Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd - [2020] WASCA 77

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   HANCOCK PROSPECTING PTY LTD -v- DFD RHODES PTY LTD [2020] WASCA 77
CORAM:   QUINLAN CJ
BEECH JA
VAUGHAN JA

HEARD:   18 & 19 NOVEMBER 2019
DELIVERED          :   19 MAY 2020
FILE NO/S:   CACV 12 of 2019
BETWEEN:   HANCOCK PROSPECTING PTY LTD
First Appellant
HOPE DOWNS IRON ORE PTY LTD
Second Appellant
HANCOCK MINERALS PTY LTD
Third Appellant
TADEUSZ JOZEF WATROBA
Fourth Appellant
WESTRAINT RESOURCES PTY LTD
Fifth Appellant
HMHT INVESTMENTS PTY LTD
Sixth Appellant
ROY HILL IRON ORE PTY LTD
Seventh Appellant
MULGA DOWNS IRON ORE PTY LTD
Eighth Appellant
AND
DFD RHODES PTY LTD
First Respondent
MATTHEW JOHN KEADY as executor of the estate of DONOVAN FRANCES DUNCAN RHODES
DOROTHEA MARGARET CAMPBELL as executor of the estate of DONOVAN FRANCES DUNCAN RHODES
Second Respondents
WRIGHT PROSPECTING PTY LTD
Third Respondent
BIANCA HOPE RINEHART
Fourth Respondent
JOHN LANGLEY HANCOCK
Fifth Respondent
HOPE RINEHART WELKER
Sixth Respondent
GINIA HOPE FRANCIS RINEHART
Seventh Respondent
GEORGINA HOPE RINEHART
Eighth Respondent
THE HANCOCK FAMILY MEMORIAL FOUNDATION LTD
Ninth Respondent
150 INVESTMENTS PTY LTD
Tenth Respondent
MAX CHRISTOPHER DONNELLY as trustee in bankruptcy of LANGLEY GEORGE HANCOCK
Eleventh Respondent
MULGA DOWNS INVESTMENTS PTY LTD
Twelfth Respondent
HAMERSLEY WA PTY LTD
Thirteenth Respondent

FILE NO/S: CACV 16 of 2019
BETWEEN: GEORGINA HOPE RINEHART
First Appellant
150 INVESTMENTS PTY LTD
Second Appellant
AND
BIANCA HOPE RINEHART
First Respondent
JOHN LANGLEY HANCOCK
Second Respondent
HANCOCK PROSPECTING PTY LTD
Third Respondent
HANCOCK MINERALS PTY LTD
Fourth Respondent
THE HANCOCK FAMILY MEMORIAL FOUNDATION LTD
Fifth Respondent
TADEUSZ JOZEF WATROBA
Sixth Respondent
WESTRAINT RESOURCES PTY LTD
Seventh Respondent
HMHT INVESTMENTS PTY LTD
Eighth Respondent
HOPE RINEHART WELKER
Ninth Respondent
GINIA HOPE FRANCIS RINEHART
Tenth Respondent
MAX CHRISTOPHER DONNELLY as trustee in bankruptcy of LANGLEY GEORGE HANCOCK
Eleventh Respondent
HOPE DOWNS IRON ORE PTY LTD
Twelfth Respondent
ROY HILL IRON ORE PTY LTD
Thirteenth Respondent
MULGA DOWNS INVESTMENTS PTY LTD
Fourteenth Respondent
MULGA DOWNS IRON ORE PTY LTD
Fifteenth Respondent
WRIGHT PROSPECTING PTY LTD
Sixteenth Respondent
DFD RHODES PTY LTD
Seventeenth Respondent
MATTHEW JOHN KEADY as executor of the estate of DONOVAN FRANCES DUNCAN RHODES
DOROTHEA MARGARET CAMPBELL as executor of the estate of DONOVAN FRANCES DUNCAN RHODES
Eighteenth Respondents
HAMERSLEY WA PTY LTD
Nineteenth Respondent

FILE NO/S: CACV 88 of 2019
BETWEEN: HANCOCK PROSPECTING PTY LTD
First Appellant
HOPE DOWNS IRON ORE PTY LTD
Second Appellant
HANCOCK MINERALS PTY LTD
Third Appellant
TADEUSZ JOZEF WATROBA
Fourth Appellant
WESTRAINT RESOURCES PTY LTD
Fifth Appellant
HMHT INVESTMENTS PTY LTD
Sixth Appellant
ROY HILL IRON ORE PTY LTD
Seventh Appellant
MULGA DOWNS IRON ORE PTY LTD
Eighth Appellant
GEORGINA HOPE RINEHART
Ninth Appellant
150 INVESTMENTS PTY LTD
Tenth Appellant
GINIA HOPE FRANCIS RINEHART
Eleventh Appellant
HOPE RINEHART WELKER
Twelfth Appellant
AND
WRIGHT PROSPECTING PTY LTD
First Respondent
DFD RHODES PTY LTD
Second Respondent
MATTHEW JOHN KEADY as executor of the estate of DONOVAN FRANCES DUNCAN RHODES
DOROTHEA MARGARET CAMPBELL as executor of the estate of DONOVAN FRANCES DUNCAN RHODES
Third Respondents
BIANCA HOPE RINEHART
Fourth Respondent
JOHN LANGLEY HANCOCK
Fifth Respondent
THE HANCOCK FAMILY MEMORIAL FOUNDATION LTD
Sixth Respondent
MAX CHRISTOPHER DONNELLY as trustee in bankruptcy of LANGLEY GEORGE HANCOCK
Seventh Respondent
MULGA DOWNS INVESTMENTS PTY LTD
Eighth Respondent
HAMERSLEY WA PTY LTD
Ninth Respondent

Catchwords:

Arbitration - Proper construction of s 8(1) of the Commercial Arbitration Act 2012 (WA) - Whether s 8(1) requires mandatory stay of proceedings brought by third parties to arbitration agreement - Whether proceedings brought by third parties are 'in a matter which is the subject of an arbitration agreement'

Arbitration - Proper construction of s 5 of the Commercial Arbitration Act 2012 (WA) - Whether a court determining a claim by third parties to arbitration agreement 'intervening in a matter governed by' the Act

Arbitration - Application for stay of proceedings pursuant to the court's general power - Whether primary court erred in exercise of discretion - Whether failure to take into account relevant considerations - Whether irrelevant considerations taken into account - Re-exercise of discretion

Arbitration - Where curial proceedings brought by third parties against several defendants who are parties to an arbitration agreement - Where some defendants plead defence and counterclaim raising issues that overlap with the subject matter of the arbitration agreement - Where pursuant to s 8 of the Commercial Arbitration Act 2012 (WA) the court refers the parties to arbitration in relation to the counterclaim - Application for stay of the proceedings under the court's general discretion - Whether judge erred in treating the potential binding effect of the court's decision upon an issue in the arbitration as a factor favouring refusal of a stay of the curial proceedings

Injunctions - Whether court should restrain party from asserting claim in pleadings - Whether primary court erred in exercise of discretion

Legislation:

Arbitration Act 1996 (NZ)
Commercial Arbitration Act 2010 (NSW), s 8(1)
Commercial Arbitration Act 2012 (WA), s 5, s 8, s 17J
International Arbitration Act 1974 (Cth), s 7
Iron Ore (Hope Downs) Agreement Act 1992 (WA)
Supreme Court Act 1935 (WA), s 25(9), s 60(1)(f)

Result:

CACV 12 of 2019: Directions as to further hearing of appeal. Cross appeal dismissed
CACV 16 of 2019: Appeal dismissed. Cross appeal dismissed
CACV 88 of 2019: Directions as to further hearing of appeal.

Category: A

Representation:

CACV 12 of 2019

Counsel:

First Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Second Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Third Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Fourth Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Fifth Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Sixth Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Seventh Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Eighth Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
First Respondent	:	D Ryan SC & S Taylor
Second Respondents	:	D Ryan SC & S Taylor
Third Respondent	:	L Kelly SC & T Mehigan SC & W LeMass
Fourth Respondent	:	C H Withers & A Hochroth
Fifth Respondent	:	C H Withers & A Hochroth
Sixth Respondent	:	No appearance
Seventh Respondent	:	K Lindeman
Eighth Respondent	:	G Finch SC & C Boya SC & T O'Brien
Ninth Respondent	:	No appearance
Tenth Respondent	:	G Finch SC & C Boya SC & T O'Brien
Eleventh Respondent	:	No appearance
Twelfth Respondent	:	No appearance
Thirteenth Respondent	:	No appearance

Solicitors:

First Appellant	:	Corrs Chambers Westgarth
Second Appellant	:	Corrs Chambers Westgarth
Third Appellant	:	Corrs Chambers Westgarth
Fourth Appellant	:	Corrs Chambers Westgarth
Fifth Appellant	:	Corrs Chambers Westgarth
Sixth Appellant	:	Corrs Chambers Westgarth
Seventh Appellant	:	Corrs Chambers Westgarth
Eighth Appellant	:	Corrs Chambers Westgarth
First Respondent	:	Taylor and Taylor Lawyers Pty Ltd
Second Respondents	:	Taylor and Taylor Lawyers Pty Ltd
Third Respondent	:	Clayton Utz
Fourth Respondent	:	Yeldham Price O'Brien Lusk
Fifth Respondent	:	Yeldham Price O'Brien Lusk
Sixth Respondent	:	Deutsch Miller
Seventh Respondent	:	Dentons (NSW)
Eighth Respondent	:	Speed & Stracey Lawyers
Ninth Respondent	:	No appearance
Tenth Respondent	:	Speed & Stracey Lawyers
Eleventh Respondent	:	No appearance
Twelfth Respondent	:	No appearance
Thirteenth Respondent	:	Allens

CACV 16 of 2019

Counsel:

First Appellant	:	G Finch SC & C Bova SC & T O'Brien
Second Appellant	:	G Finch SC & C Bova SC & T O'Brien
First Respondent	:	C H Withers & A Hochroth
Second Respondent	:	C H Withers & A Hochroth
Third Respondent	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Fourth Respondent	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Fifth Respondent	:	No appearance
Sixth Respondent	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Seventh Respondent	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Eighth Respondent	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Ninth Respondent	:	No appearance
Tenth Respondent	:	K Lindeman
Eleventh Respondent	:	No appearance
Twelfth Respondent	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Thirteenth Respondent	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Fourteenth Respondent	:	No appearance
Fifteenth Respondent	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Sixteenth Respondent	:	L Kelly SC & T Mehigan SC & W LeMass
Seventeenth Respondent	:	D Ryan SC & S Taylor
Eighteenth Respondents	:	D Ryan SC & S Taylor
Nineteenth Respondent	:	No appearance

Solicitors:

First Appellant	:	Speed & Stracey Lawyers
Second Appellant	:	Speed & Stracey Lawyers
First Respondent	:	Yeldham Price O'Brien Lusk
Second Respondent	:	Yeldham Price O'Brien Lusk
Third Respondent	:	Corrs Chambers Westgarth
Fourth Respondent	:	Corrs Chambers Westgarth
Fifth Respondent	:	No appearance
Sixth Respondent	:	Corrs Chambers Westgarth
Seventh Respondent	:	Corrs Chambers Westgarth
Eighth Respondent	:	Corrs Chambers Westgarth
Ninth Respondent	:	No appearance
Tenth Respondent	:	Dentons (NSW)
Eleventh Respondent	:	No appearance
Twelfth Respondent	:	Corrs Chambers Westgarth
Thirteenth Respondent	:	Corrs Chambers Westgarth
Fourteenth Respondent	:	No appearance
Fifteenth Respondent	:	Corrs Chambers Westgarth
Sixteenth Respondent	:	Clayton Utz
Seventeenth Respondent	:	Taylor And Taylor Lawyers Pty Ltd
Eighteenth Respondents	:	Taylor And Taylor Lawyers Pty Ltd
Nineteenth Respondent	:	Allens

