Telesto Investments Ltd v UBS AG - [2012] NSWSC 44

Supreme Court

New South Wales

Medium Neutral Citation: Telesto Investments Ltd & ors v UBS AG [2012] NSWSC 44
Hearing dates: 21 November 2011
Decision date: 07 February 2012
Jurisdiction: Equity Division - Commercial List
Before: Ward J
Decision:
Temporary stay to be granted of the proceedings in this Court, pending the outcome of matters in other proceedings in Singapore in relation to the same controversy. Form of orders to be determined after further submissions.

Catchwords:
CONFLICT OF LAWS - stay of proceedings - anti-suit injunction granted in Singapore - whether New South Wales is forum non conveniens - whether duplication of proceedings is vexatious or oppressive - whether commencing or continuing proceedings in New South Wales amounts to an abuse of process - whether enforceability of foreign judgment where non-monetary relief sought relevant to granting a stay

CONFLICT OF LAWS - stay of proceedings - principles of comity - where New South Wales proceedings commenced in breach of anti-suit injunction granted in Singapore - foreign anti-suit injunction a factor to be taken into account when exercising discretion to grant stay but not determinative

CONFLICT OF LAWS - choice of law - tort - misrepresentation - cross-border communications over telephone - law of jurisdiction where communication reasonably expected to be received is proper law of the misrepresentation
PROCEDURE - issue estoppel - foreign judgment as basis of estoppel - estoppel said to arise from finding in Singapore regarding question of forum non conveniens - different legal test for forum non conveniens in Singapore and Australia - precise identification of the legal issue - no issue estoppel in relation to forum non conveniens question - issue estoppel in relation to finding by Singapore court whether New South Wales proceedings vexatious and oppressive
Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth)
Fair Trading Act 1987 (NSW)
Trade Practices Act 1974 (Cth)
Cases Cited: Adam P Brown Male Fashions Proprietary Limited v Philip Morris Incorporated (1981) 148 CLR 170
Air Bus Industries GIE v Patel (1999) 1 AC 119
Allstate Life Insurance Co v Australia and New Zealand Banking Group Limited [1995] FCA 1563
Armacel Pty Ltd v Smurfit Stone Container Corp (2008) 248 ALR 573
Aussie Home Security Pty Ltd v Sales Systems Australia Pty Ltd (2000) 172 ALR 14
Barclays Bank plc v Homan [1993] BCLC 680
Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256
Blair v Perpetual Trustee Co Ltd v Curran (Adam's Will) (1939) 62 CLR 464
British Airways Board v Laker Airways Limited [1985] 1 AC 58 (HL)
Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] AC 853
Castillon v P&O Ports Ltd [2007] QCA 364
Champerslife Pty Ltd v Manojlovski & Anor [2010] NSWCA 33
Christie v Baker (1996) 2 VR 582
Commonwealth v Cockatoo Dockyard Pty Ltd [2003] NSWCA 192
Commonwealth Bank of Australia v White [1999] 2 VR 681
Commonwealth Bank of Australia v White [No 3] [2000] VSC 259
Commonwealth Bank of Australia v White [No 4] [2001] VSC 511
CSR Ltd v Cigna Insurance Australia Limited [1997] HCA 33; (1996-7) 189 CLR 345
DA Technology Australia Pty Limited v Discreet Logic Inc [1994] FCA 958
Delco Australia Pty Ltd v Equipment Enterprises Incorporated and Ors (2000) 100 FCR 385
Diamond v Bank of London and Montreal (1979) QB 333
Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575
Ellerman Lines Limited v Read [1928] 2 KB 144
Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630
Garsec v Sultan of Brunei [2008] NSWCA 211; (2008) 250 ALR 682
Guardian Group Australia Pty Ltd v Alice Lu [2005] NSWSC 1299
Habib v 2UE Pty Ltd [2009] NSWCA 231
Henry v Henry (1996) 185 CLR 571
Hilton v Guyot (1895) 159 US 113
Hunter Grain Pty Ltd v Hyundai Merchant Marine Co Ltd (1993) 117 ALR 507
John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503
Kolden Holdings Ltd v Rodette Commerce Ltd [2008] 3 All ER 612
Kuligowski v Metrobus [2004] HCA 34; (2004) 220 CLR 363
Laker Airways Limited v Pan American World Airways (1983) 559 F Supp 1124
Laker Airways Limited v Sabena (1984) 731 F 2d 909
Laker Airways Limited v Pan American (1983) 577 F Supp 348
Ling v The Commonwealth (1996) 68 FCR 180
Maritime Insurance Co Ltd v Geelong Harbour Trust Commissioners (1908) 6 CLR 194
Newmont Yandal Operations Pty Ltd v J Aron Corporation [2007] NSWCA 195; (2007) 70 NSWLR 411
News Corporation v Lenfest Communications Inc [1996] NSWSC 474
Mala Pty Ltd v Johnston (1995) 13 ACLC 100
Moore v Inglis (1976) 9 ALR 509
Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197
Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; 147 CLR 589
Puttick v Tenon Ltd [2008] HCA 54; (2008) 238 CLR 265
Ramsey v Vogler [2000] NSWCA 260
Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; (2002) 210 CLR 491
Reichel v Magrath (1989) 14 App Cas 665
Ridgeway v The Queen (1995) 184 CLR 19
Rippon v Chilcotin Pty Ltd [2001] NSWCA 142
Rocklea Spinning Mills Pty Limited v Consolidated Trading Corporation [1995] VSC 15; [1995] 2 VR 181
Rogers v The Queen (1994) 181 CLR 251
Roy Morgan Research Centre Pty Ltd v Wilson Market Research Pty Ltd (1996) 39 NSWLR 311
Sadler v Robins (1808) 170 ER 948
Slough Estates Ltd v Slough Borough Council [1968] Ch 299
Society of Lloyd's v White [2004] VSCA 101
Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460
State Bank of NSW Ltd v Stenhouse Ltd (1997) Aust Torts Rep 81-423
Sterling Pharmaceuticals Pty Ltd v The Boots Company (Aust) Pty Ltd (1992) 34 FCR 287
Tiufino v Warland (2000) 50 NSWLR 104
Thames Launches Ltd v Trinity House Corporation of Deptford Strond [1961] Ch 197
The Daeyang Honey [1993] FCA 584
The Sennar (No 2) [1985] 1 WLR 490 (HL)
Thoday v Thoday [1964] P 181; [1964] 1 All ER 341; [1964] 2 WLR 371
Turner v Grovit [2002] 1 WLR 107 (HL)
UBS AG v Telesto Investments Pty Ltd [2011] SGHC 170
United Pacific Finance Pty Ltd v Tarrant [2009] NSWSC 630
Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538
Williams v Society of Lloyd's (1994) 1 VR 274
Zavodnyik v Alex Constructions Pty Ltd (2005) 67 NSWLR 457
Texts Cited: Collins, Dicey, Morris and Collins on The Conflict of Laws (14th ed, 2006)
Davies, Bell and Brereton, Nygh's Conflict of Laws in Australia (8th ed, 2010)
Handley, Res Judicata: General Principles and Recent Developments (1999)
Mortensen, Private International Law in Australia (2006)
Spencer Bower, Turner and Handley, The Doctrine of Res Judicata (3rd ed, 1996)
Category: Interlocutory applications
Parties: Telesto Investments Ltd (First Plaintiff)
Scott Francis Tyne (Second Plaintiff)
ACN 074 921 109 Pty Ltd as trustee of the Argot Unit Trust (Third Plaintiff)
UBS AG (Defendant)
Representation: Counsel
R Stitt QC (Plaintiffs)
J Stoljar SC with L Livingston (Defendant)
Solicitors
Eakin McCaffery Cox (Plaintiffs)
Mallesons Stephen Jaques (Defendant)

File Number(s): 10/363808

Judgment

HER HONOUR: Before me for hearing on 21 November 2011 was an application by the defendant (UBS AG), by notice of motion filed on 24 October 2011, for a permanent stay of proceedings commenced in this Court on 2 November 2010 by the respondents to the motion (to whom I will refer collectively as the Telesto parties). These proceedings have not yet progressed to the stage where a Commercial List Response has been filed, there having been a temporary stay in place pending the outcome of the present application.

The stay of proceedings is sought pursuant to s 67 of the Civil Procedure Act 2005 (NSW) or the Court's inherent or implied power to control its own processes and procedure, having regard to the existence of separate proceedings in Singapore between the same parties in which an anti-suit injunction was granted against the Telesto parties restraining ( inter alia ) the continuation of proceedings such as the present proceedings and in which at the same time an application by the Telesto parties for a stay of the Singapore proceedings was dismissed.

UBS AG seeks the stay on four grounds, which it concedes are to a certain extent overlapping:

(i) as a matter of comity (on the basis that the continued prosecution of these proceedings is in defiance of the subsisting anti-suit injunction granted in Singapore);

(ii) on the basis of an issue estoppel following the dismissal by the High Court of Singapore of the application by the Telesto parties for a stay of the Singapore proceedings (which issue estoppel is said to preclude the Telesto parties from contending in the present proceedings that Singapore is not the appropriate forum for this dispute or that it is not vexatious or oppressive for them to continue to prosecute the present proceedings);

(iii) if (contrary to UBS AG's contention) there is not an issue estoppel in the strict sense, then on the basis that it is an abuse of process for the Telesto parties to seek to re-litigate in this Court the forum non conveniens issues which have already been determined in Singapore; and

(iv) that (if it is open to the Telesto parties to re-litigate the forum non conveniens issues) the continuation of these proceedings would be vexatious and oppressive having regard to the controversy as a whole.

Summary

For the reasons set out below, I am of the view that:

(i) the principles of comity do not require the grant of a permanent stay of the proceedings in this Court, although the principles of comity warrant due recognition being given (in determining whether a stay should be granted) to the exercise of judicial power in Singapore in granting the subsisting anti-suit injunction;

(ii) while I consider that there is an issue estoppel which precludes the Telesto parties from contending in the present proceedings that it is not vexatious or oppressive for them to continue to prosecute the present proceedings, in the sense in which those terms were used in Voth v Manildra Flour Mills Pty Limited [1990] HCA 55, I do not consider that this is determinative of the issue as to whether a stay should be granted;

(iii) it would be an abuse of process for the Telesto parties to seek to re-litigate in this Court the forum non conveniens issues which have already been determined in Singapore, subject to the qualification that where matters have subsequently come to light which may affect the conclusions that would be reached in relation to that issue then there is no such abuse of process; further, where there is at this stage only the prospect that the same issues will be required to be determined in the substantive proceedings in each jurisdiction I am not satisfied that there is an abuse of process in the maintenance of the present proceedings (in contrast with the position that would apply if the present proceedings were seeking in substance to re-litigate issues already decided in the Singapore proceedings); and

(iv) having considered the factors to be taken into account on a forum non conveniens application in this jurisdiction, if the Singapore proceedings will involve the determination of the issues raised in these proceedings in relation to the alleged misleading and deceptive conduct or misrepresentation in relation to the acquisition of investments for the Telesto account (and related issues) then the continuation of these proceedings would be vexatious and oppressive having regard to the controversy as a whole; however, I am not satisfied that there will necessarily be such an overlap any longer in circumstances where the Singapore proceedings are now confined to the claims for declaratory relief and indemnity costs (and whether there is such an overlap will largely be dependent on the course that the Telesto parties now take in relation to their defence of the Singapore proceedings).

