FEDERAL COURT OF AUSTRALIA

Mining Standards International Pty Ltd v Atlantic Nickel Mineracao Ltda (No 2) [2024] FCA 666

ORDERS

THE COURT ORDERS THAT:

1.    The respondent’s interlocutory application dated 9 June 2023 be dismissed.

2.    The third and fourth cross-respondent’s interlocutory application dated 9 June 2023 be dismissed.

3.    The parties are to be heard on the question of costs.

4.    The matter be listed for a case management hearing at 10:30 am on 10 July 2024.

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

REASONS FOR JUDGMENT

DERRINGTON J:

INTRODUCTION

1    “And if you’re impecunious, well, you shouldn’t be litigating”. That was a submission made on behalf of Atlantic Nickel Mineração Ltda (Atlantic Nickel), a multimillion-dollar Brazilian mining company with substantial resources, in support of its claim that the present proceedings brought against it by Mining Standards International Pty Ltd (MSI) should be stayed for being an abuse of process. The substance of that submission was that MSI is not entitled to rely upon its previous financial inability to join Atlantic Nickel as a cross-respondent in earlier proceedings in which MSI had been sued, as an answer to Atlantic Nickel’s claim that MSI’s present action against it is an abuse of process. This, it was said, followed from the decision of the High Court in UBS AG v Tyne (2018) 265 CLR 77 (UBS v Tyne). Whilst it is possible to discern a suggestion of that in the decision, it is not clear that it goes so far. Rather, it would appear that a lack of funds can be relevant to assessing whether, in the totality of circumstances, a failure to bring certain claims, including a counterclaim or cross-claim, in earlier proceedings renders a subsequent action an abuse of process.

2    Central to this case is an agreement for the sale of the shareholding in the respondent company, Atlantic Nickel, to the applicant, MSI, which did not proceed. That agreement involved several parties including Atlantic Nickel, MSI and the two Australian companies that owned the shares (which are known as “quotas” under Brazilian law), being Mirabela Nickel Ltd and Mirabela Investments Pty Ltd (the Sellers). It also included the receivers of the Sellers’ property (which included the shares), being Mr Martin Madden, Mr Scott Langdon and Mr Richard Tucker of KordaMentha (the Receivers). On 22 November 2017, the Sellers and the Receivers purported to terminate the agreement in reliance on the non-fulfilment of a condition requiring MSI to obtain funding to pay the purchase price within 14 days of the exchange of signed copies of the agreement. When that occurred, MSI claimed that the agreement had not been terminated, and that it was entitled to specific performance of it. In response, the Receivers and the Sellers commenced somewhat confined litigation in the Supreme Court of Western Australia in which they sought a declaration that the agreement had been validly terminated. That action was brought against only MSI. Atlantic Nickel, which had an obvious interest in the matter, was not joined in any capacity. The proceedings were case managed to a trial, and while the scope of relevant issues both waxed and waned, the central point always remained the validity of the purported termination. Ultimately, the Court refused to make the declaration sought, holding, in essence, that the 14-day period which was required to elapse before the Receivers and Sellers could terminate the agreement had not expired as at the date of the purported termination.

3    Some time after judgment was reserved in that matter, MSI commenced the present proceedings in this Court seeking damages from Atlantic Nickel in respect of its alleged conduct which, MSI claims, prevented the sale agreement from being completed. Atlantic Nickel, which has not previously been sued on the agreement, now asks the Court to stay the proceedings as an abuse of process, as do the Receivers who have been joined as cross-respondents to the proceedings by Atlantic Nickel. In substance, those parties (who will be referred to collectively as the “stay applicants”) submit that MSI ought to have joined Atlantic Nickel to the initial proceedings for declaratory relief and pursued the claims brought in these proceedings at that time.

4    At all relevant times from the wrongful termination of the agreement, MSI was anxious to enforce its rights against the parties which it claims are in default. It made written demands upon the potential defendants and went so far as obtaining leave from the Supreme Court of Western Australia to serve Atlantic Nickel out of the jurisdiction. It was, however, unable to fund the pursuit of those claims, and that was despite having approached and negotiated with numerous litigation funders over an extended period. Whilst its attempt to raise funds continued, the Receivers and Sellers brought their proceedings seeking a declaration as to the validity of their purported termination of the agreement. Presumably, they did so believing that a declaration in their favour would relieve them from liability in respect of any of MSI’s claims. Though the Sellers and Receivers sought to provoke MSI into bringing all and any other claims it may have had against them and any other parties in those declaratory proceedings, MSI made it clear that the action should be confined to deciding the declaratory relief which the Sellers and Receivers sought, as that was, essentially, a preliminary issue which would determine the nature of some of the claims which MSI had and as against which parties. Although the judge managing the litigation expressed some concern about that approach, it appears that the proceedings progressed in that fashion.

5    Once MSI had a sufficient degree of confidence of obtaining funding, it commenced the current proceedings in this Court. It seeks no relief against the Receivers, but only against Atlantic Nickel. That said, the background facts on which it relies encompass many of those which underpinned the issues in the declaratory proceedings. Nevertheless, MSI’s claim does not involve any collateral attack on the ultimate finding in those proceedings — namely, that the agreement was not validly terminated. Rather, it proceeds on that assumption. Nor does MSI seek findings of fact which would give rise to an issue estoppel if the Sellers or Receivers were a respondent. The present proceedings are concerned with Atlantic Nickel’s breach of contract or unconscionable conduct in relation to its performance of the sale agreement. However, MSI does seek to support those claims in reliance on some factual allegations which are inconsistent with some obiter observations made in the reasons for judgment in the declaratory proceedings. That factor is exacerbated by Atlantic Nickel having joined the Receivers in the current proceedings, which is justified given MSI’s reliance, in part, on the Receivers’ conduct in relation to the performance of the agreement.

6    The determination of whether the present proceedings constitute an abuse of process requires a broad-based consideration of the facts of the case, taking into account the affected public and private interests. For the reasons that follow, the weight of relevant factors leads to the conclusion that no abuse arises and, for that reason, the applications to stay the proceedings should be dismissed.

BACKGROUND FACTS

7    Atlantic Nickel was formerly known as Mirabela Mineracao Do Brasil Ltda, and for that reason it is sometimes referred to in correspondence between the parties as “MMB”. It will be referred to as Atlantic Nickel in these reasons.

8    The major asset of Atlantic Nickel is the Santa Rita nickel mine in Bahia, Brazil.

9    Until about July 2018, more than 99.99% (being 1,284,076,317) of the quotas in Atlantic Nickel were held by Mirabela Nickel Ltd (MBN), and the balance (being 2 quotas) were held by Mirabela Investments Pty Ltd (MBI), which was, itself, wholly owned by MBN (together being the Sellers).

10    As at 10 November 2017, Atlantic Nickel owed substantial debts, including AUD12.7 million and USD488.7 million to MBN pursuant to various loan agreements, and as at July 2018, it owed approximately USD47 million to Banco Bradesco S.A. (Bradesco), a Brazilian bank. Additionally, it appears that Atlantic Nickel, MBN and MBI were indebted to Certes CT Pty Ltd (formerly AET Structured Finance Services Pty Ltd) (AET) as trustee for the Australian Mirabela Security Trust, in the sum of (at least) USD129.2 million, which debt was secured over all the property and undertakings of MBN and MBI (and is otherwise known as the “Noteholder Debt”).

11    On about 28 October 2015, the Receivers were appointed by AET to the assets of the Sellers, including the quotas and the loan to Atlantic Nickel (the Assets).

12    In late August 2017, the Receivers sought bids for the purchase of the quotas and the loan. Bids were subsequently received from, inter alia, MSI and Appian Capital Advisory LLP on behalf of the Appian Natural Resources Fund (Appian).

13    At all relevant times, Mr Walter Milbourne Junior was the director and controlling mind of MSI.

14    MSI was the successful bidder and on 1 November 2017, a written agreement was executed by the Sellers, the Receivers and Mr Milbourne on behalf of MSI for the sale of the Assets by MBN and MBI to MSI.

15    Atlantic Nickel, which was also a party to the agreement, executed that agreement on 10 November 2017.

16    For convenience, the agreement will hereinafter be referred to as the “ASA”.

The terms of the ASA

17    The terms of the ASA relevantly included the following:

(a)    On the Completion Date, as identified in cl 7.1, the Sellers were to sell the Assets to MSI for USD50 million and MBN was to assign the loan to MSI.

(b)    The Sellers’ obligation to transfer the Assets, and MSI’s obligation to pay for them, were subject to certain conditions precedent (the Conditions Precedent). They included:

(i)    by cl 2.1(b), MSI obtaining the consent of Bradesco, being a lender to which Atlantic Nickel was indebted (the Bradesco Condition); and

(ii)    by cl 2.1(f), MSI executing binding finance agreements for an amount equal to USD50 million, and satisfying all conditions precedent under those finance agreements (the Finance Condition).

(c)    By cl 2.2(a), each party was obliged to use all reasonable endeavours to ensure that each Condition Precedent was satisfied as soon as practicable after the date of the ASA and, in any event, before the “End Date”, which was defined to mean 90 days after the date of the ASA or any other date agreed in writing between the Sellers and MSI.

(d)    By cl 2.2(b), the Sellers and Atlantic Nickel were obliged to provide all reasonable assistance requested by MSI to satisfy the Conditions Precedent, including providing all reasonable access to the business and employees of Atlantic Nickel, and facilitating access by MSI to Bradesco.

(e)    By cl 2.5, any party was entitled to terminate the ASA by notice to the other parties if:

(i)    the terminating party had complied with its obligations under clause 2.2; and

(ii)    the Finance Condition was not satisfied by the date which was 14 days after the date of the exchange of signed copies of the ASA.

(f)    Clause 2.6(c) of the ASA provided:

Between the date of this agreement and the earlier of Completion and termination of this agreement the Sellers and the Company must not, and must procure that any employees of the Company do not:

(i)     provide information regarding the Assets to any potential purchaser of the Assets other than the Buyer; or

(ii)     solicit any offers for the Assets from any person other than the Buyer.

(g)    Pursuant to cl 3, MSI was to pay MBN a deposit of USD100,000 within 7 days of the exchange of signed copies of the ASA.

18    Clause 9 is also important in the present case because it operated to exclude any personal liability of the Receivers under, or pursuant to, the ASA or in relation to it at the suit of MSI. It also provided that MSI released and discharged the Receivers in relation to any liability. It read:

9    Exclusions and Acknowledgements

9.1    No liability of Receivers and Managers

(a)    The Buyer [MSI] acknowledges and agrees that:

(i)    it is not contracting with the Receivers and Managers personally except in relation to this clause 9;

(ii)    neither the Receivers and Managers nor any of their Representatives incur any personal liability to the Buyer on any account whatsoever under or pursuant to this agreement;

(iii)     the limitations of the Receivers and Managers’ liability under this clause 9 will continue notwithstanding the Receivers and Managers ceasing to act as receivers and managers of the Sellers and will operate as waivers of any claims in tort and restitution as well as under the law of contract; and

(iv)     the limitations under this clause 9 will be in addition to, and not in substitution for, any right of indemnity or relief otherwise available to any Seller, or the Receivers and Managers and will continue notwithstanding the transactions contemplated by this agreement being completed.

