Kipoi Holdings Mauritius Limited v Robert Michael Kirman as joint and several administrators of Tiger Resources Limited (Subject to Deed of Company Arrangement) [No 3]
[2022] WASCA 78
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: KIPOI HOLDINGS MAURITIUS LIMITED -v- ROBERT MICHAEL KIRMAN as joint and several administrators of TIGER RESOURCES LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) [No 3] [2022] WASCA 78
CORAM: BUSS P
BEECH JA
VAUGHAN JA
HEARD: 22 JUNE 2022
DELIVERED : 11 JULY 2022
FILE NO/S: CACV 106 of 2021
BETWEEN: KIPOI HOLDINGS MAURITIUS LIMITED
Appellant
AND
ROBERT MICHAEL KIRMAN as joint and several administrators of TIGER RESOURCES LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
ROBERT CONRY BAUER as joint and several administrators of TIGER RESOURCES LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
First Respondents
YINGKOU YANGZHOU TRADE CO LTD
Second Respondent
JINJI RESOURCES FINANCE PTY LTD
Third Respondent
RICHARD SCOTT TUCKER
Fourth Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: MASTER SANDERSON
Citation: ROBERT MICHAEL KIRMAN as joint and several administrators of TIGER RESOURCES LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT) -v- YINGKOU YANGZHOU TRADE CO LTD [No 2] [2021] WASC 354
File Number : COR 69 of 2021
Catchwords:
Appeals - Practice and procedure - Whether leave to adduce additional evidence on appeal should be granted - Whether leave to cross-examine deponent of affidavit should be granted
Legislation:
Nil
Result:
Second and third respondents' application dated 7 March 2022 granted
Second and third respondents' application dated 4 May 2022 referred to the hearing of the appeal
Appellant's application dated 3 May 2022 granted
Appellant's application dated 7 June 2022 granted
Fourth respondent's application dated 27 April 2022 referred to the hearing of the appeal
Category: B
Representation:
Counsel:
| Appellant | : | J J Hutton & P A Walker |
| First Respondents | : | No appearance |
| Second Respondent | : | S J Maiden QC, J G Abberton & N J Wallwork |
| Third Respondent | : | S J Maiden QC, J G Abberton & N J Wallwork |
| Fourth Respondent | : | E J Sylwestrzak |
Solicitors:
| Appellant | : | Clayton Utz |
| First Respondents | : | Norton Rose Fulbright |
| Second Respondent | : | Lavan |
| Third Respondent | : | Lavan |
| Fourth Respondent | : | Jones Day |
Case(s) referred to in decision(s):
Kipoi Holdings Mauritius Ltd v Kirman and Bauer as joint and several administrators of Tiger Resources Ltd (Subject to Deed of Company Arrangement) [2021] WASCA 194
Kipoi Holdings Mauritius Ltd v Robert Michael Kirman as joint and several administrators of Tiger Resources Ltd (Subject to Deed of Company Arrangement) [No 2] [2022] WASCA 14
Kipoi Holdings Mauritius Ltd v Tiger Resources Ltd (Subject to Deed of Company Arrangement) [2021] WASCA 165
Kipoi Holdings Mauritius Ltd v Tiger Resources Ltd (Subject to Deed of Company Arrangement) [2021] WASCA 186
Robert Michael Kirman as joint and several administrators of Tiger Resources Ltd (Subject to Deed of Company Arrangement) [2021] WASC 411
Stack v Western Australia [2004] WASCA 300; (2004) 29 WAR 526
Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 234 CLR 492
JUDGMENT OF THE COURT:
Introduction
Four applications to adduce additional evidence in the appeal and for sundry other orders, and one application to adduce additional evidence in relation to those applications, were before the court on 22 June 2022.
The second respondent (YYT) and the third respondent (Jinji) (together, the YYT Parties) have filed two applications to adduce additional evidence. The first is dated 7 March 2022. The second is dated 4 May 2022. The latter application also seeks leave to amend their respondents' answer.
In response to the YYT Parties' first application, the appellant (Kipoi) filed an application dated 3 May 2022 seeking:
(1)leave to file and adduce additional evidence;
(2)an order that the appellant have leave to cross‑examine Aiping Wei on her affidavit the subject of the YYT Parties' first application; and
(3)leave to file and serve a reply to the YYT Parties' respondents' answer.
Kipoi also filed an application, dated 7 June 2022, to adduce the evidence contained in an affidavit of Alistair Fleming, dated 7 June 2022, in respect of the other four applications.
The fourth respondent, Mr Richard Scott Tucker, by an application dated 27 April 2022, seeks leave to rely on stipulated evidence in an affidavit of Amit Gupta sworn 16 December 2021 as evidence in the appeal.