In those circumstances, in the exercise of my discretion I consider it would be appropriate to grant a temporary stay of the present proceedings pending the outcome of the claim by UBS AG in the Singapore proceedings for declaratory relief and indemnity costs.

If the claim for declaratory relief is determined in favour of UBS AG then that may (as UBS AG contends) dispose of all the issues in the present proceedings by virtue of a res judicata issue estoppel or an Anshun estoppel (though it is not appropriate for me at this stage to express any view on this). If the claim for declaratory relief is unsuccessful, then whether the maintenance of the present proceedings is vexatious or oppressive at that point will depend in my view on the scope of the matters litigated in the Singapore proceedings in its defence (and the overlap between those and the matters sought to be litigated in the present proceedings), subject to any argument that UBS AG might then raise as to the consequence of what has or has not been pleaded or put in issue by way of defence in those proceedings (and the prospect of an Anshun estoppel claim there springs to mind).

I will, however, hear submissions as to the event upon which the termination of the temporary stay should be conditioned as it may be that the stay need not remain in place beyond some different point in the conduct of the Singapore proceedings.

Background Facts

The background to the present dispute is canvassed in the reasons for judgment handed down by Chong J in the High Court of Singapore ([2011] SGHC 170) on 14 July 2011 dismissing the Telesto parties' appeals against the grant of the anti-suit injunction and the dismissal of their stay application. Senior Counsel for UBS AG, Mr Stoljar SC, appearing with Mr Livingston of Counsel, notes that the factual findings made by his Honour have not been challenged by the Telesto parties (an appeal from his Honour's judgment having been dismissed for want of appearance by the Telesto parties).

The first plaintiff (Telesto), described by Chong J at para [5] of his reasons as an underlying company of the Dog Star Trust (a purpose trust registered in Jersey in the Channel Islands), is incorporated in Jersey.

Mr Tyne (the second plaintiff in the present proceedings and a defendant in the Singapore proceedings) is a director (said at [6] of his Honour's reasons to be the controlling mind) of Pole Star Funds Management Pty Ltd, an Australian company through which Mr Tyne controlled the investments of Telesto. (Pole Star was described by Chong J in the Singapore proceedings as being, at all material times, in charge of Telesto's discretionary investment and the sole beneficial owner of the assets in Telesto's account with UBS AG).

An ASIC search in respect of Pole Star records Mr Tyne's address as director of the company as an address in the United Kingdom, that also being the address disclosed to UBS AG as Mr Tyne's address in the Guarantee. At least having regard to what seems to have transpired when attempts were made to serve Court documents in the Singapore proceedings on Mr Tyne at a Queensland address in late 2010, it appears that Mr Tyne is not infrequently overseas. However, Senior Counsel for the Telesto parties, Mr Stitt QC, has noted that Mr Tyne is currently resident in Australia.

Mr Tyne was described by Chong J (at [8]) as the common denominator of Telesto, Pole Star and the entity which is the third plaintiff in the present proceedings (to which I will refer, consistently with the terminology adopted by Chong J, as "Argot"). Argot is a company incorporated in Australia and the corporate trustee of the Argot Unit Trust. At [8] of his Honour's reasons, Chong J notes that Mr Tyne was at all material times the director of Argot and the sole beneficial owner of the assets held in Argot's (separate) account with the Singapore branch of UBS AG (opened in 2010).

UBS AG is a financial institution which carries on business in Singapore (and elsewhere) as a banker. Telesto opened an investment account with the Singapore branch of UBS AG on 3 December 2007.

From December 2007, Telesto entered into various facility arrangements with UBS AG, pursuant to which UBS AG made funds available to Telesto for the purpose of the purchase of various investments through Telesto's account with UBS AG (those facilities being a short term overdraft facility with a limit, as increased, of USD60 million; an Exchange Traded Derivative Trading Facility with a limit of USD100,000 and an OTC Foreign Exchange and Precious Metal Derivatives Trading Facility with a similar limit as the Exchange Traded Derivatives Facility). The respective facilities were put in place by the acceptance by Telesto of an initial Credit Services Notification Letter (CSNL) dated 12 December 2007 and subsequent CSNLs dated 13 February 2008, 1 June 2008 and 1 August 2008, respectively. Those facilities were to operate in accordance with UBS AG's Account Terms and Conditions (the respective CSNLs, together with the Account Terms and Conditions, being referred to as the Account Agreement).

Pursuant to the Account Terms and Conditions, Telesto's account and the facilities are "governed by and construed in accordance with the law of the country in which the relevant Account is booked" (that being, in the present case, Singapore) and Telesto, as the account holder, has submitted irrevocably and unconditionally to the non-exclusive jurisdiction of the courts of that country (clause 19.1).

The funds made available to Telesto under the UBS AG facilities were used to purchase various investments on or to Telesto's account, those investments relevantly including bonds issued by a number of financial institutions in Kazakhstan. Chong J noted that the investments were purchased under the Account Agreement with UBS AG and were secured by way of a Charge Over Asset, that charge described at [14] of his Honour's judgment as also securing all other assets in the account.

The UBS AG Terms and Conditions, under which the Telesto account operated, permit statements or confirmations issued in relation to investment transactions carried out under the Account Agreement to be retained in a Retained Mail account if (as was the case with Telesto's account) this had been the subject of an instruction under the relevant Account Mandate. The information contained in such a Retained Mail account is accessible electronically by the account holder. The Terms and Conditions also contain provisions under which there is a deemed approval and acceptance by the account holder of investment transaction statements and confirmations in the absence of notification within a specified time of any errors or inaccuracies in the account. These provisions were relied upon by UBS AG in the Singapore proceedings for the submission that Telesto was deemed to have agreed to the investments in question.

In the present proceedings it was noted that it had been open to Telesto (during the period in which UBS AG later sold the collateral and extinguished the debt owing under the facilities, which was prior to delivery of Chong J's judgment in 2011) to have ascertained the status of the investments in the account by electronically accessing the retained mail account or 'e-banking portal'. The evidence indicates that Telesto did not do so (and that it had not accessed the e-banking portal since June 2010), although there is no suggestion that UBS AG was aware at the relevant time that Telesto had not electronically accessed its retained mail account during the period in which the collateral was sold by UBS AG in reduction of the debt owing to it.

In September 2008, the value of the collateral provided by Telesto in respect of the borrowings under its facilities with UBS AG decreased, leading to a margin shortfall in its account and, over the period from September 2008 to late 2009, there were discussions between Mr Tyne and UBS AG (at least some of which took place in Singapore) as to the basis on which UBS AG might be prepared not to exercise its right under the terms of the facilities to sell the collateral or to make further margin calls in relation to amounts owing under the facilities.

On 26 September 2008, Mr Tyne executed a guarantee and indemnity in favour of UBS AG, under which he guaranteed all the obligations and liabilities of Telesto owing to UBS AG under the respective facilities. The guarantee was expressly said to be governed by "and construed in all respects in accordance with" the laws of Singapore. Mr Tyne has, under the Guarantee, submitted to the non-exclusive jurisdiction of the Singapore courts and such other jurisdictions as UBS AG might deem fit (clauses 27.1 and 27.2).

On 29 October 2008, UBS AG issued a Notice of Margin Call to Telesto, noting that the collateral provided by Telesto was no longer sufficient to meet the required margin in respect of Telesto's obligations and that, as at 28 October 2008, the shortfall was USD28,159,607. The Notice required Telesto immediately to deposit additional collateral (or, if applicable, to terminate or deal with transactions booked in its account) so as to restore the required margin.

The October 2008 margin call was not met and on 22 December 2008 UBS AG notified Mr Tyne that a Default Event had occurred and that the full amount of the "Total Liabilities" (as defined in the Account Agreement) was immediately due and payable. However, that letter went on to advise that "In recognition of your full cooperation to date", and subject to certain stated provisos, UBS AG would "suspend enforcement of its rights under the Account Agreement for the time being". The letter contained an express reservation of UBS AG's rights and, further, stated that nothing therein was to prejudice any right of UBS AG.

A proposed "Standstill Agreement" dated 23 April 2009 was forwarded to Telesto in April 2009 but that document was not signed by Telesto and there is no suggestion that a binding agreement on the terms contained in that document ever came into existence. Nevertheless, it appears that during this period no steps were taken by UBS AG either to enforce its rights in relation to the collateral or to make any further margin call.

The arrangements by which a standstill or suspension of enforcement by UBS AG of its rights in relation to the facilities was ultimately put in place were not finalised until December 2009 (after the default in May 2009 of some of the Kazakhstan investments which comprised part of the collateral and after further (unsatisfied) demands had been made, again in May 2009, on both Telesto and Mr Tyne).

By letter dated 14 December 2009, countersigned by Telesto by way of acceptance of those terms on 31 December 2009, (the Standstill Agreement) UBS AG set out the terms on which it agreed (without prejudice to its rights under the Account Agreement) not to liquidate the collateral or to make further margin calls or call for further collateral until 31 March 2011 or the occurrence of an earlier event of default. In consideration for that agreement of UBS AG, Telesto agreed, inter alia , to procure a letter of undertaking from Argot (as trustee of the Argot Unit Trust) in favour of UBS AG. (Also as part of the arrangements contemplated by the Standstill Agreement, Telesto and Argot assigned to UBS AG the proceeds of certain litigation brought against a third party in Victoria.)

On 28 January 2010, Argot executed the Letter of Undertaking. The Letter of Undertaking expressly stated that it was to be " exclusively governed by and construed in accordance with the laws of Singapore" and that the " exclusive place of jurisdiction for any disputes arising out of and in connection [therewith]" was to be Singapore (my emphasis). Under the Letter of Undertaking, Argot undertook to open an account with UBS AG and to charge all and any assets held within that account as a continuing security in favour of UBS AG to secure Telesto's liabilities to it. Argot also agreed to apply the proceeds of the Victorian litigation (the subject of the assignment referred to in [21] above) directly to the Argot account towards repayment of Telesto's liabilities to UBS AG. (The Argot account was opened on or about 14 May 2010. Chong J noted in his judgment that the Argot account is governed by Singapore law and subject to the exclusive jurisdiction of the Singapore courts.)

The Standstill Agreement (which contained no express choice of jurisdiction or choice of law clause) made provision for its termination on the occurrence of certain events of default, those including the failure of Telesto or Argot to comply with any of the conditions of the Letter of Undertaking; the failure of Telesto to comply with any of the conditions under the Standstill Agreement; and the occurrence (in the reasonable opinion of UBS AG) of a material adverse change in Telesto's financial condition or operating environment or of any event or circumstances causing UBS AG to believe that Telesto may not be able to comply with or perform any one or more of its obligations.

UBS AG has alleged (and Mr Stoljar submits, by reference to [32]-[34] of his Honour's judgment, that Chong J has found) that three events of default occurred under the Standstill Agreement in the period between 31 December 2009 and October 2010, including the making by Telesto's solicitors in Australia of claims against UBS AG in relation to what have been referred to as the "Kazakh Bonds", by reason of which UBS AG formed the opinion that Telesto might not, or might be unable to, perform or comply with any one or more of its obligations. It is contended that the effect of the occurrence of the Events of Default was that the Standstill Agreement was terminated and the amounts owed by Telesto under the facilities (and guaranteed by Mr Tyne) then became due.

