Rinehart & Anor v Hancock Prospecting Pty Ltd & Ors; Rinehart & Anor v Georgina Hope Rinehart (In her personal capacity and as trustee of the Hope Margaret Hancock Trust and as Trustee of the HFMF Trust) & Ors

[2018] HCATrans 236

[2018] HCATrans 236

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S143 of 2018

B e t w e e n -

BIANCA HOPE RINEHART

First Appellant

JOHN LANGLEY HANCOCK

Second Appellant

and

HANCOCK PROSPECTING PTY LTD (ACN 008 676 417)

First Respondent

HANCOCK MINERALS PTY LTD (ACN 057 326 824)

Second Respondent

TADEUSZ JOSEF WATROBA

Third Respondent

WESTRAINT RESOURCES PTY LTD (ACN 009 083 783)

Fourth Respondent

HMHT INVESTMENTS PTY LTD (ACN 070 550 104)

Fifth Respondent

ROY HILL IRON ORE PTY LTD (ACN 123 722 038)

Sixth Respondent

HOPE DOWNS IRON ORE PTY LTD (ACN 071 514 308)

Seventh Respondent

MULGA DOWNS IRON ORE PTY LTD (ACN 080 659 150)

Eighth Respondent

GEORGINA HOPE RINEHART (IN HER PERSONAL CAPACITY AND AS TRUSTEE OF THE HOPE MARGARET HANCOCK TRUST AND AS TRUSTEE OF THE HFMF TRUST)

Ninth Respondent

HANCOCK FAMILY MEMORIAL FOUNDATION LTD (ACN 008 499 312)

Tenth Respondent

150 INVESTMENTS PTY LTD (ACN 070 550 159)

Eleventh Respondent

HOPE RINEHART WELKER

Twelfth Respondent

GINIA HOPE FRANCES RINEHART

Thirteenth Respondent

MAX CHRISTOPHER DONNELLY (IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF THE LATE LANGLEY GEORGE HANCOCK)

Fourteenth Respondent

MULGA DOWNS INVESTMENTS PTY LTD (ACN 132 484 050)

Fifteenth Respondent

Office of the Registry
  Sydney  No S144 of 2018

B e t w e e n -

BIANCA HOPE RINEHART

First Appellant

JOHN LANGLEY HANCOCK

Second Appellant

and

GEORGINA HOPE RINEHART (IN HER PERSONAL CAPACITY AND AS TRUSTEE OF THE HOPE MARGARET HANCOCK TRUST AND AS TRUSTEE OF THE HFMF TRUST)

First Respondent

150 INVESTMENTS PTY LTD (ACN 070 550 159)

Second Respondent

HANCOCK PROSPECTING PTY LTD (ACN 008 676 417)

Third Respondent

HANCOCK MINERALS PTY LTD (ACN 057 326 824)

Fourth Respondent

TADEUSZ JOSEF WATROBA

Fifth Respondent

WESTRAINT RESOURCES PTY LTD (ACN 009 083 783)

Sixth Respondent

HMHT INVESTMENTS PTY LTD (ACN 070 550 104)

Seventh Respondent

ROY HILL IRON ORE PTY LTD (ACN 123 722 038)

Eighth Respondent

HOPE DOWNS IRON ORE PTY LTD (ACN 071 514 308)

Ninth Respondent

MULGA DOWNS IRON ORE PTY LTD (ACN 080 659 150)

Tenth Respondent

HANCOCK FAMILY MEMORIAL FOUNDATION LTD (ACN 008 499 312)

Eleventh Respondent

HOPE RINEHART WELKER

Twelfth Respondent

GINIA HOPE FRANCES RINEHART

Thirteenth Respondent

MAX CHRISTOPHER DONNELLY (IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF THE LATE LANGLEY GEORGE HANCOCK)

Fourteenth Respondent

MULGA DOWNS INVESTMENTS PTY LTD (ACN 132 484 050)

Fifteenth Respondent

KIEFEL CJ
GAGELER J
NETTLE J
GORDON J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 14 NOVEMBER 2018, AT 10.03 AM

(Continued from 13/11/18)

Copyright in the High Court of Australia

____________________

KIEFEL CJ:   Yes, Mr Ng.

