Rabobank Australia Limited v Littore
[2016] VSC 673
•22 July 2016 (Ex tempore)
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S ECI 2015 00407
| RABOBANK AUSTRALIA LIMITED (ACN 001 621 129) & ORS | Plaintiffs |
| v | |
| VINCENT LITTORE & ORS | Defendants |
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JUDGE: | HARGRAVE J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 22 July 2016 |
DATE OF RULING: | 22 July 2016 (Ex tempore) |
CASE MAY BE CITED AS: | Rabobank Australia Limited & Ors v Littore & Ors |
MEDIUM NEUTRAL CITATION: | [2016] VSC 673 |
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PRACTICE AND PROCEDURE – Case management – Stay – Commercial dispute – Claim for repayment of debt – Amount outstanding exceeded $90 million – Counterclaim alleged sale of secured assets at undervalue – Overarching purpose – Objects of case management –Civil Procedure Act 2010 ss 7–9, 49.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr N D Hopkins QC with Mr M P Costello | Minter Ellison |
| For the First to Sixth Defendants | Mr N Lucarelli QC with Mr J C Paterson | Robert James Lawyers |
HIS HONOUR:
The plaintiffs have applied to stay the counterclaim in the proceeding as presently pleaded by the first to sixth defendants, who I will call the Littore defendants, save for paragraphs 147 to 150. Alternatively, the plaintiffs seek an order for a separate trial of their claims before the trial of the counterclaim.[1]
[1]These reasons were delivered orally on the day of hearing. For a summary of the relevant issues in the proceeding see the reasons given by the Court of Appeal, on appeal from this decision, in Littore & Ors v Rabobank Australia Limited & Ors [2016] VSCA 258.
The stay application is based on the powers of the court contained in s 49(1) of the Civil Procedure Act 2010 (the ‘Act’). That section relevantly provides:
In addition to any other power a court may have, a court may give any direction or make any order it considers appropriate to further the overarching purpose in relation to the conduct of the hearing in a civil proceeding.
The ‘overarching purpose’ is defined by s 7(1) of the Act, as follows:
The overarching purpose of this Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute.
By s 8(1) of the Act, the Court is required to give effect to the overarching purpose in exercising its powers. In so doing, s 9(1) provides that the Court shall have regard to the following relevant objects:
(a) the just determination of the civil proceeding;
…
(c) the efficient conduct of the business of the court;
(d) the efficient use of judicial and administrative resources;
(e)minimising any delay between the commencement of a civil proceeding and its listing for trial beyond that reasonably required for any interlocutory steps that are necessary for—
(i) the fair and just determination of the real issues in dispute;…
(ii) …
…
(g) dealing with a civil proceeding in a manner proportionate to—
(i) the complexity or importance of the issues in dispute; and
(ii) the amount in dispute.
The alternative application for an order for separate trials is based on r 10.06 (a) and (b) of the Supreme Court (General Civil Procedure) Rules 2015, which provide:
Notwithstanding Rules 10.02 and 10.03, where a counterclaim may embarrass or delay the trial of the claim of the plaintiff or cause prejudice to any party or otherwise cannot conveniently be tried with that claim, the Court may—
(a) order separate trials of the counterclaim and the claim of the plaintiff;
(b) order that any claim included in the counterclaim be excluded;…
At the outset, I note that some reliance was placed by the Littore defendants on principles of estoppel and waiver arising out of the plaintiffs’ requests, with some encouragement from the court, to cross-vest proceedings brought by them in the New South Wales Land and Environment Court to this Court. That cross-vesting has occurred and the relevant allegations from those proceedings are now replicated in the counterclaim as it presently stands. Senior counsel for the Littore defendants properly acknowledged that the matters relied on as constituting an estoppel or waiver cannot bind the court in complying with its duty to further the overarching purpose under the Act by exercising its discretion to stay proceedings where appropriate. To that I would add that the counterclaim in this respect as pleaded, and the relevant evidence in the New South Wales Land and Environment Court, relate only to the sale of the vineyard assets (including the water rights), not the winery assets; and involve an alleged under-sale in the order of about $2 million.
