Nauru Phosphate Royalties Trust v Harris

[2007] HCATrans 329

[2007] HCATrans 329

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M40 of 2007

B e t w e e n -

NAURU PHOSPHATE ROYALTIES TRUST

Applicant

and

JOSEPH BARROTT HARRIS

Respondent

Summons

HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON WEDNESDAY, 27 JUNE 2007, AT 9.30 AM

Copyright in the High Court of Australia

MR N.A. MOSHINSKY, QC:   If the Court pleases, I appear for the Nauru Phosphate Royalties Trust, the appellant in these proceedings.  (instructed by Jacobsons Lawyers)

MR D.J. WILLIAMS:   If the Court pleases, I appear for the respondent.  (instructed by Baker & McKenzie)

MR G. GRIFFITH, QC:   If your Honour pleases, I appear with my learned friends, MS L.G. DE FERRARI and MR S.M. REBIKOFF, seeking leave to intervene on a summons that we have issued.  (instructed by Peak Legal)

HIS HONOUR:   Yes.

MR GRIFFITH:   We would suppose, your Honour, that would be a matter that would have to go over to the court hearing the appeal in any event.

HIS HONOUR:   Yes.  What do you say then is the course I should follow in relation to your summons?

MR GRIFFITH:   We propose, your Honour, that the court to hear the matter be constituted, whether it is two or three or more judges, and that the matter be brought on before that court preliminary to the hearing of the appeal for three purposes:  one, to determine our intervention; two, to determine the nature of the appeal.  Is it a matter of first instance?  Is it equivalent to a first level appeal to a Court of Appeal or, in some way, we would say certainly not is it equivalent to a normal appeal to the High Court exercising its appellate jurisdiction within the Australian jurisdiction.  We say that is an issue that so far, your Honour, has not been before the Court.  Ruhani did not deal with it.  So that is a matter of identifying the nature of the appeal itself. 

Within that aspect, your Honour, we would say there would be the further issues of, having identified the nature of the proceedings, whether or not further evidence could be received.  For example, one issue, your Honours, is whether the curator when she gave evidence was still in office when she gave her evidence.  The other issue, your Honour, would be the issue of the proof of Nauruan law which, although it is an appeal to the Nauruan Court, this Court does have to have Nauruan law proven before it.  We see issues as to that.  Your Honour, all those matters we would suppose it would be for the appellate court seized with the matter.

HIS HONOUR:   Yes.  I think that the course I will follow is first hear this question of stay.

MR GRIFFITH:   Yes, your Honour.

HIS HONOUR:   I see the force in what you say about the summons seeking intervention or joinder being dealt with by the court as constituted to hear the appeal.  It may be that there are some other aspects of that which may be more conveniently dealt with after I have heard what is to be said about the stay application and the way in which the matter might then proceed more generally.

MR GRIFFITH:   It might be we do not have to say anything on the stay, one, because we are not entitled to and two, your Honour, that as long as the money is there somewhere, we would not have any interest.

HIS HONOUR:   Yes.  Mr Moshinsky, it is your application for stay, is it not?

MR MOSHINSKY:   Yes, it is my application.  Your Honour, the matter comes before this Court by way of notice of appeal brought under the Nauru (High Court Appeals) Act 1976. This Act invests the High Court of Australia with jurisdiction with respect to appeals from the Supreme Court of Nauru. It is short in form, the Act itself. In substance it says that Schedule ‑ ‑ ‑

HIS HONOUR:   Yes.  I had occasion to consider it in Ruhani, Mr Moshinsky.  You may take it that I am generally familiar with the way in which it operates, yes.

MR MOSHINSKY:   Your Honour, the essence of the matter is Article 4 of the agreement, which is annexed to the Act.  The agreement is approved by the Act and Article 4 provides that:

1.        Pending the determination of an appeal from the Supreme Court of Nauru to the High Court of Australia, the judgment, decree, order or sentence to which the appeal relates is to be stayed, unless the Supreme Court of Nauru otherwise orders.

There is also under the agreement a right of appeal to the High Court without the necessity for asking for leave in a case like the present one. So there is no question of special leave. It is an automatic right to appeal. We say that when you consider we have made an application for a stay, the High Court Rules that deal with appeals from Nauru adopt Part 42 of the Rules that deal generally with appeals to the High Court, but they are to be adapted as far as practicable for the purposes of an appeal from Nauru. The High Court Rules in rule 42.09 provide that:

Unless the Court or a Justice otherwise orders, an appeal shall not operate as a stay of proceedings.

