PERDAMAN CHEMICALS & FERTILISERS PTY LTD -v- the GRIFFIN COAL MINING COMPANY PTY LTD [No 9] - [2013] WASC 42

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: PERDAMAN CHEMICALS & FERTILISERS PTY LTD -v- THE GRIFFIN COAL MINING COMPANY PTY LTD [No 9] [2013] WASC 42

CORAM: EDELMAN J

HEARD: 14 FEBRUARY 2013

DELIVERED : 14 FEBRUARY 2013

FILE NO/S: CIV 1925 of 2011
CIV 2422 of 2011
CIV 2423 of 2011
CIV 3201 of 2011
Consolidated by orders dated 18 August 2011 & 14 November 2011

BETWEEN: PERDAMAN CHEMICALS & FERTILISERS PTY LTD
Plaintiff
AND
THE GRIFFIN COAL MINING COMPANY PTY LTD
First Defendant
LANCO INFRATECH LTD
Second Defendant
LANCO RESOURCES AUSTRALIA PTY LTD
Third Defendant
RUSSELL CONLEY
Fourth Defendant
MANOJ AGARWAL
Fifth Defendant
LAGADAPATI MADHUSUDHAN RAO
Sixth Defendant
KANDIMALLA K V NAGA PRASAD
Seventh Defendant
LANCO RESOURCES INTERNATIONAL PTE LTD
Eighth Defendant
S AMARENDRAN
Ninth Defendant
(BY ORIGINAL ACTION)
THE GRIFFIN COAL MINING COMPANY PTY LTD
Plaintiff
AND
PERDAMAN CHEMICALS AND FERTILISERS PTY LTD
First Defendant
VIKAS RAMBAL
Second Defendant
ANDREAS WALEWSKI
Third Defendant
(BY COUNTERCLAIM)

Catchwords:

Practice and procedure - Application for leave to be released from obligation to use documents obtained by coercive process only for the purposes of the action in which they were obtained - Broader heads of power for service out of the jurisdiction in Federal Court Rules 2011than in Rules of the Supreme Court 1971 - Whether plaintiff can be released from the obligation in relation to documents in the Supreme Court for the purpose of application to serve out of the jurisdiction in the Federal Court - Factors relevant to exercise of discretion

Legislation:

Federal Court Rules 2011
Rules of the Supreme Court 1971 (WA)

Result:

Plaintiff granted leave to use documents in the Federal Court proceedings

Category: B

Representation:

Original Action

Counsel:

Plaintiff:     Mr M L Bennett
First Defendant             :     Mr B D Luscombe
Second Defendant         :     Mr B D Luscombe
Third Defendant           :     Mr B D Luscombe
Fourth Defendant          :     Mr B D Luscombe
Fifth Defendant            :     Mr B D Luscombe
Sixth Defendant            :     Mr B D Luscombe
Seventh Defendant        :     Mr B D Luscombe
Eighth Defendant          :     Mr B D Luscombe
Ninth Defendant           :     Mr B D Luscombe

Solicitors:

Plaintiff:     Bennett & Co
First Defendant             :     Clifford Chance
Second Defendant         :     Clifford Chance
Third Defendant           :     Clifford Chance
Fourth Defendant          :     Clifford Chance
Fifth Defendant            :     Clifford Chance
Sixth Defendant            :     Clifford Chance
Seventh Defendant        :     Clifford Chance
Eighth Defendant          :     Clifford Chance
Ninth Defendant           :     Clifford Chance

Counterclaim

Counsel:

Plaintiff:     Mr B D Luscombe
First Defendant             :     Mr M L Bennett
Second Defendant         :     No appearance
Third Defendant           :     No appearance

Solicitors:

Plaintiff:     Clifford Chance
First Defendant             :     Bennett & Co
Second Defendant         :     Herbert Smith Freehills
Third Defendant           :     Herbert Smith Freehills

