondents to recover the unpaid accounts referred to in [4] [being the invoices or payment claims to each of the Respondents identified in Annexure 1] in relation to services rendered by the members of the Hastie Group of companies prior to 28 May 2012 upon facts substantially similar to those involving [Multiplex].

50    In terms of the relief sought, the Concise Statement provides at [24]-[25]:

The liquidators seek orders from the Court determining the no mutuality proposition in the first instance as between Watters and Desair and [Multiplex] and thereafter as between each relevant Applicant and Respondent.

Thereafter the liquidators seek a finding that each of the Respondents is indebted to the Hastie Group of companies in the amounts set out in Annexure 1.

51    The Concise Statement then goes on (at [26]) to set out the questions that “arise for determination in the first instance”, being the same set-off question from the Originating Process that I have referred to above.

52    In terms of the primary legal grounds for the relief sought, the Concise Statement provides at [27]:

The liquidators bring this proceeding both on behalf of the Hastie Group of companies and in their capacity as liquidators of the Hastie Group of companies relying upon ss 5-30 and 90-20 of the Insolvency Practice Schedule to the Corporations Act, r 1.34 of the [Rules], ss 23, 37M and 37N of the [FCA Act], and ss 18, 19 and 310(c) of the [Personal Property Securities Act 2009 (Cth)].

53    The Concise Statement then provides at [28] and [32]:

The [L]iquidators seek directions and orders so as to facilitate recovery by the Hastie Group of companies in the winding up of the Hastie Group of companies of debts arising from progress payment claims and invoices for services provided totalling approximately $68million.

[…]

Further or alternatively, the [L]iquidators seek orders from the Court as to whether the bank guarantee creditors are entitled to retain the proceeds of any guarantee called upon on or after 28 May 2012 and orders that retained bank guarantees be returned.

54    Annexure 1 to the Concise Statement provides details of indebtedness and alleged improperly called upon bank guarantees in columns setting out the:

(a)    builder group;

(b)    Respondent;

(c)    Hastie entity;

(d)    project names, which necessarily entail a series of other matters in relation to those projects such as the location, dates and nature of the work performed and, in respect of the named Applicant Hastie entities, also draw attention to the contracts under which the work was performed;

(e)    debt amount;

(f)    bank guarantee; and

(g)    bank guarantee amount; and

(h)    rows following each builder group setting out a sub-total for each of the:

(i)    debt amount; and

(ii)    bank guarantee amount.

55    Annexure 2 to the Concise Statement provides details of amounts owed for services undertaken by Watters and Desair under various contracts with Multiplex, and contains columns setting out:

(a)    Hastie entity and project;

(b)    amount owing as per the Hastie Group’s books and records;

(c)    invoices, which contain invoice numbers, dates, in some cases claim numbers, and amounts; and

(d)    letter of termination and contractual clause relied upon.

56    Annexure 3 to the Concise Statement provides details of alleged costs and expenses that Multiplex says it has incurred to perform the services that Watters and Desair did not perform, and is entitled to set off against the amounts in Annexure 2, and contains columns setting out:

(a)    Hastie entity and project:

(b)    set-off claim amounts; and

(c)    particulars, which are specific references to paragraphs and appendices of letters.

57    It is to be observed that Annexure 1 goes to all claims, whereas Annexure 2 and 3 relate to the questions posed in relation to the claims by Watters and Desair against Multiplex. This is an illustration of the distinction between the general debt claims and the specific Multiplex example.

Amended Originating Process

58    On 16 February 2018, the Applicants filed the Amended Originating Process. The amendments to the Originating Process were in substance to:

(a)    amend the words to the commencement of the process:

These proceedings are commenced against each of the Respondents in relation to debts owed to the Hastie Group of companies, as detailed described in Annexure 1 to the concise statement (debts).

(b)    make changes to the questions posed in relation to the Multiplex, Desair and Watters claims; and

(c)    amend the orders to include:

Each Respondent has no proper basis to invoke s 553C of [the Corporations Act] to deny its obligations to pay to the relevant company in the Hastie Group of companies (the relevant Hastie entity) the debts described in Annexure 1 to the concise statement.

Each of the Respondents is indebted to the Applicants as set out in Annexure 1 to the concise statement.

Initial Points of Claim

59    On 13 July 2018, the Applicants filed Points of Claim which commences at Section A with an index to major claims totalling approximately $52 million. Section B contains a summary of the liquidation and Section C concerns the secured creditors.

60    Section D is entitled “projects with the largest 26 accounts owing to the Hastie Group.” This section sets out in relation to those projects principally:

(a)    what is contained in the books and records of the relevant Hastie entity in relation to the amounts owing;

(b)    details concerning the contracts, including the relevant terms;

(c)    dates of termination and demands for payment;

(d)    the Respondent’s refusal to make payment; and

(e)    the allegation of set-off made by the Respondent.

61    Section E provides:

In addition to the matters set out above, each respondent identified in Annexure 1 to the Concise Statement is indebted to the Hastie Group as set out therein.

62    Section F sets out the basis for the proposition that the Respondents subject to the major claims are not entitled to set-off.

63    Annexure 1 contains details of major claims including amounts, invoice numbers and dates.

Grocon and Watpac Concise Statements and the FAOP

64    As noted above, on 16 November 2018 the Applicants filed Concise Statements in respect of each of Grocon and Watpac, which contain details of the debt and bank guarantee claims against these Respondents.

65    The Concise Statement in respect of Grocon was only directed at one of the two Grocon Respondents, being Grocon Constructors (NSW) Pty Ltd.

66    Similarly, the Concise Statement in respect of Watpac was only directed at two of the four Watpac Respondents, being Watpac Construction (Vic) Pty Ltd and Watpac Construction (NSW) Pty Ltd.

67    The Applicants also filed a FAOP on 19 December 2018, which deletes the separate and preliminary set-off questions and makes reference to the claims in the Grocon and Watpac Concise Statements.

SFAOP

68    As noted above, the Applicants filed a SFAOP on 21 August 2019. The SFAOP makes amendments principally to:

(a)    the commencement of the process stating:

These proceedings are commenced against each of the Respondents in relation to debts owed to the Hastie Group of companies as set out in Annexure 1 to the Concise Statement filed 23 November 2017…

(b)    allege that in addition to the initial Concise Statement and the Grocon and Watpac Concise Statements, the Liquidators rely upon the facts to be provided in the proposed Points of Claim;

(c)    seek orders that:

The Respondents are indebted to the Applicants in the amounts set out in Annexure 1 to the Concise Statement filed 23 November 2017 further or alternatively.

Further or alternatively, the Respondents pay the Applicants damages in the amounts set out in Annexure 1 to the Concise Statement filed 23 November 2017, further or alternatively [in each of the Grocon and Watpac concise statements and the proposed Points of Claim].

Proposed Points of Claim and amended Concise Statements for Grocon and Watpac

69    As noted above, from 1 to 14 October 2019 the Applicants filed proposed Points of Claim directed at each of the Respondents other than Grocon and Watpac, which contain details of the debt and bank guarantee claims against these Respondents. The proposed Points of Claim for Multiplex and Hansen Yuncken included new unconscionable conduct claims for alleged breaches of s 20 of Schedule 2 to the Australian Competition and Consumer Act 2010 (Cth).

70    On 14 October 2019, the Applicants also provided (but did not file) proposed amended Concise Statements for Grocon and Watpac which are directed to all of the Grocon and Watpac Respondents, rather than the initial subset of Respondents referred to above, and contain further details of the debt and bank guarantee claims against these Respondents.

71    I will now turn to the various case management hearings.

Case management hearing of 9 February 2018

Correspondence

72    During the course of the proceeding, there has been a substantial body of correspondence between the parties. In summary, between the commencement of the proceeding and in advance of the case management hearing held on 9 February 2018:

(a)    the Applicants wrote to the Respondents proposing a course of action to have the set-off question determined by way of separate question involving a contradictor;

(b)    there were various responses to this proposal including requests for further information and documents; and

(c)    a number of parties proposed adjourning the proceedings pending the progress of the an appeal from the Hamersley First Instance decision which the Applicants did not consent to.

The parties’ written submissions

73    On 9 February 2018, the Applicants filed written submissions seeking directions as to the effect of the Personal Property Securities Act 2009 (Cth) (‘PPSA’) on claims relying upon s 553C of the Corporations Act. The Applicants stated that they sought directions and determination of the set-off question as the most economical use of the Court’s resources and the limited resources in liquidation.

74    Watpac filed written submissions submitting that:

(a)    while the proposed separate and preliminary set-off question might be appropriate in a test case between the Hastie entities and Multiplex, it is directed at determining rights and obligations and is therefore not properly the subject of an application for judicial advice;

(b)    it is premature to make orders for the filing of defences as:

(i)    it is unclear whether other Respondents beyond Multiplex would be bound by a determination of the set-off question;

(ii)    preliminary questions ought be formulated with precision including as to facts;

(iii)    the similarity between Multiplex’s circumstances and those of other Respondents is unclear at this point noting that:

The liquidators have not particularised the debts claimed against the Respondents other than the Multiplex entities.

                  and

(iv)    it would potentially be unfair to require defences from the other Respondents.

75    Badge and Hansen Yuncken filed written submissions submitting that:

(a)    the proceeding should be adjourned awaiting the outcome of the appeal of the Hamersley First Instance decision;

(b)    taking steps in the proceeding runs the risk of wasted costs and resources and the possibility of inconsistent decisions; and

(c)    alternatively, if the Court is not minded to adjourn the proceeding, pleadings should be ordered as “[t]here is a striking lack of particularity to the Concise Statement”, which was said to be particularly evident in relation to the Respondents other than Multiplex.

76    John Holland filed written submissions submitting that:

(a)    its position in relation to the directions that should be made was the same as the other Respondents;

(b)    the proceeding should be adjourned awaiting the outcome of the appeal of the Hamersley First Instance decision;

(c)    alternatively, if the Court is not willing to adjourn, then the Court should make orders to ensure that the Applicants’ claims are “properly pleaded” against each Respondent;

(d)    the Applicants purport to seek judicial advice pursuant to, inter alia, s 90-20 of the Insolvency Practice Schedule (Corporations) of the Corporations Act; and

(e)    the proposed separate and preliminary set-off question is not properly the subject of an application for judicial advice.

77    CPB and Thiess filed written submissions submitting that:

(a)    the proceeding should be adjourned awaiting the outcome of the appeal of the Hamersley First Instance decision as, among other things, there is no apparent urgency and there is the prospect of wasted costs, including the costs of the Applicants which will affect the ultimate distribution to the creditors;

(b)    there is no pleading other than a Concise Statement which focuses on the Applicants’ claims against Multiplex and so only Multiplex could file a response at this stage; and

(c)    the case against all Respondents should be properly pleaded before any defences or responses are required from other Respondents.