We say that in order to adapt those rules for appeals from the High Court, this Court ought to take into account the provisions of the treaty or the agreement that is annexed to the Nauru Appeals Act because it will be exercising its jurisdiction under the Act.  To determine and interpret that jurisdiction by reference to the Nauru Appeals Act, the Acts Interpretation Act enables this Court to have reference to a treaty.  If I could read from section 15AB(2)(d) of the Acts Interpretation Act, that provides that ‑ ‑ ‑

HIS HONOUR:   What is the provision of the Act that is being interpreted in aid of which you refer to the provision of the treaty?

MR MOSHINSKY:   Yes.  I will just turn up the Act, sorry.  We say, first of all, section 5(1) of the Act provides that:

(1)Appeals lie to the High Court of Australia from the Supreme Court of Nauru in cases where the Agreement provides that such appeal are to lie.

And then the “Procedure,” section 6 says:

The power of the Justices of the High Court or a majority of them to make Rules of Court under section 86 of the Judiciary Act 1903 extends to making Rules of Court in relation to matters referred to in paragraph 1 of Article 3 of the Agreement.

Then section 5(2):

The High Court has jurisdiction to hear and determine appeals mentioned in subsection (1).

We say that when this Court examines the nature of its jurisdiction and its rule‑making powers, which have been exercised and which bring into a sort of mixture of High Court Rules and whatever is appropriate, in that sort of grey area of working out how the jurisdiction is to be applied, what rules are to be applicable, you have to look at the treaty to work out how to deal with questions of stay.

HIS HONOUR:   But do you say that a stay is now in place by operation of some legislation?

MR MOSHINSKY:   No, I do not say that.  I do not make ‑ ‑ ‑

HIS HONOUR:   If that is right, then the question of stay becomes a question for exercise of discretion according to ordinary principles.  I would understand the principal matters to which you point are the person having the benefit of the judgment is not resident in either this jurisdiction or the jurisdiction of Nauru.

MR MOSHINSKY:   Yes.

HIS HONOUR:   Presumably you point also to the fact that the amount at stake is a large amount.

MR MOSHINSKY:   Yes, I do.

HIS HONOUR:   You point also to, subject to what Mr Williams may say, at least on my examination of the papers so far, seem to be an absence of demonstration of capacity to repay.  Now, does it come to that?

MR MOSHINSKY:   It comes to that.

HIS HONOUR:   Can I just understand though precisely what the procedural basis is upon which we are all working.  Firstly, it is your summons of 22 June 2007.

MR MOSHINSKY:   Yes.

HIS HONOUR:   You rely, do you, on the affidavit of Mr Jacobson of 22 June 2007?

MR MOSHINSKY:   I do, your Honour.

HIS HONOUR:   Is there any objection to my receiving that affidavit, Mr Williams?

MR WILLIAMS:   No, your Honour.

HIS HONOUR:   Yes.  Is there any other material upon which you move, Mr Moshinsky?

MR MOSHINSKY:   Yes.  I do have a copy of the Civil Procedure Act 1972 of the Republic of Nauru which I refer to in my outline.  That is relevant for - one other point that I wanted to make was that interest is available on the judgment pending a stay.

HIS HONOUR:   Is there any debate about interest continuing to run, Mr Williams?

MR WILLIAMS:   No, your Honour.

HIS HONOUR:   Yes.  I do not think I need be troubled about that.

MR MOSHINSKY:   That in essence is my submission.

HIS HONOUR:   Yes.  Perhaps if I hear what Mr Williams has to say?  Mr Williams, what do you say?

MR WILLIAMS:   Your Honour, in an ordinary case this might be one where there was some force in what my learned friend has to say.  I do not contest the central propositions that he makes, but my client is someone who, on the face of it, would be one who brings a risk of inability to repay if the judgment sum is paid to him.

HIS HONOUR:   Do you accept that there is an absence of demonstrated capacity to repay?

MR WILLIAMS:   Precisely, your Honour.

HIS HONOUR:   Yes.

MR WILLIAMS:   However ‑ ‑ ‑

HIS HONOUR:   You then point to the position of the Trust.

MR WILLIAMS:   Yes.

HIS HONOUR:   What exactly is the present position of the Trust as demonstrated on the material - which reminds me, what is the material on which you rely?