(b)    In consideration of the Receivers and Managers executing this agreement on behalf of the Sellers, the Buyer:

(i)     releases and forever discharges the Receivers and Managers, the Receivers and Managers personally and their Representatives to the fullest extent permitted by law from all Claims which (but for this clause 9) the Buyer has had, has now or may at any future time have against the Receivers and Managers or the Receivers and Managers personally on any account whatsoever arising out of or in connection with, flowing from or related to this agreement or any document or circumstance referred to in this agreement; and

(ii)     covenants not to sue the Receivers and Managers personally in respect of any liabilities, Claims, demands, suits, causes of action, damages, debts, verdicts and judgments whatsoever whether at law or in equity or under statute which they have or which but for this clause 9 could, would or might at any time hereafter have or have had against the Receivers and Managers personally arising out of this agreement or any document or circumstance referred to in this agreement.

19    Relevantly, for the purposes of cl 9, cl 1.1 of the ASA defined the word “Claim” as meaning:

… any claim, demand or cause of action whether arising in contract, tort, under statute or otherwise in relation to:

(i)     any provisions of this agreement; or

(ii)     the Assets or their sale.

20    Clause 10 obliged the parties to keep confidential the existence and terms of the ASA and all related negotiations between them, subject to certain permitted exceptions.

Alleged non-performance of the Finance Condition

21    MSI required finance to complete the ASA and, indeed, was only capable of providing a relatively small deposit of USD100,000. It did so by applying a success fee payable by Atlantic Nickel to it under the terms of a pre-existing consultancy contract.

22    As a result of a delay in the payment of that success fee by Atlantic Nickel, on 8 November 2017, the date for the payment of the deposit was extended to 10 November 2017.

23    In the period following entry into the ASA, the parties disputed the date by which MSI was to obtain satisfactory finance for the purposes of cl 2.1(f) and, consequently, also disputed the date on which any party might terminate the ASA for failure of that condition.

24    On 22 November 2017, the Receivers and the Sellers issued a notice to MSI purporting to terminate the ASA. The notice asserted that the Finance Condition was required to be satisfied by 5:00 pm on 22 November 2017, and that, as this had not occurred, the entitlement to terminate was enlivened.

25    Shortly after giving notice to MSI of termination, on 27 November 2017, the Receivers, the Sellers and Atlantic Nickel entered into a contract to sell the Assets to Appian for a price of about USD65 million (the Appian Sale Agreement).

The contentious correspondence

26    Immediately following the purported termination, MSI retained Russells, a law firm, to act for it to preserve its rights under the ASA.

27    On 1 December 2017, Russells wrote to the Sellers and the Receivers, asserting that they and Atlantic Nickel had wrongly repudiated the ASA from the date on which it had been entered into and that they had done so in a number of different ways. Despite that, it was said that MSI waived the repudiatory conduct, was holding the parties to the agreement, and had instructed Russells to commence proceedings for specific performance and, if necessary, injunctive relief.

28    On 4 December 2017, Clayton Utz, the solicitors for the Receivers and the Sellers, asserted in a letter that, should MSI take any such action, it would need to provide immediate security for costs and the usual undertakings as to damages in relation to any injunctive relief.

29    Further correspondence followed in which MSI sought the agreement of the Sellers and the Receivers to complete the ASA, but those overtures were rejected on the basis of the latter’s assertion that the agreement had been terminated.

30    On 5 December 2017, Clayton Utz wrote to Russells concerning the allegations which MSI had raised about the alleged non-termination of the ASA and set out in detail their clients’ claims as to why the agreement had come to an end. Pointedly, the letter also stated as follows:

Your client has no claim against the Receivers – please refer to clause 9 of the ASA.

31    In about mid-March 2018, MSI became aware that the Sellers, the Receivers and Atlantic Nickel had entered into the Appian Sale Agreement. This caused Mr Milbourne some considerable consternation and, on 24 April 2018, he wrote to Appian indicating MSI’s intention to commence proceedings.

32    On 30 June 2018, Russells wrote to Appian to notify it that MSI held a continuing equitable interest in the Assets and that it intended to institute proceedings against the Sellers, the Receivers, Atlantic Nickel and the Noteholders. Similar correspondence was sent to other interested parties.

33    On 3 July 2018, Russells wrote to AET to notify it that MSI was the equitable owner of the Assets, or at least held a continuing equitable interest in them, and that it intended to commence proceedings in relation to the sale of the Assets to Appian.

34    By a letter dated 27 July 2018, Clayton Utz wrote to Russells to advise that the Appian Sale Agreement had completed that day. It sought confirmation that Russells held instructions to file proceedings and also indicated that it held instructions to commence proceedings if a response was not received to its letter.

The Receivers’ direction proceedings

35    On 3 August 2018, the Receivers made an application for directions in the Supreme Court of Western Australia pursuant to s 424 of the Corporations Act 2001 (Cth). Though their precise form altered as the application progressed, the Receivers sought three substantive directions. First, that they were justified in performing their obligations under the Appian Sale Agreement on the basis that, at the time of its completion, MBN and MBI were able to complete it in accordance with its terms thereby conveying the Assets, noting the claims asserted by MSI that the Receivers had not validly terminated the ASA and that it had an equitable interest in the Assets. Secondly, that they were justified in distributing to AET the amount payable under the security which it held over the Sellers. Thirdly, that they were justified in defending MSI’s claims or commencing proceedings against MSI for declarations that they validly terminated the ASA, and that MSI had no equitable or other interest in the Assets.

36    MSI appeared at the hearing of the application and opposed the making of the first two directions sought. In doing so, it relied upon an affidavit of Mr Milbourne sworn 14 September 2018, which stated that “MSI intends to institute proceedings in this honourable Court to challenge this purported termination and also the purported sale of the Assets” and for that purpose exhibited a “draft of the Statement of Claim for the proceeding which MSI intends to bring”. Mr Milbourne further stated that the draft statement of claim did not encapsulate all of MSI’s claims in respect of the Assets or the ASA or the conduct of the Receivers, Sellers and others.

37    A decision on the Receivers’ application for directions was given by Vaughan J on 5 November 2018: Re Mirabela Nickel Ltd (receivers and managers appointed) (in liq); ex parte Madden [2018] WASC 335. In a carefully reasoned decision, his Honour concluded that certain directions should be given to the Receivers. Relevantly, he made the following order:

Subject to the Receivers giving no less than 21 days’ written notice to MSI, Brazil Mining BV, Brazil Holding BV and ANR BR Investment BV of their intention to distribute, despite the MSI proceeding and MSI’s claims against MBN, MBI and the Receivers, the Receivers are justified in distributing to AET Structured Finance Services Pty Ltd (AET) amounts payable under the Amended General Security Deed dated 24 December 2013 as amended on 16 June 2014 between MBN and MBI (each as a Grantor) and AET (as Secured Party), perfected by registration on the Australian Personal Property Securities Register with registration number 201312240086006.

38    On that same day, the Receivers gave a notice as contemplated by the above order.

39    MSI did not commence the threatened proceedings to restrain the Receivers from distributing the proceeds of the Appian Sale Agreement to AET. For the reasons which are discussed below, it can be accepted that, at that time, it did not have sufficient funds to do so.

40    Subsequently, the Receivers distributed some of the proceeds but retained a portion for the purposes of funding their legal disputes and discharging any potential liabilities. It is uncontroversial that the Receivers are not likely to have sufficient funds of their own to meet a claim as might be made by MSI in the present proceedings, and are not suitable respondents in any action by MSI. In that latter respect, cl 9 of the ASA appears to protect them from many claims which MSI might otherwise make. Similarly, as the Sellers were in liquidation and their assets had been transferred to Appian, any proceedings against them for damages would be futile.

MSI’s draft writ proceedings

41    On 23 October 2018, MSI filed an ex parte originating motion in the Supreme Court of Western Australia seeking leave to issue a writ in the form exhibited to an affidavit of Mr Stephen Russell (the Draft Writ) and to serve it overseas on, inter alia, Atlantic Nickel and the Appian buyers. The Draft Writ named the Sellers, the Receivers, Atlantic Nickel, AET and the Appian buyers as defendants, amongst others.

42    The relief sought in the Draft Writ included a declaration that the ASA remained on foot, an injunction to restrain the Appian Sale Agreement from being completed, an order for specific performance of the ASA or, alternatively, damages for breach of it. As against the Receivers, damages were sought for procuring or inducing a breach of the ASA by the Sellers and Atlantic Nickel. The allegations of breach of contract were, in part, to the effect that certain of the parties acted in ways which prevented MSI from completing the ASA.

43    The Draft Writ was supported by a draft statement of claim which extended the relief sought in the writ but, relevantly, alleged that the Sellers, the Receivers and Atlantic Nickel had breached cl 2.2 of the ASA, which required them to use all reasonable endeavours to ensure that the Conditions Precedent were satisfied. It also alleged that the Sellers and Receivers had repudiated the ASA in several ways, including by soliciting offers from Appian for its purchase of the Assets and disclosing information to Appian. It made further allegations supporting the claim that the Receivers had procured a breach of the ASA.

44    For present purposes, it is relevant to note that in the present proceedings, the stay applicants emphasised that the draft statement of claim made substantial allegations against, inter alia, Atlantic Nickel and the Receivers to the effect that they had breached their obligations under cl 2.2 of the ASA.

45    Leave to issue the Draft Writ and to serve it overseas was given by Master Sanderson on 8 November 2018.

46    That same day, Clayton Utz wrote to Russells in relation to the issue of the Draft Writ indicating that substantial security for costs would need to be provided by MSI for the Receivers’ costs in the contemplated proceedings as their investigations had revealed that MSI did not have any significant assets, and nor did it have any litigation funding. It cannot be seriously in doubt that the Receivers and Sellers were aware of MSI’s financial difficulties at this point in time.

47    It can be expected that, had the Draft Writ been issued and served, the other parties would also have sought security for costs from MSI.

48    As matters transpired, neither the Draft Writ nor the accompanying statement of claim were issued or served because neither MSI, nor its directors and shareholders, had sufficient funds to pursue the proceedings.

The Receivers’ declaratory proceedings

49    On 9 April 2019, the Receivers notified MSI that they intended to seek a determination of their rights in relation to their obligations under the ASA. In a letter of that date, Clayton Utz said:

The Receivers now intend to seek final determination of the rights in respect of the assets the subject of the asset sale agreement dated 27 November 2017 [being the Appian Sale Agreement], such determination again afformed [sic] on 24 November 2017, and declarations regarding MSI in respect of the same, in the Supreme Court of Western Australia.

50    Subsequently, on 23 April 2019, Clayton Utz wrote to Russells requiring MSI to issue the Draft Writ proceedings, failing which the Receivers would seek that the Draft Writ be struck out or declared invalid and further, a declaration that the termination of the ASA by the Sellers was valid. The letter sought confirmation that Russells held instructions to accept service of the application for declaratory orders.

51    On 8 May 2019, the Receivers and the Sellers commenced proceedings, numbered CIV 1806 of 2019, against MSI in the Supreme Court of Western Australia. For convenience, these will be referred to as the “WA Proceedings”.

The issues in the WA Proceedings

52    The only relief claimed in the WA Proceedings was declaratory relief in the following terms:

The Plaintiffs’ claim is for declaratory relief that, by notice sent by email on 22 November 2017 and by prepaid post on 23 November 2017, the Plaintiffs validly terminated the Asset Sale Agreement (ASA) made on 1 November 2017 between the First Plaintiff, Second Plaintiff, Third Plaintiffs, Fourth Plaintiffs, Mirabela Mineracao do Brasil Ltda (MMB) and the Defendant, in relation to the acquisition of quotas held in MMB.

