Hayden Leigh White as joint and several receiver and manager of East Rockingham RRF Hold Co Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) v Acciona Construction Australia Pty Ltd
[2024] WASC 466
•5 DECEMBER 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: HAYDEN LEIGH WHITE as joint and several receiver and manager of EAST ROCKINGHAM RRF HOLD CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) -v- ACCIONA CONSTRUCTION AUSTRALIA PTY LTD [2024] WASC 466
CORAM: HILL J
HEARD: 26 & 29 NOVEMBER 2024
DELIVERED : 29 NOVEMBER 2024
PUBLISHED : 5 DECEMBER 2024
FILE NO/S: CIV 2390 of 2024
BETWEEN: HAYDEN LEIGH WHITE as joint and several receiver and manager of EAST ROCKINGHAM RRF HOLD CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
HAYDEN LEIGH WHITE as joint and several receiver and manager of EAST ROCKINGHAM RRF PROJECT CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
DANIEL HILLSTON WOODHOUSE as joint and several receivers and managers of EAST ROCKINGHAM RRF PROJECT CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
DANIEL HILLSTON WOODHOUSE as joint and several receiver and manager of EAST ROCKINGHAM RRF HOLD CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
HAYDEN LEIGH WHITE as joint and several receiver and manager of EAST ROCKINGHAM RRF FINANCE CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
CHRISTOPHER CLARKE HILL as joint and several receivers and managers of EAST ROCKINGHAM RRF HOLD CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
CHRISTOPHER CLARKE HILL as joint and several receiver and manager of EAST ROCKINGHAM RRF FINANCE CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
DANIEL HILLSTON WOODHOUSE as joint and several receiver and manager of EAST ROCKINGHAM RRF FINANCE CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
CHRISTOPHER CLARKE HILL as joint and several receiver and manager of EAST ROCKINGHAM RRF PROJECT CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
First Plaintiffs
EAST ROCKINGHAM RRF PROJECT CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) as trustee of the THE EAST ROCKINGHAM RRF PROJECT TRUST
Second Plaintiff
EAST ROCKINGHAM RRF FINANCE CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED)
Third Plaintiff
EAST ROCKINGHAM RRF HOLD CO PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) as trustee for EAST ROCKINGHAM RRF HOLD TRUST
Fourth Plaintiff
AND
ACCIONA CONSTRUCTION AUSTRALIA PTY LTD
First Defendant
ACCIONA INDUSTRIAL AUSTRALIA PTY LTD
Second Defendant
ACCIONA M&E PTY LTD (FORMERLY JOHN BEEVER (AUST) PTY LTD)
Third Defendant
HITACHI ZOSEN INOVA AG
Fourth Defendant
HITACHI ZOSEN INOVA AUSTRALIA
Fifth Defendant
Catchwords:
Practice and procedure - Application to transfer proceedings to Federal Court - Whether overlap in subject matter - Whether risk of inconsistent findings - Whether expenditure of costs and resources a significant factor in favour of transfer - Turns on own facts
Legislation:
Competition and Consumer Act 2010 (Cth) sch 2, s 21
Corporations Act 2001 (Cth) s 424, s 440D
Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA) s 5(1)
Result:
Application dismissed
Category: B
Representation:
Counsel:
| First Plaintiffs | : | S K Dharmananda SC & L N Firios |
| Second Plaintiff | : | S K Dharmananda SC & L N Firios |
| Third Plaintiff | : | S K Dharmananda SC & L N Firios |
| Fourth Plaintiff | : | S K Dharmananda SC & L N Firios |
| First Defendant | : | C Young KC & J Sippe |
| Second Defendant | : | C Young KC & J Sippe |
| Third Defendant | : | C Young KC & J Sippe |
| Fourth Defendant | : | A-M K Wholley |
| Fifth Defendant | : | A-M K Wholley |
Solicitors:
| First Plaintiffs | : | King & Wood Mallesons |
| Second Plaintiff | : | King & Wood Mallesons |
| Third Plaintiff | : | King & Wood Mallesons |
| Fourth Plaintiff | : | King & Wood Mallesons |
| First Defendant | : | Gilbert + Tobin |
| Second Defendant | : | Gilbert + Tobin |
| Third Defendant | : | Gilbert + Tobin |
| Fourth Defendant | : | DLA Piper |
| Fifth Defendant | : | DLA Piper |
Cases referred to in decision:
Access Group Australia Pty Ltd v Topper Hydraulic Platforms Pty Ltd [2019] WASC 265
Ao Qing Investment Pty Ltd v 52 Lord St East Perth Pty Ltd (No 3) [2023] FCA 716
Cini v Pets Paradise Franchising (SA) Pty Ltd [2008] SASC 287
Commissioner of Taxation v Residence Riverside Proprietary Ltd as Trustee for the D&J Discretionary Trust and as Trustee for the D&J Investment Trust [2013] FCA 720
UON Pty Ltd v Hoascar [No 3] [2021] WASC 17
HILL J:
(This judgment was delivered extemporaneously and has been edited from the transcript to include references, headings, and to correct matters of grammar and expression.)