MR WILLIAMS:   I rely, your Honour, on the affidavit of Peter Michael Lucarelli, sworn 22 June 2007, and the exhibits to that affidavit.

HIS HONOUR:   Yes.  Is there any objection to my receiving that affidavit, Mr Moshinsky?

MR MOSHINSKY:   No objection.

HIS HONOUR:   There seems to be a rather voluminous bundle of papers there, Mr Williams, including a lot of reference to what is happening in the Supreme Court, not all of it instantly digestible and apparent to me, but what is ‑ to use the vogue expression ‑ the bottom line?

MR WILLIAMS:   The bottom line is this, your Honour.  The material shows reasons why the plaintiff - now the respondent - had concerns, going back to before he even issued this proceeding in Nauru, as to whether he would finish up with an empty judgment.  His concerns in that respect relate to the fact that all of the Trust’s Australian assets are being sold up by receivers.  Receivers presently hold a substantial sum of money in Australia.  They have a tax obligation which has been determined and they are holding funds to determine that tax obligation and, at the end of that determination, no doubt they will, unless otherwise prevented from doing so, remit the balance to the trust. 

Now, the Trust’s own financial position appears to be a matter of considerable uncertainty, and that is part of what the material goes to.  But perhaps the simplest way of taking your Honour to that is in fact to take your Honour to the judgment below in respect of which something is said about that matter.

HIS HONOUR:   Let it be assumed for the purpose of debate that the Trust is in a position of financial embarrassment, evidenced at least by the appointment of receivers and managers.

MR WILLIAMS:   Yes.

HIS HONOUR:   Does it not follow from that fact alone that the interest of third parties may be affected directly or indirectly if the judgment is now satisfied?

MR WILLIAMS:   Indirectly, yes, your Honour, of course.

HIS HONOUR:   And if, following satisfaction of the judgment, an impecunious party was left unable to repay the judgment sum into the assets of the trust.

MR WILLIAMS:   Yes, your Honour.

HIS HONOUR:   Why does that not suggest simply stopping the dance now, holding the position as it is, leaving for whatever consequences may follow, the application of whatever may be any applicable law regulating the position of insolvent or otherwise financially embarrassed entities?

MR WILLIAMS:   Because of this, your Honour.  At the moment only one party is at risk, and that is my client.

HIS HONOUR:   One party is at risk.  The point I put to you is that there are third parties who may be adversely affected, and they are not presently before the Court.

MR WILLIAMS:   In my respectful submission, the proposal which the respondent has put forward that the moneys be paid into his solicitor’s trust account and placed in an interest bearing account, is the best way of protecting everybody’s interests, his own and those other persons who may ultimately have a claim to the funds in the even that this appeal is upheld.  My learned friend’s submission does not address that proposal at all.  The letter which he cites and which is referred to in Mr Jacobson’s affidavit as providing the basis for asserting correctly that my client is impecunious, goes on to make an offer to preserve the funds in an interest bearing trust account pending the outcome of this appeal. 

Now, there would be undertakings by both my client and by instructing solicitors not to deal with those funds except in order to give effect to a judgment on the appeal or a determination of the appeal in favour of the appellant, in which case they would be released back to the appellant, or, of course, in the event that the appeal is unsuccessful then the funds would become, effectively, my client’s own because it would be a payment to him under the judgment.  Now, that proposal has the practical benefit of protecting everybody’s interests ‑ ‑ ‑

HIS HONOUR:   It seems to deal only with the position as between the parties.  It seems to assume that if you win the appeal, you get the money regardless.  You are preferred to that extent.

MR WILLIAMS:   Only in this sense, your Honour.  At the moment we have a judgment which, for other than a stay, we would be entitled to execute.  If there were no stay then we would be entitled to first claim on the moneys that the receivers have by way of garnishee or whatever it may be.  We could institute proceedings to garnishee those funds.  Now, we are not saying that the receiver should pay those funds before they are good and ready because of their own remuneration or the tax issue, but what we do say is that those funds should not be remitted back to Nauru where they may be expended on, for example, one proposal which is in the evidence is a proposal to purchase an aeroplane, which was late last year a reason why the Trust wanted $25 million from the receivers. 

My client does not want to be at risk that the Trust dissipates these funds and, in my respectful submission, there is nothing put forward by the Trust, which one would have thought was the party with the interest in persuading your Honour that interests of third party - presumably its creditors would be adversely affected by the order we propose – that is persuasive, your Honour, of the view that your Honour is effectively inviting me to deal with.  There is a party in Court which has an interest in putting material before your Honour about that. 

