Groeneveld Australia Pty Ltd v Wouter Nolten
[2010] VSC 249
•9 June 2010
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
LIST E
S CI 2009 07564
| GROENEVELD AUSTRALIA PTY LTD AND ORS | Appellants |
| v | |
| WOUTER NOLTEN AND ORS | Respondents |
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JUDGE: | FERGUSON J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 3 June 2010 | |
DATE OF JUDGMENT: | 9 June 2010 | |
CASE MAY BE CITED AS: | Groeneveld Australia Pty Ltd and ors v Wouter Nolten and ors | |
MEDIUM NEUTRAL CITATION: | [2010] VSC 249 | |
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CATCHWORDS: PRACTICE AND PROCEDURE - Whether leave to appeal should be granted from orders of Associate Judge dismissing application for joinder of further plaintiff and staying paragraphs of further amended statement of claim – whether decisions attended with sufficient doubt – whether substantial injustice if decisions not reversed
PRACTICE AND PROCEDURE – application for joinder of New Zealand company seeking to sue in Victoria in respect of New Zealand claims – defendant resident in Victoria - whether forum inappropriate – availability of relief in New Zealand – existing proceedings in New Zealand and Victoria
PRACTICE AND PROCEDURE – declaration – utility when no damages to be recovered
CORPORATIONS – shareholder – whether shareholder can sue for loss where separate duty owed to it – whether loss is a reflective loss suffered by the company
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APPEARANCES: | Counsel | Solicitors |
| For the Appellants | Mr P Crutchfield S.C. Ms R Sion | DLA Phillips Fox |
| For the Respondents | Mr P Ehrlich | Willocks Lawyers |
HER HONOUR:
Introduction and summary
This is an application for leave to appeal orders of an Associate Judge made 22 April 2010 (which concerned a stay in respect of certain paragraphs of the further amended statement of claim) and 11 May 2010 (which dismissed an application for leave to join a further plaintiff to the proceeding).
In respect of the orders made on 22 April 2010, I am not satisfied that there is sufficient doubt to warrant the Associate Judge’s decision being reconsidered. I do not grant leave to appeal in respect of those orders.
The position is different in relation to the orders of 11 May 2010. On the basis of the Full Court’s decision in Rocklea Spinning Mills Pty Ltd v Consolidated Trading Corporation,[1] (which was not brought to the attention of the Associate Judge), I am satisfied that:
(a) her Honour’s decision is attended with sufficient doubt to warrant it being reconsidered; and
(b)the injustice in the order dismissing the application for joinder is “manifest in as much as it deprives the [proposed additional plaintiff] without proper justification of an opportunity to litigate [its] dispute in [its] chosen forum”.[2]
[1][1995] 2 VR 181.
[2]Ibid at p. 186.
In those circumstances, leave should be granted in respect of the appeal from the orders of 11 May 2010.
However, the appeal should be dismissed. This is because, on re-exercising the discretion, it is clear to me that in the circumstances of this case, Victoria is an inappropriate forum for determination of the dispute between the proposed further plaintiff and the first defendant.
Principles for the grant of leave
The principles for the grant of leave were set out in the decision of Davies J in Re Saeco Australia Pty Ltd.[3] Her Honour noted that the Court’s power to grant leave will be exercised having regard to the principles considered in Neimann v Electronic Industries Limited[4] and that those principles include:
(a)whether in all the circumstances the decision from which the appeal is brought is attended with sufficient doubt to warrant it being reconsidered; and additionally
(b)whether the order would cause substantial injustice to the parties seeking leave, if leave was refused.
[3][2010] VSC 161.
[4][1978] VR 431.
Her Honour cited Mace v Murray[5] and House v The King[6] and said:[7]
The requirement of leave carries with it the requirement for the Court to be satisfied that there are reasons to grant leave and the Court must exercise its discretion judicially, even though it is not a discretion confined by particular criteria that must be satisfied. Where a grant of leave is required to appeal a discretionary decision, the Court has a duty to identify a proper basis for the grant of leave. It is not a sufficient reason to grant leave that an appellate court may have exercised the discretion differently if the matter had come before it at first instance. An appellate court will not normally interfere with a discretionary decision unless the Court can identify some error in the exercise of the discretion. Where some error in the exercise of discretion can be identified the question of injustice flowing from the order sought to be appealed will generally be an important consideration on the issue of grant of leave, particularly where, as here, the appeal is sought on an interlocutory order. The courts will more readily grant leave where the error should be reviewed because substantial injustice would result if the error was not corrected.