It appears (having regard to the email communications referred to in the Telesto parties' submissions on the present application) that during that period there were communications between the parties on a without prejudice basis in relation to the account. The admissibility of those without prejudice communications must be doubtful but in any event there is other correspondence which indicates that by 8 October 2010 UBS AG was on notice of an intention or stated intention (on the part of at least Telesto) to commence proceedings in Australia in respect of matters in dispute between the parties in relation to the account.

The letter dated 8 October 2010 (relied upon by UBS AG as giving rise to an event of default under the Standstill Agreement) from Eakin McCaffery Cox (the solicitors acting for Telesto in Australia) was one in which UBS AG was advised that, the lawyers having been engaged "potentially [to] commence legal proceedings against UBS AG in Australia", they were instructed to commence proceedings against UBS AG on 16 October 2010 or as soon as practicable. The letter raised various allegations against UBS AG: the undertaking by UBS AG of a series of trades purportedly on behalf of Telesto without authority; the misrepresentation or omission by UBS AG of material facts in its promotion of debt securities issued by financial institutions in Kazakhstan; false and misleading conduct by UBS AG in relation to the provision of a financial service under Australian law; and the inducement by UBS AG of a financial institution in Kazakhstan to default upon debt securities issued by it in breach of its contract with third parties. (There was no express allegation of any breach of fiduciary duty by UBS AG as is now also made against it, though nothing turns on this.) The letter also adverted to the possibility of "collective legal action" by "purchasers of Kazakh bank debt" and sought details of any agent of UBS AG upon whom service could be effected in Australia on and from 16 October 2010.

On 11 October 2010, UBS AG issued a certificate of indebtedness (which, under the terms of the Account Agreement, was said to be conclusive) certifying the total liabilities due and owing from Telesto to UBS AG in respect of Telesto's account to be USD12,617,499.56 as at 14 October 2010.

On 15 October 2010 (ie, the day before the date on which Telesto's Australian lawyers had foreshadowed that service of court documents in Australia would or might occur), a number of steps were taken by UBS AG. It issued to Telesto a notice of termination of the Standstill Agreement, advising that Events of Default set out in the Standstill Agreement had occurred and that pursuant to the terms of that agreement it "has terminated, ceased to be binding on the Bank and is of no further effect". (Mr Stitt suggests that this was done in order to give rise to a liquidated sum able to be claimed by UBS AG and emphasises that, according to its terms, once terminated the Standstill Agreement was thereafter of no further effect.) In that notice of termination, UBS AG demanded payment of the Total Liabilities due as at 14 October 2010 in the amount that had on 11 October 2010 been certified as owing. UBS AG also issued to Mr Tyne, as guarantor, a demand for payment of the said total liabilities. Further, it commenced proceedings against both Telesto and Mr Tyne in the High Court of Singapore. (Argot was not joined as a party to those proceedings.)

In its Statement of Claim filed in the Singapore proceedings, UBS AG not only sought recovery of the Total Liabilities then owing under the facilities and indemnity costs, it also sought declaratory relief (namely, a declaration that Telesto and Mr Tyne "are estopped from asserting, and/or have compromised, any claims or defences they may have arising out of, or in relation to, the Investments and/or the Total Liabilities, including, but not limited to, the acquisition or management of the Investments and/or the Total Liabilities". The capitalised terms in the declaration so sought were as defined in the Statement of Claim: "Investments" being a reference to the investments, including bonds, purchased for the account by utilization of the facilities; "Total Liabilities" referring to the definition contained in clause 1 of the General Account Terms and Conditions.) By reference to the fact that declaratory relief was sought from the outset, Mr Stoljar submits, and I accept, that it is incorrect for the Telesto parties now to characterise the Singapore proceedings as primarily a monetary claim.

The declaration claimed in prayer 1 of the Statement of Claim does not in its terms source the estoppel/compromise in the terms of the Standstill Agreement itself. In the body of the pleading, the estoppel (and/or compromise) is pleaded as arising " by reason of the Standstill Agreement, alternatively, the Implied Agreement" ([25]) (my emphasis). The reference to an Implied Agreement is a reference to the implied agreement alleged in [24] of the Statement of Claim, namely an implied agreement by the defendants (Telesto and Mr Tyne) to waive and/or not to raise any claims or defences they may have arising out of, or in relation to, the Investments and/or the Total Liabilities, including, but not limited to, the acquisition or management of the Investments and/or the Total Liabilities. The implied agreement is pleaded as having arisen "[b]y, and in consideration of" the entry by UBS AG into the Standstill Agreement and the conferral on (and receipt by) the defendants of the benefits under the Standstill Agreement. Hence, the fact that the Standstill Agreement expressly provides that it is of no further effect once terminated would not of itself appear to preclude reliance by UBS AG on an estoppel or compromise arising from the fact of entry into the said agreement or the conferral and receipt of benefits thereunder.

By letter dated 18 October 2010, Eakin McCaffery Cox responded, on behalf of both Telesto and Mr Tyne, to the 15 October 2010 letters in which the demands on termination of the Standstill Agreement were made, advising that they would now commence proceedings against UBS AG and would effect service in Singapore.

Also on 18 October 2010 (but it is not clear whether this was before or after receipt of the above communication), a request was made on behalf of UBS AG of the solicitors then acting for Telesto and Mr Tyne in Singapore for instructions as to whether those Singapore solicitors were authorised to accept service on behalf of the Telesto defendants of the UBS AG writ in the Singapore proceedings. (The making of such a request thus put the Singapore solicitors on notice of the commencement of proceedings in Singapore at a time before any proceedings in Australia had been commenced.)

Instructions to accept service not apparently being forthcoming, an application was then made by UBS AG in Singapore for leave to serve the writ out of the jurisdiction and an order for service out of the jurisdiction of the originating process in the Singapore proceedings was made on 19 October 2010.

The writ in the Singapore proceedings was served on Telesto in Jersey on 5 November 2010 (and a Memorandum of Appearance was subsequently filed on Telesto's behalf in the Singapore proceedings on 24 November 2010). As far as service on Mr Tyne was concerned, a copy of the writ was sent by first-class registered post to the UK address nominated in the 2008 Guarantee executed by him. (The Guarantee makes express provision for service by such means and deems this to be good and effective service - clause 27.3.) However, the envelope containing the writ was returned unopened (bearing a postal sticker dated 23 October 2010 and recording delivery as having been "refused"), at which point enquiries were again made of the Singapore solicitors as to acceptance of service on Mr Tyne's behalf of the writ (and again those instructions were not forthcoming). Orders were then made in Singapore to permit service of the writ on Mr Tyne by leaving a copy at a Queensland address or care of his Sydney solicitors. Service was duly effected on Mr Tyne in Sydney, by way of service on his solicitor, on 14 December 2010. (At [43] of his Honour's judgment, Chong J comments that the delay in service of the Singapore writ was probably due to the fact that Telesto's previous solicitors in Singapore did not agree to accept service on Telesto's behalf and hence it was necessary for UBS AG to apply for service of the writ out of the jurisdiction.)

Meanwhile ( after commencement of the Singapore proceedings but before service of the writ on either Telesto or Mr Tyne) the present proceedings were commenced by the Telesto parties (including Argot which, as noted earlier, had agreed that Singapore was the exclusive jurisdiction to which the Argot account was subject). A Summons and a Commercial List Statement were filed in this Court on 2 November 2010 (both having since been amended) and service of those documents was effected on UBS AG in Singapore on 3 November 2010 (two days prior to service of the writ in the Singapore proceedings on Telesto in Jersey).

In the New South Wales proceedings, the Telesto parties have sought declaratory relief (namely, a declaration that the investment transactions "purportedly" entered into between 14 January and 11 February 2008, referred to as the Kazakh Bonds, were entered into by UBS AG without Telesto's authority) as well as orders for the avoidance ( ab initio or from a later date) of the relevant transaction documents (including the facilities, the guarantee, the Standstill Agreement and the Letter of Undertaking signed by Argot) or, alternatively, orders to restrain UBS AG from taking any action to enforce any right or entitlement arising under any such instrument. By way of consequential relief, damages; statutory damages or compensation pursuant to various Acts; and equitable compensation are sought.

Having regard to the above chronology of events, it is apparent that, as at the time UBS AG commenced its proceedings in Singapore, it was on notice that at least one of the Telesto parties (Telesto) had expressed an intention, through its lawyers, to commence proceedings against UBS AG in Australia in relation to matters going to the validity or enforceability of the transactions the subject of the monetary claim by UBS AG in its writ in the Singapore proceedings (although UBS AG was not by then aware of the precise way in which the claim was to be pleaded against it, simply of the allegations that had been contained in the 8 October correspondence) - a fact relied upon by Mr Stitt in support of his contention (disputed by UBS AG) that UBS AG has had an agenda to frustrate the New South Wales proceedings.

However, it is also the case that, as at the time the Telesto parties commenced the present proceedings in this State, their solicitors in Singapore were on notice (and so, Mr Stoljar submits, through them also were the Telesto parties), through the requests made in relation to the service of process in that jurisdiction, that proceedings had already been commenced by UBS AG in Singapore against Telesto and Mr Tyne. (Again, however, neither Telesto nor Mr Tyne was at that stage on notice of the precise claims being made against them in the Singapore proceedings, not yet having received the writ in those proceedings.)

Pausing there, I do not consider that any adverse inference (of an intention to frustrate proceedings in this Court that had been foreshadowed but were not yet on foot) should be drawn from the commencement by UBS AG of the proceedings in Singapore simply because UBS AG was then on notice of an asserted intention of Telesto to commence proceedings in New South Wales (any more than an inference should be drawn that the Telesto parties, being on notice through their Singapore solicitors of a request to accept service of process, that might suggest that proceedings of some kind had been commenced against one or more of them in Singapore, were seeking to frustrate the Singapore proceedings). What seems to me to have occurred is that both parties were in the throes of commencing proceedings at or about the same time and were seeking to do so, as most if not all plaintiffs do, in the forum of their own choosing.

In the New South Wales proceedings, the Telesto parties contend that the Kazakhstan investments were not properly authorised; that UBS AG has breached a duty of care owed to each of the Telesto parties and/or has engaged in misleading or deceptive conduct in breach of various statutory prohibitions thereon (in relation to advice given in respect of the investments and an alleged failure to disclose certain matters in relation to the investments); and that UBS AG has breached fiduciary duties owed to them (most of those matters having been the subject of allegations contained in the 8 October correspondence).

In respect of the lack of authority issue, it is alleged that UBS AG had been advised by Mr Tyne in mid 2008 that Pole Star (the investment manager of Telesto's investment portfolio) had limited authority and that express authority was required for investment in securities other than "investment grade" debt securities.