The most that your Honour and I can do, with respect, is to debate the potentialities or likelihoods.  But we do not know precisely who might be affected or how they might be affected, because the only party who knows that, namely the Trust, has chosen not to put any material before you about that.

In the ordinary case, your Honour, of a stay pending appeal, an agreement to hold the funds and not disperse them would be an extraordinarily powerful factor against a stay, in my respectful submission.  We have made proposals in the past, and Mr Lucarelli’s material goes to this, to have the money paid into court here in Melbourne.  We would not be opposed to it being paid into the High Court if the High Court has facilities to deal with that, although, we would not necessarily trouble the Court to do that.  We would be prepared to have it paid into any form of protective account where neither party can draw on it pending the outcome of the appeal.

HIS HONOUR:   Do I understand the position then to be this, that if a stay is to go, you say that the stay should be on condition that the judgment sum – whether that is judgment sum and interest may be a separate issue, but at least the principal of the judgment sum – be paid into an interest bearing account in an Australian deposit taking institution is, I think, the relevant description in the joint names of the solicitors for the parties, to be held jointly by them, pending further or other order?

MR WILLIAMS:   We would be delighted by such an order, your Honour, or by such an undertaking, I should say.

HIS HONOUR:   How much is the judgment sum, the principal?

MR WILLIAMS:   Well, the principal is the sum of something over $7 million.  I can get the precise sum for your Honour.  We would say that it ought to include interest up to the date of payment because my learned friend rightly points out that even a stay does not prevent interest from running.  The court in Nauru has specifically held that interest runs at eight per cent on the entire judgment sum.  We have provided material as to the daily accrual of interest and I can see no reason in principle or in practicality as to why the sum that is paid to court to attract further interest, ought not be the entire sum that is due at the moment of payment.

HIS HONOUR:   When was judgment?

MR WILLIAMS:   Judgment was on 29 March, so about three months ago.

HIS HONOUR:   We are talking approximately a quarter’s interest on about $AU7 million at eight.

MR WILLIAMS:   At eight per cent.  It is not an insignificant sum and it is a sum in respect of which we would seek the same protection as in relation to the principle because, in the end, either the sum plus interest is payable or it is not.  It is difficult to conceive of any circumstances in which only the principal would ultimately found to be payable but not any interest.  I am sure the parties could agree about the precise sums, your Honours, as of today or as of the date of payment.

HIS HONOUR:   Maybe, but if I am going to make any order I want to know what I am ordering.

MR WILLIAMS:   Yes, your Honour.

HIS HONOUR:   We can come back to those matters in detail.  The question of principle is presently important.

MR WILLIAMS:   The affidavit sworn by Mr Lucarelli on Friday last, 22 June, in the Supreme Court proceeding, which is exhibit ‑ ‑ ‑

HIS HONOUR:   Why is that before me otherwise than as an exhibit?

MR WILLIAMS:   It is not.  It is exhibit 5 to Mr Lucarelli’s High Court affidavit.  Rather than swear all of the same material again he thought that a convenient way of putting it before the Court.

HIS HONOUR:   Yes.  What are these Supreme Court proceedings?

MR WILLIAMS:   They are proceedings which were commenced by my client, prior to commencement of the Nauruan proceedings, with a view to having a sum set aside in circumstances where my client perceived that the receivers were about to send money back to Nauru, to hold an amount of money out of that in order to await the outcome of the Nauruan proceedings.  They have since been amended, by reason of the matter in Nauru being issued and going to trial, to await the outcome of that case.  Since then we have a proposal further to amend rather than await the outcome of the case, to await the outcome of this appeal.

HIS HONOUR:   And to do what pending appeal?

MR WILLIAMS:   In aid of execution of foreign proceedings, your Honour.

HIS HONOUR:   Yes.

MR WILLIAMS:   The Supreme Court of Victoria has jurisdiction to make Mareva type orders, now called freezing orders under their new rules.

HIS HONOUR:   Why is the condition, which you would now seek for the stay, different from what you are pursuing in other separate proceedings?

MR WILLIAMS:   It is not, in any real sense, different, your Honour.  All we have ever sought is the setting aside of the sum to await the outcome.  What we seek in the Supreme Court proceedings is only that the receivers, prior to paying any money to the Trust, pay the money into court representing the sum of the judgment.  In fact, the offer that is contained in the 29 May letter that I have taken your Honour to in principle – I have not specifically shown you the letter, but it is in the material – was an offer to settle that proceeding on those terms, payment into a join trust account instead.  But the relief that is sought is that the receivers pay that money into the Supreme Court of Victoria’s trust account or account.  In reality, your Honour, we are seeking the same thing.

