Vinci Energies SA v McConnell Dowell Holdings Pty Ltd
[2017] FCA 561
•22 May 2017
FEDERAL COURT OF AUSTRALIA
VINCI Energies SA v McConnell Dowell Holdings Pty Ltd [2017] FCA 561
File number: VID 354 of 2016 Judge: O'CALLAGHAN J Date of judgment: 22 May 2017 Catchwords: PRACTICE AND PROCEDURE – application for temporary stay of proceeding Cases cited: Sterling Pharmaceuticals Pty Ltd v Boots Company (Australia) Pty Ltd (1992) 34 FCR 287 Date of hearing: 12 May 2017 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area Commercial Contracts, Banking, Finance and Insurance Category: Catchwords Number of paragraphs: 9 Counsel for the Applicants: Mr T Walker QC, Mr R Harris and Mr J Masters Solicitor for the Applicants: Herbert Smith Freehills Counsel for the Respondents: Mr D Collins QC and Mr M McKillop Solicitor for the Respondents: Minter Ellison ORDERS
VID 354 of 2016 BETWEEN: VINCI ENERGIES SA
First ApplicantVINCI ENERGIES AUSTRALIA PTY LTD (ACN 602 042 339)
Second ApplicantAND: MCCONNEL DOWELL HOLDINGS PTY LTDACN 003 207 270) (
First RespondentDALE JOHN MORRISON
Second RespondentDAVID GEORGE ROBINSON
Third Respondent
JUDGE:
O'CALLAGHAN J
DATE OF ORDER:
22 MAY 2017
THE COURT ORDERS THAT:
1.The respondents’ application that the proceeding be temporarily stayed pending the resolution of the dispute the subject of the Notice of Dispute described in paragraph 6 of the affidavit of Rebecca Louise Bedford sworn on 9 May 2017 be stood over to a date to be fixed.
2.The applicants file and serve any affidavit evidence of their lay witnesses on or before 23 June 2017.
3.The applicants file and serve any expert reports on or before 11 August 2017.
4.The proceeding be listed for a case management hearing at 9.30 a.m. on 15 August 2017.
5.All parties have liberty to apply on the giving of 48 hours’ notice.
6.Costs reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
O’CALLAGHAN J:
This is an application by the respondents for a temporary stay of this proceeding. The application is one made for case management purposes and in the interests of justice.
The proceeding has been set down for trial before me on 16 October 2017 on an estimate of 10 days. The applicants resist the stay application.
This proceeding was commenced in April this year. It concerns alleged breaches of a Share Sale Deed (SSD) and misleading or deceptive conduct in respect of what is said to be a failure by the respondents to disclose “the Roy Hill Sub-Contract”, information material to that sub-contract and the tender process that led to it. The Roy Hill Sub-Contract was a contract entered into between Electrix Australia (Electrix) and McConnell Dowell Constructors (Aust) Pty Ltd (MDCA), a subsidiary of the first respondent, for the provision of services by Electrix to the first respondent. The second applicant acquired all the shares in Electrix as part of the SSD. The applicants plead, among other things, that as a result of losses incurred in relation to the Roy Hill Sub-Contract, the net assets of Electrix were negatively impacted by approximately $22m. They seek to recover the loss represented by the difference between the purchase price paid for the shares in Electrix and the true value of the shares. The respondents have filed a defence which denies the substantive allegations.
The applicants seek directions, among others, for the filing of lay and expert evidence by all parties and “confirmation” that the trial will commence on 16 October 2017 on an estimate of 10 days.
In February this year, Electrix, which is not a party to this proceeding and has not sought to be heard in respect of this application, served a Notice of Dispute on MDCA. The Notice of Dispute was served pursuant to the Roy Hill Sub-Contract and claims additional payments of approximately $25m. The relevant terms of the contract, and the Notice of Dispute, require the parties to confer in good faith to negotiate and settle the dispute, failing which the dispute is to be submitted to mediation. If that fails, the dispute may then be referred to arbitration.
On 7 April 2017, Electrix submitted the dispute to mediation. The parties are currently in the process of seeking to agree the mediator to be appointed.
The respondents submit that if Electrix recovers the amount of $25m sought, then there will be no relevant losses under the Roy Hill Sub-Contract and none of the claims made by the applicants in this proceeding will or can arise.
There is, if I may say so, considerable apparent force in that submission. It seems to me, however, that it would be premature to determine that question or temporarily to stay this proceeding now because there is not yet in existence, and there may never be in existence, a concurrent arbitral proceeding: cf Sterling Pharmaceuticals Pty Ltd v Boots Company (Australia) Pty Ltd (1992) 34 FCR 287 at 291. The dispute the subject of the Notice of Dispute may resolve at mediation. If it does not, and the arbitral process is commenced, the Court will then be in a position to re-assess, among other things, the relationship between the curial and the arbitral proceedings; how, if at all, the loss and damage claimed by different parties relate to or affect each other; and the question of which process should go first.
Accordingly, I propose to order that the applicants put on their evidence within the time frame they proposed and then to re-list the case management hearing shortly thereafter. I will stand over the respondents’ stay application to a date to be fixed and give all parties liberty to apply on the giving of 48 hours’ notice.
I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Callaghan. Associate:
Dated: 22 May 2017
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