The plaintiffs contend that a trial of the counterclaim as it stands, and even if it is amended as the Littore defendants appear to intend (on the basis of the affidavit of Vincent Littore described below), lacks utility. It is a commercially futile exercise. They rely on the following matters.
First, the affidavit of Andrew Graham, the head of Special Asset Management of Rabobank in Australia. That affidavit establishes that, even without default interest being applied, and after the receipt of the net proceeds of sale of the various assets secured to Rabobank, the Littore brothers are indebted to Rabobank in the sum of about $91 million as principal debtors.
Mr Graham’s affidavit also proves the net sale proceeds of the vineyard and winery assets of the Littore Group, in the total sums of $28.78 million for the vineyard assets (including associated water rights), and $5.7 million for the winery assets. That produces a net total of about $34.48 million. That net total arises after the discharge of prior securities over plant, equipment and receivables and other associated costs. The gross sale prices for the relevant assets were $31 million for the vineyard and water assets and $14.61 million for the winery assets, making a total of $45.61 million. Accordingly, if added back to the current debt of $91 million, a total debt of between $125.48 million (net sale proceeds) and $136.61 million (gross sale proceeds) results. The alleged under-sale of the vineyard assets by $2 million, as pleaded in the counterclaim, pales in comparison.
Second, the plaintiffs contend that the evidence given by the Littore defendants in support of the exceptions to the freezing order demonstrates that they have no assets except for the frozen assets of about $20 million to satisfy the debt to Rabobank. There is thus no prospect that the Littore brothers can pay the Rabobank debt, even if they succeed both on their claim to a beneficial interest in the frozen assets and on their counterclaim.
Third, in these circumstances the plaintiffs contend that a trial of the counterclaim would be a waste of valuable court resources and would not provide any reasonable benefit to the Littore defendants, especially the Littore brothers who will likely be bankrupt in any event.
Fourth, the plaintiffs contend that the continued prosecution of the counterclaim will further reduce the Macquarie Bank funds — by the amount of the Littore defendants’ legal costs associated with prosecuting that counterclaim.
The Littore defendants rely on the affidavit of Vincent Littore sworn 19 July 2016 in which he deposes, based on his experience in the vineyard and winery businesses over a long period of time, and a mix of hearsay and rumour, that the secured assets were sold by a flawed sale process which, if it had been properly conducted, could have yielded net sale proceeds of, using his highest estimates, up to $154 million as follows:
| Asset | Low estimate | High estimate | Paragraph in Vincent Littore’s affidavit |
| Vineyard land | $20,000,000 | $25,000,000 | [62] |
| Water rights | $25,000,000 | $26,000,000 | [68] |
| Vineyard plant and equipment | $3,500,000 | $4,500,000 | [66] |
| Grape harvest | $10,000,000 | $12,000,000 | [71] |
| Wasted working possession costs | $3,000,000 | [79] | |
| Winery land | $35,000,000 | $38,000,000 | [82] |
| Winery assets | $10,000,000 | [87] | |
| Littore Family Wines business | $20,000,000 | [90] | |
| Winery stock | $12,000,000 | [93] | |
| Winery book debts | $3,500,000 | [97] | |
| TOTAL | $142,000,000 | $154,000,000 | |
As shown in the table above, if the lower estimates are used, the total would be $142 million.
The Littore defendants complain that they have been deprived of timely discovery and access to confidential information under the sale processes undertaken by Rabobank and the receivers and, as a result, have not yet been able to responsibly plead a substantial counterclaim for damages exceeding the amount of the Rabobank debt. In all the circumstances, they contend that it would be unjust to deprive them of the opportunity to plead a fully particularised counterclaim for such loss, as there is a real possibility that their counterclaim will exceed the amount of the plaintiffs’ claim against them.
