Transcript
[2010] HCATrans 271
[2010] HCATrans 271
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Perth No P40 of 2010
B e t w e e n -
ADAM JONATHON IRELAND (AS EXECUTOR OF THE ESTATE OF DEAN EDWARD IRELAND), CLARK ERVIN EASTERDAY, LEONARD LANCELOT IRELAND
First Applicants
KAYLENE HOLDINGS PTY LTD (ACN 009 462 195)
Second Applicant
BRENDA ANNE EASTERDAY
Third Applicant
WEBGO PTY LTD (ACN 009 022 057)
Fourth Applicant
FIM PTY LTD (ACN 008 964 609)
Fifth Applicant
PAUL CHRISTOPHER IRELAND
Sixth Applicant
and
NORILYA MINERALS PTY LTD
Respondent
Application for special leave to appeal
FRENCH CJ
KIEFEL J
TRANSCRIPT OF PROCEEDINGS
AT PERTH ON THURSDAY, 21 OCTOBER 2010, AT 9.01 AM
Copyright in the High Court of Australia
__________________
MR M.J. McCUSKER, QC: May it please the Court, I appear with my learned friend, MR J.A. THOMSON, for the applicants. (instructed by Bostock and Ryan Barristers & Solicitors)
MR S.M. DAVIES, SC: May it please the Court, with MS K.F. BANKS‑SMITH I appear for the respondent. (instructed by Norton Rose Australia)
FRENCH CJ: Yes, Mr McCusker.
MR McCUSKER: If it please your Honours, this is an application for special leave which was, as your Honour the Chief Justice knows, brought on on an expedited basis, the reason being that there was a great degree of urgency about the resolution of this matter. The background is set out in our submissions, or summary of argument. The essential points to make, your Honours, are these. The Court of Criminal Appeal of the Supreme Court of Western Australia by its judgment in Easterday v Western Australia, a copy of which is at tab 2 in the book of authorities, made an order for restitution of money paid by the applicants to the respondent, that order for restitution being based upon the fact that the applicants had previously paid or repaid to the respondent some $6 million by reason of their conviction, in effect, for an offence which subsequently by a further order of the Court of Appeal some years down the track found to be wrongly entered. That is essentially it. The judgment pursuant to which the ‑ ‑ ‑
FRENCH CJ: It was a non‑disclosure of prosecutorial ‑ ‑ ‑
MR McCUSKER: It was a non‑disclosure situation, your Honour, and their appeal against conviction was by way of an Attorney‑General’s reference back to the Court of Appeal of Western Australia and the Court of Appeal then upheld the appeal and the convictions were quashed, but in the interim, the applicants had paid some $6 million, as I said, to the respondent. Having had their conviction quashed, they then sought the return of the money.
FRENCH CJ: That was done by an order annulling the restitution order, was it not?
MR McCUSKER: It was, your Honour.
FRENCH CJ: Then an ancillary order for ‑ ‑ ‑
MR McCUSKER: An ancillary order for restitution and that was the subject of the decision that I have referred your Honours to of Easterday v Western Australia [2005] WASC 105 and in that decision Justice Steytler at paragraphs 41 through to 49.
FRENCH CJ: Is that tab 2, I think?
MR McCUSKER: Tab 2, your Honours, yes. He dealt with the question of whether there should be a restitution order made and it is not contended by the respondents that his reasoning was in any way faulty. The restitution order was made. He says at paragraph 41:
Also, the fact that Norilya contends that it is entitled, under the civil law, to the money which it has received does not, of itself, make this an unusual case. There have been many such cases.
He referred to Production Spray Painting where –
the opponents resisted the application for restitution on a number of grounds, including asserted counterclaims –
So when the convictions of the applicants were quashed the question was, could they have the money returned. The respondent contended that by reason of it being a civil action claiming that, in any event, they were entitled to keep the money, there should be no restitution order. The court rejected that proposition and said at paragraph 42:
If this Court was to permit a person to rely upon an erroneously entered judgment as a basis for retaining disputed money which it would not otherwise have held, it would be giving to that person a significant advantage (and giving to the successful appellant a significant advantage) which it would not have had were it not for the Court’s own error.
Error in this sense being the entry of judgment for conviction of the applicants –
Also, it should not be overlooked that, as was said in Production Spray Painting . . . the power to order repayment of what was mistakenly ordered to be paid is necessarily one in the exercise of a summary jurisdiction, inherently unsuitable for the determination of disputed questions of fact. When the party which is required by an appellate court to repay money upon the quashing of an executed restitution order asserts entitlement to that money, there is always the opportunity for it afterwards to assert that entitlement in a civil court, by seeking to recover what it must repay.