MR NG:   Your Honours, I propose to deal first with what may conveniently, though prematurely, be termed the cross‑appeal before addressing on four matters, namely, the context in which the Hope Downs deed was entered into, the significance, if any, to this appeal of the law’s recognition of separability, the governed or controlled test and, finally, the supposedly sustainable argument given expression in paragraph 249 of the reasons of the Full Court.

Now, in relation to the proposed cross‑appeal, can I begin by observing that the extended definition of “party” in the Commercial Arbitration Act has the effect of subjecting non‑parties to arbitration agreements to the process of arbitration even over their objection and that alone, in my respectful submission, should temper whatever enthusiasm may be harboured by your Honours for extending the reach of the expression “through” or “under” beyond what was identified in paragraph 309 of the reasons of the Full Court, a paragraph to which your Honour Justice Gageler drew attention in exchanges with my learned friend, Mr Hutley.  That paragraph certainly bespeaks that there is no policy, let alone textual basis, for extending the reach of those words so as to discern in them some spectre of the notion of a necessary and proper party.

Mr Hutley urges upon this Court that it is sufficient to engage the words “through or under” – that there are common factual integers in the claims against the parties and the non‑parties to the relevant agreements – which they uniformly deny in circumstances where they are members of the one corporate group. 

Now, certainly in this case membership in the one corporate group does go towards fixing one member of the group with the knowledge of another.  But the non‑parties are not liable as knowing recipients of trust property simply because they are members of the same corporate group as those respondents who are parties to the Hope Downs deed.  That relationship – the relationship of membership of the one corporate group – just lacks the quality of essentiality of which Justice Tompkins spoke in Swedish Motors in the passage reproduced in your Honour Justice Nettle’s reasons in Flint Ink at paragraph 67.  Your Honours will see that on page 131 of Mr Hutley’s further bundle of yesterday.

So much was recognised by the Full Court, paragraph 317 – which your Honours will see on page 325 of the joint core appeal book.  This is a paragraph of some significance and insofar as the centrepiece of the proposed cross‑appeal is the non‑party’s reliance upon the deeds and the releases and undertakings therein contained, in my respectful submission that was correctly dealt with by their Honours in this paragraph, the short point being that it is not essential to the defence or any defence sought to be mounted on behalf of HDIO, RHIO or MDIO that the deeds are invoked.  They may well succeed by establishing, for instance, that there were no constructive trusts of the sort asserted by my clients.

That absence of essentiality, in my respectful submission, distinguishes this case from Flint Ink and that point is recognised in the penultimate sentence of paragraph 319 where their Honours say, quoting your Honour Justice Nettle that:

Huhtamaki Australia’s third party claim was “critically dependent upon and derivative from the contractual and common law obligations alleged to have been owed by Flint Ink to Huhtamaki NZ” –

NETTLE J:   Mr Ng, accepting that is so, that they may not, as it were, have to rely upon the deed, presumably they would, if not alone, then as an alternative to some other more basic defence ‑ ‑ ‑

MR NG:   Yes, yes.

NETTLE J:   ‑ ‑ ‑ depending on the view which one took of “through or under” to the extent that they relied upon the deed, as it were, then it might be said that they are claiming “through or under”, whereas as you point out, in relation to a more direct defence, it might be said that they were not, what then would one do?  Would it mean that part would be, as it were, within the ambit of arbitration and part of the defence would be outside it?

MR NG:   Well, your Honour, I would cavil with the premise of that question.  That question proceeds upon the premise that, notwithstanding the non‑essentiality of the deeds, the invocation of the deeds as one alternative limb of the defence of those entities might suffice, notwithstanding the presence of the direct defence, to constitute the relevant non‑parties as claimants “through or under”, the parties ‑ ‑ ‑

NETTLE J:   I just meant to convey that it would be essential to that defence if it were invoked.

