Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 24] - [2023] WASC 393

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   WRIGHT PROSPECTING PTY LTD -v- HANCOCK PROSPECTING PTY LTD [No 24] [2023] WASC 393
CORAM:   WHITBY J
HEARD:   31 AUGUST & 13 SEPTEMBER 2023
DELIVERED          :   11 OCTOBER 2023
FILE NO/S:   CIV 3041 of 2010
(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
HAMERSLEY WA PTY LTD
Third Party
(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 Defendants by Counterclaim
(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
(BY ORIGINAL ACTION)

FILE NO/S: CIV 2737 of 2013
BETWEEN: DFD RHODES PTY LTD
First Plaintiff
MATTHEW JOHN KEADY AND 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
HAMERSLEY WA PTY LTD
Third Party
(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 DOWN 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 executor of the estate of DONOVAN FRANCES DUNCAN RHODES
Eighteenth Defendants by Counterclaim
(BY COUNTERCLAIM)

Catchwords:

Procedure - Application for stay of proceedings and referral to arbitration - Section 8(1) Commercial Arbitration Act 2012 (WA) - Challenge to Privilege Claims of the HPPL Parties and Mrs Rinehart - Iniquity exception to legal professional privilege - Arbitration clause - Proper construction of the Hope Downs Deed - Whether the action was brought in a 'matter' - Whether it is a 'matter' which is the subject of an arbitration agreement

Procedure - Subsidiary issue - Is the arbitration clause in the Hope Downs Deed inoperative or incapable of being performed - Public interest in the dispute - Court maintaining control of its own processes

Procedure - Documents of the HPPL Parties and Mrs Rinehart were determined to be privileged in the Martin Arbitration - Doctrine of issue estoppel - Does issue estoppel arise in relation to interlocutory orders - Were the rulings of the Martin Arbitration a final determination of the issue

Procedure - Abuse of process - Does the Privilege Challenge constitute an abuse of process - Materials change in circumstances - Whether hearing the Privilege Challenge constitutes a waste of judicial resources

Legislation:

Commercial Arbitration Act 2010 (NSW)
Commercial Arbitration Act 2012 (WA)
Iron Ore (Hope Downs) Agreement Act 1992 (WA)

Result:

Section 8 stay applications granted

Inherent stay applications dismissed

Category: B

Representation:

CIV 3041 of 2010

(Consolidated with CIV 2617 of 2012 by Orders dated 9 September 2014)

Original Action

Counsel:

Plaintiff	:	N Wootton
First Defendant	:	N C Hutley SC, C Colquhoun SC, K Sutton & D Farinha
Second Defendant	:	N C Hutley SC, C Colquhoun SC, K Sutton & D Farinha
Third Defendant	:	C Withers SC, A Hochroth & C Ernst
Fourth Defendant	:	C Withers SC, A Hochroth & C Ernst
Fifth Defendant	:	No appearance
Sixth Defendant	:	No appearance
Third Party	:	No appearance
Interested Party	:	A Shearer & J Burnett

Solicitors:

Plaintiff	:	Clayton Utz
First Defendant	:	Corrs Chambers Westgarth
Second Defendant	:	Corrs Chambers Westgarth
Third Defendant	:	YPOL Lawyers
Fourth Defendant	:	YPOL Lawyers
Fifth Defendant	:	Deutsch Miller
Sixth Defendant	:	Dentons Australia
Third Party	:	Allens
Interested Party	:	Gilbert + Tobin

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 Defendants by Counterclaim	:	No appearance

Solicitors:

First Plaintiff by Counterclaim	:	YPOL Lawyers
Second Plaintiff by Counterclaim	:	YPOL Lawyers
First Defendant by Counterclaim	:	Speed & Stracey Lawyers
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	:	Speed & Stracey Lawyers
Ninth Defendant by Counterclaim	:	Deutsch Miller
Tenth Defendant by Counterclaim	:	Dentons Australia
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 Defendants by Counterclaim	:	Taylor & Taylor Lawyers Pty Ltd

CIV 2617 of 2012

Counsel:

Plaintiff	:	N Wootton
First Defendant	:	N C Hutley SC, C Colquhoun SC, K Sutton & D Farinha
Second Defendant	:	N C Hutley SC, C Colquhoun SC, K Sutton & D Farinha
Third Defendant	:	C Withers SC, A Hochroth & C Ernst
Fourth Defendant	:	C Withers SC, A Hochroth & C Ernst
Fifth Defendant	:	No appearance
Sixth Defendant	:	No appearance
Third Party	:	No appearance

