Patrick Jebb as trustee for The Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd

[2019] WASC 121

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   PATRICK JEBB as trustee for THE TRAFALGAR WEST INVESTMENTS TRUST -v- SUPERIOR LAWNS AUSTRALIA PTY LTD   [2019] WASC 121

CORAM:   VAUGHAN J

HEARD:   7 MARCH 2019; FURTHER SUBMISSIONS 15 MARCH 2019; FURTHER AFFIDAVITS 25 MARCH 2019

DELIVERED          :   17 APRIL 2019

FILE NO/S:   COR 177 of 2018

BETWEEN:   PATRICK JEBB as trustee for THE TRAFALGAR WEST INVESTMENTS TRUST

Plaintiff

AND

SUPERIOR LAWNS AUSTRALIA PTY LTD 

First Defendant

KINGSLEY CRAIG FLUGGE

Second Defendant

MARGARET FLUGGE

Third Defendant

JEROME MATTHEW FLUGGE

Fourth Defendant

LINLEY FLUGGE

Fifth Defendant

DAMIEN CRAIG FLUGGE

Sixth Defendant

NORWESTERN COVE PTY LTD

Seventh Defendant

Catchwords:

Procedure - Application for permanent stay of proceedings - Abuse of process - Whether current proceedings are re-litigation of earlier proceedings - Whether current claims could and should have been litigated to finality in earlier proceedings - Turns on own facts

Procedure - Alternate application for temporary stay of proceedings - Abuse of process - Likely non‑payment of outstanding costs arising out of early proceedings that are the same or substantially the same - Turns on own facts

Costs - Application for security of costs - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 1 r 4A and r 4B, O 25, r 3

Result:

Application for permanent stay of proceedings dismissed
Application for temporary stay of proceedings granted
Orders made for security of costs

Category:    B

Representation:

Counsel:

Plaintiff	:	In person
First Defendant	:	M L Bennett & D Banda
Second Defendant	:	M L Bennett & D Banda
Third Defendant	:	M L Bennett & D Banda
Fourth Defendant	:	M L Bennett & D Banda
Fifth Defendant	:	M L Bennett & D Banda
Sixth Defendant	:	M L Bennett & D Banda
Seventh Defendant	:	M L Bennett & D Banda

Solicitors:

Plaintiff	:	In person
First Defendant	:	Bennett & Co
Second Defendant	:	Bennett & Co
Third Defendant	:	Bennett & Co
Fourth Defendant	:	Bennett & Co
Fifth Defendant	:	Bennett & Co
Sixth Defendant	:	Bennett & Co
Seventh Defendant	:	Bennett & Co

Case(s) referred to in decision(s):

Aldi Stores Ltd v WSP Group Plc [2007] EWCA Civ 1260; [2008] 1 WLR 748

Andrew Koh Nominees Pty Ltd v Pacific Corporation Ltd (No 2) [2009] WASC 207

Angeleska v State of Victoria [2015] VSCA 140; (2015) 49 VR 131

Arthur JS Hall & Co v Simons [2000] UKHL 38; [2002] 1 AC 615

Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256

Brundza v Robbie & Co (No 2) [1952] HCA 49; (1952) 88 CLR 171

Champerslife Pty Ltd v Manojlovski [2010] NSWCA 33; (2010) 75 NSWLR 245

Clambake Pty Ltd v Tipperary Projects Pty Ltd [No 5] [2009] WASC 141

Cobbett v Warner (1866) LR 2 QB 108

Commonwealth v Albany Port Authority [2006] WASCA 185

Construction Industries Australia Ltd (in liq) v WFI Insurance Ltd [2016] WASC 404

Crosswest Corporation Pty Ltd v Allstrike Enterprises Pty Ltd [2014] WASC 27

Duckworth v Water Corporation [2013] WASC 383

Geraldton Building Co Pty Ltd v Christmas Island Resort Pty Ltd (No 3) (1996) 14 WAR 293

Ghosh v NineMSN Pty Ltd [2015] NSWCA 334; (2015) 90 NSWLR 595

Hearne v Street [2008] HCA 36; (2008) 235 CLR 125

Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576

Hunter v Chief Constable of the West Midland Police [1982] AC 529

Ireland v Norilya Minerals Pty Ltd [2010] WASCA 203

Jebb v Superior Lawns Australia Pty Ltd [2017] WASC 335; (2017) 326 FLR 288

Jebb v Superior Lawns Australia Pty Ltd [2018] WASC 166

Jebb v Superior Lawns Australia Pty Ltd [2018] WASCA 123

Johnson v Gore Wood & Co [2000] UKHL 65; [2002] 2 AC 1

Kermani v Westpac Banking Corporation [2012] VSCA 42; (2012) 36 VR 130

Mabrouk Minerals Pty Ltd v Mabrouk Holdings Ltd [2008] WASC 132

Macchia v The Public Trustee [2008] WASCA 241; (2008) 251 ALR 385

Martin v Earl Beauchamp (1883) 25 Ch D 12

McCabe v Bank of Ireland (1889) 14 App Cas 413

Michael Wilson & Partners Ltd v Nicolls [2011] HCA 48; (2011) 244 CLR 427

Minister for Education v Bailey [2000] WASCA 377; (2000) 23 WAR 149

Moore v Inglis (1976) 9 ALR 509

Morton v Palmer (1882) 9 QBD 89

North East Equity Pty Ltd v Goldenwest Equities Pty Ltd [2008] WASC 190

North West Water Ltd v Binnie & Partners [1990] 3 All ER 547

Phillip Morris Ltd v Attorney General of Victoria [2006] VSCA 21; (2006) 14 VR 538

Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589

R v Carroll [2002] HCA 55; (2002) 213 CLR 635

Re HIH Insurance Ltd (in liq) [2014] NSWSC 774; (2014) 101 ACSR 1

Re Payne, Randle v Payne (1883) 23 Ch D 288

Reichel v Magrath (1989) 14 AC 665

Ridgeway v The Queen [1995] HCA 66; (1995) 184 CLR 19

Rippon v Chilcotin Pty Ltd [2001] NSWCA 142; (2001) 53 NSWLR 198

Robins v Incentive Dynamics Pty Ltd [2003] NSWCA 71; (2003) 45 ACSR 244

Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251

Rubik Financial Ltd v Herskope [No 2] [2014] WASC 115

Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93

Sinclair v British Telecommunications plc [2000] 2 All ER 461

Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699

Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217

State Bank of New South Wales Ltd v Stenhouse Ltd (1997) Aust Torts Reports 81-423

Stuart v Goldberg Linde [2008] EWCA 2; [2008] 1 WLR 823

Timbercorp Finance Pty Ltd (in liq) v Collins [2016] HCA 44; (2016) 259 CLR 212

Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [2011] WASC 171

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 12] [2016] WASC 216

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 2] [2012] WASC 169

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 6] [2014] WASC 278; (2014) 102 ACSR 130

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 7] [2015] WASC 280; (2015) 107 ACSR 575

Trafalgar West Investments Pty Ltd v Superior Lawns Pty Ltd [No 3] [2013] WASC 150

UBS AG v Tyne [2018] HCA 45; (2018) 360 ALR 148

Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378

Westonia Earthmoving Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd [2013] WASC 57

Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509

VAUGHAN J:

Overview

1. The plaintiff, Mr Jebb, became a member of the first defendant, Superior Lawns Australia Pty Ltd (SLA), on 23 February 2018 in his capacity as trustee of the Trafalgar West Investments Trust (the TWIT). He commenced these proceedings alleging oppressive conduct in the affairs of SLA and seeking relief under s 233 of the Corporations Act2001 (Cth) on 12 October 2018.

2. The current proceedings follow complex and protracted earlier proceedings in which the former trustee of the TWIT - a company now in liquidation, Trafalgar West Investments Pty Ltd (in liq) (TWI) - had brought oppression claims against SLA and the second to sixth defendants in these proceedings.  At all times before its external administration TWI was controlled by Mr Jebb.  A distinctive feature of the earlier proceedings was the volume and frequency of the interlocutory disputes between the parties.

3. The allegations of oppression in the current proceedings substantially mirror those alleged in the earlier proceedings (which had been commenced some seven and a half years earlier in March 2011).

4. On 18 July 2018 the earlier proceedings were deemed to have been dismissed for want of prosecution due to the operation of O 4A r 28 of the Rules of the Supreme Court1971 (WA) (the earlier proceedings having been on the Inactive Cases List for 6 months). While the earlier proceedings had been on the Inactive Cases List Mr Jebb had tried, but failed, to be substituted for TWI as plaintiff in the earlier proceedings. Earlier applications for substitution in 2012 had also been made and refused.

5. There is a vast history to the earlier litigation in this court involving Mr Jebb, TWI, SLA and the other defendants to these proceedings.  I have endeavoured to summarise the ebbs and flows of the litigation in a schedule to these reasons.  While the substantive merits of the parties' dispute have never been tried, the earlier litigation has necessitated some 24 written decisions by judicial officers of the court.  Most of those are decisions of Kenneth Martin J.  His Honour was the case manager of the earlier oppression proceedings and the related proceedings in which Mr Jebb sought to be substituted as plaintiff for TWI in the oppression proceedings.  While the defendants are not entirely blameless, it is manifest that his Honour viewed the glacial pace of the litigation - characterised as 'stuttering' and 'less than acceptable' - as something to be laid fairly and squarely with Mr Jebb and strategic decisions he had taken in the course of the litigation.[1]

   [1] Jebb v Superior Lawns Australia Pty Ltd [2018] WASC 166 [75], [88(a)], [88(b)].

6. Mr Jebb is a self‑represented litigant.  Ordinarily some latitude should be afforded to him due to that fact.  But this is not an ordinary case.  Mr Jebb is also a legal practitioner and carries on business as an Australian legal practitioner.  As a practitioner of the court, even though representing himself, Mr Jebb should observe the same professional and ethical standards as any other legal practitioner.

7. The commencement of the new proceedings obviously came as a disappointment to SLA and the other defendants.  After more than seven years of litigation the deemed dismissal of the earlier proceedings was a relief.  On the commencement of the new proceedings the defendants brought an application to stay them permanently as an abuse of process.  At the hearing an alternate position was also advanced: it was contended that the proceedings should be stayed until the likely taxed costs of the earlier proceedings were paid into court.  In the alternative the defendants sought security for costs in an amount of $1 million.  The application for those orders is the subject of these reasons.

8. For the reasons developed below I am not satisfied that the continuation of these proceedings constitutes an abuse of the process of the court warranting a permanent stay of proceedings.  However, I am satisfied that there should be a temporary stay of proceedings pending payment into court on account of the likely taxed costs of the earlier proceedings. I will also make an order for security of costs.

Background to the litigation

1. The fact that the earlier litigation involving Mr Jebb, TWI, SLA and the other defendants to these proceedings has spawned 24 written decisions heralds one fact that should be incapable of disputation: the parties' dispute has already consumed a disproportionate share of the court's resources.  As will be seen, that fact has not deterred the parties from seeking to rely on an extensive bulk of materials and to pursue numerous - often peripheral - issues on what is an interlocutory application.  In oral submissions Mr Jebb, in particular, devoted considerable effort in an attempt to persuade me of his likely prospects on the substantive merits of the oppression proceedings.  Theories were advanced in an attempt to suggest wrongdoing on the part of some of the defendants which meant that Mr Jebb's claim of oppression would be made out and was a strong claim.

2. The application before me was not a trial of the oppression proceedings.  Nothing in these reasons should be taken as a final finding on the issues in the current oppression proceedings.  Nor is it necessary - or appropriate - to descend into the detail of the many inferences that Mr Jebb seeks to draw from the documentary record.  Depending on the outcome of the application all of that should await a trial on the merits.

3. In recognition that the parties' dispute has been the subject of considerable prior judicial determination I intend to incorporate, where possible, the product of those earlier considerations.  I will otherwise have to spend much time in re-stating what has been said by others and ought to be accepted as uncontroversial.

4. Mention has already been made of the schedule to these reasons and its exposition as to the history of the relevant earlier litigation in this court.  I did not understand Mr Jebb to dispute that prior determinations and findings had been made as set out in the schedule.  Any such dispute would have been pointless.  The prior determinations and findings of the court are a matter of record self‑evident on the reasons that have been delivered in the 24 earlier determinations.

5. Something of great utility in describing the factual background is what were described as the 'uncontentious background facts' in the Court of Appeal's decision as published on 19 July 2018.[2]  There this synthesis was drawn from the many earlier decisions at first instance within the court:

   [2] Jebb v Superior Lawns Australia Pty Ltd [2018] WASCA 123.  Jebb v Superior Lawns Australia Pty Ltd [2017] WASC 335; (2017) 326 FLR 288 [6] - [11], [13] - [35] also contains a succinct account in relation to the various steps in the earlier litigation. (I have not included or relied on [12] as Mr Jebb disputes Kenneth Martin J's observation that the matter was some distance away from being ready for trial.)

