Pilmer v Duke Group- Duke v Pilmer

[1999] HCATrans 306

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A22 of 1999

B e t w e e n -

ANGUS CLAYMORE PILMER
ALAN ROBERT CRAWFORD
DOMENIC VINCENT MARTINO
PETER JOHN MESSER
PETER LAWSON MUNACHEN
PAMELA ANNE ROBINSON and JOHN RICHARD LANGFORD as executors of the estate of GEOFFREY JAMES STOKES deceased
ROBERT JOHN GRAY

Applicants

and

THE DUKE GROUP LIMITED (IN LIQUIDATION)

First Respondent

FRANCIS ANTHONY QUILTY and KEITH DANIEL SINGLETON

Second Respondents

HAROLD ABBOTT

Third Respondent

KEVIN CLARENCE SOMES  and SIR ERNEST LEE‑STEERE

Fourth Respondents

RONALD WILLIAM EDWARD ARNOLD and OTHERS (as per attached schedule)

Fifth Respondents

FRANCIS ANTHONY QUILTY and KEITH DANIEL SINGLETON

Sixth Respondents

HAROLD ABBOTT, KEVIN CLARENCE SOMES and SIR ERNEST LEE‑STEERE

Seventh Respondents

Application by second‑named sixth applicant for a stay
Application by first respondent to remove stays

Office of the Registry
  Adelaide  No A24 of 1999

B e t w e e n -

THE DUKE GROUP LIMITED (IN LIQUIDATION)

Applicant

and

ANGUS CLAYMORE PILMER
ALAN ROBERT CRAWFORD
DOMENIC VINCENT MARTINO
PETER JOHN MESSER
PETER LAWSON MUNACHEN
PAMELA ANNE ROBINSON and JOHN RICHARD LANGFORD as executors of the estate of GEOFFREY JAMES STOKES deceased
ROBERT JOHN GRAY

First Respondents

RONALD WILLIAM EDWARD ARNOLD and OTHERS (as per attached schedule)

Second Respondents

Application for consolidation and expedition

Office of the Registry
  Adelaide  No A27 of 1999

B e t w e e n –

KEVIN CLARENCE SOMES

Applicant

and

THE DUKE GROUP LIMITED (IN LIQUIDATION)

First Respondent

ANGUS CLAYMORE PILMER
ALAN ROBERT CRAWFORD
DOMENIC VINCENT MARTINO
PETER JOHN MESSER
PETER LAWSON MUNACHEN
PAMELA ANNE ROBINSON and JOHN RICHARD LANGFORD as executors of the estate of GEOFFREY JAMES STOKES deceased
ROBERT JOHN GRAY

Second Respondents

FRANCIS ANTHONY QUILTY and KEITH DANIEL SINGLETON

Third Respondents

HAROLD ABBOTT

Fourth Respondent

SIR ERNEST LEE‑STEERE

Fifth Respondent

RONALD WILLIAM EDWARD ARNOLD and OTHERS (as per attached schedule)

Sixth Respondents

FRANCIS ANTHONY QUILTY and KEITH DANIEL SINGLETON

Seventh Respondents

HAROLD ABBOTT and SIR ERNEST LEE‑STEERE

Eighth Respondents

CALLINAN J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON WEDNESDAY, 29 SEPTEMBER 1999, AT 12.24 PM

Copyright in the High Court of Australia

_______________________

MR T.A. GRAY, QC:   May it please the Court, I appear with my learned friends, MR S.J. LIPMAN and MR S.J. DOYLE, for the Duke Group Limited (In Liquidation), the applicant for expedition, resisting the Estate of Stokes’ application for a stay, and seeking to revoke the orders made in the other stays.  (instructed by Fisher Jeffries)

MR W.J.N. WELLS, QC:   If your Honour pleases, I appear with my learned friend, MR K.G. NICHOLSON, for the first to seventh applicants who are the applicant for the stay and who are respondents to the application of the Duke Group Limited to remove the stays already granted.  (instructed by Holding Redlich)

MR P. ZAPPIA:   May it please your Honour, I appear for the first and second respondents on the summons which was issued by the Duke Group on 22 September 1999 which seeks expedition and consolidation of various special leave applications.  In relation to the second respondents, your Honour, I appear generally except on a discrete issue relating to three of those respondents, Messrs Lavis, Gay and Taylor.  During the proceedings, your Honour, those three defendants, in addition to joining with the main defence, conducted a separate defence.  I did not appear, nor my instructing solicitors acting for them in relation to that defence and we do not appear for them in relation to that matter this morning.  (instructed by Phillips Fox)

HIS HONOUR:   Thank you.

