Bell Group N.V. (In Liquidation) & Anor v The State of Western Australia; W.A. Glendinning & Associates Pty Ltd v The State of Western Australia

[2016] HCATrans 11

[2016] HCATrans 011

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S248 of 2015

B e t w e e n -

BELL GROUP N.V. (IN LIQUIDATION) ARBN 073 576 502

First Plaintiff

MR GARRY TREVOR AS LIQUIDATOR OF BELL GROUP N.V. (IN LIQUIDATION) ARBN 073 576 502

Second Plaintiff

and

THE STATE OF WESTERN AUSTRALIA

Defendant

Office of the Registry
  Perth  No P63 of 2015

B e t w e e n -

W.A. GLENDINNING & ASSOCIATES PTY LTD (ACN 008 762 721)

Plaintiff

and

THE STATE OF WESTERN AUSTRALIA

Defendant

Directions hearing

BELL J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO SYDNEY AND PERTH

ON MONDAY, 8 FEBRUARY 2016, AT 12.00 PM

Copyright in the High Court of Australia

____________________

MR A.A. D’ARCY:   If your Honour please, I appear for the plaintiffs in the Bell Group matter.  (instructed by Lipman Karas)

MR G.R. DONALDSON, SC, Solicitor‑General for the State of Western Australia:   If your Honour please, I appear with my learned friend, MS R. YOUNG, for the defendants in S248 and P63.  (instructed by State Solicitor’s Office (WA)).

MR S. PENGLIS:   Your Honour, I appear with my learned friend, MR A.K. SHARPE, on behalf of the plaintiff in matter P63, Glendinning v The State of Western Australia.  (instructed by DLA Piper Australia)

MR DONALDSON:   Your Honour, while your Honour is taking appearances, could I just mention one other matter?  There is a third proceeding that is actually not listed before your Honour.  It has just been commenced, but it is a matter that deals with the same issues, and that is number P4 of 2016.  Mr Vaughan, who appears for the plaintiff in that matter is in Court, your Honour, and I think everybody is proposing that the three matters be programmed together, as it were.

HER HONOUR:   Yes.  Is Mr Vaughan at the Bar table?

MR DONALDSON:   He can be immediately, your Honour.

HER HONOUR:   There would seem, in light of it being common ground, that there is some need for the matter to be expedited and, as I rather understand it, some common ground that all three matters should proceed at the same time, that perhaps it would be convenient if Mr Vaughan were to be at the Bar table and I can just confirm with Mr Vaughan the intended attitude of the plaintiffs in the Maranoa and Woodings matter.

Finally, the Commonwealth, as I understand it, has not made a decision to intervene but, nonetheless, has filed some submissions.  Is there someone for the Commonwealth?

MR J.A. WATSON:   Yes, your Honour, I appear with my learned friend, MS Z.C. HEGER.  (instructed by Australian Government Solicitor)

HER HONOUR:   Yes.

MR WATSON:   We are seeking leave to appear at these directions.  The Commonwealth Attorney has not yet made the decision to intervene but, in practical circumstances, we have been in touch with the other parties about programming and timetables and we seek that leave in the interests of hopefully assisting the Court.

HER HONOUR:   Yes.  Thank you, Mr Watson, you have that leave.  The first question is whether or not there is a reasonable prospect that the parties might agree on the form of a special case.  I do not suggest that there would be, as it were, a consolidation of the proceedings but, as I understand it, the parties have given some thought to a uniform special case relying on the same facts, annexing the same documents and asking the same questions, save that in the Bell Group N.V. matter there is an additional ground of challenge based on the Chapter III challenge.  Is that the position?

MR D’ARCY:   Your Honour, in relation to that, the Glendinning proceedings also raised the same Chapter III point.

HER HONOUR:   I see.

MR D’ARCY:   As I understand it, Mr Woodings’ proceedings, however, will be confined to the Tax Act inconsistency and Corporations Act inconsistency points but, other than that, the issues are identical and overlap.  We obviously see the sense in the parties endeavouring to agree a single special case, if that is at all possible.  Perhaps, your Honour, if I could just update you as to the current status of that?