   Mr Jebb claims that, on 8 September 2005, he started working as a director of Superior Lawns [SLA] and, for 3 years, received no remuneration in return for Trafalgar [TWI] receiving an allotment of shares in Superior Lawns.  Trafalgar held the shares in Superior Lawns as trustee for the Trafalgar West Investments Trust (Trafalgar Trust) [the TWIT].  Trafalgar was controlled by Mr Jebb, who was the sole director and company secretary of, and is 50% shareholder of, Trafalgar.  Mr Jebb is the appointor of the Trafalgar Trust.

   On 18 March 2011, the third respondent, in her capacity as Company Secretary of Superior Lawns, wrote to Trafalgar indicating that the board of that company had resolved to raise additional working capital by way of a pro-rata rights issue.  Trafalgar was offered the opportunity to subscribe for 3 million shares at an issue price of 10 cents per share, on that basis that Trafalgar held 30% of the shares in Superior Lawns.  At that time, Trafalgar held 345 ordinary shares and one D class share in Superior Lawns.  Obviously, if Trafalgar did not take up the rights issue and other members of the company did, the value of Trafalgar's shareholding (as a proportion of the total shareholding in Superior Lawns) would be very significantly diluted.

   On 24 March 2011, Trafalgar commenced the Oppression Proceedings in the General Division of this court.  On 25 March 2011, EM Heenan J granted an interim injunction.  The interim injunction restrained Superior Lawns, until further order, from proceeding with, and accepting any moneys in respect of, the rights issue proposed in its notice to shareholders dated 18 March 2011.

   On 15 April 2009, Mr Jebb resigned as a director of Superior Lawns.

   On 21 April 2011, the primary judge made an order discharging the interim injunction granted by EM Heenan J, subject to an undertaking being provided by Superior Lawns.  An undertaking was subsequently provided.  Superior Lawns relevantly undertook:

   (1)to inform Trafalgar, within 7 days of the rights issue being completed, of the identity of persons who are issued shares pursuant to the rights issue;

   (2)not to discharge so much of certain loan accounts, specified in an affidavit of Mr Jebb, following receipt of funds pursuant to the rights issue; and

   (3)not to declare or pay any dividend on any shares issued pursuant to the rights issue until further order of the court. 

   The primary judge published reasons explaining why he would discharge the interim injunction on receipt of such an undertaking.  It appears that the undertaking remains in force.

   On 25 May 2011, Superior Lawns advised Trafalgar that the second and third respondents, as trustees for the Jacaranda Trust, applied for 3,495,652 shares in Superior Lawns on 3 May 2011.  The letter indicated that the share subscription was partly funded in cash and partly by converting a loan provided by the third respondent.  The effect of the issue of these shares was to dilute the shareholding of Trafalgar (which did not take up the rights issue) in Superior Lawns from 30% to about 0.01%.

   Trafalgar's claim in the Oppression Proceedings is for orders under s 233 of the Corporations Act, essentially seeking a repurchase of its shares by Superior Lawns. The primary judge has frequently described the complexity of the claim. In broad terms it concerns what the primary judge has described as two distinct 'baskets' of statutory oppression grievances:

   A first 'basket' of statutory oppression grievances concerns wrongs alleged to have been directly perpetrated by one or other of the defendants against Trafalgar, qua that corporation being a minority shareholder in Superior Lawns (initially a 20% shareholder from 16 June 2006, but later rising to become a 30% shareholder from 16 December 2008, before the contentious rights issue of 2011 saw Trafalgar's proportionate shareholding in Superior Lawns diminish to an infinitesimal level).

   …

   The second 'basket' of oppression grievances articulated by Trafalgar … seeks to complain of derivative, or quasi‑derivative, wrongs which Trafalgar would seek to ventilate at a trial, in effect, as the causes of action of Superior Lawns which are directed against various defendants. This is done only in a context of Trafalgar seeking the end relief under s 232 / s 233 of the Corporations Act of a court ordered compulsory acquisition order against the defendants for its minority shareholders in Superior Lawns at a 'buy-out' price fixed by the court. These derivative grievances are directed at having the assessed value of the assets of Superior Lawns increased - to take account of the value of such factors, thereby, it would be hoped, pushing up the value of Superior Lawns shares for the purposes of the compulsory 'buy out' relief sought under s 232 / s 233, if Trafalgar wins and gets that far.

   On 26 October 2011, Mr Jebb, acting as appointor of the Trafalgar Trust, substituted himself as trustee of the Trafalgar Trust.  On 8 December 2011, a share transfer form was signed by Mr Jebb on Trafalgar's behalf, and on 9 January 2012, Trafalgar was removed and Mr Jebb included as the holder of the shares on Superior Lawns' share register.

   In 2011 and 2012, Mr Jebb applied to be substituted as a plaintiff in the Oppression Proceedings. The primary judge explained Mr Jebb's motivation in seeking to become plaintiff as seeking to resolve the following problem faced by Trafalgar: Trafalgar could not afford legal representation but was required, by O4 r 3(2) of the Rules, to have legal representation.

   In dealing with the second substitution application on 29 May 2012, the primary judge expressed the view that, in order to maintain the Oppression Proceedings, it was necessary for the plaintiff to be a member of Superior Lawns both at the time the proceedings were commenced and at the time they were determined.  Trafalgar's loss of status as a member of Superior Lawns meant that it could not maintain the Oppression Proceedings, which were then stayed.  The primary judge refused to substitute Mr Jebb as plaintiff, essentially on the ground that it would be pointless to do so as he was not a member of Superior Lawns at the time that the Oppression Proceedings were commenced.

   Mr Jebb then took steps to reappoint Trafalgar as trustee of the Trafalgar Trust, and to have Trafalgar entered as the holder of the shares on Superior Lawns' share register.  On 30 November 2012, after a contested hearing, the primary judge found that Superior Lawns was not entitled to refuse to re-register Trafalgar as a member of Superior Lawns.

   On 29 April 2013, again following a contested hearing, the primary judge ruled that, since Trafalgar had been re-registered as a member of Superior Lawns, it could continue to pursue the Oppression Proceedings.

   Also on 29 April 2013, the primary judge decided that the first to sixth respondents' application for security for costs should be granted in the amount of $150,000, to be paid in three tranches.  On 25 June 2013, orders were made to that effect, with the first tranche of $32,648 being payable by 17 June 2013.  The orders provided that the proceedings remained stayed pending provision of the first tranche of the security.  Trafalgar did not pay the first tranche of the security until 12 September 2013, following the making of a springing order on 17 July 2013.

   The Oppression Proceedings were active, to some extent, between December 2013 and November 2015, during which time Trafalgar received litigation funding from LCM Litigation Fund Pty Ltd (LCM).

   On 21 November 2014, consent orders were made uplifting the security for costs in the Oppression Proceedings to $350,000, with:

   (1)the amount of the first tranche being increased to $60,000 (the balance of which was paid on 27 November 2014);

   (2)the amount of the second tranche being $100,000, due within 7 days of the close of discovery and inspection; and

   (3)the balance of $190,000 being due within 14 days after entry for trial. 

   On 8 October 2015, LCM terminated Trafalgar's litigation funding agreement.

   Discovery and inspection of documents in the Oppression Proceedings was completed on 19 November 2015.  The second tranche of security for costs was due on 26 November 2015.  The second tranche was not paid on that date, with the result that the Oppression Proceedings were again stayed.

   On 24 November 2015, Trafalgar's solicitors, Corrs Chambers Westgarth, terminated its retainer with Trafalgar.  On 4 December 2015, Mr Jebb filed a notice of change of solicitor indicating that Jebb Legal (which is the trading name of a business carried on by Mr Jebb as a sole practitioner) represented Trafalgar.

   In January 2016, Trafalgar commenced proceedings against LCM.  Trafalgar contended that, notwithstanding the termination of the litigation funding agreement, LCM remained liable to pay the second and third tranches of security for costs.  Those proceedings were dismissed on 26 May 2016, essentially on the basis that the obligation to satisfy the requirement for security for costs did not survive termination of the litigation funding agreement.  Trafalgar was ordered to pay LCM's costs of those proceedings, which were subsequently taxed in the amount of $31,000.

   On 30 May 2016, following the making of a springing order, the $100,000 second tranche of security for costs was paid into court.

   On 19 July 2016, the primary judge issued an injunction restraining Mr Jebb and Jebb Legal from acting as solicitors for Trafalgar, on conflict of interest grounds.  The primary judge has observed that the Oppression Proceedings have not been effectively progressed since that date.

   On 16 August 2016, Zafara Legal went on record as solicitors for Trafalgar in the Oppression Proceedings.

   On 4 November 2016, LCM issued a statutory demand for its taxed costs of the proceedings referred to … above.  On 8 December 2016, LCM advised Trafalgar that it intended to apply to wind up Trafalgar for failure to comply with the statutory demand.

   In December 2016, Trafalgar resigned as trustee of the Trafalgar Trust, and Mr Jebb was again appointed in its place.  On 8 February 2017, the members of Trafalgar (Mr Jebb and his former wife) resolved to wind up Trafalgar and appoint liquidators.

   On 2 February 2017, Mr Jebb commenced CIV 1179 of 2017 (Vesting Order Proceedings), seeking vesting orders in respect of the shares in Superior Lawns held by Trafalgar.  On 20 November 2017, the primary judge, at the invitation of the parties, gave reasons in the Vesting Order Proceedings which explored the impact that the proposed vesting orders would have on the Oppression Proceedings.  The primary judge indicated that he was prepared to make the vesting orders, but that the proposed application to substitute Mr Jebb as plaintiff in the Oppression Proceedings would likely be refused.  This was on the basis that Mr Jebb would not have standing to continue the Oppression Proceedings, as he was not a member of Superior Lawns at the date that those proceedings were commenced.  Further, the primary judge expressed the view that the effect of the proposed vesting order would be to immediately non-suit Trafalgar, because it would no longer be a member of Superior Lawns.

   On 14 February 2018, the primary judge made an order in the Vesting Order Proceedings that the shares in Superior Lawns, held by Trafalgar as trustee for the Trafalgar Trust, be vested in Mr Jebb as trustee for the Trafalgar Trust.

   On 18 January 2018, the primary judge ordered that the Oppression Proceedings be placed on the Inactive Cases List. The Principal Registrar gave the parties notice of that fact and of the effect of O 4A r 28 of the Rules on the same day.

   On 23 February 2018, Trafalgar ceased to be, and Mr Jebb became, recorded on Superior Lawn's register of members as the holder of the shares.

   On 28 March 2018, Mr Jebb wrote to the primary judge's associate requesting that the Oppression Proceedings be removed from the Inactive Cases List.  On the same day, the solicitors for the first to sixth respondents wrote to the court opposing the request, on grounds including that, as Mr Jebb was not a party to the Oppression Proceedings, his letter did not properly invoke the jurisdiction of the court.

   On 29 March 2018, the primary judge's associate emailed the parties indicating that, in light of the first to sixth respondents' opposition, it was not appropriate to proceed informally.  The email advised:

   [I]t will be necessary for there to be an application made to the Court by a party conformable with RSC Order 4A rule 26(1)(a) and rule 27(1), in order for his Honour to programme, hear and ultimately determine any such application for removal from the Inactive Cases List.

   On 6 April 2018, Mr Jebb, as trustee for the Trafalgar Trust, filed a chamber summons in the Oppression Proceedings, seeking an order that the proceedings be removed from the Inactive Cases List.

   On 20 April 2018, there was a brief contested hearing of that chamber summons.  In subsequent reasons, the primary judge characterised this chamber summons as seeking to have Mr Jebb substituted as plaintiff in the Primary Proceedings.  The primary judge observed that, given that the Oppression Proceedings were on the Inactive Cases List, this course was misconceived even for a party to the Oppression Proceedings, let alone for a non-party such as Mr Jebb.  The orders made at the hearing on 20 April 2018 in effect adjourned the chamber summons sine die.[3]  (citations omitted)

   [3] Jebb v Superior Lawns Australia Pty Ltd [2018] WASCA 123 [9] - [40].

1. Pre‑hearing, through my associate, I asked the parties to inform me whether there was any dispute about these findings of the Court of Appeal.  Despite being a party to the appeal in which the findings were made, Mr Jebb sought, by letter dated 5 March 2019, to raise various matters in relation to the findings.  In substance, however, Mr Jebb sought to clarify the findings.  For example, it was said that the undertaking provided was not in the form ordered.  That is irrelevant to the proper disposition of the application before me.  In the main the other issues raised by Mr Jebb were of a similar nit‑picking nature.

2. More controversially, Mr Jebb sought, in relation to the Court of Appeal's repetition of Kenneth Martin J's observation that the earlier proceedings had not been effectively progressed since 19 July 2016, to contradict any implication that TWI or he was the cause of inaction.

