Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading

[2005] FCA 454

FEDERAL COURT OF AUSTRALIA

Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading [2005] FCA 454

WALTER RAU NEUSSER OEL UND FETT AG v CROSS PACIFIC TRADING LTD AND ORS
NSD 432 of 2005

ALLSOP J
15 APRIL 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 432 of 2005

BETWEEN:

WALTER RAU NEUSSER OEL UND FETT AG
APPLICANT

AND:

CROSS PACIFIC TRADING LTD
FIRST RESPONDENT

PATRICK SHUNG WONG
SECOND RESPONDENT

WILLEM JOHAN VAN VLYMEN
THIRD RESPONDENT

ORBIS COMMODITIES PTY LIMITED (ACN 03 456 898)
FOURTH RESPONDENT

INTERNATIONAL COMTRADE & SHIPPING LIMITED
FIFTH RESPONDENT

RUSSELL ISLAND PLANTATION ESTATES LIMITED
SIXTH RESPONDENT

KAY LITTLEJOHN
SEVENTH RESPONDENT

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED (ACN 005 357 522)
EIGHTH RESPONDENT

ANZ BANK LIMITED, FIJI
NINTH RESPONDENT

JUDGE:

ALLSOP J

DATE OF ORDER:

15 APRIL 2005

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1. The amended notice to produce dated 1 April 2005 be set aside.

2. The question of costs of the notice of motion seeking to set aside the amended notice to produce referred to in order 1 be reserved.

3. On or before Friday, 22 April 2005, in relation to the arbitration applications, the parties co-operate to prepare an indexed book of documents. The application will be dealt with on the papers and will be brought back before the parties as soon as is reasonably possible for the purposes of identifying to the parties on that day, the issues needed to be addressed, by whom and any other matter that needs to be debated.

4. On or before Friday, 22 April 2005, in relation to the discharge of the Mareva injunction application, a book of relevant material be prepared including submissions on the issue with the matter to be determined on the papers unless cross examination be necessary.

5. No further notice to produce be issued without leave of the Court.

6.On or before 5.00pm, Monday, 18 April 2005, if a notice of removal or registration and dissolution from the Register of the Cook Islands of the International Companies is in the possession, power, custody or control of any of the 1^st – 7^th respondents it is to be produced to the applicant forthwith. If a notice of removal or registration and dissolution from the Register of the Cook Islands of the International Companies is not in the possession, power, custody or control of any of the 1^st – 7^th respondents they are to take all steps available to them to obtain it from the Cook Islands or otherwise.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 432 of 2005

BETWEEN:

WALTER RAU NEUSSER OEL UND FETT AG
APPLICANT

AND:

CROSS PACIFIC TRADING LTD
FIRST RESPONDENT

PATRICK SHUNG WONG
SECOND RESPONDENT

WILLEM JOHAN VAN VLYMEN
THIRD RESPONDENT

ORBIS COMMODITIES PTY LIMITED (ACN 03 456 898)
FOURTH RESPONDENT

INTERNATIONAL COMTRADE & SHIPPING LIMITED
FIFTH RESPONDENT

RUSSELL ISLAND PLANTATION ESTATES LIMITED
SIXTH RESPONDENT

KAY LITTLEJOHN
SEVENTH RESPONDENT

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED (ACN 005 357 522)
EIGHTH RESPONDENT

ANZ BANK LIMITED, FIJI
NINTH RESPONDENT

JUDGE:	ALLSOP J
DATE:	15 APRIL 2005
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. I have before me a notice of motion dated 31 March 2005 seeking to set aside a notice to produce dated 30 March 2005 as irregular or as an abuse of process with costs on an indemnity basis.

2. After the service of a notice to produce with that date, an amended notice to produce was served seeking to accommodate some anticipated difficulties of the respondents.  It is common ground before me that the motion by way of notice of motion to which I have referred is before me in relation to that amended notice of motion.

3. I do not propose to deal with this matter in great detail today.  I have had the considerable advantage of the careful and helpful written submissions of counsel for the applicant and for the first to seventh respondents, contained within an amended book of materials, which have been placed before me, together with a Judge's bundle provided by the applicant for me to peruse in relation to this application.

4. I should deal with matters formally, and I do so now.  The affidavit of Patrick Wong sworn 5 April 2005, in support of this motion, is taken as read.  Also, in relation to this affidavit, the affidavits of Jason Allan Hurley, Wayne Morris, Karen Jane Harvey all filed 8 April 2005 and Danella Anne Wimshurst filed 11 April 2005 identified behind tabs 3, 4, 5 and 6 of the Judge’s bundle respectively, to which I have earlier referred, are for the purposes of the motion admitted into evidence.  I dispense with the need for marking and this transcript will sufficiently identify the documents comprised by those titles, and the exhibits numbered PSW 131 to 137 of Patrick Sean Wong filed 4 April 2005, is also admitted into the evidence for the purposes of these proceedings.  It is indexed in the Judge’s bundle at 2.  Likewise, that which is contained in the Judge's bundle at 1, being the notice filed by the first, second and third respondents dated 1 April 2005, is admitted into evidence for the purposes of this motion.

