Paringa Mining & Exploration Company Plc v North Flinders Mines Limited

[1988] HCATrans 234

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• 'II

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IN THE H-lffit COURT OF AUSTRALIA

Registry No Cl7 of 1988

B e t w e e n -

PARINGA MINING & EXPLORATION

COMPANY PLC

Applicant

and

NORTH FLINDERS MINES LIMITED,

C.L. MAY MELLOR LAING &

CRUICKSHANK LIMITED,
GEOFFREY HUGH STEWART,
JOHN JOSEPH den DRYVER,

CLEMENS FREDERICK WEGENER,

PETER RICHARD MITCHELL,

DEAN WILFRED HOSKING

Respondents

and

AUSTRALIAN DEVELOPMENT LTD

Intervener

Application for special

leave to appeal

Paringa(2)

MASON CJ
BRENNAN J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 14 OCTOBER 1988, AT 3.41 PM

Copyright in the High Court of Australia

MlT13/l/RB 1 14/10/88

MR T.A. GRAY, QC:  May it please the Court, I appear with my

learned friends, MR J. WELLS and MR C.N. BAGOT, for

the applicant. (instructed by Piper Alderman)

MR A.R. CASTAN, QC:  I appear with my learned friends,

MR J.W. DE WIJN and MR K.W.S. HARGRAVE, for all the

~~respondents other than the second respondent.

(instructed by Baker O'Loughlin)

MR P.C. HEEREY, QC:  I appear with my learned friend,

MR A.L. CAVANOUGH, for the second-named respondent,

Mollison Litchtield)u C.L. Mav Mello~ Laanry & Cruickshank Limited.(instructed by

MR A.G. ARCHIBALD, QC: If the Court pleases, I appear with my

learned friend, MR P.R. HAYES, for Australian

Development Limited, the intervener. (instructed

by Fisher Jeffries)

MASON CJ:	Yes, Mr Gray.
MR GRAY:	May it please the Court, it is the applicant's
submission that something has gone seriously wrong
with the administration of justice in this case. process that we draw attention to to demonstrate that.
Might I start by listing those five essential features
to the Court.

First, there was a failure by a single judge to

grant interlocutory relief when in the applicant's

case it is vital because its absence would destroy

the substantive rights in issue in the case.

Secondly, the failure by the single judge to

protect the plaintiff's absolute right of appeal by

interim relief, pending appeal, thus rendering that

right of appeal nugatory.

Thirdly, the unavailability of the· Full Court

of the Supreme Court of South Australia, by direction
of the Chief Justice, to hear either the appeals or

any application for interim relief pending appeal.

MASON CJ: But was not an application for interim relief pending

appeal heard, not by the Full Court, but by a single

judge of the Full Court?

MR GRAY:	There was, at one stage in the matter, such an
application heard by another single judge of the court, Justice von Doussa, not pending appeal but for a limited period, on a Saturday night just to hold the
matter. That came back on before the judge who
initially refused interlocutory relied and he dismissed
the application for interim relief.
MASON CJ:	But the unavailability of the Full Court to deal with

an application for protection pending the hearing of appeal then disappears out of the case, does it not?

M1Tl3/2/RB	2	14/10/88
Paringa(2)

MR GRAY:  No, if the Court pleases, because the plaintiff/

applicant wished to pursue that very matter before

the Full Court. It had not obtained interim relief

pending appeal. That had been refused by the judge-

MASON CJ: __ But cannot the question of protection pending an

--appeal be determined by a single judge of the court

rather than the Full Court itself?

MR GRAY:	Yes, it can, but in this case there was a failure to
provide that protection, we say in circumstances of demonstrable error, and it has been quite impossible
to obtain any further hearing on that.
MASON CJ:	Then your criticism is of the refusal by the single

judge of interim relief?

MR GRAY:	Yes.
MASON CJ:	And the unavailability of the Full Court disappears

out of the case.

MR GRAY:	If the Court pleases. The fourth feature that is most unusual in this case has been the direction that one judge of the court is to hear all interlocutory applications, that being the present trial judge,
Justice Legoe.

MASON CJ:  Yes, I can understand that one point. One might have

expected, perhaps, that a judge other than the judge

who had actually refused the application at first

instance for an interlocutory injunction might have

been chosen to deal with the question whether interim

relief pending appeal should be granted.

MR GRAY:	Yes, Your Honour, and in the special circumstances of
this case, Justice Legoe has refused to hear, thus far,
any further application for that interlocutory relief
or interim injunctive relief pending trial to hold the
status quo.

MASON CJ:	You mean while the trial is continuing?
MR GRAY:	While the trial is continuing and an application based
on what is said to be fresh evidence and is hinged in
part on a submission of deliberate non-disclosure of
relevant material at the time of the earlier interlocutory
application for injunctive relief that was refused. So
the plaintiff/applicant at the moment is at trial. It seeks to have the trial judge hear an application for
interlocutory relief based on fresh evidence obtain by
it as late as last Friday and the learned trial judge
will not hear that application. And in respect of that
decision which was made on Tuesday, the application was
renewed following the provision of Justice Toohey's reasons from this Court in a stay matter, the application

M1T13/3/RB	3	14/10/88
Paringa(2)

was renewed with the same result.	The learned trial
judge did n_ot hear the matter.	And at the end of the

day, if the Court pleases, we say a most incongruous

situation has arisen. The events giving rise to this

dispute essentially came to a head on 19 September this

year. On 30 September the learned trial judge

~~ordered a full trial on one week's working notice.

