KIEFEL CJ, BELL, GAGELER, KEANE, NETTLE, GORDON AND EDELMAN JJ
UBS AG APPELLANT
AND
SCOTT FRANCIS TYNE AS TRUSTEE OF THE ARGOT TRUST RESPONDENT
UBS AG v Tyne
[2018] HCA 45
17 October 2018
B54/2017
ORDER
1.Appeal allowed with costs.
2.Set aside the orders made by the Full Court of the Federal Court of Australia on 20 January 2017 and, in their place, order that:
(a)the appeal to the Full Court is dismissed; and
(b)the appellants in the Full Court are to pay the respondent's costs of the appeal to that Court.
On appeal from the Federal Court of Australia
Representation
J Stoljar SC with L T Livingston for the appellant (instructed by King & Wood Mallesons)
G O'L Reynolds SC with D P Hume for the respondent (instructed by Russells)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
UBS AG v Tyne
Practice and procedure – Permanent stay of proceedings – Abuse of process – Where respondent (in personal capacity) was controlling mind of former trustee and related company – Where respondent (in personal capacity), former trustee and related company commenced proceedings in Supreme Court of New South Wales – Where respondent (in personal capacity) and former trustee discontinued as parties in Supreme Court proceedings – Where Supreme Court proceedings permanently stayed – Where respondent (as trustee) pursued substantially same claims in Federal Court of Australia – Where primary judge permanently stayed proceedings for abuse of process – Whether on appeal Full Court erred in finding no abuse of process and setting aside permanent stay – Whether Full Court failed to consider overarching purpose of conduct of civil litigation.
Words and phrases – "abuse of process", "administration of justice", "conduct of civil litigation", "discontinue", "final determination", "just resolution", "overarching purpose of the conduct of civil litigation", "permanent stay", "related parties", "unconditional discontinuance", "unjustifiably oppressive".
KIEFEL CJ, BELL AND KEANE JJ. This appeal is concerned with the power to permanently stay proceedings as an abuse of the process of the court. The varied circumstances in which the use of the court's processes will amount to an abuse, notwithstanding that the use is consistent with the literal application of its rules, do not lend themselves to exhaustive statement. Either of two conditions enlivens the power: where the use of the court's procedures occasions unjustifiable oppression to a party, or where the use serves to bring the administration of justice into disrepute[1]. The issue in this appeal is whether one or both of those conditions is met in circumstances in which the factual merits of the underlying claim have not been determined and any delay in prosecuting the claim has not made its fair trial impossible.
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
UBS AG v Tyne [2018] HCA 45
Case
[2018] HCA 45
Decision Date
CaseChat Overview and Summary
The High Court of Australia considered an appeal by UBS AG against a decision of the Full Court of the Federal Court of Australia. The dispute concerned whether the respondent, Mr Tyne, acting as trustee for the Trust, had abused the process of the Federal Court by pursuing claims substantially similar to those previously discontinued in the Supreme Court of New South Wales by Mr Tyne personally, a related company, and the former trustee. The primary judge had permanently stayed the Federal Court proceedings for abuse of process, but the Full Court had set aside that stay.
The central legal issue before the High Court was whether the Full Court erred in finding that the Federal Court proceedings did not constitute an abuse of process, and whether it failed to properly consider the overarching purpose of the conduct of civil litigation, which includes achieving a just resolution. The High Court was required to determine if the pursuit of the same claims in a different forum, after discontinuing them in another, amounted to an unjustifiable oppression or an affront to the administration of justice.
The High Court reasoned that the primary judge had correctly identified an abuse of process. It found that the discontinuance of the Supreme Court proceedings by Mr Tyne and the former trustee was unconditional, and the subsequent initiation of substantially the same claims by Mr Tyne as trustee in the Federal Court, where he was the controlling mind of the entities involved, was an attempt to circumvent the earlier discontinuance and potentially avoid adverse findings or procedural disadvantages. The Court applied the principle that litigation should have a final determination and that parties should not be permitted to pursue claims in a manner that is vexatious or oppressive.