[5][1955] HCA 2; (1955) 92 CLR 370.
[6][1936] HCA 40; (1936) 55 CLR 499.
[7][2010] VSC 161 at [9].
Background to the orders of 11 May 2010 – joinder and amendment
The orders made on 11 May 2010 concerned an application for leave to join Groeneveld New Zealand Pty Ltd (“GNZ”) as a fourth plaintiff to this proceeding. Consequential orders regarding an amended statement of claim and other pleadings were also sought. The application was made pursuant to r 9.02(b) of the Supreme Court (General Civil Procedure) Rules 2005. In reasons for decision of 11 May 2010, the Associate Judge summarised the proposed claims by GNZ against Mr Nolten as being:
… in relation to a lease entered into by GNZ with Land on the Mount Trust Pty Ltd (“LOMT”) in Tauranga, New Zealand. LOMT is the trustee of the discretionary trust of which Mr Nolten is a beneficiary. GNZ is a wholly owned subsidiary of the first plaintiff, and the lease was entered into at a time when Mr Nolten was the managing director of both the first plaintiff and GNZ. GNZ has purported to avoid the lease (although it remains in occupation of the Tauranga premises) on the grounds that it was an uncommercial transaction within the meaning of s 141 of the Companies Act (NZ). LOMT has issued proceedings against GNZ in the High Court of New Zealand disputing GNZ’s entitlement to avoid the lease.
Section 141(1) of the Companies Act (NZ) provides that a transaction entered into by a company, in which a director of the company is interested, may be avoided by the company at any time before the expiration of three months after the transaction is disclosed to all the shareholders. A transaction cannot be avoided if the company receives fair value under it (s 141(2)).
Was the decision of 11 May 2010 of the Associate Judge discretionary?
The authorities make it clear that the exercise of the Court’s powers under r 9.02(b) for the joinder of a party is discretionary.[8]
[8]See Glenwood Management Group Pty Ltd v Mayo (VSC, Young CJ, No. 8421/90, 14 August 1990, unreported, BC9000705; and see also Bishop v Bridgeland Securities (1990) 25 FCR 311 where the court considered the equivalent rule in the Federal Court Rules.
Test for a stay
Before the Associate Judge and before me, the parties accepted that in order for her Honour to refuse to allow GNZ to be joined to the proceeding (on the basis that a subsequent application by Mr Nolten for a stay would be successful) she would need to do so only if Victoria is clearly an inappropriate forum in which to bring the claim, not simply a less convenient forum. This is in accordance with the principles in Voth v Manildra Flour Mills Pty Ltd.[9]
[9](1990) 171 CLR 538.
Counsel for the appellants referred me to the Full Court decision of Rocklea Spinning Mills Pty Ltd v Consolidated Trading Corporation.[10] Counsel noted that the decision had not been brought to the attention of the Associate Judge. In that case, a Victorian company (“Rocklea”) began proceedings against a New Jersey company (“CTC”) in relation to an agency agreement between the two parties. Later, CTC began proceedings in New Jersey against Rocklea in respect of the same agreement. Rocklea was unsuccessful in an application in the New Jersey Court to dismiss the New Jersey proceeding. CTC then applied to this Court for a stay of the Victorian proceeding. It failed before a Master but was successful on appeal to a Judge. Rocklea successfully appealed from that decision to the Full Court.
[10][1995] 2 VR 181.
Tadgell J (as his Honour then was)(with whom Nathan and Hansen JJ agreed) said: [11]
If the dispute were litigated in New Jersey there might be good reason to restrain its re‑litigation in Victoria, assuming re‑litigation of the issues to be otherwise competent. The prospect of litigation of the dispute in New Jersey is alone, however, no reason to deny a prospect of its litigation here. To say, as his Honour did, that it is “clear that the issues between the parties will be litigated in the United States” does not in my opinion indicate circumstances rendering it “quite inappropriate that they should be re‑litigated in Victoria.” There was no material before the learned judge to indicate that litigation of the issues in New Jersey would or should occur before litigation of those issues in Victoria. It by no means followed, therefore, that if litigation should occur in Victoria it would be a re‑litigation of the issues; and a conclusion that it would be so cannot properly be drawn without a presumption that the New Jersey litigation will or should take precedence over the Victorian litigation. Such a presumption is permissible only if the Victorian litigation is to be somehow deferred or subordinated; and deferment or subordination by means of a stay could not be justified, in the absence of the presumption, unless other circumstances rendered the Victorian court a clearly inappropriate forum.
