Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 1)
[2012] VSC 1
•25 January 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
LIST C
S CI 2011 5977
| SUNLAND WATERFRONT (BVI) LTD SUNLAND GROUP LIMITED (ACN 063 429 532) | First Plaintiff Second Plaintiff |
| v | |
| PRUDENTIA INVESTMENTS PTY LTD (ACN 091 390 742) HANLEY INVESTMENTS PTY LTD ANGUS JOHN LUXMOORE REED MATTHEW JAMES JOYCE | First Defendant Second Defendant |
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JUDGE: | CROFT J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 19 December 2011 | |
DATE OF JUDGMENT: | 25 January 2012 | |
CASE MAY BE CITED AS: | Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 1) | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 1 | |
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PRIVATE INTERNATIONAL LAW – Application for anti-suit injunction in relation to foreign proceedings – Where foreign proceedings involve a civil right arising out of a criminal claim – Where foreign proceedings involve similar factual dispute – Whether co-existence of proceedings oppressive or vexatious – Fact of overlap is not alone sufficient to restrain proceedings – Institution or continuance of foreign proceedings vexatious and oppressive – Abuse of court process – Henry v Henry (1996) 185 CLR 571 – CSR Limited v Cigna Insurance Australia Ltd (1997) 189 CLR 345 –Batistatos v Roads and Traffic Authority of NSW (2006) 226 CLR 256 – Wilson v Nicholls [2011] HCA 48 – TS Production LLC v Drew Pictures Pty Ltd (2008) 172 FCR 433 (FC) - Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 2) [2010] FCA 312 – Merrill Lynch, Pierce Fenner & Smith Inc v Raffa [2000] All ER (D) 647.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr G.A. Thompson SC with Dr S. Monks | Thomsons Lawyers |
| For the First, Second and Third Defendants | Mr J.T. Rush QC with Mr H.R. Carmichael | Freehills |
| For the Fourth Defendant | Mr P.W. Collinson SC with Mr N.D. Hopkins | Norton Rose |
HIS HONOUR:
Application
This is an application by the first, third and fourth defendants, Prudentia Investments Pty Ltd (“Prudentia”), Mr Angus Reed (“Reed”) and Mr Matthew Joyce (“Joyce”), respectively to restrain the second plaintiff, Sunland Group Limited (“Sunland”), from taking any steps to prosecute the civil claim for compensation or civil remedy commenced by notice filed by Sunland in Dubai criminal proceedings number 2130/2009 against Reed and Joyce and from taking any steps to join Prudentia as a party to these civil proceedings. The application is, in fact, two applications made by two separate summonses, one issued on behalf of the first and third defendants on 13 December 2011 and the second issued on behalf of the fourth defendant on 14 December 2011.
An application in broadly similar terms was made by Reed to Logan J in the Federal Court of Australia when his Honour was managing this proceeding in that Court in Brisbane. This application was refused by Logan J with orders made on 31 March 2010 with reasons for judgment which are published as Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 2) [2010] FCA 312. For convenience, I refer to these as “the Federal Court reasons”.
At the time the orders of Logan J were pronounced and reasons published, it was, as I understand the position, anticipated that the trial of the matter in the Federal Court would occur in the latter part of 2011. For a variety of reasons, this did not occur and the proceeding was transferred to this Court. Following hearings for directions, objections to witness statements and other preliminary matters on 10, 25 and 28 November in this Court, the trial commenced on 29 November in this Court. At the closing of the plaintiffs’ case on 12 December 2011, the defendants informed the Court that they did not seek to call any further evidence – various documents having been tendered previously and tendered on that day. The defendants sought to proceed to closing submissions as soon as practicable. The hearing of closing submissions is now scheduled for 27, 30 and 31 January 2012.
The summons issued on behalf of Prudentia and Reed sought, as its principal orders, the following:
“1. The Second Plaintiff be restrained from taking any steps to:
(a)prosecute the civil claim for compensation or civil remedy commenced by notice filed by the Second Plaintiff in Dubai criminal proceeding number 2130/2009 against the Third Defendant (civil proceeding);
(b)press its application to join the First Defendant in the proceeding as a defendant in the civil proceeding; and
(c)commence or take any step in relation to any other civil proceeding or proceedings against the First, Second or Third Defendants arising out of or in relation to the matters pleaded in the second further amended statement of claim filed in the proceeding herein and sought against the First to Third Defendants in this proceeding.
…”
The second summons, the summons issued on behalf of Joyce, is in identical terms as far as paragraphs 1(a) and (c) are concerned, but omits paragraph (b) (with obvious changed references to parties).
The application was heard on 19 December 2011 and at the conclusion of that hearing, the parties agreed an interim, holding, position in the following terms:
“UPON the usual undertaking as to damages by the first, third and fourth defendants,
1.Until 4.00pm on 27 January 2012 or further earlier order, the second plaintiff undertakes not to:
(a)take further steps to prosecute the civil claim or claims for compensation or civil remedy commenced by notice filed by the second plaintiff in Dubai criminal proceedings 2130 of 2009 against the third defendant and the fourth defendant (the Civil Proceeding);
(b)press its application to join the first defendant in this proceeding as a defendant in the Civil Proceeding; and
(c)take any steps in relation to the Civil Proceeding other than in the Australian proceedings SCI 20115977 (the Australian Proceeding) or commence another civil proceeding against the first, second, third or fourth defendants arising out of or in relation to the matters pleaded in the second further amended statement of claim filed in the Australian Proceeding herein and sought against the first to fourth defendants in the Australian Proceeding.
2. There be liberty to apply on 2 days’ notice;
3. The undertaking by the second plaintiff does not extend to:
(a)any steps to defend the proceedings commenced by Dubai World in Dubai; or
(b)any steps in relation to the criminal proceeding Dubai penal proceedings number 2130 of 2009.”
Background to proceedings
The background to the principal proceedings is set out in the Federal Court reasons and is sufficient for the purposes of this application. I stress, however, that the Federal Court reasons are relied upon in this respect on a preliminary basis, for the purposes of providing context to this application only They do not represent any concluded view on my part as I have not yet had the opportunity to consider the evidence I have heard at trial with the assistance of the closing submissions of the parties.
Additionally, the Federal Court reasons discuss the nature and procedural aspects of the relevant civil and criminal proceedings in Dubai. For the purposes of this application, I rely upon these reasons in this respect; but, again, on the same preliminary basis as I have indicated in relation to the background material, more generally, contained in the Federal Court reasons and also subject to my assessment of further evidentiary material provided to this Court for the purposes of this application, together with party submissions with respect to that material and the further authorities relied upon.
Principles governing the grant of anti-suit injunctions
The most significant decision and most productive point of embarkation on this analysis is the decision of the High Court in CSR Ltd v Cigna Insurance Australia Limited.[1] At the outset of its consideration of the authorities, the High Court emphasised the distinction between the power of a court to stay proceedings and the power to grant anti-suit injunctions,[2] noting, nevertheless, that in some cases the power to stay a court’s own proceedings includes, as an aspect of that power, the power to grant an anti-suit injunction.[3] In relation to the power to grant a stay, the majority of the High Court said:[4]
“Although stay orders and anti-suit injunctions are not governed by the same principles, it will later become apparent that, in some cases, the power to grant anti-suit injunctions is an aspect of the power which authorises a court to stay its own proceedings. And it will also become apparent that, in other cases, the power to grant anti-suit injunctions should not be exercised without the court concerned first considering whether its own proceedings should be stayed.
The test which, in this country, governs a stay of proceedings in favour of proceedings in another country is as stated in Voth v Manildra Flour Mills Pty Ltd. In that case, this Court declined to adopt the more appropriate forum test laid down by the House of Lords in Spiliada Maritime Corp v Cansulex Ltd and accepted, instead, the test propounded by Deane J in Oceanic Sun Line Special Shipping Company Inc v Fay, namely, that a stay is only to be granted if the Australian court is a clearly inappropriate forum.
It was pointed out in the joint majority judgment in Voth that it was common ground in the judgments of the majority in the earlier case of Oceanic Sun that ‘the traditional power to stay proceedings ... on inappropriate forum grounds, is to be exercised in accordance with the general principle empowering a court to dismiss or stay proceedings which are oppressive, vexatious or an abuse of process and the rationale for the exercise of the power to stay is the avoidance of injustice ... in the particular case’.