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

Agar v Hyde [2000] HCA 41; 201 CLR 552
Bray v F Hoffman La Rouche Ltd [2002] FCA 243
Hearne v Street [2008] HCA 36; (2008) 235 CLR 125
Miller v Scorey [1996] 1 WLR 1122
Perdaman Chemicals & Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [No 2] [2011] WASC 189

EDELMAN J:

Introduction

This is yet a further contested interlocutory application in these proceedings. One thing that can be said of the approach of the parties to this litigation is that it is consistent. As the Chief Justice observed in an earlier hearing concerning some of the same issues raised in this application, the parties to this litigation have left no stone unturned. On that occasion the defendants consented to Perdaman's application. Perhaps because the defendants erroneously considered the Chief Justice's comment as a compliment, a similar application is now vigorously opposed. This time, affidavits and attachments running to hundreds of pages were filed. Substantial written submissions, responsive submissions, and reply submissions were also filed.
This application is by the plaintiff, Perdaman, for leave to use a number of documents in proceedings in the Federal Court of Australia, WAD 1 of 2013, between Perdaman and ICICI Bank Ltd. The documents were obtained by discovery and subpoenas in the litigation in this Court. Perdaman is subject to the duty not to use those documents for purposes other than the proceedings in this Court for which the documents were produced.
Perdaman's immediate need for the documents is for an application in the Federal Court for leave to serve ICICI Bank Ltd with the Originating Application overseas. The Federal Court proceedings against ICICI Bank arise from some common substratum of fact as the proceedings between the parties in this Court. The reason why Perdaman has commenced proceedings in the Federal Court of Australia against ICICI Bank is because of what it describes as a 'deficiency' in O 10 r 1(1) of the Rules of the Supreme Court 1971 (WA) (the Rules) in relation to the long‑arm jurisdiction of this Court. It was submitted that the alleged 'deficiency' concerns the absence from the list in that order of causes of action arising from Commonwealth legislation, in this case the Australian Consumer Law.
On 27 September 2012, the Chief Justice of this Court gave Perdaman leave to use other documents produced in this Court in the Federal Court proceedings. Some of those other documents which were the subject of the Chief Justice's order required retrospective leave because Perdaman had used them without first seeking leave. The orders made by the Chief Justice were not opposed by Mr Karkar QC for the defendants. Mr Luscombe for the defendants now opposes orders permitting the use of any further documents.
For the reasons which follow, Perdaman should be released from its obligation not to use the five categories of document for purposes other than those for which the documents were produced in this Court. The release is only to permit the use of those documents in the Federal Court proceedings WAD 1 of 2013. It was common ground that if leave to use the documents were to be granted then this was the appropriate extent of the leave.

The documents and obligation from which release is sought

The documents that Perdaman seeks leave to use in the Federal Court were obtained during the course of the proceedings in this Court by subpoena and through discovery. There are five categories of document that Perdaman seeks leave to use. They are set out in the appendix to these reasons. In relation to the first two categories (and the other categories to the extent to which they overlap with the first category) any leave required must be retrospective, nunc pro tunc (now for then). The first two categories of document are
(i)copies of the documents referred to in Perdaman's statement of claim filed in the Federal Court on 3 January 2013; and
(ii)the syndicated facility agreement and the negative pledge documents.
The reason why leave is necessary for the use of all five categories of document is because they are subject to a duty, which was once misleadingly described as an 'implied undertaking'. The obligation to use documents obtained by coercive process only for the purposes of the action in which they were obtained is imposed by law rather than undertaken, either subjectively or objectively: Hearne v Street [2008] HCA 36; (2008) 235 CLR 125, 157 - 160 [105] - [108] (Hayne, Heydon & Crennan JJ).
Perdaman submits that the use of the documents in the Federal Court is not a purpose which is collateral or ulterior to the proceedings in this Court because Perdaman intends to use those documents for the ultimate end of adding ICICI Bank as a party to the proceedings in this Court. As Beech J observed, referring to a number of authorities, in Perdaman Chemicals & Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [No 2] [2011] WASC 189 [20]:
There are authorities to the effect that it will not be a collateral or ulterior purpose to use documents disclosed on discovery to add new causes of action or parties to the action to which the documents have been disclosed.
For reasons I will shortly explain it is not necessary to determine that issue in this application. Nor is it necessary to determine whether those authorities extend to situations where it is only the ultimate, and not the immediate, purpose for the use of the documents that the party seeking to use them wishes to do so to add another party to the action. Irrespective of the correct answer to this question, there can be no doubt that on the state of the authorities, Perdaman was correct to seek leave from this Court.