FRENCH CJ: Now, can I just go for a moment to the reasons of the Court of Appeal published yesterday, at paragraph 30. Do you accept their characterisation of your case before them that:
The gravamen of the defendants’ contention in this application . . . is, in effect, that there is an abuse because the Court of Criminal Appeal intended that the plaintiff should not pursue its civil claims unless it first repaid to the defendants the monies which it had recovered under the original restitution orders ‑ ‑ ‑
MR McCUSKER: Yes, your Honour, although it is not merely a question of intention. It is a question of what the Court of Criminal Appeal did. Certainly we say that implicit in what it ordered and what it refused to order is that there should not be any attempt – or put it this way, before the civil action proceeded any further the present applicants should be restored to the position in which they were prior to the wrongful entry of judgment.
FRENCH CJ: But that is, as it were, with no disrespect, requiring a reading into the entrails of the reasons rather than anything that emerged in the form of an order on the part of the Court of Criminal Appeal.
MR McCUSKER: Certainly it is, your Honour, and the reason for that, of course, is that the civil proceedings were not part of the criminal proceedings.
FRENCH CJ: No, I appreciate that. They had been started before criminal proceedings, had they not?
MR McCUSKER: They had indeed, your Honour.
FRENCH CJ: Or the first tranche of them, as it were.
MR McCUSKER: Yes, and indeed summary judgment had been entered but was later by consent set aside once the convictions were quashed. The Court of Criminal Appeal could not, because it was not dealing with a civil action, order a stay of a civil action, but what it did in a negative but important way was to refuse to stay the order of restitution as the present respondent sought, refuse to stay that until such time as the civil proceedings had been concluded. So what we say is that it was implicit, though not expressed, in what the Court of Appeal did, and its reasoning in 2005 was that there should be immediate repayment of the sum which had been wrongfully paid to the respondent. There should be immediate repayment, there is no question about that, that is not in dispute, and refuse to defer that payment, as the respondent sought, pending the completion of the civil proceedings.
FRENCH CJ: I do not want to trivialise your argument, but you are hanging a lot on the word “afterwards” in paragraph 42, are you not?
MR McCUSKER: Yes, not entirely that. We say they could afterwards do it and that is an important aspect of it, but the most important we say, your Honour, is that when an application was made, as appears in the further decision of that same court on 28 October, which is under tab 3, the court at paragraphs 13 through to 16 dealt with the proposition that was put to the court by the respondent that there should be a stay until such time as the civil proceedings have been concluded and, with respect, the court’s reading there cannot be faulted. Paragraph 13 and following, Justice Steytler said:
I do not accept that the effect of a stay –
which was sought by the respondent –
would be that of restoring the parties to the position in which they were prior to the making of the restitution orders by the District Court. The purchase price was then in the hands of the applicants and not those of Norilya . . . Moreover, as counsel for Norilya acknowledged, if the money was to be returned to the applicants subject to the Mareva orders . . . the applicants would nonetheless be given access to the moneys for the purposes of funding their defence of the civil proceedings.
The important point to make, your Honours, is that unless the money was repaid to the applicants who were defendants in the civil action, they would have and did have grave difficulty in defending the civil action. So they were put at a considerable disadvantage by reason of the wrongly entered judgment against them.
KIEFEL J: There has been an order for security for costs?
MR McCUSKER: $25,000, your Honour, but that of course does not assist the applicants.
KIEFEL J: That would be increased if there was a reason for it, although it may not be a problem.
MR McCUSKER: It may and probably would be a problem.
FRENCH CJ: You are not constrained in applying for security for costs by the impecuniosity rule because you are dealing with the corporations.
MR McCUSKER: That is right, Your Honour, yes. So, no, that is quite correct. The important point we wish to make here and have resolved is whether when a court has ordered restitution to be made immediately and has refused to stay the order for restitution pending the outcome of some civil proceedings, related civil proceedings, in those circumstances is it an abuse of process for the plaintiffs in the civil proceedings who have been ordered to make restitution to nevertheless proceed with the civil proceedings without making the payment?