MR ZAPPIA:   I do not appear for the first respondents, your Honour, on any other application before the Court today.

MR J.S.L. LUMSDEN:   If your Honour pleases, I appear for three of the second respondents, namely, Lavis, Gay and Taylor in action No 24 of 1994.  (instructed by Thomson Playford.

MR M.E. HOILE appeared on behalf of the applicant in application A27 of 1999.  (instructed by Hume Taylor & Co)

HIS HONOUR:   Thank you.  Am I correct that those who are in Adelaide are interested only in the question of expedition?

MR ZAPPIA:   That is correct, your Honour.

HIS HONOUR:   You only would seek to be heard in relation to expedition, is that right?

MR ZAPPIA:   Expedition and consolidation, your Honour.

HIS HONOUR:   Mr Lumsden, is your position the same?

MR LUMSDEN:   Yes, it is, your Honour.

HIS HONOUR:   Let me say at the outset that I can make an order for expedition, that these matters will be listed for hearing on 30 November next for hearing in Sydney.  I will not make an order for consolidation but they will be listed for hearing together and it will be a matter for members of the Court who are sitting on that day as to how they are going to be dealt with, but obviously there are very many common issues and, if they are listed together, probably the arguments will be heard together.  But it is unnecessary to make an order for consolidation.

MR GRAY:   Might I say, your Honour, that both the trial judgment and the appeal judgment in the intermediate court are now both reported in the Australian ‑ ‑ ‑

HIS HONOUR:   Yes, I am going to say something at the end of this hearing about trying to refine, if we can, the material, because obviously it is very heavy and it is going to be very difficult for a court to get a grip on it, but I will say something about that at the end.  Thank you, Mr Gray. 

Gentlemen in Adelaide, I would propose to reserve the costs of today, no matter what happens.  Is there anything further you would wish to say?  If there is nothing further, we can discontinue the video link, you see.

MR ZAPPIA:   There is nothing further that I would wish to say, your Honour.

HIS HONOUR:   Is that your position, Mr Lumsden?

MR LUMSDEN:   Yes, it is, your Honour.

HIS HONOUR:   Is there any problem then about my discontinuing the video link?

MR GRAY:   No, your Honour.  The only matter was if the ordinary time limits apply, all documents would be finalised by 17 November.

HIS HONOUR:   Yes.

MR GRAY:   If the Court wished matters to be finalised earlier, we would need to do some expedition.

HIS HONOUR:   Yes.  I will make some orders for expedition. But no doubt everybody expected that and we can communicate them to you, Mr Zappia and Mr Lumsden, if that is convenient to you.

MR ZAPPIA:   Yes, your Honour.

HIS HONOUR:   Having decided to grant expedition, there is really no alternative. Matters do have to be expedited.

MR LUMSDEN:   Yes.  Your Honour, perhaps if I could just address you briefly on that point.  I am in a position where counsel who has previously been involved has now gone to the bench.  The primary solicitor who has had the conduct of this matter is overseas until 7 October.  I would appreciate if those factors could be taken into account in setting a timetable.

HIS HONOUR:   We will do the best we can, Mr Lumsden.  I will just have to see about that but I will keep in mind what you have told me.

MR LUMSDEN:   Thank you, your Honour.

HIS HONOUR:   Thank you.  The video link can be discontinued now.  You have no problem about that Mr, Wells?

MR WELLS:   No, your Honour.

HIS HONOUR:   Thank you.  All right, we need not continue the video link any more.