53    Though the declaration sought would, on its face, affect Atlantic Nickel, it was not joined, and it is not clear why that was the case.

54    A statement of claim was filed in the WA Proceedings on 4 June 2019. In it, it was asserted, amongst other things, that:

(a)    the ASA was executed and exchanged on 1 November 2017, such that the Sellers were entitled to terminate it in the event that the Finance Condition was not satisfied by 15 November 2017;

(b)    between 17 and 18 November 2017, the Sellers and MSI agreed to extend the date for satisfaction of the Finance Condition to 22 November 2017; and

(c)    as MSI did not satisfy the Finance Condition by 22 November 2017, the Receivers and Sellers terminated the ASA by notice on 22 and/or 23 November 2017.

55    On 12 June 2019, MSI secured some limited litigation funding from Balance REV Limited (Balance REV) which provided $412,000 towards the costs of defending the WA Proceedings. The funder was given an exclusive option to fund any further proceedings in connection with any claims which MSI might have against the Sellers, Receivers, Atlantic Nickel, AET, the Noteholders, Appian or others in connection with Atlantic Nickel and/or the Santa Rita mine.

56    MSI filed its defence in the WA Proceedings on 3 July 2019. It included an allegation that the purported termination of the ASA was invalid because the Sellers and Receivers had failed to comply with their obligations under cl 2.2 which was a precondition to terminating under cl 2.5. In support of this, allegations were made that the Sellers and the Receivers did not facilitate access by MSI to Bradesco, hindered MSI from obtaining access to Bradesco, and failed to assist MSI with, and hindered MSI from, obtaining access to the mine site, and certain company information and documents. Allegations were also made that, in further breach of the ASA, the Sellers had, through the Receivers, procured offers from Appian to acquire the Assets.

57    On 15 October 2019, Clayton Utz wrote to Russells observing that there appeared to be a significant overlap of substance between the matters raised in MSI’s Draft Writ and the questions in issue in the WA Proceedings. It sought confirmation as to whether MSI accepted that, if the declaration sought by the Sellers and Receivers in the WA Proceedings was made, it would be estopped from bringing the claims in the Draft Writ or would be prevented from re-agitating matters relating to the validity of the termination of the ASA.

58    By a reply on 23 October 2019, Russells identified that:

…

It is clear that your clients have carefully defined and confined the relief they have sought in the proceeding including the identity of the plaintiffs (and the defendant(s) for that matter).

…

The proceedings present a valuable opportunity to have confined and important issues determined quickly and efficiently by the Court when that would not otherwise be the case. The Court has been able to provide trial dates promptly – assisted, no doubt, by the confined way in which the plaintiffs framed the issues and the defendant has responded.

Further, the position of the parties will be substantially clarified by a determination of those issues and its speedy determination is likely to advance the resolution of the dispute which exists between the parties.

With these matters in mind:-

1.     MSI does not intend to issue a counterclaim in this proceeding; and

2.     MSI rejects and declines otherwise to debate the propositions you make.

The strategic conference

59    In advance of the strategic conference which was held in the WA Proceedings, the Sellers and the Receivers delivered a written paper containing the points which they intended to make to the Court. In that paper, it was asserted that the WA Proceedings had been brought to quell the controversy between the parties so that the receivership could be terminated, but that MSI did not intend to file a counterclaim in the action in line with the claims in the Draft Writ. That was said to be “surprising” given the alleged substantial overlap of factual and legal issues between the two proceedings. It was said that, even if the Receivers were successful in the WA Proceedings, they would remain at risk of being joined into latter actions, with the result that the practical utility in proceeding with the WA Proceedings as framed at the time was substantially diminished. It was further said that the Sellers and the Receivers were considering what steps to take in the circumstances, including seeking orders “in line with” those made in Tyne (Trustee of the Argot Trust) v UBS AG [2019] FCA 628 (in which case, the Court prohibited an individual from instituting any proceedings against the respondent arising from the same substratum of facts as a number of existing proceedings), amending the pleadings to add further declaratory relief, investigating whether MSI was ever able to perform the ASA and whether any damages arise, and discontinuing the proceedings altogether.

60    The strategic conference was held on 31 October 2019, before Hill J. The following matters were advanced orally on the Sellers’ and the Receivers’ behalf:

(a)    The claims which had been identified in the Draft Writ had not been brought in any proceedings by MSI and no explanation had been given for that omission. Hill J recognised that MSI was not seeking to advance in the proceedings then before the Court the claims which had been agitated in the Draft Writ, though some of the relief sought in that writ, such as specific performance, was no longer available.

(b)    The absence of the claims by MSI raised questions about the utility of the proceedings because there was little point in a hearing which did not resolve all of the issues between the parties.

(c)    The Receivers and Sellers wanted to give thought to bringing as many of the issues as possible into their proceedings.

(d)    The Receivers and Sellers considered it inappropriate for a trial to be held in the 2019 calendar year because they wished to pursue further discovery, issue subpoenas in Singapore to lenders who might have provided funding to MSI for it to complete the ASA, and examine Mr Milbourne for the purposes of assisting them in the litigation.

(e)    If MSI did not raise the claims referred to in the Draft Writ in the WA Proceedings, it ran the risk of being estopped from raising those claims in the future.

(f)    The Receivers and Sellers wanted to explore ways of bringing all the claims to a head in the WA Proceedings.

61    Conversely, for MSI, the following propositions were advanced:

(a)    The trial, which was provisionally set down for 11, 12 and 13 December, should proceed.

(b)    The subpoena which the Receivers then sought to issue was not relevant to the question to be determined, namely whether the ASA had been validly terminated.

(c)    The issue of whether MSI could have completed the ASA with the assistance of a Singaporean financier would be relevant to a later action for specific performance or damages, but was not relevant on the application for a declaration of whether the ASA had been validly terminated.

(d)    The processes of issuing subpoenas or examining Mr Milbourne were unnecessary to the trial or were inappropriate and unrelated to the confined issue in the proceedings, which solely related to the validity of the termination of the ASA.

(e)    The steps which the Receivers and Sellers wished to take could have been taken much earlier and there was no explanation for why they had not been taken until that point in time.

(f)    The WA Proceedings would determine the issue of “liability”. The judge identified that there was a risk in splitting liability from damages, but it was accepted that the plaintiffs’ application was at the time confined to the validity of the termination.

(g)    On the question of whether MSI raising issues subsequently would amount to an abuse of process, it was said that it was appropriate to determine the issue of “liability” first because if it were decided against MSI, the Court and the parties would not have to expend resources on the more complex issue of “relief”.

(h)    There was a real opportunity to considerably shorten the proceedings by resolving the “liability” question, as that would benefit all the parties as well as the creditors of the Sellers. If the Receivers and Sellers were successful in obtaining their declaration, the claims in the Draft Writ would dissipate because they were based on the termination being invalid.

62    In the strategic conference, Mr Zappia KC, counsel for MSI, repeatedly referred to the issue of “liability” as being that to be determined first. Much was made of the use of this term by the stay applicants, however, it is apparent that this was not a reference to the determination of “liability” in a proceeding where that issue was separated from that of damages. Rather, it was a shorthand reference to the issue of whether the ASA had been validly terminated. In the context of the overall dispute between the parties, Mr Zappia KC was saying that if the termination was valid, one set of causes of action might be available to MSI and, if not, another set might be available. As Mr Zappia KC said:

This proceeding effectively will determine the issue of liability and for that reason the utility is evident, and it’s evident for this reason: if we are successful on liability – that is, if we are able to resist the declaration and your Honour makes findings that the termination was not valid, that will leave only the question of relief to be determined. What flows in terms of the relief that we would be entitled to for an invalid termination and in that respect the relief that we might seek might involve specific performance, in which case the receivers would necessarily need to be a party if we [sought] specific performance, because they were a party to the contract.

…

It might leave a question of damages. In which case, presumably the receivers probably don’t become involved, because it might be said that they weren’t the party that was obliged to provide the asset.

…

Your Honour, we accept – we accept that the issue in this proceeding is one of liability and what is effectively occurring is that there is a trial on liability and it is of great utility because if we fail on the question that has been raised – let’s assume that your Honour were to find that the termination was valid, then that is the end of our ability to claim any relief and the court will not need to go into that complexity and we will not need to deal with other parties potentially not involved in this litigation.

63    Subsequently, in response to concerns raised by Hill J about keeping separate the issues of liability and relief, and the risk of issue estoppel, Mr Zappia KC made the following point:

We’re dealing with a well resourced, well advised litigant. They must have known when they issued the proceeding that we weren’t obliged to do anything other than to defend the proceeding. To come along now and say, “Well, we’ve realised that it might not have utility when we’re six weeks out from trial and we’ve been preparing for trial is, we would say, not a justification for abandoning the trial. They must have given consideration to it. It would have been obvious that what we put by way of defence is a matter for us.

64    The result of the strategic conference was that Hill J acceded to the Receivers’ and Sellers’ wishes that the trial would not proceed in December 2019 on the provisionally allocated days, so that the Receivers and Sellers could consider whether they might make amendments to their claim.

65    An examination of the transcript of the strategic conference reveals the essential point of tension between the parties. MSI sought to have the WA Proceedings heard and determined as soon as possible so that the question of whether the ASA had been validly terminated would be decided. The furtherance of its claims based on that agreement could turn on the outcome of the Court’s determination. It would also determine who would be the parties to any further litigation. Conversely, the Receivers and Sellers wished to enlarge the proceedings to encompass as wide a range of issues as possible, so that as many matters as possible could be determined in the one proceeding.

66    It is now apparent that MSI did not have the funds to engage in protracted and extensive litigation at the time and, so it seems, for that reason opted for the more expedited process. Although that was not made explicit by MSI, as the prior correspondence between the parties reveals, the Receivers were, undoubtedly, aware of MSI’s lack of funds.

The war of correspondence continued

67    The 1980’s style of litigation of engaging in a war of attrition by lengthy correspondence continued between the parties following the strategic conference.

68    As referred to above, prior to the commencement of the WA Proceedings, in a letter of 23 April 2019, Clayton Utz demanded that MSI commence proceedings to prosecute the claims in the Draft Writ. The style of the letter is unusual for its references to the Rules of Court and relevant authorities garnered in support of the propositions which were sought to be made. This was a feature of the correspondence that passed between the parties and one which, in more civil and courteous times, would have attracted significant opprobrium.

69    Some time after the strategic conference, by a letter of 26 November 2019, Clayton Utz encouraged MSI to file a counterclaim in the WA Proceedings, by which the issues raised in the Draft Writ might be ventilated. On the other hand, the letter recognised that MSI’s approach was to use the declaratory proceedings as the vehicle for determining whether the ASA was validly terminated and what relief might follow in other proceedings. It provided:

For whatever reason, MSI in effect desires a splitting of issues, by using the current proceeding to determine liability with issues as to relief being determined in (presumably) the foreshadowed proceeding. This, at least, was the way in which your client’s Senior Counsel approached the matter at the strategic conference on 31 October 2019 …

70    That characterisation is inaccurate. There was no attempt by MSI to “split” the issues between the parties. The WA Proceedings only had one issue, being whether the ASA was validly terminated. In any event, by the abovementioned letter, the Receivers indicated that they were prepared to consider the possibility of a “split trial”, so long as all of the issues in question were raised in the pleadings. The letter also reiterated that cl 9 protected the Receivers from any liability at the suit of MSI.