Solicitors:

Plaintiff	:	Clayton Utz
First Defendant	:	Corrs Chambers Westgarth - Sydney
Second Defendant	:	Corrs Chambers Westgarth - Sydney
Third Defendant	:	YPOL Lawyers
Fourth Defendant	:	YPOL Lawyers
Fifth Defendant	:	In Person
Sixth Defendant	:	Gadens Lawyers [NSW]
Third Party	:	Allens Linklaters

CIV 2737 of 2013

Original Action

Counsel:

First Plaintiff	:	K R Lendich SC & B J Tomasi
Second Plaintiffs	:	K R Lendich SC & B J Tomasi
First Defendant	:	N C Hutley SC, C Colquhoun SC, K Sutton & D Farinha
Second Defendant	:	N Wootton
Third Defendant	:	N C Hutley SC, C Colquhoun SC, K Sutton & D Farinha
Fourth Defendant	:	C Withers SC, A Hochroth & C Ernst
Fifth Defendant	:	C Withers SC, A Hochroth & C Ernst
Sixth Defendant	:	No appearance
Seventh Defendant	:	No appearance
Third Party	:	No appearance
Interested Party	:	A Shearer & J Burnett

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	:	YPOL Lawyers
Fifth Defendant	:	YPOL Lawyers
Sixth Defendant	:	Deutsch Miller
Seventh Defendant	:	Dentons Australia
Third Party	:	Allens
Interested Party	:	Gilbert + Tobin

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 Defendants by Counterclaim	:	No appearance

Solicitors:

First Plaintiff by Counterclaim	:	YPOL Lawyers
Second Plaintiff by Counterclaim	:	YPOL Lawyers
First Defendant by Counterclaim	:	Speed & Stracey Lawyers
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	:	Speed & Stracey Lawyers
Ninth Defendant by Counterclaim	:	Deutsch Miller
Tenth Defendant by Counterclaim	:	Dentons Australia
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 Defendants by Counterclaim	:	Taylor & Taylor Lawyers Pty Ltd

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

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27
Assistant Treasurer and Minister for Competition Policy and Consumer Affairs v Cathay Pacific Airways Ltd (2009) FCAFC 105
Australian Maritime Systems Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2016] WASC 52
Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334
Batistatos v Roads & Traffic Authority of New South Wales [2006] HCA 27
Blair v Curran (1939) 62 CLR 464
CBI Constructors Proprietary Limited v Chevron Australia Pty Ltd [2023] WASCA 1
Comandate Marine Corporation v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45
Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501
DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd [2022] WASCA 97
Fidelitas Shipping Company Limited v V/O Exportchleb [1966] 1 QB 630
Flakt Australia v Wilkins [1979] 2 NSWLR 243
Flint Ink NZ Ltd v Huhtamaki Australia Pty Ltd [2014] VSCA 166
Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [2020] WASCA 77; (2020) 55 WAR 435
Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [No 2] [2023] WASCA 108
Hancock Prospecting v Rinehart [2017] 257 FCAFC 170 442
Hettinga (2000) 100 FCR 420
Hoysted v Federal Commissioner of Taxation (1921) 29 CLR 537
Hoysted v Federal Commissioner of Taxation [1926] AC 155
John Holland v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451
Kuligowski v Metrobus (2004) HCA 34
Metrocall Inc v Electronic Tracking Systems [2000] 52 NSWLR 1
North West Pilots Pty Ltd as trustee for the Port Hedland Pilots Unit Trust trading as Port Hedland Pilots v Daniel [2023] WASCA 122
Recyclers of Australia Pty Ltd v Hettinga Equipment Inc (2000) 100 FCR 420
Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13
Rogers v The Queen (1994) 181 CLR 251
Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275
Sheraz Proprietary Limited v Vegas Enterprises Proprietary Limited [2015] WASCA 4
Siemens v Origin Energy v Uranquinty Power [2011] NSWSC 195; (2011) 80 NSWLR 398
Subway Systems Australia Pty Ltd v Ireland [2014] VSCA 142; (2014) 46 VR 49
Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332
Tianqi Lithium Kwinana Proprietary Limited v MSP Engineering Proprietary Limited (No 2) [2020] 56 WAR 169
Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28
WDR Delaware Corporation v Hydrox Holdings Pty Ltd [2016] FCA 1164
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 10] [2018] WASC 407
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 13] [2021] WASC 214
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 14] [2021] WASC 268
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 16] [2022] WASC 432
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 7] [2016] WASC 305
Wright Prospecting v Hancock Prospecting Pty Ltd [No 19] [2023] WASC 114

