Insurance Commission of Western Australia v Antony Leslie John Woodings as Liquidator of the Bell Group Ltd (in liq) [No 2] - [2017] WASC 372

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: INSURANCE COMMISSION OF WESTERN AUSTRALIA -v- ANTONY LESLIE JOHN WOODINGS AS LIQUIDATOR OF THE BELL GROUP LTD (IN LIQ) [No 2] [2017] WASC 372

CORAM: PRITCHARD J

HEARD: 24 MARCH 2017

DELIVERED: 1 FEBRUARY 2018

FILE NO/S: CIV 2666 of 2016

BETWEEN: INSURANCE COMMISSION OF WESTERN AUSTRALIA
Plaintiff
AND
ANTONY LESLIE JOHN WOODINGS AS LIQUIDATOR OF THE BELL GROUP LTD (IN LIQ)
First Defendant
THE BELL GROUP LTD (IN LIQ)
Second Defendant
ANTONY LESLIE JOHN WOODINGS AS LIQUIDATOR OF BELL GROUP FINANCE PTY LTD (IN LIQ)
Third Defendant
BELL GROUP FINANCE PTY LTD (IN LIQ)
Fourth Defendant
ANTONY LESLIE JOHN WOODINGS AS LIQUIDATOR OF BELL BROS PTY LTD (IN LIQ)
Fifth Defendant
BELL BROS PTY LTD (IN LIQ)
Sixth Defendant
ANTONY LESLIE JOHN WOODINGS AS PROVISIONAL LIQUIDATOR FOR WESTERN INTERSTATE PTY LTD (IN PROV LIQ)
Seventh Defendant
WESTERN INTERSTATE PTY LTD (IN PROV LIQ)
Eighth Defendant
GARRY JOHN TREVOR AS LIQUIDATOR OF BELL GROUP NV (IN LIQ)
Ninth Defendant
BELL GROUP NV (IN LIQ)
Tenth Defendant
LAW DEBENTURE TRUST CORPORATION PLC
Eleventh Defendant
COMMONWEALTH OF AUSTRALIA
Twelfth Defendant
WA GLENDINNING & ASSOCIATES PTY LTD
Thirteenth Defendant

Catchwords:

Practice and Procedure - Pleadings - Rules of the Supreme Court 1971 (WA) O 20 r 19 - Application to strike out writ and statement of facts, issues and contentions - Whether pleading discloses no reasonable cause of action, is prejudicial, embarrassing or may delay the fair trial of the action, or is an abuse of process - Whether pleading seeks to litigate same issues in another proceeding - Hypothetical questions - Whether pre-conditions for relief render pleading hypothetical
Privilege - Legal professional privilege - Without prejudice privilege - Common interest privilege - Whether pleading discloses privileged communications between parties

Legislation:

Rules of the Supreme Court 1971 (WA), O16 r 1, O 20 r 19
Corporations Act 2001 (Cth), s 564

Corporations Law, s 564

Result:

Application allowed in part

Category: B

Representation:

Counsel:

Plaintiff:     Mr S G Finch SC & Mr I J M Ahmed
First Defendant              :     No appearance
Second Defendant         :     No appearance
Third Defendant            :     No appearance
Fourth Defendant           :     No appearance
Fifth Defendant              :     No appearance
Sixth Defendant             :     No appearance
Seventh Defendant         :     No appearance
Eighth Defendant           :     No appearance
Ninth Defendant             :     Mr A D'Arcy
Tenth Defendant            :     Mr A D'Arcy
Eleventh Defendant        :     No appearance
Twelfth Defendant         :     No appearance
Thirteenth Defendant      :     No appearance

Solicitors:

Plaintiff:     State Solicitor for Western Australia
First Defendant              :     No appearance
Second Defendant         :     No appearance
Third Defendant            :     No appearance
Fourth Defendant           :     No appearance
Fifth Defendant              :     No appearance
Sixth Defendant             :     No appearance
Seventh Defendant         :     No appearance
Eighth Defendant           :     No appearance
Ninth Defendant             :     Lipman Karas
Tenth Defendant            :     Lipman Karas
Eleventh Defendant        :     No appearance
Twelfth Defendant         :     No appearance
Thirteenth Defendant      :     No appearance

Cases referred to in judgment:

Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564
Anderson v Effexseven (1999) 10 ANZ Ins Cas 61-424
Aussie Airlines Pty Ltd v Australian Airlines Ltd (1996) 68 FCR 406
Bankwest (a division of CBA) v Mann [2015] WASC 187
Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334
Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 256
Bell Group Ltd (In Liq) v Westpac Banking Corporation (1996) 18 WAR 21
Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1
Bell Group NV (in liq) v Insurance Commissioner of Western Australia [2017] WASCA 229
Bertola v Australia and New Zealand Banking Group Ltd [2016] WASC 165
Boase v Axis International Management Pty Ltd [2009] WASC 331
Branir Pty Ltd v Wallco Pastoral Co Pty Ltd [2006] NTSC 70; (2006) 18 NTLR 127
CGU Insurance v Blakeley [2016] HCA 2; (2016) 327 ALR 564
Ciavarella v Balmer [1983] HCA 26; (1983) 153 CLR 438
Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337
Commonwealth v Sterling Nicholas Duty Free Pty Ltd [1972] HCA 19; (1972) 126 CLR 297
Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18
David Clarke Air Conditioning Pty ltd atf David Clarke Air Conditioning Trust v Quann [2016] WASC 73
Deputy Commissioner of Taxation v Currockbilly Pty Ltd [2002] NSWSC 1061; (2002) 172 FLR 99
Edwards v Santos Ltd [2011] HCA 8; (2011) 242 CLR 421
Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87
Galaxy Communications Pty Ltd v Paramount Films of Australia Inc (Unreported, NSWCA, CA 40080/98, 24 February 1998)
Gel Custodians Pty Ltd v Dewar [2014] WASC 177
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125
Glengallen Investments Pty Ltd v Arthur Andersen [2001] QCA 115; [2002] 1 Qd R 233
Hee v Nyoni [2014] WASC 44
HSBC Bank Australia Ltd v Mavaddat [2015] WASC 153
In re Judiciary and Navigation Acts [1921] HCA 20, (1921) 29 CLR 257
Insurance Commission of Western Australia v Woodings as Liquidator of the Bell Group Ltd (In liq) [2017] WASC 122
Insurance Commission of Western Australia v Woodings as Liquidator of the Bell Group Ltd (Unreported, HCA, 2 September 2016)
Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75
Kermani v Westpac Banking Corp [2012] VSCA 42; (2012) 36 VR 130
Kimberley Downs Pty Ltd v Western Australia (Unreported, WASC, Library No 6414, 25 August 1986)
Kuczborski v Queensland [2014] HCA 46; (2014) 254 CLR 51
Luna Park Limited v Commonwealth (1923) 32 CLR 596
Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184; (2014) 89 NSWLR 633
MCC Proceeds Inc v Lehman Bros International (Europe) [1998] 4 All ER 675
Michael Wilson and Partners Ltd v Nicholls [2011] HCA 48; (2011) 244 CLR 427
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2013] WASC 194 (S)
Mineralogy v Sino Iron Pty Ltd [2015] WASC 454
Moore v Inglis (1976) 9 ALR 509
Moran v Atrum Coal NL [No 5] [2016] WASC 23
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Oceanbulk Shipping and Trading v TMT Asia [2011] 1 AC 662
Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11
Palmer v Ayres [2017] HCA 5; (2017) 259 CLR 478
Pihiga Pty Ltd v Roche [2011] FCA 240; (2011) 278 ALR 209
Plaza BV v The Law Debenture Trust Corporation PLC [2015] EWHC 43 (Ch)
PNJ v The Queen [2009] HCA 6; (2009) 252 ALR 612
QBE Insurance (Aust) Ltd v Lois Nominees Pty Ltd [2012] WASCA 186
Re Barrow [2017] HCA 47; (2017) 91 ALJR 1240
Re Bell Group NC (In liq); Ex parte Insurance Commission of Western Australia [No 2] [2015] WASC 114
Reichel v Magrath (1889) 14 App Cas 665
Ridgeway v The Queen [1995] HCA 66; (1995) 184 CLR 19
Rippon v Chilcotin Pty Ltd [2001] NSWCA 142; (2001) 53 NSWLR 198
Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251
Ryledar Pty Ltd v Euphoric Pty Ltd [2007] NSWCA 65; (2007) 69 NSWLR 603
Sanderson Computers Pty Ltd v Urica Library Systems BV (1998) 44 NSWLR 73
Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93
Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118
State Bank of New South Wales Ltd v Alexander Stenhouse Ltd (1997) Aust Torts Reports 81-423
Technomin Australia Pty Ltd v Xtrata Nickel Australasia Operations Pty Ltd [2014] WASCA 164; (2014) 48 WAR 261
The Bell Group Ltd (In Liq) v Westpac Banking Corporation (1996) 18 WAR 21
Thirteenth Corporation Pty Ltd v State [2006] FCA 979; (2006) 232 ALR 491
Tolcher v National Australia Bank [2004] NSWSC 6; (2004) 182 FLR 419
Unilever plc v Procter and Gamble Co [2000] 1 WLR 2436
Wallingford v Mutual Society (1880) 5 App Cas 685
Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378
Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598
Western Export Services v Jireh International Pty Ltd [2011] HCA 45; (2011) 86 ALJR 1
Wright v Wright [2002] WASC 30

Table of Contents

1. Overview of the action, its history and related proceedings

The Liquidator's Application
History of the present action
Overview of the relief sought in the present action

2.     The Application
3.     The delay in the determination of the Application
4.     Principles in respect of applications to strike out pleadings and for summary judgment

Strike out applications
No reasonable cause of action disclosed
Pleadings which would prejudice, embarrass or delay the fair trial of the action
Pleadings which would give rise to an abuse of the process of the Court
Summary judgment applications

5. Determination of the Application

(a) [877], [899] and [900] of the SIFC ‑ BGNV's claim to legal professional privilege;
[702], [857] ‑ [875], [894] ‑ [895] and [898] of the SIFC ‑ BGNV's claim to 'without prejudice' privilege

Legal professional privilege
Without prejudice privilege

(b) PFR 1 and [16] ‑ [19] and [23] ‑ [132] of the SIFC;
PFR 2 and [415] ‑ [446] of the SIFC

(d) PFRs 5, 9 and 11 and [20] ‑ [22] and [208] ‑ [285] of the SIFC

The facts and contentions ICWA pleads in support of PFRs 5, 9 and 11, and its submissions as to how s 564 applies in the winding up of BGNV
BGNV's contention that PFRs 5, 9 and 11 are hypothetical
The hallmarks of a hypothetical case
The relief sought by ICWA is not hypothetical
The parties' contentions as to jurisdiction
PFRs 5, 9 and 11 should not be struck out on the basis that the Court has no jurisdiction to grant the relief sought

(b) PFR 12 and [513] ‑ [592] of the SIFC

BGNV's contention that PFR 12 is hopeless as a matter of law
PFR 12 raises a hypothetical question

(d) PFR 18 and [955] ‑ [977] of the SIFC

(e) PFRs 21 and 22 and [746] ‑ [835] of the SIFC

(f) PFRs 23 to 29 and [978] ‑ [1144] of the SIFC

Background context

6. Orders which should be made

PRITCHARD J: These reasons deal with an application made on 4 October 2016, as amended on 21 February 2017 (Application), by which the Ninth and Tenth Defendants (BGNV) have applied to strike out a number of the prayers for relief (PFR) set out in the Writ of Summons filed by the Plaintiff (ICWA), and numerous paragraphs of ICWA's Statement of Issues, Facts and Contentions (SIFC). BGNV has also applied, in the alternative, for summary judgment in respect of PFR 12 in the Writ, and [513] ‑ [592] of the SIFC.
For the reasons set out below, the Application will be allowed to the extent that PFR 12 and the corresponding paragraphs in the SIFC ([513] ‑ [592]), save to the extent that they may be relevant to any other PFR, will be struck out. Further, there will be an order that [899] and [900] of the SIFC be redacted. The Application will otherwise be dismissed.
In these reasons, I deal with the following matters:
1.Overview of the action, its history and related proceedings;
2.The Application;
3.The delay in the determination of the Application;
4.Principles in respect of applications to strike out pleadings and for summary judgment;
5.Determination of the Application;
6.The orders which should be made.
Before turning to deal with those matters, it is necessary to identify the version of the Writ and the SIFC which was, in effect, the subject of the Application. The Application sought to strike out, or to obtain summary judgment on, various PFRs in the Writ dated 9 June 2016 and the SIFC dated 18 October 2016. However, subsequent to the filing of the Application, ICWA amended the Writ and the SIFC. As at the date of the hearing of the Application, the version of each document which was before the Court was a Minute of Further Amended Writ dated 14 February 2017, and a Minute of Amended SIFC dated 14 February 2017 (Minutes). As at the date of the hearing of the Application, no application had been made to amend the Writ and SIFC in the terms set out in those Minutes. However, counsel agreed that the argument on the Application should proceed, for convenience, by reference to the Minutes setting out the amendments to the Writ and SIFC as at 14 February 2017, although with two qualifications.[1] First, the Application did not deal, at all, with two PFRs which formed part of the proposed amendments to the Writ, namely PFR 30 and 31, and the corresponding paragraphs ICWA sought to insert into the SIFC, namely [1145] ‑ [1152], which were particularly contentious (the disputed amendments).[2] (The disputed amendments were subsequently the subject of an application for an interlocutory injunction, to which I will refer later in these reasons.) Secondly, counsel for BGNV effectively reserved his client's position in respect of whether the Court should grant ICWA leave to amend the Writ and the SIFC in terms of the Minutes.[3] At that stage, it appeared (in view of counsel's concession to proceed on the basis of the Writ and the SIFC in terms of the Minutes) that any dispute in respect of leave to amend the Writ and SIFC was likely to be confined to the amendment of the Writ and SIFC to include the disputed amendments.[4]
The upshot of that background is that the Application was, effectively, an application to strike out paragraphs of, or for summary judgment in respect of, the Writ and the SIFC as set out in the Minutes dated 14 February 2017. References to the Writ and the SIFC in these reasons should be understood as references to those documents.