This is not to say that the pendency of the New Jersey proceeding is irrelevant to a determination of the question which the judge had to decide. “The availability of relief in a foreign forum will always be a relevant factor in deciding whether or not the local forum is a clearly inappropriate one”: Voth’s case at 558. In the circumstances of a particular case the manifest appropriateness of a foreign forum may, other things being equal or finely balanced, render the local forum clearly inappropriate.
In making the assumption that the issues between the parties will be litigated in the United States, and that therefore it is “inappropriate that they should be re‑litigated in Victoria”, and basing his decision upon that assumption, the judge in my opinion took account of an impermissible consideration. His exercise of his discretion therefore miscarried.
[11]Ibid at pp.183-184.
In re-exercising the discretion, his Honour noted that the various factors connecting the dispute to one forum or the other were relatively evenly balanced. Factors connecting the dispute to Victoria included:
(a)a representative of CTC coming to Victoria to negotiate the agreement;
(b)alleged misrepresentations made in Victoria to Rocklea’s officers and said to have effect in Victoria;
(c)the relevant goods were manufactured in Victoria;
(d)it was not clear that the proper law of the contract was that of New Jersey.
His Honour thought that, in the absence of the New Jersey proceeding, it could not have been concluded that the Victorian court was an inappropriate forum. His Honour went on to state:[12]
The case is unlike Voth’s case, where a wrong committed abroad was alleged in circumstances which not only rendered a foreign forum more appropriate than the local one but rendered the local forum clearly inappropriate. In this case it cannot be doubted that New Jersey is an appropriate forum. Perhaps it is more appropriate than Victoria. I cannot conclude however – putting the existence of the New Jersey proceeding aside – that Victoria is a clearly inappropriate forum.
[12]Ibid at p.186.
Was there any error in the exercise of the discretion?
The Associate Judge made it clear that the test to be applied was whether Victoria is clearly an inappropriate forum in which to bring the claim. That is the correct legal test as determined in Voth.
The Associate Judge noted that there was no dispute between the parties that:
(a)there is a real and substantial connection between any claim GNZ would make against Mr Nolten in relation to the Tauranga lease and New Zealand; and
(b)GNZ would have the right to bring the proceedings in Victoria against Mr Nolten in relation to the Tauranga lease.
Her Honour then took into account that the claim sought to be agitated by GNZ against Mr Nolten in this proceeding almost completely mirrors the issues between GNZ and LOMT in the New Zealand proceeding. Her Honour stated:
In particular, GNZ’s reliance on s 141 of the Companies Act in its defence to that proceeding squarely raises the issue of Mr Nolten’s conduct as a director of GNZ, and traverses the same factual matters as would be traversed in this proceeding if GNZ were to be joined as a plaintiff. It is difficult to see how it would be successfully argued before the New Zealand court that the proceeding before that Court ought to be stayed, given that the dispute involves New Zealand land, New Zealand law, and the conduct complained of (GNZ’s avoidance of the Tauranga lease) occurred in New Zealand. In those circumstances, there is a real risk that there will be inconsistent findings in the two jurisdictions, which is highly undesirable, for the reasons referred to in the authorities referred to me by counsel for the plaintiff.
For example, GNZ could only claim any damages against Mr Nolten for having overpaid monies to LOMT if it was found by this Court that Mr Nolten had procured entry into an uncommercial transaction for his ultimate benefit. That is the very basis upon which GNZ has purported to avoid the Tauranga lease, which will also be determined one way or another in the New Zealand proceeding. Given that GNZ relied upon s 141 of the Companies Act to avoid the lease, LOMT was perfectly entitled to issue proceedings in New Zealand in order to have the issue of the validity of the lease determined (noting LOMT is not a party to this proceeding).
There is no legal or practical barrier to GNZ making its damages claim against LOMT (and Mr Nolten) in the New Zealand proceeding by way of counterclaim.
