Oswal v Yara Australia Pty Ltd [No 3]
[2011] WASC 255 (S)
•28 SEPTEMBER 2012
OSWAL -v- YARA AUSTRALIA PTY LTD [No 3] [2011] WASC 255 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2011] WASC 255 (S) | |
| Case No: | CIV:3078/2010 | 14 AUGUST 2012 | |
| Coram: | KENNETH MARTIN J | 28/09/12 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Costs reserved | ||
| B | |||
| PDF Version |
| Parties: | RADHIKA OSWAL YARA AUSTRALIA PTY LTD PANKAJ OSWAL YARA PILBARA HOLDINGS PTY LTD (Formerly known as BURRUP HOLDINGS LTD) TOR HOLBA VINOJIT AMBALAVANER YARA PILBARA FERTILISERS PTY LTD (Formerly known as BURRUP FERTILISERS PTY LTD) RAMESH SODUM IAN CARSON, DAVID MCEVOY AND SIMON THEOBALD AS THE RECEIVERS AND MANAGERS |
Catchwords: | Costs orders Preliminary issue Answers on preliminary issue not determinative No clear outcome for residual litigation Unresolved issues Turns on own facts |
Legislation: | Nil |
Case References: | Oswal v Yara Australia Pty Ltd [2011] WASC 355 Oswal v Yara Australia Pty Ltd [No 3] [2011] WASC 255 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
YARA AUSTRALIA PTY LTD
First Defendant
PANKAJ OSWAL
Second Defendant
YARA PILBARA HOLDINGS PTY LTD (Formerly known as BURRUP HOLDINGS LTD)
Third Defendant
TOR HOLBA
VINOJIT AMBALAVANER
Fourth Defendants
(BY ORIGINAL ACTION)
- YARA AUSTRALIA PTY LTD
Plaintiff
AND
RADHIKA OSWAL
First Defendant
PANKAJ OSWAL
Second Defendant
YARA PILBARA HOLDINGS PTY LTD (Formerly known as BURRUP HOLDINGS LTD)
Third Defendant
TOR HOLBA
VINOJIT AMBALAVANER
Fourth Defendants
YARA PILBARA FERTILISERS PTY LTD (Formerly known as BURRUP FERTILISERS PTY LTD)
Fifth Defendant
RAMESH SODUM
Sixth Defendant
IAN CARSON, DAVID MCEVOY AND SIMON THEOBALD AS THE RECEIVERS AND MANAGERS
Seventh Defendants
(BY COUNTERCLAIM)
Catchwords:
Costs orders - Preliminary issue - Answers on preliminary issue not determinative - No clear outcome for residual litigation - Unresolved issues - Turns on own facts
(Page 3)
Legislation:
Nil
Result:
Costs reserved
Category: B
Representation:
Original Action
Counsel:
Plaintiff : Mr M N Solomon
- First Defendant : Mr J C Sheahan SC &
Mr R W Douglas
Third Defendant : No appearance
First-named Fourth Defendant : No appearance
Second-named Fourth Defendant : No appearance
Solicitors:
Plaintiff : Norton Rose Australia
First Defendant : Clayton Utz
Second Defendant : Hotchkin Hanly
Third Defendant : Ashurst Australia
First-named Fourth Defendant : Gadens Lawyers
Second-named Fourth Defendant : Gilbert + Tobin
Counterclaim
Counsel:
Plaintiff : Mr J C Sheahan SC &
Mr R W Douglas
First Defendant : Mr M N Solomon
Second Defendant : Mr J C Giles
Third Defendant : No appearance
First-named Fourth Defendant : No appearance
Second-named Fourth Defendant : No appearance
Fifth Defendant : No appearance
Sixth Defendant : No appearance
Seventh Defendants : Mr K J Mony De Kerloy
Solicitors:
Plaintiff : Clayton Utz
First Defendant : Norton Rose Australia
Second Defendant : Hotchkin Hanly
Third Defendant : Ashurst Australia
First-named Fourth Defendant : Gadens Lawyers
Second-named Fourth Defendant : Gilbert + Tobin
Fifth Defendant : Freehills
Sixth Defendant : No appearance
Seventh Defendants : Freehills
Case(s) referred to in judgment(s):
Oswal v Yara Australia Pty Ltd [2011] WASC 355
Oswal v Yara Australia Pty Ltd [No 3] [2011] WASC 255
(Page 5)
1 KENNETH MARTIN J: On 14 September 2011 I delivered reasons providing answers to a series of questions framed at six different time periods on agreed preliminary issues: see Oswal v Yara Australia Pty Ltd [No 3] [2011] WASC 255 (primary reasons). No substantive orders were made at that time, although I am advised that an appeal against my decision has been instituted by the first defendant (Yara) and that other parties have filed cross-appeals to the Court of Appeal, which are all presently pending.