I do not accept the Littore defendants’ submissions. In my opinion, the overarching purpose, including the attainment of justice in the proceeding and avoiding inefficient use of judicial resources on a futile counterclaim, will be furthered by staying the counterclaim (except paragraphs 147-150) until the hearing and determination of the plaintiffs’ claims. The plaintiffs acknowledge by their application that any stay should not include paragraphs 147–150 of the counterclaim, which raise issues relating to the denial and allegations in paragraphs 52, 52A and 52B of the defence of the Littore defendants to the plaintiffs’ claims. My reasons follow.
First, I find that Mr Littore’s affidavit is, even at this interlocutory stage when evidence is necessarily incomplete, implausible. It is substantially met by the whole of the affidavit of the plaintiffs’ solicitor Brendan Watkins sworn 21 July 2016 and the exhibits to that affidavit. In particular, it is clear from those exhibits that, while there were good commercial reasons for Mr Littore to be ‘talking the business [of the Littore brothers] down’, Mr Littore’s current estimates of the value of the relevant assets are vastly greater than he, his brother, and those engaged by them or Rabobank to advise as to the realisable value of the Littore Group assets have previously estimated. I say vastly because Mr Littore’s current estimates are at least five times the net values previously estimated by him and others or offered by third parties. Estimates of between $24 – $30 million in the second half of 2015 have become $142 – $154 million as at the time of the sales by Rabobank and the receivers in the first half of 2016. Examples follow.
25 October 2012. Mr Littore sent an email to Brett Pekin of BLP Agribusiness and copied that email to his brother David and Michael Birthisel, the general manager of the Littore Group. At the time, BLP Agribusiness acted for a consortium of potential purchasers of the Littore Group assets. The email attached a copy of the ‘Standstill Deed’ dated 23 October 2012 between Rabobank, the Littore brothers and other entities in the Littore Group. The Standstill Deed provided for the implementation of an asset realisation plan in respect of the assets of the Littore Group which were subject to Rabobank’s securities. In his email, Mr Littore proposed a meeting to discuss ‘what strategy we are to take’ and stated:
Michael [Birthisel] and I are conference calling the Valuers tomorrow and talking through a ‘Going Concern’ valuation. The valuation we just had done [is] on vacant possession assumption and [came] up to a total of $30.9M … $22.5M on Vineyards & $8.4M on winery.
Talk soon. (Emphasis added)
31 January 2013. Mr Littore sent an email to Eric Gottenbos of Rabobank (copied to Martin Pierce of Rabobank) attaching a copy of the asset realisation plan prepared by Deloitte for the Littore Group, pursuant to the Standstill Deed. The asset realisation plan set out a detailed strategy for selling the business and assets of the Littore Group, including ‘all land, vineyards, equipment, receivables, contracts, brands and other intangible assets owned by the Littore Group…[and] the winery and bottling facility as well as the business and assets of Littore Family Wines Pty Ltd’. The total estimated value of the assets of the Littore Group were noted in the asset realisation plan at $30.9 million plus net working capital (that is, inventory and receivables less payables). The table of estimated sale proceeds in the asset realisation plan was based on valuations performed by Gaetjens Pickett Valuers. In that table, Deloitte acknowledged that, given the current market conditions, ‘achieving these valuations may be challenging’.
Deloitte also added that any buyer was unlikely to attribute any value to the other assets of the Littore family wines business (e.g. brands, contracts and goodwill) and that the GE Finance facility over the inventory and receivables would need to be paid out from any sale proceeds.
Deloitte concluded its asset realisation plan with a ‘Teaser for distribution to potential buyers’. Deloitte concluded that Teaser with a statement that ‘the shareholders (via Deloitte) wish to engage in discussions with parties interested in acquiring the Business and Assets of [the Littore Group]’. Earlier in the Teaser, Deloitte had described those assets in terms including the vineyard assets and accompanying water entitlements, the winery and cellar door assets, the ‘[s]tate-of-the-art bottling facility’ and the ‘multiple well-recognised “entry level” brands’.
