Rizhao Steel Holding Group Co Ltd v Koolan Iron Ore Pty Ltd - [2011] WASC 1

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: RIZHAO STEEL HOLDING GROUP CO LTD -v- KOOLAN IRON ORE PTY LTD [2011] WASC 1

CORAM: KENNETH MARTIN J

HEARD: 4 NOVEMBER 2010

DELIVERED : 5 NOVEMBER 2010

PUBLISHED : 20 JANUARY 2011

FILE NO/S: ARB 24 of 2010

BETWEEN: RIZHAO STEEL HOLDING GROUP CO LTD
Appellant
AND
KOOLAN IRON ORE PTY LTD
Respondent

FILE NO/S :ARB 26 of 2010

BETWEEN :RIZHAO STEEL HOLDING GROUP CO LTD
Appellant
AND
MOUNT GIBSON MINING LTD
Respondent

Catchwords:

Interim application in Single Judge Appeal - Application for leave to appeal arbitral awards - Security for costs - Application for award amounts to be paid into court before leave application heard

Legislation:

Commercial Arbitration Act 1985 (WA), s 33, s 38
Rules of the Supreme Court 1971 (WA), O 65 r 13

Result:

Application refused

Category: A

Representation:

ARB 24 of 2010

Counsel:

Appellant: Mr F M Douglas QC & Mr S K Dharmananda
Respondent: Mr B A Coles QC & Mr K J de Kerloy

Solicitors:

Appellant: Holman Fenwick Willan
Respondent: Freehills

ARB 26 of 2010

Counsel:

Appellant: Mr F M Douglas QC & Mr S K Dharmananda
Respondent: Mr B A Coles QC & Mr K J de Kerloy

Solicitors:

Appellant: Holman Fenwick Willan
Respondent: Freehills

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

Bell Electric Ltd v Aweco Appliance Systems GMBH & Co KG [2002] EWCA Civ 1501; [2003] All ER 344
Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) 198 CLR 380
Connelly v Director of Public Prosecutions [1964] AC 1254
Hammond Suddard Solicitors v Agrichem International Holdings Ltd [2001] EWCA Civ 2065; [2001] All ER (D) 258 (Dec)
Ireland v Norilya Minerals Pty Ltd [2010] WASCA 203
Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612
Jeffrey and Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75
John Fairfax & Sons Pty Ltd v Police Tribunal of New South Wales (1986) 5 NSWLR 465
Norilya Minerals Pty Ltd v Ireland [2010] WASC 260

KENNETH MARTIN J:

(These reasons were delivered extemporaneously on 5 November 2010 and has been edited from the transcript. For convenience this decision, as part of a series of extempore reasons for decision, will be referred to as 'Rizhao 3'.)

These are my reasons in respect of the matters argued yesterday on interim applications brought by the respondent in each matter. I should say, for the purposes of clarification, that there are two matters before me as applications in two pending appeals.
The two appeals are ARB 24 of 2010 and ARB 26 of 2010, with the common appellant Rizhao Steel Holding Group Co Ltd (Rizhao) seeking leave to appeal against arbitral awards made against it on 16 August 2010 by the Hon Murray Gleeson AC QC. The two appeals by Rizhao require leave and were commenced out of this court on 6 September 2010. The applications for leave to appeal will be heard by me on Tuesday, 16 November 2010 (see Rizhao 4).
What now present before me to determine are essentially applications brought by the respondents in ARB 24 of 2010, Koolan Iron Ore Pty Ltd (Koolan Iron), and in ARB 26 of 2010, Mount Gibson Mining Ltd (Mount Gibson), seeking interim orders in each appeal.
It will only be necessary to refer to the Koolan Iron interim application as made in ARB 24 of 2010, since the materials filed on each application and in each appeal essentially replicate each other. There are, of course, two distinct arbitral awards and so, two appeals (each seeking leave to appeal), with these interim applications made in each matter.
I refer to the interim application of Koolan Iron in ARB 24 of 2010, which seeks, by process of 30 September 2010, this relief:
(1)The Appellant pay the Award debt of US$58,373,145 into Court.
(2)The Appellant provide security for the Respondent's costs of the application for leave to appeal by paying AU$15,000 into Court.
(3)In the event that the Appellant fails to comply with order 1 or 2 within 21 days of the date of these orders, the application for leave to appeal be dismissed.
The balance of the relief sought is in relation to costs or ancillary orders.
I should say in respect of the timing of 21 days, as is seen in proposed order 3 on the Koolan Iron application, that each substantive leave application by Rizhao is now listed for hearing before me on 16 November 2010. Papers and materials have been filed for that matter. Bearing in mind the leave application hearing date of 16 November, the 21 days in proposed order 3 is now sought to be abridged by Koolan Iron and Mount Gibson in each application downward to a period of seven days, in the event I am persuaded to make the requested payment in orders against Rizhao.
The fact that like applications in respect of each arbitral award are made in the two appeals, by reference to seeking the payment into court of the full amount of the arbitral awards in both arbitrations, will in aggregate, as a matter of mathematics, mean that the amount sought to be paid into court on the applications under orders 1 and 3 would be slightly in excess of US$114 million.