We would perceive, perhaps rightly or wrongly, that today’s application by the Trust is an attempt in some way to head off that action, or indeed any other action by my client, to obtain a benefit of his judgment.

HIS HONOUR:   What is the present state of the Supreme Court proceeding?

MR WILLIAMS:   Listed for hearing on 26 July, your Honour.

HIS HONOUR:   So there are separate Mareva style proceedings in the Supreme Court fixed for hearing?

MR WILLIAMS:   Yes.

HIS HONOUR:   What is the submission you make about the effect of the pendency of those proceedings on what I should do here?

MR WILLIAMS:   If your Honour perceives a practicality in achieving protection for all parties here, such that it would avoid the necessity for those proceedings to be heard and determined then, in my respectful submission, the result is that your Honour should not hesitate by reason of the pendency of those proceedings to put protection in place.  I do not seek to say, your Honour, that it is in some way an abuse of process for my learned friend to come and ask for a stay pending those proceedings, but I do say, your Honour ‑ ‑ ‑

HIS HONOUR:   I would have thought questions of abuse might rather run the other way.  You have got the bubble proceeding.

MR WILLIAMS:   But I am just opposing this – I am just the respondent, your Honour.  I am respondent to the appeal and I am a respondent to this application.  All I am saying is that this application should not be allowed, in effect, to prevent us from getting effective relief of the type that we seek in the Victorian proceeding unless it is on terms which protect all parties.  Now, if the result of that is that it renders the Victorian proceeding otiose, well and good that will only be a matter of costs for the parties and no proceedings ultimately to determine.  It is my learned friend who comes here asking for a stay, your Honour, in circumstances where he knows that my clients have those proceedings on foot and that they are awaiting determination on 26 July. 

So if your Honour is concerned that my position is an abuse of process, I invite your Honour to recognise that we are, in respect of this application, not the moving party.  The most I say is that if my learned friend wants a stay, he should pay a reasonable price for it.  The reasonable price is protection of all parties, I might say, including Mr Griffith’s clients.

HIS HONOUR:   Yes.

MR WILLIAMS:   For those reasons, your Honour, the existence of the Supreme Court proceedings is background, but not a bar either to the grant of the stay or to the imposition of conditions on a stay.

HIS HONOUR:   Yes.

MR WILLIAMS:   I am instructed, your Honour, that the amount due as at today’s date is $7,698,858.33.  That derives from the calculation from 22 June until today of an additional five days on the amount referred to in paragraph 5 of Mr Lucarelli’s 22 June Supreme Court affidavit.  On that sum interest accrues from today in the amount of $1,654.78 per day.  It is simple interest of eight per cent on the principal sum ordered.

HIS HONOUR:   Yes.

MR WILLIAMS:   If your Honour wishes me to identify particular elements of evidence concerning the Trust position, I am happy to do so.  I do not know that it is hotly in dispute that the Trust is in a difficult financial position itself, but, as I say, no specific prejudice has been pointed to that would be occasioned by this order, at least by a condition on the stay if your Honour was minded to grant a stay on the condition.

HIS HONOUR:   It occurs to me that although the application is cast in terms of a stay of proceedings, further analysis of that proposition may be required.  What emerges from Ruhani, I would have thought, with sufficient clarity, is that at least from an Australian point of view this is the first exercise of the judicial power of the Commonwealth.

MR WILLIAMS:   Yes.

HIS HONOUR:   It was an exercise of the judicial power of the Commonwealth in the original jurisdiction of this Court.  The issue, the fundamental issue, at stake, in the sense of the immediate right, duty or liability to be established by this Court, is the correctness of the determination of the Supreme Court of Nauru:  see Ruhani 222 CLR 489 at 529 to 530, paragraph 115. Because this is an exercise of original jurisdiction and because the Supreme Court of Nauru is the court of a foreign sovereign power, notions of stay may be inapposite. It is not for this Court, I think, to stay the process. Mr Williams, I am talking to you. I am not giving a judgment.

MR WILLIAMS:   I was not sure.  I am sorry, your Honour.  I do apologise.