For the reasons that follow, the orders in [91] below should be made. In broad summary, the first of the YYT Parties' applications and both of Kipoi's applications should be granted, and the remaining applications should be referred to the hearing of the appeal.
Background
The background appears from three earlier decisions of this court in proceedings between these parties: Kipoi Holdings Mauritius Ltd v Kirman[1] (stay reasons); Kipoi Holdings Mauritius Ltd v Tiger Resources Ltd (Subject to Deed of Company Arrangement) (445D reasons)[2] and Kipoi Holdings Mauritius Ltd v Kirman [No 2] (joinder reasons).[3] Consequently, the background may be summarised in broad terms.
[1] Kipoi Holdings Mauritius Ltd v Kirman and Bauer as joint and several administrators of Tiger Resources Ltd (Subject to Deed of Company Arrangement) [2021] WASCA 194.
[2] Kipoi Holdings Mauritius Ltd v Tiger Resources Ltd (Subject to Deed of Company Arrangement) [2021] WASCA 186.
[3] Kipoi Holdings Mauritius Ltd v Robert Michael Kirman as joint and several administrators of Tiger Resources Ltd (Subject to Deed of Company Arrangement) [No 2] [2022] WASCA 14.
Tiger Resources Ltd (Tiger) is the holding company for a number of subsidiaries incorporated outside Australia. One of the subsidiaries, referred to as SEK, operated a copper mine in the Democratic Republic of Congo (the Kipoi Project).
Kipoi is a secured creditor of Tiger. It had, or at least asserts it had, a beneficial interest in some of the shares of Tiger. The legal title to those shares was held by Mr Tucker, as scheme administrator, pursuant to a Scheme of Arrangement implemented on 11 June 2020.
The effect of the Scheme of Arrangement was, relevantly, that:[4]
(1)The secured debt owed by SEK (and guaranteed by Tiger) was compromised from approximately US$271 million to approximately US$100 million.
(2)The secured lender group was to receive shares equal to approximately 99.3% of Tiger's issued share capital, of which 23.66% of Tiger's capital was to be issued to Kipoi.
(3)An intercompany receivable in the sum of US$171 million was recorded as owing by SEK to Tiger.
[4] 445D reasons [14].
Mr Tucker's fees as scheme administrator were not paid.
On 16 February 2021, the creditors of Tiger resolved that the company enter into a deed of company arrangement (DOCA). The DOCA was executed on 19 February 2021. The first respondents, Messrs Kirman and Bauer, were appointed as the deed administrators of the DOCA.
YYT was the proponent of the DOCA. Jinji is, or at least claims to be, the majority secured creditor of Tiger. It is associated with YYT.
In late 2020 and early 2021, another company related to YYT, CGM Lishi Mining SARL (CGM), provided funding for Tiger while the copper mine was in care and maintenance.[5]
[5] 445D reasons [42].
Kipoi applied to set aside the DOCA pursuant to s 445D of the Corporations Act 2001 (Cth). The application was dismissed.[6] Kipoi's appeal from that decision was dismissed by this court.[7]
[6] Kipoi Holdings Mauritius Ltd v Tiger Resources Ltd (Subject to Deed of Company Arrangement) [2021] WASC 165.
[7] See the 445D reasons.
On 23 April 2021, pursuant to the DOCA, the first respondents, then the deed administrators, applied to the General Division of this court for leave under s 444GA of the Corporations Act to transfer all of the shares in Tiger to YYT.
On 20 October 2021, the master published written reasons as to why leave should be given. On 28 October 2021, the master made orders granting the deed administrators leave to transfer the shares in Tiger.
On 3 November 2021, Kipoi filed a notice of appeal from the master's decision. On the same day, Kipoi applied for a stay of the master's orders.
This court granted a stay pending the determination of the appeal, conditional upon Kipoi paying the sum of $8,983,000 into court.[8]
[8] Stay reasons [65].
That amount was not paid and, consequently, the stay lapsed.
On 19 November 2021, following directions given by the master that the deed administrators were justified in transferring the shares,[9] the deed administrators transferred all of the shares in Tiger to YYT.[10]
[9] Robert Michael Kirman as joint and several administrators of Tiger Resources Ltd (Subject to Deed of Company Arrangement) [2021] WASC 411 [1].
[10] Affidavit of Aiping Wei, 4 March 2022 [7.6].
On 6 December 2021, Kipoi filed an amended appellant's case.
On 16 December 2021, Kipoi applied for leave to add Mr Tucker as the fourth respondent.
On 7 February 2022, this court granted leave to add Mr Tucker as the fourth respondent.[11]
[11] Joinder reasons [4].
The parties filed a consent notice on 8 March 2022 concerning the first respondents' further involvement in the appeal. On 11 March 2022, Buss P ordered that the first respondents have leave to file a further notice of respondents' intention indicating that they do not intend to take part in the appeal and will accept any order made in the appeal other than as to costs.