78    Multiplex filed written submissions submitting that:

(a)    the proceeding ought be adjourned awaiting the outcome of the appeal of the Hamersley First Instance decision as, among other things, if the appeal is allowed then the Liquidators’ central thesis for the proceeding would fall away;

(b)    alternatively, if the Court is not minded to adjourn, then pleadings should be ordered;

(c)    it is unclear from the Concise Statement how the Applicants put their case, noting that there is no allegation that the Respondents have applied set offs and why or how this is contrary to the PPSA;

(d)    the Applicants ought to plead the allegations in a statement of claim and set out what it is alleged that each Respondent has done, and why it is impermissible;

(e)    the structure of the proceeding is uncertain as the proceeding has the appearance of an inter partes action between the Liquidators and the (then) 29 Respondents but the Originating Process asks the Court to determine questions, suggesting the application is for judicial advice; and

(f)    Multiplex would be prepared to assume the role of contradictor on the separate and preliminary set-off question subject to its costs being paid.

The hearing

79    On 9 February 2018, the first case management hearing was conducted and all the Respondents appeared except for the former Eleventh Respondent, Colin Joss & Co Pty Limited.

80    Senior counsel for the Applicants commenced the hearing:

What we had in mind, your Honour, was that the reason there is such utility is that using the concise statement procedure, it will be possible to identify, particularly around the question of set-off pursuant to section 553C, the bases upon which the respondents say that they are entitled to set off their damages claims against the accounts receivable which the liquidators are seeking to recover.

81    In terms of the process proposed for going forward, senior counsel for the Applicants stated:

With the benefit of [responses by the Respondents to the Concise Statement], we were proposing to prepare a proposed agreed statement of relevant facts to the issue as to the operation of the PPSA pursuant to section 19 and its attachment to each of the – can I just call them the accounts receivable for the moment. We would circulate that, and then see where the parties can get to on an agreement, and at that point in time, then we were proposing, your Honour, to bring the matter back to court to see whether or not there had emerged a sufficient consensus for the court to be satisfied that there was utility in determining that question.

82    At the commencement of the hearing, in response to the Respondents’ submissions seeking an adjournment, the Court indicated that it did not intend to adjourn the matter to wait for the Court of Appeal of the Supreme Court of Western Australia.

83    The Court also rejected the request made orally by senior counsel for the Applicants for the Respondents to prepare responses to the initial Concise Statement. Instead, the Court stated that the Respondents were not required to take any steps until the Applicants provided a document setting out the facts giving rise to the Applicants’ claims. Once this was done, the Court indicated that it would require the Respondents to confer with the Applicants in relation to an agreed statement of facts or a factual scenario.

84    The Court also indicated that the Applicants would need to persuade the Court as to whether it would be appropriate to proceed with one or two Respondents as a test case.

85    Senior counsel for Multiplex submitted that he was content with the process that had been outlined, and that Multiplex would be content to be the contradictor in the proceeding subject to the usual order in relation to the payment of costs. In terms of the proceedings generally, he stated:

But we completely agree that our friends need to plead out what their case is, and they need to plead the set-offs, the many projects involved, even concerning Multiplex, and then we can put on a defence. It’s our – it was going to be our position that we shouldn’t put on a defence until after the appeal decision comes down but we hear what your Honour says.

86    Senior counsel for Watpac stated that he would reserve his position in anticipation of receiving a document with facts.

87    Senior counsel for Lendlease submitted that the document envisaged by the Court ought to be properly a Statement of Claim or a Points of Claim. He submitted that the only relief sought in the Originating Process was against Multiplex and that the Originating Process would need to be amended to seek relief against all of the Respondents.

88    Senior counsel for the Applicants reiterated that relief was sought against all of the Respondents.

Orders made

89    At the case management hearing held on 9 February 2018, the Court made orders granting leave to the Applicants to amend their Originating Process by 16 February 2018 and file and serve Points of Claim by 1 June 2018, with costs reserved.

90    As noted above, on 16 February 2018, the Applicants filed the Amended Originating Process.

91    Further, on 13 July 2018, the Applicants filed Points of Claim for the major claims totalling approximately $52 million.

Case management hearing of 14 September 2018

Correspondence

92    In the period between the first case management hearing and the case management hearing held on 14 September 2018, the correspondence between the parties concerned:

(a)    the Applicants’ proposed Points of Claim, which was provided to the Respondents for the purpose of the Respondents providing input to the facts; and

(b)    issues raised by the Respondents as to the adequacy of the Points of Claim (including the limiting of the Points of Claim to the major debt claims without addressing the other debts or the bank guarantee claims), clarification of various matters, and the question of security for costs.

The parties’ written submissions

93    On 13 September 2018, Multiplex filed written submissions:

(a)    submitting that the current Points of Claim were unsatisfactory as:

[i]n respect of Multiplex, the [Points of Claim] articulates factual allegations in respect of only 4 projects and 4 subcontractors, out of the 26 projects and 10 subcontractors which are the subject of Annexure 1 to the Concise Statement. The [Points of Claim] also fails to set out the entirety of the Applicants’ case against Multiplex even for the claims which are pleaded. For instance, it does not address claims regarding whether Multiplex was entitled to call on or hold various bank guarantees which are referred to in the Concise Statement;

(b)    submitting that in the circumstances of the present case:

in which there are multiple respondents, a multitude of claims in respect of each (many of which may have distinguishing facts) and the preliminary question has been proposed by the Applicants to address matters in dispute in each case, [precise identification of the facts and issues in dispute] is even more important;

(c)    noting that the Applicants had stated that none of the claims set out in the initial Concise Statement had been abandoned; and

(d)    seeking that the Court make orders for the Applicants to file Points of Claim in relation to every claim against the Respondents, including Multiplex, following which the Court would be in a position to decide whether to determine a preliminary question and, if so, its formulation.

94    On 14 September 2018, the Applicants filed written submissions:

(a)    stating that the Respondents have not engaged substantively with the Points of Claim collaborative process that the Court had envisaged;

(b)    outlining a proposal for a series of dates whereby:

(i)    the Applicants would identify claims from the index of major claims in Annexure C to the Points of Claim that have been agreed;

(ii)    where claims from the index of major claims in Annexure C to the Points of Claim had not been agreed, the Respondent was to provide details of the basis of any denial;

(iii)    the Applicants would then file a list of claims to be tendered as evidence for consideration of the separate and preliminary set-off question; and

(c)    setting out a proposed formulation of the separate and preliminary set-off question.

The hearing

95    On 14 September 2018, a case management hearing was conducted.

96    Senior counsel for the Applicants commenced by stating that the Points of Claim were directed to the major debt claims totalling approximately $52 million. He noted that what was not pleaded were minor debt claims and the bank guarantee claims. He submitted:

Now we understand our learned friends can put submissions to the contrary on the preliminary issue. But if we were to succeed on the 553 proceeding, then the need to examine the cause of the loss which is being asserted against the liquidators by each of the builders as a set-off will not arise. If the liquidators are to be unsuccessful on the preliminary question, then they would, at the very least, need to consult the committee of creditors and the funder as to the commerciality of having to run so many claims where we would have to examine the circumstances of each of the alleged amounts which are said to be capable of being set-off on the basis of mutuality. Now, I’m not sure that the liquidators can be properly criticised in the circumstances of the administration for – maybe they can – I’m going to say they can’t be, but maybe they can – for seeking to find a way where the court’s time is not unnecessarily taken up by us proceeding seriatim through each of the matters.

97    In response to this oral submission, the Court stated:

Why don’t you take – one person – Mr Crutchfield’s clients and have a – see how we go with one? Would that work?

98    Senior counsel for the Applicants submitted that the preliminary question was one proposal and stated:

we are proposing a course – it may well be that, ultimately, your Honour determines that that is not the appropriate course and we may determine prior to arguing for the preliminary question that there is not sufficient utility. And if – of course, what we would urge upon your Honour is that we, at least, go down the path that we have outlined in our proposed orders today because that will certainly distil even further the amount of the – the amount of opposition that we have to the preliminary question.

99    Senior counsel for the Applicants also said he could envisage proceeding to a determination in relation to at least five Respondents on an understanding that certain debts did not appear to be questioned.

100    Senior counsel for Multiplex submitted that he expected the Applicants to provide Points of Claim in relation to every claim and that, following this, an assessment could be made as to whether or not there ought to be a hearing of a preliminary question. He noted that “[Multiplex] would think it would be sensible to have a test case” and urged the Applicants to reconsider proceeding against five Respondents as they proposed.

101    Senior counsel for Multiplex also observed that the bank guarantees had been omitted from the Points of Claim and submitted:

Your Honour, the bank guarantees – what we thought we were getting was a points of claim that covered the universe of claims that the liquidators say they have against Multiplex. And you look at that universe of claims and then you make an assessment whether or not there can be a preliminary question. Because, as your Honour knows, there’s the bank guarantee issue in this case as well. At least in the case of Multiplex and, I suspect, in the case of most other of the respondents – where claims were made by Multiplex under those bank guarantees.

Now we need to see that case because, for example, it may well be that if it’s a case based on a preference, that our friends are well and truly out of time because this company went into external administration over six years ago. So, let’s have a look – what we respectfully suggest our friends ought to do, is plead out their full case against Multiplex, which is what we thought we were getting. We can have a look at it. We are not saying it won’t be possible for there to be a preliminary question determined. Your Honour knows in Hamersley there was a preliminary question. The parties agreed to that. We embraced the notion that we ought to come up with a mechanism to resolve the litigation as efficiently as possible. But, with respect, at the moment this is half baked and it’s going to lead to problems down the track.

102    Senior counsel for Multiplex submitted further:

What our friends should do is plead out their full case against Multiplex. We can have a look at it. Work out the most efficient way for the matter to come back before your Honour with a view to a trial of the whole proceeding, if it’s no – not much more complicated than the preliminary question. Or a preliminary question if we agree to that or your Honour is persuaded that is the way to go subject to appropriate cost protection for Multiplex along the line of what, we apprehended, the plaintiffs had in mind.

103    Senior counsel for the Applicants stated:

But the principal issue – and, your Honour, the bank guarantee claim – if I can put it this way, it’s a tail. The principal amounts owing are – and which have not been paid because of section 553C are those which we’re seeking to recover. $52 million of them is the main claim and I think the total is something like $67 to $70 million.

[…]

we still think, your Honour, that there would be utility in – even in Multiplex’s position, insofar as – we’ve certainly identified in annexure C, your Honour, each of the claims made against Multiplex for the unpaid amounts.