Overview of the action, its history and related proceedings
[1] ts 357 (24 March 2017).
[2] ts 357 (24 March 2017).
[3] ts 294 (24 March 2017).
[4] ICWA subsequently filed a Minute of Amended Writ and Minute of Further Amended SIFC, both dated 8 May 2017, together with an application dated 17 May 2017 to amend the Writ and SIFC in terms of those Minutes. And more recently, ICWA has proposed further amendments to the Writ and the SIFC, as set out in Minutes dated 19 January 2018.

In the wake of the collapse of The Bell Group Ltd (TBGL) and Bell Group Finance Pty Ltd (BGF), various parties, including at various times, ICWA, the Law Debenture Trust Corporation PLC (LDTC), BGNV, the Commonwealth (collectively, the indemnifying creditors) and the then liquidators of TBGL and BGF (referred to herein, in each case, and both cases, as the liquidator), entered into agreements for the purpose of securing funding to enable the liquidator to pursue proceedings to recover or preserve the assets of TBGL and BGF, especially through proceedings against a number of banks (the Bell Litigation). As a result of the Bell Litigation,[5] and other proceedings brought by the liquidator, the liquidator has recovered approximately $1.8 billion[6] (including interest) (the Proceeds). In due course, the Proceeds will need to be distributed by the liquidator to the creditors of TBGL and BGF, in the ordinary course of the liquidation of each of those companies.

The Liquidator's Application

[5] See Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1.

[6] Affidavit of Antony Leslie John Woodings sworn 4 August 2014 in COR 146 of 2014 [67], [97]; ts 22 (1 September 2014 in COR 146 of 2014).

In related proceedings commenced in this Court by an originating process (COR 146 of 2014), the liquidator has applied for orders pursuant to s 564 of the Corporations Law (Cth) (Law) (as applied by s 1408(1) of the Corporations Act 2001 (Cth) (Act)) (the Liquidator's Application). The orders sought include orders as to how the liquidator is to apply what is referred to as the Recovered Amounts (that is, the Proceeds) in the liquidation of TBGL and BGF. Section 564 of the Law provided:
Where in any winding up:
(a)property has been recovered under an indemnity for costs of litigation given by certain creditors, or has been protected or preserved by the payment of moneys or the giving of indemnity by creditors; or
(b)expenses in relation to which a creditor has indemnified a liquidator have been recovered;
the Court may make such orders, as it deems just with respect to the distribution of that property and the amount of those expenses so recovered with a view to giving those creditors an advantage over others in consideration of the risk assumed by them.
I note that s 564 of the Act is in materially identical terms. It appears that the parties anticipate that the question may arise for determination, in due course, as to whether s 564 of the Law or s 564 of the Act governs the Liquidator's Application. It is not necessary to express any view on that issue for present purposes. For convenience, I will simply refer to the relevant provision ‑ whether of the Law or the Act ‑ as s 564.
The orders sought in the Liquidator's Application are directed, in particular, to the amounts to be paid to each of the indemnifying creditors, each of which, to varying extents, is said to have provided an indemnity for the costs and expenses of the litigation pursued by the liquidator, which resulted in the recovery of the Proceeds. In summary, the liquidator seeks an order that he pay, first, his own unpaid costs and expenses; then that he repays the indemnifying creditors rateably, according to the amounts they advanced to the liquidator; then that the liquidator discharges any liability he has incurred, as the liquidator of each of TBGL and BGF, to the liquidator of BGF and TBGL respectively; then that he distributes two‑thirds of the balance of the Proceeds to the Commonwealth, ICWA and the LDTC, and BGNV, in particular ratios; and, finally, that he distributes the remaining one‑third of the Proceeds in the order provided by s 556 of the Law.

History of the present action

Shortly after the Liquidator's Application was filed, ICWA commenced two proceedings in this Court (which were ultimately consolidated in COR 208 of 2014) in which it sought declarations and orders relating to numerous issues which it contends are relevant to the exercise of the Court's discretion under s 564. In light of jurisdictional questions which arose in relation to COR 208 of 2014, ICWA subsequently commenced the present action in the High Court. This action was then remitted to this Court.[7] COR 208 of 2014 was subsequently discontinued.

Overview of the relief sought in the present action

[7] Insurance Commission of Western Australia v Woodings as Liquidator of the Bell Group Ltd (Unreported, HCA, 2 September 2016) (French CJ).

In the present action, ICWA seeks declaratory and other relief in respect of a wide range of issues which it says will be relevant to the Court's ultimate exercise of discretion under s 564 in the Liquidator's Application. Leaving the disputed amendments to one side, the Writ seeks 29 different PFRs. The SIFC is 300 pages long (excluding annexures) and contains 1153 paragraphs. By way of a general overview of the nature of the issues raised, it suffices to note that the relief ICWA seeks includes the following:
•a declaration that for the purposes of s 564, ICWA is a creditor of BGF, and that the Proceeds were recovered by the liquidator under indemnities given by ICWA for the liquidator's costs of litigation or expenses (so that the Court would be able to make an order under s 564 in favour of ICWA);[8]
[8] PFR 1.
•a declaration that pursuant to s 564 the Court may make an order in favour of a creditor which has paid money or indemnified a liquidator for the costs of litigation or expenses, which has resulted in property being recovered, protected or preserved, and which order pertains to the payment of money to the creditor by the liquidator, BGF or TBGL, in a way that is not limited by reference to the amount of money due to that creditor in its capacity as a creditor, and which will not alter the priority of that creditor in the winding up of TBGL or BGF; and which will not reduce the amount for which that creditor's claim may be admitted to proof in the liquidation; or which will not reduce the principal amount for which that creditor's claim may be admitted to proof but may reduce the amount of post liquidation interest otherwise payable to that creditor;[9]
[9] PFR 2.
•a declaration that for the purposes of s 564, ICWA is a creditor of BGNV;[10]
[10] PFR 5.
•declarations in relation to the proper construction of agreements known as the TBGL AFI[11] and the BGF AFI[12] (collectively, the AFIs) and the PTICA,[13] namely that on the proper construction of those agreements, the liquidator is not precluded from repaying, and ICWA would not be in breach of those agreements if it encouraged the liquidator to repay, funds which were advanced to the liquidator in accordance with the AFIs, or costs and expenses properly incurred by the liquidator in relation to the winding up of TBGL and BGF, prior to the determination of the Liquidator's Application;[14]
[11] Agreement for Indemnification dated 6 April 1995, as amended, between the liquidator, the Commonwealth, the LDTC (TBGL), BGNV and ICWA.
[12] Agreement for Indemnification dated 7 April 1995, as amended, between the liquidator, the Commonwealth, the LDTC (BGF), BGNV and ICWA.
[13] Agreement for Indemnification and Post Termination Inter-Creditor Agreement between the Commonwealth, ICWA, the liquidator of BGNV, and BGNV dated 23 September 1999, as amended.
[14] PFRs 21 and 22.
•a declaration that ICWA may seek an order pursuant to s 564, in advance of the determination of the Liquidator's Application, without breaching any obligation under the AFIs or the PTICA;[15]
•various declarations (as discussed below) in relation to the operation of specified clauses of trust deeds of which trusts the LDTC is the trustee (known as the TBGL Trust Deed and the BGF Trust Deed) relating to bonds issued by TBGL and BGF and held by ICWA, which clauses are said to constitute subordination and turnover trust clauses in respect of particular amounts, for the benefit of unsubordinated creditors of TBGL and BGF (I will refer to these clauses as the subordination and turnover trust clauses);
•declarations that any monies paid to the LDTC or ICWA by the liquidator pursuant to s 564 are not subject to the subordination and turnover trust clauses;[16]
•an order pursuant to s 564 that the liquidator of BGNV pay to ICWA, out of any proceeds connected with debts owed by TBGL or BGF to BGNV, an amount equal to the aggregate of any monies received or receivable by him from BGF, TBGL, the liquidator, or the LDTC, pursuant to the operation of the subordination and turnover trust clauses, in priority to any other amount payable in the liquidation of BGNV;[17]
•a declaration that the TBGL Trust Deed and the BGF Trust Deed may be amended by the LDTC (in its capacity as the trustee of those Trusts) with the consent of ICWA;[18] and a declaration that BGNV may not bring any action against ICWA, TBGL, BGF, the liquidator, or the LDTC to resist the amendment of those Trust Deeds, and may not oppose any application for TBGL, BGF, the liquidator or the LDTC to be released from certain undertakings, given in other proceedings in this Court, not to seek to amend those Trust Deeds;[19]
•declarations in relation to the construction of the PTICA, including declarations that any monies which are payable to BGNV by TBGL, BGF or the liquidator, or by ICWA or the LDTC, pursuant to an order by the Court made under s 564, are required to be dealt with by BGNV in accordance with certain clauses of the PTICA;[20]
•declarations that any monies paid to ICWA by the liquidator pursuant to s 564, and which may be subject to the subordination and turnover trust clauses, are not required to be dealt with by ICWA in accordance with certain clauses of the PTICA;[21]
•alternatively, if the construction and operation of the PTICA and the parties' obligations under the PTICA are otherwise than as contended by ICWA, an order that the PTICA be rectified to reflect the terms of the agreement ICWA contends was reached between the parties to the PTICA;[22]
•alternatively, if BGNV's obligations under the PTICA are otherwise than as contended by ICWA, orders that BGNV pay damages to ICWA for loss or damage ICWA claims to have suffered as a result of the contravention by BGNV of s 52 of the Trade Practices Act 1974 (Cth) or s 10 of the Fair Trading Act 1987 (WA) by reason of alleged misleading and deceptive conduct by BGNV in its negotiation of the PTICA;[23]
•declarations in relation to the construction and operation of agreements known as the Western Interstate Assignment Agreement (WIAA) and the Western Interstate Inter‑Creditor Agreement (WIICA) including declarations that BGNV is a 'Terminating Indemnifier' for the purposes of the WIAA and the WIICA;[24] that upon becoming a Terminating Indemnifier, BGNV ceased to have any interest in or claim to 57,000 ordinary shares in Western Interstate Pty Ltd (in prov liq) (Western Interstate) which were the subject of the WIAA;[25] declarations that Bell Bros Pty Ltd (in liq) (Bell Bros) is obliged to transfer those 57,000 shares to the liquidator of BGF;[26] that the liquidator is obliged to receive those shares;[27] and that upon that transfer BGF will hold those shares on trust for ICWA and the Commonwealth;[28] and that ICWA and the Commonwealth are the sole beneficial owners of those shares;[29] and a declaration that any distribution by Western Interstate to ICWA and the Commonwealth, with respect to those shares, is not subject to certain clauses of the WIICA or the PTICA.[30]
[15] PFR 4.
[16] PFRs 6, 7, 8 and 10.
[17] PFRs 9 and 11.
[18] PFR 12.
[19] PFR 13.
[20] PFRs 14, 15, 16.
[21] PFRs 17 and 20.
[22] PFR 18.
[23] PFR 19.
[24] PFR 23.
[25] PFR 24.
[26] PFR 25.
[27] PFR 26.
[28] PFR 27.
[29] PFR 28.
[30] PFR 29.

ICWA does not seek an order from the Court pursuant to s 564 in relation to the winding up of BGF or TBGL. As I have already observed, ICWA considers that some of the issues raised in the present action are relevant or antecedent to the exercise of the Court's discretion under s 564. By way of example, the relief sought in respect of the shares in Western Interstate is considered relevant to the determination of the assets of BGF which will ultimately be available for distribution in the liquidation of BGF. The relief sought appears to be intended to deal with a contention, actual or anticipated, that BGNV has an interest in those shares.
Other issues and relief sought, as I presently understand them, are intended to deal with contentions, actual or anticipated, that ICWA is not entitled to advance certain arguments in the Liquidator's Application, or that the liquidator would not be able to take certain action prior to the determination of the Liquidator's Application (such as the repayment of funds advanced, or expenses paid, by any indemnifying creditors). Other issues raised and relief sought will, or may, bear upon the exercise of the Court's discretion under s 564 in the Liquidator's Application (for example, that ICWA is a creditor of BGF for the purposes of that application, and that the Proceeds were recovered, or protected, by virtue of the indemnity given by ICWA for the costs of the liquidator).
Given the nature of an application under s 564, and the number and complexity of the issues which it appeared were likely to be involved, both in this matter and in the Liquidator's Application, I took the view that these were matters in which formal pleadings would not be the most efficacious way to proceed. I therefore made orders that these matters should proceed on the basis of statements of issues, facts and contentions (SIFCs) filed by the parties. Proceeding by way of SIFCs has had the advantage of illuminating very clearly, and from the outset, the legal issues which each matter raises, and what the parties' position is in respect of each of those legal issues. Furthermore, in a case such as the present, where the matters are closely related, proceeding by way of SIFCs highlights far more clearly, from the outset, the potential and actual overlap in the matters. That is, and will be, of considerable assistance to the Court and to the parties, in making determinations about the most efficacious way to bring these matters to trial.