It is convenient to outline aspects of the parties' cases on the substantive appeal in order to provide context for the applications to adduce additional evidence.
The parties' cases on appeal
The amended appellant's case
In its amended case, Kipoi amended its submissions to advance detailed further submissions focusing on the consequences, for the appeal and for the orders sought on appeal, of the fact that the Tiger shares had been transferred. It submits that restitution should be effected by YYT transferring the Tiger shares back into Mr Tucker's name 'so as to reconstitute the trust'.[12] The amended orders wanted include orders setting aside the master's orders and orders to the following effect:
2A.By no later than 4pm (AWST) on the date that is 3 business days after the pronouncement of these orders, [YYT] deliver to [Tiger] duly executed and proper instruments of transfer, in registrable form, providing for the transfer of the shares in Tiger acquired by [YYT] on 19 November 2021 back to the persons recorded in the [Tiger] register of members as the members of [Tiger] on 18 November 2021, in the proportions as so recorded in the register.
2B.[YYT] do all such other things as are necessary to effect registration of the transfer referred to in order 2A above.
2C.There be liberty to apply for such further or other relief as is necessary to bring about the re-transfer of shares in [Tiger] from [YYT] to those who held such shares on 18 November 2021.
The YYT Parties' amended respondents' answer
[12] Appellant's submissions [82(e)].
The YYT Parties' respondents' answer filed 7 March 2022 includes a notice of contention with three grounds. Ground 1 is that Kipoi did not have a sufficient interest to oppose the application for leave under s 444GA. Their submissions in support of that ground refer to and rely upon parts of the affidavit of Amit Gupta sworn 16 December 2021.[13] That evidence of Ms Gupta, and the relevant annexures to her affidavit, is the subject of the YYT Parties' second application to adduce additional evidence.
[13] Second and third respondents' answer [11] and footnotes 19 and 20.
The YYT Parties' respondents' answer filed 7 March 2022 includes part 4, which contends that, even if the grounds of appeal have merit, the relief sought by Kipoi is not available. First, the YYT Parties contend that reversal of judgment restitution is not available to, or against, non‑parties and Kipoi was not a party below. Secondly, they contend that the purpose of restitutionary orders made on appeal is to restore the parties to the status quo ante, and Kipoi's proposed orders do not, and cannot, achieve that result.
In support of their second contention, the YYT Parties submit that, in reliance on the DOCA, and in exchange for the transfer of Tiger's shares:[14]
(1)YYT paid consideration under the DOCA totalling US$1,970,000;
(2)CGM, a related company of YYT, has advanced a further US$5,923,097 towards the expenses of the company now having conduct of the Kipoi Project; and
(3)on 4 March 2022, YYT and CGM executed documents including a loan facility agreement under which CGM agreed to provide YYT with a loan facility with a limit of US$5 million to enable further funding of the Tiger group's operations and a general security deed by which YYT mortgages its Tiger shares to CGM to secure repayment of the amounts advanced by CGM under the facility agreement.
[14] Second and third respondents' answer [97], [110].
The YYT Parties further submit that:
(1)Were it not for the expected receipt of the Tiger shares, CGM and YYT would not have incurred the detriments identified in [30] above, the value of each of which is substantial and which, given Tiger's insolvency, are now practically irrecoverable.[15]
(2)If repayment of the funds advanced by and on behalf of YYT and its related parties is not a requirement of restitutio in integrum, YYT has an available defence of change of position to the full extent of YYT's irrecoverable payments towards the DOCA and towards meeting Tiger's expenses.[16]
(3)Restitution should not be ordered where, as here, restitutio in integrum is not possible.[17]
(4)If the court is persuaded that some part of the appeal should succeed, but it is not appropriate to make an order for retransfer of shares in the blunt form proposed by Kipoi, the court should grant declaratory relief, but decline to make the unconditional order for retransfer sought by Kipoi. If necessary, in order to formulate appropriate conditions, the matter can be remitted to the General Division for determination by a single judge.[18]
Mr Tucker's respondent's answer
[15] Second and third respondents' answer [110].
[16] Second and third respondents' answer [113].
[17] Second and third respondents' answer [114].
[18] Second and third respondents' answer [115].
Mr Tucker's submissions are limited to the question of the orders which should be made if the appeal is allowed and if the court determines that restitution of the Tiger shares can and should be made. Mr Tucker identifies two means of providing such restitution. The first is by directly transferring them to Kipoi and the other beneficiaries of the relevant trusts on which Mr Tucker held them. The second is for the shares to be reinstated to Mr Tucker to be held on trust pending transfer to Kipoi and the other beneficiaries.