Her Honour’s focus in her reasons on the New Zealand proceeding and the potential risk that there will be inconsistent findings in the two jurisdictions leads me to the conclusion, on the basis of this Court’s decision in Rocklea Spinning Mills Pty Ltd v Consolidated Trading Corporation, that the decision is attended with sufficient doubt to warrant it being reconsidered. In these circumstances, leave to appeal ought to be granted, because the injustice in the order dismissing the joinder application is (in the words of Tadgell J in Rocklea Spinning Mills) ”manifest in as much as it deprives the appellant [here GNZ] without proper justification of an opportunity to litigate its dispute in its chosen forum”.[13]
[13]Ibid at p.186.
However, I would dismiss this part of the appeal. This is because, on re‑exercising the discretion, it is clear to me that in the circumstances of this case, Victoria is an inappropriate forum for determination of the dispute between GNZ (the party sought to be joined as a plaintiff) and Mr Nolten. Leaving to one side the NZ proceedings, the matters which in my opinion make Victoria an inappropriate forum are:
(a)the claim by GNZ against Mr Nolton and his defences to them would be determined according to New Zealand law;
(b)the subject matter of the dispute is based in New Zealand (the lease concerns New Zealand land, the lessor and the lessee are New Zealand corporations);
(c)there is no allegation that the breaches of duty to GNZ occurred anywhere other than New Zealand;
(d)expert evidence as to issues such as whether the rental was in excess of market rent and the value of the fit out will likely be given by expert witnesses located in New Zealand.
The facts in this case are quite different to those in the Rocklea Spinning Mills case, where there were a number of factors connecting the dispute to Victoria. Here, the only factor connecting the dispute to Victoria is that Mr Nolten is a resident of this State. In this regard, he has undertaken to accept service of proceedings commenced in New Zealand and has unconditionally consented to the jurisdiction of the New Zealand courts. It is clear that relief is available to GNZ in New Zealand. Indeed, GNZ has reserved its position in respect of the joinder of additional parties to the existing New Zealand proceeding pending the outcome of the application to join GNZ as a further plaintiff in this proceeding in this Court. Any judgment obtained against Mr Nolten could easily be registered and enforced in Australia, if it was not possible to enforce the judgment against him in New Zealand.
There are no personal or juridical advantages to GNZ in commencing the proceeding in Victoria when it is a New Zealand company which is involved in litigation in New Zealand in which the claim it proposes to bring against Mr Nolten could be brought.
The existence of the New Zealand proceeding simply adds to the weight of the conclusion I have already reached that Victoria is an inappropriate forum. As the Associate Judge said, the claim sought to be agitated by GNZ in the Victorian proceeding almost completely mirrors the issues in the New Zealand proceeding.
In their written submissions, the appellants relied upon a line of authorities concerning choice of forum clauses and stays where there would be a splintering of a dispute across jurisdictions. It was submitted that the effect of a stay in this case would be to fragment the relief sought against Mr Nolten in respect of his conduct as the managing director of the first plaintiff (“GA”).[14] The cases relied upon need to be read and understood in the context of their own facts, which concerned choice of forum clauses. In any event, in the circumstances of this case, the greater risk would be the risk of inconsistent findings if GNZ were permitted to litigate its claim against Mr Nolten in Victoria.
[14]No issue of credit in respect of Mr Nolten will arise in the New Zealand proceeding as he has admitted that he did not tell anyone that he had an interest in the trust which was the beneficial owner of the leased land.
The appellants also submitted that the claims made by GA against Mr Nolten in this proceeding are set off in defence of claims made by Mr Nolten against GA. It was submitted that the GNZ claim could be “effectively” set off in this way and that this was a reason why Victoria was not an inappropriate forum. I do not accept this submission as it is clear that no set off would arise as between GNZ and Mr Nolten (albeit that as a practical matter, the parties may choose to proceed in the manner suggested by the appellants).
The appellants also submitted that I should have regard to the chronology of claims. The New Zealand litigation has been brought seven months after these proceedings were commenced and four months after a claim against Mr Nolten in respect of the Tauranga lease was first raised. In the appellants’ submission, Mr Nolten is seeking a tactical advantage in opposing the application for joinder. Even if that is so, I do not accept that it gives rise to a basis on which to grant the application for joinder. As the Associate Judge found, LOMT was perfectly entitled to issue proceedings in New Zealand in order to have the issue of the validity of the lease determined.
The appellants also relied on a submission that Mr Nolten’s role as managing director of GA (a Victorian based company) included responsibility for GNZ (a wholly owned subsidiary) and that Mr Nolten held the position of sole director of GNZ only because he was employed as managing director of GA. It was submitted that the dispute about the Tauranga lease arose in that context. Whilst that may be so, in my opinion these matters do not detract from my finding that Victoria is an inappropriate forum, for the reasons set out above. The dispute between GNZ and Mr Nolten is about his conduct as a director of that company (not in his capacity as a director of GA).
