Talacko v Talacko
[2008] VSC 246
•27 June 2008
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 7393 of 1998
| HELENA MARIE TALACKO AND OTHERS | Plaintiffs |
| V | |
| JAN EMIL TALACKO | Defendant |
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JUDGE: | OSBORN J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 20 JUNE 2008 | |
DATE OF RULING: | 27 JUNE 2008 | |
CASE MAY BE CITED AS: | TALACKO & ORS v TALACKO | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 246 | |
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Parallel proceeding issued by Plaintiffs in the Czech Republic after institution of this proceeding – application to stay or dismiss like proceedings as an abuse of process – not established plaintiffs have the same chance and equally effective remedies in each jurisdiction – no prima facie case duplication of proceedings vexatious – this court not clearly inappropriate as a forum for the dispute.
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr S. Howells | Holding Redlich Lawyers |
| For the Defendant | Mr R. Berglund QC with Mr D. Williams | Findlay Arthur Phillips |
HIS HONOUR:
The background to this proceeding is set out in my judgment on preliminary questions of 24 April 2008.
By that decision, I concluded that the defendant had breached terms of settlement entered into in the proceeding and that the plaintiffs had not repudiated the terms or otherwise disentitled themselves from relying upon them. There remains in issue the ascertainment of the consequences of the defendant’s breach. Clause 6 of the terms provided:
In the event that the defendant breaches any term, condition or warranty in this agreement, then the plaintiffs shall be entitled to enter judgment for an order that the defendant pay equitable compensation for breach of fiduciary duty in respect of each of the Properties and interests in the Properties (as defined in the amended statement of claim) recovered or obtained by him, together with the costs of entering such judgment, and the production of these terms of settlement shall be conclusive evidence of the defendant’s irrevocable consent to the entry of such judgment.
Upon the decision of the preliminary questions, I reserved to the defendant the right to argue further that this clause is bad for uncertainty. I also did not decide the defendant’s contention that clause 6 constitutes a penalty. If these issues are ultimately resolved against the defendant, the remaining issue will be a proper assessment of equitable compensation in accordance with the clause.
The plaintiffs have now delivered particulars of the property in respect of which and the bases on which they seek equitable compensation. The central claim is one for monetary compensation reflecting two thirds of the value of the property held by the defendant and subject to the claim founding the terms of settlement.
As part of the claim for equitable compensation, however, the plaintiffs contend that the Court should compel the mutual transfer of certain interests in rural land as between the parties.[1]
[1]Being a series of plots of land at Repy which the plaintiffs contend should be transferred to them and plots at Kbely which the plaintiffs contend should be transferred to the defendant.
By summons issued on 28 April 2008, the defendant seeks orders that the plaintiffs’ claim be dismissed or, in the alternative, permanently stayed pursuant to rule 23.01(c) of the Rules of the Supreme Court. The relevant rule provides that where a proceeding generally or a claim in a proceeding, is an abuse of process of the court, the Court may stay the proceeding generally or in relation to any claim, or give judgment in the proceeding generally or in relation to any claim.
The defendant contends that it would be an abuse of process to continue the present proceeding because the plaintiffs have instituted separate proceedings in Prague in the Czech Republic “claiming the same relief sought in the Victorian proceeding” and “based upon the same factual matrix as that alleged in the Victorian proceeding.”
The proceeding in the Czech Republic was issued on 22 February 2008 in the District Court for Prague 1. The parties are the same as those in the proceeding in this Court and it is apparent that the Czech proceeding arises out of the same matrix of facts.
The plaintiff did not advise the Court of the institution of the Czech proceedings. It was left to the defendant to draw this to this Court’s attention.
The Czech claim is one for orders compelling the transfer to the plaintiffs of two thirds of the legal title to properties the subject of dispute in this court . This is in substance a core part of the relief originally sought by way of the claim in this jurisdiction and the subject of settlement after the commencement of the initial trial before Ashley J in February 2001. The original claim and the settlement also extended to properties in Dresden Germany and Sucha in the Republic of Slovakia.