2 Further issues concerning the same parties subsequently arose in a related action I dealt with: see Oswal v Yara Australia Pty Ltd [2011] WASC 355, delivered 19 December 2011.
3 The question now arises as to dispositive orders following my reasons of 14 September 2011, including as to costs. Somewhat unusually, all parties have moved for costs orders in their favour in the aftermath of those reasons and the answers provided in respect of questions posed as preliminary issues: see primary reasons [451] and following.
4 There have also been some subsequent developments involving these parties and others which have arisen throughout 2012, suggesting the 'sting' may have subsided in what remains to be determined in the present action. In particular, a 49% shareholding in Yara Pilbara Holdings Pty Ltd (YPH), which is the company formerly known as Burrup Holdings Ltd, has been sold to Apache Fertilisers Pty Ltd (Apache). Yara has acquired a further 16% of shares in YPH, taking its shareholding to a majority 51% position.
5 All parties filed extensive written submissions and further affidavit materials for the purpose of having me evaluate arguments over entitlements to the costs of the trial of the preliminary issues.
6 In the end, in the somewhat unique circumstances of the present case, I am of the view that I must reserve all costs issues surrounding the hearing and determination of the preliminary issues, at least until the end outcomes in this litigation become clearer and can translate into substantive final orders or declarations, either on Mrs Oswal's claims, or on the relief Yara seeks by its counterclaim.
7 In brief summary, the following considerations have led me to the view that costs issues should be reserved:
(Page 6)
- A. The preliminary issues I agreed to resolve at the parties' requests dealt only with contractual construction, mainly in relation to the meaning of certain key clauses in a shareholders' deed and a share sale agreement (the SD and the SSA as defined in the primary reasons).
B. In the wake of answers provided on the construction issues, only the seventh defendants by counterclaim (the former receivers of Yara Pilbara Fertilisers Pty Ltd (YPF), which is the company formerly known as Burrup Fertilisers Pty Ltd) have moved for final consequential orders resolving the claim in this action.
C. The former receivers and managers moved for the complete dismissal of Mrs Oswal's claims. However, dismissal is not appropriate at this time. It is apparent from her pleading that Mrs Oswal raises other causes of action going well beyond issues of pure contractual construction, including statutory oppression, estoppel and rectification. Those arguments have not been considered, let alone resolved. Until then it would be premature to unilaterally terminate Mrs Oswal's action. For instance, it is possible she may still seek declaratory relief concerning her individual right to appoint a director or directors to the board of YPL at some future point, invoking considerations beyond mere contractual construction relating to the SD and the SSA.
D. The position, then, is that final orders cannot be made at this time on either Mrs Oswal's claim or on Yara's counterclaim.
E. The question is whether the outcome of the preliminary issues was such that a successful or substantially successful party or parties can be identified in whose favour costs orders should be made. My view as to that proposition is in the negative.
F. The outcome of the hearing of the preliminary issues, in my view, saw no party as entirely successful in having all propositions they had sought to establish before me accepted. There remain robust arguments from each side about who was substantially successful or tactically successful upon their construction arguments. The reality is that the determination of the preliminary issues involved a complex exercise in contractual construction. Each side ran numerous arguments. The primary reasons attempted to resolve the significant construction arguments raised. But it still remains
- to be seen how the answers provided to the questions posed will affect the ultimate outcome of this litigation.