Evidence

The applicants in each matter rely upon an affidavit of David Garth Berg sworn 30 September 2010 and its contents. Attachments found within that affidavit contain a heavy amount of correspondence passing between solicitors for the respective parties, from about the time of the delivery of the awards by the learned Arbitrator in the middle of August 2010. Some of that correspondence is relied upon as bearing upon the discretion I am asked to exercise today, in terms of making interim orders against Rizhao.
Also relied upon by the applicants is an affidavit of Shane Michael Murphy affirmed 20 October 2010, which essentially updates the position as from 8 October 2010, by reference to more solicitors' correspondence, mainly emanating from the solicitors for the applicants.
There was also handed up in each matter (without objection) answering correspondence sent by Holman Fenwick Willan, solicitors acting on behalf of Rizhao, to the applicant's solicitors (Freehills) by email on 22 October 2010.
On behalf of Rizhao two affidavits by a solicitor, Laura Polly Wright of Holman Fenwick Willan, were relied upon, both of which were sworn on 18 October 2010. The first affidavit attaches a report from a financial analyst, Mr Sebastian Lewis, of 15 October 2010, in which Mr Lewis explains aspects of a proposed international corporate merger, between Rizhao Steel and Shandong Iron and Steel Group. Mr Lewis concludes his report as to the proposed merger by noting various statements made to the Hong Kong Stock Exchange. He says, between pages 5 ‑ 6:
In a statement released by Kai Yuan Holdings on 1st September 2010, Kai Yuan Holdings reported that on 30th August 2010 a second ... shall be completed via a one-time acquisition of assets held by Rigang.
His report continues:
Asset acquisition, including due diligence, asset valuation and audit, are to commence immediately and that completion of the proposed asset acquisition shall take place before 30th November 2010.
Mr Lewis concludes:
On 10th September 2010, SBB reported that Shangang had started to review its consolidation plan for merging its listed arms, Jinan Iron and Steel and Laiwu Steel Corporation, and that the two companies had suspended share trading from Thursday 9th September. SBB went on to report that it was unclear whether Rigang's assets would be included in this restructuring of Shangang.
Dealing with the significance of Mr Lewis's report, as I mention it, one of the matters relied upon by Koolan Iron (and by Mount Gibson) is a looming end of November 2010 culmination of the proposed merger involving Rizhao and arising implications, in terms of a potential divestiture of assets by Rizhao to a joint venture entity, as part of the merger and consequent exchange of shares in return for Rizhao's assets as part of that merger joint venture arrangement. I do not, for the purposes of this application, infer any pejorative connotation against Rizhao associated with that looming merger.
Other documents suggest that the proposed merger has been the subject of announcements to the Hong Kong Stock Exchange, at least since September 2009. Indeed, restructuring arrangements towards a joint venture entity involving Rizhao seem to have been spoken of for some considerable period, even before that. The submissions of senior counsel for the applicants did not ask me to infer anything pejorative against Rizhao, in terms of that looming merger as a potential business development involving Rizhao.
But the applicant's submission, as I understood it, was essentially directed towards a potential adverse outcome for it - in terms of any implementation of these restructuring arrangements ‑ in terms of a diminished consequential availability of Rizhao's assets, in a potential asset execution, if necessary. But no more than that was raised in terms of considerations said to be relevant to powers I am asked to exercise on these interim applications.
A second affidavit in each appeal was relied upon by Rizhao, also by Ms Wright, once again sworn 18 October 2010, and filed in this court on 20 October 2010. This contained more documentation including press statements, essentially associated again with looming Rizhao merger arrangements.
These documents all portray themselves to be rather orthodox looming business arrangements concerning Rizhao. That distinguishes this case, in my view, from other cases where courts have been asked to make urgent intervention orders, on a basis of concerns over what is legitimately feared to be deliberately implemented plans towards asset divestiture, taken to frustrate the ability of a creditor party to obtain execution against local or international assets of a putative or actual judgment debtor. This is obviously not one of those cases of nefarious intent embodied in an asset divestiture plan. Furthermore, these applications were not argued on the basis of seeking Mareva orders (or freezing orders pursuant to the court's powers under O 52A of the Rules of the Supreme Court 1971 (WA) (the Rules)).
That essentially constituted all the evidence relied upon on the two interim applications. There are like affidavits by the same deponents in ARB 26 of 2010, which essentially replicate the same information.

