Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 13] - [2021] WASC 214

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   WRIGHT PROSPECTING PTY LTD -v- HANCOCK PROSPECTING PTY LTD [No 13] [2021] WASC 214
CORAM:   LE MIERE J
HEARD:   14-15, 21 APRIL 2021
DELIVERED          :   2 JULY 2021
FILE NO/S:   CIV 3041 of 2010
MATTER:   (Consolidated with CIV 2617 of 2012 by Orders dated 9 September 2014)
BETWEEN:   WRIGHT PROSPECTING PTY LTD
Plaintiff
AND
HANCOCK PROSPECTING PTY LTD
First Defendant
HOPE DOWNS IRON ORE PTY LTD
Second Defendant
BIANCA HOPE RINEHART
Third Defendant
JOHN LANGLEY HANCOCK
Fourth Defendant
HOPE RINEHART WELKER
Fifth Defendant
GINIA HOPE FRANCIS RINEHART
Sixth Defendant
(BY ORIGINAL ACTION)
BIANCA HOPE RINEHART
First Plaintiff by Counterclaim
JOHN LANGLEY HANCOCK
Second Plaintiff by Counterclaim
AND
GEORGINA HOPE RINEHART
First Defendant by Counterclaim
HANCOCK PROSPECTING PTY LTD
Second Defendant by Counterclaim
HANCOCK MINERALS PTY LTD
Third Defendant by Counterclaim
THE HANCOCK FAMILY MEMORIAL FOUNDATION LTD
Fourth Defendant by Counterclaim
TADEUSZ JOZEF WATROBA
Fifth Defendant by Counterclaim
WESTRAINT RESOURCES PTY LTD
Sixth Defendant by Counterclaim
HMHT INVESTMENTS PTY LTD
Seventh Defendant by Counterclaim
150 INVESTMENTS PTY LTD
Eighth Defendant by Counterclaim
HOPE RINEHART WELKER
Ninth Defendant by Counterclaim
GINIA HOPE FRANCIS RINEHART
Tenth Defendant by Counterclaim
MAX CHRISTOPHER DONNELLY AS TRUSTEE IN BANKRUPTCY OF LANGLEY GEORGE HANCOCK
Eleventh Defendant by Counterclaim
HOPE DOWNS IRON ORE PTY LTD
Twelfth Defendant by Counterclaim
ROY HILL IRON ORE PTY LTD
Thirteenth Defendant by Counterclaim
MULGA DOWNS INVESTMENTS PTY LTD
Fourteenth Defendant by Counterclaim
MULGA DOWNS IRON ORE PTY LTD
Fifteenth Defendant by Counterclaim
WRIGHT PROSPECTING PTY LTD
Sixteenth Defendant by Counterclaim
DFD RHODES PTY LTD
Seventeenth Defendant by Counterclaim
MATTHEW JOHN KEADY AND DOROTHEA MARGARET CAMPBELL AS EXECUTORS OF DONOVAN FRANCES DUNCAN RHODES
Eighteenth Defendant by Counterclaim
HAMERSLEY WA PTY LTD
Third Party
(BY COUNTERCLAIM)

FILE NO/S: CIV 2617 of 2012
BETWEEN: WRIGHT PROSPECTING PTY LTD
Plaintiff
AND
HANCOCK PROSPECTING PTY LTD
First Defendant
HOPE DOWNS IRON ORE PTY LTD
Second Defendant
BIANCA HOPE RINEHART
Third Defendant
JOHN LANGLEY HANCOCK
Fourth Defendant
HOPE RINEHART WELKER
Fifth Defendant
GINIA HOPE FRANCIS RINEHART
Sixth Defendant
HAMERSLEY WA PTY LTD
Third Party

FILE NO/S: CIV 2737 of 2013
BETWEEN: DFD RHODES PTY LTD
First Plaintiff
MATTHEW JOHN KEADY as executor of the estate of DONOVAN FRANCES DUNCAN RHODES
DOROTHEA MARGARET CAMPBELL as executor of the estate of DONOVAN FRANCES DUNCAN RHODES
Second Plaintiffs
AND
HANCOCK PROSPECTING PTY LTD
First Defendant
WRIGHT PROSPECTING PTY LTD
Second Defendant
HOPE DOWNS IRON ORE PTY LTD
Third Defendant
BIANCA HOPE RINEHART
Fourth Defendant
JOHN LANGLEY HANCOCK
Fifth Defendant
HOPE RINEHART WELKER
Sixth Defendant
GINIA HOPE FRANCIS RINEHART
Seventh Defendant
(BY ORIGINAL ACTION)
BIANCA HOPE RINEHART
First Plaintiff by Counterclaim
JOHN LANGLEY HANCOCK
Second Plaintiff by Counterclaim
GEORGINA HOPE RINEHART
First Defendant by Counterclaim
HANCOCK PROSPECTING PTY LTD
Second Defendant by Counterclaim
HANCOCK MINERALS PTY LTD
Third Defendant by Counterclaim
THE HANCOCK FAMILY MEMORIAL FOUNDATION LTD
Fourth Defendant by Counterclaim
TADEUSZ JOZEF WATROBA
Fifth Defendant by Counterclaim
WESTRAINT RESOURCES PTY LTD
Sixth Defendant by Counterclaim
HMHT INVESTMENTS PTY LTD
Seventh Defendant by Counterclaim
150 INVESTMENTS PTY LTD
Eighth Defendant by Counterclaim
HOPE RINEHART WELKER
Ninth Defendant by Counterclaim
GINIA HOPE FRANCIS RINEHART
Tenth Defendant by Counterclaim
MAX CHRISTOPHER DONNELLY AS TRUSTEE IN BANKRUPTCY OF LANGLEY GEORGE HANCOCK
Eleventh Defendant by Counterclaim
HOPE DOWNS IRON ORE PTY LTD
Twelfth Defendant by Counterclaim
ROY HILL IRON ORE PTY LTD
Thirteenth Defendant by Counterclaim
MULGA DOWNS INVESTMENTS PTY LTD
Fourteenth Defendant by Counterclaim
MULGA DOWNS IRON ORE PTY LTD
Fifteenth Defendant by Counterclaim
WRIGHT PROSPECTING PTY LTD
Sixteenth Defendant by Counterclaim
DFD RHODES PTY LTD
Seventeenth Defendant by Counterclaim
MATTHEW JOHN KEADY AND DOROTHEA MARGARET CAMPBELL AS EXECUTORS OF THE ESTATE OF DONOVAN FRANCES DUNCAN RHODES
Eighteenth Defendant by Counterclaim
HAMERSLEY WA PTY LTD
Third Party
(BY COUNTERCLAIM)

Catchwords:

Arbitration - Proceedings - Stay of proceedings - Arbitration agreement

Statutes - interpretation - Commercial Arbitration Act 2012 (WA) s 8(1)

Practice and procedure - Application - Strike out - Further amended substituted statement of claim - Whether to extend time to apply - Whether pleadings are embarrassing, prejudicial or delaying fair trial

Practice and procedure - Application - Strike out - Further amended defences - Whether pleadings are vexatious

Legislation:

Commercial Arbitration Act 2010 (NSW)
Commercial Arbitration Act 2012 (WA)
Limitation Act 1935 (WA)
Partnership Act 1895 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Parts of amended reply stayed
Applications to strike out dismissed

Representation:

CIV 3041 of 2010

Original Action

Counsel:

Plaintiff	:	Ms K Stern SC & Ms L Coleman
First Defendant	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Second Defendant	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Third Defendant	:	Mr C Withers SC, Mr A Hochroth & Ms C Ernst
Fourth Defendant	:	Mr C Withers SC, Mr A Hochroth & Ms C Ernst
Fifth Defendant	:	No appearance
Sixth Defendant	:	Mr J Dalzell & Ms A Barwick
Third Party	:	Ms C Wren & Ms M Cummings

Solicitors:

Plaintiff	:	Clayton Utz
First Defendant	:	Corrs Chambers Westgarth
Second Defendant	:	Corrs Chambers Westgarth
Third Defendant	:	Yeldham Price O'Brien Lusk
Fourth Defendant	:	Yeldham Price O'Brien Lusk
Fifth Defendant	:	No appearance
Sixth Defendant	:	Dentons
Third Party	:	Allens

Counterclaim

Counsel:

First Plaintiff by Counterclaim	:	Mr C Withers SC, Mr A Hochroth & Ms C Ernst
Second Plaintiff by Counterclaim	:	Mr C Withers SC, Mr A Hochroth & Ms C Ernst
First Defendant by Counterclaim	:	No appearance
Second Defendant by Counterclaim	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Third Defendant by Counterclaim	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Fourth Defendant by Counterclaim	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Fifth Defendant by Counterclaim	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Sixth Defendant by Counterclaim	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Seventh Defendant by Counterclaim	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Eighth Defendant by Counterclaim	:	No appearance
Ninth Defendant by Counterclaim	:	No appearance
Tenth Defendant by Counterclaim	:	Mr J Dalzell & Ms A Barwick
Eleventh Defendant by Counterclaim	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Twelfth Defendant by Counterclaim	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Thirteenth Defendant by Counterclaim	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Fourteenth Defendant by Counterclaim	:	No appearance
Fifteenth Defendant by Counterclaim	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Sixteenth Defendant by Counterclaim	:	Ms K Stern SC & Ms L Coleman
Seventeenth Defendant by Counterclaim	:	Mr J Stoljar SC, Ms L Hulmes & Mr N Dillon
Eighteenth Defendant by Counterclaim	:	Mr J Stoljar SC, Ms L Hulmes & Mr N Dillon

Solicitors:

First Plaintiff by Counterclaim	:	Yeldham Price O'Brien Lusk
Second Plaintiff by Counterclaim	:	Yeldham Price O'Brien Lusk
First Defendant by Counterclaim	:	No appearance
Second Defendant by Counterclaim	:	Corrs Chambers Westgarth
Third Defendant by Counterclaim	:	Corrs Chambers Westgarth
Fourth Defendant by Counterclaim	:	Corrs Chambers Westgarth
Fifth Defendant by Counterclaim	:	Corrs Chambers Westgarth
Sixth Defendant by Counterclaim	:	Corrs Chambers Westgarth
Seventh Defendant by Counterclaim	:	Corrs Chambers Westgarth
Eighth Defendant by Counterclaim	:	No appearance
Ninth Defendant by Counterclaim	:	No appearance
Tenth Defendant by Counterclaim	:	Dentons
Eleventh Defendant by Counterclaim	:	Corrs Chambers Westgarth
Twelfth Defendant by Counterclaim	:	Corrs Chambers Westgarth
Thirteenth Defendant by Counterclaim	:	Corrs Chambers Westgarth
Fourteenth Defendant by Counterclaim	:	No appearance
Fifteenth Defendant by Counterclaim	:	Corrs Chambers Westgarth
Sixteenth Defendant by Counterclaim	:	Clayton Utz
Seventeenth Defendant by Counterclaim	:	Taylor and Taylor Lawyers Pty Ltd
Eighteenth Defendant by Counterclaim	:	Taylor and Taylor Lawyers Pty Ltd

CIV 2617 of 2012

Counsel:

Plaintiff	:	Ms K Stern SC & Ms L Coleman
First Defendant	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Second Defendant	:	Mr N Hutley SC, Mr C Bova, Mr J Hutton & Mr J Kennedy
Third Defendant	:	Mr C Withers SC, Mr A Hochroth & Ms C Ernst
Fourth Defendant	:	Mr C Withers SC, Mr A Hochroth & Ms C Ernst
Fifth Defendant	:	No appearance
Sixth Defendant	:	Mr J Dalzell & Ms A Barwick
Third Party	:	Ms C Wren & Ms M Cummings

Solicitors:

Plaintiff	:	Clayton Utz
First Defendant	:	Corrs Chambers Westgarth
Second Defendant	:	Corrs Chambers Westgarth
Third Defendant	:	Yeldham Price O'Brien Lusk
Fourth Defendant	:	Yeldham Price O'Brien Lusk
Fifth Defendant	:	No appearance
Sixth Defendant	:	Dentons
Third Party	:	Allens

CIV 2737 of 2013

Counsel:

First Plaintiff	:	Mr J Stoljar SC, Ms L Hulmes & Mr N Dillon
Second Plaintiffs	:	Mr J Stoljar SC, Ms L Hulmes & Mr N Dillon
First Defendant	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Second Defendant	:	Ms K Stern SC & Ms L Coleman
Third Defendant	:	Mr N Hutley SC, Mr C Bova SC, Mr J Hutton & Mr J Kennedy
Fourth Defendant	:	Mr C Withers SC, Mr A Hochroth & Ms C Ernst
Fifth Defendant	:	Mr C Withers SC, Mr A Hochroth & Ms C Ernst
Sixth Defendant	:	No appearance
Seventh Defendant	:	Mr J Dalzell & Ms A Barwick
Third Party	:	Ms C Wren & Ms M Cummings