The Application

In the Application, BGNV seeks the following relief:
1.Pursuant to O 20 r 19(1)(a), (c) or (d) of the Rules of the Supreme Court 1971 (WA) (RSC), the following PFRs and pleadings be struck out on the basis that they disclose no reasonable cause of action, are prejudicial, embarrassing or may delay the fair trial of the action, or are otherwise an abuse of process:
(a)PFR 1 and [16] ‑ [19] and [23] ‑ [132] of the SIFC;
(b)PFR 2 and [415] ‑ [446] of the SIFC;
(c)PFR 4 and [286] ‑ [414] of the SIFC;
(d)PFRs 5, 9 and 11 and [20] ‑ [22] and [208] ‑ [285] of the SIFC;
(e)PFR 12 and [513] ‑ [592] of the SIFC;
(f)PFR 13 and [594] ‑ [745] of the SIFC;
(g)PFR 18 and [955] ‑ [977] of the SIFC;
(h)PFRs 21 and 22 and [746] ‑ [835] of the SIFC;
(i)PFRs 23 to 29 and [978] ‑ [1144] of the SIFC.
2.In the alternative to the strike out of PFR 12 and [513] ‑ [592] of the SIFC, summary judgment in respect of that part of ICWA's claim, pursuant to O 16 r 1 RSC.
3.In the alternative to the strike out of PFR 18 and [955] ‑ [977] of the SIFC, an order that ICWA file and serve a statement of claim in support of its claim for relief in PFR 18.
In addition, BGNV contended that a number of paragraphs of the SIFC should be struck out on the basis that they plead communications in respect of which BGNV asserts legal professional privilege, or which BGNV says are subject to a 'without prejudice' privilege.
Of the 29 PFRs in the Writ (excluding the disputed amendments in PFR 30 and 31), the Application seeks to strike out all but 13 of them. The Application thus seeks to strike out a very significant proportion of the relief sought by ICWA, together with the corresponding paragraphs of the SIFC which are said to support the grant of that relief.
In support of the Application, BGNV filed detailed written submissions dated 24 November 2016, which were largely (but not entirely) superseded by detailed written submissions dated 21 February 2017. In addition, BGNV relied on the affidavit of Scott Bruce Foreman sworn 14 March 2017, and tendered a document referred to in that affidavit but not exhibited to that affidavit.
ICWA filed detailed written submissions in response dated 28 February 2017. Counsel for ICWA also relied on the affidavit of David Jonathan Hargreaves sworn 28 February 2017, and the affidavit of Angela Hamersley sworn 16 October 2014, filed in proceeding COR 208 of 2014. According to ICWA's submissions, it also relied on the affidavit of Angela Hamersley affirmed 10 February 2017.

The delay in the determination of the Application

The Application was heard on 24 March 2017, and I reserved my decision. Shortly thereafter, the disputed amendments were the subject of an application for an interlocutory injunction. In PFR 30 and 31, ICWA sought a permanent injunction restraining BGNV from pursuing certain prayers for relief in the course of litigation it has commenced in the Federal Court (WAD 191 of 2016) (the Federal Court proceedings) or from pursuing relief of the same kind in any other proceedings, and/or damages for breach of contract. ICWA sought an interlocutory injunction to restrain BGNV from pursuing the Federal Court proceedings, pending the determination of its application for the permanent injunctive relief it sought in the disputed amendments. BGNV opposed the grant of an interlocutory injunction on a variety of bases, including that there was no serious question to be tried on the disputed amendments. On 13 April 2017, I granted ICWA's application for an interlocutory injunction.[31] BGNV then appealed that order to the Court of Appeal (the interlocutory appeal). The interlocutory appeal was heard on an expedited basis on 27 and 28 July 2017.
[31] Insurance Commission of Western Australia v Woodings as Liquidator of the Bell Group Ltd (In liq) [2017] WASC 122.
By the time that that appeal had been filed, ICWA had made an application to amend the Writ and SIFC in terms of a Minute of Amended Writ and Minute of Further Amended SIFC, both dated 8 May 2017 (amendment application). BGNV opposed the grant of leave to amend.
As I have already mentioned, the disputed amendments appeared to be at the centre of BGNV's opposition to the amendment application. It also appeared likely that the judgment delivered by the Court of Appeal in respect of the interlocutory appeal would address the question whether there was a serious question to be tried in respect of the claims which were the subject of the disputed amendments. In turn, the answer to that question was likely to be highly relevant to the question whether the disputed amendments disclosed a reasonable cause of action, and thus whether leave should be given to amend the Writ and SIFC to include the disputed amendments.
In those circumstances, I formed the view that from a case management perspective (including the prospect of multiple appeals) it would be preferable to defer the hearing of ICWA's amendment application until after the Court of Appeal delivered its reasons on the interlocutory appeal, to hear the amendment application prior to publishing my reasons in respect of the present Application, and then to deliver one set of reasons which would deal, in effect, with the totality of BGNV's objections to the Writ and SIFC, including the proposed amendments thereof. That view was also based on some assumptions about the likely timeframe in which all of those steps might occur.
The Court of Appeal delivered its judgment on 22 December 2017. It concluded that there was no serious question to be tried in respect of the disputed amendments.[32]
[32] Bell Group NV (in liq) v Insurance Commissioner of Western Australia [2017] WASCA 229 [89] ‑ [119].
With the benefit of hindsight, it would have been preferable to publish these reasons in respect of the Application without reference to the amendment application. That would have avoided what has turned out to be a lengthy delay in delivering judgment on the Application.
In light of the Court of Appeal's judgment on the interlocutory appeal, ICWA has now filed a Second Further Minute of Further Amended Writ, and a Second Further Minute of Amended SIFC, both dated 19 January 2018. The primary thrust of the most recent of its proposed amendments appears to be to abandon the claims which were the subject of the disputed amendments. By an email to my associate dated 25 January 2018, BGNV's solicitors advised that BGNV intended to oppose ICWA's proposed amendments to the Writ and SIFC, on the basis that those amendments disclose no reasonable cause of action, may prejudice, embarrass or delay the fair trial of the action, and are otherwise an abuse of the process of the Court. In documents filed on 29 January 2018, BGNV's position was expanded upon. It seeks to advance arguments as to why leave to amend should be refused in respect of certain paragraphs of the writ and SIFC. It also, apparently, wishes to advance arguments as to why other paragraphs should be struck out.
Given the nature of those arguments, deferring the publication of these reasons until the amendment application is heard has the potential to add to the already considerable delay in progressing this action.
In the circumstances, I have decided that, notwithstanding the approach I have adopted to date, the preferable course is now to publish these reasons without further delay. In reaching that view, I have taken into account the fact that the action is listed for a strategic conference on 1 February 2018, which is the only date convenient to all of the parties' counsel in the immediate future. It is important that that opportunity be used for a full discussion as to how to most efficiently progress the action to final determination. Resolution of the present Application will assist in that discussion.
ICWA's amendment application, which now pertains to the proposed amendments to the writ and SIFC as at 19 January 2018, (and BGNV's opposition thereto) is listed for hearing on Thursday 1 February 2018. The Court will endeavour to determine those matters as soon as possible thereafter, so that the pleadings can be finalised and the parties' attention can turn to other interlocutory steps necessary to progress the action to trial.

Principles in respect of applications to strike out pleadings and for summary judgment

Strike out applications

In so far as the Application seeks to strike out a number of the PFRs and paragraphs of the SIFC, BGNV relies on O 20 r 19(1)(a), (c) and (d) RSC which provide:
(1)The Court may at any stage of the proceedings … order to be struck out or amended any pleading, or the indorsement of any writ in the action, or anything in any pleading or in the indorsement on the ground that
(a)it discloses no reasonable cause of action or defence, as the case may be; or
(b)…
(c)it may prejudice, embarrass or delay the fair trial of the action; or
(d)it is otherwise an abuse of the process of the Court,
and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.

No reasonable cause of action disclosed

The principles in respect of a strike out application made pursuant to O 20 r 19(1)(a) RSC are well established. They were set out by Master Staples in Kimberley Downs Pty Ltd v Western Australia and have been applied on numerous occasions. Those principles are: [33]
(1)The rule is intended to apply only to cases which are really not arguable and not to cases where under the previous practice demurrer would have been the proper course.
(2)On the application, not only must all the facts alleged in the statement of claim be accepted as true, but it must be taken for granted that on all other points the pleading is unassailable.
(3)Great care must be exercised to ensure that a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal.
(4)But the rule should not be reserved for those cases where argument is unnecessary to show the futility of the plaintiff's claim. Argument, even extensive argument, may be necessary to demonstrate that the plaintiff's case is so clearly untenable that it cannot possibly succeed.
(5)As a general rule, a plaintiff is 'entitled … as of right to have his case heard, to have the facts found and then to argue the question of law as it arises before the trial Judge upon the facts as found. It is only in cases in which it can be seen from the outset that, however the facts be found, there is no basis for the legal conclusion contended for by the plaintiff that the pleading should be struck out.
(6)A court at first instance should be careful not to risk stifling the development of the law by summarily rejecting a claim where there is a reasonable possibility that, as the law develops, it will be found that a cause of action will lie.
[33] Kimberley Downs Pty Ltd v Western Australia (Unreported, WASC, Library No 6414, 25 August 1986) 6 - 7 (citations omitted).
If a plaintiff omits to plead a critical element of a cause of action, or fails to plead facts which are capable of constituting a cause of action, the pleading will fail to disclose a reasonable cause of action.[34] In the case of a deficiency of that kind, however, the plaintiff would ordinarily be permitted to amend the pleading to address the deficiency. The Court would usually expect that deficiencies of that kind would be resolved by conferral between the parties leading to an amendment, rather than by applications to strike out the pleading.

Pleadings which would prejudice, embarrass or delay the fair trial of the action

[34] Moran v Atrum Coal NL [No 5] [2016] WASC 23 [11] ‑ [13]; Boase v Axis International Management Pty Ltd [2009] WASC 331 [11] ‑ [12], [18] ‑ [23].

As for O 20 r 19(1)(c), the phrase 'prejudice, embarrass or delay the fair trial of the action' is one which 'imports the notion [that] the character of the pleading is such as to make the fair trial of the action more difficult to achieve, that the trial will be unduly protracted or delayed or the pleading is calculated to prejudice the legal process'.[35] That description may be apt in a variety of circumstances, such as where the pleadings are evasive, or conceal or obscure the real questions in controversy, or are ambiguous or not reasonably intelligible, or raise immaterial or irrelevant issues, or fail to confine the issues or state the case of the party with reasonable particularity, or raise a case in terms which are too general to identify the cause of action.[36]

Pleadings which would give rise to an abuse of the process of the Court

[35] Bertola v Australia and New Zealand Banking Group Ltd [2016] WASC 165 [21] (Martino J).

[36] David Clarke Air Conditioning Pty Ltd ATF David Clarke Air Conditioning Trust v Quann [2016] WASC 73 [15] (Allanson J).

Finally, under O 20 r 19(1)(d), the Court has the power (in addition to its inherent power[37]) to prevent the misuse of its procedures in a way which, although not inconsistent with a literal application of the other procedural rules of the Court, would nevertheless be manifestly unfair to a party to litigation, or which would bring the administration of justice into disrepute.[38] The underlying policy is to prevent the waste of judicial resources and to maintain confidence in, and respect for, the authority of the courts.[39]
[37] Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 [4] (Buss JA) and the cases there cited.
[38] Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378, 393; Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251, 256, 280, 286 - 287; PNJ v The Queen [2009] HCA 6; (2009) 252 ALR 612 [3]; Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75 [28]; QBE Insurance (Aust) Ltd v Lois Nominees Pty Ltd [2012] WASCA 186 [41] (McLure P).
[39] QBE Insurance (Aust) Ltd v Lois Nominees Pty Ltd [2012] WASCA 186 [114] (Newnes JA).
The circumstances in which an abuse of process may arise are extremely varied and the courts have refrained from attempting any exhaustive categorisation of those circumstances.[40] However, a recognised category of abuse of process includes commencing successive proceedings which cause oppression, or are likely to be oppressive, to a party because they constitute an attempt by a litigant to run the same case again.[41] It is also prima facie vexatious to bring two extant civil actions where one will lie, if the issues overlap or significantly overlap or there is a similarity of subject matters of the proceedings.[42] That will be so irrespective of whether the two proceedings are in separate courts or one,[43] and even if the parties, or the relief sought, are not identical.[44]
[40] Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 256 [7]; Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48; (2011) 244 CLR 427 [89] (Gummow A‑CJ, Hayne, Crennan & Bell JJ); Ridgeway v The Queen [1995] HCA 66; (1995) 184 CLR 19, 74 ‑ 75 (Gaudron J); Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 [5] (Buss JA), [119] (Murphy JA, Chaney J agreeing).
[41] Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378, 393 (Mason CJ, Deane & Dawson JJ); Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251, 286 ‑ 287 (McHugh J); Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 [8] (Buss JA), [118] ‑ [119] (Murphy JA, Chaney J agreeing).
[42] Mineralogy v Sino Iron Pty Ltd [2015] WASC 454 [17] (Chaney J, citing Kermani v Westpac Banking Corporation [2012] VSCA 42; (2012) 36 VR 130 [97] (Robson AJA, Neave & Harper JJA agreeing)); Moore v Inglis (1976) 9 ALR 509, 514-515 (Mason J); Thirteenth Corporation Pty Ltd v State [2006] FCA 979; (2006) 232 ALR 491 [32] (Jessup J).
[43] Mineralogy v Sino Iron Pty Ltd [2015] WASC 454 [17] (Chaney J, citing Kermani v Westpac Banking Corporation [2012] VSCA 42; (2012) 36 VR 130 [97] (Robson AJA, Neave & Harper JJA agreeing)); Branir Pty Ltd v Wallco Pastoral Co Pty Ltd [2006] NTSC 70; (2006) 18 NTLR 127 [20].
[44] Mineralogy v Sino Iron Pty Ltd [2015] WASC 454 [17] (Chaney J, citing Kermani v Westpac Banking Corporation [2012] VSCA 42; (2012) 36 VR 130 [97] (Robson AJA, Neave & Harper JJA agreeing)); Moore v Inglis (1976) 9 ALR 509, 514-515.
It will also be an abuse of process for a party to make a claim in later proceedings which is based wholly or substantially on the facts of a claim made by the same party in earlier proceedings, such as by pursuing the same claim against a different defendant.[45] An abuse of process may even arise where there is no identity of parties.[46] Further, not only will it be an abuse of process to attempt to re-litigate an issue which has, in substance, been determined in earlier proceedings, but it will also be an abuse if a party attempts to litigate an issue which should have been raised and determined in earlier proceedings.[47] This category of abuse of process has been described as an extension of Anshun estoppel.[48]
[45] See, eg, Reichel v Magrath (1889) 14 App Cas 665 and Rippon v Chilcotin Pty Ltd [2001] NSWCA 142; (2001) 53 NSWLR 198 [27] ‑ [28].
[46] Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 [120] (Murphy JA); see also MCC Proceeds Inc v Lehman Bros International (Europe) [1998] 4 All ER 675 esp 695 (Mummery LJ, Pill LJ agreeing).
[47] Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 [11] (Buss JA) and the cases there cited.
[48] Michael Wilson and Partners Ltd v Nicholls [2011] HCA 48; (2011) 244 CLR 427 [94]; Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 [125] ‑ [126] (Murphy JA, Chaney J agreeing).