Mr Tucker submits that the more pragmatic outcome is to see the Tiger shares reinstated directly to the respective beneficiaries. He submits that the trusts have ended and each beneficiary is absolutely entitled to their interest in the property that had been the subject of the trust. Thus, Mr Tucker submits, an order for restitution to him unnecessarily adds a step in the process, since he would then simply transfer the shares to the respective beneficiaries.
Mr Tucker further submits that if the shares are to be transferred to him, there are questions as to whether the trusts are reconstitutions of the trusts on which they were earlier held or whether they are newly constituted trusts.
Kipoi's proposed reply submissions
In one of the applications to which we will come, Kipoi applies for leave to file submissions in reply, responding to part 4 of the YYT Parties' answer relating to whether the relief Kipoi seeks is available. It is not necessary for present purposes to detail Kipoi's proposed submissions. It is sufficient to note that Kipoi takes substantial issue, in a number of respects, as to both the legal and factual underpinnings of the YYT Parties' submissions concerning what relief, if any, is available to Kipoi in the event that the grounds of appeal succeed.
That brings us to the applications to adduce additional evidence.
The YYT Parties' application dated 7 March 2022
By their application of 7 March 2022, the YYT Parties apply for leave to adduce, as additional evidence in the appeal, the affidavit of Aiping Wei dated 4 March 2022, which was later replaced by her affidavit dated 29 March 2022. Among other things, that later affidavit deposes that:
(1)Between 30 September 2021 and 19 November 2021, CGM transferred or paid amounts totalling US$2,805,094.64 to SEK, SASE Mining SARL (SASE) or other entities that are creditors of those companies, annexing documents relating to those payments.
(2)Following effectuation of the DOCA on 19 November 2021, at the direction of, and cost to, CGM and YYT, SEK recommenced full‑scale mining operations at the Kipoi Project. As a result, YYT and CGM have incurred, and continue to incur, significant expenses in transitioning the Kipoi Project from its previous state of care and maintenance to full‑scale production.
(3)In the period between 20 November 2021 and 31 January 2022, CGM, on behalf of YYT, transferred or paid the amount of US$3,118,003.17 to SEK, SASE or other entities that are creditors of SEK or SASE, again annexing documents relating to those payments.
(4)On 4 March 2022, YYT and CGM executed:
(a)a loan facility agreement under which CGM agreed to provide YYT with a loan facility with a facility limit of US$5 million, and which provided the terms on which funds had been, and would continue to be, advanced by CGM to YYT; and
(b)a general security deed by which YYT granted CGM security over all of its present and after‑acquired property, which includes 100% of the shares in Tiger,
annexing copies of those documents.
Submissions
The YYT Parties submit that the additional evidence is fresh, in that it relates to matters subsequent to the primary proceedings and thus did not exist at the time the primary proceedings were heard. Further, they submit that the additional evidence is necessary to explain what has happened since the trial and is relevant to whether the orders for restitution sought by Kipoi should be made.
Kipoi does not oppose the grant of leave, provided that Kipoi is given leave to test the evidence by cross‑examination, as sought in its application, and is given leave to adduce its own evidence in response.
Disposition
For the reasons advanced by the YYT Parties, leave should be granted. However, that leave is subject to the order proposed in order 3.3 in [91] below. As will be seen, we would also grant Kipoi's application, to which we now turn.
Kipoi's application
By application filed 3 May 2022, Kipoi applies for:
(1)leave to adduce, as additional evidence in the appeal, five affidavits sworn on 2 May 2022 or 3 May 2022;
(2)leave to cross‑examine Aiping Wei on her affidavits of 4 March 2022 and 29 March 2022; and
(3)leave to file and serve a reply to part 4 of the YYT Parties' answer in the form annexed to Mr Fleming's affidavit of 3 May 2022.
The YYT Parties do not oppose the first and third of these aspects of Kipoi's application. Only the application for leave to cross‑examine Ms Wei is opposed.
In support of its application for leave to cross‑examine Ms Wei, Kipoi submits that the proposed evidence bears on the issues on appeal as to whether restitutio in integrum is possible, and as to whether the YYT parties have a change of position defence. It notes that her affidavit addresses additional costs said to have been incurred by YYT to maintain the mine on care and maintenance and to ready it for operations. Kipoi points out that Ms Wei does not say when operations recommenced, how much copper is being produced, what income has been generated and how such income is expected to be used. Kipoi submits that those matters, as well as whether continued funding is necessary and the terms on which the funding was provided, are relevant to whether any change of position by YYT in borrowing funds to provide financial support has been detrimental and whether the additional funding would have been contributed by YYT even if Kipoi had maintained its majority shareholding interest.[19]
[19] Affidavit of Alistair Fleming dated 3 May 2022 [11] ‑ [15]; appellant's submissions dated [7(b)]; appellant's proposed reply submissions [18].