104    Senior counsel for Lendlease submitted that the Applicants had not identified the basis upon which they said that the debts were due and payable and had not provided copies of the relevant invoices. He stated that there was no agreement on the amounts owing and that:

[t]his is not limited to a 553C case. We will be contending that each of these debts, on my present instructions, are not due and payable and, therefore, there is no separate question in relation to 553C.

105    After hearing these oral submissions, the Court stated to senior counsel for the Applicants:

More and more I think about it, Mr Wyles, I think it’s a good idea to pick a few cases. It would be an easier job for the liquidator.

You could focus on doing all the things that one or two respondents want you to do – and without having to spread your efforts around everybody else and you could give them what they wanted as far as the points of claim are concerned and then see what they come up with.

106    The Court proposed that the Applicants write to the Respondents seeking their position on each of the relevant debts, stating further:

Well, it only forces, then, the recipient of the letter to respond to it. And in our current way in which we engage in litigation, that requires more than a denial.

[…]

And I think everyone understands what the Federal Court Act requires of practitioners and parties to respond appropriately, not by mere denial. So, this is an important piece of correspondence. All right. So, all I’m proposing to order, really, is that the matter be adjourned, effectively, to the next directions date.

107    Counsel for Laing O’Rourke sought an order that the Applicants provide the invoices as attachments to the letters to the Respondents.

108    In terms of the selection of major claims for the Points of Claim, the Court stated in an exchange with senior counsel for the Applicants:

I will say this – that the fact that you’ve picked some of the major ones – 26 of the largest debt claims and not the guarantees, doesn’t particularly worry me, I must say. If you want to run---

MR WYLES: We were trying to be practical, your Honour.

HIS HONOUR: Yes. And I don’t have a problem with that. All that means, of course, is your other claims will have to be dealt with further down the track.

109    Counsel for Scentre complained that Scentre did not know “what’s being put against us”. The Court stated in reply:

All that’s happening at the moment is you are in the litigation, or your client is, and the letter is going to go to your client and the letter to your client may have to be a little bit more fulsome than some of the other letters that go out. It will be like a letter of demand, if you like.

Orders made

110    At the case management hearing held on 14 September 2018, the Court made orders that the further case management hearing be adjourned to 7 December 2018, and that costs be reserved.

Case management hearing of 23 October 2018

111    As I have indicated already, on 21 September 2018, prior to the case management hearing, the Court of Appeal of the Supreme Court of Western Australia handed down the Hamersley Appeal, allowing the appeal and overturning Hamersley First Instance.

Correspondence

112    On 12 October 2018, the Applicants informed the Respondents that, as a result of the Hamersley Appeal decision, they intended to ask the Court to re-list the proceeding.

The parties’ written submissions

113    The Applicants filed written submissions:

(a)    seeking orders to proceed to trial against Grocon and Watpac, including leave to file a Further Amended Originating Process and Concise Statement with respect to each of Grocon and Watpac;

(b)    submitting that, if there was a remaining dispute as to the methodology of ascertaining quantum, might be most efficient to refer those questions to a referee under s 54A of the FCA Act; and

(c)    providing further:

The Liquidators propose this course and the orders sought to minimise the imposition of these disputes upon the Court’s resources and to lessen the costs burden upon the parties. The proposal for a separate question has not been embraced by the respondents. In these circumstances, the “test case” method recommends itself as the most efficient means of resolving the issues thrown up by the Liquidator’s “getting in” of the assets of the Hastie Group constituted by the receivables owing from the Respondents.

114    Watpac filed written submissions submitting that:

(a)    determination of whether leave ought to be granted to file the documents should not be entertained prior to the Applicants serving a proposed Further Amended Originating Process and a Statement of Claim “plainly articulating the claims it intends making”, so as to afford the Respondents an opportunity to assess the Applicant’s proposal;

(b)    in light of the Hamersley Appeal decision, there is a question as to the utility of the proposed test case; and

(c)    the Applicants’ Statement of Claim should be a full pleading of the whole of its case against the Watpac Respondents.

115    Badge and Hansen Yuncken filed written submissions submitting that:

(a)    as there was no identification of common issues, it was unclear what the benefit would be of proceeding by way of test cases;

(b)    the Applicants ought bring their entire case against all Respondents; and

(c)    if the test cases were to proceed, then the Applicants must identify what may or may not bind the other parties from those determinations before any test case trial is set down.

The hearing

116    On 23 October 2018, a case management hearing was conducted at which all Respondents appeared.

117    In relation to Grocon and Watpac, the Court stated:

So I would treat each case as probably – well, I would prefer – it’s easier for the court to – not start again, but to have a clean slate. Start with your new pleading, with all the issues you want to raise, and then they will be responded to in the normal way. That’s the easiest way for me to proceed.

118    Senior counsel for Grocon and Watpac stated that they did not oppose the course proposed.

119    Senior counsel for Watpac sought to be regarded as a contradictor, which the Court did not allow. Senior counsel for Watpac stated further that he would attempt to have discussion as to costs with the Applicants’ legal representatives.

120    In relation to the remaining Respondents, there was the following exchange between the Court and senior counsel for the Applicants:

HIS HONOUR: Now, what do you want to do with all the other matters?

MR WYLES: We don’t seek any further orders. Your Honour may wish to adjourn the 7 December and otherwise reserve their costs.

HIS HONOUR: Well, is – what you would want is that they be adjourned until after the hearing and determination of these two cases. That’s probably the order to be made, is it that you would seek?

MR WYLES: Yes, it is, your Honour.

121    Senior counsel for Multiplex submitted that the Applicants ought “plead out the cases or at least identify what are the common issues in relation to a preliminary question.” He submitted that one option was to discontinue against all other parties but that Multiplex’s principal position was that the proceeding be stayed until the High Court considered the application for special leave in respect of the Hamersley Appeal decision.

122    Senior counsel for Multiplex submitted that it was an abuse of process to stand back and “see what happens” with respect to the Respondents other than Grocon and Watpac, and that Multiplex would be “taking that point.”

Orders made

123    At the case management hearing held on 23 October 2018, the Court made the following orders in respect of Grocon and Watpac:

(a)    without prejudice to any party’s right to raise and rely upon a defence based on limitation periods, the Applicants have leave to file and serve a Further Amended Originating Process and an Amended Concise Statement in respect of Grocon and Watpac, and Grocon and Watpac are to file and serve a Concise Statement in Response by 21 December 2018;

(b)    for mediations to take place by no later than 22 February 2019;

(c)    by 1 March 2019, for the Applicants, Grocon and Watpac to respectively endeavour to agree upon an appropriate form of limited discovery; and

(d)    the proceeding be listed for a further case management hearing on 8 March 2019, and costs be reserved.

124    The Court made the following orders in respect of the Respondents other than Grocon and Watpac:

(a)    any of the Respondents seeking orders in respect of the future conduct of the proceeding to inform the Applicants of the nature of, and the reasons for seeking those orders (‘Conduct Orders’), by 23 November 2018;

(b)    any Respondent seeking Conduct Orders to file and serve written submissions in support of those orders by 30 November 2018;

(c)    the Conduct Orders sought by the Respondents be determined at the case management hearing listed for 7 December 2018; and

(d)    costs be reserved.

Case management hearing of 7 December 2018

Correspondence

125    In the period up to the case management hearing held on 7 December 2018, the correspondence between the parties concerned:

(a)    the Grocon and Watpac Concise Statements that were filed and served on 16 November 2018;

(b)    on 23 November 2018, a written invitation from the legal representatives of Multiplex on behalf of Multiplex and many of the other Respondents to the Applicants to discontinue the proceedings, stating that “as the law currently stands” there was no ground for the Applicants’ contentions regarding set-off (‘23 November Letter’);

(c)    on 23 and 30 November 2018, letters from other Respondents to the Applicants adopting or adding to the position taken by the legal representatives of Multiplex in the 23 November Letter;

(d)    in early December 2018, commercial offers to compromise the proceedings from the Applicants to the Respondents other than Grocon and Watpac; and

(e)    in January 2019, an open offer of compromise served by the Applicants on each of Grocon and Watpac.

The parties’ written submissions

126    On 6 December 2018, the Applicants filed written submissions:

(a)    seeking orders that the claims against the Respondents other than Grocon and Watpac be stayed or adjourned until 28 February 2019;

(b)    seeking leave to extend the date for filing of a Further Amended Originating Process for approximately three weeks;

(c)    noting that the Grocon and Watpac Concise Statements had been filed and served;

(d)    noting that open offers had been sent to the remaining Respondents other than Grocon and Watpac;

(e)    noting that a number of Respondents had sent correspondence:

(i)    inviting the Applicants to discontinue the proceedings;

(ii)    raising the prospect of strike out or summary dismissal applications; and

(iii)    stating that many claims were statute barred;

(f)    noting that, notwithstanding that the previous orders provided for the Respondents to seek orders and make submissions as to the future conduct of the proceeding, no Respondent had made such a submission or application; and

(g)    reiterating the commonalities concerning the Grocon and Watpac claims and those of the other Respondents.

127    Lendlease filed written submissions seeking an order that the Applicants provide invoices and supporting documents, noting that the invoices for the major claims are expressly referred to in Annexure C to in the Points of Claim filed 13 July 2018.

The hearing

128    On 7 December 2018, a case management hearing was conducted at which all Respondents appeared.

129    Senior counsel for the Applicants stated that he sought until the end of February 2019 to enter into discussions with the Respondents following the open offer letters and that, by that time:

we will have distilled those who it’s just not possible – it’s not going to be possible without further court intervention, in which case we would be proposing at that point in time to put on concise statements against those respondents in the form which has been filed against Grocon and Watpac.

130    The Court raised the complaint made at the previous case management hearing by Multiplex concerning the potential for abuse of process. The Court indicated that this would no longer be an issue if there were separate proceedings, and stated:

[if we] had – I don’t know how many, but let’s say 50, 60 separate proceedings. So I can manage them as separate proceedings at that stage and put off some and deal with test cases and things like that. I’m not saying there is, but there could be a potential problem, but – with that as a permanent stay.

[…]

Now, the only problem with reconstituting it would be you would have to bring separate proceedings, and the only reason you may not want to do that would be because of cost consequences and paperwork.

[…]

But they can all be managed in one way or another.

131    Senior counsel for the Applicants sought an order extending the date for filing of the Further Amended Originating Process. No complaint was raised with respect to leave or otherwise.

132    Senior counsel for Multiplex submitted in respect of the issue concerning separate proceedings that “there may be an additional issue to those your Honour mentioned, and that’s limitations”. He then observed that, notwithstanding the existence of orders for the Respondents to make complaint as to the conduct of the proceeding, Multiplex would not be barred from bringing a strike out or summary dismissal application at a later date. He said:

our view is that the – our present view is that the appropriate time for that would be after the determination of the special leave application in the WA case.