Arguments

In summary, the applicant, bearing in mind the pending applications by Rizhao for leave to appeal in both matters under s 38 of the Commercial Arbitration Act 1985 (WA) against the arbitral awards of 16 August 2010 of the learned Arbitrator, contends that this is a situation where not only it is appropriate for security for costs orders to be made (reflected by proposed order 2, in each of the interim applications), but far more fundamentally that orders going well beyond security for costs, reflected by proposed orders 1 and 3, in aggregate should be made. What is in real controversy then, is whether substantial award amounts should be paid into court, and that if they are not paid in within seven days, that Rizhao's applications for leave to appeal be not just stayed, but wholly dismissed.
Dismissal of course is a significant and fundamental negative outcome in terms of, a denial of, all relief to Rizhao. Such orders would debar Rizhao from being heard at all ‑ absent the payment of all award sums into court.
I now need to mention some further background fact material, which puts into sharper context the basis upon which the applicants bring their interim applications for relief, in terms of potentially denying Rizhao even an opportunity to be heard, absent it rendering full payment of the award amounts into court, on interim orders.
As mentioned, the arbitral awards were delivered on 16 August 2010, and it is uncontroversial that the award amounts, in aggregate (without interest), approximate over US$114 million. They have not been met to any extent by Rizhao, to this point.
There have been a number of applications in this court between these same parties after 16 August 2010, culminating in the orders which I made this week, on the applications of Koolan Iron and Mount Gibson, to have their respective arbitral awards registered as judgments of the court (see Rizhao 2). Those were applications brought pursuant to s 33 of the Commercial Arbitration Act, which provides:
An award made under an arbitration agreement may, by leave of the Court, be enforced in the same manner as a judgment or order of the Court to the same effect, and where leave is so given, judgment may be entered in terms of the award.
In very brief terms, the further evidentiary factors relied upon by Koolan Iron and Mount Gibson (apart from the fact of Rizhao's continuing non‑payment) on the interim applications, extends to include the following: the applications for leave to appeal by Rizhao seeking only to challenge a limited numerical component of the total awards for damages which are the subject of the two arbitral awards. Essentially, the aggregate amount (assessing the two awards, together) of approximately US$70 million is wholly unchallenged, even were leave to be granted, and even further, if the appeals then brought by leave in the two matters, proved to be ultimately successful. Success by Rizhao (hypothetically assumed for the purposes of this exercise) would not remove approximately 62% (US$70 million) of the aggregate award amounts that are due to the respondents. (I do not, for this purpose, incorporate any factor of interest.)
The unchallenged and large outstanding indebtedness which is due by Rizhao, is a significant consideration, on the submissions of the applicants. So also is the fact, they say, that no stay inhibiting the enforcement on the award amounts has been sought or granted in any jurisdiction by Rizhao, in terms of not only some amount of the arbitral award which might potentially be reduced by Rizhao's hypothetical success on its appeals, but to any extent.
So there is no stay. Consequently, Rizhao has been and remains fully vulnerable to all processes of execution seeking enforcement and payment upon the arbitral awards, both in Australia and elsewhere internationally, since 16 August 2010.
Moreover, as a consequence of my orders made this week (Rizhao 2), the arbitral awards are now to be treated as judgments of this court, for the purposes of effecting enforcement, under s 33 of the Commercial Arbitration Act. Accordingly, Rizhao is now vulnerable to all processes of execution that may follow as a result, here or elsewhere ‑ which are predicated upon the two arbitral awards now being regarded as having the full force and effect of judgments of this court.
So two very large monetary awards as made, have now been registered in this court against Rizhao, and there is no stay against execution. Even then, if Rizhao is successful in obtaining leave to appeal, then winning on its appeals, that will still not undermine the residual entitlement in the applicants to receive at least $US70 million (without interest).
These are said to be significant and highly persuasive considerations, I ought take account of in terms of the interim applications, not only in granting security for the costs of the leave applications, but also to require the entire amounts of the two awards to be paid into court within seven days, before allowing any hearing of Rizhao's applications for leave to appeal.
It is also said that Rizhao has put up no evidence to suggest that it is unable to pay; that Rizhao is a substantial foreign corporation based in the People's Republic of China doing business internationally; and that there are worrying developments on the horizon, in terms of the potential loss of Rizhao's own assets, by reason of the looming implementation (and without any pejorative connotation) of the foreshadowed corporate restructuring which may occur as early as the end of this month - resulting in Rizhao's assets becoming as from then, held by another entity, with Rizhao in turn holding only shares in the new entity - of questionable value. This, say the applicants, must all bear adversely upon the likelihood of them ultimately ever being able to successfully recover against Rizhao, by execution, what is owed.
The applicants say further that this is not a case of seeking prejudgment execution, because they now hold rights essentially akin to final judgments against Rizhao. And, at least to the extent of US$70 million of US$114 million, there is a wholly unchallenged obligation that is unmet.
They say further that there has been only very sparse information emerging in correspondence emanating through Rizhao's solicitors, in terms of the full implications of the looming end November 2010 merger. Indeed at one point, at page 221 of Mr Berg's affidavit, it is said that a positively erroneous statement has been made as to Rizhao's not being the subject of the merger arrangements – and clearly shown now, not to be the case.
It said (uncontroversially) that this court has clear jurisdiction over Rizhao, by reason of the 2007 iron ore supply agreements ‑ which both contain the parties' express submission (indeed, exclusive submission) to the jurisdiction to the Supreme Court of Western Australia. Those 2007 iron ore supply agreements are each expressly governed by Western Australian law.
It said in support of the interim applications that Rizhao has made no effort, or at least a very poor effort, to explain the non‑payment position, to date. Reference by Rizhao to its difficulties in persuading a People's Republic of China foreign exchange authority (the State Administration of Foreign Exchange in the People's Republic of China), about a deployment of funds out of the People's Republic of China to meet international judgment debts, as referred to in correspondence at page 202 of Mr Berg's affidavit, is said not to be a persuasive or credible explanation towards explaining why, at least the unchallenged component (US$70 million) of the award debts, has not been met to date by Rizhao.
It is said that as Rizhao is itself invoking processes of the Supreme Court of Western Australia (as it indeed does in ARB 24 and ARB 26 of 2010, in this court, in seeking leave to appeal) that there is also an element of unfairness, so it is put, associated with Rizhao essentially approbating and reprobating ‑ seeking to invoke to its advantage the privileges of a system of justice as is provided for through the courts in this State, yet at the very same time, essentially ignoring unchallenged obligations to meet the payments due to the applicants in this State.
That is the context in which, factually, the two interim applications are to be determined.

