Equuscorp Pty Ltd v Kamisha Corp - [1999] FCA 1211

FEDERAL COURT OF AUSTRALIA
Equuscorp Pty Ltd v Kamisha Corp [1999] FCA 1211
EQUUSCORP PTY LIMITED (formerly EQUUS FINANCIAL SERVICES LIMITED) (ACN 006 012 244) -v- KAMISHA CORPORATION LIMITED (ACN 009 267 850), JOHN BARDIN DAVIS and PERPETUAL TRUSTEES W.A. LIMITED (ACN 008 666 886)
VG 610 of 1996
RYAN, CARR and MARSHALL JJ
MELBOURNE
2 SEPTEMBER 1999

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VG 610 of 1996

APPLICATION FOR LEAVE TO APPEAL FROM AN ORDER OF A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

EQUUSCORP PTY LIMITED (formerly EQUUS FINANCIAL SERVICES LIMITED) (ACN 006 012 244)
Applicant

AND:
AND BETWEEN:

KAMISHA CORPORATION LIMITED (ACN 009 267 850)
First Respondent

JOHN BARDIN DAVIS
Second Respondent

PERPETUAL TRUSTEES W.A. LIMITED (ACN 008 666 886)
Third Respondent

PERPETUAL TRUSTEES W.A. LIMITED (ACN 008 666 886)
Cross-claimant

and
EQUUSCORP PTY LIMITED (formerly EQUUS FINANCIAL SERVICES LIMITED) (ACN 006 012 344)
Cross-respondent

JUDGES:

RYAN, CARR and MARSHALL JJ

DATE OF ORDER:

2 SEPTEMBER 1999

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.The motion on notice filed on 10 August 1999 for leave to appeal from the order of Heerey J made on 30 July 1999 be refused.
2.That the costs of all parties of and incidental to the said motion on notice be reserved to the docket Judge to be made the subject of such orders on the determination of the substantive application herein or otherwise as he thinks fit.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VG 610 of 1996

APPLICATION FOR LEAVE TO APPEAL FROM AN ORDER OF A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

EQUUSCORP PTY LIMITED (formerly EQUUS FINANCIAL SERVICES LIMITED) (ACN 006 012 244)
Applicant

AND:
AND BETWEEN:

KAMISHA CORPORATION LIMITED (ACN 009 267 850)
First Respondent

JOHN BARDIN DAVIS
Second Respondent

PERPETUAL TRUSTEES W.A. LIMITED (ACN 008 666 886)
Third Respondent

PERPETUAL TRUSTEES W.A. LIMITED (ACN 008 666 886)
Cross-claimant

and
EQUUSCORP PTY LIMITED (formerly EQUUS FINANCIAL SERVICES LIMITED) (ACN 006 012 344)
Cross-Respondent

JUDGES:

RYAN, CARR and MARSHALL JJ

DATE:

2 SEPTEMBER 1999

PLACE:

MELBOURNE

REASONS FOR JUDGMENT
THE COURT

There is before the Court a motion by the applicant ("Equuscorp") on notice filed on 10 August 1999 seeking, amongst other things, leave to appeal from certain orders made by Heerey J on 30 July 1999. Those orders were:
"1.Direct that the trial of these proceedings commence on 13 September 1999, the trial being limited to the following claims between the parties:
(a)all claims between the Applicant and the First and Second Respondents pleaded in the Further Amended Statement of Claim;
(b)all claims between the Applicant and the Third Respondent pleaded in paragraphs 1 through to 23; paragraphs 55 and 56; paragraphs 59, 60 and 62; and paragraphs 70 and 72 through to 74, in the Further Amended Statement of Claim;
(c)all claims between the Applicant and the Third Respondent raised in the Cross Claim and in the Defence to the Cross Claim.
2.Direct that the trial of all claims between the Applicant and the Third Respondent other than those referred to in paragraph 1(b) and (c) be stood over to await the further direction or order of the Court.
3. Costs of the directions hearing on 13 July 1999 reserved."
Both the present proceedings (VG 610 of 1996) and later proceedings in this Court (VG 140 of 1998) have arisen from transactions related to the financing of the production of a movie film originally named "The Night of the Leopard" but released under the name "Sudden Impact". The following description of the issues involved in the litigation has been given by the learned primary Judge in reasons for an interlocutory judgment published on 21 May 1999:-
"The owner of the film was Balmedie. The public was invited to subscribe for units issued pursuant to a Trust Deed of which Perpetual Trustees was trustee. In very broad outline, the scheme was that investors would become "Production Contractors" of the film. Balmedie agreed to pay to investors a certain minimum fee called the "Base Production Services Fee" and to provide the security for those fees. The first respondent Kamisha Corporation Limited ("Kamisha") agreed with the investors to carry out the actual production work as their agent. As part of the arrangements, Equus provided to Perpetual Trustees a document described as a "letter of credit" as security for some $9.6m due to the investors by Balmedie.
In the present proceeding [VG 610 of 1996] the statement of claim of Equus includes the following (this summary being taken from Perpetual Trustees' outline of submissions):
a.representations were made to the applicant being:
i.the Trustee and Kamisha would accept from Equus a performance guarantee as security for the performance of Balmedie's obligations;
ii.it was not necessary for Equus to provide security in the form of a letter of credit;
iii.the payment of the production services fee would be made in accordance with the terms of the Trust Deed;
iv.on each occasion on which the payment of the base production services fee fell due, Equus would only need to seek funding for the amount to which it was entitled under the loan arrangements with the productions contractors and the amount of money to be provided under the performance guarantee;
v.that Davis had authority to act on behalf of the Trustee, and on behalf of Kamisha during the negotiations with Equus.
b.The applicant was induced by the representations to enter into the security contract and security document on or about 29/6/90. (par 19)
c.As a result of the common intention of the parties or mutual mistake, reference to "Letter of Credit" should be rectified. (pars 21 and 22)
d.In reliance upon the representations, Equus advanced funds totalling $8,375,000. (par 23)
e.The representations were misleading and deceptive in contravention of s 52 Trade Practices Act 1974 (Cth). (pars 70-71)
f.As a result the applicant has suffered loss and damage. (par 74)
In proceedings VG 140 of 1998 the third respondent in VG 610 of 1996 ("Perpetual Trustees") as applicant sought to recover from Equuscorp amounts allegedly due from it under the document entitled "letter of credit" which Equuscorp contends should have been called a "performance guarantee". By its defence in VG 140 of 1998, Equuscorp has pleaded in substance the matters which it has affirmatively averred in its statement of claim in VG 610 of 1996.
By motions on notice dated 13 May 1998 in each of VG 610 of 1996 and VG 140 of 1998, Equuscorp sought orders that the two proceedings be joined and heard together pursuant to O 29 r5 of the Rules of this Court. Those motions were heard with the use of video-conference facilities on 5 March 1999 after which his Honour made the following orders:
"1.(i)        Proceeding VG140 of 1998 be tried at the same time as
proceeding VG610 of 1996.
(ii)Leave be granted for documents discovered in proceeding VG140 of 1998 to be used in proceeding VG610 of 1996.
(iii)Evidence given in proceeding VG140 of 1998, whether by Affidavit or viva voce, to be treated as evidence in proceeding VG610 of 1996.
2.The First and Second Respondents and the Third Respondent/Cross-Claimant to file and serve any further Affidavits on which they propose to rely at trial on or before 19 March 1999.
3.The Applicants to file and serve any further answering Affidavits on which they propose to rely at trial on or before 1 April 1999.
4.        The Directions Hearing be adjourned to 26 April 1999.
5.        Costs be reserved."
In the light of the judgment of the High Court in Re Wakim; Ex parte McNally (1999) 163 ALR 270 published on 7 June 1999, doubts were expressed as to whether this Court had jurisdiction to entertain the whole of the proceedings VG 610 of 1996 and VG 140 of 1998. Accordingly, Equuscorp issued a further motion on notice in VG 610 of 1996 returnable on 13 July 1999 seeking "that directions be made concerning the further progress of the within action."
Before the return of that motion, the Associate to Heerey J wrote to the solicitors for the parties the following letter dated 9 July 1997 (omitting formal parts):
"You will be aware that in Re Wakim: ex parte McNally (1999) 163 ALR 270 and related cases the High Court decided that the statutory provisions that vest jurisdiction in the Federal Court in matters arising under the Corporations Law are invalid.
This ruling may affect the jurisdiction of the Court to deal with the above matters in which you are one of the solicitors on the record.
Matter V 3120/99 is listed for argument as to costs on Tuesday 13 July 1999 at 9.15am. Due to trial commitments, Justice Heerey will only be available for 45 minutes on Tuesday morning, and it may not be possible to complete the hearing of submissions on the question of jurisdiction at that time.
Given the trial date of 13 September 1999 for matter VG 140/98, it is desirable that the jurisdictional issue be resolved as soon as possible. If the matter cannot be completed on 13 July his Honour will adjourn it to a further date in the near future.
It would be of assistance if parties file and exchange short written submissions on the costs and jurisdictional issues within 24 hours before the hearing on 13 July."
At the hearing on 13 July 1999, Mr Palmer QC for the third respondent, Perpetual Trustees, furnished written submissions urging that so much of the proceeding VG 610 of 1996 as was in the original jurisdiction of the Federal Court should continue to be heard by this Court on the appointed trial date, 13 September 1999. That submission continued:
·other issues in VG 610 which relate to the claims against Perpetual in its personal capacity can easily be separated out of VG 610 and can be heard in whatever Court is appropriate;
·once the issues preventing distribution which arise in VG 610 are determined there will be issue estoppels between the parties which will enable the remainder of VG 140 to be determined expeditiously by a State Supreme Court and a distribution of the Fund can be made;
·there should be no decision that VG 610 and VG 140 be heard together if that means that both matters will have to be sent to a State Supreme Court with the inevitable delays before a hearing date can be given and the Fund can be distributed.
........ .
3.There could be no doubt that the Trade Practices Claims arise under a federal law and are within the original jurisdiction of the Federal Court. Once the Trade Practices claims are determined by the Federal Court there will be issue estoppels as between Perpetual and Equus which will determine the issues raised in VG 140 Defence par.28. The time and expense in determining the remaining issues in VG 140 will be very much reduced.