In Mr Fleming's affidavit sworn 3 May 2022 he stated that Kipoi seeks to cross-examine Ms Wei:[20]
on matters relevant to whether the conduct of [YYT] since the Original Decision constitutes a detrimental change of position made in reasonable reliance on [YYT] continuing to hold a 100% shareholding in Tiger, including:
(a)when mining operations at the Kipoi copper mine recommenced;
(b)how much copper is being produced by the Kipoi copper mine; and
(c)how much income is being earned by the Kipoi copper mine and how that income is being used (i.e. whether to repay YYT and CGM or otherwise).
[20] Affidavit of Alistair Fleming dated 3 May 2022 [15].
In oral submissions, Kipoi identified more precisely the topics it proposed for cross‑examination as:[21]
(1)when steps were taken to recommence full-scale copper production;
(2)when such production actually commenced;
(3)what revenue has been generated by the mine since commercial production recommenced;
(4)what operating costs have been incurred during that time;
(5)what profits have been made during that time;
(6)whether there are any terms of the funding that are additional to those that are reduced to writing in the documents attached to Ms Wei's affidavit of 29 March 2022;
(7)the nature of the negotiations that Ms Wei deposes to, which are said to have led to the loan or funding agreement between CGM and its related entity YYT in March 2022; and
(8)evidence as to the ability of YYT, from the profits generated by the mine, to repay the amount that it has acknowledged as a debt.
[21] Appeal ts 101. See also appeal ts 98, 100 where counsel for Kipoi identified that the two primary issues that the cross-examination would go to were: (1) whether or not there had been a change of position in good faith in reliance on receipt of the shares; and (2) the extent of the asserted detriment.
In opposing the application, the YYT Parties submit that neither Kipoi's submissions as to restitutio in integrum, nor its submissions as regards a defence of change of position, justify the proposed cross‑examination.
As to restitutio in integrum, the YYT Parties submit that Kipoi's reply submissions in the appeal identify the incorrect time for consideration of the status quo ante. Whereas Kipoi refers to the status quo ante 'since the wider CGM Group bought into Tiger', the YYT Parties submit that the relevant status quo is the time immediately before the shares were transferred. Further and in any event, the YYT Parties submit that, even when the wider CGM Group bought into Tiger, Tiger was in external administration. The new evidence makes clear that Tiger has now exited external administration and is no longer subject to the DOCA.
As to change of position, the YYT Parties emphasise that the relief sought by Kipoi in this appeal is unconditional restitution. The YYT Parties oppose such an order on the basis that any order for restitution must take into account any change of position. The YYT Parties submit that they do not rely on the new evidence to definitively prove the extent of the change of position, nor the cause of it. Rather, the new evidence simply demonstrates that facts have occurred since the order was made giving rise to the need to determine whether a detrimental change of position has occurred. Thus, the YYT Parties will submit on the substantive appeal that restitution could not be granted until such time as the change of position arguments have been properly articulated, tried and determined.
Determining the extent of the change of position and the cause of it is, the YYT Parties submit, a matter for the General Division, not for three judges of this court. In any event, no such exercise is required because Kipoi has adopted an all or nothing approach to the question of relief.
The YYT Parties advance three reasons why leave to cross‑examination should be refused. First, for the reasons outlined above, they contend that the subject matter of the proposed cross‑examination is irrelevant. Secondly, given the prospect of a remitter by this court of the matter to a single judge, cross‑examination in this court would give rise to a risk of conflicting findings. Thirdly, cross‑examination is liable to consume an unnecessary and disproportionate part of the time of this court.[22]
[22] Appeal ts 90 - 91.
In response, Kipoi points to authorities indicating that it is unusual in the context of an affidavit sought to be admitted for the purposes of a final hearing for a court to deny an opportunity to cross‑examine the deponent on a bona fide request.[23] Kipoi further submits that the YYT Parties' submissions summarised at [48] above depart from their respondents' answer which asserts the existence of a change of position by YYT (referring to [91], [100(c)], [110], [113] of the YYT Parties' respondents' answer). In any event, Kipoi submits that even if the evidence is adduced by the YYT Parties for the purpose now asserted, the evidence Kipoi seeks to adduce by cross‑examination would go to whether there is a serious question to be tried as to the existence of a change of position.
[23] See, for example, Stack v Western Australia [2004] WASCA 300; (2004) 29 WAR 526 [76] - [101].
Finally, Kipoi emphasises the court's powers to control the length and nature of cross‑examination and to take steps to ensure that it is conducted efficiently and fairly.
Disposition
The starting point, reflected in the authorities to which Kipoi refers, is that, given that the YYT Parties seek to rely on Ms Wei's affidavits as evidence relevant to the final relief to be granted, as a matter of procedural fairness Kipoi should be given the opportunity to cross‑examine Ms Wei in order to clarify or discredit her evidence, or to adduce additional evidence relevant to the issues as to the question of relief.