HER HONOUR:   Yes, do.

MR D’ARCY:   We served an initial draft in mid‑December last year from the parties.  We then filed a further draft in accordance with the orders made on the last directions hearing, and we did that on 22 January.  The State on 4 February served a joint amended case, incorporating some aspects of the Glendinning Case stated, some aspects of our case stated and some aspects that the State had drafted.  As I say, we received that on Friday.  We have turned around our comments and response to that draft case stated over the weekend and we served the parties with a revised draft on Sunday, so the ball is in the court of the other parties as to their response to that document.

I should say that while we are endeavouring to agree it ‑ and a large part of the material has been agreed, insofar as we are concerned ‑ there are some aspects of the draft joint case that have apparently been agreed between Glendinning and the State which BGNV is unable to agree to and that is because the matters agreed to are directly inconsistent with the case that BGNV runs in this matter.

So unless there is movement from Glendinning and the State on issues such as that, then it simply as a practical matter will not be possible to have a single case stated or special case but that is hopefully something that we can sort out between the parties by way of conferral.  As I say, we have tried to keep the process moving as quickly as possible by turning around our comments and response within less than a business day, given the urgency of the matter, so we await the response of the other parties to the draft that we have prepared.

HER HONOUR:   Yes.  Can I just raise with you, Mr D’Arcy, this?  If I go to Mr Lipman’s affidavit, there is annexed to that the amended statement of claim for which you seek leave to file ‑ ‑ ‑

MR D’ARCY:   Yes, your Honour.

HER HONOUR:   ‑ ‑ ‑ and when one looks to the relief that is claimed in that document it is, firstly, a declaration that the Act by which I refer to the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015, which from now on I will describe as the WA Act, is invalid. Alternatively, you seek a declaration that provisions of Parts 3 and 4 and specified provisions of the WA Act are invalid.

When I turn to the draft special case annexed to Mr Lipman’s affidavit, the second question asks “Are any provisions and, if so, which of the WA Act invalid?”  Has any attention been given to why the form of the question asked in the proposed special case should be broader than the relief claimed in the declaration in some respects?

MR D’ARCY:   Your Honour, it was simply a drafting technique in the draft special case to state – ultimately, the question for the Court is, is the Act or any provision of the Act invalid for the three grounds which have been identified?

HER HONOUR:   Yes.

MR D’ARCY:   The special case simply asks that question as broadly as it possibly can because it was with a view to the fact that there were going to be other parties bringing their own proceedings and it may well be that, for example, because Mr Woodings does not run a Chapter III argument, which we in Glendinning do, that his position may be that certain sections are not invalidated because that ground is not relied upon.  So, rather than specify dozens and dozens of sections of the Act and link them to the individual grounds of challenge we thought it preferable to ask the broader question such as that which appears in the draft special case.

HER HONOUR:   I understand that your primary argument is that the WA Act is invalid as a whole, but you do have an alternative argument and that does identify particular parts and provisions of the Act.

MR D’ARCY:   Yes.

HER HONOUR:   I just wonder if attention should be given in the special case to refining it.  I can understand that, on your broad case, it is a challenge to the Act in its entirety, but should not the special case pick up your alternative case in terms with some precision?

MR D’ARCY:   Certainly, your Honour, we are happy to look at that.

HER HONOUR:   All right.

MR D’ARCY:   Essentially, we thought that would be ultimately an issue of severance with that, but that is something we can certainly take on board, your Honour.

HER HONOUR:   Yes, very well.  Now, if it is merely a question that the plaintiffs in the Maranoa proceedings will not raise a Chapter III argument, one would still see room, potentially, for the matter to proceed on the basis that each party agreed on the form of a special case, as it were, in the Bell Group proceedings and the Glendinning proceedings, that special case having a further component to it, being the Chapter III argument.  But do I understand it may be that there are larger differences than that between the parties?

MR D’ARCY:   Your Honour, there should not be because the approach that was adopted by Glendinning was to copy our statement of claim as much as possible.  They sought our permission to do it and we gave it, for obvious reasons.  As I understand it, Mr Woodings is also adopting that approach of adopting our statement of claim where he considers it appropriate to do so, so there should be essential common ground between the parties. 