As to the claim in tort or for misleading and deceptive conduct, this relates to the alleged giving of oral recommendations and advice to Mr Tyne, in various telephone conversations in late 2007, in relation to the "Kazakh Bonds" and the alleged failure of UBS AG to disclose certain matters in relation thereto. The said recommendations or advice are attributed, inter alia , to what was said in one or more telephone conversations between Mr Tyne, who was apparently in Australia at the time, and an officer or employee then but no longer employed by UBS AG and then resident in Singapore (Mr Betsalel), about whom I will say more later.

As to the alleged breach of fiduciary duties said to have been owed to Telesto in relation to the account, it is alleged that UBS AG acted as advisers to one of the Kazakhstan financial institutions (the institution that had defaulted on payment of coupons owed to bond holders, including Telesto, in May 2009) and that the decision by that Kazakhstan institution to default on coupon payments was on advice given by, or with the concurrence of, UBS AG.

On 11 November 2010, steps were taken by UBS AG to resolve the question of the forum in which the parties' disputes should be determined. It commenced proceedings in Singapore joining each of the Telesto parties (including Argot who, as noted above, was not a party to the Singapore proceedings commenced the previous month), seeking an anti-suit injunction against them and on 9 December 2010, an application was made by UBS AG (by notice of motion in this Court) for a temporary stay of the New South Wales proceedings pending determination of its application for an anti-suit injunction in Singapore. Consent orders were made (without prejudice to the position of the parties in the anti-suit application) for such a stay. (From March 2011, successive adjournments of these proceedings have been ordered by this Court, with the result that no Commercial List Response has yet been required to be filed by UBS AG in the proceedings in this Court.)

On 21 December 2010, Telesto applied in Singapore for a stay of the Singapore proceedings on the basis of forum non conveniens (thus itself invoking the jurisdiction of that court to determine the issue as to where the disputes should be heard). Mr Tyne in turn filed a similar stay application in the Singapore proceedings on 10 January 2011.

The respective anti-suit and stay applications came before Assistant Registrar Tan in the High Court of the Republic of Singapore on 11 February 2011. At that time the total liabilities claimed from Telesto by UBS AG were in excess of USD12m. That was also the case on 21 February 2011, when the Assistant Registrar made orders in chambers dismissing the applications by Telesto and Mr Tyne for a stay of the Singapore proceedings on the ground of forum non conveniens and granting an anti-suit injunction against Telesto, Mr Tyne and Argot from prosecuting or continuing to prosecute the Australian proceedings.

The orders made in February 2011, relevantly, were in terms that:

1. The Defendants [ie the Telesto parties] are to forthwith withdraw and discontinue, and are hereby restrained from prosecuting, or continuing to prosecute [the New South Wales proceedings].

2. The Defendants be and are hereby restrained from commencing or continuing any further or other proceedings of any nature in Australia or anywhere else in the world against the Plaintiffs arising from, relating to, and in connection with [any of the matters specified in paras (a) - (n), which relevantly include the UBS AG account; the various transaction documents; the Standstill Agreement; any alleged breach of fiduciary duties by the plaintiffs on account of the engagement of UBS Limited in relation to the crisis in Kazakhstan banks; and "any and all claims or defences the Defendants may have arising out of, or in relation to, the Investments and/or total liabilities ... including, but not limited to, the acquisition or management of the Investments and/or the Total Liabilities"] ...

otherwise than in the High Court of the Republic of Singapore.

The orders made by the Assistant Registrar also noted the agreement of the parties that, notwithstanding orders [1] and [2], in the event that an appeal were to be filed against the Assistant Registrar's decision, no steps were to be taken in the New South Wales proceedings (which were to be suspended pending disposal of the said appeal).

On 28 February 2011, the Telesto parties lodged notices of appeal from the orders made by Assistant Registrar Tan.

During March 2011, UBS AG informed Telesto in writing of its intention to take steps to realise the collateral in Telesto's account and to apply the proceeds to reduce the liabilities owing in respect of the account (see letters dated 8 March 2011 and 24 March 2011 exhibited to the affidavit affirmed 7 November 2011 of UBS AG's solicitor, Ms Mills).

On 16 May 2011, the appeals from the decision of Assistant Registrar Tan were heard by Chong J in the High Court of Singapore. By this time, the Total Liabilities owing by Telesto had been reduced, by way of realisation of part of the collateral held by UBS AG, to a sum of around or in excess of USD5 million. His Honour reserved judgment. The appeals were subsequently dismissed on 14 July 2011 (by which time the Total Liabilities owing under the facilities, recovery of which had been sought in the Singapore proceedings, had been wholly discharged).

Mr Stitt places weight on the fact that Chong J was not notified by UBS AG, prior to delivery of his reasons for judgment, of the extinguishment of the debt claimed in the proceedings (submitting that UBS AG was obliged to act with equity and good conscience when seeking the anti-suit injunction and should have notified Chong J before judgment that the debt no longer existed; and that had this been made known to his Honour this might have had a determinative effect on the decision whether to grant relief at all and as to costs) as again suggestive of an agenda on the part of UBS AG to frustrate proceedings in this Court. UBS AG does not accept that it had an obligation so to inform his Honour and does not accept that there is any reason to have expected that this was a fact that would have been relevant to his Honour's decision (having regard to the basis on which his Honour determined the application).

I consider in due course what weight, if any, should be placed on the non-disclosure of this matter to Chong J. Suffice it at this stage to note that the submission that UBS AG did not act with good conscience with respect to the proceedings in Singapore and the obligations owed to the Court in this regard sits somewhat uncomfortably with the fact that the Telesto parties are themselves in apparent breach of orders made against them in Singapore. It does not seem to be disputed that the anti-suit injunction granted in February 2011 (and which as a consequence of Chong J's dismissal of the appeal has not been discharged) remains in place. Nor was it suggested that the injunction was not binding on each of the Telesto parties; rather, it is contended for the Telesto parties that the subsistence of the anti-suit injunction is not determinative of the application now before me. Mr Stoljar notes that in the context of the present application the Telesto parties have taken positive steps in the proceedings (contrary to the terms of the anti-suit injunction) in that they have served a Notice to Produce and have also taken steps to resist the present application for a stay. Needless to say, there has been no compliance with the order that the Telesto parties withdraw or discontinue the New South Wales proceedings.

On 25 July 2011, the Telesto parties filed an application for leave to appeal from the decision of Chong J but there was no appearance for them at the hearing of that application, which was dismissed on 16 September 2011. The present notice of motion was filed by UBS AG on 24 October 2011.

UBS AG has confirmed that it will continue to prosecute the Singapore proceedings in order to seek judgment on its claim for declaratory relief and indemnity costs. I was informed that the Singapore proceedings were listed for a pre-trial conference only a few days after the hearing of the present application before me but I am not aware what directions, if any, were made on that occasion for the preparation of the matter for trial. As at the time of the application before me, I understand that no defence had yet been filed by Telesto or Mr Tyne in the Singapore proceedings. (This is relevant when considering the likely ambit of the proceedings in Singapore now that the debt owing to UBS AG has been extinguished.)

After having reserved my decision on the present application, I was appraised by the solicitors acting for the respective parties of various matters: first, that Mr Betsalel (the ex-employee of UBS AG whose compellability or otherwise to give evidence in New South Wales was a matter that Chong J had considered relevant, though not determinative, when determining the stay application) had relocated from Singapore to Hong Kong, though the Telesto parties' solicitors subsequently advised that Mr Betsalel had since altered his instructions to state that he may not now be moving to Hong Kong; and, secondly, that Argot was deregistered on 8 January 2012 (though the Telesto parties' solicitors have advised that Mr Tyne is taking action to have the company restored to the register and have referred to their client's instructions to the effect that the deregistration occurred in error or by inadvertence).

As to Mr Betsalel's position, Eakin McCaffery Cox have advised (and this is consistent with the submissions made by Mr Stitt during the hearing) that Mr Betsalel has confirmed he is prepared to give evidence for the Telesto parties and to travel to Australia for cross-examination (a matter the subject of evidence and/or submissions before Chong J); the solicitors for UBS AG, Mallesons Stephen Jaques, have reiterated the submissions made by Mr Stoljar at the hearing of this application as to the views expressed by Chong J in that regard and have indicated that they are not aware of Mr Betsalel's present address (and hence that they have not been able to contact him).

Judgment of Chong J

Before turning to the issues for determination, I summarise below the relevant findings made in the reasons for judgment handed down by Chong J in the High Court of Singapore on 14 July 2011 when dismissing the respective appeals by the Telesto parties. (While UBS AG contends that an issue estoppel arises in respect of many of the findings of fact made by his Honour, I note that in each instance that will depend on whether the factual finding was necessary in the reasoning that led to determination of the relevant issue. That said, on a number of the factual issues there does not seem to have been any serious dispute before his Honour or at least no reference to such in his Honour's reasons for judgment.)

His Honour observed that both appeals related to the issue as to which of the two jurisdictions (Singapore and Australia) was "the more appropriate forum to hear and decide the dispute between the parties arising from a customer-banker relationship" ([1]). His Honour also noted the concession made by Counsel appearing for the Telesto parties in Singapore (an important concession in Mr Stoljar's submission) that their claim in Australia could essentially be mounted as a defence to the claim by UBS AG in the Singapore proceedings ([2]), his Honour later describing the respective positions of the parties on the ultimate issue in dispute as being two sides of the same coin ([57]) (ie, whether UBS AG is entitled to repayment of the Total Liabilities under the contractual documents or whether the defendants were entitled to rescission or damages in respect of the investment in the Kazakh Bonds).

Insofar as it was submitted by Mr Stitt on the present application that the New South Wales proceedings are not, as Chong J considered they were (and, relevantly, as Counsel for the Telesto parties in Singapore seems to have conceded), "essentially in the nature of defences to avoid liability to the claims bought by UBS AG in the Singapore proceedings" or "two sides of the same coin" or "in truth the defences against the claim by UBS AG", Mr Stitt stating that the claim for damages under the Trade Practices Act greatly exceeds the amount that was claimed by UBS AG in the Singapore proceedings and persists despite the Telesto debt having been extinguished, Mr Stoljar submits that the concession made in the Singapore proceedings was correct and was properly made but that in any event the Telesto parties should not now be permitted to depart from it. This in my view reinforces the concern expressed by UBS AG as to the re-litigation of issues already determined in those proceedings. The concession made by the Telesto parties' own Counsel in Singapore, which was noted by his Honour and seems to have been relied upon as support for the conclusions that Chong J reached on his own analysis of the pleadings (see [2], [57] and [85]) is one from which the Telesto parties should not now be permitted to resile (at least not without any explanation for the apparent withdrawal from that concession).

At [37], his Honour noted that to that date neither Telesto nor Mr Tyne had made payment of the sum demanded of them. (This indicates that his Honour was of the belief that the full amount of the Total Liabilities remained outstanding at that stage. It is not disputed in the present proceedings that the debt in respect of the Total Liabilities was fully extinguished in late June 2011, his Honour's judgment being handed down about two weeks later.)

His Honour noted that at the hearing of the appeals he had directed Counsel for the Telesto defendants to proceed first with the appeal in relation to the stay applications on the basis that if it were to be decided that a stay of the Singapore proceedings should be granted (on the ground that Singapore was not the more appropriate forum to try the matter) then logically the appeal against the decision to grant the anti-suit injunction would be allowed but that the converse was not the case (since the fact that Singapore was the natural or more appropriate forum to hear the dispute did not per se mean that the anti-suit injunction must necessarily be ordered - that also depending on whether other requirements were established by UBS AG to justify the grant of an anti-suit injunction, such as whether the Australian proceedings were vexatious and/or oppressive) ([49]).