The jurisdiction to stay for abuse of process is not limited to cases where the proceedings have been brought for an improper purpose or where there is no possibility of the court affording the affected party a fair hearing.[49]
[49] Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378, 395; Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251, 255 (Mason CJ), 286 (McHugh J).
Whether a subsequent action constitutes an abuse of process must be assessed by reference to guiding considerations of 'oppression and unfairness to the other party to the litigation and concern for the integrity of the system of administration of justice'.[50] Among the matters which may be relevant to that issue will be:[51]
[50] State Bank of New South Wales Ltd v Alexander Stenhouse Ltd (1997) Aust Torts Reports 81-423, 64,089 (Giles CJ Comm Div); Kermani v Westpac Banking Corp [2012] VSCA 42; (2012) 36 VR 130 [97] (Robson AJA, Neave & Harper JJA agreeing); Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 [134] (Murphy JA, Chaney J agreeing).
[51] State Bank of New South Wales Ltd v Alexander Stenhouse Ltd (1997) Aust Torts Reports 81-423, 64,089 (Giles CJ Comm Div); Kermani v Westpac Banking Corp [2012] VSCA 42; (2012) 36 VR 130 [97] (Robson AJA, Neave & Harper JJA agreeing); Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 [134] (Murphy JA, Chaney J agreeing); Mineralogy v Sino Iron Pty Ltd [2015] WASC 454 [17] (Chaney J).
(a)The importance of the issue in and to the earlier proceedings, including whether it is an evidentiary or an ultimate issue;
(b)The opportunity available and taken to fully litigate the issue;
(c)The terms and finality of the finding as to the issue;
(d)The identity between the relevant issues in the two proceedings;
(e)Any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceeding;
(f)The extent of the oppression and unfairness to the other party if the issue was re-litigated and the impact of the re-litigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and
(g)An overall balancing of justice to the alleged abuser against the matters supportive of abuse of process.
The Court should also consider whether there was reasonable justification for the second proceeding based on legitimate considerations of convenience, cost or the like.[52]

Summary judgment applications

[52] Kermani v Westpac Banking Corp [2012] VSCA 42; (2012) 36 VR 130 [97] (Robson AJA, Neave & Harper JJA agreeing); Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 [134] (Murphy JA, Chaney J agreeing).

A defendant to an action may apply to the Court for summary judgment pursuant to O 16 r 1 RSC. O 16 r 1 requires the Court to be satisfied either that the action is frivolous or vexatious, or that the defendant has a good defence on the merits, or that the action should be disposed of summarily.
An application for summary judgment by a defendant must be brought within 21 days of the defendant's appearance or any later time by leave of the Court.[53] BGNV filed an appearance in the matter on 17 June 2016. The Application was filed on 4 October 2016. BGNV should have leave to proceed with the Application in so far as it seeks summary judgment. ICWA did not object to the Application on the basis that it was out of time. Summary judgment was sought in the alternative to the strike out application in respect of PFR 12 and [513] ‑ [592] of the SIFC, and I am unable to see that any prejudice to ICWA would arise from the grant of leave to proceed out of time.
[53] Rules of the Supreme Court 1971 (WA) O 16 r 1(1).
The principles in relation to the determination of applications for summary judgment are well established. A party should not ordinarily be denied the opportunity to have his or her case determined following trial, and for that reason, the jurisdiction to grant summary judgment should be reserved for the clearest of cases, where there is a high degree of certainty about the ultimate outcome of the action if it were allowed to go to trial.[54] In other words, the question is whether, on the material before the Court, it has been demonstrated that the plaintiff's action should not be permitted to proceed to trial because it is apparent that it must fail.[55] However, that does not mean that summary judgment will be given only where the case is so hopeless as not to require argument. Extensive argument may be necessary to demonstrate that a party's case is so clearly untenable that it cannot possibly succeed.[56]
[54] Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57] (Gaudron, McHugh, Gummow & Hayne JJ); Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [46] (Gleeson CJ, Gummow, Hayne & Crennan JJ); Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 [24] (French CJ & Gummow J); Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99; Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598, 602 ‑ 603 (Mason CJ, Deane & Dawson JJ).
[55] Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598, 602.
[56] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, 130 (Barwick CJ).
The defendant bringing the summary judgment application bears the legal onus of establishing that there is no serious question to be tried on any cause of action raised by the plaintiff.[57] Under O 16 r 1(2) the defendant is required to file an affidavit verifying the facts upon which the application is based.
[57] Anderson v Effexseven (1999) 10 ANZ Ins Cas 61-424, 74,757 (Parker J, Owen J agreeing).
The plaintiff is also entitled, under O 16 r 2, to file an affidavit to show cause against the application. If the plaintiff shows cause against the application for summary judgment by filing an affidavit in response, the plaintiff may assume an evidentiary onus to show why summary judgment should not be given. In other words, the plaintiff needs to show, on the evidence, that there exists a 'triable issue'.[58] In doing so, the affidavit must 'condescend upon particulars' - that is, it must set out facts which establish that it is reasonable to permit the plaintiff to pursue the action.[59]
[58] See Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 110 (Brinsden J) (in relation to applications under O 14 r 1 RSC); see also Bankwest (a division of CBA) v Mann [2015] WASC 187 [46]; HSBC Bank Australia Ltd v Mavaddat [2015] WASC 153 [26]; Gel Custodians Pty Ltd v Dewar [2014] WASC 177 [25]; Hee v Nyoni [2014] WASC 44 [25]; Wright v Wright [2002] WASC 30 [19].
[59] Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 113 (Brinsden J), citing Wallingford v Mutual Society (1880) 5 App Cas 685, 704 (Lord Blackburn).
While the plaintiff may assume an evidentiary onus, the defendant retains the legal onus of demonstrating that there is no real question to be tried on any cause of action raised by the plaintiff.[60]
[60] Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18, 24 (Murray J); Anderson v Effexseven (1999) 10 ANZ Ins Cas 61-424, 74,757 (Parker J, Owen J agreeing).

Determination of the Application

(a) [877], [899] and [900] of the SIFC ‑ BGNV's claim to legal professional privilege;

[702], [857] ‑ [875], [894] ‑ [895] and [898] of the SIFC ‑ BGNV's claim to 'without prejudice' privilege

Counsel for BGNV submitted that various paragraphs of the SIFC plead communications in respect of which BGNV has claimed legal professional privilege, or which it claims are subject to without prejudice privilege.

Legal professional privilege

This issue can be readily dealt with. BGNV contended that [877], [899] and [900] of the SIFC disclosed material in respect of which BGNV claimed legal professional privilege. Counsel for ICWA indicated that ICWA does not seek to rely on [899] and [900] of the SIFC, and, in the minute of amended SIFC dated 14 February 2017, those paragraphs have been struck through. BGNV complains that that is not enough, and that the paragraphs should be deleted entirely. ICWA proposes that those paragraphs be deleted or redacted. In my view, the proper course is to redact the paragraphs in question.
As for [877] of the SIFC, the material before the Court does not support the conclusion that that paragraph contains a reference to privileged material. The paragraph refers to a communication between the legal adviser for BGNV's liquidator, and ICWA and the Commonwealth, in which the former provided an opinion (whether his own or counsel's is not clear) to confirm a particular view. The pleading, on its face, does not permit the conclusion that BGNV is entitled to claim legal professional privilege in the reference to the opinion. The affidavits on which BGNV relies do not advance that position.

Without prejudice privilege

Counsel for BGNV submitted that [702], [857] ‑ [875], [894] ‑ [895] and [898] of the SIFC referred to a number of communications which were the subject of without prejudice privilege, and that those paragraphs should be struck out.
[857] ‑ [875] deal with the negotiation of the PTICA. [894] ‑ [895] and [898] deal with the possible amendment of the TBGL Inter‑Creditor Agreement, the WIICA and the PTICA.
Having regard to its context in the pleading, [702] appears to refer to communications which took place in the context of a broader discussion about settlement of claims made by the plaintiffs in another related proceeding, which overlapped with the Bell Litigation, namely CIV 2061 of 1996.
The principles in relation to without prejudice privilege were discussed by the Full Court of this Court in Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd.[61] Justice McLure summarised those principles, in the context of a discussion about the admissibility of documents marked 'without prejudice'. Her Honour observed:[62]
Statements made without prejudice in an attempt to settle a dispute or action are privileged. Without prejudice privilege is a joint privilege and thus cannot be waived without the consent of the negotiating parties. The mere fact that a document is or is not marked 'without prejudice' is not decisive. The test is whether the communication was part of a genuine attempt to settle a dispute. If so, the whole course of the negotiations is privileged. (case references omitted)
[61] Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11.
[62] Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 [91] (McLure J, Murray & Parker JJ agreeing).
The operation of the privilege was also discussed by the Queensland Court of Appeal in Glengallen Investments Pty Ltd v Arthur Andersen.[63] Williams JA, with whom McPherson JA and Ambrose J agreed, noted that the two essential prerequisites for the operation of the rule are:[64]
(1)a genuine attempt to reach a settlement of a dispute the subject of litigation or which will become so if the dispute is not resolved; and
(2)the making of an express or implied admission in so doing. The rule then operates to prevent the use of such admissions in subsequent litigation.
[63] Glengallen Investments Pty Ltd v Arthur Andersen [2001] QCA 115; [2002] 1 Qd R 233.
[64] Glengallen Investments Pty Ltd v Arthur Andersen [2001] QCA 115; [2002] 1 Qd R 233 [28] (Williams JA, McPherson JA and Ambrose J agreeing).
In Pihiga Pty Ltd v Roche,[65] Lander J explained that there are two bases for the rule. The first lies in public policy, in that the existence of the rule encourages parties to engage in full and frank discussions aimed at settling their disputes without recourse to the courts. The second is that the rule is founded on the express or implied agreement of the parties that the communications between them should not be admissible in evidence if those communications do not lead to a settlement.[66] Accordingly, the rule protects admissions in the form of an offer to settle, and communications between parties generally in respect of issues in the dispute including assertions made of the strength and weakness of a party's case or an opponent's case.[67]
[65] Pihiga Pty Ltd v Roche [2011] FCA 240; (2011) 278 ALR 209.
[66] Pihiga Pty Ltd v Roche [2011] FCA 240; (2011) 278 ALR 209 [83] - [86] citing Unilever plc v Procter and Gamble Co [2000] 1 WLR 2436, 2448 - 2449 (Robert Walker LJ) and Oceanbulk Shipping and Trading v TMT Asia [2011] 1 AC 662 [27] (Lord Clarke).
[67] Pihiga Pty Ltd v Roche [2011] FCA 240; (2011) 278 ALR 209, [81] (Lander J).
There are, however, numerous exceptions to the rule. In Old Papa's, McLure J noted that the rule is not absolute 'and resort may be had to without prejudice material for a variety of reasons and when the justice of the case requires it'.[68] By way of example, without prejudice communications are admissible when the issue is whether such communications have resulted in a concluded compromise agreement.[69] Another exception is that a party to without prejudice negotiations can rely upon anything said in the course of them in order to show that a settlement agreement should be rectified.[70] Further, evidence of negotiations conducted on a without prejudice basis is admissible to show that an agreement apparently concluded between the parties during the negotiations should be set aside on the ground of misrepresentation, fraud or undue influence.[71]
[68] Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 [94] (McLure J, Murray & Parker JJ agreeing).
[69] Unilever plc v Procter and Gamble Co [2000] 1 WLR 2436, 2444 (Robert Walker LJ).
[70] Oceanbulk Shipping and Trading v TMT Asia [2010] 3 WLR 1424 [33] (Lord Clarke).
[71] Unilever plc v Procter and Gamble Co [2000] 1 WLR 2436, 2444 (Robert Walker LJ).
I am not persuaded that BGNV has established that the challenged paragraphs disclose communications which are subject to the 'without prejudice' privilege, so as to warrant the paragraphs in question being struck out of the SIFC. I have reached that view for the following reasons.
First, it was far from clear that the communications referred to in each paragraph were in fact subject to without prejudice privilege. BGNV did not adduce any evidence to support that conclusion. Copies of the documents referred to, for example, were not put into evidence. The surrounding context for each of the challenged paragraphs was not sufficient to establish that the privilege applied. While the surrounding context for the challenged paragraphs suggests that the communications were conducted in the course of negotiations, ICWA disputed that those negotiations were undertaken between the parties concerned for the purpose of settling a dispute. For example, in respect of [857] ‑ [875], [894] ‑ [895] and [898], which pertain to the negotiation of the PTICA, counsel for ICWA submitted that the negotiation of the PTICA
was to ensure the 'BGNV Actions' (as defined in the PTICA) were pursued thereby enhancing the prospects of success for the applicants in the Main Proceeding. Consequently, there was no relevant 'dispute' to be settled by the negotiation …[72]
[72] ICWA Submissions [41].
In the absence of evidence to establish the true position, BGNV's contention that the challenged paragraphs disclose privileged communications cannot be accepted.
Secondly, in so far as [702] is concerned, I am not persuaded that that paragraph discloses a privileged communication. Counsel for ICWA submitted that the communications referred to in [702] were not pleaded as evidence of an admission.[73] The paragraph refers to the fact that particular communications occurred, and in very broad terms to the subject of the communications, but does not disclose BGNV's position in respect of any matter the subject of those communications.
[73] ICWA Submissions [42].
Thirdly, even if the communications referred to in [857] ‑ [875], [894] ‑ [895] and [898] are liable to attract the privilege, I am satisfied that the circumstances in which they are relied upon by ICWA brings them within the scope of exceptions to the rule that without prejudice communications are not admissible. The communications are clearly relied upon by ICWA in support of its rectification claim, and in support of its misleading and deceptive conduct claim. The former is a recognised exception to the rule against the inadmissibility of without prejudice communications. It is arguable that admission on the latter basis would be analogous to the exception for communications in order to establish misrepresentation or fraud, or (for similar reasons) would be admissible on the basis that the justice of the case requires it. I am not persuaded that the paragraphs of the SIFC should be struck out in these circumstances.
There will be an order that [899] and [900] of the SIFC be redacted. BGNV's application to strike out paragraphs of the SIFC on the grounds that they disclose privileged communications will otherwise be dismissed.