Orders made

133    At the case management hearing held on 7 December 2018, the Court made orders that:

(a)    the next case management hearing would be 15 March 2019, with costs reserved and liberty to apply;

(b)    the date by which the Applicants had leave to file a Further Amended Originating Process against Grocon and Watpac was to be extended to 10 December 2018; and

(c)    within 14 days, the Applicants were to produce to Lendlease copies of all invoices and supporting documentation evidencing certain amounts claimed in Annexure C to the Points of Claim.

134    On 19 December 2018, the Applicants filed the FAOP, which as I have already observed deletes the separate and preliminary set-off question and makes reference to the claims contained in the Concise Statements for Grocon and Watpac.

Case management hearing of 15 March 2019

Correspondence

135    In the period up until the case management hearings held on 15 March and 7 June 2019, the correspondence between the parties concerned:

(a)    the provision of supporting documents by the Applicants to the Respondents in relation to the claims in the Points of Claim, or otherwise in Annexure 1 to the initial Concise Statement;

(b)    requests by the Applicants for the Respondents to provide any missing documents the Liquidators had not been able to locate;

(c)    correspondence from the Applicants proposing mediation and reiterating offers of settlement, as well as disagreeing with criticisms of the pleadings;

(d)    set-off, as the Applicants did not agree that the Hamersley Appeal dealt conclusively with the question of set-off and requested information from the Respondents as to their set-off claims;

(e)    correspondence from the Respondents generally declining the proposal to mediate, inviting discontinuance, and responding to requests for documents.

The hearing

136    On 15 March 2019, a case management hearing was conducted at which Multiplex, John Holland and Scentre appeared. The parties had agreed as to the proposed form of orders.

Orders made

137    At the case management hearing held on 15 March 2019, the Court made the following orders in respect of Grocon:

(a)    Grocon to file and serve a Concise Statement in Response by 12 April 2019;

(b)    the disputes between the Applicants and Grocon be referred to mediation on or before 10 May 2019 (with ancillary orders relating to the mediation); and

(c)    by 17 May 2019, the Applicants and Grocon endeavour to agree upon an appropriate form of limited discovery.

138    The Court made the following orders in respect of Watpac:

(a)    the time for mediation in relation to the disputes between the Applicants and Watpac be extended to 15 April 2019;

(b)    by 15 April 2019, the applicants and Watpac endeavour to agree upon an appropriate form of limited discovery; and

(c)    by 26 April 2019, Watpac:

(i)    file and serve any application seeking further and better particulars in respect of the Watpac Concise Statement filed 16 November 2018; and

(ii)    file and serve any application seeking security for their costs in the proceeding.

139    The Court also ordered that the proceeding be listed for a further case management hearing on 7 June 2019, with liberty to apply and costs reserved.

Case management hearing of 7 June 2019

The hearing

140    On 7 June 2019, a case management hearing was conducted at which all Respondents appeared.

141    Senior counsel for the Applicants said that the Liquidators had insufficient detail as to the various set-off claims made by the Respondents, and sought orders for the Respondents to provide the evidence upon which they would rely on at trial to establish their claims (including any right to set-off).

142    In response, the Court indicated that further information about the Respondents’ positions could be provided by way of response to the Points of Claim.

143    Senior counsel for Multiplex raised concerns about departing from the test case approach against Grocon and Watpac. He said that this approach had previously been supported by the Applicants and there was no reason to depart from it now.

144    Senior counsel for Multiplex also said that the common issue between the Respondents had fallen away in light of the Hamersley Appeal decision and what remained were factual claims against each of the Respondents that ought to be dealt with in separate trials. He then complained as to the adequacy of the initial Points of Claim.

145    Counsel for Grocon also complained about the Liquidators’ alleged failure to articulate their claims and said that the Liquidators “appear unwilling or unable to clearly articulate the alleged indebtedness or to advance the evidence in respect of that indebtedness”. He also observed that the Grocon Concise Statement filed on 16 November 2018 was only directed at one of the Grocon Respondents.

146    Senior counsel for Watpac said that Watpac shared the same concerns as Grocon.

147    The Court accepted that, following the Hamersley Appeal decision, the Applicants no longer sought to pursue test cases. The Court stated:

And once everybody puts in – if this is the way we’re going to go – their concise statement in response, once the proper pleadings have been done by the liquidator, then we will know exactly what you’re saying, and then I will know the ..... dispute. It may not be the same with every respondent. And then we can work it out in a logical way. I mean, we tried to cut through this on the basis of having the test cases because of the history of where were with Hamersley, I think. Anyhow, let’s not worry about that. That doesn’t seem to be the everyone wants – well, the applicant wants to go now. So as long as we put the steps in place in relation to points of claim – points in response – I thought what [senior counsel for the Applicants] was telling me was that once that is done, he is in a position to put on his evidence, and then you respond to that. So I wouldn’t be thinking about you putting your evidence on before the liquidator does. So their case is set out. Now, if they want to rely upon the simple way through according to their advice, so be it.

Orders made

148    At the case management hearing held on 7 June 2019, the Court made the following orders:

(a)    the Applicants have leave to file and serve a Second Further Amended Originating Process by 31 July 2019;

(b)    the Applicants have leave to file and serve Points of Claim on each of the Respondents, other than Grocon and Watpac, by 31 July 2019;

(c)    each of the Respondents referred to in (b) above file and serve Points of Defence to the respective Points of Claim by 20 September 2019;

(d)    the Applicants to file and serve any additional affidavit evidence on which they intend to rely at trial by 23 October 2019; and

(e)    the proceeding be listed for a further case management hearing on 15 November 2019, with liberty to apply and costs reserved.

Case management hearing of 15 November 2019

Correspondence

149    In the period up until the case management hearing held on 15 November 2019, the correspondence between the parties concerned:

(a)    service by the Applicants of the SFAOP, the Points of Claim and a significant body of affidavit material, along with a request by the Applicants for the Respondents to produce missing documents;

(b)    acknowledgement by the Applicants that the timetable had not been met, explaining that “it has proved more time consuming than anticipated to complete the volume of drafting required”;

(c)    correspondence from the Respondents setting out complaints in relation to the Points of Claim; and

(d)     many of the Respondents seeking costs thrown away.

The parties’ written submissions

150    I will summarise the written submissions for the case management hearing held on 15 November 2019 other than those in relation to costs, as the parties’ submissions on costs are addressed below.

151    The Applicants filed written submissions seeking orders:

(a)    allowing the Respondents until 28 February 2020 to provide their Points of Defence;

(b)    listing the proceeding for a further case management hearing in March 2020;

(c)    to regularise the Court’s earlier orders of 7 June 2019 in relation to the dates by which the Applicants were to file their Points of Claim and affidavits; and

(d)    for a first tranche of trials (said to amount to $99.2 million of the total $129 million in claims that the Liquidators sought to pursue) against the following Respondents:

(i)    Multiplex,

(ii)    Lendlease;

(iii)    CPB;

(iv)    Hansen Yuncken;

(v)    Grocon; and

(vi)    Watpac.

152    The Applicants submitted that:

(a)    the Respondents have not engaged with the Liquidators on the substantive issues; and

(b)    Multiplex is mistaken that the 14 additional projects in the Points of Claim against Multiplex are statute barred, as the Liquidators have always claimed in respect of these projects, including in relation to the bank guarantee claims, and these projects were identified in Annexure 1 to the initial Concise Statement.

153    Multiplex filed written submissions submitting that it opposed the Applicants’ leave to file and serve the SFAOP and the proposed Points of Claim against Multiplex.

154    Watpac filed written submissions submitting that there is no longer any basis for the prosecution of an action against the Respondents as a group and seeking orders that Watpac be removed from the proceeding. Alternatively, Watpac submitted that the Watpac claims be heard separately and leave to file and serve the proposed amended Watpac Concise Statement should be refused.

155    Lendlease filed written submissions opposing leave to file and serve the SFAOP and the proposed Points of Claim against the Lendlease Respondents. Lendlease noted that the proposed Points of Claim against Baulderstone sought to join a new party to the proceeding, Baulderstone Queensland Pty Ltd (‘Baulderstone Qld’), and submitted:

(a)    the claims against Baulderstone Qld commence new claims and are statute barred;

(b)    the Points of Claim against the Lendlease Respondents plead individual facts and contracts and share no resemblance to the other causes of action against the other named Respondents;

(c)    the proceedings should therefore be dismissed and separate proceedings commenced against each of the Respondents; and

(d)    until the future conduct of the proceeding is settled, it is premature for the Court to make any orders relating to the filing of any Points of Defence.

156    Badge and Hansen Yuncken filed written submissions submitting:

(a)    that they do not oppose leave being granted to file the SFAOP on the basis that:

(i)    any reliance by the Liquidators on the projects and amounts referred to in the Originating Process, Amended Originating Process and FAOP which are not the subject of any claim in the recent Points of Claim have been abandoned;

(ii)    the claim against the Ninth Respondent, Badge SA, against which no relief is sought in the recent Points of Claim, be dismissed; and

(iii)    leave is granted without prejudice to the rights of the remaining Badge Respondents and Hansen Yuncken Respondents to bring such interlocutory processes as they may be advised seeking to have certain of the Liquidators’ claims dismissed or struck out.

157    I observe that this position changed in the written submissions filed later by Badge and Hansen Yuncken, as set out below.

158    Grocon filed written submissions submitting that:

(a)    any proceeding in respect of the Grocon related claims should be:

(i)    prosecuted by the proper parties (namely, the four Applicant companies now identified as having the Grocon related claims);

(ii)    litigated in a Court that has jurisdiction to determine the Grocon related claims (which, as presently articulated, do not arise under any law made by the Commonwealth); and

(iii)    be confined to claims that are not statute barred; and

(b)    the Applicants should be refused leave to file and service their proposed SFAOP and their proposed amended Grocon Concise Statement.

159    Laing O’Rourke filed written submissions submitting that the Applicants ought not be entitled to rely on the SFAOP and the proposed Points of Claim against Laing O’Rourke. As one basis for this position, Laing O’Rourke contended that the contracts relied on by the Applicants contained detailed dispute resolution provisions and that some of these provisions may not have been complied with.

160    Laing O’Rourke also sought a timetable to be put in place for the Applicants to apply for leave, and any other interlocutory applications which the parties wish to make.

The hearing

161    On 15 November 2019, a case management hearing was conducted, at which all Respondents appeared.

162    Senior counsel for the Applicants stated:

There’s been much agitation about having costs thrown away by reason of the conduct of the proceeding and the new points of claim. We don’t resist that. We do resist an immediate taxation of those costs…

163    Senior counsel for the Applicants observed that the proposed Points of Claim and amended Grocon and Watpac Concise Statements were intended to omit low value claims from Annexure 1 to the Concise Statement. The Applicants did not agree to pay the costs of any Respondents where claims had been abandoned.

