Otis Elevator Company v Guide Rails

[2002] NSWSC 1004

CITATION:	Otis Elevator Company v Guide Rails [2002] NSWSC 1004
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	SC 4383/00
HEARING DATE(S):	9 October 2002
JUDGMENT DATE:	9 October 2002
PARTIES :	Otis Elevator Company Pty Limited (Plaintiff/First Cross-Defendant) Guide Rails Pty Limited (in liq) (First Defendant/Second Cross-Defendant) East Coast Rail Systems Inc (Second Defendant/First Cross-Claimant) Colorado Elevators Inc (Third Defendant/Second Cross-Claimant) Wood Parsons Pty Limited (in liq) (Third Cross-Defendant)
JUDGMENT OF:	Campbell J

COUNSEL :	No Appearance (Plaintiff) R Eassie (First Defendant/Second Cross-Defendant)
SOLICITORS:	No appearance (Plaintiff/First Cross-Defendant) Coudert Brothers (First Defendant/Second Cross-Defendant) No appearance (Second Defendant/First Cross-Claimant) No appearance (Third Defendant/Second Cross-Claimant) No appearance (Third Cross-Defendant)
CATCHWORDS:	PRIVATE INTERNATIONAL LAW - procedure - interlocutory anti-suit injunction - tests for granting of - foreign proceedings raise same issues as have already been determined, or are pending, in New South Wales - foreign proceedings impugn the activities of one of the Court's own officers - PROCEDURE - anti-suit injunction - tests for granting of - foreign proceedings raise same issues as have already been determined, or are pending, in New South Wales - foreign proceedings impugn the activities of one of the Court's own officers - INJUNCTIONS - anti-suit injunctions - tests for granting of - foreign proceedings raise same issues as have already been determined, or are pending, in New South Wales - foreign proceedings impugn the activities of one of the Court's own officers
CASES CITED:	CSR Limited v Cigna Insurance Australia Limited (1996) 189 CLR 345 Re Siromath Pty Limited [No3] (1991) 25 NSWLR 25 Sydlow v TG Kotselas Pty Limited 91996) 20 ACSR 470 Voth v Manildra Flour Mills (1990) 171 CLR 538
DECISION:	Injunction granted

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EQUITY LIST

CAMPBELL J

WEDNESDAY 9 OCTOBER 2002

4383/00 OTIS ELEVATORS v GUIDE RAILS PTY LIMITED (IN LIQUIDATION)

JUDGMENT

1 HIS HONOUR: Guide Rails Pty Limited is a company, 25 per percent of the shares in which were owned by Otis Elevator Company Pty Limited, and 75 percent of the shares in which were owned by Wood Parsons Pty Limited.

2 On 28 August 2000 a transaction occurred, the validity of which has been disputed, where Wood Parsons purported to sell its 75 percent of the shares in Guide Rails to East Coast Rail Systems Inc and Colorado Elevators Inc.

3 Proceedings number 4383 of 2000 are proceedings in which Otis Elevator Company Pty Limited is the plaintiff, Guide Rails Pty Limited is the first defendant and East Coast Rail Systems Inc and Colorado Elevators Inc are the second and third defendants. Those proceedings were begun on 30 October 2000, with Otis seeking the winding up of Guide Rails on the ground of oppression and on the just and equitable ground. On 6 November 2000 an order was made appointing a provisional liquidator to Guide Rails.

4 East Coast and Colorado have been joined in those proceedings because of their claim to be entitled to 75 percent of the shares in Guide Rails. East Coast and Colorado have filed a cross claim in those proceedings in which they name as cross defendants Otis, Guide Rails and also Wood Parsons Pty Limited. In that cross claim they sought to have upheld their claim to be entitled to 75 percent of the shares in Guide Rails. As defendants in the litigation, and parties propounding a cross claim, East Coast and Colorado had an address for service within New South Wales.

5 The cross claim has been dismissed as against Otis, in consequence of the cross claimant's failing to provide security for costs. The cross-claim is otherwise on foot.

6 Comparatively recently the solicitors who had been acting for East Coast and Colorado have filed a notice of ceasing to act. They did this on 1 August 2002. That notice of ceasing to act notified the place of business last known to the solicitors as c/- Callenders and Co, counsel and attorneys, 1 Millar’s Court, PO Box N-7117, Nassau, Bahamas.

7 Earlier this year, on 12 March 2002, Barrett J ordered that Guide Rails be wound up. Mr Vouris, an accountant, from the same firm which had been carrying out the duties of the provisional liquidation, was appointed as liquidator.

8 On 12 September 2002 Mr Vouris' office received a letter from Mr Adrian Powells dated 11 September 2002, enclosing a notice filed in the Supreme Court of the Commonwealth of the Bahamas. Although the letter referred to there being "notices" in the plural, there was only one notice enclosed with the letter. It was a notice of initiation of proceedings in the Supreme Court of the Bahamas by East Coast Rail Systems Inc and Colorado Elevators against Wood Parsons Pty Limited (in liquidation), Guide Rails Pty Limited (in liquidation), Adrian Duncan and Mr Vouris.

9 The claim is one whereby the plaintiffs seek to have upheld the validity of the share purchase contract, whereby they purchased 75 percent of the shares in Guide Rails (or, at least, that is what I take to be meant by the prayer for relief which seeks "an order ratifying the share purchase contract"); an order for specific performance to register the plaintiffs as shareholders in Guide Rails, damages, interest, costs and further and other relief.