Table of Contents

The applications for referral to arbitration and stay of the challenge to privilege claims

Background to the curial proceedings

Previous occasions on which a court has ordered a stay pursuant to s 8(1) of the Act

Federal Court proceedings

Counterclaims in the curial proceedings

Stay of matters between the Rhodes Parties and Bianca and John

Bianca and John's defences in the curial proceedings

Discovery Orders

Bianca and John's challenge to the HPPL parties' and Gina's privilege claims

Issues in the applications

Section 8 Stay Applications

Legislative regime relevant to the s 8 stay applications

Has an action been brought in a matter which is the subject of an arbitration agreement?

Hope Downs Deed

Characterisation of dispute between the parties

Matter the subject of an arbitration agreement

Is the arbitration agreement inoperative or incapable of being performed?

Conclusions on s 8 stay applications

Inherent Stay Applications

Does an issue estoppel arise in relation to those documents [redacted]?

Does Bianca and John's Privilege Challenge constitute an abuse of process?

Are Bianca and John bound by the rulings made in the Martin Arbitration?

Conclusions on inherent stay applications

Final orders

WHITBY J:

The applications for referral to arbitration and stay of the challenge to privilege claims

Hancock Prospecting Pty Ltd (HPPL) and Hope Downs Iron Ore Pty Ltd (HDIO) (together the HPPL Parties), by amended chamber summonses dated 29 August 2023, seek orders in CIV 3041 of 2010 (WPPL Proceedings) and CIV 2737 of 2013 (Rhodes Proceedings) (together the curial proceedings) that the challenge to privilege claims of the HPPL Parties by Bianca Rinehart and John Hancock (the third and fourth defendants respectively in the WPPL proceedings and the fourth and fifth defendants respectively in the Rhodes Proceedings), be referred to arbitration and be stayed.
Ms Georgina Hope Rinehart (Gina), as an interested party, also seeks the same orders by chamber summonses dated 26 July 2023 filed in each of the WPPL Proceedings and the Rhodes Proceedings. I will refer to the chamber summonses filed by each of the HPPL Parties and Gina collectively as the applications.
As has been the practice in the curial proceedings, I will refer to the parties by their first names with no disrespect intended.
The substantive orders sought in the applications are that:
(1)Pursuant to s 8(1) of the Commercial Arbitration Act 2012 (WA) (the Act), Bianca and John's challenge to the privilege claims of the HPPL parties and Gina be referred to arbitration and stayed.
(2)Further, or alternatively, Bianca and John's challenge to the privilege claims of the HPPL Parties and Gina in respect of documents identified in Annexure A to the applications be stayed.
I will refer to each paragraph of the applications as the 's 8 stay applications' and the 'inherent stay applications' respectively.
Bianca and John oppose the applications. Wright Prospecting Pty Ltd (WPPL) and DFD Rhodes Pty Ltd (DFD Rhodes) and its former director, the late Donovan Frances Duncan Rhodes (now represented by his executors Matthew John Keady and Dorothea Margaret Campbell) (together the Rhodes Parties), the plaintiffs in the WPPL Proceedings and the Rhodes Proceedings respectively, appeared at the hearing of the applications but did not seek to be heard in relation to the applications. Accordingly, all other parties to the curial proceedings neither support nor oppose the applications.