Decision

The applications under par 2 in each matter which seek security for costs in the amounts of $15,000, by the paying of those funds into court, are essentially unchallenged, on the materials before me. On those costs applications, as I foreshadowed yesterday, in the absence of any challenge by Rizhao, it manifestly being a foreign party based out of this jurisdiction, my view is that orders for security for costs are appropriate, and so, they will be made in the terms sought; that is, on each application for leave to appeal, there will be security for costs ordered to be paid by Rizhao in the amount of AU$15,000, by payments into court, within seven days.
But the far more controversial dispute requiring my determination at this point, goes to the basis upon which this court may, or should, in the context of Rizhao's pending applications for leave to appeal under s 38 of the Commercial Arbitration Act, make interim orders in each appeal requiring payment of the entire award amounts (exceeding US$114 million) into court within seven days.
The issue was succinctly framed yesterday by senior counsel on behalf of Rizhao, by his submission that both interim applications essentially came down to a question of power for this court to make such 'payment' in orders for the full amount of the award amounts.

It was said, correctly I think, that there is no direct Australian case on the point, where such payment in orders have ever been previously made. Therefore, in the absence of any applicable precedent, I proceed with some caution in assessing the applicant's invitation to make such orders.
The jurisdictional basis argued to support payment in orders as sought was essentially put on behalf of the applicants on a twofold platform. First, by reference to the Rules of this court, under O 65, which governs appeals to the General Division. In particular, significant reliance was placed upon O 65 r 13, which provides, by r 13(1):
At any time after an appeal is commenced and before it is concluded a party may apply for an interim order or an order amending or cancelling an interim order.
Rule 13(2) then provides that such an application must be made by the applicant filing a form 86 which is an application in the appeal. That has all been done.
The second edifice advanced to support the orders sought, is by reference to the court's inherent jurisdiction. I will now proceed to evaluate each suggested platform in turn.