Mr Gray, let me say this to you at the outset, and Mr Wells will no doubt have regard to this. This is a situation in which I have a very carefully reasoned judgment by Chief Justice Doyle who seems to me to have considered all of the relevant matters.  The judgment which he gave is essentially a discretionary judgment.  All parties accept that to have me exercise jurisdiction on these applications would generally call for very exceptional circumstances.  I have read the arguments on both sides and you will be confined to the same amount of time as you would have on a special leave application.  I would suggest that you turn your mind, particularly, to new factors, if any, that may have arisen since the Chief Justice considered the matter.

MR GRAY:   I am grateful to your Honour.  We understood that the estate’s application will be heard first.  Se are in your Honour’s hands as to which would be the most convenient course.

HIS HONOUR:   Is there any particular utility in that?  I do not mind.  It does not matter to me.

MR GRAY:   No, it is a matter entirely for your Honour as to which matter your Honour would wish to hear first.

HIS HONOUR:   Yes, all right.  If that is what you expected, that is the way we will do it.  Mr Wells, what I said to Mr Gray applies with equal force to you in your application.

MR WELLS:   Yes, I understand, your Honour.  Your Honour, if the time is to be set ticking, I wonder if I can first of all raise a number of preliminary matters which we need to deal with for the purpose of my ‑ ‑ ‑

HIS HONOUR:   You are concerned with the confidentiality, is that it?

MR WELLS:   Yes.

HIS HONOUR:   I have not read those affidavits.  I deliberately did not because I was not sure whether you were going to rely upon them and I did not think it appropriate to do so.  They are ones that are sealed up, are they?

MR WELLS:   They are, your Honour.  We will be seeking ‑ ‑ ‑

HIS HONOUR:   I am very reluctant to close the Court.  Is there any way that reference can be made which would not reveal matter that you do not want revealed?  I take it Mr Gray has seen them, has he?

MR WELLS:   Yes, he has, your Honour, on undertakings as to confidentiality.

HIS HONOUR:   Of course.

MR WELLS:   And, indeed, Mr Sheehan, who is the liquidator of the plaintiff, who is in Court has also provided an undertaking as to confidentiality with respect to the same affidavits before the Supreme Court.

HIS HONOUR:   Why do I not read them first?

MR WELLS:   Can I invite your Honour to.  In that respect, I wonder if I could suggest that you read the affidavit of Dr Fabrikant and not only the text of that, your Honour, but also the exhibit which is an e-mail from the treating psychiatrist, Dr Tannenbaum, who, at the time, was overseas.  He has since returned and he has filed an affidavit which has been seen by my friend confirming what appears in the e-mail.

HIS HONOUR:   All right, I have that.  I will read that quickly, Dr Fabrikant’s affidavit.

MR WELLS:   If your Honour pleases.

HIS HONOUR:   Yes, I have read that.

MR WELLS:   Could I ask your Honour also to look at the sealed affidavit of Mrs Stokes, especially but not limited to paragraph 2.

HIS HONOUR:   Mr Gray, do you have any objection to my making an order of this kind?

MR GRAY:   No, we do not, your Honour.

HIS HONOUR:   There is a public interest in the matter too, or in the openness of court proceedings.

MR GRAY:   Your Honour, our position is that all this information your Honour has seen was before Chief Justice Doyle.  We did not oppose there.  We did not oppose here.  It is a matter for the Court.

HIS HONOUR:   All right.  I am prepared to make an order that the contents of the two sealed affidavits, that is, of Dr Fabrikant and Mrs Stokes and their exhibits be kept confidential.

MR WELLS:    I am obliged, your Honour.  Does that mean we are proceeding as in chambers?

HIS HONOUR:   Yes.

MR WELLS:   If your Honour pleases.  I wonder if I might ask whether in that respect I am to take it that as to dissemination outside the Court, the estate ‑ ‑ ‑

HIS HONOUR:   I will make an order for non‑publication, which will apply to all submissions that are made until such time as I say the order is to cease to be in effect.  That is to say, anything that you say until I say otherwise is not to be published.  It is to be kept confidential.

(The transcript of the proceedings after this point is subject to a non‑publication order)

HIS HONOUR:   Each of the applicants seeks interlocutory relief pending the hearing of applications for special leave to appeal to this Court.  The parties have filed some fresh material but seek to rely on a very great deal of material which was before his Honour Chief Justice Doyle of the Supreme Court of South Australia when his Honour granted a number of stays and refused one application for a stay.