Mr Hlavička, the plaintiffs’ Czech attorney, has deposed that all of the requests for relief made in the Czech claim are due to the defendant’s breach of the terms of settlement.
The Prague Claim
The Prague claim has been submitted in translation in evidence before me. It first sets out the basis on which the plaintiffs invoke the jurisdiction of the Czech court, namely, that the defendant is a Czech citizen residing in Prague, and that the subject matter of the proceedings comprises real properties situated in the Czech Republic.
The claim goes on to set out particulars of the parties and the properties in issue.
It sets out the underlying basis of the plaintiffs’ claim, namely, that the defendant is obligated to them with respect to properties acquired by him but formerly comprising part of the estate of his parents.
It sets out the alleged history of the dispute between the parties.
In Part III it records the making of the original claim to this Court in 1998 and the nature of the relief claimed. It records the entry of the parties into terms of settlement after the commencement of the initial trial hearing.
It characterises the terms as corresponding to an “extrajudicial settlement” concluded after commencement of the Czech proceedings. It asserts that, according to Victorian law, they constitute a validly concluded agreement of parties according to which the parties are obliged to act.
It then sets out alleged breaches of the terms of settlement by the defendant and goes on to state:
… the breach of the “Terms of Settlement” on part of the Defendant, gives the Plaintiffs the possibility under the law of Victoria and pursuant to Article 6 of the “Terms of Settlement” to do any of the following steps:
(i)to require that the Defendant at court’s injunction should meet requirements of the Plaintiffs stated in the action based upon which the “Terms of Settlement” were agreed;
(ii)to ask the court to order the Defendant to fulfil terms of the “Terms of Settlement”;
(iii)to ask for compensation of damage; or
(iv)to ask for “equitable compensation”. The Plaintiffs may at their sole discretion choose from these options.
…
The Plaintiffs have decided that they would require an equitable compensation from the Defendant, which according to the Australian law can consist in requirement to transfer the title to shares in the Properties under the agreement between Talacko brothers and sisters in 1990, or 4 March 1991, to account for incomes and expenses and to compensate a proportional part of incomes to the Plaintiffs.
Judgment is then sought for the transfer of part interests in the Czech properties to the plaintiffs, together with an account of profits with respect to the defendant’s enjoyment of the properties and payment to the plaintiffs of shares of the income from the properties.
By Part V of the claim the plaintiffs seek a preliminary interlocutory injunction restraining the defendant from disposing of his interest in the properties in issue.
That application has since been granted and restraining orders were made preventing the defendant from disposing of or encumbering his interest in the properties, save for entering into leases of up to three years. The Prague Court’s reasons were stated in part as follows:
The Plaintiff, in the framework of the action for satisfaction consisting of the transfer of a 2/3 interest in the real estate specified above, seeks the issuance of an injunction ordering the defendant to refrain from disposing with the real estate, and in particular from selling, renting, letting to be used by a third party or encumbering the real estate by any other third-party rights. The defendant, while asserting the claim for restitution of the real estate, omitted the rights of the other beneficiaries (plaintiffs) contrary to their mutual agreement, and thus the plaintiffs filed a legal action against the defendant with the Supreme Court of Victoria for determination of the 2/3 interest in and to the real estate and lost revenue. In the course of the proceedings, the parties entered into the “terms of Settlement” whereby the defendant agreed, among other things, to transfer the ownership rights attached to some pieces of the real estate to the plaintiffs. The defendant has breached the Terms of Settlement and thus the plaintiffs have the right, under the laws of Victoria, to request that the defendant perform the plaintiffs’ demands relating to their respective ownership interests and lost revenues.