On 21 November 2024, the plaintiffs filed a writ of summons in this court, together with a chamber summons seeking urgent relief from court. Essentially, in these proceedings, the receivers seek:
(a)orders for access to the premises and various locations at the project site for the inspection of items by an independent solicitor; and
(b)directions from the court pursuant to s 424 of the Corporations Act 2001 (Cth) (Act) that the receivers are justified and acting properly in taking steps to give effect to these orders, including by engaging an independent solicitor.
The first to third defendants (Acciona companies) contend that these proceedings should be transferred to the WA District Registry of the Federal Court. On 26 November 2024, these defendants filed a chamber summons seeking orders for the transfer of the proceedings pursuant to s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA) (Cross-Vesting Act), alternatively, that these proceedings be permanently stayed.
Factual background
The factual background to these applications can be briefly summarised as follows.
The first plaintiffs are the receivers and managers of three companies: East Rockingham RRF Hold Co Pty Ltd, East Rockingham RRF Project Co Pty Ltd (Project Co), and East Rockingham RRF Finance Co Pty Ltd (Companies)), having been appointed on 28 October 2024. They were appointed as receivers shortly after Richard Tucker and John Bumbak of KordaMentha were appointed as joint and several voluntary administrators of the Companies, as well as a fourth company, East Rockingham RRF Hold Co 2 Pty Ltd.[1]
[1] Affidavit of Christopher Clarke Hill filed 22 November 2024 [10], [13], 'CCH-3'.
The Companies are privately-owned companies, who are part of a corporate group developing a waste-to-energy recovery facility (Facility) in the Rockingham Industry Zone in East Rockingham, Western Australia (Site). The project involves the financing, design, construction, testing, commissioning, operation and maintenance of the Facility. At its inception, the total capital cost of the Facility was initially estimated to be approximately $500 million.
The construction of the Facility is governed by an EPC Contract dated 20 December 2019 between Project Co, and an unincorporated joint venture between three Acciona companies and two Hitachi Zosen Inova (HZI) companies, who are the fourth and fifth defendants to these proceedings.[2]
[2] Affidavit of Christopher Clarke Hill filed 22 November 2024 [17] - [18], 'CCH-4'.
As at the date of the appointment of the plaintiffs as receivers:[3]
(a)the construction of the project had been considerably delayed;
(b)significant claims had been made by the Acciona companies against Project Co; and
(c)in addition, the evidence before the court is that at or about the time of their appointment, three separate court proceedings had been commenced: two in the Federal Court (one of which has been resolved) and one in this court.
[3] Affidavit of Christopher Clarke Hill filed 22 November 2024 [21].
The Site is currently under the control of the first plaintiffs. This has occurred as a result of notices suspending all works and terminating the EPC Contract for convenience, which were given on 28 October 2024. The notice terminating the Contract took effect as at 5.00 pm on 18 November 2024.[4] Following this, the evidence before the court is that there have been ongoing disputes between the receivers and the Acciona companies as to the receivers' access to certain documents, laptops and other equipment. At present, these items are locked in various demountables that are located at the Site.[5]
Federal Court proceedings
[4] Affidavit of Christopher Clarke Hill filed 22 November 2024 [27(a)] - [27(b)], 'CCH-5'.
[5] Affidavit of Christopher Clarke Hill filed 22 November 2024 [31] - [32].
On 8 April 2024, Project Co commenced proceedings in the WA District Registry of the Federal Court of Australia against the first to fifth defendants in these proceedings. Those proceedings are WAD 72 of 2024 (Federal Court Proceedings). The Federal Court Proceedings are being case managed by Feutrill J.