It is clear from the rationale for the exercise of the power to stay proceedings and, also, from the words ‘oppressive’, ‘vexatious’ and ‘abuse of process’ in Voth, in Oceanic Sun and in the earlier cases considered in Oceanic Sun, including St Pierre v South American Stores (Gath & Chaves) Ltd, that the power to stay proceedings on grounds of forum non conveniens is an aspect of the inherent or implied power which, in the absence of some statutory provision to the same effect, every court must have to prevent its own processes being used to bring about injustice.” [Footnotes omitted]
[1](1997) 189 CLR 345.
[2](1997) 189 CLR 345 at 390, with reference to the advice of the Privy Council in Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] 1AC 871.
[3](1997) 189 CLR 345 at 390.
[4](1997) 189 CLR 345 at 390-1 (Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ).
As to the power to grant anti-suit injunctions, the majority continued:[5]
[5](1997) 189 CLR 345 at 391-4.
“The counterpart of a court’s power to prevent its processes being abused is its power to protect the integrity of those processes once set in motion. And in some cases, it is that counterpart power of protection that authorises the grant of anti-suit injunctions. Thus, for example, if ‘an estate is being administered ... or a petition in bankruptcy has been presented ... or winding up proceedings have been commenced ... an injunction [may be] granted to restrain a person from seeking, by foreign proceedings, to obtain the sole benefit of certain foreign assets’. Similarly, as Gummow J pointed out in National Mutual Holdings Pty Ltd v The Sentry Corporation, a court may grant an injunction to restrain a person from commencing or continuing foreign proceedings if they, the foreign proceedings, interfere with or have a tendency to interfere with proceedings pending in that court.
The inherent power to grant anti-suit injunctions is not confined to the examples just given. As with other aspects of that power, it is not to be restricted to defined and closed categories. Rather, it is to be exercised when the administration of justice so demands or, in the context of anti-suit injunctions, when necessary for the protection of the court's own proceedings or processes.
Quite apart from the inherent power of a court to protect its own processes, a court may, in the exercise of the power deriving from the Chancery Court, make orders in restraint of unconscionable conduct or the unconscientious exercise of legal rights. If the bringing of legal proceedings involves unconscionable conduct or the unconscientious exercise of a legal right, an injunction may be granted by a court in the exercise of its equitable jurisdiction in restraint of those proceedings no matter where they are brought.
In some cases, the equitable jurisdiction to restrain unconscionable conduct may be exercised in aid of legal rights. Thus, as the respondents correctly contend, if there is a contract not to sue, an injunction may be granted to restrain proceedings brought in breach of that contract, whether brought here or abroad. Similarly, an injunction may be granted in aid of a promise not to sue in a foreign jurisdiction constituted, for example, by an agreement to submit to the exclusive jurisdiction of the courts of the forum.
One well established category of case in which an injunction may be granted in the exercise of equitable jurisdiction is that involving proceedings in another court, including in a foreign court, which are, according to the principles of equity, vexatious or oppressive. Thus, it was said in Carron Iron Company v Maclaren that ‘[w]here [there is] ... pending a litigation here, in which complete relief may be had, [and] a party to the suit institutes proceedings abroad, the Court of Chancery in general considers that act as a vexatious harassing of the opposite party, and restrains the foreign proceedings.’
In Société Aerospatiale, the Privy Council emphasised that the various cases decided in the nineteenth century with respect to vexation and oppression, including Peruvian Guano Company v Bockwoldt, have continuing significance for the grant of anti-suit injunctions. Those cases establish that the mere co-existence of proceedings in different countries does not constitute vexation or oppression. In particular, Peruvian Guano establishes that ‘double litigation [which] has no other element of oppression than this, that an action is going on simultaneously abroad, which will give other or additional remedies beyond those attainable in [the domestic forum]’ does not amount to vexation or oppression.
More recently, in Bank of Tokyo Ltd v Karoon, Robert Goff LJ pointed out, correctly, in our view, although without specific reference to underlying equitable principle, that foreign proceedings are to be viewed as vexatious or oppressive only if there is nothing which can be gained by them over and above what may be gained in local proceedings. On the other hand, they are vexatious or oppressive if there is a complete correspondence between the proceedings or, in terms used in Carron Iron Company, if ‘complete relief’ is available in the local proceedings.” [Footnotes omitted]
The importance of the protection of the integrity of the processes of a court was also stressed in Batistatos v Roads and Traffic Authority of New South Wales.[6] In that case, the majority of the High Court said that: “[W]hat amounts to abuse of court process is insusceptible of a formulation comprising closed categories”.[7] After repeating this passage from Batistatos, the High Court again emphasised the point in Wilson v Nicholls:[8]
“[89] … In Ridgeway v R, Gaudron J noted that the concept extended to proceedings ‘instituted for an improper purpose’, and to proceedings that are ‘seriously and unfairly burdensome, prejudicial or damaging’ or ‘productive of serious and unjustified trouble and harassment’. In Rogers v R, McHugh J concluded that, although the categories of abuse of process are not closed, many cases of abuse can be identified as falling into one of three categories: ‘(1) the court’s procedures are invoked for an illegitimate purpose; (2) the use of the court’s procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court’s procedures would bring the administration of justice into disrepute.’
[90] One recognised class of abuse of process is where proceedings are instituted against a party in a second forum when there are proceedings against that party pending in another and the continuance of the second would be an abuse of the process of the first. In such a case, the continuance of the second proceedings would be an abuse if it would be unjustifiably oppressive to the party that is named as defendant in both forums. But, of course, that was not this case. The respondents to the appeal in this court were not, and could not have been, joined as respondents to the London arbitration. And it was not suggested that Mr Emmott could have been joined as a party to the New South Wales proceedings.” [Footnotes omitted]
[6](2006) 226 CLR 256.
[7](2006) 226 CLR 256 at 265 (Gleeson CJ, Gummow, Hayne and Crennan JJ).
[8][2011] HCA 48 at [89], [90] (Gummow ACJ, Hayne, Crennan, Bell JJ).
As the majority of the High Court in CSR v Cigna made clear, both in the passage set out above and elsewhere,[9] the power to grant an anti-suit injunction derives from equity, “it is a power the limits of which are determined by the dictates of equity and good conscience”.[10] Continuing, their Honours said:[11]
“Thus, for example, it may be that the bringing of proceedings with respect to one claim is properly to be seen, in the circumstances of the case, as an election either not to proceed on another claim or not to proceed in another jurisdiction, thus giving rise to an estoppel by conduct such that it would be unconscionable for that other claim to be pursued or for proceedings to be commenced in another jurisdiction. In cases of that kind an injunction may issue in restraint of the subsequent proceedings.” [Footnotes omitted]
[9](1997) 189 CLR 345, 389-90.
[10](1997) 189 CLR 345, 394.
[11](1997) 189 CLR 345, 394.
The authorities emphasise that a degree of caution is required of a court in relation to the exercise of the power to grant an anti-suit injunction.[12] Although, as with injunctive relief in equity more generally equity acts in personan the grant of such relief does, nevertheless, involve some interference in the process of a foreign court, if indirectly. Thus the majority of the High Court in CSR v Cigna said:[13]
“The cases concerned with injunctions in restraint of proceedings in foreign courts recognise that, although an injunction of that kind operates in personam, it nevertheless interferes with the processes of the foreign court and may well be perceived as a breach of comity by that court. Comity, relevantly, was explained by the Supreme Court of the United States in Hilton v Guyot in the following terms:
‘”Comity”, in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.’” [Footnotes omitted]
The Australian courts have, unlike some courts in the United States, taken comity into account but have not elevated it to the status of a decisive factor.[14]
[12]See McHenry v Lewis (1882) 22 Ch.D 397 (CA) at 403 (Jessel MR), 406-7 (Cotton LJ) and 408 (Bowen LJ); and cf CSR v Cigna (1997) 189 CLR 345 at 372 (Brennan CJ, dissenting); and see Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] 1 AC 871 (PC).