KIEFEL J: But it is, as the Chief Justice has pointed out, that you can read too much into this. The court is also accepting that the civil proceedings are continuing and it is necessarily accepting that issues about the execution upon the order for restitution will take its normal course and that is what has occurred, I understand. Statutory demand was set aside?
MR McCUSKER: Statutory demand was set aside, so an attempt to recover was defeated.
FRENCH CJ: That was on the basis that there was a dispute.
MR McCUSKER: There was a dispute, yes, your Honour.
FRENCH CJ: That really the annulment and the repayment litigation in the Court of Criminal Appeal had not provided an opportunity to ventilate, as it were, the set off.
MR McCUSKER: Well, I think that was the reasoning, yes, your Honour.
FRENCH CJ: Well, as I read Master Sanderson’s ‑ ‑ ‑
MR McCUSKER: Yes, I think that is right.
FRENCH CJ: And that was not challenged by way of an appeal.
MR McCUSKER: No, it was not. Your Honour, interestingly, Master Sanderson, I think, with great perception at paragraph 12 of his reasons, which is at tab 4, noted that no payment whatsoever had been made by the respondent in fulfilment of the order for restitution. It put forward its position financially, and we do not challenge this, that it was unable to pay, it had no assets and no liabilities, it was being financed by Xstrata and, as the Master said in the last couple of sentences:
Someone is meeting the costs of maintaining those proceedings –
that is for the plaintiff –
and someone has provided security for costs in those proceedings. But there is no indication that if the Prospectors (and the defendants) were successful in defending the action, the judgment would be paid. To that extent, the plaintiff is engaged in a forensic game in which, more than likely, it has nothing to lose.
The applicants are placed at a considerable disadvantage by reason of the non return of the moneys ordered to be paid under restitution order.
KIEFEL J: But you are not putting it as high as saying that they are unable to conduct their defence?
MR McCUSKER: No, we are not, your Honour, because ‑ ‑ ‑
KIEFEL J: They borrowed money.
MR McCUSKER: They managed to borrow money in the end but that was not until August and that accounts for the fact that there has been a delay.
KIEFEL J: Delay of the trial.
MR McCUSKER: Yes. And, in our respectful submission, matters of case management should not interfere with this important question of principle. All that we are seeking is an order that there be a stay of the action until such time as either the sum ordered to be repaid is paid into court or else there is an affidavit which deposes to the fact that if unsuccessful in the action, the plaintiff in that action will be able to repay or pay the amount of the restitution order. Now, on the face of it ‑ ‑ ‑
KIEFEL J: If the plaintiffs were successful, there would be questions about the set off after the proceedings?
MR McCUSKER: There would, yes, there certainly would, but the important point of principle that we seek to agitate before the Court is whether, in these circumstances where there has been an order for restitution, it can effectively be set at naught so maintaining the disadvantage identified by the Court of Appeal, Justice Steytler, which flowed as a result of the wrongfully entered judgment in order to rectify the disadvantage. What the plaintiffs, the present respondent, has done is to effectively set that at naught. It is financed by its holding companies, Xstrata. Clearly Xstrata is able to meet the judgment but it is, as Master Sanderson said, something of a forensic game.
KIEFEL J: Makes you wonder what there is of value in the plaintiff if Xstrata is behind it.
MR McCUSKER: It does, your Honour, yes. It does lead to speculation.
FRENCH CJ: Does the plaintiff still have the tenements?
MR McCUSKER: I am not sure of the answer to that, your Honour.
FRENCH CJ: Well, it is perhaps irrelevant anyway.
MR McCUSKER: They depose to the fact, in any event, that they have no assets and no liabilities and we do not challenge that proposition. I am told that the tenements have actually been lost, so that answers that question. What we are seeking to do is to give effect to what the Court of Appeal, through Justice Steytler’s reasons, identifies as the disadvantage which flowed from the wrongfully entered judgment. That is the overriding principle. That disadvantage will continue if the respondent is permitted to proceed with the civil action which is expected to take some 50 days, I am told. Fortunately I am not briefed in that. If it is permitted to proceed with that without either paying the money into court as security for ultimately giving effect to the restitution order or at least deposing to the fact that if unsuccessful it will be able to and would repay the money under the restitution order. That is somewhat of a variation from what the Court of Appeal, through Justice Steytler, we say, was envisaging which was repay the money, certainly you can go on with civil proceedings, but repay the money. That intention ‑ ‑ ‑
FRENCH CJ: Court of Criminal Appeal?