CACV 88 of 2019

Counsel:

First Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Second Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Third Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Fourth Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Fifth Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Sixth Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Seventh Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Eighth Appellant	:	N C Hutley SC & C Colquhoun & J Hutton & C Mitchell
Ninth Appellant	:	G Finch SC & C Bova SC & T O'Brien
Tenth Appellant	:	G Finch SC & C Bova SC & T O'Brien
Eleventh Appellant	:	K Lindeman
Twelfth Appellant	:	No appearance
First Respondent	:	L Kelly SC & T Mehigan SC & W LeMass
Second Respondent	:	D Ryan SC & S Taylor
Third Respondents	:	D Ryan SC & S Taylor
Fourth Respondent	:	C H Withers & A Hochroth
Fifth Respondent	:	C H Withers & A Hochroth
Sixth Respondent	:	No appearance
Seventh Respondent	:	K Lindeman
Eighth Respondent	:	G Finch SC & C Bova SC & T O'Brien
Ninth Respondent	:	No appearance

Solicitors:

First Appellant	:	Corrs Chambers Westgarth
Second Appellant	:	Corrs Chambers Westgarth
Third Appellant	:	Corrs Chambers Westgarth
Fourth Appellant	:	Corrs Chambers Westgarth
Fifth Appellant	:	Corrs Chambers Westgarth
Sixth Appellant	:	Corrs Chambers Westgarth
Seventh Appellant	:	Corrs Chambers Westgarth
Eighth Appellant	:	Corrs Chambers Westgarth
Ninth Appellant	:	Speed & Stracey Lawyers
Tenth Appellant	:	Speed & Stracey Lawyers
Eleventh Appellant	:	Dentons Australia
Twelfth Appellant	:	Deutsch Miller
First Respondent	:	Clayton Utz
Second Respondent	:	Taylor and Taylor Lawyers Pty Ltd
Third Respondents	:	Taylor and Taylor Lawyers Pty Ltd
Fourth Respondent	:	YPOL Lawyers
Fifth Respondent	:	YPOL Lawyers
Sixth Respondent	:	No appearance
Seventh Respondent	:	Dentons (NSW)
Eighth Respondent	:	Speed & Stracey Lawyers
Ninth Respondent	:	No appearance

Case(s) referred to in decision(s):

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170
Australian Maritime Systems Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2016] WASC 52
Barfoot v O'Meara [2019] NZHC 3470
Cape Lambert Resources Ltd v MCC Australian Sanjin Mining Pty Ltd [2013] WASCA 66; (2013) 298 ALR 666
Carter Holt Harvey Ltd v Genesis Power Ltd [2006] 3 NZLR 794
Chandu Lal Agarwalla v Khalilur Rahaman [1949] LR 77 Ind App 27
Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] FCAFC 192; (2006) 157 FCR 45
Fencott v Muller (1983) 152 CLR 570
Fitzpatrick v Emerald Grain Pty Ltd [2017] WASC 206
Flint Inc NZ Ltd v Huhtamaki Australia Pty Ltd [2014] VSCA 166; (2014) 44 VR 64
Hancock Prospecting Pty Ltd v Rinehart [2017] FCAFC 170; (2017) 257 FCR 442
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2019] WASCA 141
Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (1998) 86 FCR 374
House v The King [1936] HCA 40; (1936) 55 CLR 499
In the matter of Ikon Group Ltd (No 2) [2015] NSWSC 981
Insurance Exchange of Australasia v Dooley [2000] NSWCA 159; (2000) 50 NSWLR 222
Interchase Corporation Ltd (in liq) v FAI General Insurance Co Ltd [1998] QCA 180; [2000] 2 Qd R 301
JN Taylor Holdings Ltd (in liq) v Bond (1993) 59 SASR 432
John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1
John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451
Lysaght Buildings Solutions Pty Ltd v Blanalko Pty Ltd [No 3] [2013] VSC 435
Maung Sein Done v Ma Pan Nyun [1932] LR 59 Ind App 247
McConnell Dowell Constructors (Aust) Pty Ltd v The Ship 'Asian Atlas' [2011] FCA 174
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2017] WASCA 76
Munni Bibi v Tirloki Nath [1931] LR 58 Ind App 158
Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; (1988) 165 CLR 197
Paharpur Cooling Towers Ltd v Paramount (WA) Ltd [2008] WASCA 110
Patrick Jebb as trustee for The Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd [2019] WASCA 208
Pearce v International Mining Technologies Ltd [2009] WASCA 239
Pipeline Services WA Pty Ltd v ATCO Gas Australia Pty Ltd [2014] WASC 10
QBE Insurance (Australia) Ltd v Lois Nominees Pty Ltd [2012] WASCA 186
Re 700 Form Holdings Pty Ltd [2014] VSC 385
Re Wakim; Ex parte McNally [1999] HCA 27; (1999) 198 CLR 511
Recyclers of Australia Pty Ltd v Hettinga Equipment Inc [2000] FCA 547; (2000) 100 FCR 420
Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 93 ALJR 582
Rinehart v Rinehart (No 3) [2016] FCA 539; (2016) 257 FCR 310
Rinehart v Rinehart (No 3) [2020] NSWSC 68
Rinehart v Welker [2012] NSWCA 95; (2012) 95 NSWLR 221
Siam Steel International PLC v Compass Group (Australia) Pty Ltd [2014] WASC 415
Sterling Pharmaceuticals Pty Ltd v The Boots Company (Aust) Pty Ltd (1992) 34 FCR 287
Subway Systems Australia Pty Ltd v Ireland (2014) 46 VR 49
Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; (1990) 169 CLR 332
UDP Holdings Pty Ltd v Ironshore Corporate Capital Ltd [2016] VSC 400
Welker & Ors v Rinehart & Anor (No 2) [2011] NSWSC 1238
Welker v Rinehart (No 4) [2011] NSWSC 1636
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 7] [2016] WASC 305
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 10] [2018] WASC 407

Table of Contents

Quinlan CJ

Introduction and Overview

CACV 12 of 2019 - HPPL's appeal

CACV 16 of 2019 - Mrs Rinehart's appeal

Issues in the appeals

The Hope Downs Deed

The primary proceedings

The claims made by WPPL and DFD Rhodes

HPPL's defences

Mr Hancock and Ms Rinehart's defences

Summary of parties' positions relevant to these appeals

Mr Hancock and Ms Rinehart's counterclaims

Issue 1: Does the Commercial Arbitration Act mandate a stay?

Statutory context - Commercial Arbitration Act

The 'matter which is the subject of an arbitration agreement'

Do the counterclaims raise a 'matter which is the subject of an arbitration agreement'?

Does the Commercial Arbitration Act mandate a stay of Mr Hancock and Ms Rinehart's defences?

What does it mean to 'stay' a defence?

Do the defences raise, or mean that the primary proceedings are 'in', a 'matter which is the subject of an arbitration agreement'?

Does section 5 of the Commercial Arbitration Act prohibit the Court from adjudicating on the defences?

Section 5 does not prohibit the Court from adjudicating on the defences

Conclusions in relation to Issue 1

Issue 2: A discretionary stay?

The learned primary judge's reasons as to a discretionary stay

HPPL's challenge to the exercise of discretion

Did the learned primary judge fail to take into account material considerations?

Did the learned primary judge take into account irrelevant considerations?

Conclusions in relation to Issue 2

Issue 3: HPPL and Mrs Rinehart's alternative claims for injunctive relief

The learned primary judge's reasons as to injunctive relief

The appellants' submissions in relation to injunctive relief

Did the learned primary judge err in refusing to grant an injunction?

Conclusions in relation to Issue 3

My conclusions as to the appeals

The programming appeals

Conclusion and orders

Beech & Vaughan JJA

Introduction

The primary judge's reasoning

Does the judge's reasoning disclose error?

The first step ‑ estoppel between co‑defendants

The third step ‑ binding effect as a factor favouring refusal of a stay

Mrs Rinehart's appeal

Other discretionary grounds

The re‑exercise of the discretion

Conclusion and orders

QUINLAN CJ:

Introduction and Overview

The appellants seek leave to appeal the decision of Le Miere J, in which his Honour refused their applications to stay proceedings commenced in the Court by Wright Prospecting Pty Ltd (WPPL), being CIV 3041 of 2010 (consolidated with CIV 2617 of 2012) (the WPPL proceedings), and DFD Rhodes Pty Ltd and others (DFD Rhodes), being CIV 2737 of 2013 (the DFD Rhodes proceedings).[1]
[1] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 10] [2018] WASC 407 (Reasons). The WPPL proceedings and the DFD Rhodes proceedings are referred to in these reasons, collectively, as the 'primary proceedings'.
There are four substantive appeals: CACV 12 of 2019 (consolidated with CACV 13 of 2019) and CACV 16 (consolidated with CACV 17 of 2019).
The appellants in the substantive appeals are:
(a)in CACV 12 and 13 of 2019, Hancock Prospecting Pty Ltd (HPPL) and related companies;[2] and
(b)in CACV 16 and 17 of 2019, Georgina Hope Rinehart (Mrs Rinehart) and 150 Investments Pty Ltd, a company controlled by Mrs Rinehart.[3]
[2] References to HPPL, in its capacity as an appellant, for the purposes of these reasons, includes the other appellants in CACV 12 of 2019. References to CACV 12 of 2019 also include CACV 13 of 2019.
[3] References to Mrs Rinehart, in her capacity as an appellant, for the purposes of these reasons, includes 150 Investments Pty Ltd, the other appellant in CACV 16 of 2019. References to CACV 16 of 2019 also include CACV 17 of 2019.