HIS HONOUR:   Yes.  The notion of this Court staying the process of a foreign court is possibly inapposite.  What then emerges is that the application is perhaps more properly seen as an application for injunction for preservation of subject matter pending first exercise of the judicial power of the Commonwealth.  Ordinarily, little would turn upon that.  Where there are proceedings pending between the parties in another court in which injunctions are sought though, why should this Court intervene?

MR WILLIAMS:   It is my learned friend who asked you to intervene, sir.

HIS HONOUR:   I understand that, but I am now asking you for your submissions, Mr Williams.

MR WILLIAMS:   I think there are two things to say, your Honour.  The first is that the Court is presently seized of the matter and a proposal is before the Court which has the benefit of appearing sensible and beneficial to all parties.  There is nothing that either party presumably would wish to have before your Honour that is not before your Honour.  My learned friend wants protection, presumably, in the meantime so that there is to him a benefit in the matter being determined now.  They are reasons why your Honour might proceed.  No doubt there are reasons why your Honour might not proceed and those reasons would be that the Supreme Court has before it a process which is rather more considered, has gone on over a longer period, and perhaps more well developed and formulated than the

one that is presently before your Honour.  Your Honour might not wish to interfere with that process.  From my client’s perspective, your Honour, my client would simply urge upon the Court that it ought not ‑ ‑ ‑

HIS HONOUR:   Yes.

MR WILLIAMS:   ‑ ‑ ‑ intervene in such a way that the relief that my client seeks in the Supreme Court be rendered nugatory.  An unconditional stay would be in that category because it would be no doubt perceived by the Supreme Court of Victoria, and probably urged upon it, that the court granting a stay is a factor that the Supreme Court of Victoria should take into account.  In my respectful submission, the caution that the Court ought adopt is a caution against granting an unconditional stay.

If the Court were to grant a stay on condition, it becomes a matter for my learned friend’s side as to whether it wishes to take up that condition.  If the Court were to grant a stay on condition that the money be paid into court, or into a joint trust account, or however it may be, that does not oblige my learned friend’s side to make that payment.  It simply gives them the opportunity, if they wish to, to make the payment in return for a stay.  So that a conditional stay would not cause any difficulty in the Supreme Court proceeding.

In my respectful submission, there is no reason why the Court ought hesitate in granting a conditional stay if the Court is of the view that that is an appropriate outcome and put it in my learned friend’s client’s hands as to whether it wishes to avail itself of that stay.  If it does not, then it will fail in obtaining a stay. 

So, in my respectful submission, that is the best way for the Court to deal with the interplay between the two proceedings and, in particular, with the fact that this application has brought in this proceeding in circumstances where the other proceeding is pending.

HIS HONOUR:   Yes.  Anything else you wish to add, Mr Williams?

MR WILLIAMS:   No, your Honour.

HIS HONOUR:   Yes.  Now, Mr Moshinsky, you have heard what I said about whether this application is best characterised as application for stay or is to be characterised as application for injunction preserved subject matter.  I have in mind that stream of authority which I think begins in Wilson v Church in 12 Ch D about preserving the subject matter of litigation.

MR MOSHINSKY:   I respectfully accept what your Honour’s analysis of the true essence of this application to be, but the language of stay has to be looked at because of the conditions of the treaty and because of the relevance of the treaty in terms of exercising that discretion.  I have to draw to your Honour’s attention something very important that has been overlooked or not emphasised so far in the discussion and that is that most of the assets of the Trust are in Victoria and they are in the hands of receivers.

HIS HONOUR:   Why are these issues not issues that are best resolved in the pending Supreme Court proceedings?  Why should I not simply hold my hand, leaving the parties to fight it out in the presently constituted Supreme Court action which is, as I understand it, fixed for trial?

MR MOSHINSKY:   Yes.  I will seek instructions on that.  We see the force of what your Honour is saying, having had the discussion in this matter, and it may be that it may be more appropriate to await the outcome of the Supreme Court proceedings in Victoria before we resume our application for a stay, because the proceedings in Victoria are really directed fundamentally against the receivers.  We contend in those proceedings that they are completely misconceived.  They are misconceived because the judgment from the Supreme Court of Nauru is not enforceable in Australia.  It is not subject to the regulations made under the Foreign Judgments Act (Cth). We contend also that those ‑ ‑ ‑

HIS HONOUR:   If that proposition is right, that puts in an acute form, I would have thought, the questions of fundamental nature of the jurisdiction of the Court.