[13](1997) 189 CLR 345, 395-6.
[14]See Bell and Gleeson, ”The Anti-Suit Injunction” (1997) 71 ALJ 955 at 965-7.
Although the majority of the High Court in CSR v Cigna distinguished stay applications and anti-suit injunctions and the bases for the exercise of these powers,[15] their Honours also discussed the relationship between these powers:[16]
“In a case in which an anti-suit injunction is sought on equitable grounds, the central question is whether the court to which application is made or some other court should hear and determine the matter in issue or, at least, that aspect of it involved in the application for injunction. And where the courts concerned are, respectively, an Australian court and a court of another country, there is involved in that question the further question whether the Australian court is an appropriate forum, in the Voth sense of it not being clearly inappropriate, for the determination of that matter. The fact that there is that further question, the preclusive nature of an interlocutory anti-suit injunction and the importance of comity combine to require an Australian court to consider whether it is appropriate, in the sense that it is not clearly inappropriate, for it to determine the matter in issue before granting an anti-suit injunction.”
…
In cases where anti-suit injunctions are sought to protect the proceedings or processes of a court, no question arises, whether that court is an appropriate forum for the resolution of that issue; it is the only court with any interest in the matter. Subject to that consideration, the appellants are correct in their contention that, before granting an interlocutory anti-suit injunction, an Australian court should consider whether it is an appropriate forum, in the Voth sense, for the resolution of the matter in issue or, if there be a difference, the matter advanced in support of the injunction.
In this respect, as discussed further below, it should be kept in mind that the present proceedings have, in this Court, proceeded to trial. All the evidence to be relied upon by the parties is before the Court and completion of the trial now only awaits closing submissions, scheduled for the last three sitting days of January 2012.
[15](1997) 189 CLR 345, 390-94; and see above, paragraph 8.
[16](1997) 189 CLR 345 at 397-8.
On behalf of Joyce, and as adopted by Reed, Mr Collinson SC, submitted that ten principles were to be derived from the judgment of the majority in CSR v Cigna. In my view, these principles, which I now summarise, do accurately state the position to be derived from Cigna and the other authorities considered -
(i)a counterpart of the Court’s power to prevent its processes being abused is its power to protect the integrity of those processes once set in motion;
(ii)a foreign proceeding may be restrained if it involves the exercise of unconscionable conduct by the other party;
(iii)an established case for injunctive relief is where the foreign proceeding is vexatious or oppressive;
(iv)foreign proceedings are to be regarded as vexatious and oppressive if, and perhaps only if, there is nothing which can be gained by a party conducting those proceedings over and above that which that party may gain in conducting local proceedings; [17]
[17]The onus being on the party seeking injunctive relief to establish prima facie vexation or oppression in terms of there being nothing to be gained by the party pursuing the foreign proceedings thus leaving the party resisting such relief to establish that there is some “juridical” or other advantage to be gained from or “legitimate interest” in bringing and pursuing the foreign proceeding (see TS Production LLC v Drew Pictures Pty Ltd (2008) FCR 433, at 443 (Finkelstein J), 448 (Gordon J, with Stone J concurring, at 445); and see, similarly, Bank of Tokyo v Karoon [1987] AC 45 (CA), at 60 (Goff LJ); and Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 2) [2010] FCA 312, at [26] (Logan J)).
(v)the mere coincident or co-existence of proceedings in different countries is not, of itself, vexation or oppression;
(vi)proceedings are generally considered vexatious or oppressive if there is a complete correspondence between the proceedings, that is, if complete relief is available in the local proceeding;
(vii)the Court’s power in this respect is determined by the dictates of equity in good conscience;
(viii)although an anti-suit injunction operates in personan, it does, nonetheless, interfere with the processes of the foreign court and may be perceived as a breach of comity by that court, hence the power is to be exercised with caution;
(ix)there is no rule that an anti-suit injunction should not be granted until an application has been made in the foreign court for a stay;
(x)one first applies the Voth[18] test in considering the application for an anti-suit injunction; and
(xi)one does not need to apply the Voth test in a case where the application is founded on the need to protect the integrity and processes of the local court.
These principles were then illustrated, elaborated upon and discussed in the course of consideration of a number of other authorities to which reference was made in the course of the hearing of the application. It is to these that I now turn.
[18]Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538; the test being “whether the Australian court is an appropriate forum, in the Voth sense of it not being clearly inappropriate for the determination of the matter” (CSR v Cigna at 189 CLR 397; see above, paragraph 13).
In Société Nationale Industrielle Aerospatiale v Lee Kui Jak,[19] Lord Goff of Chieveley, in delivering the advice of the Privy Council, said:[20]
“Another important category of case in which injunctions may be granted is where the plaintiff has commenced proceedings against the defendant in respect of the same subject matter both in this country and overseas, and the defendant has asked the English court to compel the plaintiff to elect in which country he shall alone proceed. In such cases, there is authority that the court will only restrain the plaintiff from pursuing the foreign proceedings if the pursuit of such proceedings is regarded as vexatious or oppressive: see McHenry v Lewis (1882) 22 ChD 397 and Peruvian Guano Co v Bockwoldt (1883) 23 ChD 225. Since in these cases the court has been presented with a choice whether to restrain the foreign proceedings or to stay the English proceedings, we find in them the germ of the idea that the same test (ie whether the relevant proceedings are vexatious or oppressive) is applicable in both classes of case, an idea which was to bear fruit in the statement of principle by Scott LJ in St Pierre v South American Stores (Gath & Chaves) Ltd [1936] 1 KB 382, 398, in relation to staying the proceedings in this country, a statement of principle now overlaid by the adoption in such cases of the Scottish principle of forum non conveniens, which has been gratefully incorporated into English law.”
[19][1987] 1 AC 871.
[20][1987] 1 AC 871, 893.
The nature of the vexatiousness or oppressiveness of parallel proceedings in different countries was the subject of further consideration and comment by the High Court in Henry v Henry.[21] This was not a case involving an anti-suit injunction but, rather, a case where there were divorce proceedings commenced in Monaco and subsequently second divorce proceedings commenced by the husband in Australia and an application by the wife to have the Australian proceedings stayed on grounds which included forum non conveniens. As is clear from the authorities already considered, there is a close relationship between the grounds upon which a proceeding might be stayed in these circumstances and the grounds upon which an anti-suit injunction may be granted, though they are separate powers governed by separate, though in many senses related, considerations. In terms of the vexing or oppression, the majority said:[22]
“Parallel proceedings in another country with respect to the same issue may be compared with multiple proceedings with respect to the same subject matter in different courts in Australia. In Union Steamship Co of New Zealand Ltd v The Caradale, Dixon J observed of that latter situation that ‘[t]he inconvenience and embarrassment of allowing two independent actions involving the same question of liability to proceed contemporaneously in different courts needs no elaboration.’ From the parties' point of view, there is no less - perhaps, considerably more - inconvenience and embarrassment if the same issue is to be fought in the courts of different countries according to different regimes, very likely permitting of entirely different outcomes.
It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue. And although there are cases in which it has been held that it is not prima facie vexatious, in the strict sense of that word, to bring proceedings in different countries, the problems which arise if the identical issue or the same controversy is to be litigated in different countries which have jurisdiction with respect to the matter are such, in our view, that, prima facie, the continuation of one or the other should be seen as vexatious or oppressive within the Voth sense of those words.
It does not follow that, because one or other of the proceedings is prima facie vexatious or oppressive within the Voth sense of those words, the local proceedings should be stayed. However, it does follow that the fact that there are or, even, that there may be simultaneous proceedings in different countries with respect to the same controversy is highly relevant to the question whether the local proceedings are oppressive in the sense of ‘seriously and unfairly burdensome, prejudicial or damaging’, or, vexatious, in the sense of ‘productive of serious and unjustified trouble and harassment’. And it also follows that courts should strive, to the extent that Voth permits, to avoid that situation.” [Footnotes omitted] [Emphasis added]
[21](1996) 185 CLR 571.
[22](1996) 185 CLR 571, at 590-1 (Dawson J, Gaudron, McHugh and Gummow JJ).