MR NG:   That may well be so.

NETTLE J:   So, to that extent, the defence would be critically dependent upon the deed and thus it might be said they claimed “through or under”, those who are party to the deed.  I am not seeking here to confirm one way that that is so, but just accepting for the sake of argument it might be thus.  Is the possibility one would finish up with to some extent, the defence would be within the ambit of the extended definition and, to the more basic extent, would be outside it?

MR NG:   If the concept of defence were looked at in terms of the alternative limbs of defence, as distinct from the case overall, then your Honour may be correct in what your Honour puts to me.  The submission ‑ ‑ ‑

GORDON J:   The reality is, is it not, that where you have the claim against RDO, MDIO and HDIO, which is a claim made on the basis of knowledge, separate from any of the other entities – that is, the direct claim of knowledge giving rise to construct of trust – that would stay in the Court?  That is your position, regardless of the view you took it through and under?

MR NG:   Yes.

NETTLE J:   That is one reason why you would stay the arbitration, as it were, and put it all in Court?

MR NG:   Yes, and I should say that the word “defence” is critical here.  Now, it may be that ‑ ‑ ‑

GORDON J:   Is it critical or a misnomer?

MR NG:   It may be a misnomer, but I was using the term “defence” to mean the entirety of the case sought to be advanced by HDIO, RHIO and MDIO.  The point I was seeking to put was that that limb of that case which depends upon the deed is not essential to it.  Now, if the word “defence” in the relevant authorities was understood to mean the individual point sought to be taken, then of course your Honour Justice Nettle is correct.  The deeds are essential to that point which invokes the deeds.

NETTLE J:   What if they pleaded only that – that is, rather than take the direct offence, they have pleaded the indirect defence of having taken through or under someone who was entitled to the benefit of the deed?

MR NG:   Your Honour, that I think would still be tested against the notion of essentiality and the circumstance that they have pleaded, only the deed does not mean the deed is so essential as to render those particular entities’ claims through or under.

NETTLE J:   But surely it would be essential to that defence.  That would be their sole defence.

MR NG:   Yes, it would be and can I just say in relation to that I would simply draw to your Honours’ attention, as was drawn to your Honours’ attention yesterday, paragraph 4 of the reasons of the Full Court, which makes very clear that every point that is available to be taken will be taken.  Your Honour has raised an interesting question, but it may not arise in the context. 

NETTLE J:   No, that is the answer, thank you. 

MR NG:   Yes.  Now, turning to the context of the Hope Downs deed, it is no small matter of context in that regard that Mrs Rinehart executed the Hope Downs deed as trustee of the Hope Margaret Hancock Trust in circumstances where that deed purported to confer upon her significant benefits relative to the beneficiaries of that trust, including the appellants, not least of which was the power, pursuant to clause 5, to suspend and even to divert distributions of dividends from HPPL upon any breach of the deed by the beneficiaries, not to mention, of course, the releases to which your Honours have been taken.

Now, in my respectful submission, the Hope Downs deed was consequently a transaction for which Ms Rinehart, as trustee, required the informed consent of the beneficiaries obliging her, amongst other things, to make full disclosure of any breaches of trust before the execution of that deed and this is in circumstances where the parties could well anticipate that had such disclosure been less than fulsome, there would likely be a contest concerning the validity of the deed.

Now, I do not understand anyone to be suggesting that Mrs Rinehart made full confession to the appellants or to any other beneficiaries of the Hope Margaret Hancock Trust, instead the Full Court noted at paragraph 76 of their reasons, on page 250, and your Honours need not go to it, but I will draw to attention their Honours noted that in the period leading up to the execution of the Hope Downs deed, there was some contemporaneous communication in which Ms Rinehart, the first appellant, said she objected to being harassed.