The Federal Court application for which use of the documents is sought

In the Federal Court action, Perdaman seeks leave to serve the Originating Application, dated 2 January 2013, upon ICICI Bank in Singapore: Rule 10.43(2) of the Federal Court Rules 2011. Perdaman has filed written submissions in the Federal Court submitting that notwithstanding that ICICI Bank is a foreign corporation, ICICI Bank nevertheless engaged in conduct in Australia which gives rise to a prima facie case against it.
The defendants to Perdaman's action in this Court have applied to intervene in the Federal Court proceedings. Their written submissions in the Federal Court include:
(i)that the allegations against ICICI Bank are 'colourable';
(ii)that the conduct alleged against ICICI Bank does not attract the jurisdiction of the Federal Court; and
(iii)that an inference can be drawn that the allegations against ICICI Bank are made for an improper purpose.
The defendants therefore oppose the grant of leave by the Federal Court to serve the Originating Application out of the jurisdiction. The Federal Court will hear the application in four days' time.

The defendants' arguments against release of Perdaman's obligation

The defendants submit that although the obligation not to make collateral use of documents can, in special circumstances, be released or modified by the Court, that power is not one which is 'freely exercised'. The defendants also submit that it is ordinarily no easy matter for an applicant such as Perdaman to secure the Court's indulgence to waive or relax the obligation. As the defendants submitted, 'good reason' must be shown to do so. Both of those propositions are correct.
The defendants then submit that Perdaman has not satisfied its burden of demonstrating that it is appropriate for the Court to grant leave. They make three submissions in this respect:
(i)there is no utility in the grant of leave because the Supreme Court proceedings have now advanced to a stage that will not permit the joinder of ICICI Bank as a defendant;
(ii)the purpose of leave is to attempt to generate jurisdiction over a potential foreign defendant which this Court's Rules do not permit; and
(iii)Perdaman has engaged in conduct constituting a serious breach of the substantive obligation necessitating an application for retrospective leave for the second time.
As to (i), it is not necessary to determine whether it is likely that there will be any joinder of ICICI Bank as a defendant to these proceedings or consolidation of the ICICI Bank proceedings with these proceedings. During the oral hearing this afternoon, Perdaman clarified that the references in its submissions to its desire to use the documents in order to consolidate the current Federal Court proceedings with those in this Court was not the expression of an intention that proceedings against ICICI Bank would necessarily be abandoned if consolidation were unsuccessful. It suffices to proceed on the basis that Perdaman seeks to prosecute an action against ICICI Bank, either in the Federal Court or in the Supreme Court.
As to (ii), the defendants submit that it would be perverse to grant leave because a purpose of the leave sought is to attempt to achieve indirectly something which cannot be obtained directly under this Court's Rules (that is, to serve ICICI Bank out of the jurisdiction and subsequently to bring ICICI Bank before this Court despite the likely absence of relevant long-arm jurisdiction of this Court). I do not accept this submission for three reasons.
First, although the service of process out of the jurisdiction was, and is, an exorbitant jurisdiction in England, this position has now been rejected by the High Court of Australia. In Agar v Hyde [2000] HCA 41; 201 CLR 552, 570 - 571 [42], Gaudron, McHugh, Gummow and Hayne JJ said:
Considerations of comity, and consequent restraint, have informed many of the reported decisions about service out of the jurisdiction. It is, however, important to notice that rules of court, or local statutes, providing for service outside the jurisdiction are now commonplace - at least in jurisdictions whose legal systems have been formed or influenced by common law traditions. Further, as the Court of Appeal rightly noted in its reasons in these matters, contemporary developments in communications and transport make the degree of 'inconvenience and annoyance' to which a foreign defendant would be put, if brought into the courts of this jurisdiction, 'of a qualitatively different order to that which existed in 1885' (footnotes omitted).
Secondly, it is, at the very least, arguable that such a stratagem by Perdaman serves to complement rather than to stultify the basis and nature of the long‑arm jurisdiction of this Court as expressed in the Rules. Much may depend on the underlying purpose served by the 'gateways' to service out of the jurisdiction in the Rules of this Court. Professor Briggs has recently remarked of the commonplace court rules concerning the service of documents out of the jurisdiction which are structured around requiring satisfaction of particular heads that 'it is difficult to see what value is added by these ... pigeonhole criteria': A Briggs The Conflict of Laws (3^rd ed, 2013 forthcoming) (123).
Thirdly if such an argument of perversity is to be raised, and it appears that it was not raised when this procedure was previously used to serve process out of the jurisdiction on some of the present defendants, the argument would best be considered if Perdaman obtains leave from the Federal Court to serve ICICI Bank out of the jurisdiction, and then seeks to cross‑vest the Federal Court proceedings back to this Court.
As to (iii), the conduct of Perdaman in using the first two categories of document prior to seeking the leave of this Court is a matter of concern.
In relation to the first two categories of document, this is the second time that Perdaman has been required to seek 'retrospective' leave from this Court in order to use documents for the purpose of bringing a claim against ICICI Bank.
On 13 July 2012 the solicitors for Perdaman sent a letter before action to the Directors of ICICI Bank and its Managing Director and Chief Executive Officer. That letter attached a number of documents which the defendants had provided pursuant to discovery orders made in this Court. The solicitors for the defendants wrote to the solicitors for Perdaman raising their concern that Perdaman had breached its obligation not to use those documents for purposes other than the proceedings in this Court. Perdaman's solicitors required and explained that having reviewed the authorities to which the defendants' solicitors had drawn attention they appreciated the concern. Perdaman's solicitors said that they were instructed to make an application to the Supreme Court for retrospective leave to use the documents which had been attached to the letter sent to ICICI Bank on 13 July 2012. Perdaman's solicitors said that the affidavit would include an apology for failing to seek leave prior to sending the letter.
The documents included with the letter were:
(i)an email from D Mittal from Lanco to B Agarwal from ICICI Bank;
(ii)draft letters attached to that email; and
(iii)three letters from ICICI Bank to Lanco.
On 27 September 2012, Martin CJ, after noting the apology proffered by counsel for the defendants, and by consent, ordered that Perdaman be given retrospective leave to use certain of the documents discovered by the defendants.
The submission of the defendants is that Perdaman had ample opportunity to apply for leave to use the documents prior to the filing of the Federal Court proceedings on 3 January 2013. They submit that because of Perdaman's decision not to do so it 'has put itself in a position where it is required to seek the leave of the Court to use documents that it has already deployed in breach of its substantive obligation'.