The High Court allowed the appeal, set aside the orders of the Full Court of the Federal Court, and reinstated the permanent stay of proceedings ordered by the primary judge. The appellants in the Full Court (the respondent in the High Court) were ordered to pay the respondent's (UBS AG) costs of the appeal to the Full Court.
Orders
Orders of the court
1. Appeal allowed with costs.
2. Set aside the orders made by the Full Court of the Federal Court of Australia on 20 January 2017 and, in their place, order that:
(a) the appeal to the Full Court is dismissed; and
(b) the appellants in the Full Court are to pay the respondent's costs of the appeal to that Court.
Background
Background to the litigation
For the reasons to be given, taking into account the public and private interests involved, the primary judge was correct to stay this proceeding as an abuse of the processes of the Federal Court. The conclusion makes it unnecessary to address UBS's second ground of appeal. The appeal must be allowed and, in place of the Full Court's order, the appeal to that Court must be dismissed.The factual background In about 2007, Telesto opened an investment account with UBS, through which certain credit facilities were extended to it. Under the terms and conditions of the account the facilities were governed by the law of the country in which the account was booked. Telesto's account was "booked in Singapore" and Telesto unconditionally submitted to the non-exclusive jurisdiction of the courts of Singapore. The Trust's claims in the SCNSW proceedings and in these proceedings are founded on allegations that UBS gave negligent advice and/or that UBS engaged in misleading or deceptive conduct (or conduct that was likely to mislead or deceive), in relation to financial services, in the representations made by its officers to Mr Tyne, and, through Mr Tyne, to Telesto and ACN 074 (in its capacity as trustee of the Trust) ("the Trust's TPA claims"). The representations are alleged to have induced Telesto to acquire and retain bonds issued by financial institutions in Kazakhstan, the Bank Turan-Alem and Astana Finance ("the Bonds"), which ultimately proved to be worthless. In September 2008, the value of collateral provided by Telesto under the facilities declined. UBS issued a margin call requiring Telesto to provide additional collateral or to reduce the amount owed under the facilities. At Telesto's and Mr Tyne's request, UBS agreed not to sell the collateral and not to make further margin calls on terms that were contained in a letter dated 14 December 2009. The letter was counter-signed by Telesto on 31 December 2009 ("the Standstill Agreement"). Under the Standstill Agreement, Telesto undertook to have ACN 074 (in its capacity as trustee of the Trust) enter into a letter of undertaking in favour of UBS. On 28 January 2010, ACN 074 (in its capacity as trustee of the Trust) executed the letter of undertaking. On 15 October 2010, UBS purported to terminate the Standstill Agreement. On the same day, UBS commenced proceedings 801 of 2010 in the High Court of Singapore ("the Singapore 801 proceedings") against Telesto, as principal debtor, and Mr Tyne, who had personally guaranteed Telesto's liabilities to UBS, alleging that Telesto's account with UBS was in default. On 2 November 2010, Telesto, Mr Tyne in his personal capacity and ACN 074 (in its capacity as trustee of the Trust) commenced the SCNSW proceedings. In those proceedings, it was claimed that UBS did not have authority to purchase the Bonds on Telesto's behalf. Alternatively, it was claimed that Telesto purchased the Bonds in reliance on UBS's negligent advice and/or on representations made by UBS about the nature and quality of the Bonds, which constituted misleading or deceptive conduct in contravention of Commonwealth and State law. The Trust pleaded that it had entered into sureties on Telesto's behalf in continuing reliance on UBS's negligent advice and misleading or deceptive conduct. It sought to be released from those sureties, or the award of damages or compensation. Telesto also claimed equitable compensation for breach of fiduciary duty owed by UBS to it arising from UBS's alleged acceptance of an engagement to advise the Government of Kazakhstan on a re-structuring of the Kazakh banking industry. The Trust makes a like claim to equitable compensation in these proceedings.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
KIEFEL CJ, BELL AND KEANE JJ
(dissent)
GAGELER J
(dissent)
NETTLE AND EDELMAN JJ
(dissent)