It is simply that we noted that one of the paragraphs inserted by Glendinning in the draft case concerns an issue of law which is relevant to the determination of the constitutional issues and it is framed in a way which is inconsistent with our case.  It is also inconsistent with the case advanced by Glendinning in its statement of claim, although not in its reply, and it is a point that, as I say, we cannot agree with because it is a limb which is essential to one of our inconsistency arguments. 

So it will ultimately depend upon the attitude adopted by the State and Glendinning to that point as to whether they wish to push it, or press it, in which case it will be difficult to agree a consolidated joint case, but if they agree with the comments that we have made and the paragraph is removed, along with other paragraphs we have identified, then it should be possible to have a single case applicable to all parties.

HER HONOUR:   As I say, I have not seen it as consolidating the proceedings, Mr D’Arcy.

MR D’ARCY:   No, your Honour.

HER HONOUR:   All right.  Now, I note in your minute of proposed orders, Mr D’Arcy, you propose that I refer the matter into the Full Court for hearing on 5 and 6 April.  I can indicate to the parties that those dates are available, and I think as everyone understands, the aim is to work towards them, but I do not propose today making an order referring into the Full Court a special case that I have not seen. 

So what I had in mind, if there was a measure of agreement, was making orders – I know there is some difference between you about timetabling issues, but making orders such that on the filing of the special case, provided it was appropriate, I might in chambers make an order then referring it to the Full Court on 5 April next.  Is there anything you wish to put about that?

MR D’ARCY:   Your Honour, we are content with that.  This minute of order was prepared prior to receipt of the State’s comments on our draft.  We were hoping that the matter would have been agreed by 4 February which would have enabled your Honour to make that order, but we understand in the absence of such agreement it is premature at this stage.

HER HONOUR:   Yes.  Now, as far timetabling goes – well, perhaps before I get to that, Mr D’Arcy, I might ‑ ‑ ‑

MR DONALDSON:   Sorry, your Honour, it is Donaldson in Perth.

HER HONOUR:   Yes.  Thank you, Mr Donaldson.

MR DONALDSON:   Your Honour, it may assist because the parties have been talking about these matters before your Honour came into Court.

HER HONOUR:   Yes.

MR DONALDSON:   If your Honour has the Bell Group N.V. minute of proposed orders?

HER HONOUR:   Yes, I do.

MR DONALDSON:   Your Honour, I think my learned friend, Mr D’Arcy, wants to make a further amendment to the statement of claim which deals with point 1.  We do not have any difficulty with that, your Honour.  We do not have any difficulty with 2; 3 will simply go out, in light of what your Honour has said.  Order 4 can be in those terms.  Could I simply make this observation, your Honour, dealing with the point my learned friend, Mr D’Arcy, made?  If I am understanding the point that my friend is referring to when he says “a particular matter of law that cannot be agreed”, we may have to come back before your Honour but, in any event, we will know that, your Honour, well before 22 February, if I could put it that way.

HER HONOUR:   Yes.

MR DONALDSON:   In relation to 5, your Honour, that is agreed; 6 is agreed; 7, your Honour, the dates are agreed but if your Honour could – sorry, no, 7 is agreed.  I am sorry, your Honour, I am going off the old numbering now, they will be renumbered, will they not?  So what is 7 will become 6 ‑ ‑ ‑

HER HONOUR:   Well, Mr Solicitor, if you can continue going off the numbers on the document I have in front of me, I think we will be on safer ground.

MR DONALDSON:   Okay, it will be easier.  Thank you, your Honour.  Easier for me as well; thank you, your Honour.  So what is 7 is agreed.  It is proposed to insert a new order after that, your Honour, which will be, in effect, that the Commonwealth if it intervenes – and without going through the irrelevant words, but the Commonwealth will have until 30 March, your Honour, to file any written submissions.

HER HONOUR:   Yes.

MR DONALDSON:   Then over on 8, the existing 8, your Honour, that date of 29 March will become 1 April.

HER HONOUR:   I see.