3. I reject the suggestion that, as between TWI, Mr Jebb and the defendants, TWI and Mr Jebb were not primarily responsible for the failure to progress the earlier litigation (whether from 19 July 2016 or as a whole).  When the course of the earlier litigation is viewed in its totality - as appears from the history recounted in the Court of Appeal's findings and the earlier reasons as summarised in the schedule ‑ substantial parts of the delay in progressing the earlier proceedings are attributable to TWI and Mr Jebb.  The interlocutory disputes in which the defendants were unsuccessful have only had a minor impact on the lack of progress of the earlier litigation.

4. The refusal to accept responsibility for the failure to progress the earlier litigation in a timely way reflects poorly on Mr Jebb.  It is difficult to understand how any legal practitioner could so contend when, due to inaction, the earlier proceedings were put on the Inactive Cases List and were subsequently deemed to have been dismissed for want of prosecution.

5. The Court of Appeal's decision went on to describe the outcome of the substitution application before Kenneth Martin J:

   On 23 April 2018, Mr Jebb applied by originating motion in the Primary Proceedings to be substituted for Trafalgar as plaintiff in the Oppression Proceedings.

   On 1 June 2018, the primary judge published reasons as to why Mr Jebb's substitution action should be dismissed.  In very broad summary, his Honour did so on essentially two grounds:

   (1)The substitution of Mr Jebb as plaintiff in the Oppression Proceedings would be a futile exercise, as Mr Jebb was not in the category of persons, defined by s 234 of the Corporations Act, who could advance an application for orders under s 233 of that Act. This is because Mr Jebb was not a member of Superior Lawns at the time that the Oppression Proceedings were commenced. Trafalgar's chose in action for breach of s 232 of the Corporations Act is a non-assignable personal right.  State provisions of the Trustees Act 1962 (WA), which provide for the vesting of property in a new trustee, do not augment or enlarge the parameters of potential plaintiffs provided for by the Corporations Act.

   (2)Even if that had not been the case, the primary judge would have exercised his discretion under O18 r 6 of the Rules to refuse substitution of Mr Jebb as plaintiff.[4] (citations omitted)

   [4] Jebb v Superior Lawns Australia Pty Ltd [2018] WASCA 123 [49] - [50].

6. The hearing before the Court of Appeal concerned an application for an order to remove the earlier oppression proceedings from the Inactive Cases List.  The application was unsuccessful.  The Court of Appeal was not satisfied that if Mr Jebb was substituted as plaintiff the proceedings would be progressed to trial in a timely way.[5]

   [5] Jebb v Superior Lawns Australia Pty Ltd [2018] WASCA 123 [77], [83] - [84].

7. Among other things the Court of Appeal noted:

   Mr Jebb has not presented any plan to this court explaining how he will progress the Oppression Proceedings to what would appear to be a long, complex and expensive trial.  Nothing in Mr Jebb's written submissions in support of this application even addresses the question of the progressing of the action to a timely resolution.[6]

   [6] Jebb v Superior Lawns Australia Pty Ltd [2018] WASCA 123 [79].

8. Various costs orders have been made in the wash-up of the earlier litigation. On the deemed dismissal of the earlier oppression proceedings a costs order was made against TWI.  TWI was ordered to pay the defendants' costs of the proceedings with a lifting of the scale limits.  The costs were partially fixed at $160,000 so that an order could be made to pay out to the defendants the amount that had been paid into court by way of security for costs.  The balance of the costs are to be taxed.

9. Included in the materials before me for the purposes of the application was the defendants' draft amended bill of costs against TWI in the earlier proceedings.[7]  The costs as claimed total $400,015.50.  (There is, however, affidavit evidence to the effect that the defendants have incurred actual costs of more than $600,000 in connection with the earlier litigation).[8]  Now that $160,000 has been paid the remainder of the amount sought on taxation is in the order of $240,000.

   [7] Exhibit 2.

   [8] Affidavit of Jerome Flugge sworn 8 November 2018, par 28; Affidavit of Alexander Tharby affirmed 8 November 2018, par 43.1.

10. TWI is in liquidation. There is a large deficiency in the winding‑up.  The liquidator's annual report dated 8 May 2018 referred to creditors of $2.764 million and the only significant asset - described as 'contingent' - as being the estimated recovery in the event the now dismissed oppression claim was successful.[9]  At the hearing I asked Mr Jebb what was intended on his part as to satisfaction of the costs ordered against TWI.  In substance Mr Jebb informed me that if he is successful in the current proceedings he will reimburse the company for the costs.[10]  No other means of payment was mentioned.

    [9] Affidavit of Alexander Tharby affirmed 8 November 2018, attachment 'AJT-32' (page 300).

    [10] ts 98.

11. Accordingly, payment of the costs awarded against TWI in favour of the defendants in the earlier oppression proceedings is dependent on the defendants being unsuccessful in the current proceedings.  Mr Jebb's proposal assumed that he would be successful in the current proceedings.

12. Cost orders were also made against Mr Jebb personally in the related substitution proceedings (in which Mr Jebb was the plaintiff) and the appeal against the outcome in those proceedings.

13. At the time of the hearing before me those costs had been provisionally taxed,[11] but Mr Jebb had sought review by the taxing officer.  I made orders to enable the parties to file affidavits post‑hearing to inform me of the outcome of the reviews and whether the costs had been paid.  Affidavits were filed on 25 March 2019.[12]  No adjustments were made on the review.  On 21 March 2019 certificates of taxation were signed in the amounts of $29,095.50 (as to the substitution proceedings) and $22,932.59 (as to the appeal).

    [11] Exhibit 3; Exhibit 4.

    [12] Affidavit of Alexander Tharby affirmed 25 March 2019; Affidavit of Patrick Jebb sworn 25 March 2019. 

14. Mr Jebb has not paid those amounts.  However, on 25 March 2019 he sent correspondence to the defendants' solicitors purporting to set off against the two costs amounts (which, with interest, totalled $54,312.76) various debts said to be due to him by SLA. Whether, given that the costs were awarded in favour of the defendants generally rather than just SLA, there was sufficient mutuality for set off has not been the subject of any submission.  Accordingly, I will not consider that point. The claimed set off concerned alleged debts of SLA to Mr Jebb totalling $36,169 said to have been incurred in 2009.  Mr Jebb contended that with compound interest of 6% the amount owed to him exceeded the $54,312.76.

15. The defendants' solicitors have disputed the alleged set‑off.

16. I am not in a position to assess the validity of Mr Jebb's claimed debts which ground the alleged set off.  The invoices relied on by Mr Jebb do not, on their face, support his claim.  Mr Jebb's affidavit sworn 11 October 2018 refers to the amounts as having been spent 'on behalf of [TWI]' rather than the company.[13]  It is also not apparent why, assuming the alleged debts are not statute barred, there is any claim for compound interest at the rate of 6%.  The most that can be said is that Mr Jebb has not paid the costs amounts and has not adequately explained why he has a proper basis to set off amounts so as to extinguish the costs awarded against him as established by the two costs certificates.  In that regard it is material that Mr Jebb's affidavit sworn 25 March 2019 does no more than assert that he is owed a current debt by SLA and does not seek to answer the matters raised by the defendants' solicitors to challenge the claim to a set off.

    [13] Affidavit of Patrick Jebb sworn 11 October 2018, par 107.

17. In the absence of an explanation, verifying on oath the basis for the claimed set off, I am not satisfied that Mr Jebb has discharged his indebtedness.  The most that can be said is that Mr Jebb disputes the debts.  To the extent that, more generally, Mr Jebb contends by reference to these alleged debts said to be due to him personally, that the debts constitute a discretionary matter to be taken into account in answering the defendants' application, I reject the contention for the same reason.  Mr Jebb has not established that such debts were (or are) due and payable by SLA to him.

Mr Jebb's new oppression proceedings in COR 177 of 2018

1. It was common ground that the oppression claims sought to be prosecuted in the current proceedings substantially mirrored those raised but dismissed for want of prosecution in TWI's earlier oppression proceedings.  Mr Jebb expressly conceded that, in substance, what was now sought to be litigated were the same complaints as were litigated by TWI in the earlier oppression proceedings.[14]  While strictly Mr Jebb had a different chose in action to TWI, the claim made was essentially the same action.[15]

   [14] ts 90.

   [15] ts 91.

2. Although Mr Jebb became a member of SLA on 23 February 2018 he complained about alleged oppressive conduct towards him and TWI based on events that commenced in 2001.  That is well before even the time when TWI first became a member of SLA (16 June 2006) and the time when Mr Jebb says that he agreed to join the company as an executive director (8 September 2005).  Mr Jebb relied on a decision of Kenneth Martin J in the earlier proceedings to the effect that a person may hold a good cause of action under s 232 in respect of a corporation's acts or omissions preceding the person becoming a member. In short, a member may complain as to pre-membership conduct.[16]

   [16] Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 6] [2014] WASC 278; (2014) 102 ACSR 130 [58], [69].

3. On 1 February 2019 Mr Jebb filed a Concise Statement to outline the material facts as alleged and to set out the legal grounds relied on for the relief as sought.  The Concise Statement identifies the nature of the oppression claim Mr Jebb seeks to pursue.

4. Before turning to the Concise Statement I begin by noting that for many years before Mr Jebb's involvement SLA conducted a turf farm business.  In part SLA did so from land it owned at 59 Sydney Road, Gnangara (Sydney Road).  SLA had purchased that land in 1989.

5. The defendants, other than the seventh defendant, were at some time directors of SLA.  The second and third defendants, Kingsley Craig (known as Craig) and Margaret Flugge, are husband and wife.  They were directors of SLA until 22 July 2016.  The fourth defendant, Jerome Flugge, is the son of Craig and Margaret Flugge and the husband of the fifth defendant, Linley Flugge. Jerome Flugge continues to be a director of SLA.  Linley Flugge was a director of SLA between 16 December 2005 and 7 September 2010.  Damien Flugge, the sixth defendant, is another son of Craig and Margaret Flugge.  Damien Flugge was a director of SLA between 30 July 2001 and 11 October 2004 and at some stage held a D class share in SLA.  I infer that this preceded TWI becoming a member as TWI was a subsequent holder of the D class share.

6. The terms of the Concise Statement are imprecise. Broadly, however, the claims of oppressive conduct fall within the following heads:

   (1)An alleged failure to pay the consideration and other amounts payable by Craig and Margaret Flugge in respect of their purchase (as trustees of various trusts) of the Sydney Road property from SLA.  Reference is made to:

   (a)purchase of a 22% interest for $127,500 in August 2001;

   (b)purchase of the remaining 78% interest for $3,432,000 in March 2006; and

   (c)SLA meeting the stamp duty liability of Craig and Margaret Flugge in respect of the two transfers.

   (2)The Sydney Road transactions should be considered with an allegation made as to an eligible termination payment of $2.78 million which, if valid, had the effect of reducing Craig and Margaret Flugge's debt to SLA.  Mr Jebb alleges that the ETP was effected by an October 2007 journal entry backdated to 31 March 2006.  He contends that the ETP was never agreed and was not effective.

   (3)The leasing of the Sydney Road property by SLA from 1 July 2008 at an alleged over‑inflated and uncommercial rental of $180,000 per annum in circumstances when it was not suitable as a depot for the company and the company had an alternate location available to it at no cost.

   (4)The alleged improper use of the company's funds to confer benefits on the Flugges.  The items mentioned are:

   (a)amounts exceeding $400,000 to pay principal and interest on a personal loan obtained by Craig and Margaret Flugge to purchase a residence (between May 2005 and mid‑2007);

   (b)a 22 January 2007 transfer of $500,000  to a bank account in the name of Craig and Margaret Flugge;

   (c)payment of bank charges and interest on a commercial bill taken out by Craig and Margaret Flugge as trustees of the Flugge Property Trust (in connection with the Sydney Road property). This is alleged to have occurred between 2008 and 2013; and

   (d)an alleged 2011 appropriation by Craig Flugge of $150,000 obtained on the sale of the company's water entitlements.

   (5)An alleged April 2009 proposal to reduce Mr Jebb's salary by 30% which, it is said, brought about his resignation as a director of SLA.  Mr Jebb then complains that, having been so allegedly forced out of management, SLA and the Flugges refused to pay anything for the TWIT's shares, to pay Mr Jebb's accrued leave and superannuation entitlements or to reimburse him for payments made on behalf of the company.

   (6)An alleged improper 2011 rights issue whereby SLA allotted approximately 3.5 million ordinary shares at 10 cents a share.  It is alleged by Mr Jebb that this occurred at an undervalue and diluted the TWIT's then shareholding to the negligible level of about 0.01% of the issued shares.

   (7)An alleged failure to pay dividends to members.

   (8)An alleged failure to provide meaningful financial information regarding the company to TWI and Mr Jebb since 2009.

   (9)Alleged use of SLA's funds to pay the Flugge family's legal costs of defending the earlier proceedings and other related proceedings.

   (10)The transfer to the seventh defendant, Norwestern Cove Pty Ltd (Norwestern Cove), of all of the shares in SLA (other than those held by Mr Jebb).  It appears to be alleged that Norwestern Cove took the shares in breach of certain rights of pre-emption.