In considering the appeal from the decision on the stay application on the basis of forum non conveniens , Chong J applied (and noted that the parties were ad idem as to the applicability of these principles) the principles laid down in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460. His Honour noted that the first stage of the Spiliada test required that the Telesto defendants establish that Australia was clearly or distinctly the more appropriate forum to try the dispute (that not being the issue to be determined on a forum non conveniens application in this Court).

In considering the various connecting factors for the purpose of the application of this test, his Honour accepted UBS AG's submission that the Standstill Agreement was governed by Singapore law, noting that it was not a "standalone contract" but was executed to supplement and/or modify the rights and obligations of the parties under the Account Agreement ([64]). (His Honour also noted the concession by the Telesto defendants' Counsel during the hearing that Singapore was clearly the natural forum for the determination of the claims by UBS AG under the various contractual documents ([66]).

In considering the Telesto defendants' submission that Australia was the more appropriate forum to try the matter having regard to the allegations as to misrepresentations by UBS AG said to have been received and acted upon by Mr Tyne in Australia (which his Honour said was "admittedly the only connection which the dispute has with Australia" [71]), his Honour found that the place of the tort of misrepresentation was Singapore and not Australia ([80]). At [79], Chong J had observed that "It is pertinent to point out that the tort in the present case did not occur without a contractual context: but for the banking relationship between UBS AG and Telesto which stemmed from the various banking instruments between the two parties, Mr Betsalel and/or Mr Farrell would not have spoken to Mr Tyne about the Kazakh Bonds to begin with".

His Honour nevertheless went on to observe that even if the tort had occurred in Australia in his view that was not in his view in and of itself sufficient to displace Singapore as the natural forum to determine the entire dispute. (Thus it cannot be said that the finding by his Honour as to the lex loci delicti for the tort of misrepresentation was fundamental to his Honour's conclusion on the stay application so as to give rise to an issue estoppel.)

Mr Stoljar submits that the finding by Chong J that the place of reliance on Mr Betsalel's alleged misrepresentation was Singapore (and hence that the lex loci delicti for the tort for misrepresentation was Singapore and not Australia) ([80]) was correct, the alleged misrepresentations having been acted upon by communication of instructions to officers of the bank in Singapore. For the reasons I set out later, I do not accept that submission.

Chong J concluded that at [87] that "The attempt to displace Singapore as the natural forum for UBS AG's claim [by asserting what his Honour described as "essentially a tortious defence in the guise of a claim in Australia"] ... is disingenuous" and that the stay application was nothing more than an instance of forum shopping by the Telesto defendants.

At [88], his Honour held that Singapore was not only the natural forum of the dispute but was clearly and distinctly the more appropriate forum for the determination of the dispute between the parties. On that basis his Honour dismissed the appeal against the decision not to grant a stay of the Singapore proceedings. Accordingly, his Honour's consideration of the second stage of the Spiliada test, namely as to whether the ends of justice required the stay of the proceedings, was in that sense obiter . Nevertheless, the conclusion reached by his Honour in relation to the second stage of the Spiliada test (in particular, as to the claim by the Telesto defendants that if the stay were not granted they would be deprived of the juridical advantage of pursuing the statutory claims for misleading and deceptive conduct available to them in this jurisdiction) formed part of the reasoning in relation to his decision on the anti-suit injunction and thus was not obiter in that context.

In the Singapore proceedings, the Telesto defendants relied upon an expert opinion from Senior Counsel in New South Wales (Mr J T Gleeson SC) as to the relevant Australian legislation and the juridical advantages available to the Telesto defendants thereunder (those being, broadly, the reversal of the evidentiary onus where the representation in question is as to a future matter; the absence of any requirement for the plaintiff to prove or plead intent, negligence or carelessness in the conduct alleged to be misleading or deceptive; the "remedial smorgasbord" provided by the legislation; issues as to causation, remoteness/foreseeability, and the lack of any constraint imposed by limitations on the right to rescind for misrepresentation at common law).

Chong J noted that Mr Gleeson did not conclude that the differences he had identified would make a material bearing on the outcome of the dispute given the specific facts of the case ([97]). His Honour, having reviewed the opinion of Mr Gleeson and having compared it with the position under the law of Singapore in relation to the same issues, concluded that there were no significant or material differences which would make it unfair or unjust for the case to be heard in Australia and hence that, had stage one of the Spiliada test had been satisfied (which it was not), UBS AG would not have satisfied the burden of proof under stage two of the Spiliada test ([96]). (The corollary of this, relevant for the purposes of the appeal in relation to the grant of the anti-suit injunction, was that his Honour considered that the Telesto defendants would not be deprived of any substantial juridical advantages if not able to pursue their claims in the New South Wales proceedings.) His Honour concluded that although there may be some differences between the relevant laws of the two countries they did not translate into any material difference on the specific facts of the present dispute ([101]).

As to the differences (and potential advantages for a claimant) between the Australian statutes proscribing misleading conduct and the laws of Singapore, Mr Stoljar submits that the finding by Chong J (at [92]-[95]) (that these did not translate into any material differences on the specific facts of the present dispute and did not displace the natural forum (Singapore)) was based upon a close analysis of the specific allegations of misrepresentation made in the New South Wales proceedings ([96]-[101]). He further submits that the conclusion that the alleged representations were not with respect to "future matters" (but, rather, were as to present facts pertaining to the status or suitability of the Kazakh Bonds [99]) is binding on the Telesto parties. Insofar as that was a finding on a question of law that was a fundamental or necessary part of the reasoning on the determination of the anti-suit injunction, I accept that an issue estoppel would arise on that issue (even if that might not have been the conclusion that would be drawn in this jurisdiction - and I make no comment as to whether that would be the case).

Having dismissed the appeal in relation to the stay application, his Honour turned then (from [106]) to consider the appeal in respect of the anti-suit injunction, noting that an anti-suit injunction is not invariably granted whenever a stay is refused; that such jurisdiction must be exercised with caution; and that such an injunction should only be granted and justified in the clearest of circumstances that the foreign proceedings are vexatious or oppressive [109].

Chong J then considered the five factors set out in [108] of his judgment, relevantly applying in this regard his findings that Singapore was the natural forum of the dispute and that there were no differences of sufficient materiality between Australian and Singapore law on the common issues in dispute (the latter in answer to the submission for the Telesto defendants that injustice would be caused to them if the anti-suit injunction were maintained because they would be deprived of substantial juridical advantages under Australian law).

His Honour found that the institution of the proceedings in this Court was not in breach of any contractual obligation other than Argot's Letter of Undertaking. In regard to Argot his Honour accepted that there was no issue of parallel proceedings so far as Argot was concerned, as it was not a party to the Singapore proceedings, and he accepted that, while its claim in isolation could be construed as a breach of the exclusive jurisdiction provision, that breach would assume significance only if the commencement of the proceedings by Telesto and Mr Tyne "is somehow wrongful and/or vexatious", since it hinged on the outcome of the declaratory relief sought by those parties in the Australian proceedings - thus his Honour considered that the fate of Argot's claim in the Australian proceedings would abide the outcome of the analysis vis a vis the other Telesto defendants' claims ([113]).

His Honour explicitly approached the matter on the basis that, in order to justify the continuation of the anti-suit injunction, it was necessary for UBS AG to prove vexatious and/or oppressive conduct independent of the non-exclusive jurisdiction clauses [127], noting that the vexatious or oppressive ground is a separate and independent basis for an anti-suit injunction ([128]). His Honour there applied the following passage at [12-073] in Dicey, Morris & Collins on Conflict of Laws vol 1:

[12.073] In the result, an injunction may be granted if England is the natural forum for the resolution of the dispute and the proceedings in the foreign court are vexatious or oppressive. English courts have refrained from giving a comprehensive or limiting definition of these expressions; indeed, they have deliberately refrained from marking the outer extent of their power to act to restrain conduct which may give rise to injustice or, if the need for caution is given its due weight, serious injustice. It has been held that vexation or oppression may be indicated by the following: subjecting the other party to oppressive procedures in the foreign court, especially a party with no substantial connection with that jurisdiction; bad faith in the institution of the proceedings, or the institution of proceedings which are found to fail, extreme inconvenience caused by the foreign proceedings; multiplicity of actions, especially where the foreign action might spawn further consequential litigation which might not be reconcilable with the foreign decision; bringing proceedings which interfere with or undermine the control of the English court of its own process; bringing proceedings which could and should have formed part of an English action brought earlier; bringing proceedings for no good reason in a court which will disregard an express choice of English law . (my emphasis)

Chong J considered matters such as whether the institution and maintenance of the New South Wales proceedings amounted to subversion of the choice of law clauses in the respective transaction documents; the timing of the commencement of the proceedings in Australia (in the context of which his Honour said he would be slow to impute to Telesto any ulterior motive of 'getting ahead' before the Singapore proceedings, given that the Australian proceedings had been foreshadowed by Telesto in advance), his Honour according little weight to the order in which the claims were brought in the competing jurisdictions (as this would encourage a 'rush to fire the first shot'); and the possibility of there being conflicting judgments in the context of the non-exclusive jurisdiction clauses in the parties' agreements.

His Honour then proceeded on the basis that if UBS AG were able to show that the Telesto defendants would not suffer injustice if the foreign proceedings were restrained then an anti-suit injunction should be granted since the Singapore court was the natural forum of the dispute ([150]). Summing up his views in that regard, his Honour concluded that the commencement of the Australian proceedings was not in breach of contract (apart from the position of Argot); that there was no presumption that the multiplicity of proceedings was vexatious; that the possibility of conflicting decisions, while undesirable, was not in and of itself vexatious or oppressive; that the claims and issues in both proceedings were essentially similar though not identical; and that, although there might be some differences between the respective laws on the common issues, those differences were overstated and not of sufficient materiality to displace the natural forum, Singapore ([151]).

His Honour noted that there had been heavy reliance by the Telesto defendants on the perceived juridical advantages of suit in Australia as leading to the conclusion that the defendants would suffer injustice if the anti-suit injunction were not discharged. At [153], Chong J (having earlier noted that the court will not grant an injunction if by so doing it will deprive the respondent of advantages in the foreign forum of which it would be unjust to deprive him) said this of the rationale for the proposition that in order to justify the grant of an anti-suit injunction the applicant must show that the forum court is the natural forum and that justice does not require that the action should nevertheless be allowed to proceed in the foreign court:

... if there is no advantage which the defendant would be deprived of if the foreign proceedings are restrained, then there is no reasonable explanation for not defending or pursuing the claim in the natural forum. Consequently, the court is entitled to conclude or infer that the defendants in instituting such foreign proceedings are indeed acting vexatiously or oppressively . (my emphasis)

His Honour's finding of vexatious and oppressive conduct was predicated on the finding that there were no differences of sufficient materiality between the respective countries' laws on the issues in dispute, and hence that it must follow that there would be no injustice to the defendants if the Australian proceedings were restrained and that the loss of the alleged juridical advantages did not render it "unjust" for the dispute to be heard and determined in the jurisdiction which he found to be the natural forum. His Honour said:

In the premises, it must follow there would be no legitimate reason for the defendants to pursue the Australian Proceedings. In any event, even if the differences can amount to some juridical advantages (which I have determined to be overstated), the court can still grant the anti-suit injunction particularly in this case since the advantages are only available in the Australian Proceedings which is not the natural forum of the dispute.... There is no reason for a different outcome [from that in Bhojwani and Evergreen International to which his Honour had referred], on the specific facts of the case especially given my finding that Australia is not the natural forum of the dispute. (my emphasis)

The question of the compellability of Mr Betsalel, while a matter to which his Honour had regard and which he commenting was something that could not be overemphasised, was one that was not determinative of the issue, his Honour pointing out that he would have arrived at the same conclusion even if the compellability of the witness had not arisen as an issue.