Now, in my respectful submission, it would be anomalous, if not absurd, to borrow Mr Hutley’s expression, if the appellants were in that context taken to be content in the event of less than full disclosure by Mrs Rinehart for Mrs Rinehart by the bland words of the arbitration clause to escape the close public scrutiny to which trustees are ordinarily subject.

That is all the more so because by choosing the preposition “under”, the parties had described a nexus between the relevant dispute and the deed, which was less than the broadest imaginable.  The fact of the matter is, your Honours, that if the parties had sought to describe such a nexus there was a model readily available to them.

If your Honours could go, please, to the joint authorities book, volume 2, behind tab 20 your Honours will see the ACICA rules as at 2005.  On page 629 your Honours will there see a model arbitration clause recommended by ACICA – a very thoroughly drafted arbitration clause, it might be said, one which contrasts with clause 20.2 of the Hope Downs deed.

So, in my respectful submission, the matters of context which inform the construction of the deed do not tend in the one direction, as my learned friend, Mr Hutley, urged upon your Honours yesterday and, indeed, such matters were adverted to in the reasons of the Full Court ‑ ‑ ‑

EDELMAN J:   Sorry, Mr Ng, what date did these rules come into effect?

MR NG:   I am told that it is as at 1 August 2005, your Honour.

NETTLE J:   2005, did you say?

MR NG:   Yes.

NETTLE J:   Thank you.

KIEFEL CJ:   That appears at page 647.

MR NG:   Yes, I am indebted to your Honour.  Now, the matters of context akin to those relied upon by my learned friend, Mr Hutley, were traversed at paragraph 203 of the Full Court’s reasons on page 295 but the conclusion on the question of construction was stated at paragraph 204 and, in my respectful submission, it is of some significance that that – the prefatory words of the expression of the conclusion are considering the assumption referred to in Francis Travel and Comandate. 

So their Honours certainly did not rest their conclusion exclusively upon the matters of context adverted to in paragraph 203.  There can, therefore, be no suggestion that the treatment of the assumption by their Honours beginning with Francis Travel and extending to Fiona Trust was done merely for completeness.

Can I then turn, your Honours, to the suggestion that a fresh start dispensing with anything that was said before the 1990s may be justified by reference to the law’s recognition of separability.  It need only be said in that regard that Chief Justice Gleeson in Francis Travel endorsed the reasoning in Ethiopian Oilseeds with, in my submission, Justice Hirst’s less expansive understanding of the phrase “arising under” after Ferris v Plaister had been decided.  There was no paradigm shift effected by the common law’s recognition of the notion of separability. 

In the face of this, though, my learned friend, Mr Hutley, contends that in the post‑separability world “dispute” under this deed goes so far as to refer to a dispute due to the existence of the deed.  Your Honours, whatever else might be said about the varied relational reach of the preposition, the humble preposition “under”, it would, in my respectful submission, be to slip the surly bonds of the English language in its ordinary usages to assert that it embraces some notion of causation. 

Now, there is an attempt made by those to my right to avoid this difficulty by emphasising a theme that fell from your Honour Justice Edelman, namely, the structural differences between say a plea of non est factum and a pleading of misleading or deceptive conduct in the manner of Lord Justice Diplock in Mackender v Feldia. 

Can I just draw to attention that the Full Court itself saw little significance in that asserted structural difference.  If your Honours could go, please, to page 344 of the joint core appeal book, your Honours will see at paragraph 379 that their Honours were responding to a submission made in a different context, true, concerning the meaning of the words “null and void” in the proviso to section 8(1) of the Commercial Arbitration Act.  The submission was to the effect that those words do not extend to that which is merely voidable.  Before the quote, your Honours will see that their Honours condemn:

the unsatisfactoriness of an approach to construction that relied on a clear distinction between “void” and “voidable”.