The orders of 22 April 2010 and background issues
On 22 April 2010, the Associate Judge made an order that the claims in paragraphs 77 to 90 of the further amended statement of claim be stayed. The plaintiffs seek leave to appeal from that order.
In so far as the pleading in paragraphs 77 to 90 concern GA, the relevant paragraphs relate to a claim by it against Mr Nolten for breach of his duties as a director of GA, connected with the entry by GNZ into the New Zealand lease. The relief sought is an account of profits, alternatively, an order for equitable compensation.
On the hearing before me, counsel for the appellants properly conceded that paragraph 89 of the further amended statement of claim could not stand in its current form. The reason for this is that it pleads that GA has suffered loss comprising its obligation to pay above market rent, the value of fit out of the premises and the cost of removing the fit out at the end of the lease (all of which relate not to GA, but rather to GNZ).
Counsel sought leave to amend paragraphs 77-90 in accordance with the proposed amended statement of claim that had been prepared in anticipation of leave being granted to join GNZ as a further plaintiff. I have therefore considered that proposed pleading for the purpose of this part of the application for leave to appeal.
The proposed pleaded case
It was submitted on behalf of GA that the material facts alleged in paragraphs 77 to 90 of the proposed further amended statement of claim are:
(a)Mr Nolten was a director of GA and owed fiduciary and statutory duties;
(b)GNZ is and was at all relevant times a wholly owned subsidiary of GA;
(c)at relevant times GNZ was under the control of Mr Nolten as its sole director;
(d)in April 2008 Mr Nolten caused GNZ to enter into a lease of premises;
(e)the lessor under the lease was LOMT;
(f)the rent payable under the lease was NZ$46,000 per annum;
(g)the rent was in excess of market rent;
(h)GNZ spent approximately NZ$167,000 fitting out the premises;
(i)Mr Nolten held a beneficial interest in LOMT;
(j)Mr Nolten did not disclose to the board of GA his interest in LOMT.
It was submitted that Mr Nolten owed a duty to GA separate and distinct to the duty he owed to GNZ and that the breach of that duty has led to loss. It was also submitted that the case here is distinguishable from that where a shareholder sues in respect of a cause of action available to a company in respect of damage suffered by the company.
The loss pleaded is:
(a)GNZ’s obligation to pay rent in excess of market rent for the duration of the lease;
(b)the value of any part of the fit-out that is not fully amortised at the end of the lease that GNZ is unable to retain;
(c)the cost to GNZ of removing its fit-out at the end of the lease.
The particulars of that loss, in respect to GA, are said to arise by reason of GNZ being a wholly owned subsidiary of GA; and the costs incurred by GNZ in excess of the costs it would have incurred, but for Mr Nolten’s breach of duty, give rise to a reduction in the retained profit of GNZ which results directly in a corresponding loss to GA.
Reflective loss
In Thomas v D’Arcy,[15] the Queensland Court of Appeal applied the principle adopted by the House of Lords in Johnson v Gore Wood & Co.,[16] that a shareholder in a company is not entitled to claim or recover damages for a loss which is a diminution in the value of the shareholder’s shareholding that merely reflects the loss suffered by the company. Those cases were followed in Ballard v Multiplex Ltd.[17] The Australian cases make it clear that in applying the principle, the Court must consider the substance of the claim, not the form in which it is pleaded.[18]
[15][2005] 1 Qd R 666; [2005] QCA 68.
[16][2002] 2 AC 1.
[17][2008] NSWSC 1019.
[18]Thomas v D’Arcy [2005] 1 Qd R 666 at 675; [2005] QCA 68 at [18]; Ballard v Multiplex Ltd [2008] NSWSC 1019 at [41].
The Associate Judge’s decision
Her Honour referred to the relevant authorities and the defendants’ submission that GA cannot recover damages for a loss caused by a breach of duty owed both to the shareholder and the company where the loss is merely derivative or reflective in nature. Her Honour held:
In this case, it is obvious that the losses claimed by the first plaintiff are entirely reflective of the losses claimable by its New Zealand subsidiary, in that the losses claimed are described as “a reduction in the retained profit of Groeneveld New Zealand which results directly in a corresponding loss to the first plaintiff”, and there is no doubt that Groeneveld New Zealand could sue and recover the losses claimed to have been suffered by it as a result of the breaches of the duties owed by Mr Nolten to it.