4.The claims against Perpetual in VG 610 which are made against it in its personal capacity and which can be separated out and heard later in a State Supreme Court if necessary are those founded on alleged breach of fiduciary duty under the Trust Deed or breach of contract (eg the claims collected in SC pars. 37, 39, 47-50, 54, 54C, 64, 65, 66, 67, 69G).
5.It may be that some factual issues involved in determining those claims will also fall to be determined under the Trade Practices Claims in VG 610. If so, there will be issue estoppels between Equus and Perpetual which will prevent those issues from being relitigated in another Court, again saving the parties and the Courts time and expense.
In the course of oral submissions on 13 July 1999, Mr Palmer amplified his written submissions and Mr Beaumont QC for Equuscorp contended that "everything should be heard together ........ there is just nothing to be gained by splitting [the various causes of action]." Accordingly, he contended that the whole of both proceedings VG 610 of 1996 and VG 140 of 1998 should be transferred to the Supreme Court of Victoria. Mr Caleo of Counsel for the first respondent to VG 610 of 1996, ("Kamisha") and the second respondent to that application, Mr Davis, adopted the submissions of Perpetual Trustees that so much of proceeding VG 610 of 1996 as could be tried in this Court should remain here. After hearing submissions in reply from Mr Beaumont, his Honour observed:
"I think the starting point is that if parties have brought litigation to this court and the court has jurisdiction, the court should be very slow to decline to deal with the matter, even if that may result in some considerable untidiness and inconvenience in separating out those issues which can be dealt with in this court and those which cannot. I accept the submissions of Mr Palmer for Perpetual Trustees and Mr Caleo for Kamisha that there is jurisdiction under the doctrine of accrued jurisdiction in relation to, in matter 140 of 98, the dispute between Equus and Perpetual concerning the personal liability of the trust and also the question of the letter of credit and likewise I accept that there is accrued jurisdiction in 610 of 1996.
I do so deal with the matter as "a matter of impression and of practical judgment" see Stack and Co Securities No 9 Pty Ltd (1983) 154 CLR 261 at 294. I will direct that counsel within seven days bring in minutes of proposed orders and the parties will have liberty to apply to inspect a list of those orders."
This exchange then occurred between Mr Beaumont and his Honour:
Mr Beaumont: "I'm sorry, your Honour, does that mean that the trustees and Kamisha, etcetera, are to tell your Honour what they say should remain in detail?"
His Honour: "They'll submit orders as to the mechanics of how this is going to work and obviously they'll show it to you first and if it's agreed well and good, if not there'll be some further debate about it."
On 16 July 1999, the solicitors for Perpetual Trustees forwarded to the solicitor for Equuscorp the following minutes of order proposed by Perpetual Trustees in VG 610 of 1996 in consequence of the hearing on 13 July 1999:
”1.Direct that the trial of these proceedings commence on 13 September 1999, the trial being limited to the following claims between the parties;
a)all claims between the Applicant and the First and Second Respondents pleaded in the Further Amended Statement of Claim;
b)all claims between the Applicant and the Third Respondent raised in the Cross Claim and in the Defence to the Cross Claim.
2.Direct that the trial of all claims between the Applicant and the Third Respondent other than those referred to in paragraph 1(b) be stood over to await the further direction or order of the Court.
3. Costs of the directions hearing on 13 July 1999 reserved.
As to VG 140 of 1998, it was proposed that the trial of all claims in that proceeding be stood over to await the further direction or order of the Court. The solicitor for Equuscorp was invited to indicate, by 16 July 1999, that party's attitude to the proposed orders "in preparation for the mention of the matter on 20 July."
On 19 July 1999, the solicitor for Equuscorp wrote to the solicitors for Perpetual Trustees suggesting that specific arrangements should be made for the transfer of VG 140 of 1998 to the Supreme Court of Victoria and complaining about the limited time which Equuscorp had been given to consider the proposed minutes of order. The solicitors for Perpetual Trustees then, on the same day, submitted to the solicitor for Equuscorp further draft minutes of order revised to take account of suggestions made by the solicitors for Kamisha and Mr Davis. The revised minutes of order in VG 610 of 1996 were as follows:
"1.Direct that the trial of these proceedings commence on 13 September 1999, the trial being limited to the following claims between the parties:
(a)all claims between the Applicant and the First and Second Respondents pleaded in the Further Amended Statement of Claim;
(b)all claims between the Applicant and the Third Respondent pleaded in paragraphs 1 through to 23; paragraphs 55 and 56; paragraphs 59, 60 and 62; and paragraphs 70 and 72 through to 74, in the Further Amended Statement of Claim;
(c)all claims between the Applicant and the Third Respondent raised in the Cross Claim and in the Defence to the Cross Claim.
2.Direct that the trial of all claims between the Applicant and the Third Respondent other than those referred to in paragraph 1(b) and (c) be stood over to await the further direction or order of the Court.
3.Costs of the directions hearing on 13 July 1999 reserved."
By letter dated 20 July 1999, the solicitors for Perpetual Trustees invited the solicitor for Equuscorp to comment on the second set of draft minutes and intimated an "intention to have the orders entered before the end of the week." However, by 26 July 1999, the solicitor for Equuscorp had obtained advice from new Senior Counsel retained in place of Mr Beaumont who had returned his brief. In the light of that advice, the solicitor for Equuscorp wrote, on 28 July 1999, to the solicitors for Perpetual Trustees contending that the minutes of order proposed by that respondent were unworkable and that the issues in VG 610 of 1996 could not be split for seven reasons indicated in point form. The letter then suggested a joint application to the Supreme Court of Victoria for the transfer to that Court of both actions. The letter concluded:
"If this course of action is unacceptable then it will be necessary for the parties to return before Justice Heerey in order that formal orders be made."
On 29 July 1999, the solicitor for Equuscorp prepared a draft notice of motion in each of VG 610 of 1996 and VG 140 of 1998 seeking that both proceedings be transferred under s 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 to the Supreme Court of Victoria or, alternatively, the Supreme Court of New South Wales, and a request was made to Heerey J's Associate to list both motions for a hearing which, it was estimated, would occupy half a day. Understandably, his Honour was not prepared to entertain those motions which sought to revive a proposal which he had rejected on 13 July 1999 when he intimated that this Court should proceed to determine all of the issues in the two proceedings over which it had jurisdiction. No endeavour was made by the solicitor for Equuscorp before 30 July 1999 to have debated before his Honour the form of orders which should be made in consequence of the hearing of 13 July 1999 and, on 30 July 1999, his Honour made orders in the terms which had been proposed by the solicitors for Perpetual Trustees on 20 July 1999.
It has been contended on behalf of Equuscorp that the order as made by the learned primary Judge on 30 July 1999 is repugnant to the observations which he made at the end of the hearing on 13 July. We take that submission to be based on the fact that, despite his Honour's ruling that "there is jurisdiction under the doctrine of accrued jurisdiction in relation to, in matter 140 of 1998, the dispute between Equuscorp and Perpetual concerning the personal liability of the trust", the order of 30 July 1999 makes no provision for the continued hearing in this Court of VG 140 of 1998. (Although a draft minute had been prepared embodying a direction that the trial of all claims in VG 140 of 1998 be stood over until further order or direction, no order of any kind seems to have been taken out in VG 140 of 1998 since 13 July 1999).