MR McCUSKER: Court of Criminal Appeal, I should say, yes, back in 2005. That clear intention, in our submission, has been thwarted by what Master Sanderson rightly described as a forensic game by reason of the fact that the holding company is financing the action but is not coming up with the money ordered to be restored to the applicants.
KIEFEL J: I suppose there is also the possibility of third party costs by reason of the funding arrangement?
MR McCUSKER: It is a possibility, your Honour, but ‑ ‑ ‑
KIEFEL J: Could not put it any higher than that.
MR McCUSKER: Yes.
KIEFEL J: But I suppose your principle protection would have to be security for costs.
MR McCUSKER: That is right, yes. The important question is whether, at the end of the day, if the action is unsuccessful, what happens? As Master Sanderson said, the plaintiffs really engaged in an exercise in which it has nothing to lose because it has no assets but yet it is proceeding with an action which puts the present applicants at a considerable disadvantage which continues because of the non‑payment. I think that is all I can usefully say and I see that the orange light is glowing anyway, your Honour.
FRENCH CJ: Thank you, Mr McCusker. Yes, Mr Davies.
MR DAVIES: Your Honours, the first point in relation to what is put as the intention of the Court of Criminal Appeal is answered in the reasons of the Court of Appeal decision that is under appeal, and if I can take your Honours to paragraphs 33 and 34 of those reasons. What the Court of Appeal found when dealing squarely with this point, which was the way in which the case was put before the Court of Appeal, that we should look at the intention of the Court of Criminal Appeal, in paragraph 33 about halfway through the paragraph, it said:
Steytler J (with whom the other members of the court agreed) held, in effect, that the imposition of a stay by the court would not put the parties back into the position that they occupied prior to the making of the original restitution orders in the District Court –
and he was dealing with the then application for a stay of the CCA orders. Then, the Court said that –
His Honour was not addressing his attention to the proposition, nor expressing an intention, that the plaintiff should be barred from pursuing its civil claims unless it first repaid to the defendants the monies which it had recovered under the original restitution orders.
Then in paragraph 34 the Court of Appeal said:
It is to be noted that when the Court of Criminal Appeal declined to stay the orders on the basis then advanced by the plaintiff, it was known that the plaintiff was probably impecunious. Steytler J, in dealing with the question of payment of interest on the principal sums, referred to the likelihood of the plaintiff being able to pay as ‘academic’.
Now, the court then collected the references in the Easterday Case [2005] WASCA 202 and the references there appear, paragraphs 19 and 20, which clearly indicate that Justice Steytler and the Court of Criminal Appeal fully appreciated that the respondent was impecunious and that there was no capacity to repay and then the Court of Appeal, still in paragraph 34 of these reasons, collected the references to other parts of that judgment where Justice Steytler spoke clearly in terms which anticipated the continuation on of the plaintiffs’ civil claims, and those paragraphs are there given.
That, in our submission, is the answer to the point about the Court of Criminal Appeal’s supposed intention and it seems, in our submission, there would be absolutely no reason why, if that was the intention, the applicants could not have had the matter brought back before the Court of Appeal and had the order clarified or supplemented which you would think would be the ordinary way of dealing with the contention that is now put that the order does not reflect the intention of the court.
FRENCH CJ: Do you say the Court of Criminal Appeal would have had the power to attach to a requirement that the restitution moneys be repaid that they really not be able to proceed with its civil claim until that had happened?
MR DAVIES: Well, it would have the power to order a stay of the civil claim and, really, it was represented in these hearings and was present in these hearings.
FRENCH CJ: What would be the source of that power, because it was acting under the Criminal Code, was it not, provisions of the Code?
MR DAVIES: I suppose, your Honour, it would have the inherent jurisdiction to order a stay. I cannot identify ‑ ‑ ‑
FRENCH CJ: It is a statutory court. I think that was the whole point of the discussion in the judgment in the first place on the annulment.
MR DAVIES: I cannot identify for your Honours a power, but there is any number of mechanisms by which these applicants could have got the matter back before a court for a stay and could have done so many years ago had it been thought that this was the proper basis for a stay, namely, the supposed intention of the Court of Criminal Appeal.
The next brief point in response is there is, in fact, no proper evidence of supposed financial difficulty of these applicants that only changed in August of this year. Can I just take your Honours to the affidavit of Ms Hill that was sworn for the purpose of the stay application. It is the affidavit sworn 19 October 2010. Attached to that affidavit is a transcript both at first instance and before the Court of Appeal. Can I take your Honours to the first instance transcript. I do not think the pages are numbered but it is transcript page 523. Do your Honours have that?