Contrary to the YYT Parties' submission,[24] this court cannot properly be satisfied that the evidence proposed to be adduced by Kipoi in cross‑examination is irrelevant to the appeal without determining the merits of some of the YYT Parties' submissions in part 4 of their respondents' answer. That is true, for example, of the YYT Parties' submissions as to relevance in [47] ‑ [48] above. Moreover, while on this application the YYT Parties submit that they do not rely on the new evidence to definitively prove the extent or cause of the change of position, the submissions in their respondents' answer set out in [31] above suggest, or might reasonably be taken to suggest, otherwise.
[24] Appeal ts 85 - 86.
As already noted, the YYT Parties' submissions in part 4 of their respondent's answer are disputed by Kipoi, in significant legal and factual respects, as reflected in Kipoi's proposed reply submissions.
It is not appropriate, at this stage, for the court to attempt to determine the merits of these competing submissions prior to the hearing of the substantive appeal. Rather, leave to cross‑examine should be given and the evidence adduced in cross‑examination should be received provisionally. Whether and for what purpose the evidence is ultimately received is appropriately determined by the court in the context of the hearing and resolution of the appeal as a whole, when the court is fully seized of all of the parties' arguments.
The second and third reasons advanced by the YYT Parties, as outlined in [50] above, do not sustain a different approach.
As to the second, we accept that, among the myriad possibilities in this complex appeal, the court may come to a view that remitter of the matter is appropriate. Even so, in our view, the risk of conflicting findings is insubstantial. Were this court minded to remit the matter it would, no doubt, be careful to make only such findings as were necessary. Any risk of conflicting findings falls well short of justifying the injustice to Kipoi that would result if they were deprived of the opportunity to cross‑examine Ms Wei in circumstances where the YYT Parties rely on her evidence as a ground to dismiss the appeal.
The same is true of the third reason advanced, namely the time involved in cross‑examination. Further, the court has ample power to control the manner and extent of cross‑examination.
The court's orders as to cross‑examination are interlocutory in nature and so may be revisited by the court in the course of the hearing of the appeal.
It seems to us to be appropriate, in the interests of the efficient conduct of the appeal, to identify the scope of the cross‑examination to be permitted. We would grant leave for Kipoi to cross‑examine Ms Wei in relation to the topics set out in [45] above as to whether the conduct of YYT constitutes a detrimental change of position made in reasonable reliance on YYT continuing to hold a 100% shareholding in Tiger. It would be open to Kipoi to request the consent of the other parties to a modification of the list of the subject matter of cross‑examination and, if necessary, to apply to the court in that respect.
The YYT Parties' application dated 4 May 2022
By application dated 4 May 2022, the YYT Parties apply for leave to rely upon the affidavit of Amit Gupta, sworn 16 December 2021, and five of its attachments, namely:
(a)the orders of Justice Gleeson in Federal Court proceeding NSD 2043/2019 dated 21 February 2020 approving the Scheme of Arrangement of Tiger;
(b)the Jericho Master Trust Deed;
(c)emails of March 2020 including calculations as to scheme share entitlements;
(d)notice of creation of the Teichmann Trust; and
(e)an email from Mr Tucker to the scheme creditors dated 11 June 2020,
as evidence in the appeal. They also seek leave to amend their respondents' answer in accordance with a document filed with the application.
Ms Gupta's affidavit was filed by Kipoi in support of its application for leave to join Mr Tucker.
The orders of Gleeson J in Federal Court proceeding NSD 2043 of 2019 approved and annexed a copy of the Scheme of Arrangement of Tiger.
Submissions
In support of their application, the YYT Parties point to two reasons why the additional evidence, which they concede is new rather than fresh, should be admitted. First, the additional evidence undermines Kipoi's case that the orders it seeks on appeal will restore the status quo ante. The YYT Parties contend that the additional evidence shows that Kipoi never held shares in Tiger and, to the extent that it was the beneficial owner, it was the beneficial owner of shares in a company in administration. By contrast, now, following the effectuation of the DOCA and the funding provided through YYT, Tiger is no longer in administration.
Secondly, the YYT Parties submit that there is no prejudice to Kipoi, given that the evidence is evidence of a director of Kipoi filed by Kipoi in support of its application to join Mr Tucker.
In response, Kipoi contends that the YYT Parties' object in adducing the proposed additional evidence is apparent from the proposed amendments to their respondents' answer. That object is to support a submission by the YYT Parties, made for the first time on appeal, supporting ground 1 of the notice of contention, that Kipoi never had a beneficial interest in the Tiger shares. Kipoi advances five reasons why the court should refuse the application.