MR DONALDSON:   Then the only other issue, your Honour, that my learned friend, Mr D’Arcy, has suggested – and for my part, I do not think we need an order, your Honour – but it is the extent to which we are responding to anything from the Commonwealth, who will have their material in by 30 March, that we do that by 1 April as well, which - we are content to simply do that, your Honour.

HER HONOUR:   Very well.

MR DONALDSON:   So pretty much everything is agreed, if I might say, your Honour.  Your Honour, those orders, we have had an opportunity to speak with the parties in the other two matters as well.  I think, without verballing anybody here, it would be fair to say, your Honour, that those same orders can be made in all three matters, save for order 1, your Honour, which deals specifically with the Bell Group matter and the statement of claim there.

HER HONOUR:   Yes.

MR DONALDSON:   Can I say, your Honour, plainly it is everybody’s intention that there will be one agreed special case in an agreed form, not consolidated, but in an agreed form.  That is what everybody is working toward, your Honour.

HER HONOUR:   Yes, thank you.  Well, now, Mr Penglis, is there ‑ ‑ ‑

MR PENGLIS:   Your Honour, I cannot usefully add to that.  My learned friend, Mr Solicitor, did not verbal me.  We are content with orders, as my learned friend has just indicated, save, as he has said, for paragraph 1 which is not relevant to our proceedings.  May it please the Court.

HER HONOUR:   Yes.  Thank you, Mr Penglis.  Mr Watson, do you wish to be heard or are you content with matters as they have fallen out?

MR WATSON:   We are content, your Honour, and grateful for the discussion of the parties and accommodation.

HER HONOUR:   Thank you, Mr Watson. 

MR J.C. VAUGHAN, SC:   Your Honour, Vaughan in Perth, I am for the plaintiffs in the Maranoa proceedings, P4 of 2016.  (instructed by Ashurst Australia)

HER HONOUR:   Yes, Mr Vaughan.

MR VAUGHAN:   We will fall in with those orders as well, other than order 1.  Just to also say that, of course, we have not got pleadings in our matter yet.  We did file a summons.  I do not know whether that summons has found it to your chambers administratively.  It is obviously not listed.

HER HONOUR:   I have received electronically a copy of your summons and I think I am right, Mr Vaughan, in saying a copy of proposed orders sought on a summons for directions.  Now, the matter was not listed before me today.  You are here.  The first defendant is here.  The submissions that have been made on behalf of the first defendant have suggested a willingness to see orders made which, as I see it, are broadly in terms of those that you seek in your summons for direction.  Is there some difficulty with me making orders today?

MR VAUGHAN:   The only difficulty is that while we have served the second defendant – and I apprehend that they have representatives in Court – they have not yet put in an appearance and we do not know what their intentions are concerning the proceedings.  We rather suspect that they will simply abide but, technically, that is the position.

HER HONOUR:   Well that, I think, is a fairly strong technical reason why orders cannot be made today in the Maranoa Transport proceedings.

MR VAUGHAN:   Very well, your Honour.

HER HONOUR:   Mr Vaughan, I take it that those who instruct you will work towards this timetable and the matter will have to be regularised by the matter coming back and orders being made, possibly by consent, once ‑ ‑ ‑

MR VAUGHAN:   I am obliged to your Honour.

HER HONOUR:   Yes, thank you.  Very well, does that ‑ ‑ ‑

MR D’ARCY:   Your Honour, could I just mention one thing in relation to order 1 and the leave to amend the statement of claim?

HER HONOUR:   Yes.

MR D’ARCY:   If I can ask your Honour’s indulgence, we noticed this morning a minor amendment that needs to be made to paragraphs 80 and 81 of the statement of claim.

HER HONOUR:   Paragraphs 80 and 81?

MR D’ARCY:   I have spoken with – 80 and 81 to make it consistent with paragraph 82.

HER HONOUR:   Yes.

MR D’ARCY:   At the moment, paragraphs 80 and 81 give a list of various sections of the Corporations Act.  We want to replace those references with simply a statement referring back to the provisions of the Corporations Act referred to in paragraphs 60 to 75 of the statement of claim which, as I say, is consistent with the wording used in 82, and we just wish to avoid any potential confusion.