That is within approximately 20 days from the day of
the events. It is a very substantial conunercial cause,
it involves on any view something in the order of

$60 million, it involves a claim for oppression under

section 320 of the Code which essentially calls for

injunctive relief ...... And the judge on the one hand,

recognizing the need for urgent disposition of the matter ordered such an early trial, which continues

today; on the other hand he declined to hold the status,

quo in the intervening· period. And we say, if the Court
pleases, that the rationale for granting such an urgent

trial must be in such circumstances to try to protect

parties' positions, but the nature of the prejudice in

this case is such that it can occur in minutes. Once

the protective umbrella of interim relief is removed

a simple phone call to a -stockbroker can bring about

catastrophic damage as far as the plaintiff is concerned.

Its right are rendered nugatory.

Now, I have identified, if the Court pleases, those

essential features that we say, when viewed in a

cumulative way, go to show something seriously has

gone awry and in such circumstances that we invite this

Court to grant special leave by reason of the provisions

of section 35A(b) of the JUDICIARY ACT. It is a case

in which we say the Court should intervene for the

reasons of administration of justice arising out of this

case.

MASON CJ:  You are asking this Court to do a lot, are you not,

because this Court has expressed on a number of occasions

in the past its unwillingness, except in exceptional

circumstances, to grant special leave to appeal from the

decision of a single judge.

MR GRAY:  We accept that.

MASON CJ: And thereby deny ourselves the benefit of a consideration

of the question by an intermediate court. Now, that

hurdle becomes all the higher when you consider that the

orders to which your application for special leave

relates are all interlocutory orders. It is a rare

thing indeed for this Court to grant special leave to

appeal in relation to interlocutory matters.

MR GRAY:	Yes, we accept that both those, of course, represent the general position. This case is exceptional. Take the first of the points that Your Honour the Chief Justice
raises:  we say this, that this is a case where we
cannot get before the Full Court.  We would like to be

MlT13/4/RB	4	14/10/88
Paringa(2)

arguing this matter before the South Australian Full

Court at the moment. We cannot get there.	It is
impossible.

MASON CJ:  But you are going to get, are you not, before the
South Australian Supreme Court, the Full Court, in

~~November if you pursue an appeal?

MR GRAY:  Yes-

MASON CJ: And you are not going to get before the Full Court

of this Court any earlier than that, and indeed you

may not get before this Court in November.

MR GRAY:	If the Court pleases, if we can have interim protection
until we can argue that before the Full Court we are
protected - the Full Court of the Supreme Court of
South Australia, we are protected, but the difficulty is that any gap, even a matter of half an hour, for
reasons I can go to- - -

MASON CJ: You need not demonstrate that. But what I was going

to say to you was the object of your proceeding in

this Court is not to obtain special leave to appeal

and to prosecute an appeal but really to obtain

interim relief.

MR GRAY:	If the Court pleases, no. We are here seeking special
leave because we cannot obtain relief from any other
court. It is simply not possible for us to obtain any
relief from the Supreme Court of South Australia.
MASON CJ:	But interim relief?

MR GRAY: Interim or interlocutory relief.

MASON CJ: That is the point I am making.

MR GRAY:	Yes, it is simply impossible, so we say that if we
can demonstrate - perhaps if I go to Your Honour's
second point, this is interlocutory in nature. True,
it is, but it is interlocutory in nature that does
erode substantive rights and we draw the distinction
between, on the one hand, matters of discretion that
go to practice and procedure, and on the other hand,
matters of discretion that go to substantiv.e rights.
Now, on occasions, interlocutory decisions of a
discretionary nature affect substantive rights. When
they do so, they fall into that class of case, we would say, that is exceptional, and we hope to persuade
Your Honours, and shortly we will present the argument, that here, the main injunctive relief is taken, the
plaintiff's substantive rights are gone.
MASON CJ:	But the point I have difficultywith at the moment is

this: let us make the most favourable assumption from

your point of view and let us assume that we grant you

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Paringa(2)

special leave to appeal against these interlocutory
orders and the case comes on for hearing in the

November sittings of the Court, we will say round about 17 November. Will not the trial have concluded then?

MR GRAY: It may well not have.

MASON CJ:  But is there not a distinct possibility that the trial

will have concluded by then?

MR GRAY:	There is a possibility; at the moment, as I understand
it, the first witness is still in the witness box.

MASON CJ: If there is a distinct possibility that it will have

concluded by then, what is the point of our entertaining

an appeal in relation to interlocutory matters? The

interlocutory situation will by then, in the assumptions

I am putting forward, have been displaced by a final

determination.