Solicitors:

First Plaintiff	:	Taylor And Taylor Lawyers Pty Ltd
Second Plaintiffs	:	Taylor And Taylor Lawyers Pty Ltd
First Defendant	:	Corrs Chambers Westgarth
Second Defendant	:	Clayton Utz
Third Defendant	:	Corrs Chambers Westgarth
Fourth Defendant	:	Yeldham Price O'Brien Lusk
Fifth Defendant	:	Yeldham Price O'Brien Lusk
Sixth Defendant	:	No appearance
Seventh Defendant	:	Dentons
Third Party	:	Allens

Case(s) referred to in decision(s):

ACD Tridon Inc v Tridon Australia Pty Ltd [2002] NSWSC 896
AED Oil Ltd v Puffin FPSO Ltd [2010] VSCA 37; (2010) 27 VR 22
Bahr v Nicolay [No 2] [1988] HCA 16; (1988) 164 CLR 604
Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127; (2017) 51 WAR 341
Berry v CCL Secure Pty Ltd [2020] HCA 27; (2020) 94 ALJR 715
Betella v O'Leary [2001] WASCA 266
BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd [2008] FCA 551; (2008) 168 FCR 169
Flint Ink NZ Ltd v Huhtamaki Australia Ltd [2014] VSCA 166; (2014) 44 VR 64
Graham & Linda Huddy Nominees Pty Ltd v Byrne [2016] QSC 221
Grimaldi v Chameleon Mining NL [No 2] [2012] FCAFC 6; (2012) 200 FCR 296
Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [2020] WASCA 77 (S)
Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [2020] WASCA 77; (2020) 55 WAR 435
Hancock Prospecting Pty Ltd v Rinehart [2017] FCAFC 170; (2017) 257 FCR 442
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29
Heller Financial Services Ltd v Thiess Contractors Pty Ltd [2000] FCA 802
KNM Process Systems SDN BHD v Mission Newenergy (formerly known as Mission Biofuels Ltd) [2014] WASC 437
Korda v Australian Executor Trustees [2015] HCA 6; (2015) 255 CLR 62
McHutchison v Western Research and Development Ltd [2004] FCA 419
Piercy v Young (1879) 14 Ch D 200
Qantas Airways Ltd v Chief Commissioner of State Revenue [2008] NSWSC 1049
Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 267 CLR 514
Scherk v Alberto-Culver Co 417 US 506 (1974)
SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362
Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; (1990) 169 CLR 342
Tensioned Concrete Pty Ltd v Munich Re [2020] WASC 431
Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 10] [2018] WASC 407
Zhang v Shanghai Wool and Jute Textile Co Ltd [2006] VSCA 133; (2006) 201 FLR 178

Table of Contents

Summary

The present applications

Background to the application

The Hope Downs Deed

The issues in the proceedings

WPPL's claim in WPPL proceedings

HPPL's defence to WPPL claims

Bianca and John's defence to WPPL claims

Rhodes claim in Rhodes proceeding

HPPL's defence to Rhodes claim

Bianca and John's defence to Rhodes claim

Stay application by HPPL parties in Rhodes proceeding

Matters sought to be stayed

Bianca and John's defence in Rhodes proceeding

Rhodes amended reply in Rhodes proceeding

Commercial Arbitration Act s 8(1)

Does the amended reply mean that the proceedings are 'in' a matter which is the subject of the arbitration agreement?

A person claiming through or under a party

Party requesting referral to arbitration

Not later than submitting their first statement on the substance of the dispute

Waiver, case management and Court of Appeal stay judgment

Stay application - conclusion

HPPL parties' application to strike out WPPL amended statement of claim

Overview of strike out application

Category 1 - Paragraphs 111AA, 118A, 121A, 137, 138, 139, 140, 145.1.5, 147.1

Category 2: Paragraphs 111, 121, 145

Category 3: Paragraph 111AA

Category 4: Paragraphs 12.3, 109, 111, 118, 145.1.5

Category 5: Paragraph 22A.1 (after the first parenthesis), 136A, 140, 141, 148.2A, 148.3, particulars to 144

Category 6: Paragraphs 46A, 49A, 53AA, 53C, 65.3, 76.3, 81A, 84A, 90A, 94A, 105, 107, 108, 110.6, 111, 116, particular (m) to 53A and particular (c) to 53C

Category 7: Paragraphs 46A, 49A, 53B and 53C

Category 8: Paragraphs 4.4, 5.4 (and consequential amendments to 17C, 22A.1, 23B(c), 23B(e)), 44A(b), 110.3, 121A, particular (iiiB) to 42AC, 68B, 110.1 and 110.2

Challenge to 6FASSOC amendments - summary

HPPL parties' application to strike out 6FASSOC [53C] and [111]

HPPL parties' application to strike out Arbitration Dispute Matters in Rhodes and WPPL proceedings

The applications

HPPL parties submit Arbitration Dispute Matters are vexatious

Bianca and John's pleading is not vexatious

LE MIERE J:

Summary

These are my reasons for deciding the latest interlocutory applications in these proceedings - the Rhodes proceeding[1] and the consolidated WPPL proceedings[2] ‑ concerned with the effect of arbitration agreements in deeds of settlement, primarily the deed known as the Hope Downs Deed.
[1] DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd & Ors CIV 2737 of 2013.
[2] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd & Ors CIV 3041 of 2010 consolidated with CIV 2617 of 2012.
In the Rhodes proceeding, the HPPL parties, Hancock Prospecting Pty Ltd (HPPL) and Hope Downs Iron Ore Pty Ltd (HDIO), have applied for orders that paragraphs of the amended defence of John Langley Hancock (John) and Bianca Hope Rinehart (Bianca) be stayed pursuant to s 8(1) of the Commercial Arbitration Act 2012 (WA) (CAA) or alternatively struck out.
In the consolidated WPPL proceedings, the HPPL parties have applied for orders that paragraphs of the sixth further amended substituted statement of claim of Wright Prospecting Pty Ltd (WPPL) be struck out and that paragraphs of Bianca and John's further amended defence be struck out.
For the reasons which follow:
(a)paragraphs of the amended reply of Rhodes in the Rhodes proceeding as set out in [151] of my reasons will be stayed;
(b)the HPPL parties' applications to:
(i)strike out paragraphs of WPPL's sixth further amended substituted statement of claim in the WPPL proceedings;
(ii)and to strike out paragraphs of Bianca and John's further amended defence in the WPPL proceedings and their amended defence in the Rhodes proceeding;
will be dismissed.

The present applications

Background to the application

The Hope Downs Deed is a deed entered into by a number of persons including HPPL, Mrs Georgina Hope Rinehart (Gina), Bianca, Hope Rinehart Welker (Hope) and Ginia Hope Frances Rinehart (Ginia). John entered into a further deed in April 2007 in which he adopted the Hope Downs Deed.
John, Bianca, Hope and Ginia are Gina's children (collectively, the Children).
The Hope Downs Deed settled disputes about the title to various mining tenements, including what are defined in the deed as the Hope Downs tenements. Those disputes arose from claims initially made by John in around 2003.
The Hope Downs Deed provides for releases by the parties to the deed in relation to various claims and acknowledgements as to the ownership of the Hope Downs tenements. Clause 20 of the Hope Downs Deed provides that any disputes under the deed are to be resolved by way of confidential arbitration.
Since entering into, or agreeing to be bound by the Hope Downs Deed, Bianca and John have brought various court proceedings making claims concerning the conduct of Gina, HPPL and others. Those claims include claims relating to the ownership of the Hope Downs tenements. Bianca and John brought proceedings in 2014 against Gina, HPPL, HDIO and others in the Federal Court of Australia (the Federal Court proceedings). In the Federal Court proceedings Bianca and John claimed, amongst other things, that the Hope Downs tenements were held on trust for the Children. Those claims are described as the substantive claims.[3]
[3] In addition to those substantive claims, in the Federal Court proceedings Bianca and John also challenged the validity of the Hope Downs Deed itself. Those claims were described as the validity claims.
After an appeal to the Full Court of the Federal Court[4] (Full Court) and the High Court,[5] the Federal Court proceedings were ultimately stayed under s 8(1) of the Commercial Arbitration Act 2010 (NSW) pending any arbitral reference between the parties or until further order.
[4] Hancock Prospecting Pty Ltd v Rinehart [2017] FCAFC 170; (2017) 257 FCR 442.
[5] Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 267 CLR 514.
In the Federal Court proceedings Bianca and John sought relief against a number of respondents, all of whom (except one) was a party within the meaning of the Commercial Arbitration Act 2010 (NSW) either on the basis that they were parties to the arbitration agreement in the Hope Downs deed or they claimed 'under or through' such a party.
These proceedings are different. The plaintiffs in the WPPL proceedings, WPPL, and the plaintiffs in the Rhodes proceeding, DFD Rhodes Pty Ltd and the executors of the estate of Donovan Rhodes (collectively Rhodes) are not parties to, or bound by, the Hope Downs Deed. WPPL and Rhodes claim interests in the Hope Downs tenements.[6] The defendants to the WPPL proceedings are HPPL, HDIO and the Children. The defendants to the Rhodes proceeding include all of those parties, with the addition of WPPL.
[6] The pleadings in the WPPL proceedings and the Rhodes proceeding variously refer to mining tenements in areas referred to as Hope Downs and East Angelas. It is sufficient for the purposes of these applications to refer to the tenements the subject of the proceedings as the Hope Downs tenements, being the defined tenements in the Hope Downs Deed.

In addition to filing defences in these proceedings, Bianca and John brought counterclaims against Gina and others, including all of the parties to the Hope Downs Deed (counterclaims). Bianca and John made the same claims in the counterclaims as in the Federal Court proceedings.
The HPPL parties applied for orders that all of the parties to the Rhodes proceeding and the WPPL proceedings, except the plaintiffs in each of the proceedings (WPPL and Rhodes) be referred to arbitration in respect of the defence and counterclaim of Bianca and John and their defences and counterclaims be stayed pursuant to CAA s 8(1). The HPPL parties also sought an order that the whole of the proceedings be stayed pending the outcome of any arbitration pursuant to the court's power to control its own proceedings. I will refer to those applications as the 2018 stay application.
I stayed the counterclaims against the parties to the arbitration agreement in the Hope Downs Deed pursuant to CAA s 8(1) and the counterclaims against the other parties pursuant to the court's general power to control its own proceedings.[7] I will sometimes refer to that judgment as the WASC stay judgment. I declined to stay the whole of the proceedings or the defences of Bianca and John in each proceeding. The Court of Appeal dismissed appeals and cross‑appeals from those orders.[8] I will sometimes refer to the judgments in the Court of Appeal as the stay appeal judgments.
[7] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 10] [2018] WASC 407.
[8] Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [2020] WASCA 77; (2020) 55 WAR 435.
The appeals were heard before the Court of Appeal on 18 and 19 November 2019. The Court of Appeal delivered judgment on 19 May 2020. The Court of Appeal heard further argument on 2 July 2020 and delivered a further judgment on 7 August 2020.[9] Rhodes filed a reply to the defence of Bianca and John on 20 September 2019 but it was not referred to by or before the Court of Appeal.
[9] Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [2020] WASCA 77 (S).
At the hearing of the appeals and in his judgment Chief Justice Quinlan criticised the defences of Bianca and John which incorporated by reference their pleadings in the Federal Court proceedings.[10] The Chief Justice noted that Bianca and John accepted that if the appeals were dismissed, the pleadings concerning their alleged interest in the Hope Downs tenements (and only those pleadings) should be pleaded in their defences.[11] After the dismissal of the appeals by the Court of Appeal, Bianca and John amended their defence by filing their amended defence of 29 January 2021 in each of the WPPL proceedings and the Rhodes proceeding. On 21 March 2021 Bianca and John filed a further amended defence in the WPPL proceedings. In the Rhodes proceeding Rhodes filed an amended reply to the defence of Bianca and John on 26 March 2021.
[10] Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [2020] WASCA 77; (2020) 55 WAR 435 [87].
[11] Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [2020] WASCA 77; (2020) 55 WAR 435 [88].
On 15 February 2021 WPPL amended its statement of claim in the WPPL proceedings by filing its sixth further amended substituted statement of claim (6FASSOC).
In their chamber summons of 29 March 2021, amended on 7 April 2021 and further amended on 13 April 2021, in the Rhodes proceeding, the HPPL parties now seek a stay of certain matters or controversies arising from paragraphs in Bianca and John's amended defence and the response to those pleas in Rhodes' amended reply, which the HPPL parties submit are matters the subject of the arbitration agreement in the Hope Downs Deed. The HPPL parties submit alternatively that those paragraphs be struck out. The HPPL parties seek in the further alternative that the issues raised by those paragraphs be determined separately after the other issues in the proceedings or in the further alternative there be a preliminary determination of certain questions related to those issues.
In the consolidated WPPL proceedings by chamber summons of 24 February 2021, the HPPL parties have applied for orders that paragraphs of WPPL's 6FASSOC be struck out, and by chamber summons of 29 March 2021, amended 13 April 2021, the HPPL parties have applied for orders that paragraphs of Bianca and John's further amended defence be struck out, or alternatively that issues raised by those paragraphs be determined separately after the other issues in the action, or in the further alternative there be a preliminary determination of certain questions related to those issues.
I deferred determination of the HPPL parties' applications for determination of separate questions or preliminary issues until after the determination of their stay and strike out applications. I did so principally because of the limited time available for the hearing of the applications.
Before turning to the principal issues in these applications, I will briefly set out relevant provisions of the Hope Downs Deed and the issues raised in the proceedings.