(b) PFR 1 and [16] ‑ [19] and [23] ‑ [132] of the SIFC;

PFR 2 and [415] ‑ [446] of the SIFC

BGNV seeks to strike out these PFRs and the paragraphs of the SIFC which pertain to them on the basis that they may prejudice, embarrass or delay the fair trial of the action, or that they are otherwise an abuse of the process of the Court.
PFRs 1 and 2 are each concerned with the construction and operation of s 564. In PFR 1, ICWA seeks a declaration for the purposes of s 564 that ICWA is a creditor of BGF and that either property (namely the Proceeds) recovered under an indemnity for the costs of litigation given by ICWA, or protected or preserved by the payment of money or the giving of an indemnity by ICWA, or expenses in relation to which ICWA has indemnified the liquidator, have been recovered by the liquidator.
In PFR 2, ICWA seeks a declaration that the Court may make an order pursuant to s 564 in favour of a creditor which has paid money, or given an indemnity for the liquidator's costs or expenses:
(a)for the payment of money by BGF and/or TBGL or the liquidator to that creditor, that is not limited by reference to the amount due to that creditor in its capacity as a creditor, and/or without altering the priority of that creditor in its capacity as a creditor; and
(b)for the payment of money by BGF or its liquidator and/or TBGL or its liquidator to that creditor, which will not reduce the amount for which that creditor's claim may be admitted to proof pursuant to s 555 and s 556; or
(c)for the payment of money by BGF or TBGL or the liquidator to that creditor, which will not reduce the principal amount for which that creditor's claim may be admitted to proof under s 555 or s 556 but may reduce the amount of post liquidation interest otherwise payable to that creditor.
BGNV contends that the relief sought in PFR 1 overlaps with the relief sought in connection with Issue 2 raised in the liquidator's SIFC in the Liquidator's Application. It further contends that the relief sought in PFR 2 overlaps with the relief sought in connection with Issues 3 to 6 in the liquidator's SIFC in the Liquidator's Application.[74]
[74] BGNV Submissions 21 February 2017 [27].
The precise extent of any overlap is a matter of dispute. ICWA does not dispute that there is some overlap between the issues raised by PFR 2 in this action and Issues 4 to 6 raised in the Liquidator's Application.[75] However, it disputes that there is a precise correspondence with all of the issues in PFRs 1 and 2. For example, it disputes that there is a 'direct correspondence' between PFR 1 in this action and Issue 2 in the Liquidator's Application.[76] It says there are significant differences in the issues raised between PFR 2 and Issues 4 to 6 in the Liquidator's Application.[77] Counsel for ICWA also submitted that there is no overlap between Issue 3 identified in the Liquidator's Application, and PFR 2 in the present action.[78] In my view, it is unnecessary to resolve the precise extent of the overlap for present purposes.
[75] ICWA Submissions [59].
[76] ICWA Submissions [49].
[77] See, for example, ICWA Submissions [61].
[78] ts 336.

The crux of BGNV's case for the strike out of PFRs 1 and 2 is that it is an abuse of process to seek to litigate in a further, separate proceeding a matter which is the subject of an existing proceeding. BGNV contends that there was, and is, no justification for ICWA to include PFRs 1 and 2 in this action when 'the very same questions to be answered by those prayers arise directly in [the Liquidator's Application]'.[79]
[79] BGNV Submissions [30]; Reply Submissions [15].
Whether an overlap in the issues raised in different proceedings gives rise to an abuse of process must be judged by reference to all of the circumstances. I am not persuaded that the pursuit of PFRs 1 and 2 in the action should properly be regarded as an abuse of process, notwithstanding that there is some overlap between the issues in those PFRs and the issues raised in the Liquidator's Application, having regard to the following circumstances in particular.
First, in my view, there is no present risk that the continued pursuit of PFRs 1 and 2 will bring the administration of the law into disrepute, or will undermine public confidence in the administration of justice. As I am case managing both of the actions, this is not one of those cases which more typically give rise to an abuse of process claim, where (for example) there exists the prospect that two overlapping actions could be separately tried, independently of each other, with the prospect of inconsistent outcomes.
Further, although no final decision has been made as to how the trial of the Liquidator's Application and the trial of this action should proceed, the factual and legal overlap between the two proceedings means that the prospect that the actions will be tried together (if not consolidated), has been identified as a distinct possibility from the outset. In the unlikely event that it ultimately transpires that the actions should not be tried together, and that one action should proceed to trial first, then clearly questions might arise as to whether the pursuit of overlapping issues in the later action would constitute an abuse of process. However, if that transpires, it is more likely that the later action would be the Liquidator's Application. All of that is an issue for another day. For present purposes, the point is that it is not an abuse of process for the overlapping issues to be pursued in the present action, for the time being.
Furthermore, once all of the SIFCs have been filed in the Liquidator's Application and this action, the question whether there should be consolidation of both proceedings may warrant consideration. At the very least, it will be appropriate for consideration to be given to the preparation of a consolidated summary of the issues that arise, in total, in both of the proceedings so that the Court is left in no doubt about what is required to be resolved at trial. That exercise will require conferral between the parties, and is an issue I intend to raise with the parties at a strategic conference or directions hearing at an appropriate point.
Secondly, notwithstanding any overlap with the issues raised in the Liquidator's Application, it was not suggested that the pursuit of PFRs 1 and 2 will be productive of any oppression or unfairness to BGNV. While BGNV will need to plead to similar issues in this proceeding and in the Liquidator's Application, the cost in its doing so will not give rise to an abuse of process.
Thirdly, the differences in the pleading of the issues in PFRs 1 and 2, as compared with the Liquidator's Application, has a certain utility. It is to the advantage of all of the parties to see how other parties seek to frame what they say are the questions the Court needs to determine in the course of construing, and then applying, s 564. That is particularly so given that those questions pertain to issues concerned with the construction of s 564 for which there is little or no authority, and which concern the operation of s 564 in a case which is, factually, quite out of the ordinary. The legal novelty of this case, and its very unusual factual circumstances, mean that particular caution is warranted in the exercise of the power to strike out, so as to ensure that the development of the law is not stifled by prematurely excluding issues from examination.
Fourthly, I do not see any basis for concluding that the pursuit of PFRs 1 and 2, in addition to the issues raised in the Liquidator's Application, is likely to waste the time or resources of the Court. Whether or not the issues raised by ICWA are ultimately advanced in this action, or in the Liquidator's Application, it is apparent that at the trial the Court will be asked to resolve them.
Accordingly, BGNV has not demonstrated that the action should be struck out under O 20 r 19(1)(d).
BGNV did not advance any different basis for contending that these PFRs and paragraphs of the SIFC were embarrassing or liable to prejudice or delay the fair trial of the action. For the same reasons as I have already set out, BGNV has not demonstrated that the action should be struck out under O 20 r 19(1)(c) either.

(c) PFR 4 and [286] ‑ [414] of the SIFC

BGNV seeks to strike out this PFR and the paragraphs of the SIFC which pertain to it on the basis that they may prejudice, embarrass or delay the fair trial of the action, or that they are otherwise an abuse of the process of the Court.
ICWA is a party to the AFIs and the PTICA. In PFR 4, ICWA seeks a declaration that it may seek an order from the Court that a payment be made directly to it under s 564 without breaching any obligation it has under those agreements. ICWA seeks this relief in the alternative to the relief it seeks in PFRs 6, 7, 8, and/or 10, or alternatively to the relief it seeks in PFRs 9 and/or 11, or alternatively to the relief it seeks in PFR 12. It acknowledges that declaratory relief in relation to PFR 4 will not be necessary if it is successful in relation to any of those alternative claims for relief.
BGNV relies on two arguments to strike out PFR 4. It contends that PFR 4 assumes that the Court will find that ICWA is an indemnifying creditor of BGF ‑ that is, that the declarations sought in PFRs 1 and 2 will be made. Accordingly, BGNV contends that PFR 4 raises the same issue that will be determined in the Liquidator's Application in any event.[80] I do not agree with that contention, nor with the submission that that means that the pursuit of PFR 4 is an abuse of process. In my view, while PFR 4 is contingent upon ICWA being successful in its application for declaratory relief that it is an indemnifying creditor (PFR 1), PFR 4 does not, itself, raise that issue. PFR 4 instead raises quite distinct issues related to the construction and operation of the AFIs and the PTICA, and ICWA's obligations under those agreements.
[80] BGNV Submissions [35].
Even if I am wrong in the conclusion that PFR 4 raises issues quite distinct from those raised by PFR 1 (and PFR 2), then for the same reasons as are set out above in relation to PFRs 1 and 2, I am not persuaded that it is an abuse of process for ICWA to pursue PFR 4 in this action.
Secondly, BGNV contends that to the extent to which PFR 4 raises a question about the construction of the PTICA, that cannot occur until ICWA's claim for rectification of the PTICA (which is the subject of PFR 18) is determined.[81] As I understand it, BGNV contends that because PFR 18 should be struck out, the foundation for PFR 4 also falls away.[82] I do not accept that submission. A quite discrete issue of construction which remains in relation to the PTICA, and which is at the heart of PFR 4, is whether, on the proper construction of the PTICA, ICWA would be precluded from seeking an order under s 564.
[81] BGNV Submissions [35].
[82] BGNV Submissions [35].
In any event, to the extent that BGNV contends that PFR 4 should be struck out on the same basis as PFR 18, I am not persuaded that PFR 4 should be struck out for the reasons identified in relation to PFR 18 below.
Furthermore, the relief sought in PFR 4 is not confined to the question of the construction and operation of the PTICA, but extends also to the construction and operation of the AFIs. Consequently, the outcome of PFR 18 could not, in and of itself, dictate whether PFR 4 can be pursued in any event.
Thirdly, it is possible that, depending on the outcome of the other issues pleaded by ICWA, the claim underlying PFR 4 may prove unnecessary to determine. That does not, however, mean it is an abuse of process for ICWA to seek the declaration it does in PFR 4 in the present action. It is not an abuse of process to seek relief in the alternative. Nor does the prospect that it may not be necessary to determine the claim underlying PFR 4 mean that that PFR (or related paragraphs of the SIFC) is embarrassing or liable to prejudice, embarrass or delay the fair trial of the action.[83]
[83] Ciavarella v Balmer [1983] HCA 26; (1983) 153 CLR 438, 449 (Gibbs CJ, Mason, Wilson, Deane & Dawson JJ); David Clarke Air Conditioning Pty Ltd atf David Clarke Air Conditioning Trust v Quann [2016] WASC 73 [22] (Allanson J).
Finally, the issues raised in relation to PFR 4 overlap with those raised in relation to PFRs 21 and 22. BGNV contends those PFRs are hypothetical. The purported hypothetical nature of that relief is further dealt with below in my discussion of BGNV's application to strike out PFRs 21 and 22. It suffices to say, for present purposes, that no basis has been shown for concluding that PFR 4 itself is hypothetical, so as to warrant being struck out on that basis.

(d) PFRs 5, 9 and 11 and [20] ‑ [22] and [208] ‑ [285] of the SIFC

BGNV seeks to strike out these PFRs and the paragraphs of the SIFC which pertain to them on the basis that they disclose no reasonable cause of action, or may prejudice, embarrass or delay the fair trial of the action, or that they are otherwise an abuse of the process of the Court.
In each of PFRs 5, 9 and 11, ICWA seeks an order under s 564 in relation to the winding up of BGNV (rather than in relation to the winding up of TBGL or BGF). In PFR 5, ICWA seeks a declaration that for the purposes of s 564, ICWA is a creditor of BGNV. Then in PFRs 9 and 11, ICWA seeks orders under s 564 that BGNV's liquidator pay ICWA an amount equal to the aggregate of any monies he receives from BGF, TBGL, the liquidator or the LDTC, and that that amount be paid out of the proceeds of, or connected with, any debts owed by TBGL and BGF to BGNV, pursuant to certain clauses of the TBGL Trust Deed and the BGF Trust Deed. ICWA seeks orders that that amount be paid in priority to any other amount payable in the liquidation of BGNV pursuant to s 556.
In order to explain my conclusions in respect of BGNV's contentions concerning these PFRs, it is necessary to briefly refer to the facts and contentions set out by ICWA in its SIFC in relation to these PFRs, read and understood in conjunction with ICWA's submissions, which clarify ICWA's intended argument in relation to this part of its case.