It was submitted on behalf of Perpetual Trustees as respondents to this second motion for leave to appeal, that his Honour made a slip when he said that there is accrued jurisdiction in relation to VG 140 of 1998 and that what his Honour meant to do was uphold the submission advanced on behalf of Perpetual Trustees in VG 610 of 1996 that the claims made in that proceeding against Perpetual Trustees in its personal capacity "which can be separated out and heard later in a State Supreme Court if necessary are those founded on alleged breach of fiduciary duty under the Trust Deed or breach of contract."
In our view, it is undesirable that this Full Court, on an application for leave to appeal, should attempt to construe what was said in an ex tempore indication of views at first instance in seeking to resolve whether the order of 30 July 1999 accurately reflects those views. That is particularly so when no request has been made to the learned primary Judge for an opportunity to speak to the form of order which he ultimately made. As we have already pointed out, the motion on notice which Equuscorp sought to bring on did not embody any such request. Rather, it sought to revive a submission that VG 610 of 1996 and VG 140 of 1998 should be transferred in their entirety to a State Supreme Court, a submission which his Honour had clearly rejected. Equuscorp, therefore, has not, in any real sense, been denied natural justice.
Moreover, if Equuscorp wishes to persist in its contention that there is a discrepancy between the views indicated on 13 July 1999 and the order entered on 30 July, it remains open to it to apply for the order to be varied under O 36 r 7(2) of the Rules of this Court which, so far as is relevant, provides:
"The Court, where it is not exercising its appellate or related jurisdiction under Division 2 of Part III of the Act, may if it thinks fit vary or set aside a judgment or order after the order has been entered where:
........
(c) the order is interlocutory;
........
(e) the order does not reflect the intention of the Court;"
In these circumstances, we do not consider that it is appropriate to grant leave to appeal. Insofar as Equuscorp wishes to pursue what it maintains is a disparity between the reasons given on 13 July 1999 and the formal orders entered, that is a matter which should more appropriately be raised with the Judge having the conduct of the proceedings. Any confusion (if there be such confusion) between what his Honour decided on 13 July 1999 and the terms of the orders so entered may be resolved by bringing the matter on for further consideration by the Judge who conducted those proceedings.
Accordingly, leave to appeal is refused. The costs of all parties of the motion on notice filed 10 August 1999 shall be reserved to be the subject of such order by the docket Judge on the determination of the substantive application or otherwise as he thinks fit.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate:
Dated: 2 September 1999