The Hope Downs Deed

The parties to the Hope Downs Deed are John, Bianca, Hope, Ginia, Gina, HPPL, Hancock Minerals Pty Ltd (HML), the Hancock Family Memorial Foundation Ltd (HFMF), Gina as trustee of the Hope Margaret Hancock Trust, Mr Watroba (a director of HPPL), Westraint Resources Pty Ltd (formerly known as Hancock Resources Ltd (HRL)), HMHT Investments Pty Ltd (HMHT) and 150 Investments Pty Ltd (150 Investments), a company associated with Gina.
The High Court confirmed in Rinehart v Hancock Prospecting Pty Ltd that one of the fundamental purposes of the Hope Downs Deed was the quelling of disputes about the title to the Hope Downs tenements.[12] That is manifested by cl 4 of the deed which provides:
The parties acknowledge that at all material times the Hancock Group Interests have been and remain beneficially owned by the Hancock Group member that purports to own them including, without limitation, the Hope Downs Tenements which Tenements have been at all times beneficially owned by only HPPL and or HDIO and which are now fifty per cent (50%) beneficially and legally owned by HDIO.
[12] Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 267 CLR 514 [27].
The Hancock Group is defined to mean HPPL and any related body corporate of HPPL. The Hancock Group Interests are defined to include the Hancock Group's interests in the Hope Downs Tenements and the Hope Downs Joint Venture, that is, the unincorporated joint venture between members of the Hancock Group and members of the Rio Tinto Group.
Clause 6 of the deed provides for extensive releases by the parties both in relation to the specific Proceedings (defined to refer to action CIV 1327 of 2005 in this court) and also to a broad class of Claims generally. 'Claim' is defined to include any claim, demand etc for any relief for any liability including for breach of fiduciary duty.
Clause 7 of the deed provides for a number of undertakings by the parties to the deed, including not to challenge the right of any member of the Hancock Group to any of the Hancock Group interests at any time.
The dispute resolution clause of the Hope Downs Deed is cl 20 which relevantly provides that any dispute under the deed will be referred to confidential arbitration.

The issues in the proceedings

The nature of the claims and the defences in these proceedings were summarised in the WASC stay judgment and the stay appeal judgments. A number of pleadings have been filed or amended after the WASC stay judgment and the stay appeal judgments, as I have referred to earlier in these reasons.
First, after the WASC stay judgment but before the hearing of the appeal to the Court of Appeal commenced, the HPPL parties filed defences in both the Rhodes proceeding and the WPPL proceedings. Although the HPPL parties had not filed defences before the hearing of the 2008 stay application, the HPPL parties had disclosed the substance of their defences which is reflected in the defences they filed.
Secondly, in the Rhodes proceeding, Rhodes filed a reply after the WASC stay judgment but prior to the commencement of the hearing of the appeal to the Court of Appeal. That reply was not adverted to by the parties or considered by the Court of Appeal. Rhodes filed an amended reply in the Rhodes proceeding on 26 March 2021. The HPPL parties submit that it is as a result of the amended reply that the Rhodes proceeding is brought in a matter which is the subject of an arbitration agreement and that matter should be stayed.
Thirdly, Bianca and John filed an amended defence on 29 January 2021 and a further amended defence on 19 March 2021 in the Rhodes proceeding and the WPPL proceedings respectively. As I have said, in the course of the hearing of the appeal, Bianca and John accepted that if the appeals were dismissed, as they subsequently were, the pleadings concerning their alleged interest in the Hope Downs tenements (and only those pleadings) should be pleaded in their defences. Senior counsel for Bianca and John, Mr Withers SC, submitted that Bianca and John's defences were amended in accordance with their submissions to the Court of Appeal.
Fourthly, WPPL filed an amended statement of claim ‑ the 6FASSOC ‑ on 15 February 2021. The HPPL parties have applied to strike out paragraphs of that pleading.
I will now set out a helicopter view of the claims and defences of the parties in the proceedings.

WPPL's claim in WPPL proceedings

WPPL and HPPL carried on business as a partnership exploring and prospecting for minerals, investing in property and other assets, mining for minerals and receiving royalties (the Partnership).
The opportunity to explore and prospect for minerals and acquire tenements on the Hope Downs and East Angelas areas was a Partnership asset. Two other companies in the Hancock group, HML and HRL, acquired exploration licences over the Hope Downs and East Angelas areas. The shares in HML and HRL (which were held by HFMF) were held on trust for HPPL, and HML and HRL held their interests in the exploration licences on trust for HPPL. HPPL's beneficial interest in the exploration licences was held as an asset of or on trust for the partnership. The exploration licences were transferred from HRL to HPPL, via Hope Downs Ltd (HDL), another company in the Hancock Group, and then from HPPL to HDIO by a series of transactions. Accordingly, HDIO holds its interest in the tenements as an asset of or on trust for the Partnership.
WPPL advances an alternative claim at 6FASSOC [53C], substantially previously pleaded in WPPL's fifth further amended substituted statement of claim (5FASSOC), that if HML did not hold the exploration licences on trust for HPPL or as assets, interest or property of or on trust for the Partnership then it held them on trust for itself and for WPPL in equal shares. That plea addresses the factual allegation by Bianca and John that HML took the East Angelas tenements in furtherance of a commercial purpose which they describe as the income protection purpose, which was to quarantine the entities that are entitled to the royalty income from entities undertaking development within the Hancock Group. WPPL's alternative case is that it should be inferred that HPPL and HML intended that WPPL should retain or obtain an interest in the tenements.
HDIO is obliged to account to WPPL with respect to royalties received by HDIO from Hamersley under the joint venture.
Alternatively to its claims to interests in the tenements and royalties, WPPL claims damages for breach of contract and equitable compensation for breach of fiduciary duties.

HPPL's defence to WPPL claims

The exploration licences initially held by HML and HRL were held on trust for HPPL.
However, the rights held by, or on behalf of, HPPL were not a Partnership asset. HPPL was entitled to take up the opportunities resulting in its interest in the tenements and the Hamersley joint venture without being obliged to offer WPPL any opportunity to participate in those activities and without any liability to pay royalties to WPPL in respect of iron ore produced from those activities.
Accordingly, HDIO does not hold its interest in the tenements as an asset of the Partnership or for WPPL and it is not required to account to WPPL with respect to royalties received by HDIO from Hamersley under the joint venture.

Bianca and John's defence to WPPL claims

The shares in HML and HRL were not held on trust for HPPL. HML/HRL did not hold their interest in the exploration licences on trust for HPPL. The series of transactions referred to by WPPL in support of the allegation that the exploration licences held by HML and HRL were held on trust for HPPL, was part of a fraudulent and dishonest design by Gina in breach of her fiduciary duties under a trust in favour of the Children ‑ the HFMF Trust. When HRL transferred the exploration licences to HPPL and then HDIO, this was done in breach of Gina's fiduciary duty under the HFMF Trust and therefore HPPL and HDIO hold those exploration licences on constructive trust for the Children. HPPL and HDIO never held beneficial title to the tenements and therefore could not hold the tenements as a Partnership asset or on trust for the Partnership.
Alternatively, WPPL is precluded from relief by laches and acquiescence.

Rhodes claim in Rhodes proceeding

By the 1969 Agreement between Rhodes, HPPL and WPPL, HPPL and WPPL agreed to pay Rhodes a royalty on ore produced from certain reserves. HPPL, WPPL and Rhodes agreed that the Hope Down areas would fall within the 1969 Agreement. Through a chain of applications for the grant of mining tenements, the ground comprised in the Hope Downs and East Angelas is included in the ground comprised in mining lease 282SA (ML282SA). Through a chain of corporate ownership, HPPL and WPPL caused the interest in ML282SA to be held by HDIO. Accordingly, HDIO holds its interest in ML282SA on trust for Rhodes to the extent of Rhodes entitlement to royalties on iron ore produced from the ground the subject of the lease.
Alternatively, Rhodes is entitled to equitable compensation.
Rhodes put forward an alternative case in their reply to the defence of Bianca and John. I will refer to that reply in more detail when considering the HPPL parties application to stay matters in Bianca and John's defence and Rhodes' amended reply.

HPPL's defence to Rhodes claim

HPPL admits the 1969 Agreement but denies that HPPL, WPPL and Rhodes subsequently agreed that the Hope Downs areas would fall within the 1969 Agreement.
HPPL otherwise responds to the Rhodes claim in similar terms to its defence to the WPPL claim. HPPL denies that Rhodes are entitled to royalties or any relief.

Bianca and John's defence to Rhodes claim

The shares in HML and HRL were not held on trust for HPPL. The tenements were held on trust for the Children as beneficiaries of the HFMF Trust. HML and HRL did not hold the interests in the tenements on trust for HPPL and therefore HDIO never obtained beneficial title to the Hope Downs tenements and does not hold those tenements subject to a trust in favour of Rhodes.
I will refer to the defence of Bianca and John in more detail when considering the HPPL parties application to stay matters constituted by parts of Bianca and John's defence and Rhodes' amended reply.

Stay application by HPPL parties in Rhodes proceeding

Matters sought to be stayed

In the 2018 stay application the HPPL parties contended that the court must refer to arbitration the issues raised by Bianca and John in their defences to the extent that those defences concern subject matters that are the subject of the arbitration agreement between the parties to the Hope Downs Deed. They submitted, in essence, that Bianca and John's defences and counterclaims constituted part of the 'matter which is the subject of an arbitration agreement' within the meaning of CAA s 8(1).
In the WASC stay judgment I found that the claims made by Bianca and John in their counterclaims in which they dispute the right and title of HDIO and its predecessors in title to the Hope Downs tenements is a matter which is the subject of the arbitration agreement in the Hope Downs Deed.[13] I stayed Bianca and John's counterclaims against the parties to the arbitration agreement in the Hope Downs Deed, pending the determination of the disputes by arbitration, to which they were referred pursuant to CAA s 8(1). I stayed the counterclaims against the other persons pursuant to the court's general power to control its own proceedings. I refused to stay the proceedings by the plaintiffs (WPPL and Rhodes) who are not parties to the arbitration agreement. I found that the claims made by Bianca and John disputing the rights and interests of HDIO or its predecessors in title in their defences to the claims of WPPL and Rhodes is not a matter the subject of the arbitration agreement because WPPL and Rhodes are not parties to the arbitration agreement.[14]
[13] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd[No 10] [2018] WASC 407.
[14] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd[No 10] [2018] WASC 407.
The HPPL parties appealed that decision. They contended that, notwithstanding the plaintiffs to the proceedings were not bound by the arbitration agreement, the court must stay the proceedings, or at least the defences filed by Bianca and John who are parties to the arbitration agreement, pending any arbitral proceedings between the parties to the arbitration agreement, pursuant to CAA s 8(1), or, in the alternative, pursuant to the court's general power. The HPPL parties further contended that I had erred in not restraining the defendants who were parties to the arbitration agreement from making claims in the proceedings in respect of tenements subject to the arbitration agreement.
The Court of Appeal dismissed the HPPL parties' appeals. The Court of Appeal held that the claims made in the counterclaim by parties to the arbitration agreement against other parties to it, are a 'matter which is the subject of an arbitration agreement' within the meaning of CAA s 8(1) and I was correct to refer those parties to arbitration pursuant to that section.[15] The Court of Appeal further held that only a dispute between the parties to the arbitration agreement can constitute a relevant 'matter' under CAA s 8(1). Claims brought by persons who were not parties to the arbitration agreement did not form a 'matter' and so CAA s 8(1) did not require a mandatory stay of the defence or proceedings.[16]
[15] Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2020] WASCA 77; (2020) 55 WAR 435 [186], [194] - [198], [475].
[16] Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2020] WASCA 77; (2020) 55 WAR 435 [248], [324], [475].
CAA s 8(1) does not expressly provide that the court is to order a stay of proceedings. A stay order is the procedural means or mechanism to give effect to the requirement that the court refer the parties to arbitration. Chief Justice Quinlan, in the stay appeal judgment, held that there is therefore an essential correspondence between the referral under CAA s 8(1) and the stay under s 8(1). One is the means of giving effect to the other. For that reason, there must also be an underlying symmetry between the extent of the referral under s 8(1) and the extent of the stay to give effect to that referral.[17]
[17] Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2020] WASCA 77; (2019) 55 WAR 435, [264].
The fact that only the parties to the arbitration agreement can (and must) be referred to arbitration leads to the conclusion that it is only proceedings as between the parties to the arbitration agreement that can be the subject of a mandatory stay under CAA s 8(1). Those principles lead the Court of Appeal to decide that while the right of Bianca and John to dispute HDIO and its predecessor's title to the Tenements may well give rise to a 'matter' between Bianca and John and other parties to the arbitration agreement in the Hope Downs Deed (in relation to which those other parties might seek relief against Bianca and John), the defences of Bianca and John are not, and do not mean that the proceedings are 'in' 'a matter which is the subject of an arbitration agreement.' That is because the defences themselves are confined to disputes between Bianca and John on the one hand and WPPL and Rhodes on the other.