Each applicant submits that I have both an inherent jurisdiction and a jurisdiction to entertain the applications pursuant to Order 70 of the Rules of this Court.  I doubt that there is a relevant jurisdiction to be entertained under Order 70.  That Order is concerned with appeals.  The distinction between appeals and applications for leave to appeal has been drawn in cases in which both stays and bail have been sought and need no further discussion now.

There is a serious question also whether I should, assuming I have an inherent jurisdiction, exercise it in a case of this kind for reasons which I will state a little later.  For present purposes, despite my grave doubts whether I should do so, I am prepared to proceed upon the basis that this is a case in which I should entertain the arguments to grant relief of the kind sought.  Little need be said about the principal litigation.  It was prolonged and ultimately fruitful for the liquidator of the Duke Group which has had judgment entered for him by the Full Court of the Supreme Court of South Australia in the sum of about $117 million.

Applications for special leave to appeal by parties on both sides of the record have been made.  Expedition of those applications was sought and I am in a position to order that they be heard on 30 November next, that is to say I am in a position to grant the applications for expedition.

The judgments in the court below run to many hundreds of pages.  It was neither possible nor, indeed, appropriate for all of the pages of those judgments and the other massive volume of material which has been filed in support of these applications today to be absorbed by me. 

The principal matters necessarily to which I have been able to apply myself are the written submissions of the parties and any new matters which have been said to have arisen since the Chief Justice of South Australia made his orders.  The applicant on behalf of the Stokes estate was invited to point to evidence, if possible, to show that Mrs Stokes would have been or would be in a worse position if the stress of the litigation is removed or prolonged or if I were or were not to grant a stay in respect of the estate.

I have read the latest medical evidence available in respect of her condition and I am not satisfied that it can be demonstrated that any order that I would, or would not make, would be likely to have any different effect upon her condition from the stresses to which she is already subject.  Accordingly, on the assumption that effects upon either third parties or Mrs Stokes if she to be regarded as a de facto party may be relevant, I am of the view that the evidence does not support any basis for a finding that the effects of any order I might make or might not make would have any further deleterious effect upon her.

Having regard to the fact that Chief Justice Doyle was exercising what was ultimately a discretionary jurisdiction, and that there has not been any significant change in any circumstances demonstrated to me, I would refuse the application for a stay in the case of the Stokes’ estate.  One factor which influences to which I have not already referred is that the application for special leave has now been expedited and the period is relatively short before there will be some indication to this lady as to what the future situation is to be.

Mr Gray, in support of his applications for the lifting of stays, points principally to two matters.  He submits that there were two errors of legal principle made by Chief Justice Doyle and that new circumstances or that changed circumstances dictate that I should form a different view of the matter from that which his Honour formed.

I am not satisfied that his Honour did reach a concluded view on the legal points to which Mr Gray referred.  His Honour’s judgment was an interlocutory judgment and he was concerned, as his reasons make clear, at the period that the hearing had taken and at his inability to explore at the length that he might otherwise have done the legal questions that have arisen.

Furthermore, I would be strongly disinclined on an interlocutory application of this kind, to say, even if I were so persuaded - and I want to make it clear that I have an open mind on these matters - that a justice of the Supreme Court sitting alone has made any error of legal principle.  It is hardly a matter upon which a single Justice of this Court, sitting as I am today, should embark.  When I refer to error of legal principle, I appreciate that Mr Gray says that this was made in two respects, in relation to the likelihood or otherwise of the adjournment of some proceedings in the Bankruptcy Court, and a finding of mixed law and fact as to whether two of the respondents to his application were professional people or not.  The fact remains that the majority of the respondents to his application were professional people, and that that was only one of the considerations to which his Honour had regard, anyway, in making the orders that he did.

Mr Gray says that new circumstances have arisen, particularly in relation to the capacity, or otherwise, of the respondents to satisfy the conditions of the orders that were made by his Honour the Chief Justice.  It is simply impossible for me, and not appropriate for me, to go into those matters.  They would involve, necessarily, consideration in detail of financial matters, possibly accounts, and the circumstances in which compliance or otherwise has been made with those orders.