7. Mr Jebb's affidavits and submissions also make complaint as to a salary paid to Linley Flugge.  However, this is not raised in the Concise Statement.  Accordingly, that complaint may be disregarded.  There are other matters mentioned in the affidavit material which have also not made it to the Concise Statement.  They too will be disregarded.

8. Kenneth Martin J described the claims referred to in pars 36(1) to (4) above as 'some sort of quasi-derivative action articulating causes of action' of SLA.[17]  His Honour's explanation of the concept was referred to in the passage of the Court of Appeal's reasons that I have reproduced above.[18]  The forensic purpose for pursuing these matters in this way was explained succinctly by his Honour:

   This derivative or quasi-derivative contention goes in the end under the present litigation exclusively towards Trafalgar's pursuit of elevated worth share valuation arguments, to the effect that if and when Trafalgar can make good a case of statutory oppression against Superior Lawns, or against any of the other natural person defendants for the purposes of ss 232 and 233 of the Corporations Act, Trafalgar's minority shareholding should be ordered compulsorily to be purchased. In effect, Trafalgar's minority shareholding is sought to be bought out. And in that 'buy out' process the compulsory acquisition of Trafalgar's minority shareholding is sought to be ordered by the court upon the basis of a valuation exercise which assumes increased values for Superior Lawns' assets - based on the assessed worth to Superior Lawns of (presumably) successful cause(s) of action held by that corporation against Craig and Margaret Flugge as the trustees of the Flugge Property Trust - to seek and obtain an account of the 'Profit', as defined.[19]

   [17] Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [2011] WASC 171 [34].

   [18] See also Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 7] [2015] WASC 280; (2015) 107 ACSR 575 [30].

   [19] Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 7] [2015] WASC 280; (2015) 107 ACSR 575 [60].

9. Mr Jebb made it clear in the course of his oral address that, from his perspective, the viability of the proceedings was dependent on success in relation to the complaints as to the Sydney Road property.[20]

   [20] ts 93.

10. In oral submissions Mr Jebb clarified his complaint as to the Sydney Road property transactions.  Mr Jebb did not complain about the transactions per se; he did not allege a breach of fiduciary duty in selling the relevant interests at the price as stated.[21]  Mr Jebb said that he never objected to the value on the sale.[22]  Mr Jebb's complaint was as to the non-payment of the consideration that was stated to be payable[23] - meaning that the transaction was effectively a gift.[24]  It was said that SLA had paid the holding costs on the Sydney Road property for the entire period allowing the Flugge family to profit on the eventual sale of the property.[25]

    [21] ts 68 - 69, 72.

    [22] ts 66, 72.

    [23] ts 66 - 67, 68, 70, 72.

    [24] ts 72 - 73.

    [25] ts 70.

11. Mr Jebb's Concise Statement relies on profit eventually made by Craig and Margaret Flugge as trustees of a trust on an on-sale of the Sydney Road property to increase the notional value of his shares for the purpose of a buy‑out order.  The Concise Statement alleges that the Sydney Road property was sold in 2013 for approximately $18.6 million.

12. The Concise Statement seeks two main forms of relief.  First, an order cancelling the shares allotted under the rights issue.  (That would mean Mr Jebb becomes the holder of 30% of the ordinary shares on issue in SLA).  Second, a buy‑out order.  Before a post‑hearing amendment the buy-out order was sought as against each of the second to seventh defendants.  After the hearing Mr Jebb amended the Concise Statement to no longer seek the buy-out order as against Damien Flugge.  As will be seen, this created another controversy between the parties.

13. The buy-out order as sought seeks that Mr Jebb's shares be valued on a notional basis as if:

    •First, a proportion of the shares transferred to Norwestern Cove in alleged breach of the right of pre‑emption had instead been transferred to be held on trust for the TWIT (this would increase Mr Jebb's proportionate interest in the shares on issue to a notional 46% rather than the notional 30%).

    •Second, on the basis that the Flugges (other than Damien Flugge) jointly and severally account to SLA for: (1) the proceeds of sale of the Sydney Road property; (2) the rent paid in respect of the Sydney Road property; (3) dividends that ought to have been paid; and (4) the other impugned payments.

1. This, on Mr Jebb's calculation as provided in the Concise Statement, would see a payment to him of in the order of $29 million (based on a 46% proportionate interest) or $19 million (based on a 30% proportionate interest).

2. Mr Jebb reaches this figure by valuing the company's capital at $63 million.  This includes an amount of $40 million based on the notional account - most of which is related to the Sydney Road property.  Here Mr Jebb allows for both the on-sale proceeds ($18.6 million) together with interest thereon (said to be $9 million) and the initial purchase price which was not - for the purposes of his calculation - ever paid and the rental payments ($5 million) together with interest thereon ($2 million).  Mr Jebb also includes various amounts for goodwill ($18 million), net assets ($5 million) and other items to be reimbursed ($3 million).  (This totals $60.6 million.  The $2.4 million difference was not explained).

3. Counsel for the defendants submitted that this was an inflated claim.[26]  I agree.  At the least there is a double counting in relation to the Sydney Road property: Mr Jebb seeks both the eventual on-sale proceeds and the purchase price.  The amount said to be reflective of interest also grossly exceeds court rates.  And there is no substantiation of the very large goodwill figure - or even the alleged amount for net assets.

   [26] ts 37 - 39, 46.

4. Counsel for the defendants contended that, in considering the issue of abuse of process, I should take into account that Mr Jebb himself had not been oppressed as a member.  It was also said that I should take into account the lack of merit of bringing a claim where limitation defences were likely to significantly impact on Mr Jebb's claim.  Mention was made of Kenneth Martin J having characterised the claim as being 'speculative … novel … unusual … [and] not one of a statutory cause of action for oppression of clear and overwhelming merit'.[27]  By contrast Mr Jebb submitted that he had a strong claim.

   [27] Jebb v Superior Lawns Australia Pty Ltd [2018] WASC 166 [88(d)].

5. In the circumstances I consider it incumbent on me to come to a preliminary view as to the strength of Mr Jebb's claim.  That view ‑ while necessarily provisional - is something that may be taken into account on the issue of abuse of process and security for costs. Mr Jebb relied on the strength of his claim in opposing the defendants' application.

6. In reaching a view on the strength of the claim three things must be noted.  First, the view is no more than provisional.  I intend to approach it in much the same way as one might approach the strength of the case in assessing whether to grant an interlocutory injunction.  Second, the inquiry is being undertaken in circumstances where the defendants have adduced little evidence on the substantive merits of the oppression claim.  Quite properly they chose not to do so given the nature of their application.  That also serves to emphasise that the view reached is no more than provisional.  The picture that presents once the defendants address the merits of the claim may be very different.  Third, although Mr Jebb has filed considerable affidavit evidence in support of his claim much of the documentary evidence was objected to by the defendants.  The defendants claimed that the use of this material violated the 'implied undertaking' as acknowledged to be a substantive obligation imposed by law in Hearne v Street[28] because the documents had been obtained through the compulsory process of the court in the earlier and related proceedings.

   [28] Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 [3], [56], [106] - [108].

7. Before the hearing I made provisional rulings on this and numerous other evidentiary objections (between the parties more than 200 objections were taken to the affidavit material). As to the objection based on alleged non‑compliance with the implied undertaking I observed that whether documents had been used (and evidentiary statements had been made based on such documents) in breach of the implied undertaking was a matter for consideration as part of the permanent stay application (it being contended that reliance on the materials in breach of the implied undertaking was itself abusive). I determined that as a matter of efficiency and economy it was inimical to the goal and objects in O 1 r 4A and r 4B of the Rules of the Supreme Court 1971 (WA) to adjudicate on the issue by an evidentiary ruling in advance of the full argument which was to occur in the context of the substantive application.

8. Accordingly, I informed the parties that the documents and statements the subject of the 'implied undertaking' objections would be received on a provisional basis only.  Their ultimate reception was to depend on whether the argument advanced in the context of the substantive application was successful.

9. The defendants submitted that Mr Jebb's affidavit material attached documents and used information obtained by Mr Jebb as a director of TWI as a result of the earlier oppression and related proceedings.  Reference was made to documents:

   •returned on subpoena issued in the earlier proceedings at TWI's request to SLA's bank;

   •provided to TWI's former solicitors;

   •obtained through discovery and inspection in the earlier proceedings; and

   •in the form of accounts data and reports generated from SLA's accounts package, and bank statements, pursuant to inspection orders.

10. The defendants also referred to information obtained from affidavits that had been filed in the earlier and related proceedings.

11. It was said, however, that the defendants were not in a position to identify precisely where Mr Jebb had obtained all of the documents and information used in commencing the new proceedings.[29]

    [29] Defendants' submissions dated 21 December 2018, par 83.

12. Mr Jebb contended that he had not breached the implied undertaking in making use of any of the documents and other information.  I did not understand Mr Jebb to argue that he was not bound by the implied undertaking.  It is plain that, although a third party to many of the earlier proceedings, Mr Jebb must have known of the origin of the materials and was thus bound by the implied undertaking.[30]  Mr Jebb argued that, as the economic interests and claims were the same, his use of the documents in subsequent related proceedings was not a collateral use; it was said that he was using the documents for purposes connected with or related to the original proceedings and not for a collateral or ulterior purpose.[31] In the alternative leave was sought to allow Mr Jebb to use the materials.[32]

    [30] Hearne v Street [3], [109] - [112].

    [31] Plaintiff's submissions dated 1 February 2019, pars 35 - 38.

    [32] Plaintiff's submissions dated 1 February 2019, par 45.

13. Whether or not there has been a breach of the implied undertaking, I am satisfied that, if and to the extent required, Mr Jebb should have leave to rely on the materials.  For that reason I consider it unnecessary to assess whether the use of each of the numerous documents the subject of the objection constituted a breach of the implied undertaking.  Doing so will be an extensive exercise.  For example, it is generally accepted that the implied undertaking ceases once the relevant document or information is received into evidence.[33]  It appears that at least some of the documents have been referred to in evidence in the earlier proceedings.[34]

    [33] Hearne v Street [96].

    [34] See eg ts 104 - 105.

14. Special circumstances must present if the court is to grant leave to use documents or information otherwise subject to the implied undertaking - thereby enabling a person to use the materials for a purpose other than that for which they were provided.[35]  There is no general definition of what may amount to special circumstances.  Each case must depend on its own peculiar facts and circumstances.[36]  While there are accepted factors,[37] the ultimate touchstone for the grant of leave is the interests of the administration of justice and the public interest.[38]

    [35] Hearne v Street [107].

    [36] Minister for Education v Bailey [2000] WASCA 377; (2000) 23 WAR 149 [29].

    [37] See eg Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217, 224.

    [38] Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576, 579 (referred to with approval in Minister for Education v Bailey [21] - [22]); North East Equity Pty Ltd v Goldenwest Equities Pty Ltd [2008] WASC 190 [40]; Andrew Koh Nominees Pty Ltd v Pacific Corporation Ltd (No 2) [2009] WASC 207 [15].

15. I am satisfied that the unique circumstances of this litigation provide special circumstances. In technical terms Mr Jebb is prosecuting a different cause of action to that which was pursued by TWI.  But these proceedings effectively replicate the claims made by TWI in its capacity as trustee of the TWIT in the earlier proceedings.  Mr Jebb is now the trustee of the TWIT and sues in that capacity.  Assuming, without deciding, that the implied undertaking applies, there is a broad coincidence between the two proceedings.  That is all the more so when it is recalled that at all times Mr Jebb was the directing mind and will of TWI.  To treat the two proceedings as being entirely separate and distinct would be to defy the practical realities of the situation. Indeed, it is the very coincidence between the earlier oppression and related proceedings and the current proceedings that informs the defendants' application that the new proceedings are an abuse of the process of the court.

16. In finding that there are special circumstances it is also relevant that the documents relied on - or at least many of them - would be discoverable in due course in the current proceedings.

17. It is also in the interests of justice that Mr Jebb have leave, if and to the extent required, to rely on the materials in answering the defendants' application.  I am conscious that I must weigh the public interest and also the defendants' private interest in preserving the confidentiality of the materials so far as they were only made available to Mr Jebb (as a director of TWI) through coercive processes of the court.  Against that, the defendants are seeking to permanently stay the prosecution of Mr Jebb's claim.  As part of that it is contended that the new proceedings lack merit.  It would not be just to shut Mr Jebb out from deploying the materials available to him to answer that contention - even if those materials are only available due to coercive processes of the court in the earlier and related proceedings. In coming to that conclusion I also take into account the broad coincidence between the two proceedings and the likely discoverability of the material in the current proceedings.  Those two matters suggest that the defendants, properly informed, would have had an expectation that the materials would have become available for use in these proceedings in due course.

18. For these reasons the pre‑hearing provisional ruling that I would receive the documents and statements the subject of the 'implied undertaking' objections will stand.  For the purposes of this application, if and to the extent required, Mr Jebb has leave to rely on the materials.