MR GRAY:	If the Court pleases, it is possible that the trial
itself might finish by the 17th, but not judgment
delivered.  We would say that the prospects of having
a judgment handed down by 17 November, the way the
trial is progressing at the moment, appear remote. I
cannot tell you the precise number of witnesses
opened but it is substantial and the first witness has
been cross-examined for more than a day.
MASON CJ:	One can only assume, as Justice Brennan points out

to me, that if you make that assumption about the

delay in the delivery of judgment on the part of the

single judge of the Supreme Court of South Australia,

you must be compelled to make similar assumptions in

relation to delay in the delivery of judgment in this

Court. It is highly unlikely, if the case is as complex as you say it is, that we would be in a p9sition to

deliver judgment on an appeal on 17 November.

MR GRAY:	The appeal in regard to the interlocutory matters,
we would respectfully submit, is in a narrow compass. We would put to Your Honours, and in fact can shortly
do so, identify three clear and demonstrable errors by
example, on the initial interlocutory application we the primary judge at each interlocutory stage. For
say that on his express words His Honour applied the
wrong test. His Honour required the plaintiff to
establish a clear and strong case, rather than an
arguable or triable issue.  He applied, if the Court
pleases, what has become the outmoded test for the
normal injunction case.  We can demonstrate that as
being an error of principle.

We say, secondly, that the balance of convenience

is all one way and his discretion must have miscarried

there.

MlT131'6/RB 6 14/10/88

Paringa(2)
BRENNAN J: That would ordinarily lead to a setting aside of the

decision and a remitting of the matter to apply the

appropriate test.

MR GRAY:	Yes, and if the Court pleases, a holding order until
that argument could take place.  So from our point of

~-=view, we would say we could demonstrate to this Court

on the appeal that the case is so strong that this

Court would in fact act iilllilediately. We do not shy

from that; we say there is a very strong case for an

interlocutory injunction and that the primary judge

had simply misdirected himself as to the appropriate

test and it is a plain error of principle and we would

invite this Court to act.

But, in the alternative, we would be happy to have

the matter remitted provided there was the usual

holding order till the matter be argued.

The second aspect of the matter, that is the

learned primary judge's refusal to grant interim relief

is, again, a clear demonstrable error of principle. What

His Honour did was to say that he treated the issues on

the interlocutory application on the one hand, and the

issues on the interim application pending appeal on the other as being

synonymous. And he completely misunderstood or

misapplied what we have described as the ERINFORD

principle, the decision of Justice Megarry, and

Mr Justice Megarry draws the distinction between the

nature of interlocutory applications on the one hand
and the test to be applied, and the nature of the
interim relief pending appeal on the other and the test

to be applied, and I will take the Court to that and

demonstrate the nature of that difference.

MASON CJ: Let us first understand what are the orders that were

made in the court below against which you seek special

leave to appeal. Now, am I right in thinking, first

of all, we have Mr Justice Legoe's refusal on

30 September to grant interlocutory relief by way of

continuing the ex parte injunctions?

MR GRAY:	Yes, we do.
MASON CJ:	Now that is the first thing against which you seek

special leave to appeal. Now, secondly, this is in

the first, again, of your special leave applications,

you complain of Mr Justice Legoe's dissolution on

3 October of the interim injunction granted by

Mr Justice Von Doussa on 1 October?

MR GRAY:	Yes.
MASON CJ:	Then the final matter which seems to be the subject

of your first application for special leave to appeal

is the refusal of Mr Justice Legoe on 3 October to

entertain an application for an expedited hearing

M1Tl3/7/RB	7	14/10/88
Paringa(2)

by the Full Court and also of an application for an

interlocutory injunction pending the appeal to the

Full Court?

MR GRAY:  Only the latter. It is the failure to entertain or

grant the application for what we would call interim

~~relief pending appeal.

MASON CJ:	To the Full Court?
MR GRAY:	To the Full Court, and that is where we say we can
demonstrate to Your Honours on the face of the
documents a clear error of principle in the application
of what we describe as the ERINFORD principle.
MASON CJ:	And then the fourth matter is the subject of the

second special leave application, Cl7 of 1988,

His Honour's refusal on 11 October to hear and

determine an application for interlocutory relief

pending the trial?

MR GRAY:	Yes, during trial. And that application was sought to
be renewed following the publication of Justice Toohey's
reasons on the afternoon of 11 October, it was resumed on the morning of the 12th, and the learned trial
judge, having had the advantage of those reasons, still declined to exercise jurisdiction and hear the
application. And can I indicate this to the Court,
on 11 October when the matter was first raised the
defence said, ah, this is a delay tactic, and in answer to that the plaintiff/respondent, "We undertake to open the case immediately, proceed with the trial immediately, argue interlocutory matters on the usual
adjournment hour, providing we have an interim order
to hold us over", to demonstrate our bona fides, but
that invitation was not accepted.
BRENNAN J:	Mr Gray, is it right to say that the effect of all

everything else is passed- - -

orders other than that of 11 October is now spent?