This passage from the majority judgment in Henry v Henry[23] does, as I have indicated, provides a more precise articulation of the notion of vexation and oppression which, as the High Court identified in CSR v Cigna, lies at the foundation of the jurisdiction to grant anti-suit injunctions, at least in the exclusive jurisdiction.[24] On a more general level, it affirms the notion that prima facie to have two proceedings in respect of the same controversy in different countries is vexatious and oppressive and that the court should do what it can to avoid that situation, for all the reasons to which reference has been made. Vice Chancellor Browne-Wilkinson, sitting in the Chancery Division in Australian Commercial Research and Development Ltd v ANZ McCaughan Merchant Bank Ltd,[25] expressed similar views in relation to the vexatious nature of a plaintiff seeking to pursue the same defendant in two jurisdictions in relation to the same subject matter and then stressed that in these circumstances, “… the plaintiff is required to elect which set of proceedings it wishes to pursue”.[26] At this point, I interpolate that Sunland has not only commenced the present proceedings in Australia, but has pursued them to completion short of closing submissions, as indicated previously. As discussed further, below, the first, third and fourth defendants submit that this amounts to an election on Sunland’s part to pursue proceedings in relation to the same subject matter in Australia, rather than Dubai. In the absence of some juridical or other advantage or “legitimate interest” for or in taking and pursuing the Dubai civil proceedings, as I have found and discussed below, I accept that Sunland has made such an election.
[23](1996) 185 CLR 571, at 590-1.
[24]See Bell and Gleeson, “The Anti-Suit Injunction” (1997) 71 ALJ 955 at 958 et seq, 963 et seq; and see Raphael, The Anti-Suit Injunction (OUP, 2008), 121 et seq.
[25][1989] 3 All ER 65 at 69-70.
[26][1989] 3 All ER 65 at 70.
Reference was also made to the Queen’s Bench Division decision in Merrill Lynch, Pierce Fenner and Smith Inc v Raffa,[27] a decision which was in part relied upon by Logan J in the Federal Court reasons. Raffa was, however, not an application for an anti-suit injunction with respect to a civil claim which had been brought in Egypt but was, rather, an application by Mr Raffa to stay the English proceeding because of the fact that a civil claim was on foot in Egypt. Broadly, the facts of the case were that Mr Raffa, an employee of Merrill Lynch, engaged in some alleged misdeeds with the result that Merrill Lynch obtained a world-wide freezing order. Mr Raffa was arrested and imprisoned in Egypt. He was then charged in Egypt whilst held in custody and Merrill Lynch filed a request for a civil claim against him in Egypt. At the same time, Merrill Lynch had on foot a proceeding in England seeking judgment against Mr Raffa. Apart from issues as to the divergence in approach as between the Australian and English courts in this area, particularly in relation to Voth, the Raffa case is distinguishable from the present case because it was not an anti-suit injunction application and because it did not focus attention on the legitimacy or otherwise of Merrill Lynch maintaining its Egyptian civil claim. Another important consideration is that it appears that Mr Raffa had assets available in Egypt, so there was a commercial reason, or legitimate purpose, for taking proceedings there.
[27][2000] All ER (D) 647.
Another distinguishing feature in Raffa, which appears from the judgment of Judge Raymond Jack QC sitting as a Deputy Judge of the High Court, is that the claimant was found to have sufficient justification for bringing the two sets of proceedings, for the following reasons:[28]
“The reason why two sets of proceedings in respect of the same subject matter will normally be vexatious is that it amounts to a harassment of the defendant to make him fight the same battle twice, with the attendant multiplication of costs, time and stress. But, in my view, it will not be vexatious, nor will an election be called for, where the claimant has a sufficient justification for bringing the two sets of proceedings. The passage in Dicey & Morris provides examples of when that may be so.
The submission made here on behalf of Mr Raffa is that by reason of the claim made for compensation in the Egyptian criminal proceedings the English action should be stayed to await an outcome in Egypt. I do not think that Mr Raffa is facing anything in Egypt equivalent to the English action. If he is charged, he will be facing criminal charges arising out of the same subject matter as the English action. No question of liability for compensation will arise until he is convicted. I cannot see anything vexatious in Merrill Lynch in the meanwhile seeking judgment against Mr Raffa in England.
Nor do I think that a question of election arises. Mr Raffa’s case was not put in those terms, perhaps because Merrill Lynch would prefer to continue with the English proceedings, and it is those which Mr Raffa wants to stop. It was submitted that under Egyptian law Merrill Lynch were now unable to withdraw their claim for compensation made to the Egyptian Prosecutor. That seems to me to be contradicted by the terms of Article 262.
As this was not dealt with in their evidence, I asked why Merrill Lynch had made the claim for compensation to the Egyptian Prosecutor. One reason I was given was that they were now having difficulty in getting the freezing order recognised and enforced in Egypt. I think that it was probably initially done by Dr Wahed as an obvious step to take in the circumstances to protect Merrill Lynch’s interests.”
[28][2000] All ER (D) 647 at p 5 of the electronic print.
There is no indication in the judgment in Raffa, as to whether or not there were any assets available in England. The defendants submitted that the decision is distinguishable from the present proceedings because it did not involve an anti-suit injunction application or any consideration of the ongoing legitimacy of the civil claim in Egypt and, secondly, it is distinguishable because there were apparently circumstances that justified maintaining the claim in Egypt as well, particularly having regard to the fact that there were assets available in Egypt. Logan J, in the Federal Court reasons, placed considerable reliance upon the decision in Raffa in the context of the “legitimate interest consideration” raised by the Sunland parties in the proceedings before him. In this respect, his Honour said, having considered the judgment in Raffa:[29]
“[32] That there may be forensic advantages in terms of law and practice in Dubai in the making of the civil right claim emerges from the expert evidence. The Sunland parties may well benefit from the amalgam of their own resources and those of the public authorities in Dubai in demonstrating that Mr Reed has committed fraud there. If so, a guilty verdict will, at the very least, be of singular advantage in terms of assisting their establishing liability in their civil right claim. That advantage will be retained even if, as appears likely, the criminal court were, in the event of a finding of guilt, to decide, given the quantum of the claim, to refer it to a civil court.
[33] Any such advantage would be lost in the event that a restraining order is made and it transpires that the Dubai criminal proceeding is completed before this proceeding is concluded. …”
[29]Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 2) [2010] FCA 312, [32]-[33].
Reference was also made by the parties and by Logan J in the Federal Court to TS Production LLC v Drew Pictures Pty Ltd,[30] particularly the judgment of Finkelstein J. Particular reliance appears to have been placed by Logan J on the approach of Finkelstein J which, in general terms, was that if a party proceeding in a foreign jurisdiction could show some “juridical advantage to be gained in the foreign proceeding (which is not available in a local proceeding) then the [anti-suit] injunction will be refused”.[31] Further, Finkelstein J emphasised that the existence of simultaneous proceedings does not, of itself, establish that an action is vexatious. Continuing, referring to the Peruvian Guano Company case, Finkelstein J said:[32] “Something more is needed; the applicant must ‘shew that there is vexation in point of fact, that is to say, that there is no necessity for harassing the Defendant by double litigation”. In my view, these comments and the approach of Finkelstein J in TS Production does not indicate that any different approach should be taken in the present circumstances than flows from the authorities already considered. In particular, it should be noted in relation to the TS Production case that the foreign proceeding was a proceeding in the United States concerned with copyright under United States law and there was no overlap in the issues the subject of the foreign and domestic proceedings because the Australian court was concerned with copyright under Australian law. Having regard to the lack of overlap in issues it followed that there was no existing or likely future interference with the Australian proceedings.[33]
[30](2008) 172 FCR 433.
[31](2008) 172 FCR 433 at 443, [32].
[32](2008) 172 FCR 433 at 443; referring to Peruvian Guavo Company v Bockwoldt (1983) 23 Ch D 225 at 232.
[33](2008) 172 FCR 433 at 447-8, [53] and [54] (Gordon J); cf Sunland’s oral submissions referring to this part of the judgment of Gordon J in the TS Production case (Transcript (19/12/11), 56-57).