19. What, then, is my preliminary view on the strength of Mr Jebb's claim?

20. I intend to address only two aspects of the overall claim.  First, the claim as to non-payment of the consideration for the Sydney Road property (see pars 36(1) and (2) above).  Mr Jebb made it clear in his oral address that this is the lynchpin of the oppression proceedings.  Second, the dispute as to the rights issue (see par 36(6) above).  Unless Mr Jebb is able - in substance - to set aside or otherwise have ignored the rights issue, he has what counsel for the defendants correctly characterised as an 'infinitesimally small' shareholding. Unless successful on the rights issue head of oppression, the value of Mr Jebb's shareholding will be negligible.

21. The evidentiary materials adduced by Mr Jebb support a prima facie conclusion that there was no immediate payment for the purchase by Craig and Margaret Flugge of the 22% interest in the Sydney Road property (the 2001 transaction) or the later purchase of the remaining 78% interest (in 2006).  There is also evidence to support a prima facie conclusion that SLA paid the stamp duty on the transfers.  The second transfer (at $3.432 million) and the second tranche of stamp duty ($179,028) were journalised as a loan payable by Craig and Margaret Flugge.

22. It does not, however, appear to be correct to conclude (even provisionally) that there was never any payment by the Flugges on account of the purchase.  Indeed, Mr Jebb's written submissions in answer to the abuse of process contention accept that there was a partial payment.  He states:

    The payment of the sale proceeds from Cowalla Rd in January 2007 [an amount of some $658,062], and the subsequent discharge of the Company's commercial bill ($2.05 million) from the sale of Sydney Rd to [the Flugges as trustees of the Flugge Family Trust] resulted in the Flugge Family loans to buy Sydney Rd being partially reduced.[39]

    [39] Plaintiff's written submissions dated 1 February 2019, par 119.

23. Those admitted amounts could only partially pay the purchase price.  Whether the whole of the purchase price for the Sydney Road property was substantially paid for depends on the efficacy or otherwise of the impugned eligible termination payment (refer to par 36(2) above).

24. The documentary evidence is that on 11 October 2007 a journal entry was made in SLA's books. This provided for the ETP of $2,748,355.65 to Craig and Margaret Flugge and resulted in a reduction in their shareholders' loan account.  The journal entry was backdated to 31 March 2006 and included a description 'profit on Sydney rd paid as etp to retiring owners'.[40]

    [40] Affidavit of Patrick Jebb sworn 11 October 2018, 'PGJ-12' (page 90).

25. As at 31 March 2006 and 11 October 2007 Mr Jebb was a director of SLA.  Mr Jebb's evidence is that he only became aware of the ETP in early April 2008.[41]  Mr Jebb says that he was not consulted and never agreed to any payment by way of a retirement benefit or consultancy being paid to the Flugges.[42]  Mr Jebb also says that, when the ETP was raised with Jerome Flugge, Jerome Flugge was unaware of it.[43]  The defendants' case is that:  (1) Mr Jebb was aware of SLA's intention to make the ETP before he became a director of SLA and TWI became a shareholder in SLA; (2) the ETP was approved by the shareholders of SLA on or about 1 December 2005 (at which time TWI was not a shareholder); and (3) Mr Jebb knew of the proposal to make the ETP as he attended the meeting on 1 December 2005.[44]

    [41] Affidavit of Patrick Jebb sworn 11 October 2018, par 60.

    [42] Affidavit of Patrick Jebb sworn 11 October 2018, par 59.

    [43] Affidavit of Patrick Jebb sworn 11 October 2018, par 61.

    [44] Affidavit of Alexander Tharby affirmed 8 November 2018, attachment 'AJT-8' pars 41 - 42 (pages 156 ‑ 158).

26. Resolution of whether Mr Jebb knew of the intention to provide for the ETP, and whether it was approved by SLA's shareholders, must await a trial.  The most that can be said at the moment is that there is a contest.

27. I acknowledge that Mr Jebb sought to persuade me that there was no evidence that the ETP was agreed; this was developed at length by reference to various documents in his written submissions.[45]  I accept also that the notes of the 1 December 2005 meeting (while partly illegible) do not refer to the ETP or any approval of it.[46]  But whether or not there were oral notifications and approvals as contended cannot be determined on documents.  It is a matter for trial.

    [45] Plaintiff's written submissions dated 1 February 2019, pars 126 - 151.  See also ts 61, 62 - 65.

    [46] Affidavit of Jerome Flugge sworn 16 November 2018, attachment 'JMF-8'.

28. In the circumstances I accept that there is an arguable claim that Craig and Margaret Flugge did not make payment in full for the consideration payable on the Sydney Road property. But it is going too far to characterise the claim as a 'strong' claim.  And, on Mr Jebb's own admission, there is not a reasonable claim that no part of the purchase price was ever paid.  Mr Jebb accepts to the contrary.  In the face of the admission in his written submissions Mr Jebb's insistence that the transactions effectively involved a gift of the Sydney Road property cannot be sustained.  That has implications for Mr Jebb's contention that if successful in the oppression proceedings the appropriate relief will be a buy-out order based, in part, on a notional value of his shares as if Craig and Margaret Flugge were to account to SLA for the proceeds of the Sydney Road property on its eventual sale.

29. In suggesting that was the appropriate relief for the quasi‑derivative oppression claim he pressed, Mr Jebb referred me to Robins v Incentive Dynamics Pty Ltd.[47] There the directors of Incentive Dynamics, in breach of fiduciary duty, caused it to pay $375,064.63 to Coldwick so that Coldwick could purchase two properties.  Incentive Dynamics did not receive any benefit from the transaction.  Nor was any benefit intended.  The New South Wales Court of Appeal held that Incentive Dynamics was entitled to a remedial constructive trust over the two properties and their proceeds of sale.

    [47] Robins v Incentive Dynamics Pty Ltd[2003] NSWCA 71; (2003) 45 ACSR 244.

30. Mr Jebb relied on the following passage:

    The incontrovertible facts establish that, unless Coldwick's assets were intended to be held on trust for Incentive Dynamics from the outset (in which case caedit quaestio), the payments for that company represented an improper use of its officers' positions to gain advantage for themselves as major shareholders of Coldwick and for others (Coldwick itself and its other shareholder Lorkin).  No benefit accrued to Incentive Dynamics, while the officers (through their shareholdings in Coldwick) reaped the benefit of having to spend nothing to obtain enjoyment of the equity in two valuable assets.[48]

    [48] Robins v Incentive Dynamics Pty Ltd[56].

31. It will be seen at once that Mr Jebb propounds a very different claim to that which was successful in Robins v Incentive Dynamics Pty Ltd.  Mr Jebb does not seek to challenge the sale itself or the price of the sale.  Nor - other than as to the stamp duty amount and alleged payments to meet Craig and Margaret Flugge's liability under the commercial bill (see par 33(4)(c)) - is it said that the company's funds were applied on the sale.  Instead the complaint is as to non‑payment of the purchase consideration (although Mr Jebb accepts that some payment was made).  Accordingly, Mr Jebb's reliance on Robins v Incentive Dynamics Pty Ltd is misplaced.

32. Mr Jebb's suggested claim in the form as propounded at the hearing before me - in particular for relief based on Craig and Margaret Flugge notionally accounting to SLA for the proceeds of their eventual sale of Sydney Road - appears weak.  To the extent that the complaint is as to non‑payment of some, but not all, of the purchase consideration, there is a substantial issue as to whether the appropriate relief ought to be measured in monetary terms, with interest, rather than a notional account as to the sale proceeds.  If the appropriate relief is to be measured in monetary terms (ie loss of the full and immediate use of the purchase consideration), rather than a notional account of the eventual sale proceeds, the amount of the claim will be reduced considerably.

33. Two other issues emerge when assessing the strength of the claim.

34. First, Mr Jebb was not a member of SLA at the time of the alleged acts of oppression.  Moreover, he became a member knowing of the alleged acts.  It may be accepted that, in spite of this, Mr Jebb has standing to complain about the alleged acts.[49] However, such temporal considerations can and should be taken into account in adjudicating an oppression action; for example, in evaluation of the merits and the appropriate relief, if any.[50]  In particular, available relief following a finding that a company's affairs have been conducted oppressively is discretionary.  An applicant in the position of Mr Jebb - one who takes the shares knowing of the oppressive conduct - might well have a less meritorious case for the exercise of the court's discretion.

    [49] Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 6] [2014] WASC 278; (2014) 102 ACSR 130 [58], [69]; Jebb v Superior Lawns Australia Pty Ltd [2017] WASC 335; (2017) 326 FLR 288 [209], [229]; Jebb v Superior Lawns Australia Pty Ltd [2018] WASC 166 [14], [60], [88(h)].

    [50] Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 6] [2014] WASC 278; (2014) 102 ACSR 130 [70]. See also Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 2] [2012] WASC 169 [55]; Jebb v Superior Lawns Australia Pty Ltd [2018] WASC 166 [14], [60] - [62], [88(h)], [89].

1. Second, while the defendants accepted that there was no applicable limitation period on the right of a member to complain about oppressive conduct[51] - a matter on which I express no opinion - they foreshadowed that so far as a quasi‑derivative claim was propounded a limitation type defence would be available to answer the claim for relief. The defendants said that if a company could not take proceedings, because they would be time-barred, a shareholder should not be able to avoid the time-bar by commencing oppression proceedings raising a quasi-derivative type claim.

   [51] Defendants' submissions dated 21 December 2018, par 100.

2. The two sales of the interest in the Sydney Road property took place more than 12 years before the commencement of the current proceedings.

3. Kenneth Martin J has accepted that limitation issues may prove an obstacle to the sort of claim now under consideration.[52] I accept that it may be something to be taken into account in any exercise of discretion under s 233 of the Corporations Act 2001 (Cth). While there might be no absolute limitation defence, like considerations may be relevant by analogy in the exercise of discretion. Accordingly, given the time of the alleged oppressive acts, this too presents as a matter that adversely impacts on the strength of Mr Jebb's claim.

   [52] Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 7] [2015] WASC 280; (2015) 107 ACSR 575 [112(b)]; Jebb v Superior Lawns Australia Pty Ltd [2017] WASC 335; (2017) 326 FLR 288 [209]; Jebb v Superior Lawns Australia Pty Ltd [2018] WASC 166 [88(h)].

4. These additional two issues reinforce my provisional view that Mr Jebb's oppression claim based on non-payment of the consideration for the Sydney Road property is arguable but not strong. More importantly, for the reasons given, my provisional view is that the claim is weak so far as it seeks relief based on Craig and Margaret Flugge notionally accounting to SLA for the proceeds of their eventual sale of Sydney Road.

5. In one respect this aspect of the claim was not merely weak but was properly characterised as speculative.  It will be recalled that the Concise Statement originally sought a buy‑out order against defendants including Damien Flugge.  In the course of oral submissions it emerged that, despite Damien Flugge not being involved in the affairs of SLA post- October 2004, Mr Jebb sought that Damien Flugge be subject to the proposed buy‑out order as Mr Jebb believed that Damien Flugge might have received part of the eventual sale proceeds of the Sydney Road property from Craig and Margaret Flugge.  When asked whether he had evidence to support that belief Mr Jebb informed me that he was speculating given the timeline.[53]  Speculation is not a proper basis for a claim and it is troubling that Mr Jebb, as a legal practitioner, would be advancing proceedings based on speculation rather than evidence.

   [53] ts 59.

6. Post‑hearing Mr Jebb amended the Concise Statement so that the buy‑out order was no longer sought as against Damien Flugge.  I infer that this followed Mr Jebb's re‑consideration of the propriety of the claim so far as it is pursued against Damien Flugge.

7. In post‑hearing submissions filed with leave the defendants argued that no account should be taken of the amendment.  I disagree.  Given the nature of the defendants' application I should have regard to the plaintiff's claim as outlined in the Concise Statement as amended.  It is apparent that, having reflected whether he had a proper basis to pursue relief by way of a buy-out order against Damien Flugge, Mr Jebb no longer intends to do so.  That part of the claim which was not merely weak, but was speculative, is not to be pursued.

8. My provisional view of the strength of the rights issue claim is more optimistic than my provisional view in relation to the Sydney Road property claim.

9. Again, the rights issue claim may have issues as concerns discretionary relief.  Mr Jebb was not a member at the time of the rights issue.  And the allotment occurred in May 2011.  However, the rights issue was plainly extremely dilutive.  It resulted in TWI holding less than 0.01% of the shares on issue whereas previously it had held a 30% interest. The issue effectively valued the prior shares on issue ‑ 1,150 ordinary shares - at a mere $115.00.  It put a negligible value on TWI's then shareholding.

10. The notice of offer in respect of the rights issue said that it was to provide $1 million in additional working capital to meet costs of litigation, repayment of related party loans and operations.[54] An undertaking provided restricted SLA from repaying disputed related party loans.[55]  In fact the rights issue resulted in the allotment of 3,495,652 shares at 10 cents a share.[56]  A report from an accounting firm suggests that there is some inconsistency in SLA's financial reports as to the amount received in cash for the rights issue.  A statement of cashflows refers to an amount of $349,565 whereas a directors' report mentions only $200,000 with the balance being raised by the discharge of a shareholder loan.[57]

    [54] Affidavit of Patrick Jebb sworn 11 October 2018, attachment 'PGJ-24' (page 143).