MR GRAY: It is; in fact, if the Court pleases, that is the

rationale behind Justice Toohey's decision when

His Honour was asked for an interim order pending

special leave and he pointed out that, well, the trial

is about to start today and the trial judge has this

jurisdiction to hear any application and, with respect,

it is rather obvious that time was allowed for such an

application to be made and Justice Toohey's remarks

during counsel's address indicated he wished that done;

it was made, and Justice Legoe refused to exercise the

jurisdiction, would not hear the plaintiff.	The
plaintiff is in the position - - -

BRENNAN J: Can I just interrupt you to say, why is it that an

appeal does not lie to the Full Court of the Supreme

M1Tl3/8/RB	14/10/88
Paringa(2)

Court of South Australia against Mr Justice Legoe's

refusal to entertain an application for relief during

the trial?

MR GRAY:  It does lie, but it cannot be heard?

BRENNAN -h- Why can you not apply for interim relief to a judge

of the Full Court to give you the protection which you

say you need?

MR GRAY:  We have tried, and we cannot.

BRENNAN J:  Why? To whom?

MR GRAY:	An approach has been made for the Full Court to be
convened to hear either the appeal immediately or an application for an interim order - - -

MASON CJ: But that all seems to have been rather informal. You

do not seem to have taken out a motion returnable before

the Full Court for an expedited hearing and for an

interlocutory injunction giving you interim protection

pending an appeal.

MR GRAY:	If the Court pleases, the practice of the court in
South Australia is for an approach to be made, and it
was made, to the Chief Justice in chambers for an
expedited hearing and legal advisers attended with, at that point of time, either the notice of appeal or
a draft notice undertaking to lodge, and the answer
was "The matter cannot be heard until November at the
earliest".
MASON CJ:	But that all appears to have been done, as it were,

informally, in an administrative fashion and, after

all, you cannot really complain of what is done

administratively ra~r than judicially. I should have

thought the appropriate thing to do wa$ to take out a

formal motion, bring it on before the Full Court for

hearing.

MR GRAY:	The problem is that one cannot get it before the
Full Court until November.  He just will not hear the
matter. It simply is not possible to go before a
Full Court in Adelaide before November. The matter
will not be heard.

MASON CJ: But surely it is possible to get before a Full Court

to hear a motion, as distinct from an appeal.

MR GRAY: No. It simply is not possible. Just to put the

matter in perspective, Justice Legoe's decision -

refusal was made at about 1.20 on the Tuesday and

the approach was made on the Wednesday morning at

approximately 9.15 Adelaide time, for an urgent

matter to be brought on before the Full Court- - -

MlT13/9/RB	9	14/10/88
Paringa(2)

MASON CJ: It strikes me as extraordinary, Mr Gray, that you

cannot get a motion returnable before the Full Court.

MR GRAY: If the Court pleases, and I am happy to go to the

affidavit material, that is the position and that is

why we are before this Court. We would be very happy

~~to argue this matter before the Full Court of South

Australia. That is our wish. We are here reluctantly.

As Your Honour the Chief Justice points out, it is

most unusual to be here from a single judge, let alone

for an interlocutory matters, albeit against

substantive rights. We are here because we cannot be

heard in the Full Court of South Australia.

MASON CJ:  We are not a Court that exercises jurisdiction in the

place of the Supreme Court of South Australia.

MR GRAY:	We would not be here if we could be heard in South
Australia.  We have been seeking, in regard to various
matters, the Full Court's attendance but there is, if
the Court pleases, an established practice as to how
these matters are dealt with in South Australia, and
that practice has been followed and we cannot be heard.
The door there is closed at the moment.
BRENNAN J:	Mr Gray, you did have an order made by

Mr Justice Von Doussa?

MR GRAY:  Yes.

BRENNAN J: And that was an order which was made, as I understand

it, to maintain the status quo until an appeal that you

wished to have instituted before or heard before the

Full Court could be proceeded with.

MR GRAY: No, that is not quite correct. Justice Von Doussa

granted the order for but four days in very unusual
circumstances on a Saturday night, specifically giving
the parties liberty to apply to come back on and argue
for its continuation or discharge until the appeal

process could be heard.

BRENNAN J: Quite.
MR GRAY:	Justice Von Doussa's order was made on the Saturday
night but specifically in circumstances where he invited invitation back to Justice Legoe.
BRENNAN J:	I appreciate that, but the point is that that is an

instance of an application which was made to a judge

of the Supreme Court other than Justice Legoe for the

purpose of maintaining the status quo whilst you were
proceeding to exercise your rights of appeal before

the Full Court. Now, it was frustrated, I appreciate

that, in your view, by the order subsequently made by

Justice Legoe, but why is it that if we are concerned

about Justice Legoe's order of 11 October, that a

M1Tl3/10/RB	10	14/10/88
Paringa(2)

similar application could not now be made on motion

to the Full Court, if need be heard by a single judge

of that court, to preserve the situation until the

Full Court can hear the appeal from the order of

Justice Legoe of 11 October? Because otherwise what

_you are really saying is, will this Court please

--step in to the breach that is left by the Supreme

Court of South Australia and take over the interlocutory control of these proceedings?