164    Senior counsel for Watpac complained that the proposed amended Watpac Concise Statement included 13 additional projects that were not in the previous Watpac Concise Statement. In response, senior counsel for the Applicants said that the Watpac Concise Statement had only included major claims but the amended document now included the entirety of the claims against Watpac that were listed in Annexure 1 to the Concise Statement.

165    Senior counsel for Multiplex also complained that the proposed Points of Claim against Multiplex included 14 additional projects that were not in the initial Points of Claim and that Multiplex considered these to be statute barred, although conceded that these projects were referred to in Annexure 1 to the Concise Statement.

166    In respect of the application for costs to be paid on an indemnity basis and for costs to be paid forthwith, senior counsel for Multiplex submitted, among other things:

Well, from November it was clear, your Honour, that the fulcrum that underpinned this entire proceeding, which was the set-off point, had nowhere else to go. The liquidators were dead in the water with that because of the Hamersley decision. But undeterred, they pushed on in relation to that.

[…]

Our learned friend didn’t want to do that. They said, “No, we want to get on with it,” and they persuaded your Honour that they should be entitled to press ahead and that’s their right. It’s not a blame attribution, that’s their right. They did that. But importantly, your Honour ordered that there be full pleadings filed and that wasn’t done. We didn’t actually get a pleading against Multiplex until – in substance, until August this year. So the reason costs – so that’s the first reason why the costs should be payable forthwith. Because from August this year, it is an entirely new case. It’s purely a debt claim, and if your Honour’s going to split the cases out which I think most of, if not all the respondents urge, the current form of the proceeding is at an end…

167    Senior counsel for the Applicants also sought orders for mediation between the Applicants and the Respondents that had lower value claims. Counsel for Badge (as well as for the former Seventeenth, Twenty-Sixth and Twenty-Seventh Respondents being Probuild Constructions (Aust) Pty Ltd (‘Probuild’), Shape Australia Pty Ltd and Shape Esat Pty Ltd (together ‘Shape’)) agreed to the Court making referral orders for mediation by a Registrar of this Court.

Orders made

168    At the case management hearing held on 15 November 2019, the Court made the following orders:

(a)    the Respondents’ interlocutory applications, the Applicants’ application for leave to extend the period of time to amend the FAOP, Concise Statements and Points of Claim and the case management hearing are adjourned to be heard on a date to be fixed in the period of 16 to 18 March 2020;

(b)    by 20 December 2019, the Respondents (other than Badge, Probuild, Shape and the former Eighteenth Respondent, Contexx Pty Ltd (‘Contexx’)) file and serve any further interlocutory application and material in support, along with submissions and any response to the Applicants’ application for leave to extend the period of time to amend the FAOP, Concise Statements and Points of Claim;

(c)    the disputes in the proceeding between the Applicants and each of Badge, Probuild, Shape and Contexx were referred to a Registrar for mediation to be completed before 21 February 2019;

(d)    any of the Respondents referred to mediation were to file and serve any interlocutory application and material in support along with submissions, and any response to the Applicants’ application for leave to extend the period of time to amend the Further Amended Originating Process, Concise Statements and Points of Claim, within seven days of the termination of the mediation where such mediation is unsuccessful;

(e)    for non-mediating parties: by 28 February 2020, the Applicants file and serve any material in response to the Respondents’ material or any interlocutory application by the Respondents, along with submissions;

(f)    for mediating parties: by 6 March 2020, the Applicants file and serve any material in response to the Respondents’ material or any interlocutory application made by the Respondents along with submissions; and

(g)    costs be reserved, with liberty to apply.

169    The hearing of these various applications of the parties could not be heard in the period of 16 to 18 March 2020 and was instead heard on 21 May 2020.

Further written submissions filed after 15 November 2020

170    The parties filed further written submissions after the case management hearing held on 15 November 2019. I will set these out insofar as they are relevant to the present applications. As I have already noted, the parties’ submissions in relation to costs are addressed below.

171    Hansen Yuncken filed written submissions opposing leave to file the SFAOP and proposed Points of Claim against Hansen Yuncken. Hansen Yuncken observed that it had changed its position in light of the orders made at the case management hearing of 15 November 2019 as its prior position had been conditional on bringing alternative interlocutory applications for the Applicants’ claims to be dismissed or struck out.

172    Badge filed written submissions opposing leave to file the SFAOP and proposed Points of Claim against the Seventh and Eighth Respondents, Badge Constructions (WA) Pty Ltd (‘Badge WA’) and Badge Constructions (QLD) Pty Ltd (‘Badge Qld’). Badge also sought that the proceeding against the Ninth Respondent, Badge SA, against which no relief is sought in the proposed Points of Claim against Badge, be dismissed.

173    Laing O’Rourke filed written submissions submitting that the proceeding should be transferred to the Supreme Court of New South Wales or, alternatively, that Laing O’Rourke cease to be a party to these proceedings. Laing O’Rourke also reserved its right to have the SFAOP, the proposed Points of Claim against Laing O’Rourke or any other proceedings brought by the Applicants, stayed on the basis that the Applicants have not complied with the dispute resolution mechanisms in the relevant contracts.

174    Grocon filed written submissions submitting, among other things, that the proposed amended Grocon Concise Statement was not in the form permitted by the orders made on 7 June 2019.

175    CPB and Thiess filed written submissions neither consenting to nor opposing leave to file the SFOAP and proposed Points of Claim.

176    Scentre filed written submissions opposing leave to file the SFOAP and proposed Points of Claim against Scentre.

177    John Holland filed written submissions seeking that John Holland be removed from the proceedings.

178    I now turn to consider the substantive issues before the Court for determination.

CONSIDERATION OF LEAVE TO EXTEND TIME

Were the claims identified in the initiating documents

179    The starting point for consideration of leave to extend time is my conclusion that the Originating Process and the initial Concise Statement, including Annexure 1 thereto, have identified that the relief sought by the Applicants was always to recover the debt and bank guarantee claims. I have already explained the content of these documents. The Applicants’ initiating documents did certainly emphasise the separate and preliminary set-off question, but then went on to seek relief relating to the debt and guarantee claims. This is apparent from a reading of the initiating documentation as I have set out above.

180    Looking for example at Multiplex, the Applicants have claimed from the commencement of the proceedings in respect of 14 projects, including those in relation to the bank guarantee claims. Annexure 1 to the Concise Statement covered all of those projects (see pages 23-25). As I have already observed, the initial Points of Claim only contained major claims, which for Multiplex only included four claims (see [38]-[49] of the initial Points of Claim). However, the Originating Process and initial Concise Statement covered all the relevant projects and this was acknowledge in the initial Points of Claim (at [38(e)]) as follows:

Multiplex is otherwise indebted in respect of additional projects as identified in Annexure 1 to the Concise Statement.

181    I should mention that, while the proposed Points of Claim for Multiplex filed on 1 October 2019 (and the proposed Points of Claim for Hansen Yuncken filed 14 October 2019) include an unconscionable conduct claim, the Applicants no longer seek to claim damages or any cause of action based on unconscionable conduct against any of the Respondents, and so any limitation issue or prejudice in respect of such additional claims does not arise or need to be considered by the Court.

Did the initiating documents contain sufficient detail about the claims?

182    Some of the Respondents contend that there should have been further particulars in the Originating Process and the initial Concise Statement including the relevant contractual provisions, the work engaged in justifying the debt or payment claims, the date a debt was allegedly incurred and the circumstances in which bank guarantees were drawn.

183    In answer to this, the Applicants contend that the case that the Respondents must meet on the pleadings is based on the books and records of the Hastie entities. The Applicants place reliance on s 1305 of the Corporations Act.

184    In the context of considering the issue of leave, I make these observations as to the relevance of s 1305 of the Corporations Act. Section 1305 of the Corporations Act is an evidentiary provision that the Applicants may seek to rely upon at trial. However, s 1305 does not provide conclusive evidence of the debts the Applicants allege. In Hayes (Liquidator) v 5G Developments Pty Ltd, in the matter of 5G Developments Pty Ltd [2019] FCA 1541, Stewart J stated (at [88]):

For completeness I should mention that 5GCI sought to rely on s 1305 of the Corporations Act which provides that a book kept by a company is admissible as evidence in any proceeding and is prima facie evidence of any matter stated or recorded in the book. It submitted that the general ledger loan accounts and balance sheets of DC and DW, which do not reflect the debt now claimed by the plaintiffs, should be taken as evidence that there is no such debt. It is, however, clear that that provision does not make the company’s books of account conclusive evidence of what is stated in them. If the court is satisfied, as I am in this case in particular on account of inconsistent and conflicting entries in the books of account, that what is reflected in the books of account is not correct then the court can make contrary findings: Australian Securities and Investments Commission v Rich [2009] NSWSC 1229; 75 ACSR 1 at [396]–[400] per Austin J.

185    I accept that some Respondents take issue with the reliability of the Hastie books and records. However, the Applicants are entitled to simply claim a debt (as distinct from damages). The Applicants claim a right to payment of a sum accrued, where there is an obligation to pay a certain or ascertainable sum of money. It will be up to the Respondents to plead any circumstances that may give rise to the debt claim not being validly claimed.

Would there be prejudice to the Respondents if leave were granted?

186    There was some argument by the Respondents as to prejudice by the grant of leave, and effectively the elapsing of time. As there are no limitation issues preventing leave to amend being granted, it is difficult to see any relevant prejudice having regard to the history of the proceedings and the position of the Respondents. The Respondents have been on notice of the claims of the Applicants (as I have read them) since the proceeding was commenced.

187    Mr Antony Riordan, a legal representative for John Holland, gave evidence that:

Enquiries by myself and solicitors in my employ have identified that many of the key personnel on those projects are no longer employed by John Holland, having either retired or moved onto other employment. Further, enquiries by myself and solicitors in my employ have identified that numerous key documents have not been maintained on a central project management system but rather on past and present employee's [sic] personal computers. That means there is no central repository of documents which myself or solicitors in my employ are able to access and extensive time will be involved in seeking to communicate with past and present employees, locate copies of documents on personal computers or in archived emails, and where available, access and uplift those documents.

188    Multiplex contemplated the following example of prejudice:

One obvious aspect of prejudice that Multiplex would face in dealing with the new claims is the difficulty of now being required for the first time to plead to events said to have occurred over seven years ago.

189    Hansen Yuncken rely on the fact it will be put to the burden of locating documents and records to prove the accounting position on each project, including progress claims, payment schedules, records of payments made to the Hastie entity, as well as documents going to the assessment and evaluation of work performed and defects in the work performed. Hansen Yuncken contends that it will need to prove the terms of the subcontracts, which in turn will involve proving (among other things) that Hansen Yuncken was required to incur additional amounts over and above the subcontract sums to complete the works that are the subject of the subcontracts carried out by the Hastie entities, and rectify any defects existing in those works.