71    On 30 November 2019, Russells wrote to Clayton Utz refuting many of the allegations made in the letter of 26 November. For present purposes, the following statements are relevant:

Again, MSI has not “refused” to bring a counterclaim. …

Your continued reference to “proceedings” as though our client has commenced proceedings is a mischief. There are no overlapping issues, because there is only one set of proceedings.

MSI earnestly hopes that there will be only one proceeding.

Surely, your clients must likewise hold that view: we repeat what MSI’s senior counsel submitted in the course of the strategic conference on 31 October 2019, namely, that MSI accepts that if your clients succeed in this proceeding, that will be the end of any litigation, certainly between the current parties, in relation to the MSI Asset Sale Agreement.

Equally, if MSI succeeds, it is confident that this will assist the parties, MMB, the noteholders – the receivers’ principals – and the Appian Buyers in evaluating their respective positions and responding in a commercially realistic fashion.

72    On 9 December 2019, the Receivers and the Sellers filed an amended statement of claim in the WA Proceedings. In it, it was alleged that it was reasonably foreseeable that MSI would bring the proceedings contemplated by the Draft Writ against the Receivers and, therefore, an additional declaration was sought that, by cl 9.1(b)(i) of the ASA, the Receivers were released and forever discharged in relation to any cause of action raised against them. In other words, they sought a negative declaration which appeared in the prayer for relief in the following form:

A declaration that, pursuant to clause 9.1(b)(i) of the MSI Sale Agreement, MSI has released and forever discharged the Receivers in relation to any cause of action pleaded against them in the draft statement of claim exhibited to the affidavit of Stephen Charles Russell filed on 23 October 2018 and marked “SCR 2”.

73    By way of a response, on 17 December 2019, Russells wrote a letter to Clayton Utz which stated the following:

In case it was not apparent to you from our previous correspondence, we confirm that MSI does not intend to issue proceedings against the Receivers in the form of the draft Statement of Claim exhibited to the Affidavit of Stephen Charles Russell filed on 23 October 2018 and marked “SCR-2” (the DSOC).

Further, absent any obligation to do so, MSI hereby irrevocably undertakes to the Receivers that it will not institute any proceedings in any court of competent jurisdiction in relation to any cause of action pleaded in the DSOC without giving to the Receivers care of your firm not less than 21 days’ notice in writing of their intention in that regard, any such notice to be accompanied by the draft proceedings which MSI may intend to issue.

74    MSI later amended its defence to indicate that it did not intend to bring proceedings in the form of the draft statement of claim with the result that there was no issue between the parties, and the plaintiffs were not entitled to the negative declaration which was sought.

The application to obtain evidence in Singapore

75    On 12 December 2019, the plaintiffs in the WA Proceedings filed a summons seeking an order, pursuant to the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, opened for signature 18 March 1970, 847 UNTS 231 (entered into force 7 October 1972) and s 110(1)(c) of the Evidence Act 1906 (WA), that the Court issue a letter of request to the judicial authorities of Singapore. This was directed to obtaining evidence from a Mr Socrates Economou (who resided in Switzerland), or alternatively, the Proper Officer of Trafigura Pte Lte (Trafigura), being the entity from which MSI claimed it would have been able to secure finance for the purposes of completing the ASA.

76    That application was refused by Hill J on 22 January 2020, who considered that it would involve “both parties incurring substantial costs and delay the resolution of the proceedings”: Mirabela Nickel Ltd (in liquidation) (receivers and managers appointed) v Mining Standards International Pty Ltd [2020] WASC 4.

77    On 6 February 2020, the Receivers filed an appeal from Hill J’s decision. Before this Court, MSI submitted that had the Receivers’ appeal been successful, and discovery proceedings were commenced in Singapore, the WA Proceedings would not have been set down for some time. In the circumstances, that submission is self-evidently correct and should be accepted.

78    An email from Russells to Mr Milbourne of 6 February 2020 reveals that MSI’s response to the plaintiffs’ appeal was that the relevant defence, which prompted the Receivers’ application to obtain evidence from Singapore, should be abandoned. The rationale given was that the defence would only arise if MSI was wrong about the date from which the Receivers were entitled to terminate the ASA, and that it was not worth the cost and delay associated with the appeal process.

79    On 12 February 2020, MSI filed an amended defence in which it elided the allegation that the purported termination of the ASA was invalid and of no effect because the Sellers and Receivers failed to comply with their obligations under cl 2.2. This had the effect of removing the issue which might have rendered the discovery from Singapore relevant.

80    The result of this was that the appeal was abandoned, and orders were made, by consent, to this effect on 4 March 2020.

Public examination of Mr Milbourne

81    A public examination of Mr Milbourne occurred between 24 and 26 June 2020. He was examined on a number of topics, including the financial position of him and MSI, MSI’s intention to seek specific performance of the ASA or damages, MSI’s litigation funding agreement in respect of the WA Proceedings, and several other matters.

The WA Proceedings listed for hearing and late discovery

82    On 17 July 2020, the WA Proceedings were listed for trial for three days, commencing on 12 October 2020.

83    On 9 September 2020, the Receivers discovered a document which was described as a file note of a teleconference on 6 November 2017 between Mr Tucker, Mr Carruthers and Mr Dey of the Receivers, and a Mr Rathborne and Mr Loftus-Hills of Moelis, the latter being Appian’s representative in bidding for the Assets.

84    It appears that the late discovery prompted MSI to issue subpoenas and apply for leave to amend its defence. Although that leave was opposed, Hill J granted it on 7 October 2020.

85    The hearing of the WA Proceedings then took place on 10, 11, 14, 15 and 23 December 2020.

The decision in the WA Proceedings

86    The decision in the WA Proceedings was handed down on 3 March 2023 and supported by very lengthy reasons. Although the central issue was whether the Receivers and the Sellers had validly terminated the ASA on 22 or 23 November 2017 for non-satisfaction of the Finance Condition, the reasons show that the parties raised an array of other issues which overly complicated the real issue in dispute — a tendency which repeated itself in the present application.

87    In Hill J’s very careful and thorough decision, her Honour held that: the ASA was entered into on 10 November 2017, when the last party executed it, such that the Finance Condition needed to be satisfied 14 days from that date; the time for satisfaction of the Finance Condition was not extended by agreement between the parties; MSI was not estopped from denying that the date on which the ASA was executed was 1 November 2017; the ASA had not been validly terminated; and MSI’s request for repayment of the deposit was not an acceptance of the validity of the purported termination. In substance, the conclusion was that the notice of termination issued by the Sellers and the Receivers was not efficacious.

88    As a result of those conclusions, it was unnecessary for Hill J to deal with a number of additional contentions which the parties had raised. Whilst this was recognised by her Honour, some obiter observations were made in relation to several issues.

89    On 19 May 2023, Hill J made orders dismissing the plaintiffs’ claims.

The current proceedings against Atlantic Nickel

90    Whilst the WA Proceedings were reserved before Hill J, on 1 November 2021, MSI filed an originating application and accompanying statement of claim in this Court to commence these proceedings (which will be referred to as the “current proceedings”). In general terms, MSI makes claims against Atlantic Nickel for:

(a)    damages for Atlantic Nickel’s breach of contract;

(b)    further or alternatively, damages for inducing a breach of contract by the Receivers and the Sellers;

(c)    further or alternatively, damages under s 236 of the Australian Consumer Law (being Sch 2 to the Competition and Consumer Act 2010 (Cth)) for contravention by Atlantic Nickel of s 21, namely the prohibition against unconscionable conduct; and

(d)    further or alternatively, damages under s 236 of the Australian Consumer Law for loss caused by Atlantic Nickel being involved in a contravention of s 21 by the Receivers and the Sellers.

91    An amended statement of claim was filed on 18 March 2022.

92    In substance, MSI’s allegations are to the effect that Atlantic Nickel, the Receivers and the Sellers failed to observe the obligations in the ASA to provide reasonable assistance to MSI or to act so as to give it the benefit of the agreed terms. It is specifically alleged that their conduct prevented MSI from securing finance to complete the purchase and, further, that they breached the obligation not to deal with third parties whilst the ASA was on foot. The pleading sets out, in some length, the terms of several letters, emails, text messages, and telephone conversations in support of the allegations.

93    The gravamen of the complaints made is that Atlantic Nickel breached the ASA or induced the Receivers and the Sellers to breach it in several respects. The same or similar conduct is also characterised as constituting unconscionable conduct, within the scope of s 21 of the Australian Consumer Law, by the Receivers and, especially, Mr Tucker. It is then said that Atlantic Nickel was a person involved in that unconscionable conduct or that it engaged in unconscionable conduct on its own behalf.

94    The substance of MSI’s alleged damage is its lost opportunity to complete the ASA to acquire the Assets, and the quantum of the damage may be around USD745 million.

95    A further claim for exemplary damages is made against Atlantic Nickel.

96    On 13 April 2023, Atlantic Nickel filed a cross-claim in the proceedings against MSI. It also makes claims against Mr Milbourne as the second cross-respondent, and the Receivers as the third and fourth cross-respondents. In part, it seeks a declaration that there was no binding agreement constituted by the ASA or, alternatively, that the date for satisfaction of the Finance Condition was 22 November 2017. As against the Receivers, it claims damages for breach of contract and an order that the Receivers are liable to MSI for any damages for unconscionable conduct, if the cognate allegations are made good against it by MSI.

97    On 9 June 2023, MSI lodged an interlocutory application seeking, inter alia, an order that Atlantic Nickel’s amended statement of cross-claim be struck out.

98    On the same day:

(a)    Atlantic Nickel lodged an interlocutory application seeking to have the current proceedings stayed permanently pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) or in the Court’s inherent jurisdiction;

(b)    the Receivers lodged an interlocutory application seeking to permanently stay the current proceedings; and

(c)    the Receivers and the Sellers filed a notice of appeal seeking to appeal from the judgment of Hill J in the WA Proceedings.

RELEVANT LEGAL PRINCIPLES

99    The stay applicants relied upon several grounds in support of the contention that the current proceedings are an abuse of process or that MSI should otherwise be prevented from pursuing them. The submissions in relation to each overlapped considerably and though most attention was focused on broad principles of abuse of process, some reliance was also placed on Anshun and issue estoppel.

100    A prominent submission made on behalf of Atlantic Nickel was that the decision in UBS v Tyne had dramatically altered the range and scope of the doctrine of abuse of process. On that basis, it is appropriate to commence with a consideration of that decision.

UBS v Tyne

101    Aside from the High Court’s discussion of principle, Atlantic Nickel submitted that the facts of UBS v Tyne were important in revealing the new scope of the doctrine as articulated by the High Court. It is, therefore, appropriate to set them out in some detail.

102    In about 2007, Telesto Investments Ltd (Telesto), an investment company incorporated in Jersey, opened an investment account with UBS AG (UBS), which extended credit facilities to it. The investment which Telesto pursued was located in Singapore. Unfortunately, it failed and the Argot Trust (the Trust), being the family trust of a Mr Tyne, alleged that it had suffered loss upon the receipt of negligent advice from UBS, or that UBS had engaged in misleading or deceptive conduct in relation to the provision of financial services. The alleged conduct was constituted by representations said to have been made to Mr Tyne and, through him, to other entities, including ACN 074 971 109 Pty Ltd (ACN 074), being the former trustee of the Trust, and Telesto. Mr Tyne was, at all material times, the controlling mind of ACN 074 and Telesto. Those representations were alleged to have induced Telesto to acquire and retain bonds issued by financial institutions in Kazakhstan, the Bank Turan-Alem and Astana Finance (the Bonds), which ultimately proved to be worthless. After the value of the security provided by Telesto under its facilities fell, a margin call was made requiring Telesto to provide further security. Following some negotiations, ACN 074 executed a letter of undertaking in favour of UBS in relation to the security shortfall. That undertaking extended to include assets held in the Trust.