FRENCH CJ: Yes.
MR DAVIES: In arguing the matter before Justice Le Miere there was a suggestion put by counsel for the applicants that there was an issue about the prejudice and not having funds to defend the claim. Now, at transcript 523 at the bottom of the page, I then commenced to deal with that proposition and I referred to – it is probably point 5 on page 523 – and I made the submission:
There is really no evidence of prejudice before [the court] in relation to this notion of being unable to fund the litigation.
The only evidence there was was one paragraph in an affidavit of Mr Easterday which said simply this, and I actually read out the paragraph. It says:
We are adversely affected by not having funds to defend the claim.
Now, the first time that paragraph was read it was objected to. Mr Easterday is swearing an affidavit in proceedings where there is multiple defendants, it is not on information and belief even, and it is just so vague and lacking in particularity that no weight could be given to it. It does not say what their assets are, their liabilities or in what way they are adversely affected. Now, I move to make that submission and Mr Thomson then rose – and this is at the top of page 524 of the transcript – and he rose to say that “we are not saying that at this point.” In other words, they conceded there that they did have the funds and they were not concerned they did not have the funds to run the litigation and Mr Thomson put what was then put as the matter, he says:
It is clear from the nature of the application that we have made we are here to litigate it so that we want a prize at the end.
So it was not being put on the basis they could not fund the litigation. It was being put on the basis that there was no prize. On the question of security for costs which my learned friend raised the respondent has always accepted that it must provide security for costs and there have been extensive discussions and negotiations. There is no question about the provision of security costs. The fact that my friend says only 25,000 has been paid so far, I do not know, but there are negotiations between the solicitors and, if necessary, that matter can be brought back before the trial judge who, indeed, has said that to the applicants many times, “There is an issue about security of costs”, he said, “bring it back and we will fix the number.”
In relation to the passage from Master Sanderson that my friend refers to, obviously that is not part of Master Sanderson’s reasoning but, of course, the respondent does have something to lose because if it does not establish its legal entitlement to these funds, it will inevitably be wound up and in this action, if it loses the action, it will be ordered to pay the costs and there will be access then to the security for costs that will be provided which, I can tell your Honours, will be a significant sum. $25,000 does not represent in any way the likely amount of security.
FRENCH CJ: When you say that, there is an order for security in place at the moment, I take it?
MR DAVIES: There is.
FRENCH CJ: For how much?
MR DAVIES: I do not know how much has been provided, but we are told it is 30,000. It has always been accepted that that number would be increased before trial. The only reason it has not been ‑ ‑ ‑
FRENCH CJ: That will be sometime next week?
MR DAVIES: It is a matter between the solicitors, your Honour. I mean, it is not controversial. I mean, I think we have had a letter – I think there has been a letter from their side asking for 1.5 million and there has been letters back from our side saying 1.5 million is not reasonable, it should be some other number. That is the state of play.
Moving then to the other reasons why special leave should not be granted. In our submission, the proposed appeal turns on the application of established law to particular facts and that applies to, really, the two issues that are sought to be raised because the first issue must be whether in the particular circumstances the Court of Appeal ought to have given leave to appeal the first instance decision. That is the decision that is under appeal and that must be an application of established law to the facts. The second matter, if you go to the primary decision, is whether in the particular factual circumstances of this case, which are peculiar to this case, the prosecution of the proceedings amounts to an abuse of process. No principle of general application arises in relation to that matter.
FRENCH CJ: The process posited for the purposes of this application and in the Court of Appeal seems to have been the incompatibility between the continuance of these proceedings and the intention imputed to the Court of Appeal – the Court of Criminal Appeal, I am sorry, that the restitution moneys be repaid before the civil claim went forward.
MR DAVIES: Yes. Well, it is our submission, you cannot find that intention. It was an ordinary order of the court that it be repaid and it not be stayed. That is the end of the matter. If there was to be anything further, there would need to be a stay of these proceedings because the court knew that the respondent was impecunious and, indeed, the court was told that there was no capacity to repay the money.
The other matters that we would invite your Honours’ attention to is that the decision of the Court of Appeal as to whether to give leave is a discretionary decision. The decision at first instance, whether the circumstances give rise to an abuse of process, is an evaluative decision heavily dependent on the particular circumstances of the matter. Contrary to what is submitted in my learned friend’s case, there is no difference of opinion between different courts which requires a decision of the High Court to resolve.