Rules of the Supreme Court O 65 r 13

It is relevant that O 65 r 13 falls within a division of O 65 headed 'Division 3 - Procedure on Appeals'. The power the court holds arising out of O 65 r 13(1) is said to flow from the definition of 'interim order', used in r 13(1). 'Interim order' is found to be defined in O 65 r 1, in definitions specifically provided for application within O 65.
Order 65 r 1 commences on a basis of the respective definitions being applicable, unless a contrary intention appears. The definition of 'interim order' is expressed as 'interim order in an appeal, means ...'. There follow subparagraphs (a) ‑ (e). A central focus of the (first alternative) jurisdictional submission, places heavy reliance upon r 1(e), in terms:
any other order that the Court may make before the appeal is concluded, other than an order giving or refusing to give leave to appeal.
Predecessor r 1(a) ‑ (d) in the definition of 'interim order' read:
(a)an order staying the proceedings in the primary court or the execution of the primary court's decision;
(b)an urgent appeal order;
(c)an order that an appellant provide security for a respondent's costs;
(d)an order extending or shortening the time for obeying a requirement of these rules, other than the time for commencing an appeal.
Thus, the applicant's first jurisdictional case is that subparagraph (e) in the definition of 'interim order', provides a repository of sufficient power to support the making of payment in orders.
This is said to be on the basis that, as a matter of principle, the power afforded by subparagraph (e) can be seen to be phrased in broad terms; that rules of court ought to be read literally, and so there is no reason why the full breadth of wide words as deployed in subparagraph (e) of the definition, ought be constrained. This is said to be so, even though it is equally to be seen that subparagraph (e) in the definition has been framed essentially by reference to any order that may be made, as between two temporal points, ie any order made between the time of the commencement of the appeal and conclusion of the appeal.
I am, with respect, unable to accept that the definition used in subparagraph (e) for 'interim order' in O 65 r 1(e) and in r 13(1), can provide an adequate jurisdictional basis for the payment in orders, as now sought.
The definition of 'interim order' found in the Rules, in my view, would be a somewhat unusual place to find a power of such allegedly wide‑ranging and significant implications. Were it the true intent of the legislature or indeed the rulemaking authorities of the court to confer such a significant power, it seems to me that surely the conferral would have been afforded more overtly and in more express terms.
The surrounding predecessor rules, subparagraphs (a) ‑ (d) in the definition of 'interim order', give, I think, colour and give the true meaning to what is seen to follow as a miscellaneous concluding subparagraph (e) - in terms of the true character of what was envisaged by (e).
It is also a forceful factor favouring Rizhao, and against jurisdiction on this ground, that if there is, as can be seen, an express conferral of power under subparagraph (c) - just in order to render an order for security for costs in a pending appeal. Then surely the same express framework should be expected in terms ‑ for what is potentially, a far more significant (payment in) order - given the potential ramifications of such an order ‑ potentially debarring a party's right even to be heard, in the absence of payment of all moneys into court, which are the subject of challenge.
I accept it as being most unlikely that an intended conferral of power of such potential moment, would have been left to the miscellany of the concluding phrase (e) in a definition that reads: 'any other order that the Court may make before the appeal is concluded'.
I also note O 65 r 13, with its incorporated reference to 'interim order', sits within the context of procedural rules generally, applying to appeals, in div 3 of O 65. Procedural rules deal with how appeals are commenced, how parties compile a record, and the more mundane matters of that kind. It seems to me, once again, that this would be an unusual location to find a conferral of a power of the scope, now contended for. I do not think that was the true intent.
Reference was made by the applicants to some overseas authorities, in the English Court of Appeal, in support of this jurisdictional argument.