103    Subsequently, on 15 October 2010, UBS commenced proceedings in the High Court of Singapore against Telesto under its credit facilities, and against Mr Tyne as guarantor of Telesto’s liabilities.

104    On 2 November 2010, Telesto, Mr Tyne and ACN 074 commenced proceedings in the Supreme Court of New South Wales claiming that UBS did not have the authority to acquire the Bonds on Telesto’s behalf, or that Telesto had only acquired the Bonds in reliance on UBS’s negligent advice or misleading or deceptive conduct in relation to the nature and quality of the Bonds. The Trust alleged that it had granted the securities in reliance on the same conduct and sought to be released from its obligations as surety or to recover damages.

105    In early 2011, UBS obtained anti-suit injunctions against Telesto, Mr Tyne and ACN 074, restraining them from prosecuting their claims in the Supreme Court of New South Wales, which injunctions were subsequently confirmed. By that time, however, UBS had realised its security and applied it against Telesto’s debt, which was reduced to nil. It followed that UBS’s proceedings in the High Court of Singapore were limited to declaratory relief as to its entitlements.

106    UBS sought a permanent stay of the proceedings in the Supreme Court of New South Wales. In the course of that application, Mr Tyne and ACN 074 indicated that they would discontinue their claims, and that Telesto would not contest UBS’s proceedings in Singapore and would abandon all of its claims in the New South Wales proceedings, save for its claims for misleading or deceptive conduct and breach of fiduciary duty. Thereafter, the Singapore proceedings went uncontested and orders were made that Telesto and Mr Tyne were liable to UBS for the sum claimed and interest. Following the obtaining of those orders, UBS applied to the Supreme Court of New South Wales for a permanent stay of the proceedings in that Court. Those orders were granted on the basis that the Singapore proceedings covered the causes of action raised in the New South Wales proceedings which were now res judicata.

107    In 2014, Mr Tyne, who had become the trustee of the Trust, and his wife, commenced proceedings against UBS in this Court. The claims made against UBS were substantially the same, being for damages and equitable compensation consequent upon advice and representations made by UBS to Mr Tyne and, through him, to other entities, including ACN 074 (in its capacity as the former trustee of the Trust) and Telesto. The Trust claimed to have suffered loss in connection with its pledge of assets to secure Telesto’s liabilities under credit facilities extended by UBS.

108    At first instance in this Court, UBS sought and was granted a permanent stay of the Federal Court proceedings on the basis that they were an abuse of process. The appeal before the High Court was from the Full Court’s decision which overturned the primary judge’s decision.

109    From the joint reasons of Kiefel CJ, Bell and Keane JJ, the following matters of principle can be identified:

(a)    The varied circumstances in which the use of the court’s process will amount to an abuse is not capable of exhaustive statement. However, either of two conditions enlivens the power: “where the use of the court’s procedures occasions unjustifiable oppression to a party, or where the use serves to bring the administration of justice into disrepute” (at 83 [1]).

(b)    Whether conduct amounts to an abuse of process is a determination which requires a consideration of relevant circumstances and, as explained by Lord Bingham in Johnson v Gore Wood & Co [2002] 2 AC 1, 31 (Johnson v Gore Wood), it requires:

a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not.

(c)    The determination of whether conduct constitutes an abuse of process must take into account the court’s procedural law and, in the Federal Court, that includes s 37M of the Federal Court Act (at 92 [34]).

(d)    Similarly, the “timely, cost effective and efficient conduct of modern civil litigation takes into account wider public interests than those of the parties to the dispute”. Those wider interests are reflected in s 37M(2) of the Federal Court Act and, as was observed in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, 213 [98] (Aon), integral to the “just resolution of a dispute” is the minimisation of delay and cost. In this context, whilst parties may have a right to bring proceedings, choices have to be made as to what claims are made and how they are framed (at 93 – 94 [38]).

(e)    In Aon, French CJ had recognised the overlap between abuse of process and Anshun estoppel in that “abuse of process principles may be invoked to prevent attempts to litigate a claim that should have been litigated in earlier proceedings as well as attempts to re-litigate a claim that has been determined” (at 94 [39], citing Aon at 193 [33]). However, their Honours in UBS v Tyne went on to say the following at 95 – 96 [43]:

This is not to say that in England or here the circumstance that a claim could have been raised in earlier proceedings makes the raising of it in later proceedings an abuse of process. It is to recognise that in some circumstances the bringing of a claim which should have been litigated in an earlier proceeding will be an abuse and that that may be so notwithstanding that the later proceeding is not precluded by an estoppel. …

(Footnote omitted).

(f)    Further, their Honours exhorted the courts to be astute to protect litigants and the system against abuse of process and not to indulge parties who engage in “tactical manoeuvring” that prevents the “just, quick and efficient” resolution of litigation (at 96 [45]).

(g)    So too, the staged conduct of what is, in essence, the one dispute prosecuted by related parties under common control with the attendant duplication of court resources, delay and expense, might well generate the perception that the administration of justice is inefficient, wasteful and profligate in the application of money (at 100 [59]).

110    It is tolerably clear that in UBS v Tyne, there had been a number of attempts by the Tyne interests to litigate the issue of UBS’s liability and, indeed, it had been effectively determined in the Singaporean proceedings. That determination included the conclusion that Mr Tyne and Telesto were liable to UBS for the amount claimed. Further, an attempt had been made to litigate that issue using only one of the parties whose rights were affected. Mr Tyne had caused the Trust’s proceedings to be abandoned in the belief that it would be cheaper to pursue Telesto’s claim instead. However, it was apparent that he had only done so after UBS had made an application to stay the whole of the proceedings. If the Trust’s claims were allowed to proceed, the holding back of its claims in case Telesto’s action was stayed would result in the duplication of resources and increased costs as well as delaying the resolution of the dispute. As the plurality said of this at 99 [55]:

… Hiving off the Trust’s claim, with a view to bringing it in another court after the determination of the SCNSW proceedings, was the antithesis of the discharge of the duty imposed on parties to civil litigation in the Supreme Court of New South Wales and in the Federal Court. That duty is to conduct the proceedings in a way that is consistent with the overriding/overarching purpose.

(Footnotes omitted).

111    The resultant oppression to UBS was not only in the delay in the resolution of the dispute, but also in the vexation of being required to deal again with claims that should have been resolved in the New South Wales proceedings.

112    Gageler J generally agreed with the reasons of the plurality. However, he added that the concept of abuse of process is to be informed in part by considerations of finality and fairness, similar to those matters which inform the doctrine of estoppel, albeit being broader and more flexible. His Honour referred to the observations of Lord Bingham in Johnson v Gore Wood at 31, where his Lordship recognised that a finding of an abuse of process generally required that there be some unjust harassment of a party, even though it is not necessary to identify an additional element such as a collateral attack on a previous decision or dishonesty. Further, the fact that a claim could have been raised in earlier proceedings did not necessarily mean that it should have been raised. From this, his Honour recognised (at 103 [69]) that, in considering whether a claim should have been raised in earlier proceedings, an appropriate question is whether “the claim sought to be brought in the later proceedings was so relevant to the subject matter of the earlier proceedings that it would have been unreasonable not then to have brought the claim so as to have allowed all relevant issues to have been determined in the one proceeding”. In the determination of whether the promotion of a claim constitutes an abuse of process, a normative judgment needs to be made taking into account the public and private interests involved, and that process underscores the question of whether the claim should have been brought in the earlier proceedings (at 103 – 104 [70]).

113    His Honour agreed that an abuse of process existed in circumstances where Mr Tyne was, at all times, the controlling mind of all relevant parties, the Trust’s claims arose out of the same complex series of transactions as Telesto’s claims which had been pursued, there was no juridical advantage to the trustee in advancing its claims in the New South Wales proceedings, and there was no proper explanation of why it did not do so (at 104 – 106 [73] – [76]).

114    Gageler J further recognised that there had been no intimation or communicated likelihood that the trustee would bring subsequent proceedings (at 106 [76]). Additionally, the saving of costs by the Trust was an insufficient explanation for the failure to bring the proceedings in the light of UBS’s interests and the efficient administration of justice (at 107 [80]).

115    The recognition by Gageler J that the lack of intimation that future proceedings were possible was a relevant factor, reflected the observations of the plurality (at 100 [58]) to the effect that an exacerbating factor was that, at the conclusion of the New South Wales proceedings, UBS was entitled to order its affairs on the understanding that its dispute with Mr Tyne and his related entities was at an end. That suggests that where it is made clear by a party that other claims might arise in subsequent litigation, a finding of an abuse of process might less easily be made.

Other principles concerning abuse of process

116    In addition to the above principles, the following additional points should be made:

(a)    It is necessary to keep steadily in mind that the imposition of a permanent stay may have the consequence that a plaintiff may have a good claim which will not be determined on its merits and, therefore, their prima facie entitlement to vindicate their rights will be denied. Denying recourse to the courts is a step which should not be lightly taken and it requires the party seeking the stay to discharge a “heavy onus”. For that reason it has often been repeated that the staying of proceedings should only occur in the most exceptional circumstances: Williams v Spautz (1992) 174 CLR 509, 529; General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125, 129; CBRE (V) Pty Ltd v Trilogy Funds Management Ltd (2021) 107 NSWLR 202, 210 [31] (CBRE v Trilogy); Lantrack Holdings Pty Ltd v Yammine [2023] FCAFC 156 [130], [132] (Lantrack v Yammine).

(b)    In UBS v Tyne, it was only Gordon J who reaffirmed that the onus to establish an abuse of process is a “heavy one” (at 127 [136]). Her Honour additionally identified, in the same paragraph, that the exercise of the power to stay proceedings can be justified by considerations of fairness, finality and the maintenance of public confidence in the administration of justice. In this context, the establishing of wasted costs, duplication of issues and delay may well go some way to satisfying the standard.

(c)    Despite the width of circumstances in which a remedy might be granted, permanently staying a matter as an abuse has often been regarded as “a measure of last resort” which will only be ordered where there is no other way to protect the integrity of the system of justice administered by the Court: Williams v Spautz at 529; see also Lantrack v Yammine [130].

(d)    In order to establish an abuse of process, it is not necessary that the second proceeding involves the same parties as the first case or their privies. The doctrine is wider and brings within its scope cases which do not give rise to an estoppel: see Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507, 515 – 516 [17]. That is especially so in relation to what might be called the second limb of the concept — where the proceedings serve to bring the administration of justice into disrepute.

(e)    The risk that inconsistent conclusions might be reached in different courts is a not insignificant matter to be taken into account in determining whether an abuse of process exists: Lantrack v Yammine [140], citing Trilogy Funds Management Limited as trustee and responsible entity of the Pacific First Mortgage Fund v CBRE (V) Pty Ltd [2021] NSWSC 883 [90].

(f)    Mere inefficiency in the conduct of litigation is not sufficient. Were it otherwise, the fact that a claim or defence could have been raised in earlier litigation would be determinative, whereas what is required is, at the minimum, that the defence or claims should have been raised: Lantrack v Yammine [115]. It is not in all circumstances that a claim which should have been advanced in earlier proceedings will be prevented from being agitated in later proceedings. Much will depend on a broad analysis of the surrounding circumstances: Lantrack v Yammine [116].