The facts and contentions ICWA pleads in support of PFRs 5, 9 and 11, and its submissions as to how s 564 applies in the winding up of BGNV

ICWA claims that it is the holder of BGNV Bonds[84] (and thus, a creditor of BGNV[85]) and that it provided various indemnities to the liquidator of BGNV in connection with the Bell Litigation, and with the overlapping action in this Court, CIV 2061 of 1996.
[84] SIFC [252] ‑ [255].
[85] SIFC [283].
In broad sweep, ICWA claims that under the PTICA, it agreed to indemnify BGNV's liquidator in respect of his reasonable costs and expenses after 30 March 1999, and to provide security for costs ordered against BGNV, in relation to that part of the Bell Litigation which concerned a claim against BGNV by the banks, and BGNV's response to that claim (including an application to set aside a subordination deed which was the basis for the banks' claim).[86] In addition, ICWA claims that pursuant to the PTICA, ICWA and the Commonwealth agreed to pay to the liquidator amounts that were payable by BGNV pursuant to a number of other indemnities including the AFIs, the Western Interstate Indemnity Agreement (WIIA) and the WIAA.[87] ICWA claims that it paid those amounts, and that it funded BGNV's participation in the Bell Litigation in accordance with the provisions of the PTICA and the AFIs.[88] ICWA claims that it advanced over $1.689 million to BGNV's liquidator in relation to the indemnity granted under the PTICA.
[86] SIFC [229], [230].
[87] SIFC [232].
[88] SIFC [234].
ICWA claims that the indemnity given, and the payments it made, to enable BGNV to participate in the Bell Litigation enabled evidence to be led and arguments to be put at trial which ultimately supported the conclusion reached by the Court of Appeal that the subordination deed on which the banks relied was void ab initio.[89] ICWA claims that the result of that conclusion was that property of BGNV ‑ namely proceeds of, resulting from or connected with the debts owed to BGNV by TBGL and BGF ‑ which would not have been recovered at all, or would have been recovered in a lesser amount, could be recovered, and were protected and preserved.[90]
[89] SIFC [236].
[90] SIFC [237].
ICWA also contends that it advanced over $115,000 to BGNV's liquidator, pursuant to an agreement referred to as the BGNV Indemnity.[91] ICWA says that that indemnity was requested by BGNV's liquidator, to cover any legal costs he incurred as a result of BGNV being joined as defendants in CIV 2061 of 1996.[92]
[91] SIFC [251].
[92] SIFC [240] ‑ [242], [247] - [250].
In summary, ICWA claims that both prior to becoming, and while it has been, a creditor of BGNV, ICWA gave an indemnity for BGNV's costs of litigation under which property has been recovered, or paid money as a result of which property has been protected and preserved, and that it is an indemnifying creditor of BGNV for the cost of litigation, pursuant to indemnities provided under the PTICA and the BGNV Indemnity. ICWA claims that BGNV and its creditors have benefited from the provision of those indemnities by ICWA.[93]
[93] SIFC [283] - [284].
Having regard to ICWA's submissions, it appears that ICWA's case is that the 'property' which was protected and preserved, by virtue of its payment of money or its indemnity to BGNV's liquidator, was the debt owed by TBGL and by BGF to BGNV.
ICWA seeks the relief in PFRs 5, 9 and 11 only in the alternative to the relief it seeks in PFRs 6, 7, 8 and/or 10, which deal with the construction and operation of the subordination and turnover trust clauses, and the question whether monies paid to ICWA or the LDTC (whether as trustee in respect of the BGF Trust Deed or the TBGL Trust Deed) pursuant to s 564 in the Liquidator's Application would be subject to the subordination and turnover trust clauses. ICWA seeks this alternative relief because its position is that if it is unsuccessful in its argument about the operation of the subordination and turnover trust clauses, so that monies paid to ICWA or the LDTC pursuant to an order under s 564 in the Liquidator's Application would need to be paid to BGNV, then BGNV 'will receive a windfall benefit'.[94] ICWA expressly acknowledges that it seeks the alternative relief in PFRs 5, 9 and 11 'to mitigate the consequences of the possible diversion of monies otherwise payable to ICWA if it is unsuccessful in relation to [PFRs] 6, 7, 8 and/or 10'.[95]
[94] SIFC [498].
[95] SIFC [210].
To that end, the amount of the s 564 order ICWA seeks in the winding up of BGNV (in PFRs 9 and 11) is an amount which is 'equal to the aggregate amount of monies received or receivable' by BGNV's liquidator from either TBGL, BGF or the LDTC, by virtue of the operation of the subordination and turnover trust clauses. ICWA's case is that it would be 'just' to make an order under s 564 in that amount because otherwise BGNV will receive a windfall as a result of the operation of the subordination and turnover trust clauses.
BGNV advances two arguments to support its claim that PFRs 5, 9 and 11 should be struck out. First, it says that PFRs 5, 9 and 11 are hypothetical. Secondly, it says that the Court does not presently have jurisdiction to deal with the claims behind these PFRs.

BGNV's contention that PFRs 5, 9 and 11 are hypothetical

BGNV contends that these PFRs are hypothetical in the sense that they are pursued only to the extent that ICWA is unsuccessful in obtaining the relief it seeks in PFRs 6, 7, 8 and/or 10. Counsel for BGNV contended that PFRs 5, 9 and 11 will only arise for determination if five preconditions or contingencies are satisfied: an order must be made under s 564 in favour of the LDTC or ICWA (in the Liquidator's Application); the LDTC or ICWA must have been paid monies pursuant to that order; the Court must find that those monies are caught by the subordination and turnover trust clauses; an amount must be paid to the liquidator of BGNV as a consequence of that finding; and then the Court must find that the liquidator of BGNV received those funds representing the proceeds of, or resulting from or connected with, any debts owed by TBGL and BGF to BGNV, so as to satisfy the requirements for an order under s 564 in the winding up of BGNV.[96] He submitted that this meant that PFRs 5, 9 and 11 were hypothetical.
[96] BGNV Submissions [39], [56].
Counsel for BGNV also relied on the decision of Templeman J in The Bell Group Ltd (in liq) v Westpac Banking Corporation.[97] He submitted that the argument advanced by ICWA as to why these PFRs were not hypothetical is the same argument that was rejected by Templeman J. It is convenient to deal with that argument below, in relation to BGNV's contention that the Court does not have jurisdiction to deal with ICWA's claims at present.

The hallmarks of a hypothetical case

[97] The Bell Group Ltd (In Liq) v Westpac Banking Corporation (1996) 18 WAR 21.

As the present action is clearly within federal jurisdiction, the question raised by BGNV's contention is whether the issues raised by PFRs 5, 9 and 11 constitute a 'matter' within the meaning of ch III of the Constitution. The requirement for the existence of a 'matter' as a justiciable controversy requires that there be an 'immediate right, duty or liability to be established by the determination of the Court'.[98] The implications of federal jurisdiction aside, the power to grant declaratory relief is in any event 'confined by the considerations which mark out the boundaries of judicial power'.[99] Consequently, a declaration must concern a real controversy susceptible of judicial determination.[100]
[98] Palmer v Ayres [2017] HCA 5; (2017) 259 CLR 478 [27] (Kiefel, Keane, Nettle & Gordon JJ); In re Judiciary and Navigation Acts [1921] HCA 20; (1921) 29 CLR 257, 265; CGU Insurance v Blakeley [2016] HCA 2; (2016) 259 CLR 339 [26] (French CJ, Kiefel, Bell & Keane JJ).
[99] Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564, 582 (Mason CJ, Dawson, Toohey & Gaudron JJ).
[100] CGU Insurance v Blakeley [2016] HCA 2; (2016) 259 CLR 339 [26] (French CJ, Kiefel, Bell & Keane JJ); Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564, 582 (Mason CJ, Dawson, Toohey & Gaudron JJ); Kuczborski v Queensland [2014] HCA 46; (2014) 254 CLR 51 [3] - [4] (French CJ).
A party who seeks declaratory relief must therefore demonstrate a 'real interest'[101] in the subject matter of the declaration and it must be apparent that the declaration will produce foreseeable consequences for the parties.[102] The power to grant a declaration includes the power to declare that intended conduct which has not yet taken place will not be in breach of a law, or will be a nullity in law.[103] However, there is no power to grant a declaration where the question is 'purely hypothetical' in the sense that it is 'claimed in relation to circumstances that [have] not occurred and might never happen'.[104]
[101] Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564, 582 (Mason CJ, Dawson, Toohey & Gaudron JJ).
[102] CGU Insurance v Blakeley [2016] HCA 2; (2016) 259 CLR 339 [83] (Nettle J); Aussie Airlines Pty Ltd v Australian Airlines Ltd (1996) 68 FCR 406, 414 (Lockhart J, Spender & Cooper JJ agreeing).
[103] Edwards v Santos Ltd [2011] HCA 8; (2011) 242 CLR 421 [37] (Heydon J, French CJ, Gummow, Crennan, Kiefel & Bell JJ agreeing); Commonwealth v Sterling Nicholas Duty Free Pty Ltd [1972] HCA 19; (1972) 126 CLR 297, 305 (Barwick CJ).
[104] Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564, 582 (Mason CJ, Dawson, Toohey & Gaudron JJ); University of New South Wales v Moorhouse [1975] HCA 26; (1975) 133 CLR 1, 10 (Gibbs J); Kuczborski v Queensland [2014] HCA 46; (2014) 254 CLR 51 [6] (French CJ).

Justice Lockhart, with whom Spender and Cooper JJ agreed, held that the question whether Aussie Airlines was a new entrant to the industry was not a mere hypothetical question because it had requested that Qantas grant it a sublease, Qantas had declined to do so, Qantas was obliged under the head lease to enter into a sublease of its terminal if requested to do so by a Third Party Carrier, and the case was of real practical importance to Aussie Airlines because if negotiations commenced and it was granted a sublease, there would be far‑reaching ramifications for its business activities.[173] To my mind, the key point of difference from the present case is that notwithstanding that Aussie Airlines had no right to enforce the head lease, Qantas was obliged to grant a sub-lease if it was the case that Aussie Airlines was a Third Party Carrier, which had requested a sublease. In the present case, if ICWA had pleaded that the LDTC intends to pursue an amendment of the Trust Deeds, or that it would be obliged to do so if ICWA requested an amendment, then the question raised by PFR 12 would not be hypothetical.
[173] Aussie Airlines Pty Ltd v Australian Airlines Ltd (1996) 68 FCR 406, 415 - 416.
Similarly, as I noted at [159] above, in Edwards v Santos[174] the evidence established that the defendants clearly intended to apply for the grant of a production licence, to which they claimed to be automatically entitled pursuant to the ATP. Justice Heydon held that the dispute was therefore not a hypothetical one, and the plaintiffs had standing to seek the declaration because they would be affected by the outcome of the dispute in that their negotiating position (in the negotiations for an indigenous land use agreement, which they were contractually obliged to conduct with the defendants) would be gravely weakened if the defendants were entitled to apply for (and thence to be granted) the licence, by virtue of the ATP. In contrast, for the reasons set out at [150] ‑ [154] above, ICWA has not pleaded that the LDTC intends to pursue an amendment of the Trust Deeds.
[174] Edwards v Santos Ltd [2011] HCA 8; (2011) 242 CLR 421 [37] (Heydon J, French CJ, Gummow, Crennan, Kiefel & Bell JJ agreeing).
In the circumstances, it is neither necessary nor appropriate to express a view about the additional contention advanced by BGNV, namely that there were a number of additional hurdles which stood in the way of an amendment of the Trust Deeds being achieved, and which themselves would render PFR 12 hypothetical. One of the reasons why it is not appropriate to do so is that a number of those 'hurdles' arose from BGNV's contention that the liquidator, on behalf of TBGL and BGF, would need to have a role in facilitating the amendment of the Trust Deeds. It is not apparent why that is so, having regard to the requirements of par 18. As that issue was not addressed by counsel, the preferable course is to let the issue lie until such time, if ever, as it arises for determination. In any case, this contention seems to me to address the question whether ICWA would ultimately be successful in achieving the amendment of the Trust Deeds. However, PFR 12 is only concerned with whether ICWA (and the LDTC) are entitled to pursue a certain course to effect that amendment. The prospect that, for other reasons, ICWA and the LDTC may not succeed in effecting an amendment does not mean that determining the right to pursue an amendment under par 18 is a hypothetical question.
In conclusion, as the deficiency in the facts pleaded in the SIFC means that PFR 12 raises what is merely a hypothetical question, PFR 12, and the corresponding paras of the SIFC (save in so far as they are relied on in support of any of the other PFRs) should be struck out on the basis that they do not disclose a reasonable cause of action. In the circumstances, however, I will hear from ICWA on the question whether it should be given leave to re‑plead (if it contends that the deficiency in the pleaded facts can be cured by an amendment).