Counsel for the Applicant/Cross-Respondent:

Mr N Young QC, with Mr M Scott

Solicitor for the Applicant/Cross-Respondent:

Mr M Leaker

Counsel for the First and Second Respondent:

Mr C M Caleo

Solicitor for the First and Second Respondent:

Peter Black & Associates

Counsel for the Third Respondent/Cross-Claimaint:

Mr G Palmer QC with Mr J Hennessy

Solicitor for the Third Respondent/Cross-Claimaint:

Middletons Moore and Bevins

Date of Hearing:

11 August 1999

Date of Judgment:

2 September 1999

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 610 of 1996

BETWEEN:	EQUUSCORP PTY LIMITED (formerly EQUUS FINANCIAL SERVICES LIMITED) (ACN 006 012 244) Applicant
AND: AND BETWEEN:	KAMISHA CORPORATION LIMITED (ACN 009 267 850) First Respondent JOHN BARDIN DAVIS Second Respondent PERPETUAL TRUSTEES W.A. LIMITED (ACN 008 666 886) Third Respondent PERPETUAL TRUSTEES W.A. LIMITED (ACN 008 666 886) Cross-claimant and EQUUSCORP PTY LIMITED (formerly EQUUS FINANCIAL SERVICES LIMITED) (ACN 006 012 344) Cross-respondent
JUDGES:	RYAN, CARR and MARSHALL JJ
DATE OF ORDER:	2 SEPTEMBER 1999
WHERE MADE:	MELBOURNE

JUDGES:	RYAN, CARR and MARSHALL JJ
DATE:	2 SEPTEMBER 1999
PLACE:	MELBOURNE

Counsel for the Applicant/Cross-Respondent:	Mr N Young QC, with Mr M Scott
Solicitor for the Applicant/Cross-Respondent:	Mr M Leaker
Counsel for the First and Second Respondent:	Mr C M Caleo
Solicitor for the First and Second Respondent:	Peter Black & Associates
Counsel for the Third Respondent/Cross-Claimaint:	Mr G Palmer QC with Mr J Hennessy
Solicitor for the Third Respondent/Cross-Claimaint:	Middletons Moore and Bevins
Date of Hearing:	11 August 1999
Date of Judgment:	2 September 1999