There is then a reproduction of a passage from the reasons of Justice Dixon in Posner v Collector for Inter‑state Destitute Persons (Victoria).  Then, paragraph 380:

There is as good reason not to refer a dispute to an arbitrator if the arbitration agreement was brought about by deception as there is if the execution of the agreement was a forgery or made utterly without authority.

I appreciate, of course, that this is all said in a different context in the course of construing a different verbal formula.  However, the word “under” is a far less obvious candidate, in my respectful submission, than the word “void” for the role of a word whose construction turns upon the distinction between that which is void and that which is voidable.  So, in my respectful submission, your Honours would draw little guidance from the maintenance of that distinction.

Can I turn, please, to the test “governed or controlled” articulated by his Honour Chief Justice Bathurst in New South Wales?  Contrary to what was put by my learned friend, Mr Hutley, my clients attempt no crab‑wise retreat from what was said by the Chief Justice.  That aspect of his Honour’s reasoning was met with criticism in paragraph 199 of the reasons of the Full Court – and your Honours will see that on page 293 – and that paragraph commences:

With the utmost respect to Bathurst CJ, the limitation of disputes that are (necessarily) governed or controlled by the deed is narrow, not liberal.

While the word “under” has a range of meanings, one struggles to see in these reasons the identification of that meaning of the word “under” which is said to be broader than that ascribed to it by the Chief Justice.  So, one struggles to understand with precision what exactly it is that constituted the wrong turn in the reasoning of the Chief Justice.

To his credit, my learned friend, Mr Hutley, sought to rectify this omission by pointing to what was said to be absurdities flowing from the adoption of that test.  In particular, it was said that if it were correct it would be sufficient to take a dispute outside, say, clause 20 of the Hope Downs deed that in answer to a claim for breach one asserts laches or the effect of a statute of limitations.

However, it must be borne in mind that the question of referral to arbitration arises at an early stage in the proceedings.  Thus, merely to assert laches is not to establish that defence and, thus, it is not to negative, necessarily, the existence of a sustainable argument that there has been a breach of the relevant contract.  And, while soever there is such a sustainable argument, then there is a dispute under the deed.  So, in my respectful submission, the absurdities to which my learned friend, Mr Hutley, points are more apparent than real.

NETTLE J:   What is the difference between that and what we have here?  Is there not, similarly, on the same line of reasoning, a sustainable argument that there is something the subject of the deed?

MR NG:  Your Honours will recall, there is a section of the reasons of the Full Court to which Mr Hutley took your Honours, namely, paragraph 146 in which their Honours did say that before one ‑ or in the course of attempting to ascertain and assess what is said to be a sustainable argument, the Court must form a view as to the legal meaning of the arbitration agreement. 

So what we are concerned with, your Honour, is the anterior stage of the exercise, namely, the ascertainment of the legal meaning of the arbitration agreement.  We say the legal meaning is such that there could be no sustainable argument in relation to the validity claims that they engage the deeds in the requisite manner.

NETTLE J:   I follow that.  The point about laches and acquiescence and delay and so forth, that would apply equally to the sorts of defences that are being advanced here, or purported to be advanced here, would it not?

MR NG:   It may, yes.  Can I then take your Honours to paragraph 249, to which I had foreshadowed a reference.  That your Honours will find on page 305 of the joint core appeal book.  Your Honours will there see that the Full Court had pointed to the possibility that:

the claims to set the deeds aside are challenges to the rights of Hancock Group members to Hancock Group Interests and so can be seen to be themselves in breach of and controlled by the Hope Downs Deed.

It may be the case, of course, that if the deed were valid, then the prosecution of the validity claims would be in breach of and controlled by the Hope Downs deed.  However, whether or not the Hope Downs deed is valid is not controlled by that instrument and, in my respectful submission, the distinction between those two forms of conduct is elided in this particular paragraph.