Dubai civil proceedings
The position that appeared to be reached on the basis of the plaintiffs’ evidence as at the close of their case was that findings of fact which are made in the criminal proceedings in Dubai would form the factual basis of the civil proceedings. It follows that a party seeking to bring civil proceedings on the basis of conduct that is the subject of a criminal proceeding has an “interest” in the conduct of those criminal proceedings insofar as they go to fact finding which is critical to the subsequent civil proceedings. This also appears to be entirely consistent with the process as described in the Federal Court reasons; viewed as background to this application, as indicated previously.
The submissions of the parties and further evidence provided in support of or in opposition to this application do serve to support, with some elaboration of detail, the nature of and the processes involved in the Dubai criminal and civil proceedings as set out in the Federal Court reasons. Consequently, it is not necessary to repeat that account in this judgment.
There are, nevertheless, some further aspects that emerged from or were emphasised in the evidence relied upon by the parties to this application.
There was before Logan J a translation of the Dubai civil claim, together with the affidavit of Ahmed Alqari affirmed on 9 November 2009 and filed on behalf of Joyce as to the nature of the civil and criminal proceedings. Also before Logan J was an affidavit of Ms Bronwyn Lisa Lincoln sworn on 8 December 2009 to which is exhibited an English translation of the Dubai civil claim instituted by Sunland against Joyce, together with Anthony Brearley and Marcus Lee seeking ultimately, the payment of AED44,105,780 to Sunland. Subsequently, Sunland joined further defendants to the Dubai civil proceeding, namely Prudentia, Reed, Clyde & Co (Legal Consultants – Dubai), and Jonathon Silver (Clyde & Co). Substantially the same amount is claimed in this proceeding and it was common ground in this proceeding and in the anti-suit injunction application before Logan J in the Federal Court that “the substratum of facts in respect of the proceedings in this Court, the criminal proceedings in Dubai and the civil right claim in those proceedings is substantially the same.”[34] The fact that there are other parties involved in the Dubai civil proceedings and other matters raised in the criminal proceedings with respect to Prudentia, Reed and Joyce in those proceedings – and other matters raised in the civil proceedings with respect to other parties – does not detract from the position that the Dubai civil proceedings are an action with respect to the same subject matter in the sense relevant to this application or with respect to the applicants. There is no suggestion that complete relief against the applicants is not available to Sunland in these “local“ proceedings.[35]
[34]Sunland Waterfront (BVI)Ltd v Prudentia Investments Pty Ltd (No 2) [2010] FCA 312, at [10] (Logan J); and see the affidavit of Bronwyn Lincoln (8 December 2009) filed in these Federal Court proceedings on behalf of Prudentia, Hanley Investments PTE LTD and Reed which exhibits an English translation of the Dubai civil right claim with reference to Case No 2130/2009 – Penal (Exhibit BLL 19).
[35]See Bank of Tokyo v Karoon [1987] AC 45 (CA) at 60 (Goff LJ); referred to with approval in CSR Limited v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 393 (Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ) in the passage set out above, paragraph 9.
Reed and Joyce placed reliance upon the opinion of Mr Alqari in relation to Dubai law.[36] In particular, reliance was placed on his opinion in relation to the manner in which legal proceedings are conducted in Dubai. In summary, in the Dubai case, Sunland has requested that all seven defendants be subject to the claim of Sunland, based on fraud. The Dubai criminal court will assess any culpability of each defendant individually and any defendants found liable could be held by that court, in its discretion, to be either jointly and severally liable with other liable defendants for the full amount of Sunland’s civil claim, or be liable for a defined portion of that claim as the court, in its discretion, might direct. In relation to the question whether Joyce would be likely to be able to obtain a stay of the civil claims by Sunland against him in Dubai, given that Sunland is prosecuting a civil claim against him in Australia, the opinion of Mr Alqari indicates that such applications are rare in Dubai and that it would be very difficult to predict how a Dubai court might view such an application, particularly anticipating considerable resistance from the lawyers acting for Sunland.[37]
[36]See affidavit of Ahmed Alqari, affirmed 9 November 2009, Exhibits “AAQ5” and “AAQ6”.
[37]See Exhibit “AAQ-06”, paragraph 7.
Some further light is shed on the Dubai proceedings by the affidavit of Abdulrahman Juma affirmed on 9 December 2009 and filed on behalf of Sunland entities in the Federal Court proceedings (which was relied upon by Reed and Joyce). The evidence of Ahmed Alquari affirmed on 9 November 2009 and filed in the Federal Court proceedings on behalf of Joyce together with the affidavit of Diana Hamade affirmed on 15 December 2011 and filed by the Sunland entities in the proceedings now in this Court support, or are at least consistent with, Mr Juma’s evidence in this respect. Mr Juma describes the process in some detail in circumstances where a plaintiff, in Sunland’s position, lodges a statement of claim under Article 22 of the UAE Criminal Procedure Law. This claim may be described as an “initial or preliminary damages claim”.[38] Mr Juma continues:
11. By this claim, the party (called the plaintiff) can claim damages or compensation against an accused in the criminal proceedings. This unique type of “civil claim” if filed before the same criminal Court which is deciding on the criminal liability. The plaintiff cannot issue an initial damages claim against a person who is not an accused in the primary criminal proceedings. The plaintiff can apply to join any of the accused to its claim at any time prior to judgment in the criminal proceedings.
12. The initial damages claim is commenced by the plaintiff lodging a statement of claim before the public prosecutor or the criminal court and paying a filing fee under article 22 of the UAE Criminal Procedure Law. The amount claimed can be increased at any time before judgment by submitting an amended statement of claim, and paying an increase in the filing fee. (The filing fee varies depending on the amount claimed.) Once the filing fee has been paid, the initial damages claim is on foot and must be determined by the Court. However, the claim can be discontinued by the plaintiff at any time prior to judgment.
13. When the initial damages claim is lodged, the public prosecutor does not have a discretion to refuse to allow the plaintiff to bring the initial damages claim.
14. The accused usually defends both the criminal and the ‘initial damages claim’ in the same criminal proceedings (i.e. there are no separate court proceedings for this). At the end of the trial the criminal Court will issue its judgment on the criminal liability, and may (i) uphold the ‘initial damages claim’; or (ii) reject the ‘initial damages claim’; or (iii) refer the ‘initial damages claim’ to the civil courts.
15. The plaintiff who has lodged an initial damages claim under article 22 of the UAE Criminal Procedure Law is not normally permitted to take an active role in proving criminal liability (this is the role of the public prosecutor). The plaintiff does not have any right to influence the timetable to be set by the criminal Court, although the plaintiff’s lawyers are entitled to appear in the criminal Court, and to obtain copies of the prosecution documents.”
[38]Affidavit of Abdulrahman Juma (9 December 2009), paragraph 10.
Mr Juma’s evidence is that in the event that the criminal court finds an accused person subject to an initial damages claim “not guilty”, then the claim must also be dismissed. It appears, however, that the plaintiff would then have the option of commencing separate civil proceedings in the Dubai civil courts relying on the ordinary provisions of the UAE civil and commercial laws. In the event that the criminal court finds the accused guilty, it may, he says, make an award of damages to the plaintiff of all or part of the amount claimed, or refer the assessment of the quantum of the initial damages claim to the civil courts. Mr Juma says that the criminal court is likely to take this course if it decides that further investigation is required in order to prove the amount of loss suffered by a plaintiff or if the amount claimed is a large amount. Consequently, it does seem a fair generalisation in relation to the Dubai proceedings that a civil claim made in the circumstances of the present Dubai proceedings will, in effect, rely on the fact-finding in the criminal proceedings. In spite of some of the expert evidence before the Federal Court suggesting that Sunland would be constrained in its ability to participate in the criminal proceedings, this is contrary to evidence heard during the trial of this matter, which indicates that Sunland has the ability, and has, taken a more than merely passive role.[39]
[39]Cross examination of Mr Soheil Abedian, Transcript of Proceedings p 499-501.