In those proceedings, at present, Project Co contends that the Acciona companies breached their obligations under the EPC Contract by failing to provide replacement bank guarantees that had expired in accordance with the terms of those guarantees. Project Co relies on this failure as the basis for its claim that the Acciona companies have engaged in unconscionable conduct in contravention of s 21 of the Australian Consumer Law (ACL).[6] In those proceedings, Project Co seeks declaratory relief (including under the ACL) and a mandatory injunction compelling the Acciona companies to provide it with replacement bank guarantees.
[6] Competition and Consumer Act 2010 (Cth) sch 2.
The Acciona companies have filed a defence and cross-claim in the Federal Court Proceedings, in which they contend that Project Co has been insolvent since October 2023 and, as a result, is not entitled to the equitable relief claimed. They contend that by reason of the insolvency event, the EPCC[7] was entitled to issue a default termination notice terminating the EPC Contract with immediate effect. In their cross-claim, they seek declarations that Project Co has been insolvent since October 2023 and that an 'Employer Default Event' has occurred within the meaning of cl 33.8 of the EPC Contract.[8] There is no contention that a notice of termination was ever issued by the Acciona companies and HZI.
[7] The 'EPCC' refers to the unincorporated joint venture between the first to third defendants and the fourth to fifth defendants.
[8] Affidavit of Christopher Clarke Hill filed 28 November 2024, 'CCH-43', p 107.
The Acciona companies also contend that Project Co has acted unconscionably in failing to address their claims for an extension of time and in claiming an entitlement to delay damages in contravention of s 21 of the ACL.
Applications to strike out parts of the concise response and notice of cross-claim and for summary judgment were brought by Project Co and dismissed by Feutrill J on 24 July 2024. In his reasons for decision, his Honour, after referring to the evidence as to the nature and quantum of disputes between the parties, made the following observation:
What I take from the evidence about these matters is that a significant dispute about extensions of time, responsibility for delays and damages flowing from delays in completion of the Works looms large and the subject matter of these proceedings is, in the scheme of things, likely to be a relatively minor skirmish.
On 4 September 2024, Feutrill J made orders requiring the Acciona companies to provide security of approximately $38.6 million 'as a condition upon which they are permitted to defend the applicant's claim'. Following this, there has been a dispute between the parties as to whether the bank guarantees delivered by the Acciona companies complied with his Honour's orders. On 18 October 2024, his Honour ruled that they did not.
On 15 November 2024, the Acciona companies filed an interlocutory application in the Federal Court Proceedings. In the interlocutory process, they seek orders:
(a)joining the first plaintiffs (in their capacity as receivers and managers of Project Co) as second cross‑respondents;
(b)for leave, pursuant to s 440D of the Act, to proceed with their cross-claim and the claims raised in the interlocutory application against Project Co;
(c)restraining Project Co and the receivers and managers of Project Co from entering the Acciona companies' Site offices at the Facility and taking possession or control of, or accessing any information, documents, and equipment located in the Site office; and
(d)requiring the service of an amended application and statement of claim to address the termination of the EPC Contract on 18 November 2024, as well as amended defences and cross‑claims (which are intended to address the interlocutory relief sought by those parties).
The Federal Court Proceedings, together with the Acciona companies' interlocutory process, are currently listed for a case management hearing before Feutrill J at 9.15 am on 4 December 2024. From the evidence before me, it appears that the interlocutory process is listed for mention only.
On 28 November 2024, Project Co advised the defendants that they had instructions to discontinue Project Co's claim in these proceedings; although, I note the notice provided to the parties proposed that there be no order as to costs and required signature by all parties. There is no evidence that this has occurred, or that the orders sought by Project Co are, in fact, agreed by the defendants.
Supreme Court proceedings
The writ that was issued in these proceedings was indorsed with an indorsement of claim. At present, no statement of claim has yet been filed. The claim made by the plaintiffs, as summarised in the indorsement, is that following the appointment of the first plaintiffs as receivers and managers of the second to fourth plaintiffs, notice was given by the receivers and managers of Project Co of the termination of the EPC Contract for convenience and the suspension of all works under the EPC Contract. Under the EPC Contract, Project Co is said to have rights to certain 'works' and material and information which they say must be transferred to Project Co on the termination of the EPC Contract.
The plaintiffs seek declarations as to the ownership of these items, the proper construction of clauses 30(a), 33.14 and 33.10 of the EPC Contract, and the delivery up of items to Project Co.
Should these proceedings be transferred to the WA District Registry of the Federal Court, or alternatively, stayed?
