Everest Project Developments Pty Ltd v Westpac Banking Corporation

[2009] VSC 563

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 10329 of 2009

EVEREST PROJECT DEVELOPMENTS PTY LTD (ACN 055 285 259)	Plaintiff
v
WESTPAC BANKING CORPORATION (ACN 007  457 141)	Defendant

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JUDGE:	VICKERY J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 December 2009
DATE OF RULING:	2 December 2009
CASE MAY BE CITED AS:	Everest Project Developments Pty Ltd v Westpac Banking Corporation
MEDIUM NEUTRAL CITATION:	[2009] VSC 563

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PRACTICE AND PROCEDURE – Application for a temporary stay of a proceeding pending determination of another proceeding – Inherent jurisdiction to grant a stay – Application granted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D. O’Brien	Russell Kennedy
For the Defendant	Mr T. Woodward	Allens Arthur Robinson
For Brady Constructions Pty Ltd	Mr A. Schlicht	Piper Alderman

HIS HONOUR:

1. The applications in this matter arise from a banker's guarantee dated 4 October 2007 issued by Westpac Banking Corporation at the request of Brady Constructions Pty Ltd (“Brady”).

1. A call was made on that bank guarantee in the sum on $738, 752.  The matter was then brought before Senior Member Cremean of the Victorian Civil and Administrative Tribunal (“VCAT”) for an injunction restraining Everest from calling upon the bank guarantee. 

1. The senior member refused to grant the injunction that was sought.  Subsequently that decision has been appealed to the Supreme Court, (“the VCAT appeal”).  The VCAT appeal is due to be heard before Emerton J on 16 December 2009.

1. On 25 November 2009, the plaintiff, in proceeding number S CI 2009 10329, Everest Project Developments Pty Ltd (“Everest”) issued an originating motion against the defendant, Westpac Banking Corporation (“Westpac”).

1. Everest seeks an order that its proceeding, commenced by its recent originating motion, be heard and determined immediately following the hearing of the VCAT appeal, due to be heard by  Emerton J on 16 December 2009.

1. It is said by Everest that its proceeding against Westpac is a relatively straightforward proceeding involving little factual controversy.  It is said that it essentially involves the legal effect of factual events which occurred on the morning of 4 May 2009 when, upon handing down of Senior Member Cremean's decision, and prior to any appeal or stay application being commenced, Everest made a further call on the bank guarantee on Westpac demanding the payment of a sum of $738,752.  In its proceeding, Everest claims that it was entitled to make this further call, and that Westpac was obliged to pay on the bank guarantee pursuant to that call.

1. On behalf of Westpac and Brady, it is submitted that the matter involving the VCAT appeal essentially involves the question as to whether or not the VCAT senior member, in refusing the grant of injunction, erred by, amongst other things, failing to take into account properly or at all the questions of balance of convenience. 

1. On the other hand, they say that the matter arising from the failure to pay on the part of Westpac on 4 May 2009, when the further call was made on the bank guarantee by Everest, involves quite different questions which are separate and distinct from the subject matter of the VCAT appeal.

1. It appears to me that the outcome of the VCAT appeal may well determine and, indeed, it is likely to determine whether or not the case against Westpac commenced by Everest, has in fact any work to do.  On one possible outcome, there being an undertaking on the part of Westpac given in open court that it would pay if it is required to do so on the bank guarantee, there would be no work to be done by the originating motion filed by Everest on 25 November 2009.

1. If that is the case, if an order was made, as sought by Everest, that the proceeding, which it has commenced be heard immediately after the VCAT appeal and determined at that time, Westpac would be placed in the position of having to prepare for that case.  It says that it would need to file and serve affidavit material relating to the events of 4 May 2009, and there would be significant legal issues that it would seek to address.  That work may well be rendered useless and be wasted, depending on the outcome of the VCAT appeal before Emerton J with a consequent potential for wasted legal costs and expenses. 

1. In these circumstances, in my opinion, the interests of justice are such that they are in favour of the grant of the stay on a temporary basis which is sought by Westpac and Brady in the exercise of the Court's inherent jurisdiction to grant such a stay. 

1. It is desirable, in my opinion, that the VCAT appeal proceed to its conclusion first.  Westpac and Brady therefore should be granted a temporary stay of the proceeding commenced by Everest against Westpac by originating motion dated 25 November 2009 until the hearing and determination of the VCAT appeal. 

1. That, of course, is not to say that Everest would not be in a position to mention the Everest proceeding before her Honour, for her Honour to consider an appropriate management regime for that case.

1. Accordingly, I will dismiss the summons of the plaintiff, Everest, in proceeding number S CI 2009 10329 dated 25 November 2009, and make an order in favour of Westpac and Brady that the proceeding commenced by Everest against Westpac, being S CI 2009 10329, be stayed pending the hearing and determination of the VCAT appeal.

(Submissions re costs)

1. Mr O'Brien has submitted on behalf of the Everest that costs ought to be reserved.  He has presented a vigorous case agitating that course.  However, in my view, it is appropriate that costs follow the event of the summons and accordingly, I will order that the plaintiff, Everest Project Developments Pty Ltd, pay the cost of the defendant, Westpac Banking Corporation, and the appellant in the VCAT, which is Brady Constructions Pty Ltd, being the costs of the summons and the costs of this day.

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