    [55] Affidavit of Patrick Jebb sworn 11 October 2018, attachment 'PGJ-26' (page 157).

    [56] Affidavit of Patrick Jebb sworn 11 October 2018, par 140.

    [57] Affidavit of Patrick Jebb sworn 11 October 2018, attachment 'PGJ-27' (page 162).

11. Mr Jebb adduces evidence that about two months after the rights issue SLA borrowed a further $400,000 to meet similar objects as were said to have been the subject of the rights issue.[58]

    [58] Affidavit of Patrick Jebb sworn 7 November 2018, attachment 'PGJ-62' (pages 172 - 173).

12. Proceeding with the rights issue, and its extreme dilutive effect, in circumstances where the company was able to obtain loan funds for the same purposes a little more than two months later, is sufficient to raise a serious issue as to the necessity for the rights issue.  When that is coupled with the dilutive effect of the rights issue - and the limited value it placed on the existing shares - I am satisfied that this aspect of the oppression proceedings is reasonably arguable and better than merely weak.  That is all the more so when it is plain that the rights issue took place at a time when TWI had already threatened oppression proceedings.[59]

    [59] Affidavit of Patrick Jebb sworn 11 October 2018, attachment 'PGJ-25' (page 149, par 17).

The defendants' application

1. As presented at the hearing there were three strands to the defendants' application. First, the defendants contended that the proceedings as a whole should be permanently stayed as an abuse of the process of the court.  Second, in the alternative but again relying in part on the doctrine of abuse of process, the defendants contended that the proceedings should be stayed until the likely taxed costs of the earlier proceedings were paid into court.  Third, the defendants sought security for costs in relation to the current proceedings.

2. On abuse of process the defendants said that a continuation of Mr Jebb's current proceeding:  (1) would bring the administration of justice into disrepute; and (2) would be unjustifiably oppressive to the defendants.

3. As to the former, focusing on the accepted position that the question of abuse of process is a fact bespoke analysis, counsel for the defendants contended that:

   •The claims in the current proceedings effectively repeat those made against the defendants by TWI in the earlier proceedings.  Those claims could and should have been litigated to finality in the earlier proceedings.  The failure to do so - and the revival of the claims through these new proceedings - effectively meant that the defendants were being deprived of the benefit of the dismissal of the earlier proceedings.

   •The earlier proceedings were dismissed for want of prosecution in circumstances where: (1) there had been a failure to progress the proceedings to trial despite the passage of more than seven years; and (2) the proceedings had been on the Inactive Cases List for six months.  Throughout that time Mr Jebb was the directing mind and will of TWI.  It was Mr Jebb who had failed to cause TWI to progress the earlier proceedings.

   •Mr Jebb had unsuccessfully attempted to be substituted as plaintiff to the earlier proceedings on multiple occasions, most notably in 2012.  When, at that time, Kenneth Martin J held that Mr Jebb could not be substituted, Mr Jebb elected to keep litigating with TWI as plaintiff as opposed to simply instituting new proceedings. It was said that there had then been a deliberate decision to maintain the proceedings by TWI.  There was then a further substitution attempt in 2018.  It was said that Mr Jebb had delayed in commencing the present proceedings until October 2018 when he could have commenced them in 2012 or at the latest in February 2018.

   •It was necessary to consider the effect of the earlier litigation, and Mr Jebb's tactical manoeuvring within the earlier litigation, on the court and other litigants within the court.  It was said that the 24 written decisions in connection with the earlier proceedings demonstrated that Mr Jebb's claims had already consumed a disproportionate share of the court's resources to the detriment of the public interest.  That would be exacerbated if the new proceedings were permitted to continue.

   •Mr Jebb was impecunious. (In this regard counsel for the defendants relied on admissions in affidavits sworn by Mr Jebb in the Court of Appeal proceedings.[60] That material demonstrates that Mr Jebb has an unpaid tax‑related liability of about $260,000 and a debt in respect of a child's overdue school fees of about $50,000.  Mr Jebb deposed that he relies on the support of creditors, family and friends to pay his day to day expenses.)

   •Mr Jebb should not be permitted to 'phoenix' the litigation which he (through TWI) unsuccessfully pursued in the earlier proceedings.  That was all the more so when: (1) the defendants were part of the 'carnage of creditors' who will be unable to recover debts owed by TWI as a consequence of TWI's (and Mr Jebb's) conduct in causing TWI to incur debts to creditors in relation to the old proceedings; and (2) Mr Jebb's impecuniosity put the defendants at further financial risk in relation to the further proceedings.

   •The oppression claim lacked merit (specific mention being made that the acts complained of all occurred before Mr Jebb became a shareholder - and in part before he even became involved in the company, potential limitation like defences and the 'infinitesimally small' shareholding of Mr Jebb).

   •In commencing the new proceedings Mr Jebb had improperly used documents and information obtained by coercive process of the court in the earlier and related proceedings in breach of the implied undertaking.

   [60] Affidavit of Patrick Jebb sworn 18 June 2018 (in appeal CACV 58 of 2018), pars 46 - 47; Affidavit of Patrick Jebb sworn 22 June 2018 (in appeal CACV 58 of 2018), par 3.

4. The defendants contended that the current proceedings were Mr Jebb's final fall‑back position.  It was said that, having failed in multiple substitution applications - some more than six years ago ‑ Mr Jebb had now engineered that which he had sought, but was unable to achieve, in 2012:  proceedings in which he was the plaintiff and could represent himself.

5. As to oppression to the defendants, counsel for the defendants referred to:

   •The cost and prejudice to the defendants in terms of their financial position, health and general wellbeing.  In this regard the submission was supported by detailed and eloquent affidavit evidence on the part of Jerome, Linley and Craig Flugge.[61]  Those affidavits catalogued the significant financial and emotional burden the earlier proceedings had exacted.  I accept that the protracted and convoluted nature of the earlier proceedings has had a debilitating effect on the Flugges and retarded the financial operations of SLA.[62]

   •The proposition that the parties' ability to have a fair trial diminishes with the effluxion of time as memories fade, reconstructed memories solidify and documents and records become less likely to be available.

   [61] Affidavit of Jerome Flugge sworn 8 November 2018, pars 19 - 29, 31 - 37, 47 - 49; Affidavit of Linley Flugge sworn 8 November 2018, pars 18 - 35, 37 - 56; Affidavit of Craig Flugge sworn 12 November 2018, pars 11 - 15, 17 - 22.

   [62] Strictly speaking, it was unnecessary for the Flugges to give this evidence.  The question of whether the proceedings would be unfairly burdensome or unjustifiably oppressive is a matter for inference to be collected from all the circumstances: Sheraz Pty Ltd v Vegas Enterprises Pty Ltd [2015] WASCA 4; (2015) 48 WAR 93 [75].

6. Some of the various contentions can be accepted or rejected at the outset.

7. First, Mr Jebb did not dispute that the oppression claims in these proceedings substantially repeat those made against the defendants in the earlier proceedings. Second, for reasons already given I am satisfied that TWI and Mr Jebb (as controller of TWI) were primarily responsible for the substantial delay in the conduct of the earlier proceedings.  Third, Mr Jebb could have caused TWI to discontinue its proceedings in 2012 and - having appointed himself as trustee of the TWIT - pursued the claim in the way he is now doing.  Proceeding otherwise was a deliberate decision.  By not proceeding in this way Mr Jebb avoided two procedural disadvantages:  (1) a deferred commencement date of the proceedings (which may affect the grant of relief in the court's discretion if there is a de facto limitation defence); and (2) the likely costs that would be awarded against TWI on a discontinuance. Fourth, Mr Jebb is impecunious. In submissions Mr Jebb sought to persuade me to the contrary.  Mr Jebb pointed to income tax returns he had filed showing that he had earned an income in the income years ended 30 June 2015, 2016 and 2017.  That evidence does not displace the fact that Mr Jebb has debts of more than $310,000 to third parties and extant unsatisfied costs orders in favour of the defendants of more than $54,000.  There is also Mr Jebb's statement to the Court of Appeal that he relies on the support of creditors, family and friends to pay his day to day expenses.

8. I have, however, concluded that there are material aspects of the oppression claim that are arguable (although the claim is weak to the extent that it seeks relief based on Craig and Margaret Flugge notionally accounting to SLA for the proceeds of their eventual sale of Sydney Road).  So it is not the case that the oppression claim lacks merit - or at least it is not so devoid of merit that, without more, Mr Jebb should be shut out from litigating the claim.  Also, on the allegation that there has been a breach of the implied undertaking, I have concluded that, if and to the extent required, Mr Jebb should have leave to rely on the impugned materials in answering the defendants' application.  In that circumstance any breach of the implied undertaking by Mr Jebb is not of such moment as to bespeak abuse of process.

9. Finally, as a general proposition I accept that the effluxion of time may adversely affect whether a fair trial is possible.  But that is not this case.  Mr Jebb's oppression claim will undoubtedly be primarily a documentary case.  So too the earlier oppression proceedings would have been a documentary case.  The relevant documents have already been the subject of discovery in the earlier proceedings.  There is no basis to conclude that the delay in prosecuting Mr Jebb's oppression claim has made its fair trial impossible. Indeed, counsel for the defendants did not expressly contend that this was the position.

10. The defendants' alternate position was that, in its inherent jurisdiction, the court should stay the proceedings until provision was made for payment of the costs of the earlier proceedings. In this regard counsel for the defendants relied on O 23 r 4 of the Rules of the Supreme Court 1971 (WA) by analogy.

11. Finally, the defendants sought security for their costs of the proceedings. The application was grounded on O 25 r 1 and r 3. Counsel for the defendants referred to Mr Jebb's impecuniosity, the history of the earlier proceedings and the complexity and likely expense of the litigation. In oral submissions there was also reliance on the costs orders following Mr Jebb's unsuccessful substitution application and the appeal from that adverse decision.[63]

    [63] ts 49 - 50.

12. In recounting the way in which the defendants presented their application I have not addressed all of Mr Jebb's various responses.  Mr Jebb relied on a number of affidavits[64] and three sets of submissions totalling some 55 pages. Apart from accepting that the oppression claims in these proceedings substantially reproduced the claims made against the defendants in the earlier proceedings Mr Jebb resisted all the substantive propositions advanced by counsel for defendants.  I will address the matters raised by Mr Jebb to the extent it is necessary to do so in disposing of the application.

    [64] Affidavit of Patrick Jebb sworn 11 October 2018; Affidavit of Patrick Jebb sworn 7 November 2018; Affidavit of Patrick Jebb sworn 5 December 2018; Affidavit of Patrick Jebb sworn 25 March 2019; Affidavit of Patrick Jebb sworn 14 December 2015 (in action COR 59 of 2011); Affidavit of Patrick Jebb sworn 13 July 2017 (in action CIV 1179 of 2017), pages 7 - 41 and 65 - 69.

Applicable legal principles: abuse of process

Staying proceedings as an abuse of the process of the court

1. What amounts to an abuse of the court's process is insusceptible of a formulation comprising closed categories.[65]  It extends to all categories of case in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness.[66]  Abuse of process occurs in any circumstance in which the use of the court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute.[67]  However, the onus of satisfying the court that there is an abuse of process is a heavy one.[68]  The power to dismiss proceedings as an abuse of process should be exercised with caution[69] and only in the most exceptional or extreme case.[70]

   [65] Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [9]; Michael Wilson & Partners Ltd v Nicolls[2011] HCA 48; (2011) 244 CLR 427 [89]; Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507 [25].

   [66] Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378, 393.

   [67] Tomlinson v Ramsey Food Processing Pty Ltd [25]; Timbercorp Finance Pty Ltd (in liq) v Collins [2016] HCA 44; (2016) 259 CLR 212 [69].

   [68] Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509, 529.

   [69] Moore v Inglis (1976) 9 ALR 509, 516.

   [70] Walton v Gardiner (392).

2. In Rogers v The Queen McHugh J observed:

   Although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories: (1) the court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court's procedures would bring the administration of justice into disrepute.[71]

   [71] Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251, 286 (approved and adopted in Batistatos v Roads and Traffic Authority of New South Wales [15] and Michael Wilson & Partners Ltd v Nicolls [89].