The Plaintiffs believe that without issuance of the proposed injunction the enforcement of the contingent judgment would be prejudiced in the context of the defendant’s behaviour. There is a risk that the defendant may attempt to sell the property or encumber it with long-term leases, thus rendering the enforcement of judgment impossible. The Defendant would be able to easily conceal from the Plaintiffs the proceeds of such sale, thus significantly impairing the chances of satisfying their receivables, whereas the defendant is an Australian national and often stays in Australia. In addition, the plaintiffs have no knowledge of any other property owned by the defendant in the Czech Republic. In case the defendant does not intend to sell the real estate or encumber it with any third-party rights, the injunction will only represent a negligible nuisance for the defendant as it will not prevent the use of the real estate in the ordinary course of affairs by either the defendant or the persons already using the estate.
It can be seen that the reasoning proceeds on the basis of an entitlement pursuant to the terms of settlement. Further, the basis of the plaintiffs’ claim for preliminary relief is a fear that the defendant will dissipate his assets within the Czech Republic.
The reasons further state:
The court believes that the Terms of Settlement, the plaintiff’s contentions and the extracts from the Real Estate Register (containing the acquisition titles) prove that the defendant has asserted the restitution claim in contradiction with the agreement with his siblings and has denied their legitimate claims, in the ensuing court proceeding entered with the plaintiffs into an agreement on settlement but failed to comply with its terms, and thus the plaintiffs have become entitled to satisfaction consisting of the transfer of interest in the real estate owned by the defendant. Although it is impossible under Czech law to infer the material transformation of a monetary indemnification claim, its contended and established availability under the governing law of the State of Victoria is not inconsistent with Czech public order and thus it is applicable in this case. The defendant’s conduct may be interpreted as being designed to prejudice the plaintiffs’ rights and, therefore, there is a justified concern that if the plaintiffs succeed, the enforcement of judgment would be prejudiced by the defendant’s actions. Therefore, the court has prohibited the defendant, in accordance with Section 102(1) of the Code of Civil Procedure and in accordance with the proposal, from taking any such action as would prejudice or restrict the plaintiffs’ ownership rights relating to the property, in particular its transfer, encumbering the same with third-party rights, but also letting the property for use to others and letting the property for rent for a period longer than 3 years. (My emphasis)
As I understand this passage, the Court accepts the plaintiffs’ claim on a preliminary basis, as one flowing from the terms of the settlement which form the basis of the current Victorian claim.
The procedure pursuant to which the preliminary injunction is granted included a requirement to provide some security. Mr Hlavička deposes:
5.Under Czech law the preliminary injunction is generally always issued by the Court ex parte solely based on the allegations and evidence provided by the plaintiff. Based on the evidence provided by the plaintiff, the Court is obliged to consider and assess whether or not the evidence is strong enough to issue the preliminary injunction, being usually a considerable interference with the defendant’s rights. Czech law also requires the plaintiff to pay to the Court a security deposit in the statutory amount when he applies for the preliminary injunction in order to avoid abusive applications and as a security from which the defendant may draw the damages provided that the plaintiff loses the case. Under Czech law the Court is obliged to decide on the issuing of the preliminary injunction within 7 days from receipt of the plaintiff’s submission. The main reason for deciding on issuing the preliminary injunction ex parte is to not provide the defendant with any time for trying to avoid or circumvent the preliminary injunction.
The defendant has appealed the interlocutory orders for preliminary injunctions and the plaintiffs are in turn contesting this appeal.
The defendant’s appeal is brought in part on the basis (never asserted in this Court) that the terms of settlement are void because they were executed by him under duress.
The defendant has also deposed that he does not in fact intend to dispose of the properties in issue.
The affidavit material indicates that the plaintiffs instituted the proceedings in the Czech Republic because they were advised that they should do so in order to avoid the expiration of a relevant limitation period (being as I understand it one running from the date of the terms of settlement).
There are four preliminary observations that can be made about the Czech proceedings.