(c) PFR 13 and [594] ‑ [745] of the SIFC

In PFR 13, ICWA seeks a declaration that BGNV and BGNV's liquidator may not bring proceedings against ICWA, TBGL, BGF, the liquidator or the LDTC; or take any action whatsoever to delay, oppose, hinder or resist the amendment of the Trust Deeds by the execution of any deed to amend in the manner proposed in the SSDs; or to oppose, or to encourage or procure another person to oppose, any application for TBGL, BGF, the liquidator or the LDTC to be released from their Undertakings; or to oppose, or to encourage or procure another person to oppose, the grant of the relief sought in PFR 12, or of an injunction to restrain BGNV from opposing the relief sought in PFR 12.
ICWA's case is that BGNV is contractually obligated not to bring any proceedings against the LDTC, ICWA, TBGL, BGF or the liquidator which opposes or resists the amendment of the Trust Deeds in the manner proposed in the SSDs. ICWA relies, in particular, on an agreement referred to as the Confirmation Agreement[175] between the indemnifying creditors. ICWA contends that in the Confirmation Agreement, BGNV (represented by the curatoren of BGNV's bankruptcy estate) confirmed its support for various agreements to which BGNV was a party before it went into liquidation, and agreed that it would not take the action set out in [180] above.[176] ICWA says that the terms of the Confirmation Agreement constitute a clear obligation on BGNV not to delay, oppose or hinder a curial proceeding by the LDTC and ICWA to amend the Trust Deeds in a manner that is substantially the same as the SSDs, or to commence its own proceeding to oppose or resist any attempt by the LDTC or ICWA to amend the Trust Deeds in that way.[177]
[175] The agreement dated 4 July 1997 between the Commonwealth, ICWA, the LDTC and BGNV, and referred to in the parties' submissions as the 4 July 1997 agreement.
[176] SIFC [729] - [740].
[177] SIFC [742].
BGNV seeks to strike out PFR 13 and [594] ‑ [745] on the basis that they disclose no reasonable cause of action, are embarrassing, or may prejudice, embarrass or delay the fair trial of the action, or that they are otherwise an abuse of the process of the Court. It says that PFR 13 is hypothetical for the same reason as PFR 12, because no application has been brought by any party to vary or discharge the Undertakings or to amend the Trust Deeds. Counsel for BGNV submitted that that position was confirmed by a decision of the English High Court in Plaza BV v The Law Debenture Trust Corporation PLC[178] in which Proudman J noted that the LDTC had advised the Court that it regarded the SSDs as being of no effect, that it had no present intention of implementing the SSDs, and that if ICWA were to request that it perfect the SSDs, it would consider whether to do so in accordance with its trustee obligations. Counsel for BGNV submitted that until the hurdles standing in the way of amendment of the Trust Deeds had been overcome, there was no utility in the Court restraining BGNV from opposing ICWA in seeking to amend the Trust Deeds.[179]
[178] Plaza BV v The Law Debenture Trust Corporation PLC [2015] EWHC 43 (Ch) [26].
[179] BGNV Submissions [110].
I note that the amendment of the Trust Deeds referred to in PFR 13 does not appear to be confined to an amendment of the Trust Deeds in reliance on par 18 of the Second Schedule to the Trust Deeds. Rather, I have understood PFR 13 to refer to the amendment of the Trust Deeds using either cl 20(B) of the Trust Deeds or par 18 of the Second Schedule to the Trust Deeds.
I am not persuaded that the relief sought in PFR 13 is hypothetical, for the following reasons. First, I am unable to accept that the question whether PFR 13 is hypothetical turns on whether the liquidator or the LDTC has taken steps to discharge the Undertakings or to amend the Trust Deeds. That is because the nature of the relief sought in PFR 13 is a declaration in relation to the contractual obligations of BGNV. ICWA relies, in particular, on cl 5 of the Confirmation Agreement, by which it says BGNV agreed that it would not take any action in specified litigation, or bring any action, suit or claim, to oppose or resist the position taken by the LDTC, ICWA, the liquidator, TBGL or BGF to amend the Trust Deeds in the manner proposed in the SSDs. Counsel for ICWA submitted that it was 'possible for BGNV to take a step to delay, oppose, hinder or resist the amendment of the [Trust Deeds] or to oppose the release and discharge of the Undertakings in the absence of any steps being taken by ICWA or the LDTC'.[180] Whether that is so will turn on the construction of the Confirmation Agreement. For present purposes, it suffices to say that, on the limited information before me, ICWA's argument cannot be described as unarguable.
[180] ICWA Submissions [153].
Secondly, ICWA contends that BGNV has already taken steps to delay, oppose, hinder or resist the amendment of the Trust Deeds. The SIFC refers to several circumstances which counsel for ICWA submitted constituted occasions on which BGNV had done so. One of those was that in 2014, BGNV's liquidator successfully applied for directions from this Court pursuant to s 479(3) of the Act that he would be 'justified in opposing any step to release or vary the Undertakings and any step to amend the [Trust Deeds]'.[181] If conduct of that kind can properly be said to constitute action to delay, oppose, hinder or resist the amendment of the Trust Deeds, or to discharge the Undertakings, then the declaration sought in PFR 13 could hardly be described as hypothetical. Further, it is clear that the Confirmation Agreement remains in operation; the issue on which ICWA seeks a declaration is clearly the subject of dispute between it and BGNV; a declaration as to whether BGNV is precluded from engaging in the conduct described in PFR 13 will bind ICWA, BGNV and the parties to the Confirmation Agreement, who are also parties to this action, in relation to BGNV's obligations under that Agreement; and the grant of the declaration would have real consequences, in that it would resolve a dispute as to whether BGNV would be entitled to take, or continue to take, action of that kind. Moreover, even if the application by BGNV's liquidator for the direction referred to above was not, itself, conduct prohibited by the Confirmation Agreement, nevertheless that conduct supports the conclusion that BGNV intends to take steps to oppose any attempt to amend the Trust Deeds, or to discharge or vary the Undertakings. I accept ICWA's submission that the relief sought in PFR 13 is of real practical importance to it and is relief in which it has a real commercial interest.
[181] SIFC [724]; see also Re Bell Group NV (In liq); Ex parte Insurance Commission of Western Australia [No 2] [2015] WASC 114 (Master Sanderson).
Finally, counsel for BGNV submitted that the relief in PFR 13 lacked practical utility for the additional reason that WA Glendinning may also take steps to prevent the discharge of the Undertakings or the amendment of the Trust Deeds.[182] Whether that is so does not affect the question of the Court's jurisdiction to grant the relief sought in PFR 13. Questions of practical utility may, of course, be relevant to the discretion to grant relief. But that is not an issue which needs to be determined for present purposes.
[182] BGNV Submissions [111].
BGNV did not advance any other basis for this part of its strike out application. Its application to strike out PFR 13 should be dismissed.

(d) PFR 18 and [955] ‑ [977] of the SIFC

PFR 18 is advanced, in the alternative, in the event that ICWA's contentions about the proper construction of the PTICA ‑ which are pursued in PFRs 14, 15, 16 and 17 ‑ are not accepted. ICWA's concern lies in the possibility that (as it understands BGNV to contend) the Court may conclude that on the proper construction of the PTICA, any amount recovered by ICWA pursuant to s 564, which equates to an amount advanced by ICWA to the liquidator (over and above any amount paid to ICWA, pursuant to s 564, as a 'reward or advantage') will be subject to the provisions of the PTICA. ICWA's contention is that if the Court accepts that that is what the words of the PTICA mean, then the PTICA does not reflect the common intention of all of the parties to it. Instead, its case is that all of the parties to the PTICA had the common intention that the funds to be pooled and divided under the PTICA comprised only those awarded under s 564 as a 'reward or advantage', and not those representing the repayment of advances to the liquidator.
BGNV seeks to strike out PFR 18 and [955] ‑ [977] on the basis that they disclose no reasonable cause of action, are embarrassing, or may prejudice, embarrass or delay the fair trial of the action, or that they are otherwise an abuse of the process of the Court. Initially, BGNV's challenge had numerous bases. After consideration of the matters raised by BGNV, ICWA proposed a number of amendments to the SIFC. It appears that BGNV no longer presses most of its arguments for the purposes of this application. Only two matters remain in dispute for the purposes of the strike out application.
First, BGNV contends that the SIFC does not plead how each of the parties to the PTICA disclosed their common intention to each other, and specifically, that ICWA does not plead how the Commonwealth's intention was conveyed to BGNV. There is no dispute between the parties that the only paragraph of the SIFC which addresses the question is [972], which is the subject of a proposed amendment by ICWA. In that paragraph, including its proposed amendment, ICWA pleads that the parties':
intention was objectively apparent from the words and actions of each party, communicated between the parties to the PTICA, albeit through representatives of ICWA. Consequently, BGNV, [BGNV's liquidator], the Commonwealth and ICWA had a communicated, common or mutual intention as to the effect of the PTICA … .
It is, therefore, now tolerably clear that ICWA's case is that its representatives communicated the Commonwealth's intention in relation to the PTICA to BGNV and BGNV's liquidator. A number of proposed amendments to the paragraphs in the SIFC refer to the various steps taken, and communication between the parties, in the course of the negotiation of the PTICA. Counsel for ICWA submitted that the factual propositions it now pleads include communications between representatives of ICWA and the Commonwealth in relation to the Commonwealth's concern that it 'would get whatever their actual contributions were back under the s 564 order'[183] and that it was concerned about 'the extraordinarily high level of costs which must be satisfied before dividends flow to those subsidiaries of which it is a creditor'.[184] Both of those pleadings concern communications between ICWA and the Commonwealth concerning the Commonwealth's intention with respect to the operation of the PTICA.
[183] SIFC Proposed [874B].
[184] SIFC Proposed [874D].
Counsel for ICWA submitted that proposed [874H] of the SIFC indicated that ICWA's case is that its representatives conveyed the Commonwealth's position to BGNV's representatives in the facsimile which is referred to in that paragraph.[185] They submitted that that communication indicated that 'ICWA and the Commonwealth had agreed the distribution agreement would be with respect to the sharing of the s 564 'proceeds' (that is the advantage, and not repayment of the Advances)'.[186] Counsel for BGNV submitted that proposed [874H] of the SIFC 'cannot do the work that ICWA says it does'.[187] The point of difference between the parties in this respect thus appears to lie in the means by which the Commonwealth's intention was conveyed to BGNV, and the adequacy of those means.
[185] ICWA Submissions [174].
[186] ICWA Submissions [174].
[187] BGNV Submissions in Reply [34].
ICWA's case is not that the Commonwealth's intention was expressly and directly conveyed to BGNV's representatives. Counsel for ICWA relied on observations made by Campbell JA (with whom Mason P agreed, and with whom Tobias JA expressed his agreement on this point) in Ryledar Pty Ltd v Euphoric Pty Ltd,[188] where his Honour observed that parties may become aware of each other's intention through 'a process of conscious and deliberate inference' or 'sometimes [by] simply perceiving a gestalt in a series of events'.[189] In addition, counsel for ICWA emphasised (as Campbell JA had observed) that the '[n]egotiation of any contract takes place in a context in which various facts are known or assumed by the negotiating parties'[190] so that the commercial context for the PTICA would need to be borne in mind in assessing what the parties understood about each other's intentions with respect to the PTICA.[191]
[188] Ryledar Pty Ltd v Euphoric Pty Ltd [2007] NSWCA 65; (2007) 69 NSWLR 603.
[189] Ryledar Pty Ltd v Euphoric Pty Ltd [2007] NSWCA 65; (2007) 69 NSWLR 603 [281].
[190] Ryledar Pty Ltd v Euphoric Pty Ltd [2007] NSWCA 65; (2007) 69 NSWLR 603 [281].
[191] ts 346 - 347.
In my view, the SIFC, as ICWA proposes to amend it, and now understood in light of the submissions advanced by ICWA, sufficiently clarifies ICWA's case as to how, and by what means, ICWA contends that the Commonwealth's intention was conveyed to BGNV.[192] Any assessment of whether the matters on which ICWA relies are adequate to establish the existence of a common intention, which was disclosed between the parties to the PTICA, should properly be undertaken at the trial, and not for the purposes of a strike out application.
[192] Cf BGNV Submissions [125].
Secondly, BGNV submitted that the factual matters pleaded by ICWA ‑ as the means by which the parties' common intention in relation to the PTICA was disclosed to each other party ‑ included reliance on what BGNV claimed were 'without prejudice' communications. I have already concluded (at [59]) that ICWA is entitled to rely on those communications for the purposes of its rectification case (in PFR 18), and its misleading and deceptive conduct case (in PFR 19).
In the alternative to the strike out of PFR 18 and [955] ‑ [977] of the SIFC, BGNV seeks an order that ICWA file and serve a statement of claim in support of its claim for relief in PFR 18. Given that the proposed amendments to the SIFC now make clear the basis for ICWA's rectification case, nothing would be served by requiring ICWA to proceed by way of a statement of claim.
This aspect of BGNV's strike out application should be dismissed.

(e) PFRs 21 and 22 and [746] ‑ [835] of the SIFC

BGNV seeks to strike out PFRs 21 and 22 and [746] ‑ [835] of the SIFC on the basis that they may prejudice, embarrass or delay the fair trial of the action, or that they constitute an abuse of process.
PFRs 21 and 22 seek declarations concerning the contractual obligations of the liquidator and ICWA under the AFIs and the PTICA. ICWA seeks a declaration that on the proper construction of the AFIs and the PTICA, the liquidator is not precluded from repaying, and would not be in breach of the AFIs if he repaid, funds advanced to the liquidator in accordance with the AFIs, or repaid costs and expenses properly incurred by the liquidator in relation to the winding up of TBGL and BGF (collectively, the Early Payments) from funds held by TBGL, BGF or the liquidator, prior to the determination of the Liquidator's Application. ICWA also seeks a similar declaration that it would not be in breach of the AFIs or the PTICA if it encouraged the liquidator to do so.
BGNV's contentions in relation to PFRs 21 and 22 focus on that part of those PFRs which concerns whether ICWA would be in breach of the AFIs if it encouraged or procured the liquidator to make the Early Payments prior to the determination of the Liquidator's Application.[193] Counsel for BGNV submitted that PFRs 21 and 22 are hypothetical and that, in effect, ICWA seeks an advisory opinion from the Court. The basis for that argument is BGNV's contention that the liquidator is contractually obliged to use his best endeavours to procure an order of the Court under s 564 in relation to the application of the Proceeds, that the liquidator has done so, and that the only order he seeks is an order pursuant to s 564.[194] BGNV also contends that ICWA itself is contractually obliged to support the Liquidator's Application. That is, BGNV contends that ICWA is contractually obliged to support the repayment of advances only pursuant to s 564.[195] Counsel for BGNV submitted that ICWA:[196]
has not elected to take the course of encouraging or procuring Mr Woodings to repay advances 'outside' s 564. Nor would it be wise for it to do so given its contractual obligation to support a repayment pursuant to s 564. As ICWA has not said that it intends to encourage or procure Mr Woodings to repay advances 'outside' s 564, the prospect of it doing so is, at best, a hypothetical state of facts.
The purpose of [PFRs] 21 and 22 and the reason why ICWA seeks the Court's advice about these matters is to enable ICWA to decide about a possible (presently hypothetical) future course of action. In particular, ICWA wants the Court to advise it whether conduct that it has not yet taken, and which it is not bound to take, (procuring or encouraging Mr Woodings to repay advances outside s 564) would be a breach of its contractual obligations. … The Court's assistance is sought to provide an answer to this hypothetical state of affairs in order to help ICWA decide its future conduct.
[193] See BGNV Submissions [153].
[194] BGNV Submissions [155].
[195] BGNV Submissions [156].
[196] BGNV Submissions [158] - [159].