Any concerns that I might have regarding this aspect of the matter are, in any event, allayed by the fact that I am informed that this matter is to go back before Chief Justice Doyle next Friday, at which time, subject to whatever time constraints or otherwise his Honour has, the parties will have an opportunity of persuading his Honour that there has been, if, in fact, there has been, any error of law, and of persuading his Honour that the conditions are not being complied with.

In those circumstances, I would reject the applications of both parties.  I think that would be sufficient.  If I do that, the orders of Chief Justice Doyle just stand, is that correct?

MR GRAY:   Yes, your Honour.

HIS HONOUR:   The only matter I could mention is that if there are changed circumstances in Mrs Stokes’ health, a matter which is by no means apparent to me on the material which has been filed, then it may be open for Mr Wells to make an application or to renew his application to the Supreme Court of South Australia. 

Gentlemen, then, subject only to any orders that I might make with respect to expedition, I do not think there is anything more that I need deal with, is that right?

MR GRAY:   That is so, your Honour.

HIS HONOUR:   Mr Wells?

MR WELLS:   There are two matters, your Honour.

HIS HONOUR:   Yes.

MR WELLS:   First of all, I wonder if your Honour would give a direction for the resealing of the affidavits that your Honour has seen?

HIS HONOUR:   Yes, I will do that.  I direct that the two affidavits, the affidavit of Mrs Stokes and Dr Fabrikant – it is Dr Fabrikant, is it not?

MR WELLS:   Yes.

HIS HONOUR:   Be resealed.  I do not think I need make any further order as to confidentiality.  There is no need for me to make an order of non‑publication of my judgment.  I would be disinclined to do that.

MR WELLS:   No, I would not ask that.

HIS HONOUR:   I have tried to use language, in any event, which did not disclose any details of her condition.

MR WELLS:   No.  I am obliged to your Honour.

HIS HONOUR:   Yes.

MR WELLS:   The only matter is questions of costs.

HIS HONOUR:   Yes.

MR WELLS:   For ourselves, we would seek an order for the costs of the plaintiff’s application.

HIS HONOUR:   Do the two parties who are now off the air have any interest in Mr Gray’s application?  They do, do they not, because I said to them that I would reserve the costs of their appearance.

MR GRAY:   Yes.  No, they do not.  The case is this, your Honour, that your Honour could take the pragmatic approach of saying there has been a loss by both parties and no order for costs.  It is difficult to say there has been equal time spent.

HIS HONOUR:   What do you say about that, Mr Wells?

MR WELLS:   Your Honour, if we had the opportunity we would put the contention that the application of the plaintiff was hopeless from the beginning and that there ought to be a special order for costs, and, indeed, that would be our position, your Honour.  We would press for our order for costs.

HIS HONOUR:   I think Mr Gray had some arguable points.  I really do.  I think it is a pretty bold application coming here, in a sense, any way, by both parties.

MR WELLS:   Ours, at least, have some precedence, your Honour.

HIS HONOUR:   I will not make any comment on that.  Is there anything more you want to say?  Is there anything further you want to say?

MR GRAY:   No, your Honour.  We would say it would be appropriate there was no order or, alternatively, your Honour would have costs following the event on each application, including costs against Mrs Stokes on her failed joinder application.

HIS HONOUR:   Yes.  My inclination is to make no order as to costs.  Each party has failed and I think equal time was taken up with both, so I make no order as to costs.  Now, would you just bear with me for a moment.  Have you gentlemen seen the minutes that were proposed by Messrs Phillips Fox?

MR GRAY:   We have, your Honour.

HIS HONOUR:   Have you seen them, Mr Wells?

MR WELLS:   I am not instructed, your Honour, in relation to that.

HIS HONOUR:   Do you have any interest?  It is just that they have suggested some minutes of order which look to me to be satisfactory.

MR WELLS:   But I do not know what in relation to, your Honour.

HIS HONOUR:   Would you like to look at them?

MR WELLS:   Thank you, your Honour, because I think perhaps I can tell your Honour that I am retained only in relation to the first defendant’s application for the stay, so I suspect I may not.