The basis for his Honour's express finding (at [156]) that the Telesto defendants were acting vexatiously and/or oppressively in instituting and continuing with the proceedings in this Court (so as to warrant the maintenance of the anti-suit injunction), therefore, was that Singapore (a jurisdiction to which the Telesto defendants were amenable) was the natural forum for the dispute and that there was no material advantage to the prosecution of the proceedings in this Court of which it would be unjust to deprive the Telesto defendants (from which his Honour inferred that the institution and continuation of the proceedings in this court by the Telesto defendants was vexatious and oppressive).

Fundamental to his Honour's reasoning was the conclusion that there were no substantial or material differences in the relevant laws applicable in the respective jurisdictions which would make it unjust for the Telesto defendants to be deprived of the opportunity to pursue their claims in this jurisdiction.

Thus, insofar as Mr Stitt contends that the New South Wales proceedings entail claims under the Trade Practices Act that Telesto could not prosecute in Singapore and submits that the uncontested expert evidence when the matter was before Chong J was that a Singaporean court would be unlikely to apply the Trade Practices Act and that there was no equivalent to the Trade Practices Act in Singapore, this seems inconsistent with the basis on which Chong J reached the above conclusion. In particular, to the extent that Chong J concluded (by reference to his analysis of the pleadings and his knowledge of the law in Singapore), having expressly taken into account Mr Gleeson's opinion, that, if Telesto and Mr Tyne were able to adduce evidence in the Singapore proceedings to prove the facts pleaded in paragraphs [40] and [41] of the Amended Commercial List Statement in the present proceedings, then they should be able to establish a prima facie case of misrepresentation under Singapore law, which his Honour seems to have treated as having an equivalent operation in this case, then it seems to me that this gives rise to an issue estoppel and it would not be open to the Telesto parties now to re-open that issue. (Chong J noted that under Singapore law, on a claim of misrepresentation the legal and evidential burden would be on UBS AG to prove that it did not act dishonestly, recklessly, carelessly or negligently in making the alleged misrepresentations, in order for UBS AG to succeed in proving its case on the balance of probabilities) (see his Honour's judgment at [99]-[101], [155]).

Issues for determination

With the above factual background in mind, I turn to the particular issues for determination. The test applicable in this Court on an application for a permanent stay of proceedings in favour of other proceedings, as recognised in CSR v Cigna [1997] HCA 33, (1996-7) 189 CLR 345, is that which was stated in Voth , applied in Henry v Henry (1996) 185 CLR 571 and Regie National des Usines Renault SA v Zhang [2002] HCA 10, and more recently affirmed in Puttick v Tenon Ltd [2008] HCA 54; (2008) 234 CLR 265; namely, that a stay is to be granted only if the Australian court is a clearly inappropriate forum (that being the test propounded by Deane J in Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 242, 248, 251-255, and not the test stated in Spiliada as was applicable on the determination of the stay application in Singapore). The question for the Court focuses on the advantages and disadvantages of the forum (rather than the comparative exercise required by Spiliada ).

(i) Comity

The first basis on which UBS AG relies in support of the stay application is by invocation of the principle of comity, having regard to the anti-suit injunction granted by the High Court of Singapore. It is submitted that the jurisdiction to grant that injunction was there enlivened by the tendency of the present proceedings to interfere with the due process of the Singapore court and that considerations of comity require that (at least in the absence of exceptional circumstances) this Court should be slow to permit or require a party to engage in any act or omission which contravenes such an injunction.

As noted above, Chong J, in considering the appeal against the grant of the anti-suit injunction, articulated the caution that must be exercised on such an application and the need for the clearest of circumstances to be shown by the applicant for such an injunction; his Honour clearly having in mind the principles of comity applicable in that context. Mr Stoljar submits that the corollary to the recognition that real consideration must be given to the principles of comity in the exercise of discretion to grant an anti-suit injunction is that those same principles of comity require this Court (in the absence of exceptional circumstances) to accord recognition to the anti-suit injunction so granted.

In CSR v Cigna , the High Court considered what is meant by comity in this regard, the majority referring to the explanation given by the Supreme Court of the United States in Hilton v Guyot (1895) 159 US 113 at 163-164:

"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.

and going on to observe that it is for this reason that the cases emphasise that the power to grant injunctions in restraint of foreign proceedings should be exercised with caution (whether the injunction is sought in the exercise of the inherent or equitable jurisdiction of the court).

Mr Stitt maintains that a permanent stay of New South Wales proceedings because of a foreign anti-suit injunction would amount to the enforcement of a foreign injunction that would not otherwise be enforceable (noting that at common law a foreign judgment was never enforceable unless for a debt or definite sum of money: Sadler v Robins (1808) 170 ER 948 and citing the observation in Mortensen, Private International Law in Australia (2006), p137 to the effect that there is no reported instance of a court of equity enforcing a foreign order of specific performance or injunction or its equivalent).

Mr Stoljar accepts that an anti-suit injunction operates in personam . However, he draws a distinction between the recognition by this Court of the grant by a foreign court of an anti-suit injunction and its enforceability . Mr Stoljar submits that it cannot be the case that the enforceability in Australia of a foreign anti-suit injunction is a prerequisite to the courts of this country recognising and giving due weight to the judicial act constituted by the making of such an injunction.

The question as to what recognition is to be accorded to the grant of an anti-suit injunction by a foreign court (or, perhaps more precisely, how any such recognition is to be manifested in proceedings brought or continued in the local court in defiance of such an injunction) has not often arisen for consideration (perhaps, as Mr Stoljar suggested, because parties bound by such an injunction might ordinarily be expected to act in compliance therewith). However, the issue arose for consideration in Victoria in litigation arising out of disputes involving Lloyd's 'names', on the various decisions in which emphasis was placed by both UBS AG and the Telesto parties (from a different perspective of course).

In 1997, the Commonwealth Bank of Australia commenced proceedings against Mr White (a Lloyd's name) in the Supreme Court of Victoria seeking an indemnity in respect of several letters of credit issued by the bank to the Society of Lloyd's in connection with Mr White's membership of Lloyd's. Mr White then brought a third party claim against Lloyd's, seeking an indemnity in respect of the amounts claimed by the bank and damages for alleged contraventions of the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1985 (Vic) .

An application by Lloyd's for summary dismissal, or alternatively for a permanent stay of the third party claim, was dismissed by Byrne J (in Commonwealth Bank of Australia v White [1999] 2 VR 681, to which judgment I will refer as White [No 1] ). Byrne J held that Lloyd's had been validly served in the local jurisdiction and, relevantly as it later transpired, found that "good reason" or "strong cause" had been shown not to hold Mr White to the exclusive jurisdiction clause contained in his contract with Lloyd's. His Honour accepted that the exclusive jurisdiction clause (in a contract the proper law of which was English law) cast the onus on Mr White to show strong cause why the discretion should not be exercised to stay the proceedings but considered that Mr White had discharged that onus in circumstances where it was undesirable that an exclusive jurisdiction clause could potentially circumvent the statutory protection against misleading or deceptive conduct such as that provided in s 52 of the Trade Practices Act 1974. His Honour observed at 705 that "it is a hard thing to turn away a litigant who has properly invoked the jurisdiction of this Court, particularly where the consequence of this must be that the litigant is precluded from enforcing rights which he enjoys as a person engaging in commerce in Victoria by virtue of legislation in force in this jurisdiction".

Byrne J said (at 704):

Counter veiling considerations include the non-availability in the selected forum of the relief sought in this Court based on misleading and deceptive conduct and on breaches of the company's legislation. It is undesirable that parties should, by entering into an exclusive jurisdiction agreement, be able to circumvent a legislative scheme established by parliament to protect investors purchasing interests or prescribed interests. Put more positively, the statutes creating these standards of commercial behaviour for persons doing business in this jurisdiction do not exempt foreign corporations. Moreover, the policy behind them would not be served if exemption might be achieved by inserting stipulations as to foreign law or forums. Furthermore, in this proceeding, the very validity of the exclusive jurisdiction agreement is in issue on the basis of Lloyd's alleged improper conduct. If Mr White's challenge to it is successful, the agreement as a ground for a stay disappears.

After his Honour's refusal of the summary dismissal/stay application, and unsuccessful applications by Lloyd's for leave to appeal to the Victorian Court of Appeal and for special leave to appeal therefrom to the High Court, Lloyd's sought and was granted in England an anti-suit injunction against Mr White enjoining him from pursuing in the courts of any country other than England any claim against Lloyd's arising out of or in relation to his membership of Lloyd's and/or underwriting of insurance business at Lloyd's. The anti-suit injunction was granted in the context of the separate proceedings that were then on foot in the Commercial Court, Queens Bench Division of the High Court of Justice in England (the Jaffray proceedings) in which Mr White was one of a number of defendants sued by Lloyd's and on whose behalf a counterclaim had been issued raising similar allegations to those made in Mr White's third party claim in the Victorian proceedings.

After the anti-suit injunction had been granted in England, Warren J (as her Honour then was) in Commonwealth Bank of Australia v White [No 3] [2000] VSC 259 considered an application by Lloyd's for a temporary stay of Mr White's third party claim pending the outcome of judgment in the Jaffray proceedings.

Reference was made by Mr Stitt in this regard to what was said in John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 538 per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; and Usines Renault v Zhang at [66] and [75] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ.

I have cited earlier the passage in Voth in which the place of commission of the tort involving the alleged negligent accounting advice was said to be the place where the advice was received. There, with respect to cross border communications, their Honours (deriving this principle from Diamond) said:

If a statement is directed from one place to another place where it is known or even anticipated that it will be received by the plaintiff, there is no difficulty in saying that the statement was, in substance, made at the place to which it was directed, whether or not it is there acted upon. And the same would seem to be true if the statement is directed to a place from where it ought reasonably to be expected that it will be brought to the attention of the plaintiff, even if it is brought to the attention in some third place.

Voth focuses on the intention of the party communicating the statement. The majority of the High Court held that it is the place where it is reasonably expected that the receiving party will receive it that is relevant (whether or not that is actually the place of receipt).

Similarly, Delco and Aussie Home Security are consistent with the principle established above by Voth and extended its application to claims of misleading and deceptive conduct claimed under the Trade Practices Act .

In Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575, in the context of a defamation claim, Gleeson CJ, McHugh, Gummow and Hayne JJ observed generally at 606 that locating the place of commission of a tort is not always easy, commenting that "In the end the question is 'where in substance did this cause of action arise'? In cases, like trespass or negligence, where some quality of the defendant's conduct is critical, it will usually be very important to look to where the defendant acted, not to where the consequences of the conduct were felt".

Hunter Grain illustrates the proposition that misrepresentation or misleading conduct, for the purposes of determining the proper law, is not concerned with the jurisdiction where damage accrues. Sheppard J at 520-521 said that:

... the actionable wrong relied upon in this case arises out of misleading or deceptive conduct said to have been engaged in by the parties sued. That conduct, so far as each of the defendants was concerned, was committed entirely in the United States.

An assessment of the three groups of factors leads me to the conclusion that the most significant connection is with Singapore (that being where the account was opened, the banking services were provided and the place contemplated in the transaction documents as the non-exclusive place for resolution of disputes). The alleged misrepresentations or misleading and deceptive conduct were, however, received in New South Wales and, on the authorities referred to above, acted upon by the giving of instructions in New South Wales. (Although Chong J placed weight on the business efficacy of such transactions and seems to have accepted that the place at which instructions were given by Mr Tyne was fortuitous, it remains a connecting factor on the authorities to which I have referred above.) As to the place of business of the respective parties, this was in different jurisdictions, such that this seems to be a neutral factor. As to the question of convenience, this seems to me to be weighted in favour of Singapore, particularly as Mr Betsalel is resident there or (if he moves to Hong Kong) not far away. (I note that he has apparently professed a willingness to travel to Australia to give evidence but I consider the submissions made by Mr Stoljar as to the practical difficulties if he is not compellable (let alone not contactable) to have considerable force.)

In light of the conclusions reached by Chong J (following his analysis of the pleadings and of Mr Gleeson's expert opinion) as to the operation of the law in Singapore, it is difficult to find that there are any substantial juridical advantages in the ability of the Telesto parties here to invoke the statutory provisions in relation to misleading and deceptive conduct, although I note that there is weight to be accorded to the public policy underpinning this legislation as a factor pointing to this jurisdiction.

While the substantive law to govern the claims made by the Telesto parties in relation to the tort and misleading and deceptive conduct claims seems to me to be the law of this forum, the other claims raised by the Telesto parties I accept are likely to be governed by the law of Singapore. I also note that the commencement of the proceedings in this jurisdiction by Argot is in breach of an exclusive jurisdiction clause in its contractual arrangements.

As to the enforceability of any declaratory or costs judgment obtained in Singapore, Mr Stitt places weight on the fact that the primary relief now sought in Singapore (a negative declaration) could not be enforced in New South Wales and that it was said in Henry (at [39]) that the fact that the order of the foreign court would not be enforced in Australia "will ordinarily dispose of any suggestion that the local proceedings should not continue". Mr Stoljar's response, in effect, is that this is a neutral factor as this is not a case in which any judgment obtained by UBS AG in Singapore would depend for its practical efficacy upon enforcement against assets situated in Australia. (As UBS AG is carrying on business in Singapore, I would assume it has assets there against which the Telesto parties, if they there made and were successful in the making of claims such as those in the current proceedings, could enforce the judgment so obtained by them.)

As to discretionary matters, it is submitted by Mr Stitt that the inference to be drawn from the continuation of the Singapore proceedings (despite Telesto's indebtedness being extinguished) is that this is merely a platform by which UBS AG seeks to deny the New South Wales proceedings. I do not accept that such an inference can be drawn having regard to the fact that the declaratory relief was sought from the outset and there remains a claim for indemnity costs. I accept Mr Stoljar's submission that there is no basis for this Court to find that the 'dominant purpose' of UBS AG in instituting the Singapore proceedings was to prevent the Telesto parties from pursuing remedies in Australia.

The factors referred to above must also be considered in circumstances where the effect of not granting a stay of the proceedings would be to expose the parties to the very real prospect of a duplicity of litigation. In this regard, I place weight on the observations of Jacobson J in Armacel in not dissimilar circumstances. There, an anti-suit injunction having been sought in proceedings in New South Wales in circumstances where the same controversy had been set down for hearing in the United States, Jacobson J observed that the problems which arise if the same controversy is to be litigated in different countries which have jurisdiction with respect to the same matter are such that, prima facie, the continuation of one or other of them must be seen as vexatious or oppressive in the sense stated in Voth, referring there to Henry v Henry at 591, and went on to note that the anti-suit injunction had been sought after the US District Court had determined that it had jurisdiction and after it had provisionally listed the matter for hearing. His Honour considered that in those circumstances "To ask me to now grant anti-suit relief would be invidious and the reverse of comity: The Angelic Grace " and concluded that the proceeding in the Federal Court was vexatious in the Voth sense. His Honour refused to grant an anti-suit injunction restraining Smurfit from continuing the proceeding in the US District Court and granted a temporary stay of the proceedings in this jurisdiction. (I note that his Honour came to that conclusion even though it had been acknowledged by Smurfit's legal counsel in the US District Court proceedings that the decision by Smurfit to commence suit in the United States was a tactical decision as to the selection of the forum and where the proceedings could be "expeditiously forwarded".)

Here, the Telesto parties are seeking to continue proceedings that, at least having regard to what was said by their Counsel in Singapore, will raise fundamentally the same issues as those to be dealt with in Singapore in circumstances where (although the matter has not there progressed to the point where it has been listed for hearing, provisionally or otherwise), the court in Singapore has not only accepted that it has jurisdiction but has entertained two contested hearings in which, at the heart of the matters before the court, has been the forum in which the dispute should be resolved. There is a substantial connection between the disputes raised in this forum and that to be heard in the Singapore forum (indeed, for Argot, the commencement of the proceedings here is contrary to the exclusive jurisdiction clause in its Letter of Undertaking). It seems to me that in those circumstances it would be vexatious and oppressive of the Telesto parties (in the sense of the objective effect on UBS AG of their conduct) now to pursue a course of conduct that will have the inevitable result of exposing UBS AG to the risk of conflicting judgments across two jurisdictions. The significance of the stay having been granted (and upheld on appeal) in Singapore is that a refusal to stay the proceedings in this Court must have the result that the two proceedings will continue.

I have adverted earlier to the submission by Mr Stitt as to the relevance of the fact that before Chong J issued his decision on appeal (unbeknownst to him or to Telesto) the debt had been extinguished. It is submitted that Chong J may well have not found as he did had his Honour known the primary relief in the Singapore proceedings was merely declaratory in nature and that insofar as an anti-suit injunction invokes an equitable remedy (and the court is exercising an equitable power when making such an order) (Mr Stitt referring to British Airways Board v Laker Airways Limited [1985] 1 AC 58 (HL), 80H - 81G; Barclays Bank plc v Homan [1993] BCLC 680, 686-88 (Hoffman J); Turner v Grovit [2002] 1 WLR 107 (HL) at [22]; Ellerman Lines Limited v Read [1928] 2 KB 144 per Atkin LJ), UBS AG was obliged to act with equity and good conscience when seeking the anti-suit injunction and was thus obliged to inform Chong J before judgment was given that the debt no longer existed and had been extinguished. It is submitted that such a matter may well have had a determinative effect upon his Honour's decision whether to grant the relief at all and as to costs and that the fact that UBS AG failed to do so is "highly suggestive of an agenda to frustrate the New South Wales proceedings".

In response, Mr Stoljar submits that the submission as to a failure to act with equity and good conscience (by reason of the non-disclosure to Chong J, some 6 weeks after his Honour had reserved judgment, that the debt had been extinguished) should be rejected. Mr Stoljar points out that UBS AG twice notified Telesto, in writing, of its intention to realise the collateral shortly prior to doing so; that at all times, Telesto had the ability to gain access to the electronic statements which revealed the precise status of the account and to the 'retained mail' or e-banking portal; and that neither Telesto nor either of the other Telesto parties took any step to notify Chong J of the extinguishment of the debt nor suggested to UBS AG that it would be appropriate to do so or that this would be a matter of any significance to his Honour.

As I have noted earlier, although it was at all times open to the Telesto parties to check the e-banking portal, subsequent enquiries by UBS AG have revealed that it had not done so since 2010. Therefore, the most I can draw from the above is that the Telesto parties appear not to have considered that the possibility or intention of UBS AG to sell down the collateral (once UBS AG's intention to do so was made known to them) was a relevant matter to be brought to the attention of his Honour.

As for the position of UBS AG, it is submitted by Mr Stoljar that there was no reason for UBS AG to consider that the extinguishment of the debt was a matter of any significance in respect of the issues argued before Chong J but that in any event, this Court should not now speculate, and there is no reason to suppose, that Chong J may not have found as he did had the extinguishment of the debt been disclosed to the Court prior to delivery of his Honour's reasons for judgment. Mr Stoljar points out that his Honour's judgment does not place any significance upon the enforceability in Australia of any judgment obtained in the Singapore proceedings and submits that there is no basis for concluding that the unenforceability in Australia of a Singapore non-monetary judgment would have been material to his Honour's determination, having regard to the strength of the considerations supporting the conclusion that an anti-suit injunction should be granted.

In relation to this issue, not having been privy to the argument before his Honour, it is impossible for me to assess whether the matter is one that his Honour would have expected should be drawn to his attention while the judgment was reserved. Nor would it be appropriate for me to speculate on what his Honour might have done or to express any view as to what might have been the import on the reasons for judgment of any such disclosure. I accept the force of the submission by Mr Stoljar that if there is an issue in relation to this aspect of the matter it is one better dealt with by raising it with the Court in Singapore. I am not persuaded that a finding as to lack of good conscience would be appropriate, nor am I persuaded that this is something which, as a matter of discretion, should lead me to refuse any relief that I otherwise am prepared to grant.

In this context, Mr Stoljar notes that the Telesto parties cannot prosecute the proceedings in this Court without being in contempt of the High Court of Singapore (reference being made to Allstate Life Insurance Co v Australia and New Zealand Banking Group Limited [1995] FCA 1563 at [24] where Lindgren J acknowledged if an "anti-anti-suit injunction" were to be made in New York it would have the effect that an application for an anti-suit injunction in Australia could not be made without the applicant being in contempt of the court in New York).

The significance of the fact that there is no longer a monetary claim being pursued in Singapore, in the context of the application now before me, in my view is not as to the rights or wrongs of the fact that it was not drawn to his Honour's attention but to the question as to whether the scope of the defence by the Telesto parties to those proceedings will encompass the matters raised in the proceedings they have commenced in this jurisdiction. If it will not, then much of the force of the current application by UBS AG in my view falls away.

Conclusion

I am satisfied that if the same, or in substance the same, controversy is to be litigated in two separate sets of proceedings in two different countries each of which has jurisdiction with respect to the same matter, then the continuation of the present proceedings (having regard to the strong connections between the subject matter of the claim and the jurisdiction in Singapore; the contest that has already been determined at considerable expense in relation to this issue in Singapore; and the abuse of process involved in the vexatious and oppressive conduct of exposing UBS AG to the cost of proceedings in two countries and the risk of conflicting judgments) would be vexatious or oppressive to UBS AG in the sense stated in Voth and that this Court should strive to avoid such a result. In those circumstances I would hold that this Court is a clearly inappropriate forum for the purposes of the test in Voth .