18 February 2013. Murray Najar, a member of the Executive Management Group assisting the Littore Group, sent an email report to Mr Gottenbos about his visit to the Littore vineyards on 15 February 2013. Mr Najar copied the email to Stephen Harvey of Deloitte, who were assisting the Littore Group with its asset realisation plan. Mr Najar was accompanied by David Littore on this tour of the vineyards, and his report noted that:
Dave [David Littore] spoke briefly about the Littore group sales process and he made the point that they were not expecting to receive offers for the Littore family wines operation and he thought that the offers received for the vineyards would be low. (Less than $20M). (Emphasis added)
1 May 2013. Mr Littore sent an email to Steven Skoglund of Davidsons Accountants, (accountants for the Littore Group) attaching the Standstill Deed, a letter from him dated 17 October 2012 to his estranged wife, Jane Mithen (the ‘Mithen letter’) and a settlement proposal in connection with Family Court proceedings between him and Ms Mithen. In his email to Mr Skoglund, Mr Littore explained his and the Littore Group’s financial position under the Standstill Deed in the following terms:
…What needs to be understood is that we are in, for want [of] a better description, pseudo-administration with all assets being actively marketed for sale and every transaction is scrutini[s]ed by Deloittes and Primaton in their ongoing roles as Investigative Accountants. If the sale happens before we settle with Jane then there is the very real risk that she will get absolutely nothing.
As it stands there is an overall $65M—$70M odd shortfall in asset value over what we owe so from my point of view Jane’s advisors should be telling her if she can be released from all guarantees and end up in the black then she should grab it and run … whatever that figure is. (Emphasis added)
Similarly, in the Mithen letter, Mr Littore said the following in respect of the Littore Group business:
In terms of the business there is a “hole” (we owe more than we own) to the tune of about $75M as at the end of September. You have known for years a hole existed and you were aware of the pressure the financiers (Banks etc) applied from time to time that is just the fact. Is it good? No. Is it what I want? No. But it is what it is...The Bank Statements and Sworn Valuations don’t lie …you also know quite well that over the last 2 ½ years we have had Price Waterhouse Coopers, Trevor Marriot, Murray Najar and Deloittes (all in Investigative accountant roles) crawl all over us. All they found was a great big negative …why? Because that’s what there is… A Great Big Negative!! Just another fact… (Emphasis added)
In concluding the Mithen letter, Mr Littore enclosed a series of documents to support his contention that he and the Littore Group owed more than they owned and were in a ‘hole’ to the tune of about $75 million at that time. The documents included sworn valuations and letters from William Ridge and his solicitors (Nicholas Corr) who represented ‘Investors — Kylen Investments P/L’. Mr Ridge is an associate of Mr Littore, in the sense that entities associated with him (Alternative Lending and Kylen Enterprises, defendants in this proceeding) are lenders to the Littore brothers.
Read as a whole, the Mithen letter evinces a genuine attempt by Mr Littore, with some apparently genuine fondness for his estranged wife, to convince her by objective evidence that he and the Littore Group were without any net funds to enable a substantial property settlement to be paid by him. Although I recognise that parties in matrimonial property disputes often seek to devalue their assets in negotiations, the letter is logical, supported by hard evidence and conciliatory. When compared with the other statements made by Mr Littore, as referred to above and below, the Mithen letter appears to represent Mr Littore’s genuine beliefs at the time it was written.
19 December 2013. Erik Vos of Rabobank sent an email to Peter Varnay of the Special Asset Management Division of Rabobank, Mr Harvey and Mr Najar, describing a conversation Mr Vos had with Vincent Littore in the following terms:
I have spoken with Vince and as expected he was talking the business down. He mentioned that his offer on the table was the best we would get in the market under the current market conditions. He mentioned that the investors were initially prepared to offer AUD$25mln but due to deteriorating circumstances dropped their offer in steps down to AUD$13mln.