MR MOSHINSKY:   As we said, there is no doubt about ‑ ‑ ‑

HIS HONOUR:   About whether this Court, for example, should give an injunction directed at the party if the judgment is not one enforceable by process in the courts of Australia. 

MR MOSHINSKY:   There are other issues.  It is not just ‑ ‑ ‑

HIS HONOUR:   There is, I think they would say, hours of innocent amusement to be had in debating all of those issues, Mr Moshinsky.

MR MOSHINSKY:   Yes.  There are certain common law considerations and so on that perhaps I need not trouble your Honour with, but we say that in all the circumstances, we would – if your Honour imposed a condition that we pay the money to Australia there would be, apart from the legal issues arising out of the Foreign Judgments Act, first of all, the claim of the plaintiff - it is an unsecured creditor and all the assets are held by the Victorian receivers.  It would be wrong in principle to provide security to

one creditor by that sort of an order when there are other creditors who are waiting to be paid. 

Those other considerations would have to be looked at.  We would want to produce evidence to your Honour about the actual state of the receivership and whether or not there were funds available to pay the money into court and so on.  The amount involved is so large that it represents something like 12 point something per cent of the whole fund of the Trust.  There are tax liabilities and other pending claims that have to be resolved.  So before you impose any conditions of that kind, we would say that you would need much more evidence and clarity about the position of the Trust.

HIS HONOUR:   Do you say I should stand this application over pending the outcome of the Supreme Court decision?

MR MOSHINSKY:   Yes.  I do, with respect, your Honour.

HIS HONOUR:   Mr Williams, do you wish to be heard in opposition to that proposal?

MR WILLIAMS:   There is little left to be said, your Honour.  If my learned friend wants it to stand over, that is just as practical as requiring him to reinstitute it if circumstances change.  I do not have any objections to that course.

HIS HONOUR:   Yes.

MR GRIFFITH:   Your Honour, may I, with leave, make one short point?

HIS HONOUR:   Yes, Dr Griffith.

MR GRIFFITH:   Your Honour, as I understood my learned friend the…..Victorian proceedings to which we are not a party aim to recover the money in full for the benefit and execution of his client and he offers an option, your Honour, to say that the money may be held in trust or in an account or something.  Your Honour, we have an obvious interest in the matter your Honour referred to that if my learned friends do recover something in execution, it should not be dissipated. 

So what we say, your Honour, is any term of holding this issue over should be on terms that my learned friend undertakes to your Honour that if any moneys are in fact recovered, that they be kept in his solicitor’s trust account and not be dispersed until further order.

HIS HONOUR:   I would be minded simply to stand the matter over, Dr Griffith, because according to the outcome of the Supreme Court proceedings and according to whether you or those for whom you act sought to or were granted any standing in those proceedings, I think there are several possibilities that would emerge.

MR GRIFFITH:   Yes, much leeway for clients with no money, your Honour.

HIS HONOUR:   Yes, and there is a mountain of paper that is generated in this Court already.

MR GRIFFITH:   If your Honour pleases.

HIS HONOUR:   On 18 June 2007, Nauru Phosphate Royalties Trust filed notice of appeal in this Court against the orders of Chief Justice Millhouse made in the Supreme Court of Nauru giving judgment for the plaintiff, the respondent in this Court, Joseph Barrott Harris, in an amount of over seven and a half million dollars.

The appeal to this Court is brought under the arrangements that are recorded in the Nauru (High Court Appeals) Act 1976 (Cth) and are dealt with in Part 43 of the High Court Rules 2004. The appellant contends, and the respondent does not dispute, that the appeal lies as of right.

The appellant, by summons of 22 June 2007, applies for a stay of proceedings on the judgment ordered by Chief Justice Millhouse.  The respondent opposes that application contending that if any stay were to be granted or orders made equivalent to a stay, the orders should be conditioned upon the appellant paying into an interest bearing account in Australia the amount of the judgment or the amount of the judgment and interest as it has accrued to date, to be held pending further or other order. 

There lies behind the application a series of commercial and other facts, not all of which it has been possible to explore in the course of the present application.  Some, at least, of those issues are the subject of pending litigation in the Supreme Court of Victoria in its Commercial and Equity Division in the matter between Joseph Barrott Harris and 118 Bourke Street Pty Ltd as plaintiffs and Nauru Phosphate Royalties Trust, Receivers and Managers Appointed and Others as defendants.  That proceeding presently stands fixed for trial in July of this year.