MR GRAY:	Might I answer Your Honour in this way? Justice Von Doussa
order had two problems to it: the first is that it was
discharged by Justice Legoe; the second is that on
3 October the Chief Justice directed that all
interlocutory applications be made before Justice Legoe,
so in practical terms, our ability to get before another
single judge of the Supreme Court was blocked. At the
same time, we cannot get before the Full Court.

Can I pass to the Full Court a one page chronology

that puts the sequence of events and, if the Court pleases, when the sequence of events are seen, the

Court will see the impossible position into which

the plaintiff has been put.	Can I pass to the Court
the chronology.

MASON CJ:  By all means. I think we have some appreciation of

your difficulties, Mr Gray, but the problem is that you

are really asking us to take over the disposition of

interlocutory proceedings in this litigation and it is

a function that this Court is not equipped to discharge.

MR GRAY:	Our application to this Court is to hear an appeal and we seek incidental to that interim relief to hold the status quo of what is in issue in the appeal so that our substantive rights are not lost. We are not here seeking to have this Court supervise the
interlocutory procedures of the South Australian court
in the way that has been described.  We are here
seeking to pursue an appeal in the most unusual
circumstances.

MASON CJ: But really you are, because you are seeking to appeal

against every order that has been made on an

interlocutory basis in these proceedings to date.

MR GRAY:	We seek to appeal against those identified; there have
been others. But they, in respect of each of them,
we can demonstrate when we go to the application book
the clear error of principle that the trial judge
Justice Legoe is making.  I have identified the first
two. In regard to the third- - -

MASON CJ: First of all, can you just identify in the appeal

book where we can find these errors demonstrated.	If
you could just do it very shortly for us, because we
do not want to take up time with it.

MlT13/ll/RB	11	14/10/88
Paringa(2)
MR GRAY:	Yes.	If the Court goes first to pages 51 and 52

of the application book, four lines from the bottom

of page 51, Justice Legoe in his remarks when he

refused the interlocutory application on the 30th:

I simply wish to say that having given serious

consideration to the main factual matters and
the principles in the cases I have come to

the conclusion that I should not grant an

interlocutory injunction. It is a difficult

decision to make because there are a number

of aspects about the case which have caused

me or given me cause rather to give considerable

thought as to how the serious issue is to be

analysed and thus articulating for the purposes

of the application for an interlocutory injunction.

When one considers the issue or issues, and there

are issue or issues between the parties,
certainly,it seems to me that the approach of

the Chief Justice of the High Court in QUEENSLAND

V THE COMMONWEALTH case referred to by

Mr Morcombe is a principle which has, shall I

put it, tipped the balance in the overall

question I have to consider.

And he then goes back to talk about serious question

and balance of convenience.

MASON CJ: Well, the next sentence is obviously right.

MR GRAY:  Yes, it is, he has spoken there the correct words,
but what tipped the balance was QUEENSLAND V THE COMMONWEAI
and as the Court will recall- - -

MASON CJ: It is a case that has nothing to do with this case.

MR GRAY:	Nothing to do with it at all and the principle that
His Honour Justice Legoe has picked up.from QUEENSLAND
V THE COMMONWEALTH is the principle of -'..!a strong and
clear case". That could be demonstrated by a number
of the references and in fact some later remarks
of His Honour on a later application. His Honour
tipped the balance because of the principle in
QUEENSLAND V THE COMMONWEALTH of a clear and strong
case.  In fact, I can just trace that a little more
clearly, if the Court wishes, as to the rather
extraordinary way that came about. His Honour, when the matter first started, spoke in terms of there needing to
be a strong prima facie case, going back to the
BEACHAM test and to which I replied, "No, Your Honour,
times have changed and it is now the question of an
arguable case". His Honour said, "I accept that". My learned friend, Mr Alan Myers, for the defendants
agreed with the submission we put.  Mr Morcorr~e who
appeared for one of the other parties then drew
His Honour's attention to QUEENSLAND V THE COMMONWEALTH
and suggested explicitly that the test was the clear and strong case test, and His Honour picks that up and

MlT14/l/RB	12	14/10/88
Paringa(2)

tips the balance with it.	We say, a demonstrable error
of principle.

Can I turn to the second matter. It appears at

pages 61 through to 63. At the foot of 61, line 34,

-~His Honour is now considering the question of an

interim order pending appeal.

In my judgment the matters that are appropriate to consider for the purposes of extending or granting injunction till the hearing of the appeal are synonymous with the matters that

were extensively canvassed and upon which very

erudite submissions were made for the whole of

last Friday -

that being 30 September.

I admit that was done on a time basis -

His Honour had only allowed limited time for counsel

to argue the interlocutory application -

but that was because there had been a

considerable debate during the earlier

applications which I had heard in the course

of the week prior to last Friday, including

a more informal sitting, which was really

to inform the defendants of the position on

Sunday, 20 September, and of course the more

extensive submissions -

et-cetera.