…
He is of the opinion that his business model is so special that nobody will show interest. He does not believe the parties which have expressed interest will come with a better offer. (Emphasis added)
14 February 2014. A ‘Status Report’ prepared by Deloitte recorded, among other things, that a potential buyer (Brand New Vintage) had submitted an ‘indicative offer … of $24m for the entire Littore business’, that the offer had been rejected by Rabobank, and that Brand New Vintage had later:
submitted an alternative proposal to acquire the winery assets (land, processing facility, bottling lines) for $6.0 to $6.5m less any employee entitlements relating to employees they take on (… currently [circa] $0.5m) …
In terms of the proceeds that would flow to [Rabobank], it is our understanding that the major bottling line is financed by DLL with [circa] $8m currently outstanding and an additional $0.5m of winery assets are financed by third parties. (Emphasis added)
The status report also noted that an offer had been received from the ‘Vince [Littore] Consortium’ for $13 million, but that ‘Vince had expressed that the consortium has “cooled off” following the initial offer.’
16 June 2014. Mr Littore sent an email to Mr Vos and to Mr Graham attaching ‘a memo giving a brief outline where we are at as well as listing what we believe to be the options to consider moving forward’. In the attached memorandum, Mr Littore noted the following matters:
(1) ‘The Littore Wine Group has been in Special Asset Management with Rabobank since January 2010, so well over 4 years.
During this time we have approached multiple financiers and brokers to fund the Group’s borrowing requirements … and we have also sought equity partners as part of these transactions. Despite these efforts, we have failed to receive an approval from any financier.’;
(2) ‘Our conclusion is the wine industry is virtually unbankable unless you have the ability to provide alternative security other than vineyards and wineries …’; and
(3) ‘Given the situation we thought best to list ALL possible options and assess from this the best route available’.
Mr Littore proposed the following options to Rabobank:
1. Re-market the properties with different ‘agent’
…
2.Appoint Liquidator/Receiver/Administrator to sell all assets.
•Whilst this will definitely create an outcome we would estimate that the timeframe for this to occur would be in the order of 18–24 months. Considerable expense would be incurred and by the time everything wrapped up net proceeds to the Bank would be between $5M–$8M in our opinion.
…
3. Littore to be given 12 months to conduct orderly sale that will return $18M to Rabobank.
•Winery to be sold to an external party immediately for a sale price of $3M. Total proceeds to be returned to Rabobank.
○DLL settled out of these proceeds;
○All charges Rabobank have over the Littore Family Wines Pty Ltd to be released;
•Orderly sale of water licences and other assets to be conducted by Littore to maximise value ... While we believe this asset is the most likely to appreciate over the medium term the reality is it is also the most saleable asset within the group. Estimate that undertaking of this sale process would net $11M if done in an orderly and considered manner.
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4. Re-negotiate debt.
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…a minimum 5 year commitment from the bank would be required.
…
Total repaid to Rabobank is $28M.
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5. Sale of Equity with cash injection.
As mentioned we have a potential Investor who is prepared to take a stake in the total business. … This scenario would have given Rabobank a return of $14M plus repayment of the working cap facility [$4M plus the GE debt]… (Emphasis added)
28 November 2014. In an email exchange, Mr Littore and Mr Pekin of BLP Agribusiness discussed the terms of an offer to be put to Rabobank for the purchase of the Littore Group business and assets for $18 million, to be funded by a sale of the water rights and a balance of $6.5 million to be funded by the Littores.
8 May 2015. Mr Littore advised his accountants (Davidsons) by email of a proposal to repurchase the Rabobank debt for $27.5 million by 2017. He sought his accountants’ assistance to draft terms sheets for presentation to a proposed silent investor and to Rabobank and stated that:
I think by 2017 we will be able to either refinance or simply sell the water licen[c]e that will recover the remaining $15M debt. At that point [the silent investor] just quietly walks away, we keep [our] business and Rabobank get $27.5M in cash as full and final settlement.