3. Subsequently, in Ridgeway v The Queen, Gaudron J referred to 'abuse of process' in terms that included within the concept the notion of proceedings that are frivolous, vexatious or oppressive.  Her Honour's observations bear repeating:

   The powers to prevent an abuse of process have traditionally been seen as including a power to stay proceedings instituted for an improper purpose, as well as proceedings that are 'frivolous, vexatious or oppressive'.  This notwithstanding, there is no very precise notion of what is vexatious or oppressive or what otherwise constitutes an abuse of process.  Indeed, the courts have resisted, and even warned against, laying down hard and fast definitions in that regard.  That is necessarily so.  Abuse of process cannot be restricted to 'defined and closed categories' because notions of justice and injustice, as well as other considerations that bear on public confidence in the administration of justice, must reflect contemporary values and, as well, take account of the circumstances of the case.  That is not to say that the concept of 'abuse of process' is at large or, indeed, without meaning.  As already indicated, it extends to proceedings that are instituted for an improper purpose and it is clear that it extends to proceedings that are 'seriously and unfairly burdensome, prejudicial or damaging' or 'productive of serious and unjustified trouble and harassment'.[72] (emphasis added) (citations omitted)

   [72] Ridgeway v The Queen [1995] HCA 66; (1995) 184 CLR 19, 74 - 75. These observations were referred to with apparent approval by the plurality in Batistatos v Roads and Traffic Authority of New South Wales [14] and in Michael Wilson & Partners Ltd v Nicolls [89].

1. Unlike Mr Jebb, however, I would not limit the significance of the security for costs order in the earlier proceedings to provision of security for just the later stages of these proceedings.  The way in which Mr Jebb has brought to an end and then revived the oppression claim will necessitate that - once the temporary stay is lifted - the usual interlocutory steps must be performed.  That duplication is a result of the convoluted way in which Mr Jebb had chosen to litigate the oppression claim.  It has nothing to do with the defendants.  The defendants will incur costs throughout the proceedings.  It is only just that security is provided for all stages in these new proceedings.

2. Mr Jebb did contend, however, that he ought not be required to pay security for costs on the basis that his impecuniosity was caused by the defendants' actions.

3. In this respect Mr Jebb said two things.  First, that the defendants had not made any offer to buy his shares.  That may be so but it does not follow that this caused Mr Jebb to become impecunious.  The absence of an offer to purchase the shares cannot of itself have caused a deterioration in Mr Jebb's financial position.  That is all the more so when, until relatively recently, the shares were the property of TWI.  Second, it was contended that the rights issue had made it more difficult to obtain litigation funding.  There was no evidence to support this contention.  Logically it does not necessarily follow.  A challenge to the rights issue is part of the oppression claim.  A litigation funder would discount the effect of the rights issue if it believed that Mr Jebb had a strong case to set it aside.  In any case the rights issue itself is not alleged to have, and ought not to have, caused a deterioration in Mr Jebb's financial position.

4. I do not accept Mr Jebb's contention that he is impecunious as a result of the conduct of the defendants as alleged in the oppression proceedings.

5. Save in one respect, the other usual factors which may be relevant to the exercise of the discretion to order security for costs are not factors which are material in the present case.  The remaining factor that is relevant is whether the application for security is oppressive.  In the manner in which the application is formulated I consider the application to be oppressive.  It is oppressive in amount - the claim for $1 million is overstated.  For example, it seeks costs on the basis that the hourly rate for counsel for the defendants is assessed at $1,000 per hour.  The rate under the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (WA) is $418 per hour (inclusive of GST). It is also oppressive in seeking that security be provided in two large amounts - including $600,000 within 7 days ‑ rather than appropriate tranches at various stages in the litigation. Those matters may be ameliorated by providing for security in stages as determined from time to time and fixing a more measured amount for the initial tranche.

6. Accordingly, I will order that security for costs be provided in amounts to be fixed from time to time.

7. Initially I will make an order for security for costs up to and including close of pleadings.  Once pleadings have closed it will be possible to better scope the likely extent of the litigation and the security that should be ordered for later stages.  In considering the appropriate amount for security for the defendants' costs up to and including close of pleadings I have had regard to the draft bill of costs that is attachment 'AJT‑26' to Mr Tharby's affidavit affirmed 8 November 2018.  I will, however, reduce the hourly allowance for counsel for the defendants to that provided for under the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (WA).

8. Adapting the amount claimed in this way the initial tranche to be ordered by way of security for costs will be an amount of $31,000 (rounded down from $31,174) comprising provision of the defence and three directions hearings.  The cost consequences of the current application will be dealt with separately and need not be taken into account in fixing the initial tranche to be ordered by way of security for costs.

Conclusion and orders

1. Subject to arrangements being implemented to satisfy the likely taxed costs of TWI's earlier oppression proceedings, Mr Jebb's new oppression proceedings in this action are not an abuse of the process of the court.  That is so notwithstanding that these proceedings advance the same, or substantially the same, oppression claim as was prosecuted in the earlier proceedings (although on behalf of Mr Jebb as member rather than TWI).  The defendants' application for a permanent stay of these proceedings on the ground of abuse of process will be dismissed.

2. However, the new proceedings will be stayed temporarily until there has been payment into court to ensure satisfaction of the likely taxed costs of the earlier proceedings.  The imposition of a condition to this effect is consistent with the usual practice of the court where an action has been dismissed for want of prosecution with costs.  The costs of the earlier action should be paid before fresh proceedings for the same, or substantially the same, claim are commenced or continued.  In all the circumstances it would be an abuse of the process of the court for Mr Jebb to continue these proceedings without arrangements first being made to satisfy the likely taxed costs of the earlier failed oppression proceedings.  It is also appropriate that Mr Jebb provide security for costs in relation to the new proceedings.

3. Subject to hearing from Mr Jebb and counsel for the defendants as to precise terms, I propose the following orders to give effect to these reasons:

   (1)The proceedings are stayed until an amount is paid into court to meet the balance of the taxed costs of the defendants in action COR 59 of 2011 in accordance with the orders of the Hon. Justice Kenneth Martin made 8 February 2019.  The amount to be paid into court is to be:

   (a)pending taxation and determination of the balance of the taxed costs of the defendants in action COR 59 of 2011 in accordance with the orders of the Hon. Justice Kenneth Martin made 8 February 2019, an amount of $165,000; and

   (b)following taxation and determination of the balance of the taxed costs of the defendants in action COR 59 of 2011 in accordance with the orders of the Hon. Justice Kenneth Martin made 8 February 2019, such amount as is necessary to meet the balance of the taxed costs of the defendants in action COR 59 of 2011 as so taxed and determined.

   (2)The plaintiff provide security for the costs of the defendants in these proceedings.  The security:

   (a)is to be provided by the payment of money into court; and

   (b)is to be in amounts and at times as determined by the court from time to time.

   (3)Within 35 days after the date of this order the plaintiff pay into court, by way of security for the costs of the defendants in these proceedings, an amount of $31,000 as an initial tranche in respect of the defendants' costs up to and including close of pleadings.

   (4)There is liberty to apply on 2 working days' notice:

   (a)to vary par (1) of these orders to reflect the outcome of the taxation and determination of the balance of the taxed costs of the defendants in action COR 59 of 2011 in accordance with the orders of the Hon. Justice Kenneth Martin made 8 February 2019; and

   (b)to make application for determination of the amounts and times for provision of further tranches of security for the costs of the defendants in these proceedings.

   (5)The application is otherwise dismissed.

4. I will hear from Mr Jebb and counsel for the defendants as to the costs of the application.  I propose to fix the quantum of the costs and to make them payable forthwith in accordance with par 3 of PD 4.7.1 of the Consolidated Practice Directions.

Jebb v Superior Lawns Australia Pty Ltd

Chronology of Previous Decisions

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [2011] WASC 92 (EM Heenan J)

         13 April 2011

         An interim injunction was granted to restrain SLA proceeding with a proposed rights issue.

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [2011] WASC 171

         20 April 2011

An application was made to extend the interim injunction to restrain the rights issue; the application was refused. No inference of impropriety was drawn: [19]. The court was not persuaded that it was proper interlocutory exercise to second guess the board as to whether a capital raising was necessary: [27]. The causes of action were 'arguable', but not 'strong': [30]. However, undertakings were required from the defendants including an undertaking not to apply any funds raised in repayment of related party loans: [37] - [39].

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 2] [2012] WASC 169

         29 May 2012

The court refused to allow Mr Jebb (who had become trustee of the TWIT) to be substituted as plaintiff for TWI (for the second time): [37] ‑ [38], [53] and [75]. That was untenable as Mr Jebb was not a member of SLA when the proceedings were commenced: [61] and [63]. It was noted that a previous application for Mr Jebb to become solicitor on the record for TWI had also been declined as Mr Jebb had a clear conflict of interest: [9], [52], [68], [74]. The purpose in seeking substitution was to overcome the problem that TWI required, but could not afford, legal representation: [6], [11]. Mr Jebb was found to have engaged in 'tactical manoeuvres' ([58] ‑ 59]) and to have embarked on an 'undisguised manoeuvre to circumvent the perceived inconvenience' of an earlier ruling ([68]). As TWI had been disenfranchised the oppression proceedings were stayed: [60], [74], [75].

         In obiter Kenneth Martin J observed (at [55]):

Discretion in the relief granted under s 232 and s 233 is an important consideration. It is one thing to afford redress where an existing member's interests have been and remain affected by oppressive conduct. It is another thing to grant redress to a former shareholder that has disposed of their shareholding. Redressing the position of a current shareholder that has acquired shares from another party, knowing that the transferor of those shares has claimed to have been oppressed and had issued proceedings, is a distinct, third scenario.

His Honour also noted the defendants' acceptance of the potential for the proceedings to be discontinued and for Mr Jebb to then commence his own proceedings: [70].

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 3] [2012] WASC 319

11 September 2012

         The defendants' application to be released or excused from prior coercive orders (as to the provision of audited financial accounts) and undertakings (as to repayment of related party loans) was refused.

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [2012] WASC 460

30 November 2012

The court ordered that SLA register the share transfers by Mr Jebb to TWI. In the course of the reasons, the oppression proceedings are described as a 'potentially meritorious claim': [69].

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [2012] WASC 460 (S)

1 February 2013

         Dispositive and costs orders were made following the application the subject of Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [2012] WASC 460.

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 2] [2012] WASC 143; (2013) 275 FLR 55

         29 April 2013

The defendants' application to have the oppression proceedings dismissed was refused. The application was made on the basis that, while initially a shareholder and that status having been revived, TWI had ceased to be a member during the proceedings: [1], [3], [22]. The court found that TWI was only temporarily disenfranchised and the underlying cause of that disenfranchisement had been redressed: [31].

         The court referred to:

·            the transfer and then re-transfer of TWI's shareholding being 'essentially unproductive and wasteful' and attributable to 'inept tactical decision making' by Mr Jebb: [6(b)]; and

·            Mr Jebb's decisions delivering a two year 'wholly unnecessary' delay in the progression of the litigation: [6(c)].

         Kenneth Martin J again noted the defendants' acceptance of the potential for the proceedings to be discontinued and for Mr Jebb to then commence his own proceedings: [3] (see also [8(d)).

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 3] [2013] WASC 150

         29 April 2013

TWI was ordered to provide security for costs in the amount of $150,000: [21]. It was said, however, that TWI had a legitimate interest in pursuing what is 'not an untenable cause of action': [17].

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 4] [2013] WASC 361

         27 September 2013

This concerned a costs determination following a springing order that allowed until 17 September 2013 to provide security for costs (see [20]). The court noted that TWI had twice defaulted in meeting the order for security: [23].

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 5] [2014] WASC 70

12 March 2014

         This concerned a costs decision on an interlocutory injunction application that was ultimately not pressed.

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 6] [2014] WASC 278; (2014) 102 ACSR 130

1 August 2014

         A strike out application by the defendants was dismissed.  One of the substantive issues considered was whether in alleging oppressive conduct TWI could rely on acts or events that occurred prior to it becoming a shareholder.   The court held that:

· Standing under s 231 is determined by whether the plaintiff is found on the company's register of members: [69].

· A person may hold a good cause of action under s 232 in respect of a corporation's acts or omissions preceding the person becoming a member: [58], [69]. The statutory oppression provision are not fettered by rigid temporal constraints: [68].

However, temporal considerations could and should be taken into account in adjudicating an oppression action, eg in evaluation of the merits and the appropriate relief, if any: [70]. That is a matter for trial: [77].

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 7] [2015] WASC 280; (2015) 107 ACSR 575

5 August 2015

TWI's application to re-amend its originating process was granted on a conditional basis, namely, that the defendants retain all limitation defences they currently held: [12], [108], [113]. Kenneth Martin J made considerable observations as to the 'derivative or quasi-derivative' nature of TWI's claim insofar as the buy-out order sought the value of SLA's assets be assessed having regard to alleged causes of action against other defendants which may be time barred. See eg at [58] - [61], [94] and [111] - [112]. It is said that the 'derivative character of the claims … presents as unique, in the context of ss 232 and 233': [111(a)]. His Honour concluded that any limitation defences to a notional action by SLA could be pleaded and raised in a defence to the oppression proceedings: [111(b)].

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 8] [2016] WASC 34

9 February 2016

The court determined that on the proper construction of earlier orders providing for security for costs: (1) a further tranche of security in the amount of $100,000 had fallen due on 26 November 2015; and (2) the proceedings were therefore stayed until that further security payment was made. Kenneth Martin J noted that the action had 'progressed sporadically': [10].