Section 5 of the Cross-Vesting Act provides that:
5.Transfer of proceedings
(1)Where —
(a)a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court; and
(b)it appears to the Supreme Court that, having regard to —
…
(iii)the interests of justice,
it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court, as the case may be,
the Supreme Court shall transfer the relevant proceeding to the Federal Court or the Family Court, as the case may be.
The legal principles that are to be applied on an application under the Cross-Vesting Act are well-settled. They were set out by Le Miere J in Access Group Australia Pty Ltd v Topper Hydraulic Platforms Pty Ltd and summarised by Archer J in UON Pty Ltd v Hoascar [No 3] as follows:[9]
[9] UON Pty Ltd v Hoascar [No 3] [2021] WASC 17 [19] citing Access Group Australia Pty Ltd v Topper Hydraulic Platforms Pty Ltd [2019] WASC 265 [23] - [26].
1.It calls for … a 'nuts and bolts' management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute.
2.If the court is of the opinion that s 5(1) of the Commonwealth Act or the WA Act is satisfied, it must transfer the proceeding. There is no question of judicial discretion.
3.The interests of justice capture not just the interests of the parties — competing or conflicting — but may also capture interests wider than those of either party. The interests of justice concern those of both parties and, rather than the selection of the most advantageous or least disadvantageous forum for one of them, the interests of justice are to be judged by more objective factors which facilitate identification of the 'natural forum', in which objectively judged, the dispute would fall to be resolved, with its concomitant juridical advantages and disadvantages for each party, whatever they may be.
4.Each case turns on its particular facts when determining the more appropriate court or 'natural forum'.
5.Connecting factors are relevant. Connecting factors include:
(a)factors indicating that justice can be done in one forum at substantially less inconvenience or expense such as the availability of witnesses;
(b)factors which may make a forum the 'natural forum' as being the forum with which the action has the most real and substantial connection, such as where the relevant transactions took place and where the parties carry on business.
6.An important consideration is which forum can provide more effectively for the complete resolution of the matters in issue between the parties.
Because the task of the court is to identify the more appropriate forum for the hearing of the dispute, the plaintiffs' choice in commencing these proceedings in the Supreme Court is not given any particular weight. As noted by Bleby J in Cini v Pets Paradise Franchising (SA) Pty Ltd:[10]
It is inapt to speak of the applicant for an order for transfer as bearing a burden of persuasion analogous to an onus of proof.
[10] Cini v Pets Paradise Franchising (SA) Pty Ltd [2008] SASC 287 [8].
In Commissioner of Taxation v Residence Riverside Proprietary Ltd as Trustee for the D&J Discretionary Trustand as Trustee for the D&J Investment Trust, McKerracher J expressed the view that, ordinarily, the factors in support of cross-vesting are obvious and that the decision as to whether a matter should be transferred will be 'readily instinctive' after taking into account matters such as the stage of the proceedings in the respective courts; the commonality or diversity of the parties and the issues; the nature of the proceedings; the risk of conflicting findings of fact or conflicting orders; a cost benefit analysis; the potential unnecessary drain on judicial and other public and private resources; and whether there is any particular judicial expertise residing in one court or the other.[11]
[11] Commissioner of Taxation v Residence Riverside Proprietary Ltd as Trustee for the D&J Discretionary Trustand as Trustee for the D&J Investment Trust[2013] FCA 720 [17].
In this case, the Acciona companies submit these proceedings should be transferred to the Federal Court, or alternatively, stayed for two primary reasons.
(a)It will avoid there being two proceedings dealing with the proper construction of, and the rights and liabilities of the parties under the EPC Contract following its termination with the attendant risk of inconsistent findings of both fact and construction of the agreement.
(b)These proceedings will place a considerable burden on the court and its resources, and the parties will bear the burden of two sets of proceedings dealing with the proper construction of the EPC Contract.
The Acciona companies accept that it is necessary that they obtain leave from the Federal Court to proceed with their cross-claim in the Federal Court Proceedings, given the external administrators that have been appointed to Project Co. However, in their submissions, the Federal Court Proceedings will require amendment to reflect the termination of the EPC Contract. In their submission, when this occurs, this will 'necessarily bring into relevance the termination provisions of the EPC Contract', including the rights of the parties on termination.
The plaintiffs deny this is the case and say that any proceedings before the Federal Court are 'at best embryonic' and 'it may never be born'. This is because, in their submission, the interlocutory application is contingent on two matters. First, the parties obtaining leave pursuant to s 440D of the Act, and second, the amendment of the Federal Court Proceedings to bring this claim within their scope.