The HPPL parties submit that their present application is different because matters raised by Rhodes in their amended reply concern subject matters that are the subject of the arbitration agreement between the parties to the Hope Downs Deed. The HPPL parties submit, in essence, that:
(a)parts of Bianca and John's defences and Rhodes' amended reply concern subject matters that are the subject of the arbitration agreement between the parties to the Hope Downs Deed;
(b)in making their claims in response to those parts of Bianca and John's defence, Rhodes are 'claiming through or under a party to the arbitration agreement'; and
(c)Rhodes, as well as Bianca and John, are therefore parties to a matter which is the subject of the arbitration agreement in the Hope Downs Deed.
HPPL applies for an order that pursuant to CAA s 8(1) there be a stay of matters raised by allegations in paragraphs of Bianca and John's defence, described as the Arbitration Dispute Matters or alternatively the Non‑responsive Matters;[18] and paragraphs of Rhodes amended reply[19] which respond to those allegations.
[18] Arbitration Dispute Matters means the following paragraphs of the amended defence:
i.5A.2, 23.1(g), 23.1(k) - 23.1(n), 31.2 (the words 'the beneficiaries of the HFMF Trust'), 37.2(a) (the words 'the beneficiaries of the HFMF Trust'), 37.2(b), 44, 45, 47, 49 (the words in the parentheses), 50, 51 and 164 to 465 inclusive;
ii.23.1(e), 23.1(i), 31.2, 34.2, 37.2(a), 37.3, 46, 48 and 49 inclusive; and
iii.Any other paragraphs of the Amended Defence which rely upon the matters the subject of 8(a)(i) and (ii) above, but only to the extent those paragraphs so rely;
Non-Responsive Matters means the following paragraphs of the amended defence:
i.5A.2, 23.1(g), 23.1(k) ‑ 23.1(n), 31.2 (the words 'the beneficiaries of the HFMF Trust'), 34.2 (the words 'the beneficiaries of the HFMF Trust'), 37.2(a) (the words 'the beneficiaries of the HFMF Trust'), 37.2(b), 44, 45, 47, 49 (the words in the parentheses), 50, 51, 165.6 ‑ 165.12, 166.3, 167.3, 168.2(c) and (d), 169.2(c) and (d), 171.4, 171.5, 171.8, 171.9, 171.10, 171.13, 174, 175.4, 178.3, 178.4, 179.10, 180, 226 to 228, 230, 232 ‑ 245, 250 ‑ 260, 265 ‑ 267, 268 ‑ 276, 277 ‑ 280, 294, 295.3, 297 ‑ 300, 301 (the words 'and which gave rise to a trust …' to the end), 302 (the words 'and gave rise to a trust …' to the end), 305 - 309, 313, 315 ‑ 341, 342 ‑ 343, 344 ‑ 345, 348 ‑ 349, 351 ‑ 352, 354 ‑ 363, 364 ‑ 365, 366 ‑ 370, 371 ‑ 375, 376 - 379, 380, 381, 382 , 383, 384 ‑ 397, 398, 399 ‑ 424, 425 ‑ 426, 427 ‑ 451, 452 ‑ 453, 455.4, and 461 ‑ 465 inclusive;
ii.23.1(e), 23.1(j), 31.2, 34.2, 37.2(a), 37.3, 46, 48, 49, 165, 170.6, 179, 195 ‑ 225, 229, 230, 247, 249, 263, 264, 281 ‑ 293, 295, 296, 301 ‑ 303 and 310 ‑ 312 inclusive; and
iii.any other paragraphs of the amended defence which rely upon the matters the subject of 8(b)(i) and (ii) above, but only to the extent those paragraphs so rely.
[19] Amended reply [3.3.2] ‑ [5].
HPPL says that in essence the Arbitration Dispute Matters are those matters of Bianca and John's defence which were the subject of their claims, since stayed, in the Federal Court and the counterclaims in this court, and which were broadly described in earlier judgments as the substantive claims.[20]

Bianca and John's defence in Rhodes proceeding

[20] See Hancock Prospecting Pty Ltd v Rinehart [2017] FCAFC 170; (2017) 257 FCR 442 [28] ‑ [54]; Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 10] [2018] WASC 407 [52] ‑ [54]; Hancock Prospecting Pty Ltd v Rhodes [2020] WASCA 77; (2020) 55 WAR 435 [12].

I will now set out part of Bianca and John's defences in more detail. I will refer to their defence in the Rhodes proceeding because it is paragraphs in that defence, and Rhodes' response to them in its amended reply, which the HPPL parties submit give rise to a matter the subject of the arbitration agreement in the Hope Downs Deed. Bianca and John's defence in the WPPL proceeding is to the same effect.
In their amended defence in the Rhodes proceeding Bianca and John plead:
5A.2[The Children] are entitled in equity to an interest in the tenements which are the subject of this proceeding set out in paragraphs 462 to 464 for the reasons set out in this defence.
At [23] of their defence Bianca and John refer to the Hope Downs Mining Lease (ML282SA) which was granted over land which was formerly the subject of the Hope Downs Exploration Licences (ELs) and East Angelas ELs, and that the ELs were applied for and granted variously to HPPL or HML. At the time the ELs were granted to HML, HML was a wholly owned subsidiary of HFMF and Zamoever Pty Ltd (Zamoever) was the sole B class member and controlling shareholder of HFMF. Bianca and John then plead:
23.1(g) from 3 March 1989, all of the shares in Zamoever were beneficially owned by [the Children] and held on trust for them by Lang Hancock [Lang] until 27 March 1992 and thereafter by [Gina] (HFMF Trust);
…
(k)in the premises, as of 6 October 1992, all the Hope Downs ELs and the East Angelas ELs were the property of the HFMF Trust, and therefore beneficially owned by the beneficiaries of the HFMF Trust being [the Children];
(l)as part of a fraudulent and dishonest design of Gina, in breach of her fiduciary duties as trustee of the HFMF Trust, as a director or shadow director of HFMF, HRL and Zamoever, and arising from the 1988 Agreement, with the knowledge and participation of HPPL and HDL, as pleaded in paragraph 465 of this defence, caused the following transfers of the Hope Downs ELs and East Angelas ELs:
[The pleading then sets out a series of transfers from HRL to HDL, from HDL to HPPL and then from HPPL to HDIO].
(m)in the premises, the Hope Downs ELs and East Angelas ELs were held on constructive trust for the beneficiaries of the HFMF Trust, being [the Children]:
[The pleading then sets out periods during which the ELs were held successively by HDL, HPPL, and HDL].
(n)in the premises, and for the reasons set out in paragraph 464.3 HDIO's interest in ML282SA is held on constructive trust for the beneficiaries of the HFMF Trust, being [the Children].
At [31.2], [34.2] and [37.2(a)] Bianca and John plead that, in the premises, the beneficiaries of the HFMF Trust, being the Children, are not liable to account to, or pay damages or compensation in equity to Rhodes in respect of their interest in ML282SA.
At [44] Bianca and John plead in further answer to Rhodes' claims for proprietary relief, that such relief is not appropriate and should not be granted because the grant of such relief would be injurious to and/or prejudice the interests of third parties, namely, the Children.
At [45] Bianca and John plead that HPPL does not hold proceeds received, and any further proceeds which it receives, from ML282SA on constructive trust for Rhodes to any extent, because HPPL holds such proceeds on constructive trust for the beneficiaries of the HFMF Trust, being the Children.
At [47] Bianca and John plead that neither HPPL, WPPL, nor HDIO held or hold any interest in mining tenements in respect of the ground comprised in the East Angelas and Hope Downs on trust for Rhodes to any extent because HPPL held, and HDIO now holds, those tenements on trust for the beneficiaries of the HFMF Trust and WPPL does not hold any interest in those tenements by reason of the matters pleaded in Bianca and John's defence to the WPPL proceedings.
At [49] Bianca and John plead that Rhodes is not entitled to an equitable lien over the specified areas as against Bianca and John (who hold an equitable interest in those areas by reason of the matters pleaded in their defence) because Bianca and John are not obliged to pay any royalties to Rhodes on iron ore produced from such areas.
At [50] Bianca and John plead that HDIO does not hold its interests in ML282SA on trust for ore subject to an equitable lien in favour of Rhodes because HDIO's interests in ML282SA are held on constructive trust for the beneficiaries of the HFMF Trust.
At [51] Bianca and John plead that HDIO does not hold its interests in ML282SA on trust for, or subject to an equitable lien in favour of, Rhodes because HDIO's interests in ML282SA are held on constructive trust for the beneficiaries of the HFMF Trust.
At [164] to [465] Bianca and John plead matters which they say gives rise to the Children's equitable interest in the Hope Downs tenements.
Paragraph 165 sets out a summary of their case by summarising the matters pleaded in specified paragraphs of the defence. Paragraph 165, omitting the references to the paragraphs of the defence at which the summarised matters are pleaded, is as follows:
165.1… as at or shortly after Lang's death on 27 March 1992, HRL held exploration licences over land that would become the subject of the Hope Downs Mining Lease (the Hope Downs Tenements);
165.2HRL, at the time, was wholly owned by HFMF;
165.3… Lang had caused those exploration licences to be held as separately owned assets by HRL or, prior to its sale to BHP Minerals Limited, HML, being another subsidiary of HFMF, rather than by HPPL, in order to protect HPPL's guaranteed royalty income from the risks associated with the development of mining assets (defined below as the 'royalty income protection purpose');
165.4… on 22 June 1998, Lang and Gina entered into an agreement (the 1988 Agreement), the principal terms of which included that:
(a)Lang would continue to retain complete control over HPPL until his death;
(b)Lang would establish a trust (the HMH Trust) to which he would transfer, by way of gift, the 33.3% shareholding in HPPL left to him by his late wife, Hope Margaret Hancock (HMH) in her will, of which 17.7% would be held for Gina absolutely on Lang's death, and the remaining 15.6% would be held for Bianca, John, Hope and Ginia in equal shares absolutely when Ginia turned 25;
(c)Lang would sell the remaining one third of the ordinary and cumulative special shares in HPPL held by him to HFMF;
(d)on Lang's death, Gina would have a total holding of 51.0% of the ordinary and special cumulative shares in HPPL, while the entitlement of Bianca, John, Hope and Ginia when Ginia turned 25 would be 15.6% of the ordinary and cumulative special shares in HPPL held by the HMH Trust and absolute control over HFMF, including control over the 33.3% of ordinary and special cumulative HPPL shares held by HFMF (a total of 49.0% of HPPL's shares); and
(e)Gina would abandon claims that she had against Lang, including allegations she had previously made, as pleaded at paragraph 209 of this defence, and including for any alleged breaches of his fiduciary duties as a director of HPPL in placing mining assets in HFMF or its subsidiaries rather than HPPL;
165.5… during Lang's lifetime each of Gina and HPPL knew of, acquiesced in and agreed to:
(a)the fact that the 1988 Agreement was legally binding on Lang, Gina and HPPL; and
(b)HRL and/or HML's ownership of mining assets pursuant to the royalty income protection purpose;
165.6… as a result of the 1988 Agreement, Gina owed fiduciary obligations to Bianca, John, Hope and Ginia in relation to the interests in mining assets conferred upon them through the 1988 Agreement …;
165.7... through making the 1988 Agreement, Lang established a trust, the principal asset of which was the right to control HFMF and its assets (the HFMF Trust), and the beneficiaries of which were Bianca, John, Hope and Ginia, which trust Lang formally gave effect to through:
(a)causing Zamoever to become the controlling member of HFMF; and
(b)by a deed made in March 1992 (the 1992 Deed), declaring a trust in favour of Bianca, John, Hope and Ginia over the shares he held in Zamoever;
165.8… on Lang's death, Gina became the trustee of the HFMF Trust;
165.9… between 27 March 1992, when Lang died, and 20 February 1996, Gina, with the knowledge and assistance of HPPL, undertook a series of steps to obtain interests in assets other than those provided to her through the 1988 Agreement and to take those assets away from her children. Those steps included:
(a)causing HPPL to make a claim that HRL held its interests in some of the Hope Downs Tenements on constructive trust for HPPL, on the basis (known by Gina and HPPL to be without foundation and false) that Lang had breached his fiduciary duties to HPPL by placing those tenements with HRL rather than HPPL (the Constructive Trust claim);
(b)causing HPPL to make that claim despite the fact that any such claim had been compromised and released through the 1988 Agreement;
(c)causing HRL to transfer the Hope Downs Tenements to HDL, purportedly to be held on trust for whichever of HPPL or HRL were found to be the beneficial owner of the Hope Downs Tenements;
(d)causing HFMF and HPPL to agree to a transaction referred to as the Debt Reconstruction, the effect of which was that HPPL was able to buy back the shares held in it by HFMF for effectively no consideration;
(e)causing HFMF and HRL to agree to a Deed of Acknowledgement and Release (referred to further in this defence as either the 1995 Deed or the Deed of Acknowledgement and Release), as part of the Debt Reconstruction transaction, by which HFMF and HRL purported to acknowledge, falsely and contrary to Gina and HPPL's acceptance of the royalty income protection purpose, that HFMF had held shares in HML and HRL on trust for HPPL;
(f)causing HRL to agree to a Deed of Compromise of Litigation with HPPL and HDL (the 1996 Deed relied on by the plaintiff) to compromise the Constructive Trust claim, by which HRL purported to acknowledge that it did not have any beneficial interest in the Hope Downs Tenements, in circumstances where Gina knew the Constructive Trust claim was without foundation and false and in circumstances where Gina was aware that HRL was without fully informed, independent legal advice in relation to the Constructive Trust claim;
165.10… as a consequence of the steps summarised in paragraph 165.9:
(a)title to the Hope Downs Tenements passed to HPPL;
(b)HPPL transferred title to the Hope Downs Tenements to HDIO;
(c)HDIO obtained the Hope Downs Mining Lease;
(d)HDIO entered into the Hope Downs Joint Venture with Hamersley WA: and
(e)HDIO has thereafter received and continues to receive royalties in respect of iron ore produced and sold by Hamersley WA from the area the subject of the Hope Downs Tenements;
165.11… HPPL and HDIO received their title to and interest in the assets referred to in paragraph 165.10 of this defence (the Hope Downs Assets), knowing that those assets;
(a)had been the subject of the HFMF Trust; and/or
(b)had been removed from the HFMF Trust and/or otherwise transferred to HPPL in breach of Gina's fiduciary duties:
A.as trustee of the HFMF Trust;
B.as a director or shadow director of HFMF, HRL and Zamoever; and/or
C.pursuant to the 1988 Agreement;
165.12… in the premises of the matters summarised in paragraph 165.11, each of HDL and HPPL held, and HDIO held and continues to hold, their respective interests in the Hope Downs Assets on constructive trust for Bianca, John Hope and Ginia.
Bianca and John's defence in the WPPL proceedings is different but includes substantially the same allegations.