In Hammond Suddard Solicitors v Agrichem International Holdings Ltd [2001] EWCA Civ 2065; [2001] All ER (D) 258 (Dec) the facts concerned a limited liability corporate appellant, registered in the British Virgin Islands, with a post office box in Jersey and no assets in the United Kingdom. 'Payment in' orders, which approach the level of the orders as currently sought, were made by the Court of Appeal.
A second UK Court of Appeal decision relied upon was Bell Electric Ltd v Aweco Appliance Systems GMBH & Co KG [2002] EWCA Civ 1501; [2003] All ER 344. There, Potter and Carnwath LJJ extended the breadth of payment into court orders a notch further ‑ see observations by Potter LJ at [22] where, having referred to Hammond Suddard v Agrichem International, it was said:
The question posed in this case, to which the judgment in the Hammond Suddard case provides no answer, is whether, when there is no reason to suppose that vigorously pursued steps by way of enforcement will ultimately prove to be fruitless if the appeal fails, there may none the less be a 'compelling reason' meanwhile to make an order staying the appeal if the interim order is not complied with, or a payment into court made or other security provided in respect of the judgment sum.
Potter LJ concluded:
Depending on the overall circumstances, I see no reason in principle why that should not be so in a case where (i) the appellant is in deliberate breach of the order to pay the judgment sum; (ii) he has applied for and been refused a stay; (iii) his failure or delay in payment is due not to any financial difficulty but is cynically based upon the practical difficulties for the respondent in seeking enforcement in a foreign jurisdiction.
In Bell Electric Ltd the Court of Appeal ultimately made orders requiring payment of judgment moneys into court, essentially as the price of that appeal being heard.
But it is apparent that both these UK Court of Appeal decisions turn heavily upon an English Civil Procedure Rule (CPR) 52.9, that governed both applications. In Bell Electric Ltd [7], CPR 52.9 is set out, providing:
(1)The Appeal Court may (a) strike out the whole or part of an appeal notice; (b) set aside permission to appeal in whole or in part; (c) impose or vary conditions upon which an appeal may be brought.
(2)The Court will only exercise its powers under paragraph (1) where there is a compelling reason for doing so. (emphasis added)
CPR 52.9(2) is the basis for observed references in many places in the reasons of the Court of Appeal to a phrase, 'compelling reason', which was of key significance to the respective outcomes in these appeals.
There is no counterpart to CPR 52.9 under the Rules. Both UK appeals, in my assessment, turn upon the force of the express language found in CPR 52.9 and the utilisation of the power conferred under that rule. There also appears to be a recognition that absent CPR 52.9, the ordinary position will be against such payment orders being made: see Bell Electric Ltd [26].
So in my assessment the orders in the UK appeals were essentially exceptional, and were made under an exercise of a power expressly conferred and with no West Australian counterpart rule.
I do note, in passing, that in Hammond Suddard v Agrichem International the Court observed at [45]:
We would also add that the position would be very different if the appellant were able to produce convincing evidence that the appeal would be stifled if it were required to take these steps.
I must now mention a recent decision of the Court of Appeal in this State in Ireland v Norilya Minerals Pty Ltd [2010] WASCA 203, delivered 20 October 2010, by McLure P, Newnes and Murphy JJA. In that local appeal, Hammond Suddard v Agrichem International had been relied upon (see [37]) by the appellants, in seeking relief there sought. Relevantly, the Court of Appeal observed at [44]:
The more recent English decisions referred to by the defendants … also in our view do not assist the defendants. They concern the construction and application of certain provisions of the English rules of court, and the factual circumstances with which those cases deal, provide no real assistance by analogy to this matter.
Observations in Ireland v Norilya Minerals concerning the UK Rules and their unique local character - not yet found in Western Australia ‑ are in conformity with my view that the two UK Court of Appeal decisions turn upon CPR 52.9, a provision in express terms which is presently unique to that jurisdiction.
The UK appeal decisions contain no discussion about any potentiality under the inherent jurisdiction of the court, to support orders of the kind now sought. This is the (second alternative) platform advanced to support the payment in orders. I turn then to examine submissions concerning inherent jurisdiction of the court as a basis for such interim orders.