HER HONOUR:   Yes.

MR D’ARCY:   I spoke with Mr Donaldson just before Court this morning.  As I understand it, he does not have any difficulty with that proposed amendment, so subject to that point that would be the only addition to the amendment, other than those already identified.

HER HONOUR:   Very well.  Thank you for that, Mr D’Arcy.

In matter number S248 of 2015, there will be the following orders:

1.The plaintiffs have leave to amend the statement of claim in the form of annexure A to the affidavit of Mr Lipman, sworn on 4 February 2016, together with the further amendment outlined by Mr D’Arcy on the hearing.

Now, one matter of clarification, Mr D’Arcy and Mr Donaldson; is it still proposed that the plaintiffs would file and serve the agreed special case on or before 12 February and that the special case court book would be filed on or before 22 February?  I must say, I had rather thought, perhaps, in light of the matters that you raised earlier, Mr D’Arcy, that a date somewhat further out than 12 February for the special case, but is that still the agreed position?

MR D’ARCY:   Your Honour, I think pushing it out is a sensible thing.  As I say, our comments were given yesterday so if we made that consistent with the provision of the court book for 22 February that, I think, would give everyone enough time.

HER HONOUR:   Yes.  Mr Donaldson, do I take it there is no difficulty with that?

MR DONALDSON:   None, thank you, your Honour.

HER HONOUR:   So that what it would mean, Mr Donaldson, is that the plaintiffs would file and serve the agreed special case and the special case court book on or before 22 February?

MR DONALDSON:   Yes, and the parties will be liaising on the other matters as well to try and have it all resolved between the three matters by that date.

HER HONOUR:   Indeed.  Yes, very well:

2.The plaintiffs file and serve the agreed special case and special case court book on or before 22 February 2016.

3.The plaintiffs file and serve their annotated written submissions, not exceeding 40 pages, and chronology, on or before 1 March 2016.

4.Any intervener in support of the plaintiffs file and serve its annotated written submission, not exceeding 20 pages, on or before 8 March 2016.

I pause again ‑ my apologies ‑ but in light of the proposal that the Commonwealth be given until 30 March, would it be sensible to make the order that any intervener either in support of the defendant, or without supporting any party, file and serve by 30 March?  In other words, it varies your order which is numbered 7 on the draft that I have to ‑ ‑ ‑

MR D’ARCY:   Yes, your Honour, I think some confusion might have come in because Mr Donaldson was referring to our minute of order which had been prepared on 4 February.  We prepared, for the benefit of the parties this morning, another minute of order and I think Mr Donaldson was referring to that.  The solution that had been agreed upon in relation to what was 7 and now paragraph 5 was to insert the words “other than the Commonwealth” after the word “party” on the second line.  So, “Any intervener supporting the State or not supporting any party would file on the 23rd” but the Commonwealth would be carved out from that and given until the 30th.

HER HONOUR:   Yes, very well:

5.The defendant and any intervener, either in support of the defendant or without supporting any party, save for the Commonwealth, file and serve their annotated written submissions on or before 23 March 2016 with the annotated written submissions of the defendant not to exceed 40 pages and the annotated written submissions of the intervener not to exceed 20 pages.

MR D’ARCY:   Your Honour, the new paragraph 8 that Mr Donaldson referred to, which will now be paragraph 6, which your Honour does not have before you, would read “The Commonwealth, if it intervenes, may file and serve annotated written submissions not exceeding 20 pages on or before 30 March 2016”.

HER HONOUR:   Yes.  I make an order in those terms:

6.The Commonwealth, if it intervenes, may file and serve annotated written submissions not exceeding 20 pages on or before 30 March 2016.

7.The plaintiffs file and serve any annotated written submissions in reply to the submissions of the defendant and any intervener, either in support of the defendant or without supporting any party, not exceeding 10 pages, on or before 1 April 2016.