Rhodes amended reply in Rhodes proceeding

In their amended reply Rhodes deny Bianca and John's claims that the tenements (leading ultimately to the Hope Downs tenements) were held on trust for the Children and have never been beneficially held by HPPL or HDIO. The HPPL parties assert that paragraphs of Rhodes amended reply plead facts and circumstances which give rise to matters that are the subject of the arbitration agreement in the Hope Downs Deed.
At [3.3.1] Rhodes deny that the tenements (leading ultimately to the Hope Downs tenements) were held on trust for the Children and have never been beneficially held by HPPL or HDIO. Rhodes pleads at [3.3.1.1] that at all relevant times the Hope Downs ELs and the East Angelas ELs were held by HML, HRL and HDL on trust for HPPL and WPPL. At [3.3.1.2] Rhodes plead alternatively that the tenements were held on trust for HPPL to be dealt with in accordance with the rights of HPPL and WPPL, including such royalty entitlements as HPPL and WPPL had, and subject to the rights of Rhodes.
At [3.3.2] Rhodes plead that if Lang and/or HPPL caused the acquisition, transfer or gift of the beneficial interest in the Hope Downs ELs and the East Angelas ELs to be held other than for HPPL and/or HPPL and WPPL (the Alleged Transmission Away), then the Alleged Transmission Away was a breach of Lang's fiduciary, equitable and statutory duties owed to HPPL or a breach of HPPL's fiduciary duty to WPPL and the breaches of duty prevented the purported Alleged Transmission Away being effective in equity or were transactions liable to be set aside in equity at the instance of HPPL and/or WPPL. Rhodes says that by reason of those breaches of duty, of which HML, HRL and HDL have the requisite knowledge, the Hope Downs ELs and East Angelas ELs were held on constructive trust by HML, HRL and then HDL for HPPL and/or HPPL and WPPL.
At [3.4] Rhodes deny that HDIO's interest in the Hope Downs mining lease is held on constructive trust for the Children as beneficiaries of the HFMF Trust, or, alternatively, if the Hope Downs ELs and the East Angelas ELs were assets of the HFMF Trust that was by reason of breaches of fiduciary and other duties by Lang and/or HPPL and accordingly on such transfer or retransfer equity would not impose a constructive trust over the Hope Downs ELs and East Angelas ELs in favour of the Children. Further, if Gina caused the beneficial interest in the ELs to be transferred to HPPL or its subsidiaries, the effect of the breach of Lang's and/or HPPL's fiduciary duties was undone and the correct position in equity was re‑established, that is that the beneficial interest in the Hope Downs ELs and the East Angelas ELs being held by HPPL and WPPL was subject to the rights of WPPL and subject to or in conformity with the rights of the Rhodes parties.
At [3.4.6] to [3.4.19] Rhodes plead facts and circumstances leading to the plea that if the Hope Downs ELs and the East Angelas ELs were not at all material times held on trust for HPPL and WPPL or on trust for HPPL to be dealt with in accordance with the rights of HPPL and WPPL then by the events in 1994 and 1995, which Bianca and John refer to as the Debt Reconstruction, HPPL:
3.4.19.1 acquired, or re‑acquired, the Hope Downs ELs and the East Angelas ELs from HRL and HFMF in a bona fide transaction for value, and those tenements were held on trust [for HPPL and WPPL or alternatively for HPPL to be dealt with in accordance with the rights of HPPL and WPPL];
3.4.19.2 was not knowingly concerned in any breaches of trust or fiduciary duty by Gina (which breaches are denied);
3.4.19.3 did not participate or assist in a fraudulent and dishonest design, together with [Gina] (which design is denied), for the purpose of obtaining the Hope Downs ELs and the East Angelas ELs;
3.4.19.4 did not receive title to or a beneficial interest in the Hope Downs ELs and the East Angelas ELs knowing of any breaches of trust or fiduciary duty by [Gina], HRL and/or HFMF (which breaches are denied).
At [3.5] Rhodes plead in further answer to the allegations in Bianca and John's defence that HDIO's interests in ML282SA and any proceeds received by HPPL from ML282SA (HPPL's proceeds) is held on constructive trust for the Children, that a court of equity would not hold HDIO's interests in ML282SA and/or HPPL's proceeds to be held on constructive trust because Bianca and John (and/or the Children):
(a)do not come to court with clean hands in that the alleged trust is based on breaches of fiduciary duty and other duties owed by Lang and/or HPPL [3.5.1];
(b)have failed to offer to do equity by not offering to accord priority to Rhodes' claims in relations to ML282SA and/or HPPL's proceeds [3.5.2];
(c)have been guilty of laches and acquiescence and would thereby be prevented from holding such an interest in ML282SA and/or HPPL's proceeds or from holding such an interest in priority to the interests of Rhodes and WPPL [3.5.3].

At [3.5.4] Rhodes plead that Bianca and John (and/or the Children) are prevented from holding or obtaining an interest in ML282SA by the provisions of the Limitation Act 1935 (WA) or the equitable doctrine of laches.
At [3.5.6] Rhodes plead, alternatively, that if the Children did obtain any equitable interest in ML282SA and/or HPPL's proceeds, the claimed interest would be burdened by Rhodes' royalty entitlements and would rank behind any constructive trust available to Rhodes to secure such royalty entitlements.
At [3.5.7] Rhodes plead, alternatively, that if the Children could otherwise establish an equitable interest in ML282SA and/or HPPL's proceeds, then the court would refuse to exercise its discretion to hold that the Children would be entitled to a constructive trust in relation to HDIO's interest in ML282SA and/or HPPL's proceeds that could operate by way of a defence to the Rhodes claims.
At [4] and [5], in answer to the defences of Ginia and Hope, Rhodes repeat their pleadings in [3].

Commercial Arbitration Act s 8(1)

CAA s 8(1) requires a court before which an action is brought in a matter that is the subject of an arbitration agreement to refer the matter to arbitration if a party so requests in the circumstances specified in the section. The court will give effect to that requirement by staying the matter before the court. Section 8(1) provides:
A court before which an action is brought in a matter which is the subject of an arbitration agreement must, if a party so requests not later than when submitting the party's first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.
Broken into its relevant component parts, CAA s 8(1) provides:
A court before which:
(1)an action is brought in a matter which is the subject of an arbitration agreement, and
(2)a party requests that the court refer the parties to arbitration, and
(3)the party makes the request not later than when submitting the party's first statement on the substance of the dispute, and
(4)the arbitration agreement is not null and void, inoperative or incapable of being performed,
must refer the parties to arbitration.
No party contends that the arbitration agreements are null and void, inoperative or incapable of being performed. Accordingly, the question is whether the first three elements are satisfied. If so, the court must refer the parties to arbitration.

Does the amended reply mean that the proceedings are 'in' a matter which is the subject of the arbitration agreement?