(g)    In the weighing of considerations, the significance of factors relating to efficiency will vary with the circumstances of the case. In UBS v Tyne, “tactical manoeuvring” which impeded the “‘just, quick and efficient’ resolution of litigation” was not tolerated. Further, an abuse of process will not be avoided by using different commonly controlled entities to engage in separate pieces of litigation: Lantrack v Yammine [119].

(h)    It is not the mere inconveniencing of a party or the causing of additional cost or delay which constitutes an abuse of process. What is required is a conclusion of unjustifiable oppression arising from the particular circumstances, or that the use of the court’s procedures serves to bring the administration of justice into disrepute: Lantrack v Yammine [120]; UBS v Tyne at 83 [1].

(i)    The granting of relief for an abuse of process is not directed at the punishment of a miscreant: Victoria International Container Terminal Ltd v Lunt (2021) 271 CLR 132, 141 – 142 [20]: or to punish moral delinquency, and nor is it necessary to establish some blameworthy conduct: Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 2] [2021] WASCA 105 [164]. Indeed, the expression “abuse of process” is apt to wrongly suggest that some impropriety is necessarily required, and given the recent expansion of the doctrine it would, perhaps, be appropriate to adopt a new nomenclature.

Other authorities

117    The Receivers specifically referred to a number of other authorities at the hearing, some which require particular consideration. The first was the decision of the Full Court of this Court in Robinson v Deep Investments Pty Ltd (2018) 364 ALR 305 (Robinson v Deep Investments). There, litigation had been commenced in the Supreme Court of New South Wales in relation to certain losses which had occurred on a share portfolio held by Deep Investments Pty Ltd. After four days of trial, the parties reached a settlement pursuant to which judgment was entered for the defendants by consent, the damages claim was dismissed and a cross-claim was discontinued. After about 10 months, proceedings were commenced in this Court by Deep Investments against seven respondents, three of whom had been the defendants in the Supreme Court proceedings, and the claims advanced sought to recover part of the loss the which had been the subject of those proceedings. One of the reasons given for not bringing the claims in the earlier proceedings was the late acquisition of material on which those claims were founded. The respondents sought a stay on the basis that the bringing of the proceedings in this Court was an abuse of process.

118    It was held (at 327 [117]) that there had been no conscious decision by Deep Investments not to bring in the first proceedings the claim which was advanced in the second. However, in their joint reasons, Jagot and Colvin JJ observed (at 328 [118] – [120]) that there were conscious decisions made for forensic reasons to confine the claims made in the Supreme Court proceedings and to hold back claims for later consideration. In the circumstances, it was concluded that it had been incumbent on Deep Investments “to raise those matters and seek case management directions so as to ensure the cost effective, efficient and fair resolution of the dispute.” Its failure to do so rendered the subsequent proceedings an abuse of process.

119    A further point considered by the Court (at 330 – 331 [133] – [134]) was that, as the consent judgment incorporated the conclusion that certain entities had not engaged in certain impugned conduct, it would be unreasonable, and an abuse of process, if Deep Investments could now bring a claim against another party which was based on the conclusion that the conduct had occurred. On a related point, the Court considered (at 333 – 334 [149] – [150]) that it would be inappropriate for Deep Investments to bring proceedings against a party who was not part of the earlier proceedings, in circumstances where that entity would join others who were party to the earlier proceedings and where Deep Investments sought to raise an issue which was previously determined against it.

120    Reference was also made to Stokes v Toyne [2023] NSWCA 59. That case, however, has little practical application to the present matter. There, Mr Stokes had sued Ms Toyne for the return of deposits he had paid pursuant to contracts for the sale of land. Ms Toyne had contracted to sell two lots of land to Mr Stokes. When he failed to complete, she terminated the contracts and forfeited the deposits. In Mr Stokes’ proceedings to recover the deposits, Ms Toyne claimed that she was not required to return them on the basis that she had sustained considerable losses in relation to the demolition of fences and sheds which resulted in asbestos contamination, the felling of trees and holding costs. She did not, however, file a cross-claim for damages in respect of these matters. After Mr Stokes was successful in recovering his deposits, Ms Toyne commenced proceedings in the District Court of New South Wales claiming damage in relation to those matters which had caused her loss. Mr Stokes applied to stay those proceedings on the basis of the principles of Anshun estoppel or because the proceedings were otherwise an abuse of process. The Court of Appeal held that Anshun estoppel applied — even though there was no res judicata or issue estoppel arising from the original proceedings, it was a case where the defendant in the first action had a substantive cross-claim against the plaintiff arising out of closely related circumstances and it ought to have been agitated in those proceedings. The majority also held that the District Court proceedings were such as to amount to an abuse of process.

WHETHER THE CURRENT PROCEEDINGS ARE AN ABUSE OF PROCESS

121    The reasons advanced by each of the stay applicants in support of the assertion that the current proceedings constitute an abuse are somewhat intertwined. The major criticism of both the Receivers and Atlantic Nickel is that MSI failed to ventilate the claims it now brings by way of a counterclaim or cross-claim in the WA Proceedings.

122    Atlantic Nickel relies heavily upon its characterisation of several decisions made by MSI throughout the course of the WA Proceedings as “tactical manoeuvres” which have apparently had the effect of preventing the just, quick and efficient resolution of the dispute. It also claims that, in circumstances where Anshun and issue estoppel would bar MSI from making certain claims against the Receivers following the WA Proceedings, it must be an abuse for MSI to now make those claims against Atlantic Nickel. The Receivers separately complain that the current proceedings are “the staged conduct of what is in fact one dispute”. They contend that there is a substantial overlap between the matters raised in the WA Proceedings and the current proceedings, which arises because MSI made tactical moves in the WA Proceedings to gain an advantage. In their submission, allowing the current proceedings to continue would have the effect of unduly vexing and oppressing the Receivers and would create the potential for a multiplicity of, and inconsistent, findings between courts.

123    Given that the assessment of whether proceedings are an abuse of process is conducted in light of all the circumstances, the stay applicants’ arguments are considered jointly below.

The context in which the current proceedings arose

124    The circumstances in which the current proceedings arose and the steps which had occurred in relation to the WA Proceedings at the time the current proceedings were commenced, are important considerations as to whether there is an abuse of process.

125    In the early stages of the disputation, MSI’s main concern was to seek specific performance of the ASA and prevent the sale of the Assets to Appian. That was specifically identified in the Draft Writ and whilst it also raised the usual alternative of damages in lieu of specific performance, that was secondary to its main objective. It is important that the substantive or most relevant non-performance of the ASA relied on in that proposed action was an alleged failure by the Sellers to complete, as opposed to the non-performance of other obligations by other parties such as the Receivers. Indeed, as a result of the wide release given to the Receivers under cl 9 of the ASA, there was little scope of proceeding against them for relief in the way of damages. That had been made clear by Clayton Utz in the course of correspondence from an early stage, and the point was repeated on a number of occasions.

126    Compared to MSI’s Draft Writ, the WA Proceedings brought by the Receivers and the Sellers were even more targeted. By those proceedings, they sought only a declaration that the ASA had been validly terminated, as that would justify the completion of the Appian Sale Agreement despite MSI’s allegations that other parties had breached the ASA. That narrowly framed action, as appears from the brief pleading which identified the bare facts on which the Receivers relied as justifying sending the notice of termination, was both reasonable and appropriate for advancing their interests. They had the benefit of the broad release and indemnity in cl 9 of the ASA, which eschewed the existence of any claim against them for damages arising out of or in connection with the non-completion of the ASA or any breach of it. Further, they had a limited role in the completion of the ASA, with the result being that their only real interest was in clarifying the validity of its termination.

127    Given the foregoing, it is unsurprising that MSI regarded the WA Proceedings as involving the determination of a preliminary issue which it was content to have decided expeditiously. The Receivers were aware of this and complained about it at the strategic conference. They expressed their dissatisfaction that the issues which had been raised by MSI’s Draft Writ were not being advanced in the WA Proceedings and claimed that, in their absence, the WA Proceedings would be of little utility.

128    Conversely, MSI, by its counsel, indicated that the WA Proceedings could be treated as a hearing of the question of “liability”. Though that was an inexact description, it obviously identified that an important pivotal issue, from which a range of other issues would radiate, was whether the Receivers and Sellers had validly terminated the ASA. A conclusion that they had done so may have created a significant impediment to some of MSI’s claims and the scope of its recoverable damages. The contrary conclusion would form a solid basis from which several claims for breach of contract and ancillary related claims might be made. The submissions made by Mr Zappia KC for MSI at the strategic conference propounded the continuation of the WA Proceedings as an appropriate vehicle to determine that initial question such that, if it were determined against MSI, neither the Court nor the parties would be required to expend resources on the more complex issue of to what relief MSI was entitled, and that would benefit all parties.

129    The response of the plaintiffs’ counsel was that, if the claims referred to in the Draft Writ were not advanced, MSI might be estopped from raising them in the future either by an Anshun estoppel or an issue estoppel. In support of this, the plaintiffs’ counsel made reference to comments made by Hill J earlier in the strategic conference to the effect that there was a risk of the proceedings being “a multi-act play” (which seemingly meant that the resolution of the controversy may require several proceedings). It was then said that the plaintiffs wished an opportunity to see if they were able to bring all the issues between the parties to a head in the WA Proceedings. For that reason, they sought orders that the provisional dates given for the hearing of the proceedings not be confirmed, and that the Receivers and Sellers be given time to make amendments to their pleading. Hill J acceded to that course.

130    As it was, no substantial amendments were made by the Receivers and Sellers to their claims and certainly none which had the effect of bringing all issues of the overall controversy within the scope of the WA Proceedings.

131    The compliance by the Receivers and/or Sellers with cl 2.2 of the ASA was only conditionally relevant to the validity of the purported termination. It would only be relevant if it were determined that sufficient time had elapsed such that the temporal precondition to the right to terminate had been satisfied. On its face, this was clearly a significant issue for the Receivers and their failure to overcome it before Hill J was unsurprising. Nevertheless, the non-compliance with cl 2.2 had been raised and, for the Receivers, it appeared to generate some interest in obtaining evidence from Trafigura in Singapore. However, MSI’s withdrawal of reliance on cl 2.2 removed that as an issue.

132    The plaintiffs did amend their statement of claim to seek declarations that the Receivers were released from all claims which MSI had articulated in its Draft Writ and accompanying statement of claim. Whether they were entitled to that relief was “Issue 10” in the hearing before Hill J, though it was ultimately not decided because MSI had withdrawn all threats to commence proceedings against them by that time.

133    The result of the pre-hearing conduct of the parties was that, when the hearing of the WA Proceedings ultimately commenced, all that was effectively in dispute was the efficacy of the Receivers’ purported termination. The singularity of the debate is disclosed by Hill J’s summary of the issues arising from the pleadings in her Honour’s judgment: Mirabela Nickel Ltd (in liq) (receivers and managers appointed) v Mining Standards International Pty Ltd (No 5) [2023] WASC 62 [18] – [34]. That is not to say that the Receivers expressly agreed that the WA Proceedings involved only some type of preliminary issue, but it is undoubted that they were aware that this was how it was being treated by MSI and that the issues in contest were related only to that topic. It could not have been thought by any party that MSI had brought all of the claims which it might have for damages arising out of the ASA against all relevant parties to that agreement.

134    Nevertheless, the narrowness of the issues in the WA Proceedings arose, in the first instance, as a consequence of the limited scope of the Receivers’ disputation with MSI. Although the Receivers had a facilitating role in the performance of the ASA, they did not assume many substantive obligations to MSI and they had the benefit of a broad release and indemnity. It necessarily followed that the range of issues which could possibly be directly in dispute between them and MSI was small.