3 July 2015. Mr Graham emailed Mr Littore and asked for an update on sales activity. Mr Littore responded ‘there is not much definite progress on the sales front to report’ and indicated that ‘the best case scenario in terms of realisable value is water price plus “a bit”.’ He said that he would be having further meetings in the following week in an endeavour to have some indicative scenarios to present to the bank.
14 July 2015. Mr Littore sent a draft of an email to be sent to Rabobank to Mr Birthisel of Littore Wines. The draft email stated the BLP Agribusiness Consortium deal was ‘now dead’ and ‘two other parties have recently evaporated’. The draft email included a ‘summary of the negotiations we have been endeavouring to undertake’ including the following:
1. Equity investment —
ainvolved an equity injection by a well-known industry identity. Proposal was to ‘write’ Rabobank debt down to $30M and have debt eliminated within 2 years. Problem was investor would not agree to anywhere near the $30M “valuation” and was only interested at a figure of closer to $20M … (Emphasis added)
13 August 2015. Mr Littore introduced Mr Graham and Brad Matthews of ResCom, a financial services business, to one another by email. That same day, Mr Matthews emailed a terms sheet to Mr Graham offering to purchase the Rabobank debt and securities for $22 million. That offer was later increased to $24 million on 18 September 2015.
20 August 2015. Mr Littore sent an email to Mr Graham in which he referred to the ResCom terms sheet in the following terms:
On the ResCom offer that is on the table. I have now worked incredibly hard to find an offer that will work to get Rabobank a relatively quick and clean exit which is your stated desire. Surely the outcome that is best for all concerned.
With a sales process that has run almost 3 years it’s obvious that we simply cannot again lose a genuine buyer like ResCom by trying to get a second party to the table. This will not work and only result again in a genuine and doable deal falling by the wayside. One thing we can all agree on is none of us can afford this to happen. (Emphasis added)
13, 14 October 2015. There was an email exchange between Mr Littore and Mr Ridge. By email sent 14 October 2015, Mr Ridge informed Mr Littore that he was:
Thinking of putting together an offer to buy the whole operation … Long term outlook is to sell back to you and David at a slightly higher price sufficient to pay out [Alternative Lending] and allow a rate of return for the other investors [Kylen Enterprises].
If you see a better way to achieve the same outcome for all concerned I am more than happy to cooperate.
On the same day, Mr Littore replied within minutes, informing Mr Ridge that his offer:
Would need to be somewhere between $26M to $30M [as] price being touted. You would also need a significant of working capital as well…maybe $5M. (Emphasis added)
Drawing these threads together, the above statements by Mr Littore and others evidence an inability to arrange a purchaser of either the Littore Group assets as a whole, or the Rabobank debt, over a period of at least three years until October 2015. Mr Littore’s own view by October 2015 was that the total assets, or the Rabobank debt, were worth in the vicinity of $30 million after accounting for debts to other financiers. Even if it be accepted that Mr Littore was endeavouring to achieve a sale of the assets at the lowest possible price, so as to maximise his prospects of continuing involvement in the Littore Group vineyard and winery businesses, a sale of those businesses at double the $30 million highest estimate, for $60 million, would still have left a ‘hole’ of debt owing by the Littore brothers and related entities of over $60 million (excluding default interest). Viewed in this context, the values which Mr Littore now attributes to the various assets comprising the Littore Group vineyard and winery land and businesses are implausible to the extent of being fanciful.
Second, although Mr Littore may well have had reason to talk down the assets in his dealings with relevant parties, his correspondence shows that he is obviously no fool. He obviously knew he was not dealing with fools but, rather, with a substantial bank which was receiving advice from investigative accountants and valuers. It is implausible that he would put forward figures that were about one-fifth of his own opinion of the values of those assets. Conduct of that kind would have deprived him of any commercial credibility whatsoever. It is implausible that he did so, or that market conditions altered so radically between October 2015 and the time the Littore Group assets were sold by Rabobank and the receivers earlier this year.