I have previously referred to the fact but
it seems to me that once again it is appropriate
to repeat it in respect to the current opposition

to this afternoon's application to dissolve the

injunction of Saturday night. As I consider the

issues to by synonymous I accordingly indicate

that in my view I have exhausted my functions

for the purpose of determining whether I should

exercise a discretion to extend the injunction.

And Justice Toohey - - -

MASON CJ:  He disagreed with that statement.

MR GRAY: Yes, he did, and if the Court pleases, if the Court has

regard to the decision of Justice Megarry in the case

of ERINFORD PROPERTIES LTD - I pass copies to the

Court -(1974) 1 Ch 261, the Court will see there

Justice Megarry was dealing with an appeal from a

refusal to grant an interlocutory injunction. A

question of the appropriate jurisdiction in the trial

judge was debated. At pages267 to 268 Justice Megarry

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draws the distinction between the different approaches.

BRENNAN J:  Was the argument raised before Mr Justice Legoe on

this occasion that His Honour was wrong in tipping the

scales on the previous occasion?

MR GRAY:  I am instructed it was. Other counsel argued that

matter.	Mr Bagot was present and instructed it
specifically was.	So we say there that we can

demonstrate to this Court that Justice Legoe has said,

well, I am doing the same thing I did last Friday when

I refused the interlocutory injunction. It is a synonymous activity and to be consistent I will refuse

this, whereas, of course, in considering the question

of an interim order in regard to an appeal as of

right, the test is, can it be said the appeal is

frivolous and the other is is there an extreme balance
of convenience argument. Otherwise than that, the

fundamental guiding principle is that the appeal court

will ensure that the appeal is not rendered nugatory

by the failure to hold the status quo in the interim

period.

But Justice Legoe simply misdirected himself

as to the law.

GAUDRON J: You do have an appeal as of right to the Full Court,

do you, Mr Gray?

MR GRAY:	We do from interlocutory injunction; it is either
grant or refusal. It is section 50 of the South Australian SUPRE11E COURT ACT. We are seeking in regard to each of these matters to exercise that appeal as of right. Things have moved very quickly
in this matter, as the Court can see from the chronology.
Literally day and night the parties and the court seem
to have been engaged in the matter.
The third of the decision that we complain about, if the Court pleases, is not within the present appeal
book because the transcript was not available for its
preparation. But that transcript is now available and
I pass to the Court the relevant volumes. I am
talking about the transcript from 10 October through
to - - -

BRENNAN J: What are we looking at now, Mr Gray? I am not sure

what I should be- - -

MR GRAY:	We are passing to Your Honours some further material not in the application book. It consists of the
further tnanscript of argument before Justice Legoe.
We are particularly dealing with the decision of
11 October refusing interlocutory relief at trial -
not to hear the applications.

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BRENNAN J: This is the decision which really has its bite at

the moment?

MR GRAY:	Yes, and it is this refusal to hear this application
that we want reversed. As Your Honour has said, the

other matters are rather spent force, although the

~~point about the administration of justice, we say,

is partly fuelled by the fact we are having errors

made at each interlocutory stage.

If the Court pleases, the volume starts at

page 1. It is shown as "Monday, 10 October". That

is a mistake, it is Tuesday, 11 October. Might I

just introduce this matter a little slowly and put it

into context. We started before the opening in

asking His Honour to hear an application for an

interlocutory injunction. That is at page 3 of the

book that we have just passed to the Court. Five

lines from the bottom, page 3:

Before the plaintiff's case is opened we

have an application in the nature of an

interlocutory application for injunctive

relief during the course of the trial.

The defence then obtained an adjournment so they could consider the papers and at page 10 Mr Myers informed His Honour that the application to have an

interlocutory argument was opposed,it being said to

be just a delaying tactic. At line 12:

This application is designed to delay the

cotmnencement of the proceedings and will

have that effect.

If the Court pleases, the other counsel joined with

Mr Myers in that stand. Then at page 15, line 14,

the Court will see that the undertaking was proffered,

page 15 line 14, the undertaking was proffered by

myself that we would open the case the moment the

application was disposed of or, alternatively,

providing there was an interim order until we could

argue it, we would start the trial straight away and
argue the interlocutory application that night.

Then His Honour proceeded to hear, as he says as

page 15, line 19:

Mr Gray, why should I hear this application.

We started to develop the argument as to why His Honour should hear the application and essentially the

argument went this way:  we are not about delay. And

His Honour at some point said, "I don't want to hear you further on that".

BRENNAN J: Where does that appear?

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MR GRAY:	Might I just come back to that precise reference. By that I mean he was accepting it was not a
delaying tactic, but I will have my learned junior
just find that passage.

__ Then we set about saying to His Honour that the

application relied in part on the information already

known to His Honour and in part on two types of

fresh evidence: the first was fresh evidence that

went to the question of triable issues or, as

His Honour has it, a clear and strong case; the second went to balance of convenience. The fresh evidence as

to the strong case or the arguable case was of this
nature: it was said that following discovery two or
three days earlier and .after the argument in the first
application there had been discovery of some minutes

the defendants on the first affidavit were incomplete. His Honour was given a false picture.

and on this occasion it demonstrated that what from

His Honour was only given half the minutes. They

appeared complete but they were not. There were seven

missing pages and those seven missing pages contained

express evidence, hard evidence against the defendant,

on our case, of the improper purpose. It set out

actions in regard to a take-over defensive scheme.