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 8] [2016] WASC 34(S)

         20 April 2016

TWI sought to resist a provisional costs order foreshadowed in [2016] WASC 34 [43]. Substantial submissions were filed in support of that position: [3]. The court held that the ordinary rule that costs follow the event ought to apply: [7].

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 9] [2016] WASC 68

         4 March 2016

         The court made a springing order for the dismissal of the oppression proceedings failing provision of the additional $100,000 in security for costs by 8 April 2016 (this being consequential on the original order for security for costs).

         Kenneth Martin J observed (at [41]):

It is regrettable that Trafalgar appears to have lost… its litigation funder ... Without external support, it is very clear - indeed, admitted, as I would assess Mr Jebb's affidavit of 14 December 2015 at par 5 ‑ that this complex commercial action now sought to be pursued by Trafalgar  … cannot viably advance to a trial.

His Honour suggested that there was 'virtually nothing that is tangibly optimistic … that Trafalgar is, or is likely to be, in a position to resume any viable pursuit of [the] proceedings in the near future': [42]. His Honour characterised the plaintiff's progress in the litigation as 'stuttering': [45].

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 10] [2016] WASC 111

         5 April 2016

         Orders were made for the production of a litigation funding agreement entered into by TWI.

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 11] [2016] WASC 152

         19 May 2016

         The time for compliance with the springing order made in [No 9] was extended to 30 May 2016 (in part because of the imminent hearing date of proceedings brought by TWI for a claim against its former litigation funder to the effect that it was obliged to meet the $100,000 payment).

         As to the amount of security, the following observations are pertinent:

I have no doubt that the amount of increased security for costs as ordered under those consent orders, up from $150,000 up to $350,000, was, in the overall scheme of the litigation environment then, modest in the dimensions for what is a complex underlying commercial litigation in the corporate sphere. (at [13])

Insight towards the underlying complexities of this action can be obtained from my reasons in Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 7] … It is difficult, complex and correlatively expensive commercial litigation.  There should be no pretence or glossing of its underlying complexities.  In the scheme of things, an amount of security of $350,000 in November 2014 looks to me like a proverbial 'drop in the bucket' measured against the ultimate legal costs that will be incurred on one side if this matter were to be fully litigated and run as a contested trial. (a [14])

Observations were made as to Mr Jebb's personal financial position ([35]) and TWI's case ([38]). It is said that TWI's case is 'not in the unarguable category': [38]. Observations were also made as to the defendants defending the litigation 'tooth and nail': [40].

Trafalgar West Investments Pty Ltd v LCM Litigation Management Pty Ltd [2016] WASC 159 (Beech J)

         26 May 2016

         TWI was unsuccessful in the claim that its former litigation funder was liable to satisfy the $100,000 security for costs order.

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 12] [2016] WASC 216

         19 July 2016

         With the further $100,000 security for costs having been paid on 30 May 2016 ([1]), the court addressed outstanding matters including an extant application to restrain Jebb Legal (the principal of which was Mr Jebb) from acting for TWI.  Jebb Legal, through Mr Jebb, was acting as it was said that TWI was unable to finance independent legal representation.  Despite various assurances as to activities to be undertaken by independent counsel the court restrained Mr Jebb and Jebb Legal from acting further on the part of TWI.

         Kenneth Martin J noted that:

· Mr Jebb had an acknowledged conflict of interest as a 'major witness' and also a 'direct financial interest' in the trial: [12]. See also at [47]. There was also the circumstance that Mr Jebb had provided legal advice to SLA: [13].

· At prior points in the litigation Mr Jebb had sought to act for TWI and the court had declined to countenance that situation: [14]. See also at [30] - [38].

· There had been unnecessary problems in the past with Mr Jebb attempting to involve himself as a legal practitioner for TWI: [54].

         His Honour stated as to Mr Jebb's position (at [51]):

The conflict position is stark, undisputed and ongoing.  It is a conflict that would constantly bear upon the ordinary day-to-day running of this action by any similarly placed legal practice - where a need for a competent, dispassionate, disinterested, trustworthy professional lawyer of record is indispensable.  Such a requirement is necessary to ensure the integrity of essential processes of conferral, discovery, and pleadings.  It is also indispensable to the ethical and efficient running of a trial.  Clearly very significant ethical constraints govern the conduct of the legal practitioners acting in a high level commercial trial.

Jebb v Superior Lawns Australia Pty Ltd [2017] WASC 335; (2017) 326 FLR 288

20 November 2017

On 13 December 2016 TWI retired as trustee of the TWIT; Mr Jebb became the trustee. Mr Jebb applied for vesting orders under s 78 of the Trustees Act 1962 (WA) in relation to the SLA shares. Consideration was given to whether s 234(d) of the Corporations Act 2001 (Cth) would then allow Mr Jebb to be substituted as replacement plaintiff in the oppression proceedings. The parties contended that:

·            SLA: the vesting order would non-suit TWI ([50]) and, while Mr Jebb could commence fresh proceedings, he could not be substituted as plaintiff in the existing oppression proceedings ([51] ‑ [54], [131]);

· Mr Jebb: following a vesting order he could and should be substituted as plaintiff in the existing oppression proceedings ([31], [116]).

A definitive answer was not provided. However, as a matter of 'high degree of certainty' the question was answered in the negative ([3]) as a substitution application was 'likely to fail' ([209]). See also at [211] - [212] and [228] - [230]. In so doing the court confirmed that a vesting of the shares in Mr Jebb would non-suit TWI: [144], [203], [205], [211]. On vesting Mr Jebb could invoke s 234(d) in a fresh action: [209], [229]. As a matter of standing it was said to be necessary for a plaintiff to fall within one of the categories in s 234 and then to remain so until completion of the action: [151] - [152], [204], [211]. As to that Kenneth Martin J noted the supremacy of the share register and the immateriality of equitable ownership: [153], [226] (see also at [154] - [170]). The fact that the TWIT had a continuous residual equitable ownership in relation to the shares was an irrelevant consideration: [213] - [214], [225] - [227].

The reasons contain a comprehensive overview of the background facts: [4] - [35].

Kenneth Martin J characterised a suggestion that Mr Jebb might resume a position as solicitor on the record for himself as the substituted plaintiff in the oppression proceedings as 'unsatisfactory': [94].

Jebb v Superior Lawns Australia Pty Ltd [2017] WASC 335 (S)

22 February 2018

         Vesting orders were made following Jebb v Superior Lawns Australia Pty Ltd [2017] WASC 335; (2017) 326 FLR 288: [4]. These reasons concerned costs orders following the application for the vesting orders. As between Mr Jebb and SLA the order was no order as to costs: [13].

Jebb v Superior Lawns Australia Pty Ltd [2018] WASC 166

         1 June 2018

         Mr Jebb sought an order that he be substituted as plaintiff in the oppression proceedings in lieu of TWI.  There was no challenge to the provisional assessments as reached by Kenneth Martin J in Jebb v Superior Lawns Australia Pty Ltd [2017] WASC 335; (2017) 326 FLR 288; instead a new legal argument was put in support of substitution: [18] - [20]. The new argument raised s 10 of the Trustees Act 1962 (WA) and contended that the statutory chose in action for oppression had been transmitted to Mr Jebb: [21], [23]. The application for substitution was dismissed on the basis that so doing was impermissible having regard to s 234: [42], [65] - [73], [79], [91].

         The application was:

·            heard in circumstances where the oppression proceedings were on the Inactive Cases List due to orders of the court made 18 January 2018: [3]; and

· brought in fresh proceedings to avoid the operation of O 4A r 28(1): [4].

TWI accepted that it had been non-suited in the oppression proceedings as it had ceased to be a member of SLA: [6].

         Kenneth Martin J observed that in principle (at [14] - and see also at [60] and [88(h)]):

         (1)     Mr Jebb could commence his own fresh oppression action (subject to any limitation of action issues and other obstacles);

         (2)     it was possible for Mr Jebb by that fresh action to complain about oppressive conduct of SLA against TWI provided he, Mr Jebb, was a member of SLA at the date he commenced that fresh action;

         (3)     however, the range of discretionary relief open to Mr Jebb if he succeeded at trial might not be the same discretionary relief as would have been afforded to TWI as the victim of the alleged oppressive conduct.

As to the latter point his Honour noted (at [88(i)]):

By my assessment, any fresh action commenced by Mr Jebb in 2018 as a person in whom the Super Lawns shares formerly held by Trafalgar had been transmitted in law, or as a (new) member in respect of those same shares as from 23 February 2018, is a distinctly different statutory cause of action ...  That consideration would be particularly relevant to final buy-out order relief, ultimately to be assessed.

It is one thing to be a minority shareholder (at the level of 30% at one point) and to advance a grievance of oppressive conduct under statute as Trafalgar did.  It is quite another for a down-the-line purchaser or transmittee of the same shares … (with notice of all prior events) to themselves seek buy-out relief in respect of the same minority shareholding they have later come to hold (beneficially or non-beneficially - it would make no difference).

Even if, contrary to the court's finding, substitution was allowable, as a matter of discretion Kenneth Martin J would have refused the application: [76], [78]. Reference was made to: the 'stuttering' and 'less than acceptable' progress of the litigation by TWI (when relevantly controlled and directed by Mr Jebb) ([75], [88(a)]); the oppression proceedings being on the Inactive Cases List and 'effectively over' ([81]); the ‘egregious' conflict of interest on the part of Mr Jebb which was never denied, was perpetuated and recurred ([82]); earlier manoeuvrings by Mr Jebb having delayed the progress of the litigation for approximately two years ([86]); the outlay of the litigation for the defendants - including those of an emotional and disruptive character beyond pure fiscal outlay ([88(a)]; the proceedings were 'speculative' and manifested 'novel derivative and quasi-derivative grievances' that were 'unusual to say the least'. It was a 'novel' action where any relief would 'very much' be the subject of discretionary considerations ([88(d]); the matter being a considerable distance away from being ready for a long trial ([88(e]).

         Among other things Kenneth Martin J stated:

Replacing Trafalgar with Mr Jebb as a plaintiff in COR 59 of 2011 would not be introducing any fresh directing mind towards the future strategic decisions necessary to be taken on behalf of the plaintiff in the litigation.  Fault for the unacceptable progression of Trafalgar's action needs to be laid fairly and squarely with Mr Jebb personally in terms of his strategic decisions taken over seven years.  The prospective horizon would indicate no guiding hand changes in that respect for the litigation.  Mr Jebb seeks to effectively replace the insolvent Trafalgar plaintiff 'shell' and then to rise from the ashes like a phoenix to continue that litigation - seemingly oblivious to the carnage of creditors burnt so far (at [88(b)]). (emphasis added)

Mr Jebb has manifested a gross lack of judgment at various times whilst in control of Trafalgar as regards its decision making in COR 59 of 2011.  He has repeatedly acted for Trafalgar on occasions as a legal practitioner in gross conflict of interest and whilst he has purported to recognise that by his words to this court, he has carried on regardless until stopped by order.  Any prospect of Mr Jebb as 'Jebb Legal' being on the record again in COR 59 of 2011 for the plaintiff is an unacceptable risk.  I assess that scenario to be a real future risk notwithstanding what is said about a new litigation funder and independent legal representation.  I have heard this too often in the past, only to be disappointed by Mr Jebb's conduct (at [88(c)]). (emphasis added)

A suggestion that, if substituted as plaintiff, Mr Jebb as a personal litigant should not be ordered to provide any further security for costs was said to be 'tactical and ultimately unacceptable, as a matter of overall fairness': [88(g)].

Jebb v Superior Lawns Australia Pty Ltd [2018] WASCA 123 (Mitchell and Beech JJA)

         19 July 2018

         Mr Jebb sought an order that the oppression proceedings be removed from the Inactive Cases List pending the hearing of an appeal against the order refusing his substitution as plaintiff.  The application was dismissed: [(6)(1)].  This was primarily on the ground that the Court of Appeal was not satisfied that, if substituted as plaintiff, Mr Jebb had the capacity to bring the oppression proceedings to trial in a timely way: [7] (see also at [75] - [87]).  Thereafter - recognising that the appeal would become nugatory as the proceedings would inevitably be taken to have been dismissed for want of prosecution on 18 July 2018 - Mr Jebb sought, and the Court of Appeal made, an order dismissing the appeal: [6(2)], [7].

Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd [No 13] [2019] WASC 58

28 February 2019

This concered a costs decision following the dismissal of the oppression proceedings due to the operation of O 4A r 28(1). TWI was ordered to pay the defendants' costs of the action ([10]) with a lifting of the scale limits ([11]). $160,000 had been paid into court by way of security for costs. Kenneth Martin J, concluding that the taxed costs were very likely to exceed the $160,000, ordered payment out of the $160,000 on a partial fixing of the defendants' costs; the balance of the costs were to be taxed: [13] - [25].

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

EP
Research Associate/Orderly to Master Sanderson

17 APRIL 2019