I am unable to accept these submissions, for the following reasons.
As I have already noted (at [157]), the Court's jurisdiction to grant declaratory relief clearly encompasses the power to declare that conduct which has not yet taken place will not be in breach of contract. In my view, this is a case of that kind.
While the Court's jurisdiction to make a declaration as to whether future conduct will be in breach of contract does not extend to opining on hypothetical cases, this is not a hypothetical case. As I explained at some length at [157] ‑ [168] above, the cases where such declarations have been made have involved proposed future conduct, where the intention of a party to engage in particular conduct was clear. That is the position here. It is clear that ICWA's stated objective is to see the Early Payments made by the liquidator ‑ in accordance with the AFIs and the PTICA ‑ at the earliest opportunity, and before the Liquidator's Application is resolved.[197]
[197] SIFC [747] - [748].
In addition, ICWA pleads that the liquidator also seeks to make the Early Payments before all of the Liquidator's Application is determined. ICWA pleads that in 2013, the liquidator signalled his intention to make the Early Payments, and that he intended to apply to the Court for appropriate directions.[198] When the liquidator commenced the Liquidator's Application in 2014, one of the issues identified as requiring resolution was whether the AFIs or the PTICA precluded the making of the Early Payments. In his affidavit filed in support of the Liquidator's Application, the liquidator foreshadowed seeking that the Court deal with the question of the Early Payments in advance of its determination of the balance of the relief sought in that Application.[199]
[198] SIFC [778] - [779].
[199] SIFC [746].
Furthermore, it is apparent that BGNV is of the view that the making of the Early Payments, prior to the determination of the entirety of the Liquidator's Application, would involve a breach by both the liquidator and ICWA of their contractual obligations. ICWA pleads that BGNV has, in the past, contended that to make the Early Payments, prior to the determination of any application under s 564, would be a breach of ICWA's obligations under the PTICA, and of the liquidator's obligations under the Third Amending Agreement to each of the AFIs.[200] Its submissions confirm that it remains of that view.[201] Clearly, therefore, there is a dispute between ICWA, the liquidator, and BGNV, as to whether the Early Payments can be made, consistently with the AFIs and the PTICA (and, indeed, having regard to s 564). The determination of that question would have real consequences, because the declaration sought, if granted, would leave the liquidator in no doubt as to his ability to proceed to make the Early Payments. This aspect of the relief sought by ICWA is, in my view, not dissimilar to Commonwealth v Sterling Nicholas Duty Free and to Edwards v Santos which I discussed above at [157] ‑ [160].
[200] SIFC [775].
[201] BGNV Reply Submissions [36].
Finally, I do not accept the submission of counsel for BGNV that ICWA's position is no different from that of the respondent in Sanderson Computers. That case is distinguishable from this one. As I noted at [161] ‑ [163], in that case, Urica had expressly reserved its right not to terminate the contract, and the Court of Appeal noted that the case was one in which if a declaration were made, it was possible that events might subsequently occur which might render a later termination of the contract invalid. In the present case, the position taken by ICWA and the liquidator in relation to the Early Payments is clear, and BGNV did not contend that this was a case in which a subsequent change in circumstances could render inutile any declaration as to their contractual obligations with respect to those Early Payments.
This aspect of BGNV's Application must be dismissed.

(f) PFRs 23 to 29 and [978] ‑ [1144] of the SIFC

BGNV applies to strike out PFRs 23 to 29 and [978] ‑ [1144] of the SIFC which are pleaded in support of those PFRs, on the basis that they are likely to prejudice, embarrass or delay the fair trial of the action, or that they constitute an abuse of process. These PFRs concern the construction and operation of two agreements between the parties which concerned shares in Western Interstate, namely the WIAA and the WIICA. A closely related agreement is the WIIA. I will refer to all of these agreements, collectively, as the WI Agreements.

Background context

In order to understand the PFRs, and to understand BGNV's contentions as to why they should be struck out, it is necessary to bear in mind the broader factual context in which these PFRs are made. As I noted in Insurance Commission of Western Australia v Woodings as Liquidator of the Bell Group Ltd (In liq),[202] Western Interstate claims to be a creditor of BGF, and has lodged a proof of debt in the winding up of BGF for more than $750 million (which figure represents a loan of $434 million to BGF, plus interest on that amount). Western Interstate's claim is that it loaned BGF that money in December 1988 and January 1989, and that the funds for that loan came from the issue of 43,405 redeemable preference shares in Western Interstate to Bell Group (UK) Holdings Ltd (in liq) (BGUK).
[202] Insurance Commission of Western Australia v Woodings as Liquidator of the Bell Group Ltd (In liq) [2017] WASC 122.
BGNV is a creditor of BGF, and has an admitted proof of debt in BGF's winding up in the sum of approximately $394 million. The only other substantial creditor of BGF is Western Interstate. BGNV wants to establish that Western Interstate is not a creditor of BGF. If it does so, then that will be to its considerable financial advantage in the distribution of funds in the liquidation of BGF. It has therefore commenced proceedings against BGF and Mr Woodings (in his capacity as the liquidator of Western Interstate) in the Federal Court proceedings. BGUK has also been joined as a defendant to the Federal Court proceedings. In those proceedings, BGNV challenges the validity of Western Interstate's issue of preference shares to BGUK.
In so far as PFRs 23 to 29 are concerned, ICWA's case is that the WI Agreements were entered into by the liquidator and the indemnifying creditors in the course of determining the terms on which they would provide funds to the liquidators to commence the Bell Litigation. An overview of the factual context within which ICWA alleges that each of those agreements came to be made, and an overview of the general thrust of each of those agreements, is set out in Insurance Commission of Western Australia v Woodings as Liquidator of the Bell Group Ltd (In liq) (which was founded on the claims for relief in proposed PFRs 30 and 31).[203] I will not set out that context again here. As I understand it, ICWA's case is that the WI Agreements were entered into with the objective of ensuring certainty in the quantum and ratio of the likely return to the indemnifying creditors.
[203] Insurance Commission of Western Australia v Woodings as Liquidator of the Bell Group Ltd (In liq) [2017] WASC 122.
In PFRs 23 to 29, ICWA seeks declarations that BGNV became a terminating indemnifier for the purposes of the WIAA and the WIICA in about March 1999; that from that point, BGNV ceased to have any interest in or claim to 57,000 fully paid ordinary shares in Western Interstate, which were the subject of the WIAA; that Bell Bros is obliged to transfer 57,000 fully paid ordinary shares in Western Interstate, which are the subject of the WIAA, to the liquidator; that the liquidator is obliged to accept that transfer of shares; that upon transfer, those shares will be held on trust for ICWA and the Commonwealth; and that ICWA and the Commonwealth will then be the sole beneficial owners of those shares in Western Interstate.
BGNV says that PFRs 23 to 29 and [978] ‑ [1144] of the SIFC should be struck out for four reasons. I am unable to accept those arguments for the reasons set out below.
First, counsel for BGNV submitted that there is no (present) utility in the issues raised by PFRs 23 to 29. He submitted that that was because PFRs 23 to 29 assume that Western Interstate is a creditor of BGF, but whether that is so depends on whether Western Interstate's issue of preference shares to BGUK is valid. He submitted that that is an issue which will be resolved in the Federal Court proceedings.[204] In my view, questions of utility of the relief may be relevant if, and when, the question of the grant of this relief ever arises, but they do not provide a basis for striking out the pleading at this stage. In any event, until such time as any Court concludes that Western Interstate is not a creditor of BGF, the standing of its admitted proof of debt in the winding up of BGF is unaffected.
[204] BGNV Submissions [163].
Secondly, counsel for BGNV submitted that [1090] - [1103] of the SIFC plead the very transaction which is impugned in the Federal Court proceedings (that is, the issue of redeemable preference shares in Western Interstate to BGUK). He submitted that those paragraphs have no relevance to PFRs 23 to 29.[205] Counsel for ICWA submitted that the preference share transaction is one aspect of the factual context which ICWA contends informed the commercial arrangements underpinning the WI Agreements.[206] That much is evident from other paragraphs in pt 6 of the SIFC.[207] It thus appears that ICWA contends that that factual context is relevant to the construction of the WI Agreements (presumably, because it forms part of the objective facts known to all of the parties[208]). The extent to which evidence of the facts pleaded at [1090] ‑ [1103] of the SIFC might prove to be of assistance in the construction of the WI Agreements will ultimately be a matter for submissions. For the moment, I am not persuaded that those paragraphs of the SIFC are so clearly irrelevant to the relief sought in PFRs 23 to 29 that they are likely to prejudice, embarrass or delay the fair trial of the action, or that their continued inclusion in the SIFC would give rise to an abuse of the process of the Court.
[205] BGNV Submissions [164].
[206] ICWA Submissions [201].
[207] See SIFC [982] - [1004].
[208] Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337; Western Export Services v Jireh International Pty Ltd [2011] HCA 45; (2011) 86 ALJR 1; Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184; (2014) 89 NSWLR 633; Technomin Australia Pty Ltd v Xtrata Nickel Australasia Operations Pty Ltd [2014] WASCA 164; (2014) 48 WAR 261.
Thirdly, counsel for BGNV submitted that proposed [978A] was:[209]
a transparent attempt on the part of ICWA to conjure up a non-existent overlap between CIV 2666/16 and [the Federal Court proceedings] to enhance ICWA's foreshadowed application to the Federal Court (if it is joined as a party) to transfer [the Federal Court proceedings] to this Court... Paragraph 978A is an attempt to create such a common sub‑stratum and is an abuse of process.
[209] BGNV Submissions [166] - [168].
Proposed [978A] states that 'Western Interstate claims to be a creditor of BGF and has lodged a proof of debt in the winding up of BGF for $758,386,538'. Counsel for ICWA submitted that [978A] is directly relevant to PFR 30. In more recent amendments it seeks to make to the SFIC, ICWA no longer advances PFR 30. It is not clear whether ICWA says [978A] is relevant to any other PFR. As BGNV opposes the amendment of the SIFC to include [978A] on other grounds, I will give BGNV and ICWA the opportunity to be further heard in respect of [978A] at the hearing of the amendment application on 1 February 2018.
As for BGNV's contentions that the proposed inclusion of [978A] is a deliberate abuse of process, in the circumstances it is unnecessary to address that allegation at length. It suffices to make two observations. First, absent a compelling basis for doing so, I would not be prepared to infer that counsel ‑ and especially senior counsel ‑ would deliberately ignore their obligations, as officers of the Court, so as to deliberately include an irrelevant pleading for the sole purpose of advancing a client's extraneous objective, namely to further a possible future application in other proceedings in another Court. No such compelling basis for such an inference has been demonstrated. Secondly, it is far from clear how the pleading in proposed [978A] ‑ which merely pleads the fact that Western Interstate claims to be a creditor of BGF and has lodged a proof of debt ‑ could, of itself, have a material impact on the question whether the Federal Court proceedings should be transferred to this Court.
Finally, counsel for BGNV submitted that PFR 29 was hypothetical and should be struck out on that basis. He submitted that PFR 29 was hypothetical because it assumed that each of the declarations sought in PFRs 23 to 28 had been made; that a dividend had been paid to Western Interstate in the winding up of BGF; that the WIAA is valid and not void; that Western Interstate had paid a dividend to its creditors, leaving a surplus to be paid by way of a return of capital to its shareholders; and that it is possible to make a return of capital (when the question whether and how to make a return of capital depends upon contingencies including whether Western Interstate ‑ which is in provisional liquidation ‑ is wound up or whether it is solvent).
I am unable to accept that PFR 29 is hypothetical. There is no doubt that the relief sought in that PFR would not be granted unless the various assumptions underlying it have come to pass by that stage, including whether ICWA succeeds in its application for the relief in PFRs 23 to 28. Having regard to the principles discussed at [157] ‑ [177], that is not a proper basis for concluding that PFR 29 is hypothetical.
Furthermore, in so far as PFR 29 assumes that dividends have been paid (or will be paid) in the winding up of BGF and of Western Interstate, and that it is possible to make a return of capital to the shareholders of Western Interstate, whether those assumptions are well founded, or come to fruition, will depend to some extent upon the timing of the trial in his action. An issue not yet resolved is whether there should be one single trial, or whether some parts of the action should be the subject of an initial, separate trial, with the remaining parts of the action resolved later. Furthermore, the likely hearing dates have not yet been resolved. Any trial is likely to be many months away. For the moment, however, the position is that Western Interstate claims to be a creditor of BGF and has lodged a proof of debt in its winding up, which will be adjudicated by the liquidator in the ordinary way, unless the basis for the claimed debt is successfully challenged elsewhere. There is clearly a dispute between BGNV and ICWA in relation to the construction of the WI Agreements, and as to their rights as a consequence of those agreements. The determination of that dispute would have real consequences for those parties in relation to the quantum of the dividend they may receive in the winding up of Western Interstate. Understood in that way, PFR 29 therefore does not raise a hypothetical question.
BGNV's application to strike out PFRs 23 to 29 should be dismissed.

Orders which should be made

The Application will be allowed to the extent that PFR 12 and the corresponding paragraphs of the SIFC ([513] ‑ [592]) will be struck out, save to the extent (if any) that ICWA can demonstrate that those paragraphs of the SIFC are relevant to any other claim for relief. I will hear from ICWA if it wishes to seek leave to replead. In addition, there will be an order that [899] and [900] of the SIFC be redacted.
I will hear from the parties as to the orders which should be made, including as to costs.