Reference is made in the applicants’ submissions to the Commissioner for Railways v Cavanough, Production Spray Painting and TCN Channel Nine 9 Pty Ltd. None of those authorities are in conflict with what has happened in this case. Production Spray Painting is just a case where the court ordered restitution and declined a stay, which is exactly what happened in this case. TCN Channel Nine is the same circumstances and Commissioner for Railways v Cavanough has nothing to do with these circumstances. It is a case where a railway worker sued his employer having been summarily dismissed for theft and the conviction later having been set aside. He sued to get the salary that he should have got during that period. It is nothing to do with these circumstances.
The next submission we make, your Honours, is the way in which the special leave questions have been formulated are not founded on an accurate, factual or legal premise. In relation to the first special leave question, it is common cause that the respondent does not have the capacity to repay the money and the special leave question that has been formulated ignores that fact. In relation to both special leave questions, the CCA orders have not been stayed and are presently capable of enforcement and the formulation appears to ignore that.
The other matters that we would invite your Honours’ attention to are these. The case at first instance before Justice Le Miere was put on a particular narrow basis and that was done because of the previous application for a stay which had not been appealed against. The way in which the matter was put in the Court of Appeal was different. It was put on this basis of intention of the Court of Criminal Appeal and the way in which the case was put in the Court of Appeal was not put squarely to the first instance judge, and that appears from the Court of Appeal reasons at paragraph 27. Could I take your Honours to that. In paragraph 27, the court said about halfway through that paragraph:
In relation to the latter part of the defendant’s proposition, the primary judge –
I am sorry, your Honour, that is not ‑ ‑ ‑
FRENCH CJ: That is a reference back to the 2009 application.
MR DAVIES: It is, I am sorry, your Honour. I will try and pick up the reference but, in any event, in the Court of Appeal reasons the courts said that the case that was put in the intermediate appeal was not put squarely to the judge at first instance. If I can move then to the reasons we would support the Court of Appeal decision. The first submission is there was no substantial injustice and two matters were put in relation to substantial injustice by the appellants.
The first is that the respondent had no incentive to settle and in the reasons at paragraph 50 of the Court of Appeal your Honours will see that the Court of Appeal found that not much weight could be given to that notion. The Court of Appeal said in paragraph 50 that the respondent still has to fund the litigation, fund security for costs and the usual factors that promote settlement were still in existence. So that was the first matter that was put.
The second matter that was put about a substantial injustice was the notion of difficulties in funding the litigation. Now, the Court of Appeal was prepared to deal with that, although, as I have shown your Honours from the transcript at first instance, it was conceded that that was not the way the matter was being put. They were not contending that they could not fund the litigation. The Court of Appeal noted that. It says:
It is of some significance that it is accepted that the costs will not be so burdensome that the defendants will in effect be financially shut out from defending the claims.
So there was no substantial injustice identified. I should also add, your Honours, that even if the money had have been repaid, it would have been subject to a Mareva order. It has always been subject to a Mareva order whenever the applicants had it. They might have been able to get access to some of the money to fund the litigation but only if they had no other means to do so. The evidence shows that they do have capacity to fund the litigation. So they would not have actually got any of the money, in our submission, had it been paid back. It just would have been subject to the Mareva order.
So, in our submission, there is insufficient prospect of the decision of the Court of Appeal being held to be wrong to permit special leave to be granted. In relation to the matter of abuse of process, having regard to all of the concessions that were made – and they are set out in the reasons of the Court of Appeal in paragraph 29, I will not read them, but ‑ ‑ ‑
FRENCH CJ: That all just leads into the single point, as it were, identified by the Court of Appeal in paragraph 30.
MR DAVIES: Yes. In all of those circumstances, in our submission, there are insufficient prospects that the circumstances of this case could be held to be an abuse of process sufficient to warrant the serious relief or the very extreme relief which is sought, which is to stay these proceedings which would effectively prevent my client litigating its entitlement to these funds. Those are our submissions, your Honour.
FRENCH CJ: Thank you, Mr Davies. Yes, Mr McCusker.