Inherent jurisdiction

The inherent jurisdiction of the court that is relied upon, was identified by senior counsel for the applicants, by reference to observations made by two members of the House of Lords in Connelly v Director of Public Prosecutions [1964] AC 1254. These were observations in the speeches of Lord Morris of Borth‑y‑Guest and Lord Devlin. Connolly was a decision in the criminal context. But their Lordship's observations about inherent jurisdiction are of broad applicability.
The passage relied upon in Lord Morris' speech (at (1301)), commences:
There can be no doubt that a court which is endowed with a particular jurisdiction has powers which are necessary to enable it to act effectively within such jurisdiction. I would regard them as powers which are inherent in its jurisdiction. A court must enjoy such powers in order to enforce its rules of practice and to suppress any abuses of its process and to defeat any attempted thwarting of its process. The preferment in this case of the second indictment could not, however, in my view, be characterised as an abuse of the process of the court.
It is important to assess this passage, in its overall context. Lord Morris, at the foot of 1301 going on to 1302, went on to observe:
The power (which is inherent in a court's jurisdiction) to prevent abuses of its process and to control its own procedure must in a criminal court include a power to safeguard an accused person from oppression or prejudice.
The court's inherent power was also considered by Lord Devlin, at 1347 of his Lordship's speech in these terms:
My Lords, in my opinion, the judges of the High Court have in their inherent jurisdiction, both in civil and in criminal matters, power (subject of course to any statutory rules) to make and enforce rules of practice in order to ensure that the court's process is used fairly and conveniently by both sides.
By reference to their Lordships' speeches in Connolly, the breadth of the inherent jurisdiction, in particular to ensure that the court's processes are used fairly and conveniently by both sides, was emphasised by the applicants and relied upon to support the payment in orders being sought.
But the applicants' submissions in reliance upon the inherent power are not, however, put upon the basis of any argument as to abuse of process. That is an important consideration here, I think, since there is a line of authority, including authorities considered by Le Miere J at first instance in Norilya Minerals Pty Ltd v Ireland [2010] WASC 260 (that decision being affirmed by the decision of the Court of Appeal, to which I have already referred) in which his Honour, by reference to the High Court's observations in Jeffrey and Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75, assessed various categories of conduct attracting the intervention of a court, on the basis of 'abuse of process'. Le Miere J at [54] by reference to Jeffrey and Katauskas v SST Consulting, identified categories of abuse of process cases, under four broad subcategories as:
(a)proceedings which involve a deception on the court or are fictitious or constitute a mere sham;
(b)proceedings where the process of the court is not being fairly or honestly used but is employed for some ulterior or improper purpose or in an improper way;
(c)proceedings which are manifestly groundless or without foundation or which serve no useful purpose;
(d)multiple or successive proceedings which cause or are likely to cause improper vexation or oppression.
Norilya Minerals v Ireland dealt with submissions as to abuse of process, on the potential application of two of the above four broad subcategories of the court's inherent power to prevent abuse of its processes (subcategories (a) and (b)). In the end, neither was made out, in the circumstances. There had been a quashing of criminal convictions by the Court of Appeal. Quashing orders also reversed first instance property restitution orders, earlier compliance with which, had seen formerly convicted persons, upon their conviction, pay to Norilya Minerals Pty Ltd over $5.8 million.
Orders quashing the convictions had required that the (earlier) paid over moneys now be repaid, as a correlative consequence of the quashing at the successful appeal. But Norilya no longer had the money. It failed to repay. A long trial was about to be heard with Norilya as plaintiff, seeking damages and other relief against some of former accused. Le Miere J rejected arguments that until Norilya first honoured the repayment orders of the Court of Appeal by returning all moneys earlier paid over - to the convicted persons that had initially paid them, that it would be an abuse of process for Norilya to advance the civil action at trial.
The abuse of process arguments rejected in Norilya Minerals v Ireland, to which I have referred, was the second challenge (following an earlier rejection of arguments that Norilya was in contempt of court, by failing to repay) - wholly predicated on asserted abuse of process.
In the course of reaching his conclusions against abuse of process, Le Miere J had occasion to address the court's inherent power. At [67] of the Norilya Minerals v Ireland reasons, his Honour refers to an article by Professor Dockray that was also relied upon before me, by senior counsel for Rizhao: see 'The Inherent Jurisdiction To Regulate Civil Proceedings' (1997) 113 LQR 120. The article informatively discusses the inherent jurisdiction of courts to regulate civil proceedings. Le Miere J refers, with evident approval, to some observations by Professor Dockray at page 130 from that article (see [67] of his Honour's reasons) as follows:
These decisions are quite inconsistent with the idea that the inherent jurisdiction is an unlimited reservoir from which new powers can be fashioned at will … In fact, the general approach adopted in dealing with arguments about the existence of particular inherent powers is much the same as the approach to any other question of common law. That is, the cases recognise or reject claims after argument in a conventional form about the precedents which relate to the power in question and about the merits, consequences and alternatives to the particular power which it is claimed the court possesses.
The jurisdictional argument to me, is that the inherent jurisdiction is here a sufficient repository of power to make the payment in orders, sought. Factually, all the same evidentiary considerations I identified earlier, are reiterated. There is no stay obtained by Rizhao against recovery under execution; there is no sufficient explanation as to why payment has not been rendered to date; a foreign corporation is approaching the Supreme Court of Western Australia invoking its jurisdiction in order to have determined, its two leave to appeal applications. Yet at the same time Rizhao appears to be wholly ignoring unchallenged payment obligations for its sizable debt of at least US$70 million, that cannot be undermined ‑ even if leave to appeal were granted on each Rizhao application and even then, were each Rizhao appeal were to be successful.
As regards a court's inherent jurisdiction, McHugh JA (as he then was), in John Fairfax & Sons Pty Ltd v Police Tribunal of New South Wales (1986) 5 NSWLR 465, in the New South Wales Court of Appeal, referred to the same observations made by Lord Morris in Connelly, that I earlier mentioned. That was in a context of arguments put there as to whether a tribunal could make suppression orders of its record, under its inherent power.
Relevantly, McHugh JA, by reference to Lord Morris's observations, explained:
The source of this inherent jurisdiction is the implied authority conferred on the judiciary to uphold, protect and fulfil the judicial function by ensuring that justice is administered, both in a particular case and as a continuing process, according to law and in an effective manner (476).
McHugh JA refers to an earlier article by Sir Jack Jacob, of the English High Court in Jacob, 'The Inherent Jurisdiction of the Court' [1970] Current Legal Problems 23, 27 ‑ 28.
As I mentioned, it is not said today, that there is any abuse of process by Rizhao. Nor is it contended that the court should make freezing orders (see the RulesO 52A), or Mareva orders ‑ of a character the court undoubtedly possesses jurisdiction to make and the subject of consideration by the High Court in Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612, then more recently considered by the High Court in Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) 198 CLR 380 [41] ‑ [44].
The end question then is whether, it not being alleged that this case is one within the realm of abuse of process, but rather, one within a potential exercise of this court's inherent power to render its orders, processes and procedures effective - as a part of an exercise of the judicial function ‑ that inherent power can sustain the orders sought towards payment into court of the full award sums?
In my ultimate assessment the court's inherent power, as it is invoked here, does not justify or support the orders sought, in present circumstances.
Although the facts are different and although that was a clear case of alleged abuse of process, I am influenced by the approach taken by Le Miere J in Norilya Minerals v Ireland, particularly his Honour's observations, expressed by reference to Professor Dockray's article at [67] of the reasons to which I have referred. Those observations, I think, are apposite here, as a matter of policy. Courts should, I think, be cautious in terms of the advocated invocation of so‑called inherent powers.