In addition to the substantive appeals, there are a number of cross‑appeals, notices of contention and further appeals in relation to programming orders made by Le Miere J, of which more will be said later.
These appeals are the latest in a series of proceedings, both curial and arbitral, concerned with the effect of what has become known as the Hope Downs Deed.
The Hope Downs Deed is a deed entered into by a number of persons including, HPPL, Mrs Rinehart, Bianca Hope Rinehart (Ms Rinehart), Hope Rinehart Welker (Ms Welker) and Ginia Hope Frances Rinehart (Ms Ginia Rinehart). John Langley Hancock (Mr Hancock) entered into a further deed in April 2007 in which he adopted the Hope Downs Deed (the April 2007 Deed).[4]
[4] Unless the context requires, references to the Hope Downs Deed include the April 2007 Deed, by which Mr Hancock became a party to the Hope Downs Deed. The Hope Downs Deed is also referred to in these reasons simply as 'the Deed'.
Mr Hancock, Ms Rinehart, Ms Welker and Ms Ginia Rinehart are Mrs Rinehart's children (collectively, the Children).
One of the purposes of the Hope Downs Deed was to quell disputes about the title to various mining tenements, including what are defined in the Deed as the Hope Downs Tenements.[5] Those disputes arose from claims initially made by Mr Hancock in around 2003.
[5] The Hope Downs Tenements are also referred to in these reasons simply as 'the Tenements'.
The Hope Downs Deed provides for releases by the parties to the Deed in relation to various Claims (as defined) and acknowledgements as to the ownership of the Hope Downs Tenements. Significantly the Hope Downs Deed, in cl 20, provides that any disputes under the Deed are to be resolved by way of confidential arbitration.
Since entering into, or agreeing to be bound by, the Hope Downs Deed, Mr Hancock and Ms Rinehart have sought to bring proceedings in various courts throughout Australia, making claims concerning the conduct of Mrs Rinehart, HPPL and others. Those claims include claims relating to the ownership of the Hope Downs Tenements.
Despite some early success,[6] Mr Hancock and Ms Rinehart have been prevented from prosecuting those claims in court proceedings, each of which has been stayed, pending the determination of those disputes by arbitration. The disputes have been referred to arbitration pursuant to s 8(1) of both the Commercial Arbitration Act 2010 (NSW) and the Commercial Arbitration Act 2012 (WA) (Commercial Arbitration Act or Act).[7]
[6] See Welker & Ors v Rinehart & Anor (No 2) [2011] NSWSC 1238; Welker v Rinehart (No 4) [2011] NSWSC 1636; Rinehart v Welker [2012] NSWCA 95; (2012) 95 NSWLR 221.
[7] Rinehart v Rinehart (No 3) [2016] FCA 539; (2016) 257 FCR 310; Hancock Prospecting Pty Ltd v Rinehart [2017] FCAFC 170; (2017) 257 FCR 442 (HPPL v Rinehart FFC); Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 93 ALJR 582 (Rinehart v HPPL HC); Rinehart v Rinehart [2020] NSWSC 68.
Of particular relevance to the present case are proceedings brought in 2014 by Mr Hancock and Ms Rinehart against Mrs Rinehart, HPPL and others in the Federal Court of Australia (the Federal Court proceedings). In the Federal Court proceedings Mr Hancock and Ms Rinehart claimed, inter alia, that the Hope Downs Tenements were held on trust for the Children. In addition to those substantive claims, the Federal Court proceedings also challenged the validity of the Hope Downs Deed itself (the validity claims).
The Federal Court proceedings were ultimately stayed, both as to the substantive claims and the validity claims, pending any arbitral reference between the parties to the Hope Downs Deed.
In all of these cases, the relevant court proceedings were commenced by one or more of the persons who are parties to the Hope Downs Deed. In the Federal Court proceedings, for example, Mr Hancock and Ms Rinehart sought relief against a number of respondents, all of whom (save for one) was a 'party' within the meaning of the Commercial Arbitration Act 2010 (NSW) (either on the basis that they were parties to the arbitration agreement in the Hope Downs Deed or claimed 'under or through' such a party).[8]
[8] As to which see Rinehart v HPPL HC [56]-[74] (Kiefel CJ, Gageler, Nettle & Gordon JJ). The claim against the third party not held to be a 'party' (Mulga Downs Investments Pty Ltd) was stayed, on the same terms, in the exercise of the court's power to control its own processes: HPPL v Rinehart FFC [336], [417] (Allsop CJ, Besanko & O'Callaghan JJ), as varied in Rinehart v HPPL HC [81].
The primary proceedings in the present case are different.
The plaintiffs in the primary proceedings, WPPL and DFD Rhodes, are not parties to, or bound by, the Hope Downs Deed. In the primary proceedings, WPPL and DFD Rhodes claim interests in the Hope Downs Tenements.[9] The defendants to the WPPL proceedings are HPPL, Hope Downs Iron Ore Pty (HDIO) and the Children. The defendants to the DFD Rhodes proceedings include all of those parties, with the addition of WPPL.
[9] The pleadings in the WPPL proceedings and the DFD Rhodes proceedings variously refer to mining tenements in areas referred to as 'Hope Downs' and 'East Angelas'. As set out below, it is sufficient, for the purposes of these appeals, to refer to the tenements the subject of the primary proceedings as the Hope Downs Tenements (being the defined tenements in the Hope Downs Deed).
In addition to filing defences in the primary proceedings, Mr Hancock and Ms Rinehart brought counterclaims against Mrs Rinehart and others, including all of the parties to the Hope Downs Deed (counterclaims). The counterclaims raise the same claims as the Federal Court proceedings.
Le Miere J stayed the counterclaims against parties to the arbitration agreement in the Hope Downs Deed, pursuant to s 8(1) of the Commercial Arbitration Act. His Honour also stayed the counterclaims against the other parties pursuant to the Court's general power to control its own proceedings.[10]
[10] In light of the High Court's decision in Rinehart v HPPL HC, which of the defendants to the counterclaims fell within the meaning of a 'party' to the arbitration agreement under the Commercial Arbitration Act and so were stayed under s 8 should, strictly, have been different. As the counterclaims against all of the defendants by counter claim were ultimately stayed, for the purposes of the appeals nothing turns on that issue.
His Honour did not, however, stay the whole of the primary proceedings.
The appellants contend that, notwithstanding that WPPL and DFD Rhodes are not bound by the Hope Downs Deed, the Court must stay the primary proceedings (or, at least, the defences filed by Mr Hancock and Ms Rinehart) pending any arbitral proceedings between the parties to the Hope Downs Deed, pursuant to the Commercial Arbitration Act. In the alternative, they contend that Le Miere J erred in not staying the primary proceedings (or the defences) pursuant to the Court's general power. The appellants further contend that his Honour erred in not restraining Mr Hancock and Ms Rinehart from making claims in the proceedings in respect of the Hope Downs Tenements.
The correctness or otherwise of these contentions are the principal issues in these appeals. Before setting out the issues in more detail, it is appropriate to set out the various grounds of appeal, cross appeal and contentions in the substantive appeals (i.e. CACV 12 of 2019 and CACV 16 of 2019) so as to place them in their proper context.

CACV 12 of 2019 - HPPL's appeal

HPPL seeks leave[11] to appeal Le Miere J's decision on the following four grounds:
[11] Leave to appeal is required in relation to all of the appeals as the orders made by Le Miere J were interlocutory orders: Supreme Court Act 1935 (WA), s 60(1)(f).
1.The primary judge erred in law in failing to:
(a)find that [Mr Hancock and Ms Rinehart's] defences in the proceedings must be the subject of a mandatory stay pursuant to s 8(1) of the [Commercial Arbitration Act];
(b)refer the matter the subject of the [Mr Hancock and Ms Rinehart's] defences to an arbitration between [HPPL, HDIO and the Children]; and
(c)     stay [Mr Hancock and Ms Rinehart's] defences.
(HPPL Ground 1)
2.The primary judge erred in law in failing to find that [Mr Hancock and Ms Rinehart's] defences should be stayed as against non-parties to the 'Hope Downs Deed':
(a)pursuant to s 8(1) of the [Commercial Arbitration Act] because [Mr Hancock and Ms Rinehart's] right or ability to bring that defence will follow inevitably from the outcome of the arbitration between the parties to the Hope Downs Deed; or
(b)as against [HDIO], pursuant to s 8(1) of the [Commercial Arbitration Act] because [HDIO] was a 'party' (within the extended definition of that term in the [Commercial Arbitration Act]) to the arbitration agreement and, consequently, s 8(1) of the [Commercial Arbitration Act] required the mandatory stay and referral of [Mr Hancock and Ms Rinehart's] defences to arbitration; or
(c)pursuant to the Court's general power to control its own proceedings as, to ensure a congruent resolution of the competing claims, the arbitration between the parties to the Hope Downs Deed had to be finalised prior to consideration of [Mr Hancock and Ms Rinehart's] right or ability to bring that defence; or
(d)pursuant to the Court's general power to control its own proceedings so as to avoid an outcome that would be incongruent with the operation of congruent Commonwealth legislation (the International Arbitration Act 1974); or
(e)pursuant to the Court's general power to control its own proceedings in the circumstances, properly considered, of the case.
(HPPL Ground 2)
3.In the alternative to grounds 1 and 2, the primary judge erred in law in failing to find that [Mr Hancock and Ms Rinehart] should be restrained from making any claim in the proceedings in respect of the 'Hope Downs tenements' (as that term is defined in the counterclaim of [Mr Hancock and Ms Rinehart]) or asserting any right to or interest in the Hope Downs tenements, pursuant to:
(a)     the inherent power of the Court;
(b) section 17J of the [Commercial Arbitration Act]; or
(c) section 29(5) of the Supreme Court Act 1935 (WA).
(HPPL Ground 3)
4.The primary judge erred in law in failing to find that the plaintiffs' claims should be stayed pursuant to the Court's general powers to control its own proceedings and, in doing so, his Honour's discretion miscarried as:
(a)his Honour failed to take into account material considerations, namely:
i.      the existence of a stay pursuant to s 8(1) of the [Commercial Arbitration Act] over the defences of [Mr Hancock and Ms Rinehart], which his Honour should have but did not take into account by reason of his earlier error in failing to grant that stay;
ii.     the risk of consistent decisions and unnecessary duplication and expense was greater if the court proceedings and arbitration proceeded concurrently;
iii. the possibility that, if the Court proceedings enveloped and practically disposed of matters to be determined in the arbitration, such an outcome would constitute an impermissible intervention under s 5 of the [Commercial Arbitration Act], and would be liable to be set aside;
iv.    the appellants did not initiate the proceedings in this Court; and
v.     the appellants were not responsible for the time of the stay applications relative to the commencement date of the proceedings;
(b)his Honour took into account irrelevant and wrong considerations, and considerations that have a different effect if approached in accordance with principle, namely:
i.      at [Reasons] [199], [203] and [211] his Honour misapplied John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1 and wrongly held that [Mr Hancock and Ms Rinehart], if referred to arbitration, would not be bound by a determination in this case of the ownership of the Hope Downs tenements and could seek to have the relevant declarations declared nullities.
ii.     at [Reasons] [204], his Honour held that circumvention of the arbitration agreement was an unfortunate result of the parties' entangled disputes, when such entanglement should have weighed in favour of the stay applications being granted if considered in accordance with principle;
iii.    at [Reasons] [205], his Honour considered the timing of the stay applications to be a relevant factor that weighed against granting the stays, but failed to consider that the plaintiff was responsible for that timing due to their belated joinder to the proceedings of [Mr Hancock and Ms Rinehart];
iv.    at [Reasons] [206], his Honour held that a stay of proceedings involved a 'significant interference' with the plaintiffs' rights, without identifying what the significant interference was and why it caused unfair prejudice to the plaintiffs;
v.     at [Reasons] [207], his Honour wrongly held that this Court is the only forum in which all claims to the Hope Downs tenements could be resolved, when in fact some claims can only be determined in arbitration;
vi.    at [Reasons] [208], his Honour considered that the Court proceedings were more advanced than the arbitration, but failed to consider that it is inherent in the nature of a stay under s 8(1) of the [Commercial Arbitration Act] that it will be sought part-way through Court proceedings.
(HPPL Ground 4)
These grounds do not crisply mark the distinction between the two alternative grounds for a stay. For example, while HPPL Ground 1 is clearly directed to whether a mandatory stay was required by the Commercial Arbitration Act (i.e. 'must'), and HPPL Ground 4 is clearly concerned with the discretion to order a stay under the Court's general powers, HPPL Ground 2 variously refers to issues in relation to the claim for a mandatory stay (ground 2(a) and (b)) and those in relation to the Court's general powers (ground 2(c) to (e)).
I note, also, that HPPL Grounds 1 and 2 refers to a stay of Mr Hancock and Ms Rinehart's defences, whereas HPPL Ground 4 contends for a stay of the primary proceedings as a whole (referring to 'the plaintiffs' claims'). What is meant by the notion of 'staying' a defence is discussed further below.
WPPL filed a notice of contention in relation to HPPL's appeal. It contains three grounds:
(a)first, s 8(1) of the [Commercial Arbitration Act] does not mandate a stay of an action in any circumstances;
(WPPL Contention 1)
(b)second, the primary judge had no power to grant the injunction sought by the HPPL Parties;
(WPPL Contention 2)
(c)third, if the HPPL Parties' application for an injunction had, correctly, been brought as an application for a stay, the applicable legal test is stricter than the test applied by the primary judge with respect to an injunction.
(WPPL Contention 3)
It will be apparent that WPPL Contention 1 relates to HPPL Grounds 1 and 2, and that WPPL Contentions 2 and 3 relate to HPPL Ground 3.
Finally, in relation to HPPL's appeal, Mr Hancock and Ms Rinehart raise a notice of contention and cross-appeal.
In their notice of contention, Mr Hancock and Ms Rinehart raise the following two contentions:
1.[Mr Hancock and Ms Rinehart's] claims in respect of the Hope Downs tenements in their defences did not raise any 'matter which is the subject of an arbitration agreement' within the meaning of s 8(1) of the [Commercial Arbitration Act]; (H & R Contention 1) and/or
2.it would have been premature for the court to stay [Mr Hancock and Ms Rinehart's] defences without first hearing and determining [Mr Hancock and Ms Rinehart's] chambers summonses [seeking to restrain HPPL and Mrs Rinehart from relying upon the Hope Downs Deed]. (H & R Contention 2)
The cross-appeal brought by Mr Hancock and Ms Rinehart seeks to appeal the stay of their counterclaims. The grounds of cross-appeal are in identical terms to the grounds in their notice of contention, save that they refer to the counterclaims.
Ground 1 of the cross-appeal, for example, is in the following terms:
1.[Mr Hancock and Ms Rinehart's] claims in respect of the Hope Downs tenements in their counterclaims did not raise any 'matter which is the subject of an arbitration agreement' within the meaning of s 8(1) of the [Commercial Arbitration Act]; (Cross‑appeal Ground 1).
Ground 2 of the cross-appeal, which was in substantially the same terms as H & R Contention 2, was abandoned at the hearing of the appeals.[12]
[12] Appeal ts 195.