(1)They refer to and appear in part to be premised upon the history of the settlement of the Victorian proceedings.
(2)Nevertheless, they appear to seek substantive relief by way of orders with respect to the transfer of land in accordance with the claim originally made in the Victorian proceedings. Such a claim is not pursued in the claim for equitable compensation made to the Court following my decision on preliminary questions relating to the breach of the term of settlement.
(3)No evidence was called before me as to the law governing the Czech proceedings.
(4) The interlocutory relief granted preserves the principal assets of the defendant.
By letter of 26 March 2008, the defendant’s solicitors wrote to the plaintiffs’ solicitors objecting to the prosecution of the same cause of action in two different jurisdictions and alleging that this constituted an abuse of the process of the Court.
By letter of 4 April 2008 the plaintiffs’ solicitors offered undertakings signed by their clients, not to prosecute the Czech proceedings pending the final resolution of the proceedings in this Court.
These undertakings were rejected as insufficient. The defendant contended and continues to contend, that the plaintiffs must elect as to the jurisdiction in which they wish to proceed and cannot have “two bites at the cherry”.
Principles
The question whether a dispute as to a legal right should be litigated in the courts of one country or those of another may be resolved by one court staying its proceedings in favour of the other or by granting an anti-suit injunction restraining a person amendable to its jurisdiction from commencing or continuing proceedings in that other country.[2] In the present case the defendant seeks a stay or dismissal of the plaintiffs’ claim. The defendant submits that it is prima facie an abuse of the process of this Court to initiate proceedings in another court going to the same chance of relief.
[2]CSR Ltd v Cigna Insurance Australia Ltd(1997) 189 CLR 345 at 389-390.
In The Christiansborg[3] the owners of a German vessel had first commenced proceedings in respect of a Danish ship, the Christiansborg, in an admiralty court in Holland, following a collision at sea between the two vessels.
[3](1885) 10 PD 141.
The defendant’s ship was arrested and then released upon the giving of a guarantee in a substantial sum of the compensation which might have to be paid consequent upon a legal decision in Holland. Thereafter, the plaintiffs commenced a further action in rem in England, in respect of the same collision and The Christiansborg was again arrested.
In the Court of Appeal Baggally and Fry LJJ held that bail being the equivalent of the ship, an action in England should not be allowed to proceed at the same time as the Dutch action. If the guarantee given in Holland was not to be regarded as equivalent to bail (being a private agreement), the arrest of the ship in England was not in good faith.
Lord Esher MR held that although it was not prima facie oppressive to institute an action in both a foreign and an English court in respect of the one collision, it would be oppressive if bail were required in both courts. In this case the guarantee was not equivalent to bail. Accordingly, the remedy in Holland was not as good as that sought in England and the plaintiffs were entitled to bring the action.
Lord Esher stated:[4]
Where both actions are in England in the same tribunals – because if they are in tribunals where the proceedings are not identical or the remedies are not equally effective the law would apply which is applicable to foreign countries – prima facie it is vexatious, and therefore it would lie on the party who brings the second action to show that it was not so. But where the cases are in foreign countries, prima facie not being vexatious, the man who says it is, must prove clearly to the court that it is, and that the person suing him in a court with ample jurisdiction would have in every respect the same chance in a foreign court which he has here, and equal facility to enforce the remedy. (My emphasis)
[4]At 148.
In Slough Estates v Slough Borough Council[5] the plaintiff sought to maintain both an administrative appeal with respect to a planning decision and a challenge to that decision in the courts by way of judicial review. Ungoed Thomas J held that the two remedies were substantially equally effective. What was required was not that there should be precise identity of procedure but that there should be such identity “as does not give an advantage of substance to the procedure sought to be stayed over the procedure before the other forum”, or as Lord Esher had put it “the same chance”.
[5](1968) 2 Ch 299.
Accordingly, the defendants established a prima facie case of abuse of process.