The HPPL parties relied upon the following documents in support of their application:
(1)Affidavit of Mark Anthony Wilks affirmed 11 August 2023 (First Wilks Affidavit);
(2)Affidavit of Mark Anthony Wilks affirmed 30 August 2023 (Second Wilks Affidavit); and
(3)Outline of submissions dated 11 August 2023.
Gina relied upon the First and Second Wilks Affidavits and relied upon the following additional documents in support of her applications:
(1)Affidavit of Crispian Paul Lynch sworn on 27 July 2023 (Lynch July Affidavit);
(2)Affidavit of Crispian Paul Lynch sworn on 11 August 2023 (Lynch August Affidavit); and
(3)Outline of submissions dated 11 August 2023.
Gina, by her counsel, indicated that she also relied upon the submissions of the HPPL Parties.[1] In these reasons, unless indicated otherwise when I refer to the position of the HPPL Parties, this accords with the position of Gina.
[1] ts 3770.
For the reasons that follow, I find that Bianca and John's challenge to the privilege claims of the HPPL Parties and Gina be stayed and referred to arbitration pursuant to s 8(1) of the Act. I also find that the inherent stay applications should be dismissed.
In these reasons, I deal with the following topics:
(1)background to the curial proceedings;
(2)Bianca and John's defences in the curial proceedings;
(3)the discovery orders made in the curial proceedings;
(4)Bianca and John's challenge to the HPPL Parties' and Gina's privilege claims over discovered documents;
(5)the legal principles applicable to the applications;
(6)issues arising for determination in the applications;
(7)determination of the issues; and
(8)conclusion and orders.

Background to the curial proceedings

The background to the curial proceedings has been set out in detail in several decisions.[2] I do not propose to repeat the entire background as it is long and complex, instead I will only refer to the background which is relevant to the determination of the applications.
[2] For example, in Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 10] [2018] WASC 407 [4] ‑ [84] and Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [2020] WASCA 77; (2020) 55 WAR 435 [47] ‑ [93] (2020 Stay Appeal).

Mr Lang Hancock was the founding director of HPPL. Mr Peter Wright was the founding director of WPPL. From about 1958, HPPL and WPPL carried on the business of exploring and prospecting for minerals, investing in assets, mining for minerals and receiving royalties in partnership (the Partnership).
In 1969, the Partnership entered into an agreement with, inter alia, the Rhodes Parties in relation to temporary reserves including those that would later form part of the Hope Downs Tenements. The Rhodes Parties allege that this agreement granted the Partnership the right to mine iron ore from the temporary reserves in return for the payment of royalties to DFD Rhodes.
Mr Wright died in September 1985. HPPL became the managing partner of the Partnership.
In the 1980s Hancock Mining Ltd (HML) and Hancock Resources Ltd (HRL), both subsidiaries of HPPL, were granted exploration licences covering the areas of land that were formerly the temporary reserves. The shares in HRL and HML were held by Hancock Family Memorial Foundation Ltd (HFMF).
The exploration licences were transferred from HRL and HML to HPPL, via Hope Downs Limited (HDL) (another company in the Hancock Group) by a series of transactions that occurred between 1992 and 1996.
In 1997, HPPL transferred those exploration licences to HDIO, also a subsidiary of HPPL. In 2006, the State of Western Australia granted HDIO a mining lease over that land, in exchange for surrender of the exploration licences. The mining lease is over what is referred to as the Hope Downs Tenements.
In the WPPL proceedings, WPPL says that HPPL represented to WPPL and acknowledged that the opportunity to explore for minerals and acquire mining leases in the Hope Downs Tenements belonged to the Partnership. WPPL says that the rights acquired by HML and HRL in respect of the exploration licences were rights to which the Partnership was and remains entitled. As a result, WPPL says that HDIO holds its interest in the Hope Downs Tenements on trust for the Partnership.
The Rhodes Parties also say that the opportunity to exploit the Hope Downs Tenements was a right that belonged to the Partnership. The Rhodes Parties say that HPPL and WPPL owed them fiduciary and contractual duties and seeks an order that, inter alia, the Hope Downs Tenements are held on trust for the Rhodes Parties to the extent of their royalty entitlements.
Each of WPPL, the Rhodes Parties and the HPPL Parties say that HML and HRL held the Hope Downs Tenements on trust for HPPL. The dispute between those parties is whether that beneficial interest of HPPL was an asset of the Partnership - WPPL and the Rhodes Parties say it was, the HPPL Parties say it was not.
I turn now to outline the background to the dispute between Gina and HPPL and Gina's children, John, Bianca, Hope Rinehart Welker and Ginia Hope Frances Rinehart (Gina's children).
In 2003, John made various allegations concerning alleged wrongdoing by Gina and HPPL in relation to the series of transactions by which the exploration licences were transferred from HRL and HML to HPPL.
This precipitated negotiations between Gina and her children which, in August 2006, culminated in a number of parties entering into a deed, referred to in the curial proceedings as the Hope Downs Deed, by which they agreed to settle disputes about the title to the Hope Downs Tenements. The parties to the Hope Downs Deed include HPPL, Gina, HFMF, Bianca, Ginia and Hope. John adopted the Hope Downs Deed in April 2007.
The purported effect of the Hope Downs Deed was that, in consideration for the acknowledgments, releases and undertakings given by the parties to the deed, HPPL and Gina agreed to distributions to Bianca and John provided for in the deed[3].
[3] Second Wilks Affidavit, Annexure MAW50 Hope Downs Deed, cl 5 'Distribution Covenant'.