The appellants submitted that her Honour’s conclusion ignores the following:
(a)Mr Nolten was a director of both GA and GNZ at the time he organised for GNZ to lease premises he effectively owned;
(b)the accounts of GA and GNZ are consolidated monthly, such that any increase in expenses to GNZ comes off the profit of GA;
(c)the law in relation to the claim against Mr Nolten by GA and GNZ is different. The breach of duty to GA is governed by the Corporations Act in Australia. Mr Nolten’s breach of duty to GNZ concerns s 141 of the Companies Act (NZ) which has a requirement that a lease be voided within three months after the director discloses a conflict of interest;
(d)it is conceivable – although keenly disputed by the plaintiffs – that GNZ’s claim against Mr Nolten could not succeed but the claim by GA could.
Those matters do not address the key issue, that the loss claimed by GA is entirely reflective of GNZ’s losses.
Counsel for the appellant submitted that the Full Federal Court in Harris v Milfull[19] ought to be understood as saying that reflective loss cases may depend on final findings of fact and it is inadvisable to strike out pleadings in such cases. It is true that their Honours stressed that a court must be very careful in shutting out an applicant at a preliminary stage and said that the deficiencies in the claim must be clear.
[19][2002] FCAFC 442.
In my opinion, the deficiencies in the proposed further amended statement of claim are clear. As was said by Williams JA in Thomas v D’Arcy:[20]
What the appellant cannot do, suing on the breach of the separate duty owed to him, is recover by way of damages losses which in reality are or are reflective of, the losses sustained by the companies.
[20][2005] 1 Qd R 666 at 678; [2005] QCA 68 at [30].
That is exactly what GA is attempting to do here. Although it is put that the loss arises from a breach of a separate duty owed to GA, it is clear that those losses are reflective of the loss of GNZ. The particulars in the proposed pleading make this obvious.
Counsel also submitted that none of the cases deal with the situation here where there is a separate and distinct duty that Mr Nolten owes to GA, as a director, from the duty that he owes to GNZ as its sole director. It was put that if Mr Nolten was not a director of GNZ and was only a director of GA and, if in that capacity, he allowed GNZ to enter into an uncommercial lease, GA would be entitled to plead a case against him for breach of duty. In my view, this analysis does not assist GA because, in those circumstances, no issue of reflective loss would arise as GNZ would have no claim against Mr Nolten. Both Johnson v Gore Wood & Co. and Thomas v D’Arcy make it clear that shareholders may sue for loss suffered by them when the company has no cause of action available to it.[21]
[21]Thomas v D’Arcy [2005] 1 Qd R 666 at 673; [2005] QCA 68 at [18]; Ballard v Multiplex Ltd [2008] NSWSC 1019 at [11].
Finally, counsel for the appellants submitted that if I were to find that the pleading should be stayed in respect of the claims for an account and for equitable compensation, the pleading should remain and operate insofar as it supports a claim for declaratory relief. It was submitted that a declaration that Mr Nolten has breached his duties as a director of GA would have utility. It was put that all of the facts and circumstances relevant to each alleged breach (including the alleged breach in respect of the New Zealand lease) would be relevant to cross‑examination and the argument about whether Mr Nolten has breached his duties as a director of GA. It was also submitted that a declaration that Mr Nolten was in breach of his duties as a director could not be said to be inutile in circumstances where the declaration would be sought as part of the existing broader proceedings and there are regulators in this country.
I do not accept those submissions. In this case, the declaration sought by GA in respect of Mr Nolten’s conduct would be of no value or benefit to GA if there were no damages able to be recovered in relation to that declaration. It would not be relevant to the other relief sought by GA in respect of the independent alleged breaches by Mr Nolten. The position may have been different if declaratory relief alone was sought in proceedings brought by a regulator against Mr Nolten, but that is not the case here.
Leave should be refused in respect of the appeal from the 22 April 2010 orders
In my view, there is not sufficient doubt to warrant her Honour’s decision of 22 April 2010 being reconsidered. Further, I accept the first defendant’s submission that, in any event, no substantial injustice arises because GNZ can directly sue for the loss complained of in the New Zealand proceeding.
Accordingly, I refuse the application for leave to appeal from the orders of 22 April 2010.
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