5. Counsel for the applicant, Mr Street SC also took me to other documents, which are on the court file.  In particular, he took me to pages 14 and 15 of the affidavit of Norbert Bernd Kurt Horn sworn 19 March 2005, and page 25 of the affidavit, and then referred me to, in relation to the signatures on those documents, that affidavit of Mr Patrick Sean Wong sworn 11 April 2005 and a particular paragraph 6.2, and the affidavit of Willem Johan Van Vlymen sworn 4 April 2005, and paragraph 3.2 of that affidavit.  To the extent necessary, those particular paragraphs and the introductory paragraphs of those affidavits can be taken as evidence before me without the need to mark the filed copies.

6. On the 21 March 2005, the applicant made an application ex parte before me for the making of Mareva injunction orders and world wide freezing orders.  On the material put forward to me on that day and hearing senior counsel on behalf of the applicant, I made orders, which are sufficiently understood by the above description.

7. The matter involved circumstances concerning an arrangement or arrangements for the purchase, delivery and transport of a quantity of copra from the Solomon Islands to Germany.  Serious allegations were and are made by the applicant against the respondents claiming contraventions of the Trade Practices Act 1974 (Cth), conduct amounting to fraud, and various contractual breaches. The contracts, which the parties entered into in 2003, were on their face governed by arbitration clauses by reason of their being in the form of Federation of Oils, Seeds and Fats Associations Limited (FOSFA International) contracts.

8. After the orders were made, the respondents appeared represented by solicitors, counsel and senior counsel. The respondents have applied to have the proceedings stayed per force of s 7 of the International Arbitration Act 1974 (Cth).

9. The applicant has brought a motion complementary to that stay application, to enjoin the respondents from proceeding to arbitration.  Those two related applications have not yet been heard. 

10. The respondents also move to have the orders, which I made on 21 March varied and thereafter discharged.  One ground of the application for discharge is the fact that the respondents assert in ways that are outlined in a document that has been placed before me, that the applicant failed to disclose in sufficiently important matters as to warrant the discharge of the orders on that basis alone.  That application for discharge has also not been heard.  

11. Affidavits have been now completed by both sides of the record (subject to some further affidavits mentioned this morning, which should be completed by early next week), such that both the International Arbitration Act applications, if I may use that expression, and the discharge application are prepared insofar as affidavit material is sought to be relied upon by the parties.

12. There was an outstanding issue in relation to a Mr Chek Ai Ming in Singapore and the suggested need for orders to be made for the taking of his evidence on commission in relation to the discharge application.  However, the applicant has filed and served Mr Ming’s  affidavit.  The extent to which he may be cross-examined is an issue in relation to the conduct of that application which has not been finally decided upon.  To the extent that in an interlocutory application of the kind being brought by the respondents for the discharge of the Mareva freezing orders, subject to hearing from the parties I would have thought to the extent that the Singapore authorities permitted, video link cross-examination would probably be sufficient.

13. Thus it is important to understand the three groups of issues, which are before the Court.  First, there is the group of issues dealing with the International Arbitration Act and attendant orders sought.  Second, there is the discharge of the Mareva injunction and freezing orders.  Third, are the underlying issues in the case. 

14. As to the International Arbitration Act issue that matter appears to me, subject to one consideration, able to be dealt with without the need for any form of compulsory production of documentation.  By and large it ought be a matter able to be discerned from the assertions in the pleadings together with the essential understanding of the limitations of the matter using that term in the constitutional and jurisdictional sense.  The limits of the matter in a case such as this will probably derive from the pleadings.  It may be necessary to examine the surrounding evidence said to found in the pleading, but by and large and subject to the one matter to which I will come to, that is probably an exercise on the paper.

15. The one qualification to that is the question of foreign law being Cook Islands’ law in relation to the effect of the absence of one of the parties, being the first respondent, from the Cook Islands’ register during the time that it was not on the register.  It is common ground that it was for a time not on the register.  It does not appear to be common ground during what times, nor is it common ground as to the effect of its absence from the register during such time as it was not on the register.

16. Evidence as to foreign law has been put on as to the consequences under Cook Islands law of the absence of the first respondent on the register. That issue is said to affect the s 7 application. I will come later to the disposition and procedure for disposition of the International Arbitration Act motions. That is a sufficient identification of my current view to assist the view in putting any further submissions to me today about the disposition of those motions.

17. The second group of issues is the discharge of the Mareva and freezing orders.  Whilst the underlying issues are central to those matters that does not lead to the conclusion that the obtaining of a Mareva order and freezing orders and the later application for discharge opens up for debate on that discharge application the totality of the underlying issues as if an interlocutory injunction were being obtained in relation to restraint of conduct which was sought to be finally restrained.

18. The issue, and issues, is, and are, whether or not the respondents should be subject to the severe restrictions of the dealing with their assets in the light of the evidence put before the Court as to those assets and to the likely behaviour of those respondents in respect of any frustration of the orders of the Court.  There is not in this country any notion of saisie conservatoire.  In that context, whilst the underlying issues are of course fundamental the focus of that application must be kept.