First, the proposed additional evidence existed and was available at the time of the trial. In support of that contention, by application dated 7 June 2022 they seek leave to rely upon the affidavit of Mr Fleming dated 7 June 2022 as evidence in this and the other applications. Leave was not opposed and we would grant it.
Kipoi further submits that the purpose for which YYT now seeks to adduce the evidence is inconsistent with the position it took before the master, when the YYT Parties accepted that Kipoi had a beneficial interest in the Tiger shares.
Secondly, the YYT Parties' submissions do not sustain the grant of leave. It has always been clear and uncontroversial that Kipoi did not hold the legal interest in the Tiger shares. Nor is evidence needed to establish that Tiger was a company in administration and is no longer. Absence of prejudice is not a sufficient reason to grant the application, but, in any event, the use of evidence adduced for one purpose for a different purpose is readily capable of amounting to prejudice.
Thirdly, the principles in Whisprun Pty Ltd v Dixon[25] are applicable. Contrary to the YYT Parties' submissions, their contention does not go to the court's jurisdiction.
[25] Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 234 CLR 492.
Fourthly, the new point the YYT Parties seek to raise is one which, if raised below, might have resulted in additional or different evidence being led. In other words, the facts upon which the new point turns are neither admitted nor proved beyond controversy. In any event, even if no factual issue is involved, if a new point is permitted to be raised there will be prejudice to Kipoi in that it will be deprived of the opportunity to take steps to overcome any impediment to the existence of its beneficial interest.
Fifthly, otherwise, the YYT Parties' submissions provide no reason for the grant of leave.
Disposition
The question of whether the YYT Parties should have leave to adduce Ms Gupta's affidavit and attachments as additional evidence in the appeal should be referred to the hearing of the appeal. Whether such leave should be granted is wrapped up with the parties' competing submissions as to whether the YYT Parties are raising a new issue on appeal and whether they are seeking to withdraw a concession. Consequently, the question of leave is appropriately determined in the context of the hearing of the appeal as a whole.
In the interests of clarity, the YYT Parties should have leave to amend their respondents' answer in the form in which it was filed on 7 March 2022. That grant of leave says nothing as to the merits of the debate concerning whether the YYT Parties are raising a new issue. Once that was made clear in the course of an exchange with the bench, Kipoi quite properly withdrew any objection to this manner of proceeding.
Mr Tucker's application
By application dated 27 April 2022, Mr Tucker applies for leave to rely on Ms Gupta's affidavit, sworn 16 December 2021, and two of its attachments, namely the Jericho Master Trust Deed and notice of creation of the Teichmann Trust. Mr Tucker also applies for leave to adduce, as additional evidence in the appeal, an affidavit of Zachary Sharp, sworn 10 January 2022, and an attachment to it, namely a letter from the YYT Parties' solicitors to Mr Tucker's solicitors, dated 16 December 2021.
Submissions
Mr Tucker submits that the attachments to Ms Gupta's affidavit are the documents evidencing the constitution of the Jericho Trust 3 and its terms, which is the trust Kipoi seeks to have reconstituted if the appeal is allowed.
In relation to the Sharp affidavit, Mr Tucker submits that the correspondence is evidence of YYT's intention to make a further application under s 444GA if the appeal is successful.
Kipoi does not oppose the application to adduce the limited further evidence from Mr Sharp's affidavit.
However, it submits that it is not in the interests of justice for Mr Tucker to have leave, or at least unconditional leave, to adduce the proposed additional evidence that relates to the terms and nature of the relevant trust. It submits that the court will not need to consider the terms of the trust in framing the grant of restitutionary relief, as the nature and terms of the trust are matters for the internal administration of the trust, on the following basis. Contrary to Mr Tucker's apparent assumption, the trust of which he was a trustee has not (at least on Kipoi's case on appeal) come to an end. As trustee, Mr Tucker has an ongoing obligation to seek to recover the shares for the trust for as long as they were capable of being recovered. The subject matter of the trust is, at this stage, the right to pursue recovery of the property. Thus, no question of the imposition of new trusts arises. Nor does the court have a discretion to restore the shares directly to Kipoi.
Further and alternatively, if the court considered that evidence as to the terms and nature of the trust was material, the evidence should not be adduced unconditionally lest the YYT Parties attempt to rely on it in the manner that animates their second application. In order to avoid that result, any leave should be conditional on the evidence being adduced only as between Kipoi and Mr Tucker or only for the limited purpose of proving the terms of the trust and not for the purpose of enabling any question to be raised as to the existence of the trust or identity of the beneficiaries.
In reply, Mr Tucker submits that his application does not require the court to determine at this stage whether the trust of which he was trustee continues to exist.