190    Watpac claims prejudice if the Applicants are granted leave including:

(a)    searching for progress claims, payment schedules and documents evidencing back charges where there is a significant risk that those documents were not retained or will be able to be located;

(b)    reviewing their records as far as 12 years ago;

(c)    the fact that Watpac employees with no or limited knowledge of the projects must engage in searches; and

(d)    locating documents relating to the four projects in the initial Watpac Concise Statement was very difficult and time-consuming and it was anticipated that locating documents for the additional 13 projects in the proposed amended Watpac Concise Statement would be significantly more burdensome and expensive.

191    However, as I have said, I cannot see any relevant prejudice to any Respondent. Assuming, as pleaded, the Applicants simply rely upon the Hastie entities’ books as evidence of a debt due and owing by the relevant Respondent, then it is a matter for the Respondents to substantiate and say why the debts are not due. This has always been an obligation on the Respondents, as they would have had to substantiate any set-off claims in response to the initial Concise Statement.

Are there deficiencies in the proposed Points of Claim and proposed amended Grocon and Watpac Concise Statements?

192    In addition to the issues raised above, Multiplex in particular complained about a number of pleading deficiencies affecting the proposed claims.

193    Just focusing on one example involving Multiplex, I agree that it is not possible to discern in relation to the Wintergarden Redevelopment contract (Section E of the proposed Points of Claim for Multiplex) what exactly the Applicants’ cause of action is in respect of bank guarantees and retention moneys said to have been wrongly retained by Multiplex. The Applicants do not plead facts that would be necessary to support a claim for their return, such as:

(a)    whether or when practical completion was achieved under the contract;

(b)    whether or when a request for release of security and retention moneys was made; or

(c)    whether some other event triggered an obligation for Multiplex to return the security and retention moneys.

194    Although this deficiency is most obvious in relation to the Wintergarden Redevelopment contract, no such facts have been pleaded in respect of the Applicants’ other bank guarantee claims against Multiplex either. The proposed Points of Claim for Multiplex include only a generalised claim that Multiplex had no entitlement to retain or draw upon the bank guarantees after termination of the relevant contracts.

195    These kinds of deficiencies, which also arise in the other proposed Points of Claim and proposed amended Grocon and Watpac Concise Statements, are not fatal to the present application but will need to be addressed.

196    Putting to one side the debt claims, the Applicants will need to make it clear in the Points of Claim and amended Concise Statements going forward the exact facts they rely upon to justify the relief sought in relation to the guarantees. If, as may be the case based upon the submissions of the Applicants (particularly at the interlocutory hearing on 21 May 2020), the guarantee claims merely raise questions of law, then this should be clarified. It may be that questions arise as to whether a bank guarantee (as between an unsecured creditor and a third party, the bank) is the property of the relevant Hastie entity; whether an unsecured creditor can call upon such a bank guarantee after the relevant appointment date; and whether it is relevant to consider if the unsecured creditor has lodged a formal proof of debt in the administration.

197    Leave will be granted extending the time to file and serve the SFAOP and the proposed Points of Claim, and leave will be granted to file the proposed amended Grocon and Watpac Concise Statements, but conditioned on regularising matters such as these prior to the proceeding progressing further.

Should the Security of Payment claims in the proposed Points of Claim be allowed to proceed?

198    I observe that the Applicants contend in some proposed Points of Claim that certain payment claims and payment schedules are payable as a debt pursuant to Security of Payment legislation in force in the relevant State (‘SoP claims’). However, there is no pleading of any of the facts necessary to support that conclusion (such as the service of a claim which was a compliant payment claim for the purposes of the legislation). Then the Applicants do not seem to seek any relief based upon Security of Payment legislation in the SFAOP.

199    It should be observed that the SoP claims are new claims and may not be available to the Liquidators. For example, Badge and Hansen Yuncken submitted that the relevant SoP claim was out of time, not available to a company in liquidation and, in any event, ought to be stayed. It is also observed that while the proposed Points of Claim against Badge (at [25]) plead relief under the Building Industry Fairness (Security of Payment) Act 2017 (Qld), that Act was not in force at the date on which it is alleged the bank guarantees were drawn. Even assuming this was intended to be a reference to the Building and Construction Industry Payments Act 2004 (Qld), that legislation post-dates the enactment of the Corporations Act. Accordingly, the Applicants (being in liquidation) may be unable to have recourse to any relief under that legislation.

200    It is convenient to deal with the SoP claims generally, other than just by reference to Badge. The Applicants seek judgment in respect of payment claims issued under the Security for Payment legislation applicable to each project. The payment claims the Applicants rely on, to the extent that they plead progress claims, were issued in 2012.

201    The purpose of Security of Payment legislation is to give persons undertaking construction work a right to receive regular payments and to provide a quick and efficient method for adjudicating disputes over the amount of payment. Such payments do not limit other ultimate entitlements of the payer and, as such, are taken to be on account.

202    The temporary nature of payments under the Security of Payment regime has presented the question of whether the Security of Payment regime is available to an entity that is in liquidation. In this regard, the authorities are not consistent: see Facade Treatment Engineering Pty Ltd (In Liq) v Brookfield Multiplex Constructions Pty Ltd (2016) 337 ALR 452 (‘Facade’) and Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (In Liq) (2019) 99 NSWLR 317 (‘Seymour Whyte’).

203    It may well be generally appropriate for claims under the Security of Payment legislation to be stayed where the payee is in liquidation. Failing to stay the claim, or alternatively the execution of any judgment that might be based upon it, would have the effect of transforming a payment that is intended to be interim into a permanent payment.

204    Any recovery through this proceeding would be applied to pay priority unsecured creditors and secured creditors, with likely no return being available to other unsecured creditors. Any payment made by an unsecured creditor pursuant to the Security of Payment legislation may be unrecoverable and therefore rendered permanent, contrary to the intention of the legislation that payments be on account. If the unsecured creditor has other entitlements that are preserved and that it can pursue, those claims may not be met with any funds from the Hastie entities.

205    I can understand that, if pursued successfully, the SoP claims would result in Badge and Hansen Yuncken (for instance) being required to make a payment without any underlying assessment of the merits of the underlying claim, and with no prospect of recovering the payment in subsequent proceedings even if the underlying merits were in their favour.

206    However, at this stage, I do not need to consider the various conflicting authorities as to whether the Security of Payment regime is available to the Liquidators. The addition of the SoP claims does not impact on the pleading concerning the underlying debt claims and guarantees. I accept that if it is determined that there are debts payable by, say, Badge and Hansen Yuncken because work was performed by the Hastie entities that should have been paid for, then the SoP claims would seem to add nothing. On the other hand, if it is determined that there are no debts payable, then granting relief under the SoP claims may undermine that determination. However, these matters can await trial. The inclusion of the SoP claims do not unnecessarily enlarge the scope of the proceeding, and may eventually require the consideration of conflicting views in Facade and Seymour Whyte. The proceeding will continue, and there is marginal utility in now finally determining the issues that arise in relation to the SoP claims. The approach taken by Kirby P (as his Honour then was) in Wickstead v Browne (1992) 30 NSWLR 1 at 5-7 is the one I adopt. I consider the SoP claims can proceed and should not now be terminated peremptorily. This is subject to my earlier comments regarding regularising the proposed Points of Claim and the proposed amended Grocon and Watpac Concise Statements, and pleading facts necessary to allow the foundation for the SoP claims. I should also indicate that the Liquidators may like to consider, in light of my comments, whether they need to press on with the SoP claims in any event.

Other discretionary factors

207    A number of other discretionary factors were raised by the Respondents against the Applicants having leave to file the SFAOP, proposed Points of Claim and proposed amended Grocon and Watpac Concise Statements. Most of these issues have been decided against the Respondents by way of my conclusion that the so-called “additional claims” in relation to debts and guarantees were not omitted from the Applicants’ initial formulation of the Concise Statement.

208    Obviously, I do not accept the submission that the Applicants made a decision not to plead these claims earlier in time, and to instead only adopt an approach of a separate and preliminary question or a test case. However, one consequence of the Applicants’ choices in the litigation to date has been delay. In dealing with the claims made against them, the Respondents will now face the difficulty of being required to plead to events said to have occurred nearly eight years ago. Unfortunately, as is often the case where litigation is delayed, relevant personnel may not be available and documentation may be lost. However, I have already indicated that in the circumstances no relevant prejudice is occasioned to the Respondents. This is not a case where the Respondents have not known of the existence of or the possibility of litigation: in fact, the exact opposite. Each Respondent has been actively involved in the proceeding, as is evident from the correspondence and their attendance on numerous case management hearings. In my view, the claims were articulated sufficiently from the beginning of the proceeding and the Respondents were on notice so as to have the opportunity to prepare a defence.

209    Then I observe that the SFAOP and proposed Points of Claim were lodged, respectively, three and nine weeks later than the time permitted by the orders made on 7 June 2019. While no explanation for this delay has been given by the Liquidators beyond referring to certain ‘unforeseen difficulties’, these difficulties are explicable and I accept the delay has been sufficiently explained in the current circumstances.

210    Based upon my own understanding of the correspondence between the parties, the evidence before me, and my conducting of the case management hearings, I can understand (and accept) the difficulties encountered by the Liquidators in this large scale proceeding. The various issues that arose at the case management hearings were a result of changing circumstances and a complex procedural enquiry as to the best way to proceed, especially after the separate and preliminary question was abandoned.

OTHER SUBSTANTIVE ISSUES

211    There are other substantive issues raised by the Respondents as follows:

(a)    the jurisdiction of the Court;

(b)    how the dispute resolution provisions contained in some contracts affects the exercise of discretion;

(c)    whether certain Respondents ought be removed; and

(d)    whether the proceeding should be cross-vested to the Supreme Court of New South Wales.

Jurisdiction

212    It is clear that the proceeding was commenced by reference to Commonwealth legislation, being the insolvency provisions of the Corporations Act, and sought resolution, at least initially, of a separate and preliminary question in relation to the operation of s 553C of the Corporations Act. The Court plainly had and has jurisdiction. Any submission that the changes to the Applicants’ approach to the proceeding give rise to a need to dismiss the proceeding, transfer the proceeding or to remove any or all of the Respondents is not maintainable. In the circumstances of this proceeding, once apprised of jurisdiction the Court did not thereafter lose jurisdiction: see, eg, Dorotea Pty Ltd v Vancleve Pty Ltd (1987) 75 ALR 629 at 632; Elna Australia Pty Ltd v International Computers (Australia) Pty Ltd (1987) 16 FCR 410 at 415-416; Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 220.