Further, by cl 7(b), the Hope Downs Deed provided that Bianca and John promised 'not to challenge the right of any member of the Hancock Group to any of the Hancock Group Interests at any time'. By cl 20, the Hope Downs Deed provided that any disputes under the deed are to be resolved by way of confidential arbitration.
Since entering into, or in John's case agreeing to be bound by, the Hope Downs Deed, Bianca and John have sought to bring claims in a number of Australian courts impugning the conduct of Gina, HPPL and others. The claims include claims concerning the ownership of the Hope Downs Tenements and the alleged misconduct of Gina and HPPL in relation to the ownership thereof (substantive claims) and claims concerning the validity of the Hope Downs Deed (validity claims). The substantive claims are divided into two categories - referred to as the Acquisition Matter and the Debt Reconstruction Matter.
The Acquisition Matter concerns the capacity in which HML and HRL acquired and held the Hope Downs tenements before they were transferred to HDL in 1992. WPPL and the Rhodes Parties say that, in causing HML and HRL (subsidiaries of HFMF) to acquire the Hope Downs Tenements, Mr Lang Hancock breached his fiduciary duties owed to HPPL. WPPL and the Rhodes Parties say that any allegation by Bianca and John that Gina breached her fiduciary duties to them as beneficiaries of the HFMF Trust is without foundation because the Hope Downs Tenements never formed part of the property of the HFMF Trust. WPPL and the Rhodes Parties say that HML and HRL always held the Hope Downs Tenements on trust for HPPL.[4]
[4] DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd [2022] WASCA 97 [78] (2022 Stay Appeal).
The Debt Reconstruction Matter concerns the transfer of the Hope Downs Tenements from HML and HRL to HDL, HPPL and HDIO 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 Hope Downs Tenements.[5] Bianca and John claim that Gina, through these transactions that occurred between 1992 and 1996, caused HPPL and subsequently HDIO to hold the legal interest in the Hope Downs Tenements as part of her dishonest and fraudulent design in breach of her fiduciary duties to her children under the HFMF Trust.
[5] 2022 Stay Appeal [79].

Previous occasions on which a court has ordered a stay pursuant to s 8(1) of the Act

Federal Court proceedings

In 2014, Bianca and John commenced proceedings in the Federal Court of Australia against, inter alia, the HPPL parties and Gina. I will refer to these as the Federal Court proceedings. As part of the Federal Court proceedings, Bianca and John claimed that the Hope Downs Tenements were held on trust for Gina's children and challenged the validity of the Hope Downs Deed, that is they sought to raise the substantive claims and the validity claims.
The Full Court of the Federal Court ordered that the Federal Court proceedings be stayed under s 8(1) of the Act pending referral to arbitration or until further order.[6]
[6] Hancock Prospecting v Rinehart [2017] 257 FCAFC 170 442 [336] (Full Federal Court Decision).
In the Federal Court proceedings, Bianca and John were seeking relief from a number of parties, all of whom (except one) was a party to the Hope Downs Deed (in the sense that they were actual parties to the deed or, within the meaning of the Commercial Arbitration Act 2010 (NSW), were parties that claimed 'under or through' a party to the deed). The decision of the Full Court of the Federal Court in the Federal Court proceedings was upheld by the High Court.[7]
[7] Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13 (HC Decision).
Both the substantive claims and the validity claims, the subject of the Federal Court proceedings, were referred to arbitral proceedings constituted before the Honourable Wayne Martin AC KC, Dr Michael Hwang SC and the Honourable Dr Kevin Lindgren AM KC (Martin Arbitration). The Martin Arbitration occurred in three blocks of time between August 2022 and March 2023. The decision in the Martin Arbitration is reserved.