In Moore v Inglis[6] Mason J stayed a proceeding issued in the High Court after initial proceedings were issued in the Supreme Court of the Australian Capital Territory alleging conspiracy and seeking damages. The High Court proceeding alleged in a reformulated way essentially the same conspiracy, but sought declarations and an injunction only by way of relief. His Honour stated that differences in the parties and the relief sought, were matters capable of being addressed within the Supreme Court proceedings and were of the plaintiff’s own making. The commencement of the High Court action was vexatious and oppressive and constituted an abuse of process.
[6](1976) 9 ALR 509.
The same principles were applied by Jessup J in Thirteenth Corp Pty Ltd v State.[7]
[7](2006) 232 ALR 491.
It follows from the above authorities that it will not be prima facie vexatious to institute proceedings in both a foreign country and Australia, but it will be so if the plaintiff has the same chance in each country and equal facility to obtain effective remedies.
Are the joint proceedings prima facie vexatious?
It is objected on behalf of the plaintiffs that there is no true coincidence between the Victorian and the Czech proceedings because the Victorian proceedings extend to claims in respect of land located in Dresden, Germany and Sucha in the Republic of Slovakia. It is difficult to regard this as a satisfactory answer to the defendant’s case with respect to the core properties within Czechoslovakia. At best it is a partial answer only to the defendant’s application.
More significantly, the plaintiffs submit that there is insufficient evidence before me as to the law governing the Czech proceedings, to establish that the plaintiffs have the same chance in each country and equal facility to obtain adequate remedies in each. I accept this submission. On the one hand it is not clear that the plaintiffs are entitled to claim equitable compensation in the Czech court in the manner in which it is claimed in this Court. On the other hand, it is not clear that a judgment for equitable damages in this Court will be as readily enforceable in the Czech Republic as would proceedings issued in that jurisdiction.[8] There may be difficult questions as to whether the remedies available in each jurisdiction are to be equated as reflecting the “same chance” and equal facility to obtain effective remedies. These questions are not capable of resolution in favour of the defendant on the basis of the material before me.
[8]This is so despite the initial written submission of the plaintiffs’ counsel: “The plaintiffs do not have a right to automatic enforcement of a judgment of this Court in the Czech Republic, though in the circumstances the principles of private international law will allow them to achieve enforcement.”
The plaintiffs rely on Hollander v McQuade[9] in which the Court held that where the judgment of the local court could not be enforced as of right as a judgment in the foreign court, there should be no presumption that bringing overseas proceedings in addition to local proceedings is vexatious.[10]
[9](1896) 12 WN (NSW) 154.
[10]See also Morgan v Higginson (1897) 13 WN (NSW) 146 and on appeal 200.
This authority reflects the parallel principles developed with respect to anti-suit injunctions.
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.[11] Thus, it was said in Carron Iron Company v Maclaren[12] 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,[13] have continuing significance for the grant of anti-suit injunctions.[14] Those cases establish that the mere co-existence of proceedings in different countries does not constitute vexation or oppression.[15] 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]"[16] does not amount to vexation or oppression. [17]
[11]See, for example, Story, Commentaries on Equity Jurisprudence, 13th ed (1886), vol 2 at 211; In re Connolly Brothers Limited [1911] 1 Ch 731 at 747. As to foreign proceedings, see McHenry v Lewis (1882) 22 Ch D 397; Peruvian Guano Company v Bockwoldt (1883) 23 Ch D 225; Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871 at 893; National Mutual Holdings Pty Ltd v The Sentry Corporation (1989) 22 FCR 209 at 232.
[12](1855) 5 HLC 416 at 437 [10 ER 961 at 970] per Lord Cranworth. See also Wedderburn v Wedderburn (1840) 4 My & Cr 585 [41 ER 225]; McHenry v Lewis (1882) 22 Ch D 397.
[13](1883) 23 Ch D 225.