10 There is notification in that notice that the recipient was required, within 28 days of receipt of the notice, inclusive of the date of receipt, to enter an appearance in the Supreme Court of the Commonwealth of the Bahamas, but if that was not done, judgment might be given in absentia. Those 28 days will clearly expire very shortly.

11 As well, Mr Vouris has received a notice of commencement of proceedings number 911 of 2002 in the Supreme Court of the Bahamas. Those proceedings are ones brought by Mr Barry Connor against Guide Rails Pty Limited and various other defendants who are directors, one of whom is a director of Otis, two others of whom are directors of Guide Rails and the fifth of whom is (incorrectly) said to be the liquidator of Guide Rails.

12 In those proceedings Mr Connor seeks payment of an amount of $US11,139.31, together with interest, damages and costs. The claim results from a loan which Mr Connor claims to have made to one of the directors of Guide Rails, on behalf of Guide Rails. Mr Connor apparently made that advance by a credit card debit.

13 In these proceedings now before me, Guide Rails (acting by its liquidator) seeks an anti-suit injunction to prevent the continuance of both of these sets of proceedings in the Bahamas. The basis for seeking the anti-suit injunction concerning proceedings number 1130 of 2002 is that the subject matter of the claim is substantially the same as the subject matter of the claim which has already been dismissed against Otis in this court, and remains on foot in this court against the other cross-defendants.

14 So far as the second set of proceedings are concerned, Mr Connor has lodged a proof of debt with Mr Vouris relating to this self same sum of money. That proof of debt has been rejected by the liquidator. Mr Connor has not sought to appeal against that rejection of the proof of debt.

15 The basis on which the court proceeds in granting an interlocutory anti-suit injunction has been laid down by the High Court in CSR Limited v Cigna Insurance Australia Limited (1996) 189 CLR 345 at 397-398. The first step for the court to take is to decide whether the local court is an appropriate forum in the Voth v Manildra Flour Mills (1990) 171 CLR 538 sense of not being clearly inappropriate for the determination of the matter.

16 In the present case, the issue has already been submitted to the determination of a New South Wales forum, concerning each of the two claims. In one case it has been subjected to the determination of a New South Wales forum by the making of a claim in this court; in the second it has been submitted to this forum by the making of a claim for lodgement of a proof of debt, in a liquidation being conducted under the general supervision of this court. There is, thus, a prima facie case that the New South Wales courts are an appropriate forum for the determination of both sets of proceedings.

17 The next step, according to the High Court in CSR Limited v Cigna is for the court to decide whether it should require the applicant to seek a stay or dismissal of the foreign proceedings. In circumstances where the time is about to expire concerning one set of proceedings, and where there is, at least on the evidence before me at the moment, some basis for suggesting that there has been incomplete and unsatisfactory communication with the Bahamas concerning the second claim, it would not be expedient or necessary to require the seeking of a stay in the Bahamas Court.

18 The next step to be taken is to decide whether there is a serious issue to the tried. In relation to the 1130 set of proceedings, it is, it seems to me, clear that there is a serious question to be tried about whether the proceedings in the Bahamas are ones which raise the self same issues as have already been determined by the New South Wales proceeding against Otis, and remain on foot in New South Wales against the other cross-defendants, and for that reason, the proceedings are, prima facie, vexatious and oppressive.

19 So far as the second set of proceedings are concerned, there is a well established ground for the granting of an anti-suit injunction if the activities of one of the court's own officers are impugned in a foreign forum. As to that see Re Siromath Pty Limited[No 3] (1991) 25 NSWLR 25; Sydlow v TG Kotselas Pty Limited (1996) 20 ACSR 47.

20 The final matter to be considered is the balance of convenience. When both sets of proceedings seem to involve a challenge to the integrity of the New South Wales proceedings, that is a strong factor in favour of the balance of convenience for the granting of a injunction. As well, it is relevant that each of the proceedings is one to which Guide Rails Pty Limited is a party. That company being in liquidation, any proceedings against it would ordinarily only be able to be brought with the leave of the court. No such leave has been sought, or granted, for the bringing of the proceedings in the Bahamas. Under the circumstances, it is appropriate for the granting, on an ex parte basis, of the anti-suit injunctions which are sought.

21 It will be necessary for the orders to be served in the Bahamas. Because the time for entering an appearance in the first of the matters will very soon expire, it is appropriate to permit service of the orders by an expedited electronic means. Nonetheless, it is appropriate for service of the notice of motion and supporting affidavits to occur in the traditional way. There should also be provision for the respondents to the notice of motion to have the opportunity to put on any evidence that they might wish to put on in support of any application to dissolve the injunction.

22 The form of the injunction which I propose to make is an injunction expressed to operate "until further order". In framing it in this way, I am not seeking in any way to alter what would ordinarily be the onus on an applicant, at the return of an injunction which had been granted ex parte, to convince the court of the appropriateness of extending the injunction, if that appropriateness were to be challenged. However, it seems to me that, given that it is not inevitable that the appropriateness of extending the injunction will be granted, it is perhaps less costly for the parties if an order is made in the form of "until further order".

23 I make orders in accordance with the short minutes which I initial, date with today's date and shall place with the papers. These orders may be entered forthwith.

24 I note the usual undertaking as to damages which is referred to in the short minutes of order.

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Last Modified: 11/04/2002