CACV 16 of 2019 - Mrs Rinehart's appeal

Mrs Rinehart seeks leave to appeal Le Miere J's decision on the following five grounds:
1.The primary judge erred in law:
(a)in failing to find that the allegations and claims made in the [Mr Hancock and Ms Rinehart's] defences in the proceedings, which repeated and incorporated the allegations and claims made in their counterclaims, formed part of the same arbitral matters as the primary judge correctly found must be the subject of a mandatory stay pursuant to s 8(1) of the [Commercial Arbitration Act]; and
(b)in failing to find that a mandatory stay of the arbitral matters the subject of the counterclaims operated to stay [Mr Hancock and Ms Rinehart's] defences in the proceedings, to the extent they repeat and incorporate the allegations and claims made in their counterclaims.
(Rinehart Ground 1)
2.The primary judge erred in law:
(a)in failing to find that [Mr Hancock and Ms Rinehart's] defences in the proceedings, to the extent they repeat and incorporate the allegations and claims made in their counterclaims, must, like those counterclaims, be the subject of a mandatory stay pursuant to s 8(1) of the [Commercial Arbitration Act]; and
(b)in failing to stay [Mr Hancock and Ms Rinehart's] defences, to the extent they repeat and incorporate the allegations and claims, made in their counterclaims, pursuant to s 8(1) of the [Commercial Arbitration Act].
(Rinehart Ground 2)
3.The primary judge erred in law, when considering the application of s 8(1) of the [Commercial Arbitration Act] and when determining what constituted an arbitral matter, by drawing a distinction at [Reasons] [210] between the same allegations and claims made by [Mr Hancock and Ms Rinehart] in their counterclaim as made in their defences – on the basis that the defences (in contrast to the counterclaims) did not seek any relief.
(Rinehart Ground 3)
4.In the alternative to grounds 1 - 3, the primary judge erred in law in failing to find that [Mr Hancock and Ms Rinehart] should be restrained from making any claim in the proceedings in respect of the 'Hope Downs Tenements' (as that term is defined in the counterclaim of [Mr Hancock and Ms Rinehart]) or asserting any right to or interest in the Hope Downs Tenements, pursuant to:
(a) the inherent power of the Court;
(b) section 17J or the [Commercial Arbitration Act]; or
(c) section 29(5) of the Supreme Court Act 1935 (WA).
(Rinehart Ground 4)
5.The primary judge erred in law, in not finding that [Mr Hancock and Ms Rinehart] should be restrained from making any claim in the proceedings in respect of the 'Hope Downs Tenements' (as the term is defined in the counterclaim of [Mr Hancock and Ms Rinehart]) or asserting any right to or interest in the Hope Downs Tenements, by:
(a)failing to take into account material considerations, namely:
(i)that the Court must refer to arbitration matters the subject of an arbitration agreement pursuant to the [Commercial Arbitration Act] and is not permitted to deal with those matters over the opposition of a party to such an arbitration agreement;
(ii)the appellants are only parties to the proceeding as defendants to [Mr Hancock and Ms Rinehart's] counterclaims which have been stayed;
(iii)the appellants are not parties to the claims made by WPPL and the Rhodes parties; and
(iv)the defences raised by [Mr Hancock and Ms Rinehart] to the WPPL and the Rhodes parties' claims, to the extent that they incorporate and repeat the allegations and claims in the counterclaims and make a claim in respect of the Hope Downs Tenements, make serious allegations against [Mrs Rinehart].
(b)taking into account irrelevant and wrong considerations, namely:
(i)at [Reasons] [205] the order in which proceedings were commenced;
(ii)at [Reasons] [206] that the plaintiffs' claims will not be determined in the arbitration;
(iii)at [Reasons] [207] that the court proceeding was the only forum in which all claims to the Hope Downs tenements can be resolved;
(iv)at [Reasons] [208] that the court proceedings are considerably more advanced than the arbitral proceedings;
(v)at [Reasons] [199], [203] and [211] with respect to John Alexander's Clubs Pty Ltd v White City Tennis Club (2010) 241 CLR 1.
(Rinehart Ground 5)

As can be seen, there is a good deal of overlap between these grounds and the grounds in the HPPL appeal. In that regard, Rinehart Ground 1 and Rinehart Ground 2, in substance advance the same contention as HPPL Ground 1, namely that s 8 of the Commercial Arbitration Act mandated a stay of Mr Hancock and Ms Rinehart's defences in the primary proceedings. Rinehart Ground 3 is also concerned with that issue.
Rinehart Ground 4 is in identical terms to HPPL Ground 3.
Rinehart Ground 5 is in a similar form to HPPL Ground 4, and indeed would appear to be modelled on it. It should be noted, however, that while HPPL Ground 4 asserts error in the exercise of the learned primary judge's exercise of discretion not to order a stay of the primary proceedings, Rinehart Ground 5 asserts error in the learned primary judge's discretionary decision not to restrain Mr Hancock and Ms Rinehart from making a claim to the Tenements (that is, the alternative relief identified in Rinehart Ground 4). Presumably that is because, unlike HPPL, Mrs Rinehart is not a defendant in the primary proceedings. Mrs Rinehart would thus need to seek to enforce the negative stipulation in the Hope Downs Deed by coercive order rather than seek a stay of proceedings to which she is not a party.
At the hearing of the appeals, senior counsel for Mrs Rinehart did not draw a distinction between the discretion to grant a stay and the discretion to grant an injunction. Indeed, senior counsel developed the submissions on the basis that the discretionary considerations in relation to both the proposed stay and the proposed injunction were the same.[13] For that reason, I have addressed many of the discretionary considerations raised in Rinehart Ground 5 when dealing with HPPL Ground 4. It should be emphasised, however, that Rinehart Ground 5 is confined to the claim for injunctive relief. There is no ground of appeal in which Mrs Rinehart challenges the decision not to grant a stay of the primary proceedings (or of Mr Hancock and Mr Rinehart's defences) in the exercise of the Court's discretion.
[13] Appeal ts 77.
WPPL filed a notice of contention in relation to Mrs Rinehart's appeal. It is in identical terms to its notice of contention in HPPL's appeal (set out at [25] above) and need not be repeated.
Similarly, Mr Hancock and Ms Rinehart filed a notice of contention and cross-appeal in relation to Mrs Rinehart's appeal, each of which is in the same terms as their contentions and cross-appeal in relation to HPPL's appeal (set out at [28] and [30] above).

Issues in the appeals

From the above grounds of appeal, contentions and grounds of cross-appeal a number of broad issues emerge for determination in these appeals. Logically, they arise in the following order.
The first broad issue concerns the extent of any mandatory stay required by the Commercial Arbitration Act. Much, in that regard, turns upon the proper construction of s 8 of the Commercial Arbitration Act and, in particular, of the phrase 'matter which is the subject of an arbitration agreement'. Mr Hancock and Ms Rinehart rely upon that provision for contending that the learned primary judge was in error in ordering a stay of their counterclaims (Cross-appeal Ground 1). Both HPPL and Mrs Rinehart, by contrast, rely upon s 8 as the basis for contending that his Honour erred in not ordering a mandatory stay of Mr Hancock and Ms Rinehart's defences (HPPL Grounds 1 and 2, Rinehart Grounds 1, 2 and 3, WPPL Contention 1 and H & R Contention 1).
As the submissions in relation to these grounds and contentions were developed, however, it became apparent that HPPL and Mrs Rinehart's position is not limited to the effect of s 8 of the Commercial Arbitration Act. In particular, at the hearing of the appeals, both HPPL and Mrs Rinehart relied upon s 5 of the Commercial Arbitration Act as independently giving rise to a prohibition on the Court determining the issues raised in Mr Hancock and Ms Rinehart's defences.
The second broad issue in the appeals concerns the challenge to the learned primary judge's decision whether to stay the primary proceedings, or Mr Hancock and Ms Rinehart's defences, in the exercise of the Court's general power to control its own processes. As his Honour's decision not to grant a stay in the exercise of that power involved the exercise of a discretion, that challenge requires the demonstration of an express or implied error of the kind identified in House v The King[14] (HPPL Ground 4[15]).
[14] House v The King [1936] HCA 40; (1936) 55 CLR 499, 504-505..
[15] See [35]-[36] above.
HPPL alleges that the learned primary judge failed to take into account a number of material considerations and took into account a number of irrelevant considerations. As noted above, Mrs Rinehart raised a number of these matters in the context of the alternative claim for injunctive relief.
The third broad issue in the appeals concerns HPPL and Mrs Rinehart's alternative claims for injunctive relief on the various bases identified in their grounds of appeal (HPPL Ground 3, Rinehart Ground 4 and 5, WPPL Contentions 2 and 3). Those claims rely, in particular, upon the clause in the Hope Downs Deed whereby the parties undertake 'not to challenge the right of any member of the Hancock Group to any of the Hancock Group Interests at any time' (cl 7(b)).
In dealing with the appeals, I will address the grounds of appeal in the context of these broad issues. No doubt other issues will arise to be resolved along the way.
Before turning to the resolution of the principal issues in the appeals, it is appropriate to briefly set out relevant provisions of the Hope Downs Deed and to summarise the issues raised in the primary proceedings.