The second was a letter of advice received a

little earlier than the minutes, in which a financial

adviser of the defendants had advised them of way in·

which to avoid control changing. North Flinders Mines

foresaw the problem that control could change. They

sought financial advice as to how that could be avoided.

They were given expert advice about a scheme that would

help to avoid control changing and all this was a
matter of a few weeks before the events of 19 September
when the resolutions were passed.

The plaintiff, for the first time, was seized of hard evidence against the defendant of improper motive

rather than inference. And it was said to His Honour

that was new evidence and His Honour should hear it.

On the balance of convenience there were some new

factors to be put, and I can identify that to the

Court if the Court wishes.

Now, Justice Legoe allowed us to go through the

process of identifying the points we wanted to argue
but not to develop them or expand them or, if the

Court goes carefully through this transcript, the

Court will see we were simply not allowed to prosecute

the matter in the way we wished to. Matters culminated,

at pages 34 to 35. His Honour, at page 30 - - -

MASON CJ: His Honour stopped you and said he had heard

sufficient.

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MR GRAY:  And we, at page 34, said:

I haven't finished our submissions in regard

to the matter and we wish to continue them.

HIS HONOUR: But I have heard sufficient to

enable me to so rule.

I am really asking His Honour is His Honour saying:

It is not appropriate to hear the application

at this point of time.

HIS HONOUR: That's right.

MR GRAY:  And your Honour won't hear the

application, that is the proposed ruling.

HIS HONOUR:  No, I have entertained your

submissions now for, I don't know how long you have been on your feet but I suppose it is the

best part of an hour, but whatever it is I

have got the point -

well, that begs the question.	We say he had not got
the point, that is the problem.

I understand what you are getting at -

again that begs the question -

and I am not satisfied

here is the error -

they raise new issues.

Now, here is the difficulty. His Honour is of the view

that he can only hear a further interlocutory

application if there is a new issue raised. We had

been trying for that hour to explain to His Honour

that if there is fresh evidence, fresh material,

particularly material wilfully withheld by the other

said, that that is a ground for rehearing the

application and considering his discretion anew. Not so.

His Honour says it is not a new issue. So that is the

error. His Honour is of the view that one must have a

new issue, rather than fresh evidence.

Having said that, to indicate the way in which His Honour had a closed mind as to the matter, could

I take the Court to page 28 just to identify, with

respect, the impossible position in which we found

ourselves. His Honour having asked myself to identify

issues, would I have it identified, and then as the

Court will see he will say, that is not a new issue,

and then at page 28, line 20:

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MR GRAY:  I don't put these points severally

in isolation. One of my friend's tacts is

to try to force that. What we put to Your

Honour is that there are a series of matters,

these are just some, put to your Honour with

a cumulative effect. We are being forced

to pick out one part of our application,

deal with that separately. Your Honour comes

to .some conclusion with that in isolation.

So before your Honour comes to a conclusion

we invite your Honour to allow us to address

the other matters and see the cumulative

effect.

HIS HONOUR:  I see that and you are stressing me

very strongly but I am confident I understand

the point.

MR GRAY:  Can I turn to the other material.

HIS HONOUR: It still doesn't change my view. And that other material is the fresh material that

His Honour has not, as yet, been taken to. We have,

if the Court pleases, a firm view of a closed mind.

Now notwithstanding that, if the Court pleases, I

thought it my duty to continue to address His Honour

and I then proceeded to address as best I could the

closed judicial mind. I started on the first of the

balance of convenience points and quite a long matter

follows that will take us a while to untangle but the

end result of that His Honour said, stopping me before

I come to the second of the balance of convenience

points, I have heard enough; I know what you are at;

I have got your point - that begs the question - I

will not hear you any further.	I refuse to hear the
application.

Now, we say that is a manifest denial of

natural justice in circumstances where, without

injunctive relief, my client's substantive rights are

eroded. Let us face it, in half an hour they are

destroyed. Those substantive rights can be identified

in this way. Presently there is halted by injunctive

order the progress of a part C unconditional offer.

The scheme that has been put in place, sometimes called

the poison pill scheme, is to make the target company
too expensive and unattractive to the offeror. What

North Flinders has done is to take three steps: the

first is to make an unconditional on-market part Coffer

at an overprice for another gold-producing company.

There is a plea in the statement of claim and

evidence in the affidavits to make it out a prima

facie case of overprice. Then the second part of the

scheme is, how is that to be financed? And it is

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involving doubli.IJ& the capital of North Flinders. We

are talking about $106 million transaction, it doubles

the capital of North Flinders. What they do is they

have some temporary finance, but the long term finance

for the project is by a non-renounceable rights issue.

_ _And that effectively requires my client to put in, if

--it wants to maintain its voting power, $80 million.