If, however, the controversy to be litigated in Singapore will not overlap to the extent that was considered likely when the matter was before Chong J, then I do not consider that it would be vexatious and oppressive for the Telesto parties to continue the present proceedings in which relief is sought in part under forum statutes in respect of which the courts have recognised there is a strong public policy in favour of the protection of those doing business in this jurisdiction (and even though I recognise that this would seem to involve a clear breach of the orders made against the Telesto parties in Singapore and would presumably expose them to charges for contempt according to the applicable law in Singapore). While I consider it invidious to be placed in the position where the Court might be seen to condone a breach of the anti-suit injunction (and refusal of a stay would have the effect of forcing UBS AG into the position of defending proceedings continued in breach of that order), that seems to me to be the result of the authorities that make it clear that such injunctions operate only in personam; that the courts will not enforce non-monetary orders of this kind; and that unless the present jurisdiction is a clearly inappropriate forum no stay should be granted.

The difficulty I have is that it is not clear to me into what category the present case will fall without knowing what matters are ultimately to be raised in the defence of the Singapore proceedings. In Sterling Pharmaceuticals , Lockhart J pointed to the substantial difference between a motion for a permanent stay or dismissal of a proceeding and a motion for a temporary stay or lengthy adjournment of the case, noting that the court remains in full control of the proceedings in the latter instances. In Armacel , Jacobson J granted a stay with liberty to apply (noting that the court must remain in control of its own interlocutory orders and citing Adam P Brown Male Fashions Proprietary Limited v Philip Morris Incorporated (1981) 148 CLR 170 at 178). His Honour there foreshadowed that if the United States court declined to exercise its supplemental jurisdiction to apply the Trade Practices Act then it might be appropriate to lift the stay ([118]) and that, having regard to the ordinary vicissitudes of litigation in another country, there might be other circumstances existing in the litigation in the United States that would make it appropriate to consider such an application in the future.

Bearing in mind the inherent jurisdiction of the Court to ensure that there is no abuse of its own processes, I have concluded that the appropriate relief is not to grant a permanent stay at this stage but, rather, to grant a temporary stay.

In my view it would be appropriate for the stay to be granted pending the outcome of the claim for declaratory relief in the Singapore proceedings. I did consider whether the stay should be limited to the period pending the closure of pleadings in the Singapore court (at which time it would be known what defences were to be pleaded by the Telesto parties). However, that would not take into account the possibility of amendment to the pleadings at a later stage. Moreover, it seems to me that it is not consistent with the just, quick and cheap resolution of the real issues in dispute in the proceedings to permit a situation to arise where the parties might be embroiled in litigation here in relation to the substantive claims pleaded by the Telesto parties (assuming they were not raised as defences in the Singapore proceedings and the stay were then to be lifted) only then for it to be determined in Singapore that the estoppel/compromise claim was made out.

As I did not explore with Counsel during the hearing raise the duration of any temporary stay I might be prepared to grant in lieu of a permanent stay, I will defer making orders until after I have enquired whether Counsel would wish to address me on that question. I will also hear Counsel on the question of costs as necessary.

Orders

For the reasons set out above I consider that the appropriate order is temporarily to stay the present proceedings pending the determination in the Singapore proceedings of the application by UBS AG for declaratory relief and to give the parties liberty to apply to restore the proceedings at that stage. However, I will not make final orders until I have heard any submissions from the parties on the proposed orders and as to costs.

**********

Decision last updated: 08 February 2012

Medium Neutral Citation:	Telesto Investments Ltd & ors v UBS AG [2012] NSWSC 44
Hearing dates:	21 November 2011
Decision date:	07 February 2012
Jurisdiction:	Equity Division - Commercial List
Before:	Ward J
Decision:	Temporary stay to be granted of the proceedings in this Court, pending the outcome of matters in other proceedings in Singapore in relation to the same controversy. Form of orders to be determined after further submissions.
Catchwords:	CONFLICT OF LAWS - stay of proceedings - anti-suit injunction granted in Singapore - whether New South Wales is forum non conveniens - whether duplication of proceedings is vexatious or oppressive - whether commencing or continuing proceedings in New South Wales amounts to an abuse of process - whether enforceability of foreign judgment where non-monetary relief sought relevant to granting a stay CONFLICT OF LAWS - stay of proceedings - principles of comity - where New South Wales proceedings commenced in breach of anti-suit injunction granted in Singapore - foreign anti-suit injunction a factor to be taken into account when exercising discretion to grant stay but not determinative CONFLICT OF LAWS - choice of law - tort - misrepresentation - cross-border communications over telephone - law of jurisdiction where communication reasonably expected to be received is proper law of the misrepresentation PROCEDURE - issue estoppel - foreign judgment as basis of estoppel - estoppel said to arise from finding in Singapore regarding question of forum non conveniens - different legal test for forum non conveniens in Singapore and Australia - precise identification of the legal issue - no issue estoppel in relation to forum non conveniens question - issue estoppel in relation to finding by Singapore court whether New South Wales proceedings vexatious and oppressive
Legislation Cited:	Australian Securities and Investments Commission Act 2001 (Cth) Fair Trading Act 1987 (NSW) Trade Practices Act 1974 (Cth)
Cases Cited:	Adam P Brown Male Fashions Proprietary Limited v Philip Morris Incorporated (1981) 148 CLR 170 Air Bus Industries GIE v Patel (1999) 1 AC 119 Allstate Life Insurance Co v Australia and New Zealand Banking Group Limited [1995] FCA 1563 Armacel Pty Ltd v Smurfit Stone Container Corp (2008) 248 ALR 573 Aussie Home Security Pty Ltd v Sales Systems Australia Pty Ltd (2000) 172 ALR 14 Barclays Bank plc v Homan [1993] BCLC 680 Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 Blair v Perpetual Trustee Co Ltd v Curran (Adam's Will) (1939) 62 CLR 464 British Airways Board v Laker Airways Limited [1985] 1 AC 58 (HL) Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] AC 853 Castillon v P&O Ports Ltd [2007] QCA 364 Champerslife Pty Ltd v Manojlovski & Anor [2010] NSWCA 33 Christie v Baker (1996) 2 VR 582 Commonwealth v Cockatoo Dockyard Pty Ltd [2003] NSWCA 192 Commonwealth Bank of Australia v White [1999] 2 VR 681 Commonwealth Bank of Australia v White [No 3] [2000] VSC 259 Commonwealth Bank of Australia v White [No 4] [2001] VSC 511 CSR Ltd v Cigna Insurance Australia Limited [1997] HCA 33; (1996-7) 189 CLR 345 DA Technology Australia Pty Limited v Discreet Logic Inc [1994] FCA 958 Delco Australia Pty Ltd v Equipment Enterprises Incorporated and Ors (2000) 100 FCR 385 Diamond v Bank of London and Montreal (1979) QB 333 Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575 Ellerman Lines Limited v Read [1928] 2 KB 144 Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630 Garsec v Sultan of Brunei [2008] NSWCA 211; (2008) 250 ALR 682 Guardian Group Australia Pty Ltd v Alice Lu [2005] NSWSC 1299 Habib v 2UE Pty Ltd [2009] NSWCA 231 Henry v Henry (1996) 185 CLR 571 Hilton v Guyot (1895) 159 US 113 Hunter Grain Pty Ltd v Hyundai Merchant Marine Co Ltd (1993) 117 ALR 507 John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 Kolden Holdings Ltd v Rodette Commerce Ltd [2008] 3 All ER 612 Kuligowski v Metrobus [2004] HCA 34; (2004) 220 CLR 363 Laker Airways Limited v Pan American World Airways (1983) 559 F Supp 1124 Laker Airways Limited v Sabena (1984) 731 F 2d 909 Laker Airways Limited v Pan American (1983) 577 F Supp 348 Ling v The Commonwealth (1996) 68 FCR 180 Maritime Insurance Co Ltd v Geelong Harbour Trust Commissioners (1908) 6 CLR 194 Newmont Yandal Operations Pty Ltd v J Aron Corporation [2007] NSWCA 195; (2007) 70 NSWLR 411 News Corporation v Lenfest Communications Inc [1996] NSWSC 474 Mala Pty Ltd v Johnston (1995) 13 ACLC 100 Moore v Inglis (1976) 9 ALR 509 Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; 147 CLR 589 Puttick v Tenon Ltd [2008] HCA 54; (2008) 238 CLR 265 Ramsey v Vogler [2000] NSWCA 260 Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; (2002) 210 CLR 491 Reichel v Magrath (1989) 14 App Cas 665 Ridgeway v The Queen (1995) 184 CLR 19 Rippon v Chilcotin Pty Ltd [2001] NSWCA 142 Rocklea Spinning Mills Pty Limited v Consolidated Trading Corporation [1995] VSC 15; [1995] 2 VR 181 Rogers v The Queen (1994) 181 CLR 251 Roy Morgan Research Centre Pty Ltd v Wilson Market Research Pty Ltd (1996) 39 NSWLR 311 Sadler v Robins (1808) 170 ER 948 Slough Estates Ltd v Slough Borough Council [1968] Ch 299 Society of Lloyd's v White [2004] VSCA 101 Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 State Bank of NSW Ltd v Stenhouse Ltd (1997) Aust Torts Rep 81-423 Sterling Pharmaceuticals Pty Ltd v The Boots Company (Aust) Pty Ltd (1992) 34 FCR 287 Tiufino v Warland (2000) 50 NSWLR 104 Thames Launches Ltd v Trinity House Corporation of Deptford Strond [1961] Ch 197 The Daeyang Honey [1993] FCA 584 The Sennar (No 2) [1985] 1 WLR 490 (HL) Thoday v Thoday [1964] P 181; [1964] 1 All ER 341; [1964] 2 WLR 371 Turner v Grovit [2002] 1 WLR 107 (HL) UBS AG v Telesto Investments Pty Ltd [2011] SGHC 170 United Pacific Finance Pty Ltd v Tarrant [2009] NSWSC 630 Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538 Williams v Society of Lloyd's (1994) 1 VR 274 Zavodnyik v Alex Constructions Pty Ltd (2005) 67 NSWLR 457
Texts Cited:	Collins, Dicey, Morris and Collins on The Conflict of Laws (14th ed, 2006) Davies, Bell and Brereton, Nygh's Conflict of Laws in Australia (8th ed, 2010) Handley, Res Judicata: General Principles and Recent Developments (1999) Mortensen, Private International Law in Australia (2006) Spencer Bower, Turner and Handley, The Doctrine of Res Judicata (3rd ed, 1996)
Category:	Interlocutory applications
Parties:	Telesto Investments Ltd (First Plaintiff) Scott Francis Tyne (Second Plaintiff) ACN 074 921 109 Pty Ltd as trustee of the Argot Unit Trust (Third Plaintiff) UBS AG (Defendant)
Representation:	Counsel R Stitt QC (Plaintiffs) J Stoljar SC with L Livingston (Defendant) Solicitors Eakin McCaffery Cox (Plaintiffs) Mallesons Stephen Jaques (Defendant)
File Number(s):	10/363808