135    In summary, the Receivers’ interest was to obtain a declaration as to the validity of their termination of the ASA, and they brought proceedings generally confined to that issue. Though Atlantic Nickel was naturally interested in that question and a proper party to the proceedings: see A V Dicey, A Treatise on the Rules for the Selection of the Parties to an Action (William Maxwell & Son, 1870); Australian Commercial Research and Development Limited v ANZ McCaughan Merchant Bank Limited [1990] 1 Qd R 101, 105: it was not joined by the plaintiffs. MSI had no other issue to litigate as against the Receivers and, in the light of cl 9 of the ASA, it was appropriate not to advance any substantive claim against them. It was prepared to litigate to the full the issue propounded by the plaintiffs, and it openly indicated its intent to do so ahead of pursuing litigation against any other parties which might be affected by the outcome of the WA Proceedings. At no time did it permit the Receivers or the Sellers to believe that the resolution of the WA Proceedings would finalise all disputes concerning the ASA.

136    The foregoing gives context to the substance of the complaint now made by each of the stay applicants: that is, that MSI sought to have determined the central issue raised against it and did not seek to convert narrow declaratory proceedings into much more complex proceedings by advancing claims against third parties who, in turn, would make further claims against others including the Receivers. There was more than a reasonable basis for it to take that course. Forensically, it was not inappropriate to respond to the plaintiffs’ narrow claim in kind and without seeking to expand it beyond the issue as framed. That issue is reasonably seen as being pivotal and as affecting a number of MSI’s potential claims against third parties. No submission was made to the contrary.

137    The critical nature of the outcome of the WA Proceedings to MSI was apparent from its attempts to have the proceedings heard as soon as possible. At the strategic conference, it sought to have the hearing proceed on the provisionally allocated dates. As Hill J observed, it was, curiously, the plaintiffs who sought to delay the proceedings. At each step in the WA Proceedings, it was MSI which sought to advance the action and that extended to disclaiming reliance on non-compliance with cl 2.2 as vitiating the purported termination of the ASA.

138    It is appropriate to consider what might have transpired had MSI made a cross-claim against Atlantic Nickel in the WA Proceedings. First, substantive pleadings would have been required. Secondly, they would raise significantly wider issues, including questions of breach of contract, the suffering of loss, and the quantification of damage. That latter issue would be likely to involve valuation evidence of the Santa Rita nickel mine and of Atlantic Nickel, which would be substantial matters on their own. Thirdly, time and delay would have occurred whilst third party proceedings were commenced against the Receivers, who would be entitled to contest any and all of the evidence relied upon by the other parties. The consequence of this would have been that the five-day hearing for declaratory relief would not have occurred on 10, 11, 14, 15 and 23 December 2020. Rather, it is likely that any trial of the combined issues would have taken place many months, if not years, later and, even on a conservative estimate, would have taken three or four times as long to hear.

139    In such circumstances, the forensic and practical rationales for MSI to focus upon the issue raised against it are obvious. It took an entirely defensible course and was completely transparent in doing so.

MSI’s inability to pursue its claims in the WA Proceedings

140    In an affidavit of 12 May 2022, made for the purposes of an earlier application made by MSI to serve the current proceedings out of the jurisdiction: see Mining Standards International Pty Ltd v Atlantic Nickel Mineracao Ltda [2022] FCA 623: Mr Russell, the solicitor for MSI, identified three reasons why MSI did not make the claims that it now advances in the WA Proceedings. The first was that certain facts, critical to MSI’s claims in the current proceedings, only became known to him and MSI late in the course of the WA Proceedings. The second reason was MSI’s desire to keep the WA Proceedings as simple as possible, so that they could be heard and determined as soon as possible. The third reason, being a general overarching reason, was that MSI was not in a financial position to fund a major cross-claim against Atlantic Nickel or others.

141    In the course of the hearing of the present application, Mr Russell was cross-examined about the veracity of those assertions. In general terms, he responded to the questions put to him in a straightforward manner and without hesitation. I accept that, in doing so, he was attempting to accurately recall the events which had occurred and what his considerations were at the time. He did not attempt to obfuscate or avoid the questions asked of him, and he retained a good recollection of the events in respect of which he was interrogated. He was a truthful witness and, despite the cross-examination, the Court was not seriously asked to disbelieve any of his evidence.

142    Mr Russell’s evidence that, at the relevant times, MSI was not possessed of sufficient funding to engage in major litigation against the Receivers, Atlantic Nickel, or any other party to the ASA, should be accepted. That absence of funds lay at the heart of its inability to proceed with its claims relating to the alleged failure to give it the benefit of the ASA or that breaches had occurred which denied it that benefit. It was not seriously suggested that it did have the financial capacity to litigate those matters.

The discovery of new information

143    In support of the first reason given by Mr Russell for not advancing earlier the claims made in the current proceedings, Mr Russell referred to certain documents received on 9 September 2020 and 23 October 2020 — a time shortly prior to the dates originally set for trial of the WA Proceedings. Mr Russell said that he regarded those documents as being “vitally important and in MSI’s favour”.

144    It was submitted by Atlantic Nickel, amongst other things, that knowledge of the contents of the lately discovered material would have been irrelevant to the decision whether to bring a counterclaim or cross-claim in the WA Proceedings. However, as Mr Russell indicated, had those documents been provided at an earlier time, the litigation funders with whom he had been negotiating may well have changed their minds about refusing to fund any substantial litigation. That said, MSI conceded that if the discovered documents were not sufficient to change the mind of the funders, those documents would not have made any difference to whether MSI could have widened the scope of the WA Proceedings by way of a counterclaim or cross-claim.

145    Whilst there were some tentative suggestions that the documents in question were not as important as Mr Russell might have perceived, that was not clearly put to him and not made out. It was also suggested that one of the documents, being a file note of 6 November 2017, would not have been relevant to the claims against Atlantic Nickel. However, that cannot be so. The note refers to discussions at a meeting between several parties about the existence of an alternative offer from Appian and how that might be pursued. In the context where the parties believed that there was an effective “no shop” clause in the ASA that prevented the Sellers and others from negotiating with third parties, the document could well have been poignant. Though personnel from Atlantic Nickel were not identified as having attended the meeting, it would not have been unreasonable for Russells and MSI to believe that it was aware of the dealings with Appian or would have become aware at around that time.

A desire to keep the WA Proceedings confined to the issue raised by the Receivers

146    The second reason given by Mr Russell (being a desire to keep the WA Proceedings simple) was supported by MSI’s demonstrated desire to maintain the provisional hearing dates allocated to the matter, though that desire was somewhat thwarted by the plaintiffs having the matter deferred on several occasions. As mentioned, MSI’s position in this respect was forensically defensible. The WA Proceedings were confined and targeted, and the issue raised by them was apparently pivotal to MSI’s claims. It was within MSI’s legitimate interests to have the claim for declaratory relief resolved as expeditiously as possible so that MSI might more precisely evaluate its position as against others who were not parties to the action. That approach was further supported by the rationale that, if the issue about the validity of the termination went against MSI, it might have no relevant claims against any other parties.

147    There was no dispute as to the focus of the WA Proceedings. Indeed, it was put to Mr Russell in cross-examination that the essence of the debate in the WA Proceedings was whether the Receivers had validly terminated the ASA on 22 November 2017 and, in that context, whether the right to terminate arose 14 days after the execution of the agreement by the parties other than Atlantic Nickel, or whether the latter was required to sign to cause the time to commence running. With respect, the cross-examination of Mr Russell on that topic only tended to establish that there were substantial issues between the parties in relation to the validity of the termination, and that circumstance fortified the view that it was appropriate for that issue to be determined prior to ascertaining what other claims might exist against other parties.

148    It was also put to Mr Russell in cross-examination that he was in error in thinking that, if the Receivers’ claim against MSI in the WA Proceedings succeeded, MSI would have very little in the way of claims to pursue against the Receivers. To a degree, that was true. The veracity of MSI’s claims against other parties to the ASA for breach of contract, for unconscionable conduct, and for participating in the Receivers’ breach or unconscionable conduct, would not necessarily be defeated by a finding that the ASA had been validly terminated. That is because its claim is for damages in respect of the conduct which prevented it from completing the ASA, which does not wholly depend upon whether the Receivers validly terminated when they claim they did. On the other hand, whether there was a valid termination by the Receivers at the time claimed may well be important to whether MSI could have completed the ASA prior to then. Further, as Mr Russell identified, MSI sought to advance a proposition that the Receivers had engaged in unconscionable conduct which had the consequence of denying them the right to terminate. If that claim had been lost, it is possible that the ability to characterise the Receivers’ conduct in that way, which is relevant to the current proceedings, could have been substantially damaged.

149    In any event, the approach adopted by MSI at the time of the WA Proceedings was to identify the validity of the ASA’s termination as being a critical issue. For present purposes, it is sufficient that it was not unreasonable for MSI to believe that, if the Receivers were successful in their assertion that the ASA had been validly terminated, it may have encountered difficulties in establishing some of its claims or that substantial damages might not be recoverable. Therefore, it was forensically defensible for it to approach the WA Proceedings on the basis that it was important and appropriate for the issue raised by the Receivers and Sellers to be determined as a matter of priority.

Lack of funds to pursue claim

150    The major hurdle which prevented MSI from advancing a claim against Atlantic Nickel either prior to, or in the course of, the WA Proceedings was its lack of funds. It cannot be doubted that MSI was desirous of pursuing its substantive claims against several parties to the ASA as soon as it could afford to do so. From 2017, it negotiated with several litigation funders to finance the pursuit of its claims, but that endeavour was both unsuccessful and overtaken by the commencement of the WA Proceedings with which MSI then had to deal.

151    The evidence disclosed that Mr Russell had negotiated with a number of litigation funders in relation to MSI’s financial requirements for pursuing its claims arising from the non-completion of the ASA. Those negotiations commenced well prior to the commencement of the WA Proceedings and, indeed, as early as late 2017, being shortly after the ASA was terminated. They continued through to mid-2019, during which time seven funders rejected MSI’s requests. Finally, on 12 June 2019, an agreement was struck with Balance REV, which offered limited funding in relation to the defence of the WA Proceedings which had recently been commenced. That funding was for a total of $412,000 plus GST, but did not include any amount for meeting any order for security for costs. The terms of the funding provided that Balance REV received an exclusive option to fund any further proceedings available to MSI, and such proceedings were not to be commenced without the prior written consent of Balance REV. Balance REV, however, refused to fund the making of any counterclaims in the WA Proceedings.

152    That latter point was established by an email of 11 December 2019 from Balance REV to Russells, in which the former indicated that it did not have any appetite to fund any counterclaim in the WA Proceedings. In that email, a reference was made to resolving MSI’s claims as part of the then proceedings. Presumably, that meant that if the occasion arose to resolve the WA Proceedings through negotiation, MSI’s potential claims might be incorporated into a broader settlement.