The Hope Downs Deed

As noted at the outset, the Hope Downs Deed was entered into by HPPL, Mrs Rinehart, Ms Rinehart, Ms Welker, Ms Ginia Rinehart and Mr Hancock. The other parties to the Deed are Hancock Minerals Pty Ltd, Hancock Family Memorial Foundation Ltd (HFMF), Mrs Rinehart as trustee of the Hope Margaret Hancock Trust, Mr Tadeusz Jozef Watroba (a director of HPPL), Westraint Resources Pty Ltd, HMHT Investments Pty Ltd and 150 Investments Pty Ltd.
As the High Court confirmed in Rinehart v HPPL HC, one of the fundamental purposes of the Deed was the quelling of disputes about the title to the Hope Downs Tenements.[16]
[16] Rinehart v HPPL HC [27] (Kiefel CJ, Gageler, Nettle & Gordon JJ).
To that end, cl 4 provides:
4.HPPL/HDIO OWNERSHIP OF HOPE DOWNS
The parties acknowledge that at all material times the Hancock Group Interests have been and remain beneficially owned by the Hancock Group member that purports to own them including, without limitation, the Hope Downs Tenements which Tenements have been at all times beneficially owned by only HPPL and or HDIO and which are not fifty per cent (50%) beneficially and legally owned by HDIO.
The 'Hancock Group Interests' are defined in cl 1.1 to mean:
(a)the Hancock Group's Interest in the Hope Downs Tenements and the Hope Downs Joint Venture;
(b) all other mining tenements, licences, permits and interests therein currently held by any member of the Hancock Group including without limitation any joint venture interests in any State or Territory of Australia;
(c) any partnership or royalty interests, choses in action, real property and any other property or asset of any nature of description held or owned by the Hancock Group.
The 'Hancock Group' is defined to mean HPPL and any 'Related Body Corporate' of HPPL.
The 'Hope Downs Tenements' are defined as the tenements held under the Iron Ore (Hope Downs) Agreement Act 1992 (WA) and the subject of the 'Hope Downs Joint Venture'. The Hope Downs Joint Venture is, in turn, defined as the unincorporated joint venture between members of the Hancock Group and members of the Rio Tinto Group.
Clause 6 of the Deed provides for various releases by the parties:
6RELEASES
Each party hereto both in its own right and in any representative capacity hereby:
(a) releases and discharges each of the other parties hereto now and in the future from any Claims,
(b) Irrevocably covenants not to take any proceedings against any of the other parties to this deed in relation to any matter arising in any jurisdiction, in respect of the Claims;
(c) Withdraws and forever abandons any and all allegations made against any of the other parties to this deed in respect of or arising (in whole or in part) directly or indirectly out of:
(i)        the Proceedings and any of the other Claims;
(ii)        the subject matter of the Proceedings;
(iii)any claim relating to an undertaking given or costs orders made in the Proceedings,
wherever and whenever arising, whether;
(iv)known or unknown at the time of execution of this deed;
(v)        presently in contemplation of such parties; or
(vi)       arising under common law, equity, statute or otherwise.
As can be seen, these releases were given both in relation to specific 'Proceedings' (defined to refer to action CIV 1327 of 2005 in the Supreme Court of Western Australia) and also to a broad class of 'Claims' generally.
'Claim' is defined in cl 1.1 to mean:
(a)any claim, demand, action, suit or proceeding whether existing or discontinued, whether at law, under statute, in equity or otherwise:
(i)for damages, injunctions, debt, restitution or other remedy including, without limitation, breach of fiduciary duty of whatever nature and howsoever arising with respect to events or matters arising or actions taken prior to the date of this deed but not including any claim, demand, action, suit or proceedings arising as a consequence of the obligations and releases which any of the parties to this deed have agreed to in the Deed of Obligation and Release or the Deed of Loan or the Porteous Settlement Deed;
(ii)with respect to any attempt to remove or vary the Trustee or any subsequent Hancock Family Group Member as trustee of the HMH Trust and replace the trustee with a person or entity who or which is not a Hancock Family Group Member; and
(iii)any damage, loss, liability, costs, charge, expense, outgoing or payment;
(iv)any action against any of the Directors of any company within the Hancock Group, including without limitation, the Other Directors; and
(b)without limitation of clause (a) includes any claim made in the Proceedings;
(c)any damage, loss, liability, costs, charge, expense, outgoing or payment; and
(d)without limitation of sub-clause (a) includes any claim made in the Proceedings; and
(e)without limitation of sub-clauses 9(a) and (b) includes any claim made in any proceeding or any discontinued proceeding and any documents to support such claim and without limitation and for clarity in the case of the Proceedings includes the unsigned draft affidavit of [Mr Hancock].
Clause 7 of the Deed provides for a number of undertakings by the parties to the Deed, including the following:
7.Undertakings
Each of the parties to this deed undertakes with each of the other parties to this deed
…
(b)not to challenge the right of any member of the Hancock Group to any of the Hancock Group Interest at any time.
The dispute resolution clause of the Hope Downs Deed is cl 20. Clause 20, relevantly, provides:
20.CONFIDENTIAL MEDIATION/ARBITRATION
In the event that there is any dispute under this deed then any party to this deed who has a dispute with any other party to this deed shall forthwith notify the other party or parties with whom there is the dispute and all other parties to this deed ('Notification') and the parties to this deed shall attempt to resolve such difference in the following manner.
20.1Confidential Mediation
(a)the disputing parties shall first attempt to resolve their dispute by confidential mediation …
…
(e)any mediation will be abandoned if:
(i) the disputing parties agree;
(ii)any of the disputing parties request the abandonment.
…
20.2Confidential Arbitration
(a)Where the disputing parties are unable to agree to an appointment of a mediator for the purposes of this clause … within fourteen (14) days of the date of the Notification or in the event any mediation is abandoned then the dispute shall on that date be automatically referred to arbitration for resolution ('Referral Date') and the following provisions of this clause shall apply: …
(b)The dispute shall be resolved by confidential arbitration by the arbitrator agreed to by each of the disputing parties or appointed pursuant to paragraph (2)(a)(i) above (or if more than one is appointed pursuant to paragraph 2(a)(ii) then as decided by not less than a majority of them) who shall resolve the matter pursuant to the Commercial Arbitration Act of Western Australia and whose decision shall be final and binding on the parties.

The primary proceedings

As noted above, WPPL and DFD Rhodes claim interests in the Hope Downs Tenements.
Without purporting to be comprehensive, the nature of those claims, and the defences thereto, as they arise from the pleadings in the primary proceedings, may be summarised as follows.

The claims made by WPPL and DFD Rhodes

It is uncontroversial that beginning in about 1958 WPPL and HPPL carried on business as a partnership, which included exploring and prospecting for minerals, investing in property and other assets, mining for minerals and receiving royalties (the Partnership).
The WPPL proceedings start from the premise that the opportunity to explore for minerals, and acquire tenements, on the areas covered by the Hope Downs Tenements was a Partnership asset.[17]
[17] Fifth Further Amended Substituted Statement of Claim dated 30 September 2016 (WPPL Statement of Claim), [41].
WPPL pleads that, throughout the 1980s, two other entities in the Hancock Group, Hancock Mining Ltd (HML) and Hancock Resources Ltd (HRL), acquired various exploration licences over the areas ultimately covered by the Tenements.[18] Those areas, and the exploration licences, are variously referred to as being in the 'Hope Downs' area and the 'East Angelas' area. In that regard, the pleadings in the primary proceedings draw a distinction, particularly in relation to exploration licences (ELs), between 'Hope Downs ELs' and 'East Angelas ELs'. For present purposes, however, nothing turns on this distinction. Ultimately, the claims with respect to the Hope Downs Tenements cover claims to interests in both the Hope Downs area and the East Angelas area.
[18] WPPL Statement of Claim [43]-[53], [63], [69]-[70].
WPPL pleads that, prior to 1992, the shares in HML and HRL were held by HFMF and that those shares were held on trust for HPPL[19]. WPPL, accordingly, pleads that HML and HRL held their interests in the various exploration licences on trust for HPPL.[20]
[19] WPPL Statement of Claim [4.2], [5.2].
[20] WPPL Statement of Claim [53A], [65.1].
WPPL pleads that HPPL's beneficial interest in those exploration licences were, in turn, held as an asset on trust for the Partnership.
The exploration licences were later transferred to HPPL and then to HDIO, a subsidiary of HPPL. WPPL maintains that HDIO then held the Tenements as an asset or interest of the Partnership.
WPPL pleads that on about 1 July 2005, HDIO and HPPL entered into a 50/50 unincorporated joint venture with Rio Tinto (and/or its subsidiaries) to develop the Tenements. As a consequence of the joint venture agreement, Hamersley WA Pty Ltd, a subsidiary of Rio Tinto, became a 50% shareholder in the Tenements.
This unincorporated joint venture is the 'Hope Downs Joint Venture' referred to in the Hope Downs Deed (thus making clear the identification of the tenements the subject of the primary proceedings as the Hope Downs Tenements, as defined in the Deed).
WPPL accordingly maintains that HDIO continues to hold its interest in the Tenements as an asset of the Partnership and that WPPL is entitled to 50% of the royalties that will in future be received by HDIO from Hamersley WA Pty Ltd in respect of the operation of the Tenements.
WPPL seeks, inter alia, declaratory relief, to recognise its asserted proprietary interests in the Tenements and the royalties.
The DFD Rhodes proceedings proceed from the same premise as the WPPL proceedings, namely that the opportunities giving rise to the Tenements were a Partnership asset and that WPPL's interest in the Tenements survived the various changes in legal ownership.
To this premise, DFD Rhodes adds the claim that the Partnership's interests are subject to a royalty agreement between the Partnership and DFD Rhodes, together with its former director the late Donovan Frances Duncan Rhodes (Mr Rhodes). As a consequence of that agreement with the Partnership, DFD Rhodes claims that the areas the subject of the Tenements are held on trust for DFD Rhodes to the extent of its royalty entitlement.[21]
[21] Third Further Amended Substituted Statement of Claim dated 7 November 2019 (DFD Rhodes Statement of Claim), [37E], [42.6].
DFD Rhodes, also seeks declaratory relief to recognise the proprietary interests that they claim.

HPPL's defences

In its defence to the WPPL Statement of Claim, HPPL admits that HFMF held the shares in HML and HRL on trust for HPPL[22] and that the exploration licences initially held by HML and HRL were held on trust for HPPL.[23]
[22] Amended Substituted Defence to Fourth Further Amended Substituted Statement of Claim dated 5 August 2016 (HPPL Defence) [4(c)(ii)], [5(c)(ii)].
[23] HPPL Defence [53A], [65(a)].
HPPL, however, denies that the rights held by, or on behalf of, HPPL were a Partnership asset. HPPL pleads that it was entitled to take up the opportunities resulting in its interest in the Tenements without being obliged to offer WPPL any opportunity to participate in that activity and without any liability to pay royalties to WPPL in respect of iron ore produced from that activity.[24] HPPL responds to the DFD Rhodes Statement of Claim in similar terms.
[24] HPPL Defence [149], [158].
Accordingly, HPPL denies that HDIO holds its interest in the Tenements as an asset of the Partnership or that it is required to account to WPPL (or DFD Rhodes) with respect to royalties received by HDIO from Hamersley WA Pty Ltd under the joint venture.
It will be apparent from the above summary that the position of WPPL, DFD Rhodes and HPPL all converge in relation to the basis upon which HML and HRL acquired and held the exploration licences which ultimately gave rise to the ownership of the Tenements. In particular, each agrees that HML and HRL's interests were held on trust for HPPL.
Where these parties diverge is at the next step, namely whether HPPL's beneficial interest was an asset of the Partnership. WPPL and DFD Rhodes say that it was. HPPL and HDIO say that it was not.
HPPL also pleads a number of subsidiary defences to the claims, including laches, acquiescence and limitation defences.

Mr Hancock and Ms Rinehart's defences

Mr Hancock and Ms Rinehart's defences in the primary proceedings diverge from those of HPPL at an earlier stage in the analysis. Unlike HPPL, Mr Hancock and Ms Rinehart deny that the assets of HML or HRL were ever held on trust for HPPL. Rather, Mr Hancock and Ms Rinehart maintain that the Tenements were, and are, held on trust for the Children.
It is worth setting out part of those defences in more detail. In that regard, I shall refer to the defence in the WPPL proceedings. The pleadings in the DFD Rhodes proceedings are to the same effect.
Mr Hancock and Ms Rinehart plead that:[25]
3A.3… [The Children] are entitled in equity to an interest in the tenements in respect of which WPPL claims in these proceedings to be entitled in equity to an interest, for the reasons set out in their statement of claim in Federal Court of Australia proceedings NSD1124/2014 (Federal Court proceedings) and for the reasons set out in their counterclaim below.
[25] Defence and Counterclaim dated 12 April 2017 [3.3A] (H & R Defence or the H & R Counterclaim, as the case may be).