Counterclaims in the curial proceedings

As I have outlined, in the curial proceedings WPPL and the Rhodes Parties claim interests in the Hope Downs Tenements. In 2016, Le Miere J made an order in each of the curial proceedings that Gina's children be joined as defendants on the basis that their asserted proprietary interest in the Hope Downs Tenements was inconsistent with the interests claimed in the Hope Downs Tenements by WPPL and the Rhodes Parties. Le Miere J held that the joinder of Gina's children to the curial proceedings was necessary to ensure all matters in dispute could be completely determined.[8] The result is that the HPPL Parties and Gina's children are defendants in the WPPL Proceedings and the Rhodes Proceedings. WPPL is also a defendant in the Rhodes Proceedings.
[8] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 7] [2016] WASC 305.
In the curial proceedings, Bianca and John filed defences and they also filed counterclaims against Gina and other parties, including all of the parties to the Hope Downs Deed. The counterclaims raised the same substantive and validity claims that were raised in the Federal Court proceedings.[9]
[9] 2020 Stay Appeal [90] - [93].
On 21 December 2018, Le Miere J stayed Bianca and John's counterclaims in the curial proceedings against parties to the Hope Downs Deed pursuant to s 8(1) of the Act. His Honour also stayed the counterclaims against other parties pursuant to the Court's general power to control its own proceedings.[10] His Honour did not stay the entirety of the curial proceedings. Specifically, his Honour did not stay the defences raised by Bianca and John in the curial proceedings.
[10] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd[No 10] [2018] WASC 407 (2018 Stay Decision).
Le Miere's J's decision to stay only the counterclaims raised by Bianca and John in the curial proceedings was upheld by the Court of Appeal.[11] In the 2020 Stay Appeal, Quinlan CJ observed that the position in relation to the primary curial proceedings is different to the matters brought in the Federal Court proceedings for this reason - the plaintiffs in each of the WPPL Proceedings and the Rhodes Proceedings are not parties to, and are therefore, not bound by the Hope Downs Deed.[12]

Stay of matters between the Rhodes Parties and Bianca and John

[11] 2020 Stay Appeal.

[12] 2020 Stay Appeal [15] - [16].

On 29 January 2021, Bianca and John filed their defences in the curial proceedings. On 26 March 2021, the Rhodes Parties filed an amended reply to those defences.
On 29 March 2021, the HPPL Parties filed chamber summonses seeking, inter alia, a stay of certain matters pleaded in the Rhodes Parties' Amended Reply pursuant to s 8(1) of the Act.
At first instance, Le Miere J found that certain matters pleaded by the Rhodes Parties in reply to Bianca and John's defence concerned subject matters that were the subject of the arbitration agreement in the Hope Downs Deed. Le Miere J held that, in so pleading, the Rhodes Parties were claiming through or under HPPL and therefore, those matters were susceptible of resolution by the arbitration agreement and ordered that they be referred to arbitration.[13] The Court of Appeal upheld the decision of Le Miere J to refer those matters to arbitration (save for one paragraph of the Rhodes Parties' Amended Reply).[14]
[13] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 13] [2021] WASC 214 [93] and [116] (No 13 Decision).
[14] 2022 Stay Appeal.