My learned friend, Mr Brereton, attempted, in answer to this – it was at his proposition 11 – and it depended upon the suggestion that the appellants seek not merely declarations but also injunctions with respect to the enforcement of the impugned deeds. The injunctions are sought on entirely the same basis as the declarations and your Honours will see, by way of example, in the respondent’s further materials, page 73, paragraph 326 of the statement of claim, where the entitlement of Ms Rinehart to a declaration and to an injunction pursuant to section 80 of the TPA has its provenance in the matters pleaded in paragraphs 309 to 325.

So my client’s entitlement to an injunction depends on the resolution of a question not controlled by the impugned deeds.  Subject to anything further, your Honours, those are the submissions in reply.

KIEFEL CJ:   Thank you.  You have a right of reply, Mr Hutley, in relation to the application for special leave.

MR HUTLEY:   Yes, thank you, your Honour.  Your Honours, the concept of essentiality, which is relied upon, is somewhat unclear.  The words of the definition are merely proclaiming under subsection (1):

party . . . 

(a)       any person claiming through or under ‑

Every claim in the suit is optional.  One does not have to bring it; one may choose to bring it.  Nothing is required, except perhaps a jurisdictional requirement but even then one does not have to claim it, just the Court has to take notice of it.

NETTLE J:   What happens if you plead both, the direct and the indirect as it were?

MR HUTLEY:   Well, we say the direct is “through or under” for the reasons we have advanced.

NETTLE J:   Assume you are wrong about that.

MR HUTLEY:   But I assume I am wrong about that, with respect, then one there has ‑ one goes back to the concept of the dispute under the deed.  The whole dispute is taken because we are claiming through or under a party. 

GORDON J:   Assuming we are against you on that.  Assume you are not claiming through or under a party ‑ ‑ ‑

MR HUTLEY:   Then I do not get – I do not even start ‑ ‑ ‑

GORDON J:   You do not start.

MR HUTLEY:   ‑ ‑ ‑ against MDIO.  There has to be an element of claiming through or under unless I am right ‑ ‑ ‑

GORDON J:   So you accept the proposition we have put to Mr Ng, that if the separate direct claim attributable to knowledge would stand outside, assuming you are wrong about the “through or under” point?

MR HUTLEY:   Exactly, that is why there will not be an estoppel. 

GORDON J:   Yes.

MR HUTLEY:   That issue will be determined between ‑ ‑ ‑

GORDON J:   In trial.

MR HUTLEY:   No, it will be determined between different parties in arbitration and then have to go and be determined against another party by the other party.

GORDON J:   Or it might be the other way around.  It might be there is a stay of the arbitration and it is determined in the Court.

MR HUTLEY:   Section 8 requires it be sent to arbitration.  It is different to the International Arbitration Act where you can refer to arbitration subject to conditions.  It is one of the fundamental differences between the ‑ ‑ ‑

GORDON J:   That might be right here for section 8, but practically that is what would have happened. 

MR HUTLEY:   Well, your Honour, there cannot be a stay because there is no power in the Court – the Court is admonished not to have anything to do with the arbitration beyond as required by the Act.  That is section 5.  Section 8 says ‑ ‑ ‑

GORDON J:   But that assumes it is under the deed. 

MR HUTLEY:   But there is an arbitration – there will be a – in this case the situation of MDIO will be investigated in the arbitration because, as the Full Court held, there is a sustainable argument as between HPPL and the plaintiffs, that they be injuncted from raising the issue quoad MDIO under section 7(b).  That will require a full investigation of the substantive claim; that is, the breaches of fiduciary duty said to affect the relevant titles and also the knowing receipt by ‑ ‑ ‑

GORDON J:   By Rio and MDIO.

MR HUTLEY:   MDIO.  So you will have a complete duplication of factual inquiry because that is under the deed for other reasons.  That is one of the reasons I said is there is a – these factually are so intimately tied up, you will have a complete duplication of findings of every aspect.