In addition, Mr Hancock and Ms Rinehart:[26]
4.3deny that the issued shares in HML were held by HFMF on trust for HPPL;
4.4say that the 1995 Deed relied upon by the plaintiff was part of a fraudulent and dishonest design of [Mrs Rinehart], in breach of her duty as trustee to the HFMF Trust, with the knowledge and participation of HPPL, as pleaded in sections 10, 11 and 15 of their Statement of Claim in the Federal Court proceedings, and of their counterclaim.
[26] H & R Defence [4.3]-[4.4.].
A similar plea is made in relation to the shares in HRL.[27]
[27] H & R Defence [5.3], [5.4].
The 1995 Deed referred to in paragraph [4.4] is a deed between HPPL, HFMF and HRL, by reference to which WPPL pleads that the shares in HML and HRL were held by HFMF on trust for HPPL.[28]
[28] WPPL Statement of Claim [4.2], [5.2].
Mr Hancock and Ms Rinehart's defences go on to plead that the various transfers in title to the Tenements have been impressed with a trust in favour of the Children, as the beneficiaries of the HFMF Trust.[29] Mr Hancock and Ms Rinehart deny that the Partnership or WPPL has, or had at the relevant times, any interest in the pleaded tenements.[30]
[29] H & R Defence [76.4], [79.4], [82.3].
[30] H & R Defence [106]. See also Defence and Counterclaim dated 18 April 2017 (in the DFD Rhodes proceeding) [23].
In addition to these defences based upon their asserted ownership of the Tenements, Mr Hancock and Ms Rinehart also plead a number of other defences to the claims, including laches and acquiescence, unclean hands and limitation defences. Those defences include, at least in part, pleadings as to the Children's ownership of the Tenements.[31]
[31] See e.g. H & R Defence [155].
As appears from paragraph [3A.3] of Mr Hancock and Ms Rinehart's defences, their defences to the primary proceedings, incorporate, by reference, both their pleadings in the counterclaims and in the Federal Court proceedings. Leaving aside the issues in these appeals, this is a method of pleading not to be emulated, and has the real potential to embarrass the future conduct of the proceedings (particularly in circumstances in which the counterclaims have been stayed).
At the hearing of the appeals, counsel for Mr Hancock and Ms Rinehart clarified that the references to the counterclaims and the Federal Court proceedings in their defences were included out of 'an abundance of caution' and that the defences were not intended to incorporate every argument that is made in the counterclaims, only those aspects that support their allegation that they have an equitable interest in the Hope Downs Tenements.[32] For the purposes of considering the appeals I will read the pleadings in accordance with counsel's clarification. Mr Hancock and Ms Rinehart accepted that, if these appeals were dismissed, the pleadings concerning their alleged interest in the Hope Downs Tenements (and only those pleadings) should be pleaded in the defences.

Summary of parties' positions relevant to these appeals

[32] Appeal ts 184.

In light of the above summary, and at the risk of oversimplifying matters, the parties' respective positions in the primary proceedings, as they relate to the Hope Downs Tenements are as follows:
(a)WPPL maintains that it is entitled to relief because the various tenements (leading ultimately to the Hope Downs Tenements) were held on trust for the Partnership. Any interest that HPPL (and later HDIO) have, or had, in the Tenements is therefore impressed with a trust in favour of the Partnership.
(b)DFD Rhodes accepts WPPL's position and further maintains that the Partnership's interests are subject to interests arising from a royalty agreement between the Partnership and DFD Rhodes.
(c)HPPL rejects WPPL and DFD Rhodes' claims on the basis that, while the various tenements (leading ultimately to the Hope Downs Tenements) were held on trust for HPPL, they were not held on trust for the Partnership.
(d)Mr Hancock and Ms Rinehart reject WPPL and DFD Rhodes' claims on the basis that the various tenements (leading ultimately to the Hope Downs Tenements) were held on trust for the Children and have never been beneficially held by HPPL or HDIO.

Mr Hancock and Ms Rinehart's counterclaims

Mr Hancock and Ms Rinehart's counterclaims are directed towards similar conclusions as their defences, namely that the Hope Downs Tenements are, ultimately, held on trust for the Children, as a consequence of what they allege are Mrs Rinehart's breaches of fiduciary duty.
The counterclaims are not limited to issues concerning the Hope Downs Tenements, but extend to claims in relation to what are referred to as the Roy Hill Tenements (owned by Roy Hill Iron Ore Pty Ltd (RHIO)) and the Mulga Downs Tenement (owned by Mulga Downs Iron Ore Pty Ltd (MDIO) and Mulga Downs Investments Pty Ltd (Mulga Downs Investments)). They also make claims in relation to Mrs Rinehart's shares in HPPL.
The counterclaims also challenge the validity of the Hope Downs Deed itself, on the basis that Mr Hancock and Ms Rinehart's entry into the Deed was procured by fraud, misleading and deceptive conduct, duress and unconscionable conduct.[33]
[33] H & R Counterclaim [33].
The counterclaims are brought against all parties to the Hope Downs Deed, together with a number of non-parties (including HDIO, RHIO, MDIO and Mulga Downs Investments), and seek a variety of forms of relief, including damages, injunctions and declarations.
The counterclaims were, of course, stayed by the learned primary judge, a matter challenged by Mr Hancock and Ms Rinehart in their cross-appeal (Cross-appeal Ground 1). That argument falls to be considered in the context of the first broad issue in the appeals: the scope of any mandatory stay required by the Commercial Arbitration Act.
It is to that issue that I now turn.

Issue 1: Does the Commercial Arbitration Act mandate a stay?

HPPL and Mrs Rinehart's primary position on the appeals is that the learned primary judge was bound, by the Commercial Arbitration Act, to stay the primary proceedings, or at least to stay Mr Hancock and Ms Rinehart's defences pending an arbitration between the parties to the Deed. In the course of Mrs Rinehart's submissions, senior counsel provided a schedule of individual paragraphs of those defences that Mrs Rinehart submitted should be stayed.[34]
[34] Appeal ts 82, 121.
WPPL and DFD Rhodes, together with Mr Hancock and Ms Rinehart, contend that a mandatory stay was not required by the Commercial Arbitration Act. Mr Hancock and Ms Rinehart go further and submit, in their cross-appeal, that the learned primary judge was not required to stay the counterclaims either.
The starting point for all of these issues is the Commercial Arbitration Act itself.

Statutory context - Commercial Arbitration Act

The Commercial Arbitration Act applies to domestic commercial arbitrations.[35]
[35] Commercial Arbitration Act, s 1(1).
The paramount object of the Act is to facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense.[36] Section 1C(2) and (3) of the Act provide that:[37]
(2)This Act aims to achieve its paramount object by:
(a)enabling parties to agree about how their commercial disputes are to be resolved (subject to subsection (3) and such safeguards as are necessary in the public interest); and
(b)providing arbitration procedures that enable commercial disputes to be resolved in a cost effective manner, informally and quickly.
(3)This Act must be interpreted, and the functions of an arbitral tribunal must be exercised, so that (as far as practicable) the paramount object of this Act is achieved.
[36] Commercial Arbitration Act, s 1C(1).
[37] Commercial Arbitration Act, s 1C(2) - (3).
Many of the provisions of the Commercial Arbitration Act are based upon the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (the Model Law). The Act is intended to operate so as to be as uniform as possible with the Model Law. In interpreting the Act, regard is to be had to the need to promote, so far as practicable, uniformity between the application of the Act to domestic commercial arbitrations and the application of the provisions of the Model Law to international commercial arbitrations.[38]
[38] Commercial Arbitration Act, s 1D.
International commercial arbitrations are regulated in Australia by the International Arbitration Act 1974 (Cth) (International Arbitration Act).
When interpreting the Commercial Arbitration Act, reference may be made to preparatory material related to the Model Law.[39]
[39] Commercial Arbitration Act, s 2A(3).
The Court of Appeal in Victoria distilled the following principles of interpretation arising from these provisions:[40]
(a)certainty and uniformity of application are of paramount importance;
(b)to that end, the rules generally applicable to the interpretation of domestic statutes give way to the rules applicable to the interpretation of treaties;
(c)because the international agreement is addressed to a much wider and more varied judicial audience than an act of a domestic legislature, the interpretation of the domestic enactment should be unconstrained by technical rules of interpretation and should instead be informed by 'broad principles of general acceptation'; and
(d)recourse may be had to the working documents of the international body by which, or through which, the agreed rules were developed.
[40] Subway Systems Australia Pty Ltd v Ireland (2014) 46 VR 49 [29].
Of particular relevance to the present appeals are the provisions of the Act in relation to the interaction between arbitrations and arbitration agreements, on one hand, and court proceedings, on the other.
Section 8 is the principal provision of the Commercial Arbitration Act in this regard. Section 8(1) provides:
A court before which an action is brought in a matter which is the subject of an arbitration agreement must, if a party so requests not later than when submitting the party's first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.
'Arbitration agreement' is defined by s 7(1):
An arbitration agreement is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not
'Party' is defined to mean a party to an arbitration agreement and includes, relevantly, 'any person claiming through or under a party to an arbitration agreement'.[41]
[41] Commercial Arbitration Act, s 2.
Section 8 of the Commercial Arbitration Act is closely modelled on Article 8 of the Model Law. Indeed, other than minor stylistic changes (e.g. using 'must' rather than 'shall' and 'the party's first statement' rather than 'his' first statement), s 8 of the Act is in identical terms to Article 8.
The equivalent provision to s 8 of the Commercial Arbitration Act in the International Arbitration Act is s 7(2) of that Act. Section 7(2) provides:
Subject to this Part, where -
(a)proceedings instituted by a party to an arbitration agreement to which this section applies against another party to the agreement are pending in a court; and
(b)the proceedings involve the determination of a matter that, in pursuance of the agreement, is capable of settlement by arbitration,
on the application of a party to the agreement, the court shall, by order, upon such conditions (if any) as it thinks fit, stay the proceedings or so much of the proceedings as involves the determination of that matter, as the case may be, and refer the parties to arbitration in respect of that matter.
Section 7(2) of the International Arbitration Act, is not directly based on the Model Law. Indeed, the enactment of s 7(2) predates the Model Law. In that regard, the International Arbitration Act as originally enacted was enacted to give effect to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention).[42]
[42] Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (1998) 86 FCR 374 ( Hi-Fert v Kiukiang) 393 (Emmett J); see also 385 (Branson J).
Section 7(2), in particular, was designed to give effect to Article II(3) of the New York Convention, which provides:
The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.
It is apparent that Article II(3) of the New York Convention is in terms similar to Article 8 of the Model Law.
Section 7(2) has been considered in a number of authorities referred to by the parties in the course of these appeals. While those authorities are no doubt relevant to the proper interpretation s 8 of the Commercial Arbitration Act, it is necessary, in reading those authorities to be attentive to the textual differences between the two provisions. I will return to those textual differences, and their significance, in the next section of these reasons.
The other provision of the Commercial Arbitration Act that featured heavily in these appeals is s 5.
Section 5 provides:
In matters governed by this Act, no court must intervene except where so provided by this Act.
Section 5 is in substantially the same terms as Article 5 of the Model Law. Article 5 provides:
In matters governed by this Law, no court shall intervene except where so provided in this Law.
Returning, however, to s 8: a significant issue of statutory construction arising in these appeals concerns the meaning of the expression 'a matter which is the subject of an arbitration agreement' in that section.