It was common ground that although a judgment in Dubai would be enforceable throughout the UAE and also in other Arab League countries, such a judgment would not be enforced in Australia and an Australian court judgment would not be enforceable in the UAE.[40] This is significant in the present circumstances because the evidence indicates that neither Prudentia, Reed nor Joyce have any assets in the UAE.[41] Consequently, it was submitted on behalf of Reed and Joyce that there is no sensible commercial purpose in anyone taking civil proceedings against them in Dubai - in other words, no legitimate interest on the part of Sunland in taking such proceedings. It was submitted by Sunland that this position might change in the future and, consequently, there would be some utility in it holding a judgment enforceable in the UAE. Nevertheless on the evidence before the Court I regard this suggestion as entirely speculative and could, at best, be regarded as a remote possibility. Consequently it provides no sensible commercial purpose for Sunland’s civil proceedings in Dubai – hence no legitimate interest.
[40]See Affidavit of Diana Hamade (15 December 2011) at paragraphs 30-33.
[41]See affidavit of John Luxmore Reed (18 December 2011) and the affidavits of Andrew Neil McRobert (15 and 19 December 2011). It is noted that Joyce has approximately AED103,000 worth of assets in Dubai (a sum of no significance in the circumstances of these proceedings).
The question whether Sunland has a legitimate interest in pursuing proceedings in Dubai was addressed at some length by Logan J in the Federal Court reasons, particularly with reference to the Raffa case and the “legitimate interest” of Merrill Lynch in the circumstances of that case.[42] This led his Honour to make the observations in relation to the “legitimate interest consideration” raised by the Sunland parties in the proceedings before him and also in relation to the present application. Those observations are contained as part of the Federal Court reasons, set out above.[43] Whatever “forensic advantages” in terms of the law and practice in Dubai might be available to Sunland as a result of maintaining the civil proceeding in the civil right claim, it is clear from this part of the Federal Court reasons that Logan J was making these comments in contemplation of a position where the Dubai proceedings were completed before Australian proceedings were concluded and in the context of an application to the Federal Court for an anti-suit injunction of the same general nature of that the subject of the present applications pending the final hearing and determination of the proceeding in the Federal Court, including the dismissal of any appeal therefrom.
[42]See also, as to legitimate purpose, Raphael, The Anti Suit Injunction (OUP, 2008), 129.
[43]Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 2) [2010] FCA 312, [32]-[33]; set out above at paragraph 20.
The present situation is now significantly different from that confronting Logan J as the Australian proceedings are well advanced and the Sunland case closed pending closing submissions as the final step in the trial. In these circumstances, I am of the opinion that the overriding considerations now relevant to the application are considerations of vexation and oppression flowing from the foreign proceedings and the effect of those proceedings on the integrity of the processes of this Court - including res judicata, issue estoppel and the like, matters to which reference is made below.[44] Additionally, it is difficult to see how any, so called, “forensic advantage” in the Dubai proceedings could have any practical significance in terms of a legitimate interest from the Sunland perspective in circumstances where neither Prudentia, Reed nor Joyce have any assets in Dubai, other parts of the UAE or in the Arab League countries, jurisdictions in which any Dubai judgment could be enforced.
[44]See below, paragraph 42.
Logan J, in the course of the Federal Court reasons, also refers to some other considerations which might be said to provide “inchoate benefits” for Sunland as a result of pursuit of the civil proceedings in Dubai. Thus, Logan J said:[45]
“[39] The Sunland parties were under investigation themselves by the authorities in Dubai. There may well be inchoate benefits for the Sunland parties, in the UAE, from being seen there to have instituted a civil right claim against, materially, Mr Reed and to be seen actively to be participating in the criminal proceeding in cooperation with the public authorities.
[40] All in all, the civil right claim in Dubai is ‘an obvious step to take in the circumstances’ for the Sunland parties to protect their interests.
[41] The proceeding in this court might also be termed an ‘obvious forensic step in the circumstances’, especially given Mr Reed’s residence and Prudentia’s incorporation in Australia. It is by no means unusual where an alleged fraud has factual connections with more than one country and, further, respondents resident in more than one country, for resultant civil proceedings to be instituted in the courts of each country.”
[45]Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 2) [2010] FCA 312, [39]-[41].
In terms of benefits that would or may flow to Sunland as a result of pursuing the Dubai civil proceedings reliance was placed on the more recent evidence of Diana Hamade contained in her 15 December 2011 affidavit, evidence which was not before Logan J in the Federal Court proceedings. Sunland relied, particularly, on the following:[46]
[11] In a criminal case where a civil right claim is made, if the accused is found guilty, the civil right claim is then considered. Article 269 of the UAE Criminal Procedure Law provides that findings of fact that are made in the criminal case are binding on the judge who determines the civil right claim.
[12] When the criminal case is heard, the court will consider any interviews that the police conducted with the accused or other witnesses. The court will also consider any documents that were obtained using search warrants. I have reviewed a copy of a report prepared for the Attorney-General by the Financial Audit Department dated 1 April 2009. The evidence that is referred to in that report would have been put before the court hearing the criminal case.
[46]Evidence of Diana Hamade (15 December 2011), paragraphs 11 and 12.
On the basis of this evidence of Ms Hamade Sunland submitted that there are significant forensic advantages for Sunland in pursuing the civil proceedings in Dubai. In particular, reference was made to the advantage gained as a result of the evidence in the civil proceedings being provided, in effect, by the evidence gathering process in the criminal proceedings which utilises evidence obtained by the Dubai authorities through the execution of search warrants and police interviews. It was also noted in Sunland’s submissions that the court in the Dubai criminal proceedings has also had access to statements taken by the audit section of the Ruler’s Court and by the Dubai police from Mr Lee,[47] who declined to give evidence in the proceedings in this Court – as did Joyce who, it was submitted, claimed privilege against self-incrimination in relation to many documents which, it was said, might otherwise have been available to Sunland by way of discovery. Thus it was submitted that the further evidence that is available to the Dubai court in the criminal proceedings, which results in factual findings available in the subsequent civil cases do confer upon Sunland a significant and legitimate juridical advantage not available to it in the proceedings in this Court.
[47]Mr Marcus Lee was the Project Control Group Director at Dubai Waterfront. He was also known in some of the correspondence as the Director of Commercial Operations at Dubai Waterfront.
In my opinion the “inchoate benefits” referred to by Logan J are, at best, somewhat nebulous, not relevant and, in any event, of insignificant weight in the present circumstances where the trial in this Court is substantially completed and, consequently, in the face of the type of oppression and vexation identified in the authorities to which reference has been made against which a court ought properly intervene to enjoin pursuit of the foreign proceedings and thereby protect its own processes. In my view the same applies with respect to the forensic, juridical and other advantages claimed by Sunland on the basis of Ms Hamade’s evidence.
Additionally, and as discussed further below, the loss, by Sunland, of any “inchoate benefits” or forensic and other advantages it claims as a result of pursuing the Dubai civil proceedings are benefits or advantages which it may lose on the injunctive relief now sought being granted as a result of its own actions in commencing and pursuing the present proceedings in Australia. In other words, as a result of its election.[48] Further, also as discussed below, any procedural, evidentiary advantage that may flow from any litigation – in Dubai or elsewhere – is illusory and valueless where the defendants have no assets in the jurisdiction of the court in which the litigation is being conducted or otherwise within reach of its judgments. That is the position here – neither Prudentia, Reed nor Joyce, as the evidence shows, have any assets in Dubai or within reach of its judgments and there is no evidence that they are likely to bring assets into Dubai or otherwise within the reach of its courts. There is no evidence of any other remedy which may be available to Sunland in Dubai that would not be available in this Court. Even if there were such as, for example, the right to treble damages in the United States, the remedy would, nevertheless, need to be one of practical utility in the circumstances. Using this example, treble damages would be a hollow advantage if such a judgment would simply languish with no assets accessible to meet it. Finally, I note in the context of the present discussion of “legitimate interest” and similar issues that, for the reasons set out below, I do not accept Sunland’s submissions that it has a “legitimate interest” arising from a need, as it claims, to pursue and maintain its claims in the Dubai World proceeding.[49]
[48]See above, paragraph 17.
[49]See below, paragraphs 45 and 46.