Under cover of that general submission, Mr Tucker further submits that there must be trust property for there to be a trust and that the Tiger shares were transferred lawfully in accordance with orders made under s 444GA of the Corporations Act and a direction pursuant to s 90‑15 of the Insolvency Practice Schedule (Corporations). Consequently, he had no chose in action to recover the shares so transferred and so was not in a position analogous to a trustee seeking to recover property wrongly disbursed as asserted by Kipoi.
Consequently, there is no remaining property over which Mr Tucker is trustee and therefore the trust has necessarily ended.
For these reasons, Mr Tucker submits, the court will be required to consider the nature and terms of any trust to be brought into existence by the transfer to him contemplated by Kipoi's amended orders.
The YYT Parties support Mr Tucker's application. They submit that the dispute as to whether the trusts pursuant to which Mr Tucker held the shares have come to an end cannot be resolved without reference to the terms of the trust deed. They refer to cl 2.3(b), submitting that it provides that the trust comes to an end on the date that legal title to all of the trust assets is transferred to the relevant beneficiary or to another person in accordance with the terms of the deed and the Scheme.
Thus, the YYT Parties submit, the trust documents must be admitted as evidence on the appeal.
The YYT Parties further submit that the fact that they might rely on the evidence once it is adduced is no sufficient reason to refuse the application, nor to receive it only conditionally.
Disposition
Mirroring the approach to the YYT Parties' second application, insofar as Mr Tucker's application concerns the affidavit of Ms Gupta, the application should be referred to the hearing of the appeal. The parties were ultimately content with this course.
There is no opposition to Mr Tucker's application to adduce the affidavit of Zachary Sharp. Leave should be granted in relation to Mr Sharp's affidavit.
The orders to be made
For these reasons, orders should be made in the following terms:
1.The second and third respondents have leave to rely upon the additional evidence in the affidavits of Aiping Wei sworn 4 March 2022 and 29 March 2022 as evidence in the appeal.
2.The appellant has leave to rely upon the additional evidence contained in paragraph 12 of the affidavit of Alistair Ronald Fleming sworn 3 May 2022 and the affidavits of James te Riele sworn 2 May 2022, Ian Howard Davies sworn 3 May 2022, Laurence Laveau sworn 3 May 2022 and Elizabeth Maree Frizell sworn 3 May 2022 as evidence in the appeal.
3.3.1 The appellant has leave to cross‑examine Aiping Wei on her affidavits sworn 4 March 2022 and 29 March 2022 in relation to whether the conduct of YYT deposed to therein constitutes a detrimental change of position made in reasonable reliance on YYT continuing to hold a 100% shareholding in Tiger as to the following topics:
3.1.1when steps were taken to recommence full-scale copper production;
3.1.2when such production actually commenced;
3.1.3what revenue has been generated by the mine since commercial production recommenced;
3.1.4what operating costs have been incurred during that time;
3.1.5what profits have been made during that time;
3.1.6whether there are any terms of the funding that are additional to those that are reduced to writing in the documents attached to Ms Wei's affidavit of 29 March 2022;
3.1.7the nature of the negotiations Ms Wei deposes to, which are said to have led to the loan or funding agreement between CGM and its related entity YYT in March 2022; and
3.1.8evidence as to the ability of YYT, from the profits generated by the mine, to repay the amount that it has acknowledged as a debt.
3.2Aiping Wei attend the Court of Appeal, in person or by video link, at the hearing of the appeal to be cross‑examined.
3.3If Aiping Wei fails to attend, her affidavits sworn 4 March 2022 and 29 March 2022 shall not be used in evidence.
3.4The evidence of Aiping Wei adduced in cross‑examination be received provisionally, pending the court's decision as to admission in its reasons on appeal.
4.The appellant has leave to file a reply to part 4 of the second and third respondents' answer and the materials produced in the affidavits of Aiping Wei sworn 4 March 2022 and 29 March 2022 in the form annexed to the affidavit of Alistair Ronald Fleming sworn 3 May 2022 in support of the appellant's application dated 3 May 2022.
5.The appellant has leave to rely upon the affidavit of Alistair Ronald Fleming sworn 7 June 2022 as evidence in the interlocutory applications dated 7 March 2022, 27 April 2022, 3 May 2022 and 4 May 2022.
6.The second and third respondents have leave to amend their respondents' answer dated 7 March 2022 as set out in the document filed with their application dated 4 May 2022. The second and third respondents' application dated 4 May 2022 is otherwise referred to the hearing of the appeal.
7.The fourth respondent has leave to rely upon the affidavit of Zachary Sharp sworn 10 January 2022 and attachment ZSH-3 as evidence in the appeal. The fourth respondent's application dated 27 April 2022 is otherwise referred to the hearing of the appeal.
We would reserve the costs of the various applications. The court will be in a better position to deal with any issues as to costs after determination of the appeal.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
BM
Associate to the Honourable Justice Beech
11 JULY 2022
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