The 'matter which is the subject of an arbitration agreement'

The identification of the 'matter' which is the subject of the arbitration agreement is critical because it is the overlap between that 'matter' and the controversy in the action that enlivens the court's obligation in s 8(1) of the Act. The action must be brought 'in' that matter.
I have used the word 'overlap' because it is clear that the curial controversy and the matters the subject of the arbitration need not be co-extensive.
This was made clear in Rinehart v HPPL HC in which the plurality (Kiefel CJ, Gageler, Nettle & Gordon JJ) said:[43]
[I]t is unnecessary that the issues that the defence puts in controversy in the proceedings be limited to the matter capable of settlement by arbitration. The two need not be co-extensive. It is sufficient that the defence puts in issue, among other things, some right or liability which is susceptible of settlement under the arbitration agreement as a discrete controversy.
[43] Rinehart v HPPL HC [68] (Kiefel CJ, Gageler, Nettle & Gordon JJ).
Their Honours, in this context, expressly approved the reasoning of Deane and Gaudron JJ in Tanning Research Laboratories Inc v O'Brien,[44] an earlier decision of the High Court in relation to s 7 of the International Arbitration Act.
[44] Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; (1990) 169 CLR 332 (Tanning Research).
Tanning Research was concerned (as was Rinehart v HPPL HC) with whether a particular party claimed 'through or under a party to an arbitration agreement' and so was entitled to a stay of proceedings.[45] In that case, Tanning Research Laboratories Inc (Tanning), a foreign company, proved in the winding up of a New South Wales company for the price of goods sold under an agreement between them which contained an arbitration clause. The liquidator of the New South Wales company rejected the proof of debt and Tanning appealed against the rejection to the Supreme Court of New South Wales.
[45] Pursuant to s 7(4) of the International Arbitration Act, a reference to a 'party' includes a person 'claiming under or through a party'. The same language is used in the Commercial Arbitration Act, s 2A, referred to at [108] above.
The High Court held that the liquidator claimed 'through or under' the company and was therefore entitled to a stay under s 7(2) of the International Arbitration Act.
In so holding, Deane and Gaudron JJ (in a passage approved by the plurality in Rinehart v HPPL HC) said:[46]
To ascertain whether s 7(2) operates in respect of proceedings pending in a court it is necessary to first identify the subject matter of the controversy which falls for determination in those proceedings. Only when that has been done is it possible to identify whether the proceedings 'involve the determination of a matter ... capable of settlement by arbitration': s 7(2)(b). ...
By requiring that the proceedings or so much of the proceedings as involves the determination of a matter capable of settlement by arbitration be stayed, s 7(2) clearly contemplates that the proceedings may encompass issues additional to those constituting 'a matter ... capable of settlement by arbitration'. ...
The word 'matter' is not defined in the Act. ... In the context of s 7(2), the expression 'matter ... capable of settlement by arbitration' may, but does not necessarily, mean the whole matter in controversy in the court proceedings. So too, it may, but does not necessarily encompass all the claims within the scope of the controversy in the court proceedings. Even so, the expression 'matter ... capable of settlement by arbitration' indicates something more than a mere issue which might fall for decision in the court proceedings or might fall for decision in arbitral proceedings if they were instituted. ... It requires that there be some subject matter, some right or liability in controversy which, if not co‑extensive with the subject matter in controversy in the court proceedings, is at least susceptible of settlement as a discrete controversy. The words 'capable of settlement by arbitration' indicate that the controversy must be one falling within the scope of the arbitration agreement and, perhaps, one relating to rights which are not required to be determined exclusively by the exercise of judicial power. ...
[46] Tanning Research, 350-351 (Deane & Gaudron JJ).
As the second paragraph of this extract explains, the reference in s 7(2) to staying 'so much of the proceedings as involves the determination of [a matter that is capable of settlement by arbitration]' makes it clear that the proceedings may encompass issues additional to those constituting a matter capable of settlement by arbitration. Consequently, the claims within the scope of the curial controversy need not be coextensive with the matter capable of settlement by arbitration. In my view, the same result is inherent in the phrase in s 8 'an action is brought in a matter which is the subject of an arbitration agreement'.
Tanning Research, and in particular its approach to the identification of the relevant 'matter' in the third paragraph extracted above, has since been cited and applied in the context of both s 7(2) of the International Arbitration Act and s 8 of the Commercial Arbitration Act.
In Recyclers of Australia Pty Ltd v Hettinga Equipment Inc,[47] for example, Merkel J described Tanning Research as authority for the view that, for the purposes of s 7(2), the matter to be determined in a proceeding is to be ascertained by reference to the subject matter of the dispute in the proceeding in the substantive, although not necessarily the ultimate, question for determination in the proceeding. The scope of the matter is to be ascertained from the pleadings and from the underlying subject matter upon which the pleadings, including the defence, are based.
[47] Recyclers of Australia Pty Ltd v Hettinga Equipment Inc [2000] FCA 547; (2000) 100 FCR 420 (Recyclers) [18] (Merkel J).

The position is less clear in relation to the ultimate question of whether Bianca and John have a current beneficial interest in the Tenements, leaving aside the effect of the Hope Downs Deed.[390] Counsel for Bianca and John has unequivocally indicated that they would not assert any such estoppel in the arbitral proceedings. In effect, Bianca and John have indicated that they will not plead or otherwise rely on an issue estoppel of this kind. It not being pleaded, on the face of it, the arbitrators will not be bound to give effect to an issue estoppel as to who holds the current beneficial interest. However, it is not necessary to definitively resolve whether this is so - our view as to where the balance lies does not depend upon whether the potential scope of issue estoppels encompasses the question of current beneficial ownership, leaving aside the effect of the Hope Downs Deed.

The consequences of an issue estoppel

[390] The effect, if any, of the Hope Downs Deed on who has the beneficial interests in the Tenements can be determined only in the arbitration.

To the extent that findings in the curial proceedings were to give rise to an issue estoppel, in our view, in several respects that would or may thereby have consequences that weigh firmly in favour of the grant of a stay. That is so, in our view, even if the potential issue estoppel is confined to the question of for whose benefit the Tenements were acquired.
First, as identified in the appeal reasons [512] - [513], it would undermine the court's referral of the parties to arbitration and undermine the parties' agreement to arbitrate in the Hope Downs Deed.
Secondly, a finding that the Hope Downs Tenements were acquired for the Children's benefit would, if binding in the arbitration, materially prejudice HPPL and benefit Bianca and John. That is because one element of Bianca and John's claim to set aside the Deed is their assertion as to the original acquisition of the Tenements - they say the Tenements were acquired for their benefit. In Rinehart v Hancock Prospecting Pty Ltd,[391] the High Court observed, in the context of the Federal Court proceedings, that Bianca and John's validity claims were not discrete from their substantive claims - the validity claims incorporate and rely upon the substantive claims. That observation is equally true of Bianca and John's claim in the arbitral proceedings.
[391] Rinehart v Hancock Prospecting Pty Ltd [12].
Further, we accept HPPL's submission that a binding finding as to for whose benefit the Tenements were acquired would give rise to a question of construction of the Hope Downs Deed, not otherwise arising, and that is capable of prejudicing HPPL.[392]
[392] See [49] above.
For these reasons, we do not accept the stay opponents' submission that, if the Deed is the complete answer which HPPL contends it to be, that complete answer will be given effect in the arbitration, thereby ensuring there is no injustice to HPPL. A binding finding as to the original acquisition of the Tenements will assist Bianca and John in the arbitration and be to the prejudice of HPPL.
Thirdly, if, as may be the case,[393] HPPL is precluded from relying on the Hope Downs Deed in the curial proceedings, but an issue estoppel nevertheless arose, that can fairly be said to give rise to injustice to HPPL. Part of the scheme of the Hope Downs Deed is to have all disputes arising under it, including disputes as to beneficial interests in the Tenements encompassed by the Deed, determined in one forum, namely arbitration. HPPL contends, and it is at least arguable, that the Deed is a complete answer to Bianca and John's claims that the Tenements were acquired and are held for their benefit. Yet, in this scenario, a finding as to for whose benefit the Tenements were acquired or are held could be made in the curial proceedings and be binding in the arbitration notwithstanding that HPPL has not been permitted to invoke the Deed in answer to Bianca and John's claims.
[393] As to which, see further below at [168].
We do not accept the stay opponents' contention that, in this scenario, HPPL's inability to rely on the Hope Downs Deed would give rise to no injustice because it would be a consequence of its choice to invoke s 8 of the Act. In invoking s 8, HPPL sought to uphold the parties' bargain to submit their disputes to arbitration. We are unable to see why a consequence of that should be that HPPL loses the benefit of the acknowledgment, release and covenant not to sue in a context that is precisely where HPPL would wish to rely upon them - namely, in answer to a claim that the Tenements were acquired for another party's benefit.
If an issue estoppel were found to arise, HPPL's substantive rights would be impaired in the manner and respects outlined above. As explained above, we recognise the weight to be given to the plaintiffs' interest in avoiding delay. Nevertheless, the impairment of substantive rights seems to us to attract considerable weight when balanced against the adverse consequences of delay.