The exercise of discretion

I accept the defendants' submission that there is scope for discretion to be exercised to refuse retrospective leave as a condemnatory response to the behaviour of Perdaman. In Miller v Scorey [1996] 1 WLR 1122, 1133, Rimer J (as his Lordship was then) held that an order granting retrospective leave to use documents which are the subject of the substantive obligation not to use them for collateral purposes 'would, no doubt, amount to de facto validation of what had happened to date, although the court could perhaps reflect its disapproval of that by making appropriate costs orders'.
In oral submissions this afternoon counsel for the defendants argued that the grant of retrospective leave would also cause prejudice to the defendants. He relied upon Miller v Scorey in which Rimer J struck out an action in circumstances where to have allowed it to proceed, and to have granted retrospective leave for the use of documents upon which it relied, would have allowed the plaintiffs 'to take advantage of their own wrong' (1134). The advantage in that case was the benefit of a limitation defence.
The defendants said that the advantage in this case which Perdaman would obtain from the grant of retrospective leave was that an application might ultimately be able to be brought earlier in this Court to consolidate proceedings against ICICI with those already on foot in this Court. That application would be vigorously opposed by the defendants who are extremely anxious for trial dates to be set and who have strong reasons for wanting trial dates set.
This alleged 'advantage' to Perdaman is extremely narrow. First, as counsel for the defendants properly accepted the bringing of such a consolidation application one month or even two months earlier than would otherwise be the case would afford only a minor forensic advantage to Perdaman in the context of all of the matters to be assessed in determining whether consolidation would be ordered, including the considerable delay which has already ensued and the advanced state of the action in this Court.
Secondly, a consolidation application is contingent on a number of matters including the following: (i) success in the Federal Court application to serve out of the jurisdiction; (ii) success in any application in the Federal Court based upon whether the forum is clearly inappropriate, an application to which the defendants have already alluded; and (iii) success in a cross-vesting application.
Thirdly, there may be no delay at all if I were to refuse retrospective leave. Counsel for Perdaman said that a fresh proceeding would be almost immediately filed in the Federal Court. There would then be an urgent application before me for prospective leave to use the documents in that new proceeding, which I would hear tomorrow. If prospective leave were granted tomorrow (Friday), then it would seem very doubtful that the Federal Court would vacate a hearing of exactly the same issue on Monday merely because it relates to a different matter number.

In contrast with the matters raised by the defendants, there are a number of matters which make it appropriate to exercise discretion to grant the leave sought by Perdaman, both retrospectively and prospectively, and which outweigh the concerns raised by the defendants.
First, some of the submissions of the defendants appear to suggest that the conduct of Perdaman in using documents in the Federal Court without leave relates to all five categories of document. It does not. It is only the first two categories in relation to which retrospective leave is sought. However, the issue is complicated by the fact that first category (documents referred to in the statement of claim) includes not only the two documents in the second category for which retrospective leave is sought but also 22 other documents for which retrospective leave is needed and five documents which Perdaman already has leave to use.
Secondly, is the issue of the relevance of the documents about which leave is sought to the characterisation of the conduct of ICICI Bank. That characterisation is in turn relevant to the question of whether Perdaman can satisfy the Federal Court that it falls within one of the 'gateways' in Rule 10.42 of the Federal Court Rules. Each of the gateway sub-rules relied upon by Perdaman refers to the relevant matter 'in Australia'. The characterisation of ICICI Bank's conduct may also be relevant to whether the defendants are correct that the Federal Court 'could not possibly be satisfied that the sending of a letter by ICICI to Lanco Singapore constituted tortious interference or unconscionable conduct'.
Mr Banda, one of the solicitors for Perdaman, has sworn an affidavit deposing to his belief that the documents for which the leave is sought from this Court 'are relevant to the question of jurisdiction and prima facie case requirements'. It is unnecessary, and it would be inappropriate, for me to engage in an exercise of determining the extent to which those documents are relevant or the extent to which they might strengthen Perdaman's arguments. It suffices to say that the defendants, for the purposes of this application, do not dispute that the documents upon which Perdaman seeks to rely before the Federal Court may be relevant to meet the arguments of the defendants, as proposed interveners in the Federal Court. Indeed, the written submissions of the defendants, and Perdaman's pleading in the Federal Court, place considerable emphasis upon characterisation of the conduct of ICICI Bank, in particular the sending of two letters by ICICI Bank to Lanco Singapore. Those letters must be placed in context. And Perdaman does not accept that these are the only letters relevant in order to assess the conduct of ICICI Bank.
I accept that it is arguable that the documents before the Federal Court in relation to the Federal Court application are not all of the relevant documents surrounding ICICI Bank's conduct and that in the absence of the documents the subject of this application a misleading picture might be presented.
Thirdly, it is not disputed that the documents upon which Perdaman wishes to rely are not governed by the confidentiality regime between ICICI Bank and the defendants.
Fourthly, in paragraph 17 of the supplementary submissions filed by the defendants in the Federal Court, the defendants submit that the Federal Court should not draw any inferences in Perdaman's favour in relation to whether a prima facie case exists against ICICI Bank. The defendants say that the observations that support inferences made by Carr J in Bray v F Hoffman La Rouche Ltd [2002] FCA 243 [26] 'do not apply to the current case where the applicant, Perdaman, has had access to extensive discovery by the defendants [in] the Supreme Court proceedings'. But, the defendants now submit that none of the documents discovered can be put before the Federal Court.
These four matters are sufficient to justify the exercise of discretion in Perdaman's favour. They outweigh the concerns of the defendants in their opposition to the grant of leave which is now sought by Perdaman. The appropriate costs orders, to be assessed in light of Perdaman's conduct as well as the extent of the defendants' opposition to this application, are a separate question. I have already heard some submissions from the parties about costs but I will hear from the parties now if they have anything further to say.