[14][1987] AC 871 at 893-894.
[15]See McHenry v Lewis (1882) 22 Ch D 397; Peruvian Guano Company v Bockwoldt (1883) 23 Ch D 225; Hyman v Helm (1883) 24 Ch D 531; Cohen v Rothfield [1919] 1 KB 410; Ionian Bank Ltd v Couvreur [1969] 1 WLR 781; [1969] 2 All ER 651
[16](1883) 23 Ch D 225 at 234.
[17]CSR Ltd v Cigna Insurance Australia Ltd (1996-1997) 189 CLR 345, 393.
It follows that I am not satisfied the institution of parallel proceedings in the present case has been shown to be prima facie vexatious.
Principles governing the grant of a stay
On the other hand, a plaintiff who has regularly invoked the jurisdiction of the Court will not be shut out by a stay, unless the defendant can establish that the Court is so “clearly inappropriate” a forum for the dispute, by reason of the proceedings in another jurisdiction, that it would be vexatious and oppressive to allow the plaintiff to continue.[18]
[18]Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538; CSR Ltd v Cigna Insurance Australia Ltd (1996-1997) 189 CLR 345, 390-391.
In the present case there is no dispute the Victorian proceeding has been validly instituted and maintained to date.
The principle governing a stay in these circumstances is itself to be understood as an aspect of the Court’s general power to regulate abuses of its proceedings.
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[19] 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".[20]
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,[21] 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.[22]
[19][1988] HCA 32; (1988) 165 CLR 197.
[20][1990] HCA 55; (1990) 171 CLR 538 at 554.
[21][1936] 1 KB 382.
[22]See Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612 at 617, 639-640; Hamilton v Oades [1989] HCA 21; (1989) 166 CLR 486 at 502; Jago v District Court (NSW) [1989] HCA 46; (1989) 168 CLR 23 at 25, 74; Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509 at 518; Walton v Gardiner [1992] HCA 12; (1993) 177 CLR 378 at 392-393; Ridgeway v The Queen [1994] HCA 33; (1995) 184 CLR 19 at 60, 74-75.
In the present case the dispute before this Court arises out of terms of settlement entered into in this Court and it is plain that this Court is not an inappropriate forum, save for the issue of duplication of proceedings to which I have referred.
In turn, however, it is not the mere pendency of competing proceedings issued by another party in another jurisdiction, which is in issue.[23] Rather it is the conduct of the plaintiffs in themselves issuing in two places which is contended to be vexatious and oppressive.
[23]Cf Rocklea Spinning Mills Pty Ltd v Consolidated Trading Corporation (1995) 2 VR 181.
The question which arises in whether such conduct even if it is not to be characterised as prima facie vexatious renders the continuation of proceedings in this jurisdiction plainly inappropriate.
The Plaintiffs’ Proposed Undertakings
During the course of argument Mr Howells indicated that his clients would be prepared to offer undertakings to the Court, which have been confirmed in writing in the following terms:
1.Until the conclusion of this proceeding including any appeals, they will not, without the leave of this Court, themselves or by their lawyers or other agents, take any step to prosecute the Petition proceeding in the District Court in Prague which has been ascribed number 20C-17/2008 except to maintain or, if necessary, enforce the injunctive relief given by the Court in that matter on 28 February 2008 which restrains the Defendant from dealing with the Properties the subject of the Order in any manner beyond a lease of up to 3 years duration.
2.In the event that a judgment of this Court granting relief in the form of equitable compensation for a two thirds proportion of the Properties as defined in the Amended Statement of Claim dated 18 May 2000, adjusted as determined by the Court is either accepted and abided by the Defendant or successfully enforced against him and satisfied, whether in Australia or the Czech Republic, they will not seek to obtain the same relief or any portion of the same relief, whether in the form of a sum of money or transfer of any interest in the Properties, against the Defendant, for breach of the Terms of Settlement by prosecuting the Petition proceeding in the District Court in Prague which has been ascribed number 20C-17/2008.