Power to grant relief sought
There is no controversy as to the power of this Court to grant the relief sought. It is a superior court of record armed with all the inherent and other jurisdiction of such courts.[50] The authorities to which reference has been made reaffirm this power and the nature of the jurisdiction.[51]
[50]See Young, Croft and Smith, On Equity (LBC, 2009), 1026, at [16.130].
[51]See, for example, Henry v Henry (1996) 185 CLR 571, CSR Limited v Cigna Insurance Australia Ltd (1997) 189 CLR 345, Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 and Wilson v Nicholls [2011] HCA 48.
Discretionary considerations
On the basis of the principles governing the grant of anti-suit injunctions in the exclusive jurisdiction and having regard to the evidence as to the nature of the civil and criminal proceedings in Dubai, any forensic or other advantage or benefit that may flow to Sunland in the conduct of the Dubai civil proceedings and the location of any assets of the defendants, Reed and Joyce made submissions which are now set out in the following paragraphs, and considered in this light.[52] Reference is also made to the Sunland submissions in relation to the issues raised.
[52]See below, paragraphs 39 to 52.
First, it was submitted that it is vexatious and oppressive, as a starting point, for a plaintiff to maintain two civil proceedings seeking the same relief in two jurisdictions. This position is sufficient to establish vexation and oppression on a prima facie basis, thus shifting the onus to the party maintaining the proceedings to justify its position.[53] It was common ground that mere co-incidence of proceedings in different countries is not, of itself, vexatious or oppressive.
[53]As to the burden of proof in this respect, prime facie and otherwise, see above, paragraphs 14 and 17.
Secondly, it was submitted that no question arises in relation to the present Australian proceeding being stayed, as it clearly meets the test prescribed by Voth[54] of not being clearly inappropriate and, in any event, it is past the point of no return in terms of this jurisdiction because Sunland has acceded to a trial in Australia in which it has now closed its case. Consequently, the only question that now arises is whether or not the foreign proceeding, the Dubai civil claim, ought to be enjoined.
[54]See above, paragraph 13.
Thirdly, and following on from the first point, it was submitted that if Sunland were able to point to some substantive advantage to be gained by pursuing a local proceeding and at the same time a foreign proceeding, then it might be in a position to rebut a claim for an anti-suit injunction against it.[55] Sunland submitted that the authorities indicate, particularly CSR v Cigna,[56] that foreign proceedings are to be viewed as vexatious and oppressive only if there is nothing to be gained in the local proceedings. A classic instance, it was suggested by Reed and Joyce, would be where the evidence disclosed that they had substantial assets in Dubai or in other parts of the UAE (where a judgment of a Dubai court would reach). Sunland, it was said, would then say quite logically that as it cannot enforce a judgment there, though it may be unattractive to have a court in Dubai dealing with a parallel proceeding on the same controversy, that is unavoidable, given the location of the assets and the inability to enforce judgments reciprocally. It is, however, not the situation in the absence of any assets of Prudentia, Reed or Joyce in Dubai or other parts of the UAE.
[55]See above, footnote 53.
[56](1997) 189 CLR 345.
Fourthly, it was submitted that the application sought should be granted because, apart from the question of vexation and oppression as a result of the civil proceedings in Dubai, this Court should protect the integrity of its own processes. In this respect, it was said, that a natural concomitant of civil litigation in this country is that res judicata and issue estoppels arise from the conduct of civil proceedings which prevent a multiplicity of proceedings, and re-agitation of the same issue more than once and in different fora. It is an important principal of civil litigation that once parties have had their “fight”, then that is the end of the matter, a principle reinforced by those which underpin an Anshun estoppel.[57] Finally, in this respect, it was submitted that this is all the more significant in the case of a proceeding which, in this instance, involves an Australian company and Australian citizens. In this context, it was submitted that as Sunland can advance no good reason for conducting civil litigation in Dubai, the effect of not being successful in obtaining an anti-suit injunction would be that there would be no res judicata or issue estoppel which would restrain Sunland from attempting to succeed with a claim that it was deceived into paying AED44,000,000 (or thereabouts) in Dubai, even if it were to fail in these proceedings. The point was also emphasised in submissions by Mr Rush QC who, referring to the affidavit evidence of Ms Hamade with respect to the conduct of the criminal and civil proceedings in Dubai,[58] said that there is a real risk of inconsistent outcomes on key factual issues as between the Dubai civil proceedings and these proceedings. As noted previously, here Sunland has invoked the jurisdiction of the Australian Courts, called its evidence and closed its case. This, it was said, emphasises the importance of the court protecting the efficacy of its own processes in the present circumstances.
[57]Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589.
[58]See the Affidavit of Diana Hamade (15 December 2011).
Fifthly, it was submitted that the cases tend to suggest that a particularly egregious circumstance of vexation and oppression is where the same plaintiff is pressing a civil proceeding in two different jurisdictions. Some of the English cases to which reference has been made discuss this circumstance in terms of “election”. This arises because applications of this nature are generally made early in the course of both proceedings, but here, significantly, it was submitted that Sunland has elected to pursue its claim in this proceeding and the result of that election cannot be allowed to continue the civil proceedings in Dubai.[59]
[59]And see above, paragraph 17.
Sixthly, it was submitted that Sunland is not assisted in its position by the fact that the Dubai World proceeding is on foot. This proceeding was commenced on 15 June 2010, approximately a year after this Australian proceeding. Ms Hamade’s affidavit of 15 December 2011 sets out the circumstances relating to that claim.[60] Ms Hamade identifies that Sunland has three courses available to it in resisting the claim against it by Dubai World.[61] First, she says, Sunland can avoid liability by showing that one or more of the other defendants caused all the damage to Dubai World, and Sunland was not responsible for any of the damage. Secondly, Sunland can ask the Dubai court to divide liability between the defendants according to their responsibility for the damage. Thirdly, if the Dubai court funds that Sunland and the other defendants are liable to Dubai World then Sunland can ask the court to recover from other defendants, according to their responsibility for the damage, the money Sunland is required to pay to Dubai World. It was submitted that if the court were to grant an anti-suit injunction as sought, there would be nothing arising from that which would impede Sunland from advancing a contention against Dubai World that in fact Joyce or Reed or any of the other parties to this proceeding were responsible for the damage suffered by Dubai World. That case can still be made, it was said. As indicated previously, the Hamade affidavit identifies a second possible course,[62] which is that Sunland may ask the Dubai court to apportion liability to Dubai World between the defendants. Again, it was submitted that if the anti-suit injunction sought were to be granted, there was nothing to stop Sunland from advancing that contention. It is, it was submitted, effectively a proportionate liability contention, and one that can still be made. Another possible course is that Sunland might wish to pursue a third party claim or a counterclaim against another defendant.[63] This is, it was submitted, just an empty prospect in the absence of any assets in Dubai owned by Prudentia, Reed or Joyce, at least as far as any possible third party claim against them is concerned. There is, however, nothing to prevent Sunland, even if the anti-suit injunction were granted, to make a third party claim against, for example, Clyde and Co or any other party with assets in Dubai.
[60]Affidavit of Diana Hamade (15 December 2011), paragraphs 14 to 29.
[61]Affidavit of Diana Hamade (15 December 2011), paragraphs 24 to 26.
[62]Affidavit of Diana Hamade (15 December 2011), paragraph 25.
[63]Affidavit of Diana Hamade (15 December 2011), paragraph 26.
In addition to the Dubai World proceedings Sunland submitted that it would be prejudiced in seeking to pursue a third party claim or counterclaim against another defendant if it did not have its own civil right claim. In support Sunland relied on Ms Hamade’s evidence, particularly the following paragraphs of her affidavit:[64]
[28] In particular, if Sunland does not have its own civil right claim, but only appears to defend Dubai World’s civil right claim, Sunland cannot ask the court to make any order allowing Sunland to recover money from another defendant. This includes any money that Sunland might be ordered to pay to Dubai World as a result of Dubai World’s civil right claim.
[29] The only way for Sunland to fully defend itself against Dubai World’s civil right claim, and to maximise its ability to obtain favourable findings of fact, and to recover money from other defendants, is for Sunland to have its own civil right claim in the criminal proceedings, and to have its lawyers participate in the criminal proceedings (including the determination of all civil rights claims attached to the criminal proceedings) to the fullest extent possible under Dubai law.