Existence of dispute resolution provisions

213    As I have observed above, Laing O’Rourke submits that the existence of dispute resolution provisions in the applicable contracts is relevant to the exercise of discretion on the issue of removal or transfer. I cannot see how the dispute resolution provisions are relevant (at least in the circumstances in which I am now considering the future conduct of this proceeding). I put aside the issue of whether the relevant dispute resolution provisions survive termination of the contracts. Laing O’Rourke has submitted to the jurisdiction of this Court by filing a notice of acting in this proceeding on 30 January 2018 and has actively participated in this proceeding for nearly three years. Laing O’Rourke have not sought a stay of this proceeding pending completion of any dispute resolution process. I do not consider the existence of the dispute resolution provisions impact relevantly on my views as to the future conduct of this proceeding or the position of Laing O’Rourke remaining a party.

Removal of Respondents and transfer of proceedings to the Supreme Court of New South Wales

214    It is contended by that some Respondents should be removed from the proceeding, and that the proceeding should be transferred to the Supreme Court of New South Wales.

215    I will take Lendlease’s position as an example. Lendlease submits that the Court’s overarching purpose will not be promoted by Lendlease remaining in the proceeding. Rather, it submits that the Lendlease Respondents should cease to be parties to the proceeding for a number of reasons including:

(a)    as the set of facts raised in the Points of Claim against the Lendlease Respondents are separate from and unconnected to the set of facts in the other Points of Claim, the evidence and its preparation will be discrete to the Lendlease Respondents;

(b)    past case management hearings have already demonstrated a bifurcation of the conduct of some proceedings and any future case management or final hearings are unlikely to be aided or simplified by all points of claim running and being heard concurrently;

(c)    the costs of disposal of the Points of Claim against the Lendlease Respondents will significantly increase if Lendlease is required to continue to engage and correspond with the other Respondents and prepare and attend case management hearings addressing issues other than those directly affecting Lendlease.

216    For these reasons, Lendlease seeks an order pursuant to r 9.08 of the Rules that the Lendlease Respondents cease to be parties to the proceeding. The practical effect of this order would be that the Applicants may commence separate proceedings against any of the Lendlease Respondents should they choose to do so. If such an order was made and separate proceedings were ultimately commenced in which the matters in the proposed Points of Claim against the Lendlease Respondents are pleaded, Lendlease indicates it would not take any limitation point that is not presently available to it and, save insofar as costs thrown away are concerned, it would be content for an order to be made that the costs of the proceeding as against the Lendlease Respondents be costs in any further proceedings commenced within a short period of time (say, six months). If no such proceeding is commenced within a short period of time, then Lendlease contends it they should have its costs of the whole proceeding.

217    I should observe that these submissions are directed at all of the Lendlease Respondents. However, as I have already observed, Lendlease Funds (the Sixth Respondent) is not included in Annexure C to the Applicant’s submissions dated 28 February 2020, and so I interpolate that the proceeding against Lendlease Funds is to be dismissed or discontinued. I will therefore consider these submissions in respect of the Lendlease Respondents other than Lendlease Funds.

218    Alternatively, Lendlease seeks an order pursuant to s 5(5) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (‘Jurisdiction Act’) that the proceeding against Lendlease be transferred to the Supreme Court of New South Wales. Subsection 5(5) of the Jurisdiction Act provides:

(5)    Where:

(a)     a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Federal Court or the Family Court (in this subsection referred to as the first court); and

(b)    it appears to the first court that:

(i)    the relevant proceeding arises out of, or is related to, another proceeding pending in the other of the courts referred to in paragraph (a) and it is more appropriate that the relevant proceeding be determined by the other of the courts referred to in paragraph (a); or

(ii)    it is otherwise in the interests of justice that the relevant proceeding be determined by the other of the courts referred to in paragraph (a);

the first court shall transfer the relevant proceeding to that other court.

219    There may be an issue as to whether part of a proceeding can be transferred: see Blacker v National Australia Bank Ltd [2000] FCA 681 per Katz J at [29] where the issue was raised but not determined by the Court. I need not determine this issue as I do not propose to transfer the whole or part of the proceeding.

220    If I had come to the view that it was in the interests of justice that this proceeding be determined by the Supreme Court of New South Wales, then it is clear that I must transfer the proceeding to another court. Further, the interests of justice is a concept that involves the consideration of many factors: see generally BHP Billiton Limited v Schultz (2004) 221 CLR 400.

221    Lendlease (unlike some other Respondents) accepts that, notwithstanding the relief now sought and the causes of action being pursued, the Court remains seized with jurisdiction to hear and determine the proceeding. However, Lendlease submits that the interests of justice dictate that the Supreme Court of New South Wales is more appropriate to determine the proceeding as:

(a)    the remaining issue in the proceeding arises under the common law of contract, which is usually determined by State courts;

(b)    the Supreme Court of New South Wales has a specialist list for matters arising from building work which enables the prompt and efficient resolution of issues particular to construction contracts.

222    Other Respondents made similar submissions, but not all of the Respondents applied to have the proceeding transferred to the Supreme Court of New South Wales.

223    I should say at the outset that the power to make an order under r 9.08 of the Rules is discretionary: see, eg, Dudley (liquidator) v RHG Construction Fitout & Maintenance Pty Ltd [2019] FCA 1355 per Jackson J at [53]. I proceed to apply that rule (as with the other Rules applicable to this proceeding) in a way that best promotes the overarching purpose of facilitating the just resolution of this proceeding according to law, and as quickly, inexpensively and efficiently as possible in the circumstances of this type of litigation. This is also consistent with the application of rr 1.32 to 1.35 of the Rules, which were referred to and applied by O’Bryan J in BlueScope.

224    The way in which the claim is pursued by the Applicants is primarily as a debt claim as I have explained. It is true that each individual contract set out in the various proposed Points of Claim relates to a separate building or project. The scope of work required under each of them, and the scope of work in fact performed, would be peculiar to that contract. Many of them required different kinds of services to be provided by the relevant Hastie entity. Depending on the way the proceeding is defended, if the claims were to proceed to trial, evidence from different personnel involved with the relevant contract may be required.

225    However, until the pleadings are concluded the ambit of the dispute cannot be properly determined. While the matters raised in submissions may turn out to be correct, until the various contentions of all the parties are fully set out in Points of Defence, and possibly any Points of Reply by the Applicants, it is premature to either remove a Respondent as a party or transfer the proceedings to the Supreme Court of New South Wales. I appreciate that some defence responses have been filed, but until all are filed it is difficult to determine whether truly appropriate common issues arise or whether the true nature of the dispute now arises under common law contract.

226    So until all the responses are made to the final Points of Claim, it cannot now be said to be in the interests of justice that this proceeding be determined by the Supreme Court of New South Wales. The docket judge is very familiar with the issues raised so far and the proposal to go forward; the parties have invested time and money (not all of it wasted) in reaching this point in the proceeding; this Court needs to consider whether the proceeding should progress with any common issues once all Respondents have filed points of defence and the Applicants put in a reply; this Court is equally well placed to conduct trial or trials concerning individual respondents (if necessary with the aid of referees) and the point has not been reached where this Court cannot deal expeditiously with the proceeding.

227    I am mindful of the fact that the Applicants seem to have acknowledged that they have changed the way they have prosecuted the proceeding such that there may be separate cases.

(a)    At the case management hearing on 9 February 2018, senior counsel for the Applicants submitted:

Well, the points of - well, I think what we - in terms of the points of claim, your Honour, we can simply do it and file it, or we could circulate the proposed points of claim. And the reason I raise that is for this reason, that our focus at the present point of time is upon the operation of the PPSA.

[…]

So your Honour indicated to [senior counsel for Multiplex] before you don’t know whether or not the position of the liquidators is that there’s a knockout blow. If in fact the decision of Tottle J [in Hamersley First Instance] were to be found - were not to be upheld on appeal, then the liquidators would want to reconsider the position. I’m not seeking to hide that from your Honour… Because there are practical consequences.

(b)    At the case management hearing on 14 September 2018, senior counsel for the Applicants submitted:

Now we understand our learned friends can put submissions to the contrary on the preliminary issue. But if we were to succeed on the 553 proceeding, then the need to examine the cause of the loss which is being asserted against the liquidators by each of the builders as a set-off will not arise. If the liquidators are to be unsuccessful on the preliminary question, then they would, at the very least, need to consult the committee of creditors and the funder as to the commerciality of having to run so many claims where we would have to examine the circumstances of each of the alleged amounts which are said to be capable of being set-off on the basis of mutuality.

(c)    Following the Hamersley Appeal decision on 21 September 2018, at the case management hearing on 23 October 2018, senior counsel for the Applicants submitted:

We’ve chosen the test case path, your Honour. There has been some suggestion, I think, by Mr Austin that there’s no common issues. On a strict understanding of common issues, that’s correct. We don’t cavil with that. But what we would seek to do through these cases is to establish, if I might call it, the pro forma for the liquidator’s assessment of the claims to set off. That’s really what we’re seeking to do. If the present point - because in many senses this is not inter partes litigation.

The liquidators have got a book of assets, they’ve got a responsibility to try to get them in. Each of the respondents has said we can set off an amount greater than the asset, and what we are seeking to do in this course - which we consider, your Honour, in accordance with 37M and 37N to try and achieve a just, efficient resolution of the matter - can I say to your Honour, one of the matters that strikes one in reading the Full Court in Hamersley is that it was an agreed fact case.

And we hold out no optimism for agreed facts, if I can put it that way to your Honour. And seeing the centrality of those agreed facts to that decision, we revisited the discussion on the last occasion, and this is the course that we would seek to have the court allow us to proceed.

(d)    At the case management hearing on 15 March 2019, senior counsel for the Applicants had the following exchange with the Court:

Mr Wyles: … The question central to the resolution of the 553C claims, that is, the set-off proposition, is what is the loss which each builder is claiming. It makes this case very different to the Western Australian case. Can I give your Honour this example. In the - - -

His Honour: So is the Western Australian case now not dispositive of it? Is that what’s - - -

Mr Wyles: Well, because of the decision of the Court of Appeal - - -

His Honour: Yes.

Mr Wyles: - - - then it would not be capable of disposing of the whole of the question as to whether there could be a fundamental set-off. So we’ve moved to the next stage. Assuming that there can be a set-off - - -

His Honour: Yes.

Mr Wyles: - - - then the question is what can be set-off.

His Honour: Right. Yes.

Mr Wyles: And so, for example, where as a result of the work that was performed by the Hastie Group Company and the remainder that was ascertainable under the contract, say, for example, there was $2 million worth of work to do, we have found - and I’m not putting this in any sense in terrorem - that some of what is being sought to set-off is $4 million for that that was allegedly incurred for that $2 million worth of work. So then it becomes a question, really, of contract damages.