A 'matter' within the meaning of CAA s 8(1) is a reference to the differences between the parties or the controversy or controversies that is or are covered by the terms of the arbitration agreement and it is that body of differences which is to be the subject of the arbitration agreement.[21]
[21] Hancock Prospecting Pty Ltd v DFD Rhodes [2020] WASCA 77; (2020) 55 WAR 435 [149] (Quinlan CJ).
HPPL submits that the allegations in Bianca and John's defence to which I have referred and the response to those allegations in Rhodes amended reply to which I have referred give rise to matters which are the subject of the arbitration agreements.
HPPL submits that the response of Rhodes in its amended reply to the claims of Bianca and John that HDIO and HPPL hold their interests in the Hope Downs tenements on constructive trust for Bianca and John and the Children give rise to three matters which are the subject of the arbitration agreements.
The first matter was described by senior counsel for HPPL, Mr Hutley SC, as the capacity in which HML and HRL acquired and held the tenements before they were transferred to HDL in 1992. Rhodes contends that the acquisition of the tenements by HML and HRL, then subsidiaries of HFMF, was in breach of Lang's fiduciary and other duties owed to HPPL[22] and had the consequence that HML and HRL held the tenements on constructive trust for HPPL.[23] Rhodes contends that Gina did not breach any fiduciary duties as alleged by Bianca and John as part of the Arbitration Dispute Matters because the tenements never formed part of the property of the HFMF Trust or, in transferring the tenements to HPPL, Gina was undoing the improper transfer of assets that had occurred at the direction of Lang.[24]
[22] Amended reply [3.3.2.1].
[23] Amended reply [3.3.2.3], [3.3.2.4], [4.1], [4.2], [5.1] and [5.2].
[24] Amended reply [3.4.1] ‑ [3.4.5], [4.1], [4.2], [5.1], [5.2].
The second matter concerns the transfer of the tenements to HDL, HPPL and HDIO. Rhodes contends that if HML and HRL held the beneficial interest in the tenements, those tenements were validly transferred to HPPL, and all claims to the tenements validly relinquished by HRL and HFMF either because of the breach of fiduciary duty by Lang or as a result of bona fide transactions for value as part of the debt reconstruction transactions in which HPPL provided funds to, and forgave debts of, HRL and/or HFMF in exchange for the tenements, saving HRL and HFMF from insolvency.[25]
[25] Amended reply [3.4.6] ‑ [3.4.19], [4.1], [4.2], [5.1], [5.2].
HPPL submits that an essential element of each of these matters is a right, interest or defence of law that is vested in HPPL, HDIO, HFMF, HRL or Gina. Each of those persons are parties to the arbitration agreements and the consequence of Rhodes seeking to rely upon their rights, interests or defences is that Rhodes has become a party to the arbitration agreements in respect of those matters by reason of the extended definition of 'party' in CAA s 2(1). This transforms the disputes between Rhodes and Bianca and John arising from the parts of Rhodes amended reply to which I have referred into matters that are the subject of arbitration agreements and must therefore be referred to arbitration.
The disputes between Rhodes and Bianca and John arising from the parts of Rhodes amended reply to which I have referred concern subject matters that are the subject of the arbitration agreement between the parties to the Hope Downs Deed. Those controversies, or bodies of differences, are therefore the subject of the arbitration agreements if Rhodes is a party to the arbitration agreements. That depends on whether Rhodes, in advancing the contentions in its amended reply to which I have referred, are claiming 'through or under' HPPL or another party to the arbitration agreements. I address that issue below.
The third matter arising from Rhodes' amended reply which the HPPL parties submit is the subject of the arbitration agreement is conduct or inaction of the Children alleged by Rhodes. Rhodes contends that HDIO's or HPPL's interests in the tenements are not, or should not be, subject to any constructive trust in favour of the beneficiaries of the HFMF Trust because:
(i)the Children lack clean hands by reason of their claims being based on breaches of fiduciary duties by Lang;[26]
(ii)the Children have failed to offer to do equity by recognising Rhodes claims thereby precluding the existence of a constructive trust over HDIO's interest;[27]
(iii)the Children's claims against HDIO and HPPL are prevented by laches and acquiescence[28] or otherwise out of time;[29]
(iv)any interest held by the Children that impinges on the interests held by HDIO or HPPL is in the nature of a passive interest in property only, the value of which is to take into account what was and is required to commercially exploit the property;[30] and
(v)discretionary reasons favour against imposing a constructive trust over HDIO's or HPPL's interests in the tenements.[31]
[26] Amended reply [3.5.1], [4], [5].
[27] Amended reply [3.5.2], [4], [5].
[28] Amended reply [3.5.3], [4], [5].
[29] Amended reply [3.5.4], [3.5.5].
[30] Amended reply [3.5.6.1], [3.5.6.2].
[31] Amended reply [3.5.7].
At [3.5.2] of their amended reply, Rhodes plead that Bianca and John have failed to do equity by not offering to accord priority to Rhodes' equitable interest in ML282SA. Issues of priorities in equity as between Rhodes and the Children are also raised at [3.5.3], [3.5.6], [4.3] and [5.3] of the amended reply.
Rhodes' equitable interest in the tenements is not a matter which is susceptible of settlement as a discrete controversy by arbitration.[32] It is a defence which is available to Rhodes alone[33] and is a matter which is 'unrelated to the contract containing the arbitration clause' and therefore a matter which cannot be referred to arbitration.[34]
[32] Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; (1990) 169 CLR 342 [351]; Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 267 CLR 514 [68].
[33] Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; (1990) 169 CLR 343.
[34] TanningResearch Laboratories Inc v O'Brien [1990] HCA 8; (1990) 169 CLR 344.
At [3.5.3], [4.3] and [5.3] of their amended reply, Rhodes plead laches. Rhodes contends that laches bars claims by Bianca and John to ML282SA or that laches bars claims by Bianca and John in priority to the interests of Rhodes and WPPL. Rhodes' laches pleas rely on the equitable interest of Rhodes and WPPL and issues of priorities is related thereto.
The laches plea will involve consideration of the change in the nature of the assets as a result of the substantial mining projects undertaken on the Tenements and the rights and interests of third parties in those projects. Further, allegations of laches and acquiescence have also been made against Rhodes by defendants to these proceedings and the status of the assets and the project including the position of third parties will be relevant to those claims.
The matters relating to laches cannot be the subject of a stay under CAA s 8(1).
At [3.5.7] of their amended reply, Rhodes plead that a constructive trust would not be granted because of, amongst other things, the interests of third parties (including the State and Hamersley WA Pty Ltd)[35] and the equitable interests of Rhodes and WPPL[36]. Rhodes claim that if the tenement was acquired by HML free of Rhodes' rights, then the recovery of the tenement by HPPL was correcting the situation. Further, with respect to the claims of Bianca and John in change in status of ownership away from HPPL or HDIO could effect the royalty or constructive trust rights or priority rights of Rhodes. Rhodes' reliance on the equitable interests of Rhodes and WPPL, and the interests of third parties, in order to defeat the claims which are made by Bianca and John against Rhodes, are not matters falling within the scope of the arbitration agreement and those matters are unrelated to the contract containing the arbitration clause. Those matters cannot be the subject of a stay under CAA s 8(1).

A person claiming through or under a party

[35] Amended reply [3.5.7.3.6] and [3.5.7.3.10].

[36] Amended reply [3.5.7.3.11].

CAA s 8(1) requires a court before which an action is brought in a matter which is subject to an arbitration agreement to refer to arbitration the parties, including a person who is a party because they are claiming through or under a party to an arbitration agreement. A person who claims through or under a party may be either a person seeking to enforce or a person seeking to resist the enforcement of an alleged right.[37]
[37] Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; (1990) 169 CLR 332.
Rhodes submits that it is not a person claiming through or under HPPL and hence the relevant controversies between it and Bianca and John are not matters the subject of an arbitration agreement.
Rhodes submits that for a person to be a person claiming through or under a party to an arbitration agreement ('claimant') there must be a relationship of sufficient proximity between the claimant and the party to the arbitration agreement. Rhodes cites BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd[38] and KNM Process Systems SDN BHD v Mission Newenergy Ltd[39] in support of that proposition. Rhodes say that the relationship between the claimant and the party to the arbitration agreement must be an essential ingredient of the claim and that relationship must be relevant to the claim.
[38] BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd [2008] FCA 551; (2008) 168 FCR 169 [15].
[39] KNM Process Systems SDN BHD v Mission Newenergy (formerly known as Mission Biofuels Ltd) [2014] WASC 437 [45] ‑ [46].
Rhodes submit that the reason for this requirement of proximity is obvious:
The statutory purpose of section 8 is to require parties who have voluntarily submitted their disputes to arbitration to be held to their bargain (see, eg [Court of Appeal stay judgment] at [250]). That purpose is not facilitated by requiring strangers to the agreement to participate in an arbitration, save potentially in a limited class of case, namely where there is a relationship of sufficient proximity between the claimant and the party, and that relationship is relevant to the claim.
Rhodes say that the requirement of proximity is supported by examples of when a claim has been held to be made 'through or under' another party.[40]
[40] Piercy v Young (1879) 14 Ch D 200; Heller Financial Services Ltd v Thiess Contractors Pty Ltd [2000] FCA 802; McHutchison v Western Research and Development Ltd [2004] FCA 419; AED Oil Ltd v Puffin FPSO Ltd [2010] VSCA 37; (2010) 27 VR 22; Tensioned Concrete Pty Ltd v Munich Re [2020] WASC 431; Flint Ink NZ Ltd v Huhtamaki Australia Ltd [2014] VSCA 166; (2014) 44 VR 64.
HPPL submits that in Rinehart v Hancock[41] the High Court decided that the test of whether a person is claiming through or under a party to an arbitration agreement does not require a relationship of proximity.
[41] Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 267 CLR 514.
The High Court upheld a cross‑appeal by HDIO and two other companies in the Hancock Group, Roy Hill Iron Ore Pty Ltd (RHIO) and Mulga Downs Iron Ore Pty Ltd (MDIO). Bianca and John's claim against those companies (third party companies), like their claim against HDIO in the stayed counterclaims in these proceedings, was that HPPL received the Roy Hill and Hope Downs tenements, and indirectly through HRL the Mulga Downs tenements, as a knowing participant in Gina's alleged fraudulent and dishonest design, breaches of trust and breaches of fiduciary duty, that HPPL and HRL thereafter transferred those tenements to RHIO, HDIO and MDIO in breach of trust, and that each of RHIO, HDIO and MDIO received the tenements so assigned with knowledge of the breach of trust, with the result that they hold the tenements as constructive trustee for the Children. The third party companies contended that they were claiming through or under HPPL and HRL and therefore were parties to the arbitration agreement because it is an essential element of their defence to Bianca and John's claims that HPPL and HRL were beneficially entitled to the tenements and further or alternatively that HPPL and HRL obtained releases under the Hope Downs Deed to the benefit of which the third party companies were entitled as assignees of the tenements.
The primary judge rejected the third party companies' application. The Full Court upheld the rejection of the third party companies' application, primarily on the bases that in order for a defence to qualify as a defence claim through or under a party it must generally be a 'derivative defence'; that the third party companies invocation of HPPL's and HRL's releases and other covenants in the deeds was not a derivative defence in the ordinary sense of the term; and the third party companies invocation of HPPL's and HRL's releases was not an essential element of the third party companies defences. The Full Court added that there was no legal relationship between HPPL and HRL and the third party companies relevant to the defence and in any event as no defences had been filed it was not certain that the third party companies would plead those defences.
In the High Court the majority, Kiefel CJ, Gageler, Nettle and Gordon JJ, allowed the cross‑appeal and ordered that the claims of Bianca and John against the third party companies be stayed. Edelman J in dissent would have dismissed the cross‑appeal. The majority rejected the Full Court's reasoning. They rejected the Full Court's reasoning, based on the judgment of Brennan and Dawson JJ in Tanning Resources, that in order for a defence to qualify as a defence claimed through or under a party it must generally be a derivative defence and that the third party companies invocation of HPPL's and HRL's releases and other covenants in the deeds was not a derivative defence in the ordinary sense of the term. The majority held that the test formulated by Brennan and Dawson JJ is:
whether an essential element of the defence was or is vested in or exercisable by the third party to the arbitration agreement [68].
The majority said that the statutory conception of claiming through or under applies to an alleged knowing recipient of trust property who invokes as an essential element of its defence that the alleged trustee was beneficially entitled to a trust property.
Pausing there, that formulation of claiming through or under fits the material part of Rhodes' claim in answer to Bianca and John's defence that HPPL (and therefore the Partnership) had no beneficial interest in the Hope Downs tenements, and hence Rhodes had no royalty entitlement, which is dependent on HPPL holding the tenements on behalf of the Partnership. Rhodes claims that the acquisition of the tenements by HML and HRL was in breach of Lang's fiduciary and other duties owed to HPPL and has the consequence that HML and HRL held the tenements on constructive trust for HPPL and that Gina did not breach any fiduciary duties as alleged by Bianca and John as part of the Arbitration Dispute Matters because the tenements never formed part of the property of the HFMF Trust or, in transferring the tenements to HPPL, Gina was undoing the improper transfer of assets that had occurred at the direction of Lang. An essential element of those claims, that HML and HRL held the tenements on constructive trusts for HPPL, was or is vested in or exercisable by a party to the arbitration agreement ‑ HPPL.
The majority rejected the Full Court's consideration that the relationship between the third party companies and any party to the arbitration agreement was purely factual as opposed to legal as being irrelevant.
Having rejected the further reasoning of the Full Court, the majority set out its critical findings:
[72]In Tanning Research, Brennan and Dawson JJ reasoned as follows:[42]
'A liquidator who resists a claim made by a creditor against the assets available for distribution on the ground that there is no liability under the general law thus stands in the same position vis‑à‑vis the creditor as does the company. If the creditor and the company are bound by an international arbitration agreement applicable to the claim, there is no reason why the claim should not be determined as between the creditor and the liquidator in the same way as it would have been determined had no winding up been commenced. To exclude from the scope of an international arbitration agreement binding on a company matters between the other party to that agreement and the company’s liquidator would give such agreements an uncertain operation and would jeopardize orderly arrangements: see Scherk v Alberto-Culver Co.'[43]
[73]Likewise here, where an assignee of mining tenements is alleged to have taken the assignment with knowledge that the tenements were held by the assignor upon trust for the claimant and assigned to the assignee in breach of trust, and the assignee contests the claim on the ground that there was no breach of trust or if there were that, by reason of a deed of settlement, the assignor was absolved of responsibility for the breach of trust, the assignee takes its stand upon a ground which is available to the assignor and stands in the same position vis‑à‑vis the claimant as the assignor. Accordingly, since the assignor and the claimant are bound by an arbitration agreement applicable to the claim of breach of trust, there is no good reason why this claim should not be determined as between the claimant and the assignee in the same way as it will be determined between the claimant and the assignor. To exclude from the scope of the arbitration agreement binding on the assignor matters between the other party to that agreement and the assignee would give the arbitration agreement an uncertain operation. It would jeopardise orderly arrangements, potentially lead to duplication of proceedings and potentially increase uncertainty as to which matters of controversy are to be determined by litigation and which by arbitration. And ultimately it would frustrate the evident purpose of the statutory definition.
[42] Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; (1990) 169 CLR 342.
[43] Scherk v Alberto-Culver Co 417 US 506 (1974).