I am also be guided by some further observations by Professor Dockray, found at page 131 of his article, towards inherent power, to this effect:
Nevertheless, novel applications of the inherent jurisdiction must often be rejected on the grounds that this is an inefficient and inappropriate way to develop the law. Procedure is not necessarily simpler, less important or easier to reform than substantive law. And of course, a matter which is procedural from the position of an applicant may be constitutional in the eyes of the respondent. The fact that procedural law can be described as subordinate or adjectival because it aims to give effect to substantive rules should not conceal the truth that procedures can and do interfere with important human rights, while the means by which a decision is reached may be just as important as the decision which is made in the end. Where procedure is as important as substance, procedural change requires the same degree of political accountability and economic and social foresight as reform of an equivalent rule of substantive law. Major innovations in procedural law should therefore be recognised as an institutional responsibility, not a matter on which individual judges should respond to the pleas of particular litigants. Procedural revolutions should appear first in statutes or in the Rules of Court, not in the law reports.
At the commencement of that same article, Professor Dockray, insightfully, observed that the inherent jurisdiction of the court
is a difficult idea to pin down. There is no clear agreement on what it is, where it came from, which courts and tribunals have it and what it can be used for. The law reports are full of apparently contradictory statements on these questions. In his area, there is little that can be said with complete confidence; the uncertainty of the law is almost the only thing which is never in doubt.
I also refer, without quoting, to what Professor Dockray mentioned at page 121 of the article, in terms of factors which connect so‑called inherent jurisdictions and to the weakness of the so‑called connecting factors. Problematic and unresolved issues do arise in my view, over whether or not there is just one inherent jurisdiction, or whether there are different types of inherent jurisdiction?
From passages in Connelly, to which I have referred (read in overall context), there may not be much, if any, doctrinal difference, as between the inherent jurisdiction of a court to deal with abuses of process and the inherent jurisdiction (as was invoked in the present case) ‑ towards a court's ability to make its procedures effective in order to render its outcomes fair. That, however, is all for proper evaluation and exposition on another day.
The cautionary advice found in what was observed by Professor Dockray as seen at page 131 is for me here, a telling consideration against invoking inherent power to support the payment orders.
It is also desirable that there be consistency as between judges of first instance, in terms of approaches to the issues of this kind, involving invocations of the court's inherent jurisdiction. The approach of Le Miere J by reference to the Dockray passage in Norilya Minerals v Ireland [61] that I have identified, is with respect, both appropriate and persuasive to me, by reason of the wisdom it carries, as a matter of general policy.
Finally, I would also refer to and adopt, as appropriate, the passage senior counsel for the Rizhao parties relied upon, from page 132 of Professor Dockray's article, in these terms:
Finally, on the third point, and partly for the above reasons, it is not clear whether there really is a single inherent jurisdiction at all, as distinct from a collection of inherent powers. If there is, the cases have not managed to define it. Like the dog which failed to bark, this silence is significant. If we follow the approach of recent cases, we should treat the inherent jurisdiction as a kind of ubiquitous judicial prerogative originating in the ineffable spirit of the court, but rather as a rational collection of related common law powers, each of which has a separate history, aims and boundaries, but all of which must take second place to statutes and to mandatory procedural rules.
For all these reasons, it does not seem that this is a case, where in the particular circumstances, the court's inherent jurisdiction founds a sufficiently secure basis to support the payment in orders, sought by the applicants.
Therefore, I conclude that both limbs of the argued dual jurisdictional platform relied upon by the applicants to sustain the payment in orders, fails. As a result, I am unable to make the payment in orders, sought on both applications.
Senior counsel for the Rizhao parties, very properly, did draw my attention to s 38 of the Commercial Arbitration Act. There, in the context of the pending applications, seeking leave to appeal arbitral awards, it may be that by s 38(6), the Supreme Court may grant its leave to appeal (see s 38(4)(b)), subject to an applicant complying with any conditions the court considers appropriate.
On the face of it, in sharp contrast to the unsuccessful attempted invocation of the Rules (Rules O 65 r 13), s 38 would look, prima facie, to provide a viable repository of express statutory power, delivering the potential platform to support payment in orders as conditions attached to any grant of leave to appeal. I say that, provisionally of course, bearing in mind I have not yet heard full argument or Rizhao's leave applications on the point. But s 38(4)(b), by sharp contrast to O 65 r 13, looks to provide a more legitimate foundation to ground a court exercising jurisdiction, at that time, to render conditional payment in orders close to what is presently sought, and which I find myself, at this time, presently lacking jurisdiction to make.
For these reasons therefore, whilst I will make the orders sought as to security for costs, I do not think it open, at this time, in the absence of an adequate jurisdictional platform, to make any interim orders requiring a payment into court of the award amounts due by Rizhao. I reject that component of both interim applications.