3.If following the conclusion of this proceeding, including any appeals, they decide to seek to prosecute the Petition proceeding in the District Court in Prague which has been ascribed number 20C-17/2008, they will first give reasonable notice to this Court and to the Defendant.
4. They will instruct their lawyers accordingly.
The defendant points to the limitations of these undertakings[24] and submits that they do not preclude the Plaintiff from pursuing compensation first in this jurisdiction and transfer of real property interests secondly in the Czech Republic.
[24]The defendant submits in a letter to this Court dated 25 June 2008:
If the interlocutory ruling obtained in Prague had been sought in this Court, it would not have been granted save upon the giving of the usual undertaking as to damages. Although the Czech procedure as described in affidavit evidence before me, provides for some security to be given to the defendant, it is not clear whether the Czech court will provide equivalent compensation to the defendant if the Czech proceeding fails.
Conclusion
I would not stay or dismiss the Victorian proceeding if the plaintiffs:
(a) give the undertakings proffered by their counsel; and
(b)give the usual undertakings as to damages to this Court, with respect to the preliminary injunctions granted by the Prague court.
My reasons for refusing the defendant’s application are as follows:
First, the Victorian proceedings were validly instituted and had substantially progressed prior to the institution of the Czech proceedings. Since reinstatement following the initial settlement a substantial hearing has been conducted resulting in the determination of issues of liability. On the face of it that determination entitled the plaintiffs to judgement for equitable compensation in this Court unless for reasons I have left open, the terms of settlement can be avoided. If one or other proceeding is to be regarded as vexatious it appears to me that it is not the Victorian proceeding.
Secondly, I am not satisfied that the institution of the Czech proceedings is to be regarded as prima facie constituting an abuse of process, because of the doubt that I have identified with respect to potential differences in the remedies available.
Thirdly, I am satisfied the Czech proceedings were not issued vexatiously in the strict sense of proceedings issued with the intention of harming or annoying the defendant.
Fourthly, if the undertakings proposed are given, the Czech proceedings will not unfairly interfere with or have a tendency to interfere with the Victorian proceedings.
It appears that the consent of both participants is required to suspend the Czech court proceedings. Nevertheless, the evidence of the plaintiffs’ Czech attorney is that until the City Court of Prague as a court of appeal decides on the defendant’s appeal against the preliminary injunctions which have been granted, the District Court of Prague 1 will not proceed with the case. Further, if the undertakings proposed by the plaintiffs are given then the matter will not proceed further .. in respect of the preliminary injunction unless the defendant desires it to and with the leave of this Court.
Fifthly, insofar as the Czech proceedings have resulted in interlocutory orders, those orders can be balanced by the requiring of undertakings which this Court would have required if it had restrained the defendant from disposing of his assets prior to the completion of the Victorian litigation.
Sixthly, if the Czech proceeding is prosecuted after the completion of this proceeding, it should not be assumed that the Czech court will fail to have proper regard to the outcome of this proceeding.
Seventh, having regard to the above matters the defendant has not discharged the burden upon him to demonstrate the proceedings in the Czech Republic evidence an abuse of the process of this Court.
Accordingly, the summons should be dismissed.
‘3. The undertakings proffered by there terms are vague and uncertain as to meaning and are limited in extent in that:
a.They last only until the final determination of the proceeding,
b. They are dependant upon the Court awarding equitable compensation “…for two thirds proportion of the Properties as defined in the Amended Statement of Claim…”.
c. They preserve the rights of the Plaintiffs’ to pursue the action commenced in the Czech Republic in order to recover money which may not be paid by the Defendant. That action will be based upon the matters pleaded in the Czech proceedings and not upon the enforcement of a judgement given by this Court so that the property recoverable under the Czech proceedings may be greater in value than that equitable compensation awarded, if any, by this Court.’
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