[64]Affidavit of Diana Hamade (15 December 2011), paragraphs 28 and 29.
In my opinion, this evidence does not, however, support Sunland’s submission. Ms Hamade’s evidence does not indicate that Sunland would, if the relief sought by Reed and Joyce were granted, be inhibited from defending its position in the Dubai World proceedings or that it would be precluded from seeking indemnity or contribution from defendants in those proceedings other than Reed or Joyce. Any suggestion that Sunland would be prejudiced as a result of the inhibition from seeking indemnity or contribution from Prudentia, Reed or Joyce is, in my view, without foundation as any such claim or claims are of no value in Dubai proceedings in the absence of any assets of Prudentia, Reed or Joyce in that jurisdiction or those in reach of its judgments, for the reasons already indicated. Furthermore, in terms of any possible prejudice to Sunland it should not be forgotten that it is the author of any detriment it may suffer as it is the party which initiated the present proceedings while the Dubai civil proceedings were already being pursued.
In addition to the issues raised by Reed and Joyce with respect to Ms Hamade’s evidence which have been discussed it was challenged more generally. First it was noted that her evidence in relation to the nature and effect of the civil right claims filed in the Dubai court by Dubai World and Sunland was based only on the copying and translation of the first two pages of the Dubai World claim.[65] In this respect Mr Rush QC submitted that Ms Hamade has offered an opinion without seeing the entirety of the translation of the document and has left unexplained the inclusion of entities that are not defendants in the civil proceeding. In my view the latter omission tends to detract from her opinion on Dubai criminal and civil procedure in favour of the opinions of others, particularly Mr Juma, because only the provision of a complete English translation would provide an essential factual base for the Court to consider itself and thus be in a position to properly assess her opinion evidence. I do note, however, the references to Ms Hamade’s right of audience in the Dubai courts and that Arabic is her native tongue.[66] Nevertheless this does not address the reservations I have expressed with respect to the evidence.
[65]See Affidavit of Diana Hamade (15 December 2011), paragraph 14
[66]Exhibit DH-2 to the Affidavit of Diana Hamade (15 December 2011).
Additionally, Mr Rush QC objected to the paragraphs of Ms Hamade’s affidavit in which she purports to give an opinion as to why Sunland has included Clyde & Co and Mr Silver in the civil proceedings and as to the basis for the inclusion of that firm and Mr Silver. Particular objection was raised to paragraphs 17 to 22 in this respect on the basis that they are irrelevant – and also outside matters on which Ms Hamade was asked to comment. It was said that they are entirely gratuitous and unnecessary matters for Ms Hamade to raise and it was suggested that they were an attempt to place before the Court the financial audit of Mr Mustafa.[67] Mr Thompson SC, on behalf of Sunland, submitted that they were matters within her expertise as a Dubai lawyer. Whilst that might be so, the material itself appears speculative and does not indicate any basis for her opinion beyond experience with Dubai law and procedure generally. Thus it seems no different from a situation in which, for example, Australian lawyers might consider claims and pleadings in litigation in which they are not engaged and offer opinions on why claims and pleadings were cast as they were and parties joined, or not joined. Consequently, I am of the opinion that even if this material is admissible as opinion evidence it is of no significant weight. I am more inclined, however, to the view that it is irrelevant to the present applications and is not admissible. In any event, even if admissible, it does not affect any issues critical to these applications.
[67]Mr Mohammed Mustafa Hussein of the Financial Audit Department, Government of Dubai.
Sunland also submitted that the grant of the relief sought would have the potential to create serious practical difficulties for Sunland instructing its lawyers in Dubai, as before the Dubai lawyers could ask any question of a witness or make any submission to the Dubai civil court, it would be necessary for them to obtain instructions as to whether doing so would breach the injunction.
Further, it was submitted that if the granting of an injunction would leave the person restrained uncertain as to what they were required to do or not to do in order to comply with it, that would be a powerful factor militating against granting the injunction. It is clear that certainty is important because breaching an injunction exposes a person to penal sanctions for contempt of court, which may include imprisonment. The point was also made that this is not a situation where the parties seeking the injunction are merely asking the Court to require the other party to do (or not do) something that the other party had previously willingly contracted to do.
Reed and Joyce, however, submitted that Sunland would not have any of the practical difficulties and uncertainties which it claimed if the relief sought were granted. Reference was made, in this respect, to the evidence of Mr Juma to the effect that a civil claim in Dubai may be discontinued by a plaintiff at any time prior to judgment.[68] It was common ground that Sunland would remain a party to the Dubai World proceedings as it and the Sunland entities are defending the civil claim against them in those proceedings. Further, the grant of the relief sought will not prevent the Dubai proceedings continuing against Reed, Joyce, Prudentia, Clyde & Co (Legal Consultants – Dubai) or Mr Silver (Clyde & Co) as Dubai World has brought its claims against all these individuals and entities. Nevertheless, once Sunland discontinues its civil claim against the defendants there is no risk of non-compliance with any orders in the form now sought. Once Sunland complies in this way it can conduct the Dubai proceedings – including cross-examining witnesses and making submissions – as it thinks fit, subject to the control of the Dubai court.
[68]See the Affidavit of Abdulrahman Juma (9 December 2009), paragraph 12 (set out above, at paragraph 27); noting that the opinions annexed to the Affidavit of Ahmed Alqari (9 November 2009) are consistent with this position and the Affidavit of Diana Hamade (15 December 2011) does not state or suggest a contrary position.
Finally, it was submitted on behalf of Reed and Joyce that the caution which authorities indicate should be applied by a court considering an application for an anti-suit injunction and the importance of comity are relevant but, in the present circumstances, are overwhelmed by the circumstance of vexation and oppression involved in the maintenance of the civil proceedings in Dubai by Sunland and its consequent undermining of the integrity of the processes of this court. In my view this is correct and, further, comity issues do not weigh heavily given the issues of vexation and oppression arising from the maintenance of the foreign proceedings, as discussed and because the effect of the grant of the relief sought in the Dubai civil proceedings will be minimised, going only to an aspect of the part played by one of many parties, Sunland, and then only with respect to its claim or claims.
Having regard to the nature of the Dubai criminal and civil proceedings, the lack of any juridical advantage or “legitimate interest” for or in Sunland taking or pursuing the civil proceedings in Dubai and the absence of any assets of Prudentia, Reed or Joyce in Dubai the principles applicable to the grant of anti-suit injunctions as sought by the applicants do, in my opinion, favour the grant of such relief. This follows because in all the circumstances there is nothing to balance the vexation and oppression arising from the maintenance of the foreign proceedings.
In concluding these reasons I do stress that nothing contained in them is intended as any comment or reflection on the courts of Dubai, their practices and procedures or in any other respect, comparatively or otherwise – nor, of course, on the laws of Dubai or, more broadly, the UAE. Any such comment or reflection would be quite impertinent and entirely inappropriate.[69] As the authorities indicate, consistently with this position, courts should not restrain a party proceeding in a foreign jurisdiction on the basis of their own, domestic, perceptions of the fairness or unfairness of the foreign proceeding.
[69]And see Aratra Potatoe Co Ltd v Egyptian Navigation Co (‘The El Amria’) [1981] 2 Lloyd’s Rep 119 (CA), at 126-7 (Sir Stanley Rees, Stephenson LJ concurring, at 129); Amin Rasheed Shipping Corporation v Kuwait Insurance Co [1984] AC 50 at 67 (Lord Diplock, Lords Roskill, Brandon and Brightman concurring at 72-73; Lord Wilberforce made similar remarks at 72); Al-Bassam v Al-Bassam [2004] EWCA Civ 857, at [46] (Chadwick LJ; with Sir Andrew Morritt VC and Carnwath LJ concurring).
Conclusions and orders
For the preceding reasons, I am of the view that the application the subject of the summonses should be granted. I will, accordingly, hear the parties in relation to the appropriate form of orders and in relation to the question of costs.
The delivery of these reasons for judgment does not affect the operation according to its terms of the undertaking given by Sunland on 19 December 2011.[70]
[70]See above, paragraph 5.
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