Resolution

However, for the reasons that follow, balancing the considerations previously referred to, we are not persuaded that, at this stage, the risk (and as explained below, it is highly uncertain whether the risk will materialise) that findings in the curial proceedings may give rise to an issue estoppel, in itself or in combination with the other matters on which the stay proponents rely, justifies the grant of a stay of the curial proceedings.
Putting aside for the moment whether the primary proceedings should be permitted to be heard and determined before the arbitration, we are not satisfied that the interests of justice justify a stay of the primary proceedings that would prevent them from being progressed to the point where they were ready for trial. On our assessment, the curial proceedings are unlikely to be heard before some time in 2022. We consider that the interests of justice distinctly favour permitting those proceedings to complete all necessary pre‑trial steps, rather than granting an immediate stay. An immediate stay would potentially leave the proceedings with significant interlocutory steps, causing substantial further delay, to be completed only after the arbitral proceedings have been determined - potentially many years away.
Leaving aside issue estoppels, to which we return below, in support of the need for an immediate stay of the primary proceedings, the stay proponents point to (i) the need to avoid their being twice vexed, with the consequent duplication of resources; and (ii) the loss of confidentiality which would result from the proceedings continuing.[394]
[394] See for example [69] above.
To our minds, in the circumstances of this case, the first of these considerations does not attract significant weight. To the extent that issues in the curial proceedings and arbitral proceedings overlap, the steps necessary for preparation will need to be undertaken and applied to both proceedings. Broadly speaking, at least the bulk of those steps would have been necessary even if the issues arose only in the arbitral proceedings. The additional time and expense arising from dealing with overlapping issues in both the curial proceedings and arbitral proceedings rather than only in the arbitral proceedings is not significant when weighed against the competing considerations, especially those arising from the plaintiffs' interests. This is particularly so in this case, bearing in mind the undoubted resources of the parties who would be involved in both sets of proceedings, as is manifest from the industry of their legal representatives on every conceivable point in the litigation.
As to the second, it will be open to the parties, to the extent they think necessary and appropriate, to seek confidentiality orders from the primary judge in relation to interlocutory steps in the proceedings. We acknowledge that, to some extent, HPPL, Mrs Rinehart and Ginia may be at risk of losing confidentiality in relation to some matters the subject of the Hope Downs Deed in the course of the primary proceedings progressing to the point where they are ready for trial. For example, it is likely that any witness statement of Mrs Rinehart, or of other witnesses relied upon by HPPL, concerning matters within the ambit of the confidentiality of the Hope Downs Deed would be revealed to non‑parties to those deeds, namely the plaintiffs and their legal advisers. Nevertheless, in our view, bearing in mind the matters outlined in [122] ‑ [134], the interests of justice distinctly favour permitting the primary proceedings to continue, at least to the point where they are ready for trial.
An aspect of Mrs Rinehart's complaint as to loss of confidentiality is her submission that she would be prejudiced by the court making findings - which will be public - on matters the subject of confidential arbitration in accordance with the Hope Downs Deed. That risk does not arise in the pre‑trial period and does not, in our view, (alone or in combination with the other matters on which the stay proponents rely) sustain the grant of a stay at this stage.
That brings us back to the risk of issue estoppels as a consideration weighing in favour of a stay. Four points may be made as to the risk of any issue estoppels arising from findings made in the primary proceedings.
First, and significantly, the risk is not imminent and it may never materialise. As already noted, on our assessment, the Supreme Court proceedings are unlikely to be heard before some time in 2022. By definition, an issue estoppel can only arise (i) after the Supreme Court proceedings are determined; and (ii) if the curial proceedings are determined before the arbitral proceedings. The latter may or may not occur. At this stage, the curial proceedings are undoubtedly distinctly further progressed than the arbitration and the odds currently favour the curial proceedings being heard first. Nonetheless, there is considerable uncertainty in that regard, and the position may change.
Given what we have already said, the prospect that, in the absence of a stay, the arbitral proceedings may, in the end, reach resolution before the curial proceedings is a factor counting against a stay. That prospect cannot be discounted. As we have said, in our view the odds favour the proceedings in this court being heard first. But HPPL's own solicitor has opined that a substantive hearing in the arbitration will be completed by mid‑2022[395] whereas the primary proceedings will not be ready for a hearing for at least three and possibly four years (ie mid‑2023 to 2024).[396] While we do not share this view, it underlines the uncertainty as to the likely relative progress of the curial proceedings and the arbitral proceedings. In the scenario where the arbitration is completed first there is no risk of any issue estoppel arising and, for the reasons already given at [120] ‑ [134] and [149] ‑ [154], a stay is not otherwise justified.
[395] Confidential Wilks 1 [28].
[396] Wilks 1 [29].
Secondly, an issue estoppel could arise against HPPL only if a plaintiff's claim is found to fail on a ground that is or includes that the Hope Downs Tenements were acquired for the benefit of the Children and not for the benefit of HPPL. Bianca and John's defences that the Tenements are held for their benefit take the acquisition for their benefit as a starting point.
HPPL submits that Bianca and John assert a claim based on the Debt Reconstruction Deed, as pleaded in pts 10, 11 and 15 of the counterclaim, as a standalone claim to beneficial ownership of the Hope Downs Tenements. We do not understand Bianca and John's pleading in that manner. Rather, as we understand it, Bianca and John's claim relating to the Debt Reconstruction Deed is premised on their assertion that the Hope Downs Tenements had been acquired, as to legal and beneficial ownership, by HRL, which was then a subsidiary of HFMF, the assets of which were beneficially owned by the Children.
Taking Bianca and John's defence and counterclaim in the Rhodes' proceedings as an example, pts 10, 11 and 15 of the counterclaim are incorporated in the defence in par 23. That paragraph pleads, relevantly:
(1)As of 6 October 1992 HRL had full legal and beneficial title to each of the Hope Downs ELs and was a wholly owned subsidiary of HFMF ([23](j)).
(2)All of the Hope Downs ELs were the property of the HFMF Trust and therefore beneficially owned by the Children ([23](k)).
(3)As part of a fraudulent and dishonest design, Mrs Rinehart, in breach of her duty as trustee of the HFMF Trust and with the knowledge and participation of HPPL, as pleaded in pts 10, 11 and 15 of the counterclaim, caused transfers from HRL to HDL, from HDL to HPPL and from HPPL to HDIO ([23](l)).
(4)Consequently, the Hope Downs ELs were held on constructive trusts for the Children and ML282SA is so held ([23](m) and (n)).
Similarly, the plea in par 229 of the counterclaim (in pt 15) asserts that by its execution of the Debt Reconstruction Deed and the Deed of Acknowledgment and Release, HPPL participated in a fraudulent and dishonest design, together with Mrs Rinehart, for the purposes of conferring a benefit on HPPL, namely full legal and beneficial title to the Hope Downs Tenements. This, as we would understand it, is premised on the earlier assertions that beneficial title to the Hope Downs Tenements lay with the beneficiaries of the HFMF Trust, namely the Children.
If, by contrast to [158] above, a plaintiff's claim fails for want of proof of any other factual or legal element of the claim (and there are many), or fails on any ground advanced by HPPL in its defence (again, there are many), no issue estoppel will arise. While this court cannot attempt to evaluate the relative likelihood of these scenarios, it is relevant that only on the specific scenario identified will an issue estoppel arise.
Thirdly, if a plaintiff's claim succeeds, there may be an estoppel against Bianca and John, as Bianca and John acknowledge, in relation to the finding necessary for a plaintiff to succeed - that the Hope Downs Tenements were acquired for the benefit of HPPL. Bianca and John do not complain in that regard. No prejudice to HPPL, or to Mrs Rinehart, by way of an adverse issue estoppel arises in that scenario.
Fourthly, in light of the further submissions of the parties, we now consider it more doubtful that, even if the contingencies in [156] and [158] are fulfilled, any issue estoppel would arise even in relation to the question of for whose benefit the Hope Downs Tenements were acquired.
In the appeal reasons, we observed[397] that if the primary proceedings are decided before the arbitral proceedings and the plaintiffs' claims succeed, or are rejected on the ground of the basis on which the Hope Downs Tenements were acquired, then, prima facie at least, an estoppel between the HPPL parties, on the one hand, and Bianca and John, on the other, would appear to arise in relation to that issue. However, the parties' further submissions on the appeal give rise to substantial reasons for questioning whether any issue estoppel will arise.
[397] Appeal reasons [508].
HPPL's submissions summarised in [40] above emphasise the uncertainty as to whether any issue estoppel will arise and point to a number of reasons for doubting whether any issue estoppel will arise.
The parties' further submissions have given closer attention to how, if at all, the Hope Downs Deed might be relied upon by HPPL in answer to Bianca and John's contention in the primary proceedings as to the acquisition and beneficial ownership of the Hope Downs Tenements. As already noted, HPPL contends that it must be entitled to rely on the Hope Downs Deed to avoid the risk that it might be bound, by an issue estoppel, by a finding in favour of Bianca and John. Whether an issue estoppel may arise, and whether HPPL can rely on the Hope Downs Deed, are related questions.
It is not for this court to, in effect, make a pre‑trial admissibility ruling in relation to the Hope Downs Deed, that being a matter that may well arise for decision by the trial judge. Nevertheless, the following preliminary observations may be made. First, as senior counsel for HPPL appeared to accept in argument,[398] the only basis for HPPL's tender of the Hope Downs Deed is the threat that HPPL will be subject to an issue estoppel in relation to a finding that, on HPPL's case, is answered by the Deed. Secondly, there is some difficulty in concluding that HPPL can be permitted to rely on the Hope Downs Deed given that:
(1)Bianca and John claim a right to set aside the Deed;
(2)that issue can only be determined in the arbitration;
(3)there is an obvious tension and apparent injustice in the court permitting HPPL to rely on the Deed as acknowledging the absence of, or as extinguishing, Bianca and John's claim that the Tenements were acquired for the benefit of the Children while, at the same time, precluding Bianca and John from advancing their claim to set aside the Deed.
[398] Appeal ts 73.
Those circumstances seem to us to give rise to, at the least, real doubt that a finding in the primary proceedings, that the Hope Downs Tenements were acquired for the benefit of Bianca and John, would, even if dispositive of the proceedings, give rise to an issue estoppel binding on HPPL and other parties in the arbitration. The law as to estoppels between co‑defendants is not well developed. There are few modern authorities. So far as the research of the parties and the court reveals, no case has needed to grapple with considerations of the kind that arise in this case.
In the circumstances outlined above, there seems to us to be considerable force in the view that:
(1)in the hypothesised circumstances,[399] the primary proceedings would finally determine the question - for whose benefit were the Tenements acquired - as between the plaintiffs and the defendants. However, that question would not be finally determined by the court as between HPPL, on the one hand, and Bianca and John, on the other, given the known (and undetermined) issues between those parties arising from and relating to the Hope Downs Deed.
(2)Consequently, no issue estoppel would arise between the parties to the Hope Downs Deed.
[399] Namely, the fulfilment of the contingencies in [156] and [158].
In at least the respects identified above, the prospect of any issue estoppel arising is both highly contingent and, even if the necessary contingencies occur, attended by considerable uncertainty. By contrast, the grant of a stay will, as a matter of certainty, prevent the primary proceedings from progressing to trial and being heard until the arbitration is concluded, causing the substantial and uncertain delay to which we have referred.
In all the circumstances, we are not persuaded that, at this stage, the risk that findings in the curial proceedings give rise to an issue estoppel binding in the arbitration provides, in itself or in combination with the other matters on which the stay proponents rely, a sufficiently convincing or compelling justification to sustain interference with the plaintiffs' prima facie right to continue to prosecute the proceedings each of them has instituted.
Ginia's submission, that the plaintiffs are the authors of their own misfortune in that they delayed joinder of the Children, is without substance. The process constituting the arbitration began as a result of the Federal Court proceedings. Ginia contends that the plaintiffs should, as a result of the Federal Court proceedings, have applied to join the Children earlier than they did. There is no reason to suppose that the arbitration would have progressed any faster than it has progressed if the plaintiffs had joined the Children earlier, even immediately after the Federal Court proceedings were instituted. Any delay in joinder has not had a material consequence.

For these reasons, we would decline to order a stay of the primary proceedings. In that respect we would not disturb the orders made by the primary judge. It follows that HPPL's appeal should be dismissed.

Further observations

We have decided that, for the above reasons, the current circumstances do not justify the grant of a stay and, consequently, the application for a stay should be dismissed. Thus, we have not adopted the approach on which supplementary submissions were invited, as outlined in [66] above - rather, the application for a stay fails on its merits.
Our conclusion that, on the present application, a stay should not be ordered does not preclude a different approach upon an application made at the point when the primary proceedings are ready for trial (assuming that, by then, the arbitration has not been heard and determined).
For a start, the risk of issue estoppels arising from findings in the proceedings would then be imminent. Also, at that stage, the state of the pleadings may (we do not say it is a certainty) enable a more informed view to be reached as to the risk of any issue estoppel. Contrary to HPPL's submissions, there is a reasonable likelihood that, by the time the proceedings are ready for trial, the pleadings will be refined and the issues better defined than is presently the case. There is ground to anticipate amendment of the pleadings, whether as a result of any strike out application - one being foreshadowed already by WPPL - or at the initiative of a pleading party. Further, it would be open to the parties to seek a pre‑trial ruling by the trial judge as to whether the Hope Downs Deed can be relied upon. The result of that ruling would bear upon the exercise of discretion. Finally, and potentially significantly, more will then be known about the progress of the arbitration and the likely time before its hearing.
There is no need to reserve liberty to the stay proponents to make a further application when the curial proceedings are ready for trial. If the primary proceedings are ready for trial before the arbitral proceedings, that will constitute a change of circumstances from the present situation, in which it is uncertain which of the proceedings will be ready for trial first and where that uncertainty is a factor materially favouring the refusal of a stay. Thus, if the primary proceedings are ready for trial before the arbitration, the stay proponents will, at that stage, be entitled to make a further application for a stay.[400]
[400] See, for example, Clairs Keeley (a firm) v Treacy [2004] WASCA 277; (2004) 29 WAR 479 [7] - [16].
As already noted, Ginia submits that this court should, if refusing a stay, make orders maintaining the confidentiality regime presently in place. We do not accept that submission. The orders for confidentiality made by this court were (and are) interlocutory in character - when the appeal is determined the occasion for the orders is removed. Thus the interim orders should be discharged when orders are made substantively disposing of the appeals. Any application for confidentiality orders should be made to the case manager.

Conclusion

Orders should be made in each of the appeals as set out in the Chief Justice's reasons at [9], [10], [16] and [17]. The parties should be heard as to the form of orders and as to costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

AK
Research Associate to the Honourable Chief Justice Quinlan

7 AUGUST 2020