Third, although the Littore defendants do not yet have full discovery, any possibility that they may be able to formulate a sufficiently large counterclaim with a real prospect of success when they do is, in my opinion, on the basis of the evidence and probabilities as a whole, so remote that it can be discarded.
If the Littore defendants were to obtain leave to file an amended counterclaim claiming damages exceeding the amount of the Rabobank debt, which would require a proper basis certificate signed by their solicitors, an issue may arise as to whether any credit findings made in the trial of the plaintiffs’ claims will have the capacity to create grounds for recusal of the trial judge on any later hearing of such a counterclaim. If that situation were to occur, the fact that there is no discernible overlap between the plaintiffs’ debt and proprietary claims on the one hand, and the Littore defendants’ existing and proposed counterclaims on the other, mean that another judge could conveniently hear the counterclaim if necessary.
Fourth, because of the exception in the freezing order for the Littore defendants’ legal costs of the proceeding, the continuation of the counterclaim will substantially reduce the balances in the otherwise frozen Macquarie Bank accounts. This factor, together with the fact that the trial of the plaintiffs’ debt and proprietary claims are fixed for 26 September this year, make a stay of the counterclaim until the hearing and determination of the plaintiffs’ claims and the defences to them, including by set-off and counterclaim under paragraphs 52, 52A and 52B of the defence and paragraphs 147–150 of the counterclaim, preferable to simply ordering a separate trial of the counterclaim at a later date. If that order were to be made, there would be continuing costs, of a substantial amount, depleting (and perhaps exhausting) the Macquarie Bank accounts. If the Littore defendants lose on the plaintiffs’ proprietary claims, the legal costs expended in pursuing the existing counterclaim, or any proposed amendment, will be forever lost — as the Littore defendants’ own case is that they have no other funds than those comprised in the frozen assets.
Fifth, if the Littore defendants win the proprietary issues, in whole or in part, that may assist them in gaining access to funds to prosecute the counterclaim or any amended counterclaim. In that event, it would be open to them to apply for stay of execution on any debt judgment obtained by Rabobank against the Littore brothers, pending determination of any such counterclaim. Any such application would be dealt with on its merits if made.
In all the circumstances, I take the view that this is an exceptional case where the overarching purpose, including the requirement of justice in the particular circumstances of the case, requires that the counterclaim be stayed until the hearing and determination of the plaintiffs’ claims. I will so order.
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SCHEDULE OF PARTIES
RABOBANK AUSTRALIA LITD ACN 001 621 129 First Plaintiff
and
LITTORE VINEYARDS PTY LTD ACN 078 477 620 (RECEIVERS AND MANAGERS APPOINTED) Second Plaintiff
and
CUDGEE CREEK VINEYARDS PTY LTD ACN 082 936 972 (RECEIVERS AND MANAGERS APPOINTED) (CONTROLLERS APPOINTED) Third Plaintiff
and
GOL GOL VINEYARDS PTY LTD ACN 079 467 735 (RECEIVERS AND MANAGERS APPOINTED) (CONTROLLERS APPOINTED) Fourth Plaintiff
and
IDYLL VINEYARDS PTY LTD ACN 087 927 991 (RECEIVERS AND MANAGERS APPOINTED) (CONTROLLERS APPOINTED) Fifth Plaintiff
and
VINCENT LITTORE First Defendant
and
DAVID LITTORE Second Defendant
and
FRANK ST INVESTMENTS PTY LTD ACN 150 038 930 Third Defendant
and
LITTORE SUPER PTY LTD ACN 149 093 667 Fourth Defendant
and
LITTORE PROPERTY GROUP PTY LTD ACN 161 635 007 Fifth Defendant
and
SHANDFORD TRADING PTY LTD ACN 158 818 887 Sixth Defendant
and
ALTERNATIVE LENDING LIMITED ACN 063 957 577 Seventh Defendant
and
KYLEN ENTERPRISES PTY LTD ACN 109 745 600 Eighth Defendant
and
CORANDA NOMINEES PTY LTD ACN 68 167 575 760 Ninth Defendant
0