MR McCUSKER: Your Honours, in reply first could I refer you to the decision of the Court of Criminal Appeal which I’ve taken you to previously. It is in tab 3 at paragraph 16 and really encapsulates the point where it was said:
the effect of a stay would be that the applicants would not be restored to all that was lost by them as a consequence of the erroneous judgment –
and that is the important issue in this case –
The position would, in reality, be no different than if the Court had declined to make orders for restitution pending the outcome of civil action.
and that is where we presently stand –
That being so, and given the potential prejudice which that course might work upon the applicants (as a consequence, at least, of what would then be their inability to resort to any funds, which might otherwise have been repaid by Norilya, for the purpose of funding their defence of the civil action), and given also that no other basis has been put forward to support the imposition of a stay, it seems to me that it would be inappropriate –
What their Honours said there, certainly the Court of Appeal in its recent judgment correctly stated what the principles are, but it is not the question of their statement of principles to which they adverted, as illustrated by Commissioner for Railways v Cavanough, it is the giving effect, how are those principles to be given effect? In our submission, in this case, those principles have not been given full effect.
FRENCH CJ: The prejudice referred to in 16, in terms of the inability to fund the defence for the civil action, is not relied upon in the Court of Appeal.
MR McCUSKER: It is a prejudice in the sense that ‑ ‑ ‑
FRENCH CJ: Because you are able to fund the action.
MR McCUSKER: Only by borrowing money elsewhere.
FRENCH CJ: Yes, of course.
MR McCUSKER: Yes, that is the problem, and my learned friend has said, well, if the money was paid into court, it would still be subject to a Mareva order. Certainly it would, but under the terms of that order we would be entitled to have resort to the funds at least to fund the litigation. The defendants have been severely prejudiced by having to borrow money elsewhere and so there is an opportunity cost and a cost of borrowing. There is also, we maintain, the fact that if they had been restored to the
position to which they should have been but for the wrongfully entered judgment, if they had been restored to that position they would then be in a position also to perhaps negotiate a settlement. That is not an inconsiderable – although the Court of Appeal thought it was not a very important consideration. Nevertheless we say it is. The present position is that it is a no lose situation, apart from costs, for the plaintiffs in the civil action.
So far as there being an important point of principle, we say the important point of principle is precisely that. In these kinds of circumstances, is it giving full effect to the principle stated by the Court of Criminal Appeal in reliance to authorities such as Cavanough and Production Spray Painting to allow this civil action to proceed? So it is the difference, in effect, that we say is the important issue in this case.
I should mention, your Honours, it is a minor point, but my learned friend referred to the Court of Appeal reference in paragraph 27, I think, in its reasons. With respect, to the extent that it is relevant, that statement is incorrect. The points raised were raised in the course of argument, and that appears from page 454 of the transcript and 469, and the transcript is annexed to the affidavit of Ms Hill that is filed in these proceedings, but I think that is a minor point in the scheme of things. May it please your Honour.
FRENCH CJ: Thank you, Mr McCusker.
This is an application for special leave to appeal against a decision of the Court of Appeal of the Supreme Court of Western Australia, which refused an application for leave to appeal against a decision of a judge of the Supreme Court dismissing an application to stay proceedings pending in that Court. The decision of the primary judge was, as the Court of Appeal observed, an interlocutory decision on practice and procedure. The decision being of that character, the applicants face a significant hurdle in seeking to persuade this Court to make a grant of special leave.
In our opinion, the decisions of the primary judge and of the Court of Appeal were based upon a unique set of circumstances and do not raise any question of general principle or issue going to the administration of justice which would warrant the grant of special leave. Moreover, we are not persuaded that the Court of Appeal erred in the approach that it took in refusing leave to appeal. The applicants’ argument depended significantly upon what was said to be an intention on the part of the Court of Criminal Appeal that the respondent not be able to proceed with its civil claim against the applicants until the restitution moneys had been repaid. In our view, that was not demonstrated.
The application for special leave will be dismissed. Can you resist an order for costs, Mr McCusker?
MR McCUSKER: No, your Honour, but you will see that we have asked that there be a stay of the costs order until after the resolution of the trial on the ground that if the applicants succeed in their defence at trial, they should not have paid money to an assetless company unlikely to be recovered when the company will owe them a significantly greater amount, so there is a question of a set off. So although we do not resist the order for costs, we ask that it be stayed until that time.
FRENCH CJ: What do you say about that, Mr Davies?
MR DAVIES: I do not make any submissions about that, your Honour.
FRENCH CJ: The order of the Court will simply be that the application for special leave be dismissed with costs. The Court will now adjourn.
AT 9.46 AM THE MATTER WAS ADJOURNED
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