EDELMAN J:   It really does come back to your proposition that, effectively, claiming “through or under” really needs to be read as if it were  a necessary or proper party type provision, even though unlike Rules of Court, which are concerned with necessary or proper parties, here these parties are not parties to the deed itself.

MR HUTLEY:   I accept that, your Honour, but the extended words are there for a very express purpose - I took your Honours to (1)(c) - to avoid exactly this problem, in our respectful submission, of, in a sense, the same case being run twice in a situation where, in all but name, the second case – that is the one which is putatively with the non‑party – is wholly dependent upon the facts ‑ ‑ ‑

GORDON J:   Well, it might be the same substratum of fact but it is not wholly dependent in the sense of defences and the like.  It has a separate cause of action which is direct and attributable just to it  ‑ because of the knowledge it was relevant.

MR HUTLEY:   In one sense that was exactly the situation in Flint Ink.  You had to, in effect, be able to assert a cause of action against the relevant non‑party ‑ ‑ ‑

NETTLE J:   Which relied upon the contract of the party.

MR HUTLEY:   Quite, as here and also was relying upon the relationships created under that contract between the parties and all we are saying here is that the relationships which are said to drive the case against us are wholly the same relationships which are essential issues to the claims under – which are being maintained against the parties to the arbitration agreement.

NETTLE J:   I understand that.  Forgive me for this question because I have asked you already and I know you have answered, but I did not quite follow.  Let us assume against your argument that one of your defences is a “through or under” defence and the other is not, or pleaded in the alternative.  The “through or under” on that analysis would be the subject of arbitration.

MR HUTLEY:   Well, your Honour, we would say the whole case ‑ ‑ ‑

NETTLE J:   I just wanted to ask you why does the rest which is not “through or under” become the whole case?

MR HUTLEY:   Because the proceedings are sent – because what happens is when that occurs the proceedings are referred to arbitration.  We say the extent of the proceedings, if you are claiming “through or under” ‑ ‑ ‑

NETTLE J:   Even if only partially, that is enough to get you in.

MR HUTLEY:   Quite, even partially, that is it.  You are sent to arbitration.

GORDON J:   Can you explain that to me.  I do not quite understand, Mr Hutley, how that works as a matter of legislation construction.

MR HUTLEY:   Your Honour, section 8:

A court before which an action is brought in a matter which is the subject . . . if a party –

that is, 7, the party would have to include claiming “through or under” so you may not even have a party to the agreement making this claim:

so requests not later –

which action is brought:

which is the subject of an arbitration agreement –

We say the action here is the subject of an arbitration agreement in the sense of all those facts will be investigated in point of fact, by reason of the arbitration agreement: 

if a party so requests not . . . refer the parties to arbitration ‑

So, in other words –

GORDON J:   Is there a distinction drawn there between “action” and “matter”?

MR HUTLEY:   Yes, and we say ‑ ‑ ‑

GORDON J:   So, I am asking you, is we are seeking to carve out of the matter this action which is not dependent upon the application of clause 8(1).

MR HUTLEY:   Well, your Honour, I can only ‑ ‑ ‑

GORDON J:   Your answer is it is caught regardless.  Is that your proposition?

MR HUTLEY:   It is the matter.  Yes, it is the matter.  That matter with which we are dealing is the subject of an arbitration agreement.  We know that because it has been sent - involving the parties, exactly the same facts, each and every element.  That matter has been sent and we say if a non‑party who has come in “through or under” they are sent, unless there was an aspect of their matter, their suit which was not a matter which is the subject of the arbitration agreement and we say that is absolutely co‑extensive here - total. 

True it is, it is against a different party but the very same facts and circumstances will be investigated in their entirety, each and every element of them, being the subject of the arbitration agreement because of the disputes between the parties to the arbitration agreement.  Your Honour, those are our submissions.

KIEFEL CJ:   Yes, thank you.  The Court reserves its decision in this matter and adjourns until 11.00 am.

AT 10.35 AM THE MATTER WAS ADJOURNED