8.        Liberty to apply to a Justice on three days’ written notice.

9.        Costs of today be costs in the cause.

MR D’ARCY:   Your Honour, could I just clarify what was order 9 and I think is now order 7?  What was contemplated was that the defendant would be permitted to file a reply to the Commonwealth and, therefore, it was proposed that paragraph 7 read “The plaintiffs and the defendant may file and serve any annotated written submissions strictly in reply, not exceeding 10 pages, on or before 1 April 2016.  In the case of the defendant, the submissions in reply are limited to submissions in reply to the submissions of the Commonwealth”.

HER HONOUR:   Yes.  Very well, there will be – I delete the order previously made and there will be an order in the terms just read out by Mr D’Arcy.  That completes matters in proceeding S248 of 2015.

Turning then to proceeding P63 of 2015, W.A. Glendinning & Associates Pty Ltd v The State of Western Australia.  It would help, gentlemen, if – it is difficult, I suppose – I simply do not have a copy of the orders in the form that the parties have agreed and it is making life that little bit more ‑ ‑ ‑

MR DONALDSON:   Yes.  Might I suggest this, your Honour?  Having regard to what your Honour has said, we will provide an order that reflects, or a minute of an order that reflects, what your Honour has said and send it to your Honour’s chambers and that can be made by consent today, your Honour.

HER HONOUR:   Yes, that seems a satisfactory solution.  Thank you for that, Mr Solicitor.  Now, both the Bell Group proceedings and the Glendinning proceedings are – in each of those proceedings it is contemplated that the matter, subject to the form of the draft special case being appropriate, will be remitted to a Full Court for hearing on 5 and 6 April, and it would seem that, provided the formalities can be attended to in relation to the proceedings now commenced by Maranoa Transport and the liquidator, Mr Woodings, orders in like form, procedurally, can be made by consent with a view to that matter being brought in and listed for hearing on the same date.  Is there any further matter that I need to attend to today?

MR DONALDSON:   Your Honour, if I might just mention one matter without taking too much of your Honour’s time.  There has been some discussion in Perth, your Honour, and it has not been with Mr D’Arcy this morning, and that is as to whether the Court will be sitting on 7 April on anything else.  That is, there is a view of some, your Honour – it is not mine – but a view of some, that this matter, or these three matters, may go over into a third day, your Honour, if a third day is available.

HER HONOUR:   Yes.  My understanding is that it would be possible for the matters to run into the third day, if that is necessary.  It goes without saying, given the common issues, that it will be necessary for the parties to agree on how the argument is to be divided.  We will not be listening to the same argument presented on three occasions, so there would need to be some cooperation as between counsel so that there is an orderly division of the argument and not unnecessary duplication of matters.  But, accepting that, I still understand there is still some risk in the view of at least some of the parties that the matter might run into a third day, is that so?

MR DONALDSON:   So I am told, your Honour, but I think the parties now understand the position in light of what your Honour has said.

HER HONOUR:   Yes.  There is just one further matter I wish to raise.  There is the question of the removal of part of proceedings pending before the Supreme Court of Western Australia.  It is a separate proceeding but on the last occasion, Mr D’Arcy, I think you foreshadowed that perhaps that might be brought in, it being a discrete and short point, although I understand there may be some opposition to that.  Is it intended to seek to have that matter married up with these proceedings, or not?

MR D’ARCY:   That was our intention, your Honour.  I know the State has filed a submission in opposition, which I think was filed a day or two late.  We have, I think, slightly a little time to file the reply and then it is a matter for the court to determine the appropriate course of action, but we do think there is ‑ ‑ ‑

HER HONOUR:   From that I take it you contend that it would still be appropriate for that matter ‑ I withdraw that ‑ you still seek to have that matter removed into this Court and dealt with at the same time as the present matter?

MR D’ARCY:   Yes, your Honour.  There is some overlap with the Chapter III issues from our perspective, so that is our position.

HER HONOUR:   Yes, all right.

MR D’ARCY:   We do not see that in any way lengthening the time of the hearing.  We would be content for the matter really to be determined on the papers.

HER HONOUR:   I see.  Yes, all right.  Thank you for that.  The Court will adjourn.

AT 12.36 PM THE MATTER WAS ADJOURNED