HIS HONOUR:   I see.

MR WELLS:   Pardon me.

HIS HONOUR:   Could I put it this way, I will give you an opportunity to look at them.  If you have any comments, tell me, otherwise I would propose, unless Mr Gray says anything to the contrary, to make orders in accordance with them.

MR GRAY:   Your Honour, we have no objection to this timetable.

HIS HONOUR:   Right.

MR GRAY:   If that meets the Court’s convenience, it certainly meets ours.

HIS HONOUR:   Yes, right.

MR WELLS:   I am not in a position to make a comment, your Honour.

HIS HONOUR:   All right.  Thank you, Mr Wells.  I think I will make orders in terms of that proposal.  Is that all right? 

You adverted to a matter which I wanted to come back to in the beginning, Mr Gray, and I think you were going to suggest something that I was going to propose about the reproduction of the judgments.  Did you want to say something else?

MR GRAY:   Yes, I was, your Honour.  I was going to indicate to your Honour that as both judgments are reported in the Australian Companies and Securities Reports, if the special leave Court was prepared to work off those judgments ‑ ‑ ‑

HIS HONOUR:   Yes, we are.

MR GRAY:   Yes, that would greatly simplify the appeal books and with that in mind, your Honour, your Honour might just possibly truncate points 3.8 and 3.9 because all that is going to be in the application book is going to be a reference to those two judgments and the parties’ arguments.  We cannot see anything else being in them.

HIS HONOUR:   I do not know whether I need make any different order because the index will be settled in consultation with the Registrar.

MR GRAY:   Yes.

HIS HONOUR:   And she is very conscious of that.  Indeed, she was good enough to suggest it.

MR GRAY:   Yes.  I just had in mind, your Honour, the application book reaching their Honours’ special leave Court some time prior to 17 November.

HIS HONOUR:   I will make it clear that the application books need not contain any reproductions of the judgments.

MR GRAY:   Thank you.

HIS HONOUR:   That the special leave Court will work off the reported judgments and any references should be to them.

MR GRAY:   Yes.

HIS HONOUR:   What else is likely to need to be filed on that?

MR GRAY:   We would say nothing else, your Honour.  I think for special leave purposes it is difficult to see, apart from the outlines of argument that have exchanged, to be anything but the judgments.

HIS HONOUR:   How many sitting days did the case take?

MR GRAY:   In excess of 500 at trial and the appeal was in excess of 21 days, I think.  I rather wish I could forget the length of time, your Honour, but it seems to be etched.

HIS HONOUR:   Over what period was that, Mr Gray?

MR GRAY:   Over three years, your Honour, at the trial.

HIS HONOUR:   And was virtually continuous, was it?

MR GRAY:   Yes.  Your Honour, the proceedings, I think, were commenced in 1992, trial started in 1994 and Justice Mullighan delivered his judgment in January 1998.  The Appeal Court sat in November 1998 and delivered its reasons in May 1999 and formally entered judgment because of some subsidiary arguments in August.

HIS HONOUR:   And there are still matters to be decided by the Full Court?

MR GRAY:   On the issue of indemnity between defendants, yes.

HIS HONOUR:   All right.  Thank you, Mr Gray.

MR GRAY:   Your Honour, the only other matter was that these minutes do not actually deal with the question of costs of expedition and they would normally form costs of the special leave application, I think.

HIS HONOUR:   What do you mean costs of the expedition?

MR GRAY:   The costs associated with expedition application would normally, I think, form part of the costs of the cause of the leave ‑ ‑ ‑

HIS HONOUR:   I suppose there was material filed on the expedition.

MR GRAY:   Yes.  Perhaps if they could be reserved, your Honour?

HIS HONOUR:   Why do I not make any costs associated with the application for expedition costs in the cause?

MR GRAY:   Yes, that would be convenient.

HIS HONOUR:   All right.  I will so order.

MR GRAY:   Thank you, your Honour.

HIS HONOUR:   Nothing further?

MR GRAY:   If the Court pleases.

HIS HONOUR:   All right.  Thank you.

AT 1.55 PM THE MATTER WAS CONCLUDED