- G. Absent a clear winner, in my view it would be more prudent, not to mention just, to wait to resolve costs issues associated with the determination of preliminary issues until the end outcomes concerning Mrs Oswal's claim and Yara's counterclaims are known.
H. I am led to that position first because, as the primary reasons reflect, on the assessment of extremely complex arguments, no party fully succeeded in establishing everything it was seeking to show in terms of the construction positions advocated at the hearing.
I. Next, I am advised that Yara has commenced an appeal against the primary reasons and other parties have filed cross-appeals. These appeals presently remain unresolved. So it is possible that my answers to the preliminary issues may be varied, and that the final outcome of this action and counterclaim then be guided by alternative construction outcomes framed elsewhere. Potential for the situation to change by reason of further inputs is a reason to wait before finalising costs orders associated with the preliminary issues.
J. As already mentioned, I am informed YPH shareholding control has altered and that Yara is now the 51% majority shareholder, with Apache holding a 49% share. But Mrs Oswal is pursuing proceedings in the Supreme Court of Victoria, challenging the validity of the ANZ Bank's realisation through sale of her 35% YPH shareholding. I am told that that challenge is framed in a context of issues which have been raised by Mrs Oswal over the validity of ANZ's securities and thereby its rights to realise Mrs Oswal's 35% shareholding in YPH. Outcomes in the unresolved Victorian litigation also have some potential to impact against this action. So does another action pursued by Mr Oswal in the Supreme Court of Victoria, where he challenges the reasonableness of the marketing and sale process concerning Mr Oswal's 30% shareholding in YPH.
K. Although my answers to some of the preliminary issues might be read as providing a basis for concluding that Mrs Oswal's attempted appointment of the sixth defendant by counterclaim
- (Mr Sodum) as director of YPH was inherently flawed, I have, as indicated, only considered to date issues of construction concerning the SD and the SSA. It remains to be seen whether further non-contractual causes of action could possibly bear upon my final assessment of the validity of Mr Sodum's appointment as Mrs Oswal's exclusively appointed nominee director to YPH.
- L. I have by no means finally resolved, and would need to hear more argument upon, questions regarding the status of Mr Pankaj Oswal as a continuing nominee director of YPH in the period after the execution of the SSA. Considerations applicable to the resolution of those questions extend well beyond issues of contractual construction.
M. Yara's counterclaim also raises a number of further issues, particularly concerning declarations it seeks as to the validity of resolutions carried by the board of YPH promoted by Yara's nominee director Mr Tor Holba in the last months of 2010. I have not as yet heard argument on, let alone resolved issues raised by, Yara's counterclaim concerning the validity of those resolutions. Those issues could raise factual disputes and require evaluations going beyond pure contractual construction.
N. I expect that the legal costs incurred in the hearing of the preliminary issues on behalf of the receivers and managers appointed to YPH will have been met out of realisations from the receivership process or, if not, by indemnification from the appointing secured creditor, ANZ. I see no question of real urgency in a resolution of these costs issues due to the receivers and managers being out of pocket, exposed to personal liabilities or to prejudice associated with their proper participation in the trial of the preliminary issues. Hence, some degree of deferment concerning these costs, until end outcomes in Mrs Oswal's claim and on Yara's counterclaim in this action are clearer, will not deliver any significant prejudice. Nor for that matter has Yara or Mr or Mrs Oswal sought to demonstrate any financial prejudice to their respective positions arising out of a deferment of a resolution of these costs issues.
8 Accordingly, my view is that the costs of the trial of preliminary issues should be reserved until further order.
(Page 9)
9 As there is a pending appeal by Yara and cross-appeals by other parties, the matter whilst case managed in my CMC List should now stand in abeyance until the appeal process concludes. There is, of course, liberty to apply for all parties concerning reserved costs of the hearing and determination of the preliminary issues in the action itself and in the counterclaim.
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