Appendix: The five categories of document

1The documents referred to in the statement of claim filed by Perdaman in the Federal Court proceedings dated 3 January 2013.
2The Syndicated Facility Agreement and Negative Pledge documents annexed to the affidavit of Tanya Rachel Onofaro sworn 2 January 2013 in the Federal Court proceedings and identified as annexures 'TRO-13' and 'TRO-14'.
3A letter from Lanco Resources Australia Pty Ltd to The Griffin Coal Mining Company Pty Ltd and Carpenter Mine Management Pty Ltd dated 28 February 2011.
4The Lanco Resources International Pte Ltd Directors Resolution authorising Mr Babu and Mr Argarwal to represent Lanco Resources International Pte Ltd before ICICI Bank Limited attaching the following:
4.1letter from The Griffin Coal Mining Company (Griffin Coal) to ICICI Bank Limited dated 18 April 2011;
4.2letter from ICICI Bank Limited (ICICI) to Griffin Coal dated 20 April 2011;
4.3letter from Lanco Resources Australia Pty Ltd to ICICI dated 21 May 2011;
4.4letter from ICICI to Lanco Resources International Pte Ltd dated 24 May 2011 and copied to Griffin Coal and Lanco Resources Australia;
4.5letter from Griffin Coat to ICICI dated 11 July 2011;
4.6letter from ICICI to Griffin Coal dated 19 July 2011 and copied to Lanco Resources Australia and Lanco Resources International Pte Ltd;
4.7letter from Griffin Coal to ICICI (Singapore and India) and copied to Perdaman dated 25 July 2011;
4.8letter from Griffin Coat to ICICI (Singapore and India) dated 4 August 2011;
4.9letter from ICICI to Griffin Coal dated 17 August 2011 and copied to Lanco Resources Australia and Lanco Resources International Pte Ltd;
4.10letter from Griffin Coal to ICICI dated 24 August 2011;
4.11letter from Griffin Coal to ICICI, Bank of Baroda, Exim Bank of India and Indian Overseas Bank dated 25 August 2011;
4.12letter from Lanco Infratech Limited to ICICI dated 26 August 2011;
4.13letter from ICICI to Griffin Coal and Lanco Resources Australia Pty Ltd dated 26 August 2011; and
4.14letter from Griffin Coal to Lanco Infratech dated 26 August 2011.

5A letter from Griffin Coal to ICICI Bank Limited dated 2 July 2011.