The third part of the scheme is to seek to

take over the company - the plaintiff is seeking to
take control of North Flinders Mines. But that is the

scheme. The present injunctive order stops the part C

going ahead. There is evidence that in an hour and a

half last week, when the injunctive umbrella was not

available, 4.4 per cent of the company changed hands.

There were 1.6 million acceptances in an hour and a

half.

If the Court pleases, it is demonstrable that the

damage can be done literally on one phone call because

there is a substantial shareholder of the other mining

company, the ADL Company, the company North Flinders

had made the part Coffer for, Poseidon, which is a

55 per cent holder of ADL.	So one call from that
broker will make the part C complete.	It is
unconditional.

MASON CJ: Mr Gray, time marches on. You say events have moved

quickly, but argument has not moved all that quickly

in this Court. Now, how long is it going to take you

to finish the balance of your argument.

MR GRAY: If the Court pleases, 10 to 15 minutes.

MASON CJ: Then we would have to hear your opponents. What we

have in mind to do at the moment is to adjourn this

matter until 10.15 am on Monday in Sydney. It is

necessary to obtain one of the federal courts which

I imagine we will succeed in doing, but I cannot

identify the court at the present time. It may be

advisable for the matter to proceed on the footing	that the Court will hear not merely argument in support
and against the grant of special leave but argument as
to the substance of the proposed appeal itself. Now,
if the Court were to take that view of the matter, how
long would argument ensue on the Monday.

MR GRAY:	We would prepare a precis of argument over the weekend and in those circumstances, as we have had some time
already, if the transcript were available perhaps an
hour to an hour and a half.

MASON CJ: What about your opponents? How long will they take?

MR CASTAN: Perhaps the same, Your Honour.

MASON CJ:  Mr Castan, are you speaking for all on your side of the

record or are you speaking merely for yourself?

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MR CASTAN: I speak only for myself and, indeed, even then

there is some hesitation, Your Honour, because my

personal familiarity with the matter is limited.

MASON CJ: Perhaps you will become more familiar over the

. weekend and that will enable you to be even more

-~succinct than you had hoped.

MR CASTAN:	Perhaps someone who has that greater familiarity will be even shorter than I would otherwise be. But
it has been suggested to me that I may have been over optimistic, keeping in mind the possibility of
dealing with the whole of an appeal from - - -

MASON CJ: Yes, but really what is involved are the identification

of the appropriate principles governing the grant of

interlocutory applications and governing the grant of

interim relief pending an appeal.	Now, they are
readily ascertained.

MR CASTAN:  The principles are readily entertained. The

application to the relevant situation and the analysis

of the documents may be complex.

MASON CJ: Yes, but it may be, you see, that if we were to detect

error in the approach of the trial judge, then it would

be sufficient for us to remit the matter back for

consideration by him according to the appropriate

principles and granting interim relief in the meantime,

perhaps, to allow that to occur.

MR CASTAN:	If that course were adopted, it would be shorter.
MASON CJ:	Yes, Mr Gray.
MR GRAY:	If the Court pleases, we have prepared a further
proposed notice of appeal and that appears in the
appeal book, to put all the matters into one document.
Would it be convenient to hand that to the Court
at this time and my friends.

MASON CJ:	That can be handed in at the present time .
MR GRAY:	If the Court is minded to take the course that
Your Honour the Chief Justice has suggested, we would
be seeking an interim order to hold the position until
the conclusion of argument on Monday.
MASON CJ:	If the orders made by Mr Justice Wilson on 12 October

were extended until 6 pm Eastern Standard Time on would it not?

MR GRAY: It would, if the Court pleases. If it is of assistance

we have prepared some minutes of order that could be -

or perhaps the Registrar to attend to that.

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MASON CJ:  But do we need to do any more than I have just

suggested?

MR GRAY:	Not if my learned friends indicate that that is
treated as appropriate notice by all the parties to
the case.

MASON CJ:  Yes. Mr Castan and those who support you, what do

you say about the proposal to extend Justice Wilson's

orders until 6 pm Eastern Standard Time on Monday?

MR CASTAN:  For the purpose as has been contemplated by

Your Honour to enable this matter to be adjourned?

MASON CJ: Yes.

MR CASTAN:  I think we would not seek to resist that, in the

light of the way time is going and the circumstances

that have arisen.

MASON CJ:  Now, there is nothing we can do, of course, about the

service of notice of the injunction, but what comment

do you make in response to Mr Gray's invitation to

say something it, receipt of notice?

MR CASTAN:  If it is referring to receipt of notice of the

extension that Your Honour has just pronounced, I think

we can treat it as having been served by - - -

MASON CJ: What about the other respondents?

MR HEEREY:	Our answer would be the same, Your Honour.
MR ARCHIBALD:	Yes, Your Honour.
MASON CJ:	The matter will stand adjourned to Sydney at

10.15 am on Monday on the footing that the orders

made by Justice Wilson on 12 October will be extended

until 6 pm Eastern Standard Time on Monday, 17 October.

AT 4.37 PM THE MATTER WAS ADJOURNED

UNTIL MONDAY, 17 OCTOBER 1988

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