I turn now to the evidence of each of the factors that the court is required to take into account, as those factors exist today.
Stage and nature of proceedings
I accept that there are currently proceedings in the Federal Court that have been on foot since April 2024, and that those proceedings concern the EPC Contract. However, at present, these proceedings are limited to two issues. First, issues concerning the bank guarantees and specifically, whether the Acciona companies were required to provide replacement bank guarantees and whether the court, in equity, will enforce any obligation to provide those bank guarantees. Second, whether Project Co has acted unconscionably in relation to the extension of time claims made by the Acciona companies and in seeking delay damages.
I accept that the Acciona companies have filed an interlocutory application which seeks to prevent the receivers from accessing material on Site and also to make amendments to the pleadings to bring the claim within those proceedings. This application is listed for mention only on 4 December 2024. Before this application can be heard or determined, it will be necessary for those parties to obtain leave under s 440D of the Act to proceed with their cross-claim.
In submissions before me today, senior counsel for the Acciona companies explained, by reference to the terms of the EPC Contract, why it was contended that the issues concerning the rights of the parties following termination of the EPC Contract will be raised for determination in those proceedings. However, it was accepted that if the proceedings are discontinued by the plaintiffs, this will not occur.
As the pleadings currently stand, no issue is raised in the Federal Court Proceedings concerning the termination of the EPC Contract or the rights of any parties as to what will occur following termination. It is not clear at this stage whether any amendment will be allowed or what the proposed amended pleadings will contend.
In these proceedings, no pleadings have yet been filed. However, from the indorsement of claim, it appears these proceedings are limited to the question as to the ownership of certain material and the proper construction of three sub-clauses in the EPC Contract.
Commonality of parties and issues
Many of the other factors do not bear on the decision. This is because most of the parties in these proceedings are parties in the Federal Court Proceedings. At present, the receivers have not yet been joined to the Federal Court Proceedings (although, I note that an order to this effect has been sought). The plaintiffs in these proceedings include the other companies in the group; although, I have to say it is not entirely clear why they are parties to these proceedings, as they are not parties to the EPC Contract.
In reaching my decision, I accept that both the Federal Court Proceedings and these proceedings can be described as related proceedings, in that the EPC Contract is common to both proceedings; although, at present, both proceedings focus on very different terms of the contract.
Risk of conflicting findings of fact or conflicting orders
Given this, as the proceedings currently stand, I do not consider there is any risk of conflicting findings of fact or conflicting orders being made. Any conflict could only arise if the Acciona companies obtain leave to proceed with their cross-claim and the cross-claim is amended to raise the rights on termination. As at today's date, neither of these matters has occurred.
Unnecessary drain on judicial and other public and private resources
While I accept that resources may be expended by the parties in running two sets of proceedings in separate courts, if this is, in fact, what occurs, and that both will consume the resources of each court, at this stage, I am not persuaded that these costs are unnecessary.
It is clear from the evidence before the court that the parties have been and continue to devote considerable resources to the issues between them. Given that, at this stage, I am not satisfied that this matter is a significant factor in favour of the transfer.
Conclusion
Having given careful consideration to the matter, it is my view that the Acciona companies' application should be dismissed. At present, the Federal Court Proceedings do not raise for determination any issue concerning the ownership of materials currently locked in the demountables on Site, and whether they will be granted leave to amend its cross-claim to raise these matters is yet to be determined. In circumstances where, at present, there is no overlap between the proceedings, nor a risk of any conflicting findings of fact or orders, it is my view that the application for transfer of the proceedings is premature.
The question then arises as to whether the application should be adjourned or dismissed. In my view, having considered it, I consider that the application should be dismissed for two primary inter-related reasons. First, as I have already stated, at present, there is no existing overlap between the proceedings or, in fact, any entitlement on the part of the Acciona companies to proceed with their interlocutory process. Second, given this, it is not a case of assessing which court is able to deal with the competing applications more quickly or appropriately. In this regard, a distinction can be drawn between the facts of this case and those considered by Jackson J in Ao Qing Investment Pty Ltd v 52 Lord St East Perth Pty Ltd (No 3).[12]
[12] Ao Qing Investment Pty Ltd v 52 Lord St East Perth Pty Ltd (No 3) [2023] FCA 716.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JN
Associate to the Honourable Justice Hill
5 DECEMBER 2024
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