(e)    At the case management hearing on 15 November 2019, senior counsel for the Applicants had the following exchange with the Court:

His Honour: We’re still continuing with the idea of having some cases heard independently of others.

Mr Wyles: Well, we’re a bit in your Honour’s hands. We’re not really persisting. We’ve been turning our minds to how it might assist your Honour in dealing with it. We - a number of the respondents have put that there’s no commonality in the sense that the receivables claimed against each of them are not common. We accept all of that. But of course - - -

His Honour: Well, we are moving now to a whole lot of separate cases, aren’t we? I think that’s - - -

Mr Wyles: Yes.

His Honour: I think that’s the reality.

Mr Wyles: Yes.

His Honour: The so-called interesting case that may have started a little while ago has now become a series of separate - - -

Mr Wyles: Yes.

His Honour: I’m not going to use the word actions, but separate disputes.

Mr Wyles: Yes.

228    However, I do not accept that the Applicants’ claims in this proceeding have substantially changed, other than that the Applicants no longer pursue a separate and preliminary question or seek to proceed by way of a “test case”.

229    The proceeding now needs to be case managed with the efficient handling of large scale commercial litigation in the circumstances now confronting the parties. The proper and orderly conduct of the claims against each Respondent will require the Points of Claim to be regularised, for Points of Defence and Points of Reply to be provided, and may require directions for the separate hearing of the claims against each Respondent. It may be that the use of referees is appropriate. Separate hearings, on the basis of the submissions put forward by the Respondents, will not require each Respondent to participate in all of the hearings and case management conferences. Different findings and determinations can be made against each Respondent even if part of the one proceeding; although this will need to be carefully managed. Even if there are separate trials for each Respondent, I do not consider that this will create difficulties (either as a matter of principle or procedure) that cannot be overcome.

COSTS APPLICATIONS

230    The Court has a broad discretion to order costs in the proceeding under s 43 of the FCA Act, including at any stage of the proceedings: s 43(3)(a). Although that discretion is generally exercised in favour of the successful party at the conclusion of the proceedings, there are no automatic rules atrophying the true underlying scope of the discretion, and its exercise must take into account the myriad circumstances presenting themselves in the institution and conduct of litigation: see, eg, Kazar (Liquidator) v Kargarian, Re; Frontier Architects Pty Ltd (in liq) (2011) 197 FCR 113 (Greenwood and Rares JJ) at [5] quoting Oshlack v Richmond River Council (1998) 193 CLR 72 (Gaudron and Gummow JJ) at [40]-[41].

231    The Court may order that costs be payable and taxed immediately. In exercising its discretion to so order the Court considers:

(a)    whether the demands of justice require a departure from the ordinary course;

(b)    the potential for multiple taxation proceedings to occur and for subsequent events to generate costs orders going in the opposite direction so that set-offs may ultimately be available; and

(c)    a range of other factors including:

(i)    whether the determination of the proceedings is far away:

(ii)    whether a party has been required to incur significant costs over and above those which it would have incurred had the opposing party handled the proceeding with competence and diligence; and

(iii)    whether, following a successful amendment application, a case is essentially a new proceeding.

232    As to indemnity costs which are being sought by some of the Respondents, an order for indemnity costs will normally require that some special or unusual feature arise: including where allegations are made which ought never to have been made, or where the case is unduly prolonged by groundless contentions. Indemnity costs are designed to compensate a party fully for costs incurred, as a normal costs order could not be expected to do when the Court takes the view that it was unreasonable for the party whom the order is made to have subjected the innocent party to the expenditure of costs.

The Respondents’ cost applications

233    I should briefly set out the various cost applications of the Respondents.

234    Generally, most of the Respondents contend that having regard to the case put forward in the SFAOP, proposed Points of Claim and proposed amended Grocon and Watpac Concise Statements, it is an appropriate exercise of discretion to award costs now to compensate the Respondents for what must properly be regarded as a distinct and separate phase of the proceedings brought to an end by the Applicants’ re-casting of the case against the Respondents.

235    It was submitted that it is evident that there are still defects in the pleadings which will likely require rectification before the pleadings are closed. Moreover, the proceedings should now be “de-coupled”, with each action against the various Respondents to be prosecuted and resolved separately of each other. It would therefore appear inevitable that a significant period of time is still to elapse before the proceeding can finally be resolved. In such circumstances, it was submitted it is entirely appropriate that the costs visited unnecessarily upon any Respondent by the Applicants’ conduct to date should be the subject of a costs order.

236    I will now turn to the individual submissions.

Multiplex

237    Multiplex seeks orders that:

(a)    the Applicants pay Multiplex’s costs thrown away in respect of this proceeding:

(i)    on a standard basis, up to and including 23 November 2018;

(ii)    on an indemnity basis, since 24 November 2018,

to be taxed forthwith;

(b)    the Applicants pay Multiplex’s costs of the costs application; and

(c)    the Applicants pay Multiplex’s costs of and occasioned by the amendments if leave is granted to file and serve the SFAOP and proposed Points of Claim, as well as its costs of the amendment application.

If the Court was not minded to make an order for indemnity costs, Multiplex still sought its costs on a standard basis from 24 November 2018.

238    Multiplex submits that the Applicants’ conduct has caused it to incur substantial costs in preparing for and attending the case management hearings, reviewing material filed by the Applicants and responding to correspondence. Multiplex submits that these costs have now been thrown away as a direct consequence of the Applicants’ conduct, including:

(a)    failing properly to plead their allegations against Multiplex despite multiple requests by Multiplex;

(b)    abandoning the claims based on the Hamersley First Instance decision that were initially the central focus of the proceeding and abandoning the “test case” proposal;

(c)    failing to comply with the Court’s orders and directions, resulting in delays;

(d)    repeatedly changing the proposed manner of conduct of the proceeding, without any adequate explanation as to these changes in approach;

(e)    conducting the proceeding in a manner that has not allowed scope for the parties to seek to agree orders dealing with its management, including:

(i)    providing inadequate notice regarding the proposed conduct of the proceeding; and

(ii)    repeatedly raising matters for the first time only at case management hearings,

which meant that it has been necessary for Multiplex to brief counsel to appear at the case management hearings in order to protect its position; and

(f)    now, belatedly, seeking to file a more comprehensive Points of Claim in line with the approach that Multiplex has advocated from the outset.

239    As I have referred to above, on 23 November 2018, by way of the 23 November Letter, Multiplex’s solicitors invited the Applicants to file notices of discontinuance. The 23 November Letter stated that, following the Hamersley Appeal decision, there was no basis for the Applicants’ claim that set-off under s 553C of the Corporations Act was unavailable. The letter also put the Applicants on notice that the letter would be relied on in relation to costs.

240    Multiplex submits that, notwithstanding the 23 November Letter, the Applicants maintained their position and did not abandon those claims as against Multiplex until the SFOAP was filed approximately nine months later on 29 August 2019, by which time Multiplex had had to appear at three further case management hearings. Multiplex therefore contends that this is a case with special or unusual features where Multiplex should be compensated fully for costs incurred, as a normal costs order could not be expected to do, when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs.

241    Multiplex also seeks an order for immediate taxation of its costs thrown away. It is submitted that the interests of justice require a departure from the usual rule in the circumstances of this case as:

(a)    the Applicants’ conduct of the proceeding has caused significant delay and significant additional cost and expense to Multiplex compared to that which would have been incurred had the proceeding been conducted diligently;

(b)    any final determination of the proceeding is likely to be far in the future if the proceeding is permitted to continue;

(c)    by the SFOAP and new proposed Points of Claim the Applicants have abandoned aspects of their previous case against Multiplex;

(d)    the case as now articulated by the Applicants in the SFAOP and proposed Points of Claim is essentially a new proceeding; and

(e)    despite Multiplex’s requests, the Liquidators have repeatedly failed to properly plead their case against Multiplex, and the new proposed Points of Claim against Multiplex still contains deficiencies.

Scentre

242    Scentre seeks orders that:

(a)    the Applicants pay Scentre’s costs thrown away in respect of this proceeding:

(i)    on a standard basis, up to and including 23 November 2018;

(ii)    on an indemnity basis, since 24 November 2018,

to be taxed forthwith; and

(b)    the Applicants pay Scentre’s costs of the costs application.

243    Scentre submits, among other things, that:

(a)    if leave to file the SFAOP and proposed Points of Claim against Scentre is granted, the case as conceived in these documents will be radically different to that which has been agitated for almost the entire time the proceeding has been on foot and Scentre will have incurred costs in responding to a case which has in essence been abandoned for a substantively different claim;

(b)    it is appropriate to award costs to Scentre to compensate it for what must properly be regarded as a distinct and separate phase of the proceeding; and

(c)    the procedural history of the matter, including deficient pleading and particularisation of claims, as well as the pursuit and subsequent abortion of unorthodox approaches by the Applicants, provides ample justification for the orders sought.

John Holland

244    John Holland seeks orders that the First to Fourth Applicants pay:

(a)    John Holland’s costs thrown away in respect of this proceeding:

(i)    on a standard basis, up to and including 23 November 2018;

(ii)    on an indemnity basis, since 24 November 2018;

(b)    John Holland’s costs of and incidental to the costs and amendment applications.

245    John Holland adopts, by and large, Multiplex’s approach in relation to the question of costs. John Holland’s submissions, in substance, go no further than Multiplex’s submissions.

Watpac

246    Watpac seeks orders that the Applicants pay Watpac’s costs thrown away:

(a)    on a standard basis, up to and including 8 February 2018, alternatively 22 October 2018 or 24 November 2018;

(b)    on an indemnity basis, since 8 February 2018, alternatively 22 October 2018 or 24 November 2018,

such costs to be taxed forthwith.

247    Watpac also seeks that the Applicants pay Watpac’s costs of the costs and amendment applications.

248    The significance of 8 February 2018 is that it was the date of Watpac’s submissions for the case management hearing on 9 February 2018, in which objection was taken to the Applicants’ case for a preliminary determination based on the questions relating to Hamersley First Instance, and in the absence of particulars of the Applicants’ claims.

249    The significance of 22 October 2018 is that it was the date of Watpac’s submissions for the case management hearing on 23 October 2018, in which objection was taken to the filing of further process in view of the Hamersley Appeal decision.

250    The significance of 24 November 2018 is that it is one day after the 23 November Letter.

251    It is submitted that since the commencement of the proceeding, Watpac has incurred significant wasted legal costs including in reviewing the Liquidators’ various claims documents and materials, preparation for and attendance at seven case management hearings, and correspondence with the Applicants’ solicitors regarding the failure to provide particulars and the like.