Mr Withers' third submission is that WPPL relies, in support of its position that HML/HRL acquired exploration licences over the Hope Downs tenements on trust for HPPL for the benefit of the Partnership, on the transactions which Bianca and John say were part of a dishonest and fraudulent design by Gina.
At 6FASSOC [53A] WPPL pleads that HML held the exploration licences on trust for HPPL which is to be inferred from six matters particularised. The first five of those matters, which are various deeds, transfers and the assertion of a constructive trust by HPPL from 1992 to 1996 are alleged by Bianca and John to have been part of Gina's fraudulent and dishonest design pleaded at [465] of Bianca and John's defence. That paragraph is premised on [462] which in turn relies on the allegations at [166] to [455] of their defence. WPPL relies on the matters asserted at 6FASSOC [53A] in particulars elsewhere in its pleading. Bianca and John's response is to assert that the relevant matters are part of Gina's fraudulent and dishonest design.
I accept, in substance, the arguments advanced by Mr Withers. Furthermore, my rejection of HPPL's application to strike out 6FASSOC [53C] is fatal to the HPPL parties' application to strike out the impugned paragraphs of Bianca and John's defence. I decline to strike out the paragraphs of Bianca and John's defence challenged by the HPPL parties.
The position is substantially the same with respect to Bianca and John's defence in the Rhodes proceeding. In that proceeding the impugned paragraphs of Bianca and John's defence are not unnecessary, irrelevant or vexatious.
In addition to the matters which I have referred to in relation to the WPPL proceedings, Bianca and John submit that that result flows from the nature of Rhodes' claim in their third further amended substituted statement of claim. Rhodes' principal claims are to the effect that through the 1969 Agreement, HPPL and WPPL agreed to pay to Rhodes a royalty in respect of amounts they received from or produced from land subject to the temporary reserves. Rhodes plead that through a chain of applications for the grant of mining tenements the ground comprised in those temporary reserves are now included in the ground comprised in ML282SA. Rhodes claim an entitlement to royalties based on the pleaded agreements.
Bianca and John submit that those claims do not involve establishing on whose behalf HML/HRL acquired exploration licences over the relevant ground. Bianca and John's response to the claims is essentially that HDIO's interest in ML282SA is held on constructive trust for the beneficiaries of the HFMF trust, that is the Children, for the reasons set out in [23] of their amended defence, which includes the plea that transfers of the Hope Downs ELs and East Angelas ELs which culminated in their transfer to HDIO was part of a fraudulent and dishonest design of Gina, in breach of her fiduciary duties as the trustee of the HFMF trust, as a director or shadow director of HFMF, HRL and Zamoever, and arising from the 1988 Agreement, with knowledge and participation of HPPL and HDL, as pleaded in [465] of their amended defence. Paragraph 465 is premised on [462] which turn is based upon the matters set out in [166] to [455] of their amended defence.
The HPPL parties' application to strike out the challenged paragraphs of Bianca and John's defence in the Rhodes proceeding will be dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

BR
Associate to the Honourable Justice Le Miere

2 JULY 2021

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
CITATION: WRIGHT PROSPECTING PTY LTD -v- HANCOCK PROSPECTING PTY LTD [No 13] [2021] WASC 214 (S)
CORAM:   LE MIERE J
HEARD:   ON THE PAPERS
DELIVERED          :   24 FEBRUARY 2022
FILE NO/S:   CIV 3041 of 2010
BETWEEN:   WRIGHT PROSPECTING PTY LTD
Plaintiff
AND
HANCOCK PROSPECTING PTY LTD
First Defendant
HOPE DOWNS IRON ORE PTY LTD
Second Defendant
BIANCA HOPE RINEHART
Third Defendant
JOHN LANGLEY HANCOCK
Fourth Defendant
HOPE RINEHART WELKER
Fifth Defendant
GINIA HOPE FRANCIS RINEHART
Sixth Defendant
BIANCA HOPE RINEHART
First Plaintiff by Counterclaim
JOHN LANGLEY HANCOCK
Second Plaintiff by Counterclaim
AND
GEORGINA HOPE RINEHART
First Defendant by Counterclaim
HANCOCK PROSPECTING PTY LTD
Second Defendant by Counterclaim
HANCOCK MINERALS PTY LTD
Third Defendant by Counterclaim
THE HANCOCK FAMILY MEMORIAL FOUNDATION LTD
Fourth Defendant by Counterclaim
TADEUSZ JOZEF WATROBA
Fifth Defendant by Counterclaim
WESTRAINT RESOURCES PTY LTD
Sixth Defendant by Counterclaim
HMHT INVESTMENTS PTY LTD
Seventh Defendant by Counterclaim
150 INVESTMENTS PTY LTD
Eighth Defendant by Counterclaim
HOPE RINEHART WELKER
Ninth Defendant by Counterclaim
GINIA HOPE FRANCIS RINEHART
Tenth Defendant by Counterclaim
MAX CHRISTOPHER DONNELLY AS TRUSTEE IN BANKRUPTCY OF LANGLEY GEORGE HANCOCK
Eleventh Defendant by Counterclaim
HOPE DOWNS IRON ORE PTY LTD
Twelfth Defendant by Counterclaim
ROY HILL IRON ORE PTY LTD
Thirteenth Defendant by Counterclaim
MULGA DOWNS INVESTMENTS PTY LTD
Fourteenth Defendant by Counterclaim
MULGA DOWNS IRON ORE PTY LTD
Fifteenth Defendant by Counterclaim
WRIGHT PROSPECTING PTY LTD
Sixteenth Defendant by Counterclaim
DFD RHODES PTY LTD
Seventeenth Defendant by Counterclaim
MATTHEW JOHN KEADY AND DOROTHEA MARGARET CAMPBELL AS EXECUTORS OF DONOVAN FRANCES DUNCAN RHODES
Eighteenth Defendant by Counterclaim
HAMERSLEY WA PTY LTD
Third Party

FILE NO/S: CIV 2617 of 2012
BETWEEN: WRIGHT PROSPECTING PTY LTD
Plaintiff
AND
HANCOCK PROSPECTING PTY LTD
First Defendant
HOPE DOWNS IRON ORE PTY LTD
Second Defendant
BIANCA HOPE RINEHART
Third Defendant
JOHN LANGLEY HANCOCK
Fourth Defendant
HOPE RINEHART WELKER
Fifth Defendant
GINIA HOPE FRANCIS RINEHART
Sixth Defendant
HAMERSLEY WA PTY LTD
Third Party

FILE NO/S: CIV 2737 of 2013
BETWEEN: DFD RHODES PTY LTD
First Plaintiff
DOROTHEA MARGARET CAMPBELL as executor of the estate of DONOVAN FRANCES DUNCAN RHODES
Second Plaintiffs
AND
HANCOCK PROSPECTING PTY LTD
First Defendant
WRIGHT PROSPECTING PTY LTD
Second Defendant
HOPE DOWNS IRON ORE PTY LTD
Third Defendant
BIANCA HOPE RINEHART
Fourth Defendant
JOHN LANGLEY HANCOCK
Fifth Defendant
HOPE RINEHART WELKER
Sixth Defendant
GINIA HOPE FRANCIS RINEHART
Seventh Defendant
BIANCA HOPE RINEHART
First Plaintiff by Counterclaim
JOHN LANGLEY HANCOCK
Second Plaintiff by Counterclaim
GEORGINA HOPE RINEHART
First Defendant by Counterclaim
HANCOCK PROSPECTING PTY LTD
Second Defendant by Counterclaim
HANCOCK MINERALS PTY LTD
Third Defendant by Counterclaim
THE HANCOCK FAMILY MEMORIAL FOUNDATION LTD
Fourth Defendant by Counterclaim
TADEUSZ JOZEF WATROBA
Fifth Defendant by Counterclaim
WESTRAINT RESOURCES PTY LTD
Sixth Defendant by Counterclaim
HMHT INVESTMENTS PTY LTD
Seventh Defendant by Counterclaim
150 INVESTMENTS PTY LTD
Eighth Defendant by Counterclaim
HOPE RINEHART WELKER
Ninth Defendant by Counterclaim
GINIA HOPE FRANCIS RINEHART
Tenth Defendant by Counterclaim
MAX CHRISTOPHER DONNELLY AS TRUSTEE IN BANKRUPTCY OF LANGLEY GEORGE HANCOCK
Eleventh Defendant by Counterclaim
HOPE DOWNS IRON ORE PTY LTD
Twelfth Defendant by Counterclaim
ROY HILL IRON ORE PTY LTD
Thirteenth Defendant by Counterclaim
MULGA DOWNS INVESTMENTS PTY LTD
Fourteenth Defendant by Counterclaim
MULGA DOWNS IRON ORE PTY LTD
Fifteenth Defendant by Counterclaim
WRIGHT PROSPECTING PTY LTD
Sixteenth Defendant by Counterclaim
DFD RHODES PTY LTD
Seventeenth Defendant by Counterclaim
MATTHEW JOHN KEADY AND DOROTHEA MARGARET CAMPBELL AS EXECUTORS OF THE ESTATE OF DONOVAN FRANCES DUNCAN RHODES
Eighteenth Defendant by Counterclaim
HAMERSLEY WA PTY LTD
Third Party

Catchwords:

Practice and procedure - Chamber summons - Whether chamber summons dismissed

Costs - Special costs order - Whether costs under costs determination inadequate - Legal Profession Act s 280(2)

Legislation:

Legal Profession Act 2008 (WA)

Result:

Chamber summons dismissed
Special costs order made

Category: B

Representation:

CIV 3041 of 2010

Original Action

Counsel:

Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance
Sixth Defendant	:	No appearance
Third Party	:	No appearance

Solicitors:

Plaintiff	:	Clayton Utz
First Defendant	:	Corrs Chambers Westgarth
Second Defendant	:	Corrs Chambers Westgarth
Third Defendant	:	Yeldham Price O'Brien Lusk
Fourth Defendant	:	Yeldham Price O'Brien Lusk
Fifth Defendant	:	No appearance
Sixth Defendant	:	Dentons
Third Party	:	Allens

Counterclaim

Counsel:

First Plaintiff by Counterclaim	:	No appearance
Second Plaintiff by Counterclaim	:	No appearance
First Defendant by Counterclaim	:	No appearance
Second Defendant by Counterclaim	:	No appearance
Third Defendant by Counterclaim	:	No appearance
Fourth Defendant by Counterclaim	:	No appearance
Fifth Defendant by Counterclaim	:	No appearance
Sixth Defendant by Counterclaim	:	No appearance
Seventh Defendant by Counterclaim	:	No appearance
Eighth Defendant by Counterclaim	:	No appearance
Ninth Defendant by Counterclaim	:	No appearance
Tenth Defendant by Counterclaim	:	No appearance
Eleventh Defendant by Counterclaim	:	No appearance
Twelfth Defendant by Counterclaim	:	No appearance
Thirteenth Defendant by Counterclaim	:	No appearance
Fourteenth Defendant by Counterclaim	:	No appearance
Fifteenth Defendant by Counterclaim	:	No appearance
Sixteenth Defendant by Counterclaim	:	No appearance
Seventeenth Defendant by Counterclaim	:	No appearance
Eighteenth Defendant by Counterclaim	:	No appearance

Solicitors:

First Plaintiff by Counterclaim	:	Yeldham Price O'Brien Lusk
Second Plaintiff by Counterclaim	:	Yeldham Price O'Brien Lusk
First Defendant by Counterclaim	:	No appearance
Second Defendant by Counterclaim	:	Corrs Chambers Westgarth
Third Defendant by Counterclaim	:	Corrs Chambers Westgarth
Fourth Defendant by Counterclaim	:	Corrs Chambers Westgarth
Fifth Defendant by Counterclaim	:	Corrs Chambers Westgarth
Sixth Defendant by Counterclaim	:	Corrs Chambers Westgarth
Seventh Defendant by Counterclaim	:	Corrs Chambers Westgarth
Eighth Defendant by Counterclaim	:	No appearance
Ninth Defendant by Counterclaim	:	No appearance
Tenth Defendant by Counterclaim	:	Dentons
Eleventh Defendant by Counterclaim	:	Corrs Chambers Westgarth
Twelfth Defendant by Counterclaim	:	Corrs Chambers Westgarth
Thirteenth Defendant by Counterclaim	:	Corrs Chambers Westgarth
Fourteenth Defendant by Counterclaim	:	No appearance
Fifteenth Defendant by Counterclaim	:	Corrs Chambers Westgarth
Sixteenth Defendant by Counterclaim	:	Clayton Utz
Seventeenth Defendant by Counterclaim	:	Taylor & Taylor Lawyers Pty Ltd
Eighteenth Defendant by Counterclaim	:	Taylor & Taylor Lawyers Pty Ltd

CIV 2617 of 2012

Counsel:

Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance
Sixth Defendant	:	No appearance
Third Party	:	No appearance

Solicitors:

Plaintiff	:	Clayton Utz
First Defendant	:	Corrs Chambers Westgarth
Second Defendant	:	Corrs Chambers Westgarth
Third Defendant	:	Yeldham Price O'Brien Lusk
Fourth Defendant	:	Yeldham Price O'Brien Lusk
Fifth Defendant	:	No appearance
Sixth Defendant	:	Dentons
Third Party	:	Allens

CIV 2737 of 2013

Counsel:

First Plaintiff	:	No appearance
Second Plaintiffs	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance
Sixth Defendant	:	No appearance
Seventh Defendant	:	No appearance
Third Party	:	No appearance

Solicitors:

First Plaintiff	:	Taylor & Taylor Lawyers Pty Ltd
Second Plaintiffs	:	Taylor & Taylor Lawyers Pty Ltd
First Defendant	:	Corrs Chambers Westgarth
Second Defendant	:	Clayton Utz
Third Defendant	:	Corrs Chambers Westgarth
Fourth Defendant	:	Yeldham Price O'Brien Lusk
Fifth Defendant	:	Yeldham Price O'Brien Lusk
Sixth Defendant	:	No appearance
Seventh Defendant	:	Dentons
Third Party	:	Allens

Case referred to in decision:

Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2019] WASCA 141

LE MIERE J:

Summary

Certain defendants brought chamber summonses (Discovery Objections chamber summonses) objecting to the plaintiffs in each proceeding inspecting documents discovered by other defendants. The applications were resolved by orders made on 10 September 2020. The parties now seek orders to resolve the chamber summonses. For the reasons which follow, each of the Discovery Objections chamber summonses will be dismissed and the costs of each of the summonses will be in the cause. There will be a special costs order in relation to the applications brought by the chamber summonses.

The chamber summonses

On 12 November 2019, the first defendant (HPPL) and the second defendant (HDIO) in CIV 3041 of 2010 and CIV 2617 of 2012 (the consolidated proceedings) and the third, fifth, sixth, seventh, 13^th and 15^th defendants to the counterclaim, filed a chamber summons. They sought orders that the plaintiff (WPPL) and the third party (Hamersley) not be permitted to inspect documents discovered by the third defendant (Bianca) and the fourth defendant (John) (the HPPL Objected Documents).
On 27 August 2020, HPPL and HDIO amended their chamber summons. The principal relief sought under the amended chamber summons is that WPPL and Hamersley not be permitted to inspect the HPPL Objected Documents until after determination of the application for special leave to appeal from the orders made on 7 August 2020 by the Court of Appeal in CACV 12 of 2019 or CACV 88 of 2019, and, if special leave is granted, any appeal therefrom. HPPL and HDIO sought alternative orders and interim relief that WPPL and Hamersley not be permitted to inspect the HPPL Objected Documents until determination of the chamber summons. I will refer to the chamber summons as the HPPL parties consolidated proceedings chamber summons.
On 12 November 2019, the HPPL parties filed a chamber summons to the same effect in CIV 2737 of 2013 (the Rhodes proceeding) which they amended on 27 August 2020 in the same way as the HPPL parties consolidated proceedings chamber summons. I will refer to this chamber summons as the HPPL parties Rhodes proceeding chamber summons.
On 13 November 2019, the first defendant (Gina) and the eighth defendant (150 Investments) to the counterclaim in the consolidated proceedings (together the Gina parties) filed a chamber summons. They sought orders that the parties who are not parties to the arbitration proceedings constituted before the arbitral panel comprised of the Honourable Wayne Martin QC, Michael Hwang SC and the Honourable Dr Kevin Lindgren AM QC (Arbitration Proceedings) not be permitted to inspect documents discovered by Bianca (Gina Objected Documents). I will refer to the chamber summons as the Gina parties consolidated proceedings chamber summons.
Also on 13 November 2019, the Gina parties filed a chamber summons to the same effect in the Rhodes proceeding. I will refer to the chamber summons as the Gina parties Rhodes proceeding chamber summons.
I will refer to these four chamber summonses collectively as the Discovery Objection chamber summonses.
On 10 September 2020, I made orders in each of the consolidated proceedings and the Rhodes proceeding to the effect that until the determination of the application for special leave to appeal from the orders made on 7 August 2020 in Court of Appeal proceedings CACV 12 of 2019, or the determination of the appeal if special leave is granted, inspection on behalf of the plaintiff (WPPL or the Rhodes parties respectively) or Hamersley of the identified documents be limited to inspection by their legal representatives only and specified representatives.
I directed that each party moving for an order in relation to the Discovery Objection chamber summonses file and serve a minute of proposed orders, any affidavit in support of or in opposition to the proposed orders, and an outline of submissions and the questions be determined on the papers.
On 12 March 2021, the High Court refused the special leave applications.

WPPL submissions

WPPL submits the court should make the following orders.
1.Each of the Discovery Objection Chamber Summonses be dismissed.
2.The HPPL parties pay WPPL's costs of the HPPL parties consolidated proceedings chamber summons and the HPPL parties Rhodes proceeding chamber summons, including reserved costs.
3.The Gina parties pay WPPL's costs of the Gina parties consolidated proceedings chamber summons and the Gina parties Rhodes proceeding chamber summons, including reserved costs.
4.The assessment of costs be made:
(a)without reference to the limits provided in the scale in the relevant Legal Practitioners (Supreme and District Courts) (Contentious Business) Determination (Scale);
(b)without reference to the hourly rates and daily rates provided for solicitors, junior counsel and senior counsel in the Scale; and
(c)including reasonable allowances for work undertaken by senior counsel and counsel.
(Special Costs Order)

Rhodes submissions

Rhodes submits the court should make the same orders mutatis mutandis.

HPPL parties' submissions

The HPPL parties submit the court should make the following orders.
1.Each of the Discovery Objection Chamber Summonses be dismissed.
2.The costs of each of the Discovery Objection Chamber Summonses be in the cause.

Gina parties' submissions

The primary submission of the Gina parties is that the court should order that the costs of the Gina parties chamber summonses should be reserved pending the determination of the special leave application. As I have said, the special leave application was subsequently dismissed.

Bianca and John's submissions

Bianca and John do not oppose an order that costs of the HPPL parties and Gina parties consolidated proceedings chamber summonses be costs in the cause as proposed by HPPL. Further, Bianca and John would not be opposed to no order being made as to costs. However, both Rhodes and WPPL seeks costs. Bianca and John submit that, should an order for costs be made in favour of Rhodes and WPPL, it follows that a similar order should be made in favour of Bianca and John. To that extent, Bianca and John adopt the submissions of WPPL and Rhodes. Bianca and John do not seek an order lifting the scale limits in respect of their costs of the chambers summonses.

Disposition of costs applications

The Discovery Objections chamber summonses were filed pursuant to an interim regime established by the Court of Appeal on 27 August 2019 in CACV 88-95 of 2019 (Programming Appeals). In Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2019] WASCA 141, the Court of Appeal said:
We considered that, so far as the discovery orders in pars 5 to 7 were the subject of the interim stay, there should still be discovery consistent with that ordered by the learned primary judge. However, the appellants' concern as to preservation of confidentiality pending the Substantive Appeals could be accommodated by appropriate conditions as to inspection. Effectively the appellants, Bianca and John may inspect first but not take copies. Any of those inspecting parties may then make application to the learned primary judge for an order to prevent inspection of one or more documents by non-arbitral parties. Pending determination of the application inspection is not to be provided to WPPL or the Rhodes parties.
The intention - consistent with the basis grounding the interim stay - is that such an application to restrict access be based on preservation of the asserted confidentiality consistent with the appellants' case as advanced on the Substantive Appeals. It would not be consistent with the basis on which the interim stay was granted for the appellants to apply to prevent inspection of all of the documents the subject of discovery pursuant to pars 5 to 7. Prima facie only those documents relating to Bianca's and John's proprietary claim to the Hope Downs and East Angelas tenements should be the subject of application to the learned primary judge [97] - [98].

Following the dismissal of the Programming Appeals on 7 August 2020, the HPPL parties amended their chamber summonses on 27 August 2020 and the Discovery Objections chamber summonses were listed for hearing on 10 September 2020. The parties conferred and reached substantial agreement about the resolution of the applications, except for minor matters resolved at the hearing on 10 September 2020. Except for those minor matters, the Discovery Objections chamber summonses were not heard on their merits.
The court encourages conferral to resolve interlocutory disputes and avoid unnecessary contested hearings. Conferral in this instance achieved its purpose and the costs order should reflect that the matter was in substance resolved by conferral and agreement.
I consider that the HPPL parties and the Gina parties acted reasonably to bring and maintain the chamber summonses in accordance with the interim regime established by the Court of Appeal. I consider that WPPL and the Rhodes parties acted reasonably in requiring the HPPL parties and the Gina parties to put on material in support of their applications, so as to avoid delay if it was necessary to determine the applications. All the parties acted reasonably in agreeing the orders which led to the resolution of the Discovery Objections chamber summonses on 10 September 2020.
The appropriate orders are that each of the Discovery Objections chamber summonses be dismissed and the costs of the summonses be in the cause.

Special costs order

Both WPPL and the Rhodes parties seek a special costs order.
Section 280(2) of the Legal Profession Act 2008 (WA) provides:
… if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do all or any of the following -
(a)order the payment of costs above those fixed by the determination;
(b)fix higher limits of costs than those fixed in the determination;
(c)remove limits on costs fixed in the determination;
(d)make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or assessed.
I am satisfied from my knowledge and experience as case manager that this matter is complex because of the many parties, the many issues and the complex factual and legal contentions of the parties. I am of the opinion that the amount of costs allowable in respect of the applications by the Discovery Objection chamber summonses under the relevant costs determinations is inadequate because of the complexity of the matter. I have regard to the number and extent of the affidavits and submissions filed as well as the issues raised. I am confirmed in that opinion by evidence of Gareth Jenkins in his affidavit sworn 24 September 2020 and the evidence of Simon Taylor in his affidavit sworn 10 September 2020.
The HPPL parties observed that the Discovery Objections applications were commenced pursuant to the interim regime created by the Court of Appeal in the Programming Appeals, and that the Court of Appeal refused to make any special costs order in favour of WPPL and the Rhodes parties in relation to the Programming Appeals. The HPPL parties submit that it follows that the same approach should be taken in relation to the costs of the Discovery Objections applications. I do not agree. The matters raised in an appeal and the work done in and incidental to an appeal do not reflect the costs necessarily incurred in an interlocutory application, even when they are related.
The assessment of costs should be made:
(a)without reference to the limits provided in the scale in the relevant Legal Practitioners (Supreme and District Courts) (Contentious Business) Determination (Scale);
(b)without reference to the hourly rates and daily rates provided for solicitors, junior counsel and senior counsel in the Scale; and
(c)including reasonable allowances for work undertaken by senior counsel and counsel.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

CR
Associate to the Honourable Justice Le Miere

24 FEBRUARY 2022