19. The third group of issues is the underlying issues in the case.  Serious matters have been raised and will need to be disposed of one way or the other either by curial or arbitral process.  One factor of importance is the detailed assertions that the discharge of the orders should be dealt with on the basis of asserted non-disclosure.  The applicant proposes to file a document in due course about that matter. 

20. Having looked at all the material and carefully considered counsels' submissions, my view is at the moment that the Mareva order and freezing order and the discharge thereof should be assessed and analysed on the basis that when the matter comes before the Court it is to be dealt with as if either the orders were granted and on the immediate return date affidavits were produced, or short service had been given and on the return date the applications were made, or shortly thereafter.  That does not rule out of account that in the hearing of that application and in the interests of justice there should be applied to the respondents the compulsory processes of the Court to produce material. 

21. At the moment in my view, the call for documents under the notice to produce which has under the rules, the force of a subpoena, is on its face by and large, acting as a surrogate for early discovery in relation to the primary issues.  The relationship between Commissioner for Railways v Small (1938) 38 SR 564 and modern case management and the disposition in the interests of justice of commercial matters, I do not find easy.  I have been assisted by the customarily succinct and clear views of Brownie AJ in New South Wales Commissioner of Police v Tuxford (2002) NSWCA 139 at [19] ff.

22. I think one needs, however, to always recognise, as I have no doubt that his Honour with his experience would, that each case must be examined on its own circumstances.  It should not be taken from anything I am saying now, to be adopting an inflexible position in relation to the use of notices to produce at an early stage where such is not inappropriate and in this respect, I refer to the what the Full Court said in Bailey v Beagle Management (2001) 105 FCR 136 in the helpful discussion on the relationship between notices to produce and principles of interlocutory management.

23. However, here, looking at the matter and taking into account all that the parties have said, the serious issues and the issues likely to arise on the discharge application.  I think in the interests of justice, the most appropriate course to adopt for the present is to deal with that application on the evidence put forward on affidavit by the parties.  If there are absences of evidence by reason of the failure of the respondents to bring forward documentation, that absence and that failure may weigh importantly in how I view the totality of the evidence.

24. During the course of that application it may be that the applicant can persuade me that it is in the interests of justice to deal with the discharge application only on the basis that particular documents are produced by the respondents, at the moment I am not so persuaded.  Thus, for those reasons my view at the moment is that the discharge application should proceed unclouded by later evidence based on a notice to produce and for that reason, I propose to set the amended notice of motion aside.

25. As to the question of costs, my view at the moment is that prima facie the applicant should pay the costs of the notice of motion seeking to set aside the notice to produce however, I do not propose at the moment to make that order.  I think it is sufficient for me to make clear my prima facie view and the reasons I have given would indicate that in significant part, I accept the submissions of Mr Jacobs QC, senior counsel for the first to seventh respondents in the way his application should be dealt with.

26. However, I have a residual concern that it is conceivable, depending on how matters fall out, that there could, on one view, be a more unifying theme as to how costs in this matter are dealt with, so for the moment I propose to reserve the question of costs of the notice of motion with the parties understanding that unless some matter arises in the not too distant future as to how the case should be dealt with and the underlying issues in the case, I will award costs, not on an indemnity basis but on a party party basis, to the first to seventh respondents.

27. That leave for today's purposes, the disposition and arrangement of the balance of the matters that are before the Court.  Subject to hearing from the parties and counsel in a moment, I propose to order that in relation to the arbitration applications, the parties co-operate to prepare an indexed book of documents which I will deal with on the papers and bring back before the parties as soon as I reasonably can, not for the purposes of judgment but for the purposes of identifying to the parties on that day the issues which I need to be addressed on, by whom and any other matter that needs to be debated.

28. As to the discharge application, it follows from what I have said, that in significant part, I would propose to deal with that matter on a similar basis, for the ascertainment of the proper approach, I think what I have said is sufficient but I will add this, that it can be seen to be an urgent interlocutory application brought back after an order for short service or after an order that has been made, to which the respondents are able to gather material.  On that basis the parties should assume that I will not allow extensive cross-examination though if the parties are of the view that some cross-examination is necessary in the interests of justice, I will hear them.

29. I would also like a book of relevant material prepared in that regard, it may be that that is unnecessary and perhaps all I need in relation to that is an index of all the affidavits that need to be examined which will probably be all the affidavits thus far filed and if that is the case, then all I would appreciate would be a bound volume of relevant submissions that the parties wish me to look at, so that I can use that as a working document.  That is the approach I propose to take.

I certify that the preceding twenty - nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

Associate:

Dated:             18 May 2005

Counsel for the Applicant:	Mr A W Street SC with Mr J Hogan-Doran
Solicitor for the Applicant:	Ebsworth & Ebsworth
Counsel for the First to Seventh Respondents:	Mr M S Jacobs QC
Solicitor for the First to Seventh Respondent:	Alexander & Associates
Date of Hearing:	15 April 2005
Date of Judgment:	15 April 2005