153    Although it was suggested to Mr Russell that MSI had always sought funding on the basis that the funder would first fund the defence of the Receivers’ claims and then fund the recovery proceedings, his denial of that proposition should be accepted. For most of the time during which MSI sought funding, the WA Proceedings did not exist. MSI’s sole interest appeared to be to vindicate its rights in relation to the ASA. The negotiations with Balance REV were somewhat different as, by the time that the funding was agreed, the Receivers and the Sellers had commenced the WA Proceedings. During cross-examination, Mr Russell was taken to an email of 1 June 2019 from a litigation funder, Burford Capital (Burford), which suggested that MSI was looking for funding to defend the WA Proceedings and then subsequently prosecute its claims. Though he was questioned about that evidence, he denied that this was the substance of his discussions with Burford and it was not suggested that he was mistaken about that evidence. He acknowledged that he approached Burford about funding MSI’s claims and that, whilst discussions were occurring, the WA Proceedings were commenced such that MSI had to deal also with the question of how the defence of that action would be funded. There was nothing in the material, however, which supported the contention that MSI intentionally pursued a strategy that it would defend the WA Proceedings first and then, if successful, would advance its own claims. That may have been the consequence of the circumstances as they occurred, but it was not the deliberate direction which it chose. As Mr Russell indicated, MSI was at the mercy of the litigation funders who had little interest in funding the defence of the Receivers’ claim and who were only interested, if at all, in funding MSI’s claims under the ASA.

154    A similar point was sought to be made by reference to the terms of a letter from Russells to another funder, Balance Legal Capital LLP, on 12 July 2021, in which Russells indicated that it was seeking funding for the prosecution of the current proceedings. In it, reference was made to these proceedings as being the “Stage 2 proceedings” or “Further Proceedings”, and it was suggested by the Receivers that this evidenced an intention from the beginning that MSI would undertake a staged process of the litigation. That, too, can be rejected. It is obvious that MSI was effectively forced to take the course which it did. Whilst it was able to secure funding to defend the WA Proceedings, it was financially unable to undertake other substantive litigation itself. In this way, the sequential pieces of litigation occurred despite its intention.

155    The position by late 2019 was that MSI was unable to obtain litigation funding to pursue its claims, and all that it could do was defend the action that had been brought against it. It may have been that a negotiated settlement of the WA Proceedings could have produced a settlement of MSI’s claims, but that did not eventuate. Otherwise, there is nothing to support the submission that MSI wished to hold back its claims for its own convenience.

156    To a degree, MSI’s inability to prosecute all that it wished to due to a lack of funding was emphasised by its withdrawal of the defence founded upon cl 2.2. The evidence firmly established that it withdrew that defence as a consequence, in part, of the costs associated with defending the plaintiffs’ appeal against Hill J’s refusal to allow them to attempt to obtain evidence from Singapore. It should also be noted that another reason that MSI, by its solicitors, was motivated to jettison the defence was the inevitable delay that would occur in setting the matter down for hearing were an appeal to proceed. Although this was relied upon by the stay applicants as evidencing “tactical manoeuvring”, as is discussed later in these reasons, it was obviously not. All it showed was that MSI took those steps necessary to ensure that the WA Proceedings were heard as soon as possible, at as little cost as possible, and that the central issue in dispute was determined. Though the material evidences that other matters were relevant to the decisions taken by MSI and its solicitors, such is the nature of litigation. Forensic decisions are necessarily based upon multiple considerations. Though in the course of oral submissions, counsel for the Receivers took the Court to much of the evidence surrounding this issue, all that did was fortify the conclusion that MSI made its forensic decisions for appropriate reasons and, most importantly, to advance the determination of the claim which had been made against it in the WA Proceedings in as short a time frame as possible.

157    It was suggested to Mr Russell in cross-examination that, if MSI had no interest in pursuing the claims which it might have, there was no point in defending the plaintiffs’ claims as they were made in the WA Proceedings. He rejected that proposition, and rightly so. The evidence established that MSI was interested in pursuing its claims, and that it had attempted to secure the necessary funding but was unable to do so. Whilst that was happening, the Receivers sought to bring about a crystallisation of the rights between them, the Sellers, and MSI by commencing the WA Proceedings. It would have been irrational for MSI to allow judgment to be entered against it and thereby potentially hamper any future action which it might have. By defending the WA Proceedings, it avoided being put into a position from which it might not resile if the opportunity arose for it to enforce what claims it might have. Indeed, allowing judgment to go against it would have brought with it both an injunction and a costs order. Mr Russell was correct to reject the suggestion that MSI should have acquiesced to the claims in the WA Proceedings.

158    During his evidence, Mr Russell further identified that, if such funding had been available for the purposes of the WA Proceedings, he would have caused the claims to be advanced as a counterclaim in those proceedings. That evidence was not contested and it should be accepted.

159    Had a counterclaim or cross-claim been advanced in the WA Proceedings, that would inevitably have resulted in an application for security for costs. Clayton Utz, on behalf of the Receivers, had already threatened that such an application would be made, and it was not suggested that they would not have done so had MSI advanced its claims. There was a slight suggestion that such an application would not have been successful because MSI would, in substance, have been in the position of defendant, but that lacks merit. Though parts of any counterclaim might have overlapped with the issues in the Receivers’ claims, MSI’s claims were much wider and would have been advanced against Atlantic Nickel as well. In all probability, had MSI advanced a counterclaim or cross-claim, it would have attracted applications for security for costs by all cross-respondents and, it is possible that one could have succeeded. Given MSI’s then financial position, that would have brought the action to a halt.

160    An unusual suggestion put to Mr Russell, and a major point raised in written submissions, was that he ought to have informed the opposing parties in the WA Proceedings that his client was in financial difficulties. Mr Russell correctly rejected the proposition. It would have been a breach of his duty to his client and, whilst the proposition was advanced, no attempt was made to justify why he might have done that.

161    It was also suggested by the Receivers that MSI did not require funding to commence the proceedings and that this was established by the fact that the current proceedings were commenced prior to the funding agreement being put in place. However, Mr Russell’s evidence to the effect that he was convinced that funding would be forthcoming by the time the current proceedings were commenced, should be accepted. It seems that negotiations with the funder that ultimately provided the necessary finance had reached a point whereby he could legitimately form that view. Confidence in that conclusion can be maintained despite it taking some months for the funding agreements to be put in place. It should be mentioned that Mr Russell was not seriously challenged on this issue under cross-examination.

162    Despite this issue taking up substantial time during the hearing, it is relatively straightforward. Until about the time when the current proceedings were commenced, MSI did not have sufficient financial resources to commence and prosecute its claims arising from the non-completion of the ASA. Its desire to advance them as soon as possible was evident from its negotiations with multiple funders commencing in 2017. However, as the events occurred, it was not able to secure suitable funding to enable it to bring its claims in the WA Proceedings.

A financial inability to commence proceedings is relevant

163    Atlantic Nickel submitted that the financial inability of a defendant to advance a cross-claim against third parties is not a reasonable excuse for not doing so. This was said to flow from the High Court’s decision in UBS v Tyne, and it culminated in the statement, “And if you’re impecunious, well, you shouldn’t be litigating”. In support of this it was said that, even if a person reasonably omits to advance a claim at a point of time due to a lack of funds, the policy of ss 37M and 37N of the Federal Court Act precludes them from later advancing the claim when they are financially able to do so. To allow a party to advance claims only where they are financially able to do so would “run counter to the public interest”.

164    With respect, though it may be possible to eke out some support in UBS v Tyne for that approach, had such a position been intended by the High Court one might have expected that it would have been made more explicit. Whilst it is true that the High Court did not accept that Mr Telesto’s strategic decisions, based upon what he assessed was a more economical course, were a sufficient explanation for the impugned conduct, it did not consider the position whereby a party was forced by lack of means to choose one course rather than another. Until the High Court makes it clear that a party’s lack of means is not a sufficient reason for failing to bring litigation when it is convenient to another party, it is preferable to proceed on the basis that impecuniosity can, in some circumstances, provide a reasonable excuse for the purposes of the doctrine of abuse of process.

165    That conclusion is consistent with the decision of the House of Lords in Johnson v Gore Wood. There, the plaintiff, Mr Johnson, conducted his business through a number of companies under his control, including Westway Homes Ltd (WWH). On behalf of WWH, he instructed Gore Wood & Co (Gore Wood) to act as solicitors for it in connection with a proposed purchase of land. That firm regularly acted on behalf of Mr Johnson and some of his companies other than WWH as well. WWH later made claims against Gore Wood in relation to what it alleged was negligence in the services provided to it in relation to the land acquisition. The resulting litigation was eventually settled. By the settlement agreement, Gore Wood agreed to pay certain sums to WWH with no admission of liability, in full and final satisfaction of all claims of WWH against Gore Wood, and vice versa. Four months after the settlement, Mr Johnson made claims against Gore Wood in respect of the personal loss which he had suffered resulting from the failed land transaction. He did not bring his claims against Gore Wood at the same time as WWH had for a number of reasons. They included that he was in no financial position to do so until he obtained legal aid, that advancing his own claims would have substantially delayed the progress and resolution of WWH’s claims which may have led to its liquidation, that his and WWH’s financial resources had been exhausted by the litigation against Gore Wood, and that joining his own claims would have meant that the trial dates for WWH’s claims against Gore Wood would have been lost. Very early in the litigation pursued by WWH, Mr Johnson had indicated to Gore Wood that he had personal claims against the firm as well, and he continued to maintain his entitlement to pursue them.

166    In his consideration of Gore Wood’s submission that Mr Johnson’s claims against it constituted an abuse of process, Lord Bingham noted (at 31) that it was wrong to hold that merely because a matter could have been raised in earlier proceedings that it should have been, so that raising it later constituted an abuse. He identified that whether circumstances can be so labelled involves a “broad, merits-based judgment” which takes account of the public and private interests involved and all the circumstances of the case with a focus on whether a party is misusing or abusing the process of the court. In relation to a lack of funds, his Lordship observed at 31:

Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim.

167    In that case, no abuse arose and regard was had to Mr Johnson’s financial inability to advance his own claims at the same time as WWH’s. It was also relevant that Mr Johnson had made it clear that he intended to bring claims in his own name in the future and he did not resile from that. Indeed, it was found that the parties had entered into a settlement agreement in the WWH litigation which contemplated that further proceedings might be pursued by Mr Johnson personally.

168    The relevant circumstances of the present matter include MSI’s financial inability to advance a substantial cross-claim in the WA Proceedings against Atlantic Nickel or the Receivers. It was not, at that time, even able to provide security for costs which would have likely been ordered were it to make a counterclaim or a third party claim, let alone fund the prosecution of its own action. That financial incapacity should not be held against it in the present circumstances. Rather, it provides a factor militating against a conclusion that any abuse exists. Whilst MSI did not at the time admit to its impecuniosity, it would have been foolish to do so. It cannot be said that in order to rely upon a lack of funds for not bringing an action, a party is required to disclose its forensic weakness to the other party at an early stage. Even so, in this case, the repeated threats by Clayton Utz to bring an application for security for costs were MSI to commence any proceedings, indicates the Receivers’ awareness of MSI’s lack of funds.

169    Even if it can be said that a lack of funds to advance a cross-claim is not relevant to the question of whether an abuse occurred, in this case, MSI’s lack of funds provides the reason for it not advancing its claims earlier. This is, therefore, not a case of a deliberate holding back of a claim in order to obtain a forensic advantage. Further, even if MSI’s decision had the effect of causing some harassment or inconvenience to the Receivers or Atlantic Nickel, which is not to say that it did, it should be relevant that such effects were unintended.

The communication of an intention to bring proceedings in the future

170    The fact that the party asserting an abuse of process was aware that the other had indicated an intention to bring proceedings in the future is a matter which also militates against staying the second action. At the very least, it is relevant that the party seeking the stay was not misled into believing that the resolution of the initial proceedings would resolve the controversy with the other party.