At the risk of some inaccuracy, it is convenient to summarise the purpose of those proceedings as being to secure a sum which would be available to meet the judgment which now has been obtained by Mr Harris in the Supreme Court of Nauru and against which Nauru Phosphate Royalties Trust appeals. 

The proceedings in the Supreme Court of Victoria were instituted, as I understand it, before judgment had been given in the Supreme Court of Nauru and were originally constituted as proceedings intended to secure funds for satisfaction of the judgment if judgment were obtained in favour of the plaintiff.  The position is made a little more complicated by two facts, one of which is apparent from the way in which the pending proceedings in the Supreme Court are entitled.  Nauru Phosphate Royalties Trust is in receivership.  The fact of receivership is itself some indication that at least in the past the Trust has been financially embarrassed.

The second fact which adds to the complexity of the matter is that a number of persons have sought to intervene in the appeal, whether as interveners or by being joined as parties.  Those persons allege that they are directly affected by the litigation which culminates in the appeal in this Court because they too were named as beneficiaries under the will of the late Roy Degoregore made on 20 August 1996, which is the source, so it is said, of the claimed entitlement of the present respondent to the judgment that he obtained.

As indicated in the course of argument, it is by no means clear to me that the provisions of rule 43.02 of the Rules (applying provisions of Part 42 of the Rules to an appeal from the Supreme Court of Nauru with such variations as are necessary) are entirely apt to engage the provisions of Part 42, particularly rule 42.09, concerning stay of proceedings.

As explained in Ruhani v Director of Police (2005) 222 CLR 489, particularly at 529 to 530, paragraph 115:

The immediate right, duty or liability to be established by this Court in the exercise of jurisdiction confirmed by the Nauru Act is the correctness of the determination by the Supreme Court of Nauru.

As further explained in Ruhani, it follows that the jurisdiction exercised by this Court, being the first exercise of the judicial power of the Commonwealth in respect of the matter, is an exercise of original jurisdiction.

In those circumstances, it may be that what is sought in form as a stay of proceedings in execution of the judgment of the Supreme Court of Nauru is better understood as an application for grant of an injunction to preserve the subject matter of proceedings pending in this Court, injunction of a kind considered in cases such as Wilson v Church (No 2) (1879) 12 Ch D 454 and subsequent cases examining those matters in this Court,

such, for example, as Federal Commissioner of Taxation v Myer Emporium Ltd [No 1] (1986) 160 CLR 220. See also, for example, Beljajev v Director of Public Prosecutions (1991) 173 CLR 28.

Because the proceedings that have been instituted by Mr Harris and 118 Bourke Street Pty Ltd in the Supreme Court of Victoria are fixed for trial and because those proceedings will consider, with greater opportunity for examination of relevant commercial considerations, issues of the kind that would arise in an application for injunction to preserve the subject matter of proceedings in this Court, it is, in my opinion, better to accede to the application of the appellant, Nauru Phosphate Royalties Trust, to stand over its application to a date to be fixed in order to permit the proceedings pending in the Supreme Court to go to trial and be determined.

Accordingly, I propose to order that the appellant’s summons of 22 June 2007 be adjourned to a date to be fixed, reserving liberty to the parties to apply on not less than three days notice in writing to opposite parties and also the solicitor for the applicants for leave to intervene or be joined who have moved on the summons of 7 June 2007.  The costs of the application on the appellant’s summons should be reserved.  The summons of those seeking leave to intervene or be joined as parties should, as those applicants submitted, be stood over for consideration by the Court as constituted to hear and determine the appeal.  The costs of that summons should again be reserved.

Do counsel seek to be heard about the form of the orders that I have indicated?  Dr Griffith?

MR GRIFFITH:   Your Honour, it may not be a matter for the order but we did suggest it would be appropriate to have a procedural hearing for the Court as constituted to resolve these issues of the status of the matter, et cetera.

HIS HONOUR:   I understand that and I am not minded to myself bind the Court or attempt to bind the Court as it will be constituted to hear the appeal.  I think that will be a matter that that panel of the Court should consider for itself, Dr Griffith.  I see the force in what you say.

MR GRIFFITH:   Your Honour, when that panel is known we would seek to have a procedural hearing before that Court in advance of the hearing of the appeal.

HIS HONOUR:   I see the force in what you say.  Anybody else seek to be heard about the form of orders?  No.  They will be orders in those terms.

AT 10.29 AM THE MATTER WAS CONCLUDED