Bianca and John's defences in the curial proceedings

Bianca and John deny that the assets of HML and HRL were ever held on trust for HPPL. Bianca and John's defence to the claims made by WPPL and the Rhodes Parties in the curial proceedings is that the Hope Downs Tenements were, and continue to be, held on trust for Gina's children.
At the time that the exploration licences over the Hope Downs Tenements were granted to HML, HML was a wholly owned subsidiary of HFMF. Zamoever Pty Ltd (Zamoever) was the controlling shareholder of HFMF. Bianca and John contend that, from 1989, all of the shares in Zamoever were beneficially owned by Gina's children and held on trust for them by Mr Lang Hancock, and then from 1992, by Gina. They refer to this as the HFMF Trust. As a result, Bianca and John say that the Hope Downs Tenements were the assets of the HFMF Trust and therefore, beneficially owned by Gina's children, as the beneficiaries of the HFMF Trust. These assertions concern the Acquisition Matter.
In their defences filed in the curial proceedings[15], Bianca and John plead that, between 1992 to 1996, the HPPL Parties and Gina engaged in a fraudulent and dishonest scheme to strip the economic value out of the HFMF Trust (impugned conduct).
[15] Amended Defences filed on 1 July 2023 and 5 July 2023.
Bianca and John plead, by way of defence against WPPL and the Rhodes Parties, that Gina breached her fiduciary and equitable duties as trustee of the HFMF Trust by firstly, causing the Hancock Group companies which held her children's interest in the Hope Downs Tenements to incur large debts to HPPL and secondly, by HPPL forgiving those debts in exchange for the transfer of the Hope Downs Tenements.[16] As I have outlined this is referred to as the Debt Reconstruction Matter.
[16] Bianca and John's outline of submissions dated 28 June 2023 [8], [34].
Importantly for the purposes of these applications, the impugned conduct, which is the subject of the Debt Reconstruction Matter, is pleaded by Bianca and John only by way of defence against WPPL and the Rhodes Parties and is not the subject of a claim for relief against the HPPL Parties (Bianca and John's counterclaim against the HPPL Parties and Gina having been stayed pursuant to s 8 of the Act).[17]
[17] 2020 Stay Appeal.

Discovery Orders

In 2021, Bianca and John applied for discovery from the HPPL Parties in relation to all matters in question in the curial proceedings, including the impugned conduct of Gina raised in their defences. The HPPL Parties opposed this application for discovery on the grounds that the court did not have the power to order discovery between co‑defendants. At first instance, Le Miere J ordered that the HPPL Parties give discovery to Bianca and John (with the categories of documents to be determined).[18] The Court of Appeal upheld Le Miere J's decision.[19]
[18] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 14] [2021] WASC 268.
[19] 2022 Stay Appeal.

On 14 April 2023, Smith J ordered that the HPPL Parties give discovery of the categories of documents as determined by her Honour in Wright Prospecting v Hancock Prospecting (No 19)[20] by 12 May 2023. On 10 May 2023, the time for compliance with that order was extended to 26 May 2023.
[20] Wright Prospecting v Hancock Prospecting Pty Ltd [No 19] [2023] WASC 114.
The HPPL Parties appealed the decisions of Smith J to order discovery of categories of documents. In June 2023, those appeals were dismissed.[21] This resulted however, in a delay in the HPPL Parties providing discovery of the categories of documents ordered by Smith J.
[21] Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [No 2] [2023] WASCA 108 (2023 Appeal).
On 5 July 2023, the HPPL Parties provided discovery in the curial proceedings[22]. Their discovery was provided in three tranches[23] and consisted of 91 documents. The HPPL Parties claimed privilege over 74 of those documents contained in Part 1B of the list of documents (HPPL Parties' Privilege Claims).
[22] Affidavit of Kirsty Jane McPhee affirmed 5 July 2023 (McPhee Affidavit).
[23] Tranche 1 was served on 26 May 2023, Tranche 2 and 3 were served on 5 July 2023.
On 8 June 2023 (after tranche one of discovery was served), Bianca and John indicated that they intended to challenge the HPPL Parties' Privilege Claims.
On 30 June 2023, Smith J made programming orders in relation to, inter alia, any challenge to claims of privilege made by the HPPL Parties and/or Gina in the curial proceedings (30 June Orders).
On 10 July 2023, Gina's solicitors sent a letter to the parties to the HPPL Proceedings and the Rhodes Proceedings claiming privilege over documents within the HPPL Parties' Privilege Claims (Gina's Privilege Claims).[24]
[24] Lynch July Affidavit; Annexure A.
Gina's Privilege Claims include 49 documents over which Gina and one or more entities claims privilege and five documents over which Gina claims privilege alone.
Bianca and John seek to challenge the HPPL Parties' Privilege Claims and Gina's Privilege Claims (Privilege Challenge).
By these applications, the HPPL Parties and Gina seek a stay of the Privilege Challenge pursuant to s 8(1) of the Act and the inherent jurisdiction of the court.
On 27 July 2023, at a directions hearing, I made orders vacating Orders 2 and 3 of the 30 June Orders and made further programming orders for the hearing of the applications. The applications were ultimately heard over two days on 31 August and 13 September 2023.

Bianca and John's challenge to the HPPL parties' and Gina's privilege claims

Bianca and John rely upon their outline of submissions dated 17 July 2023 (Challenge Submissions) and the affidavit of Timothy Randolph Price sworn 18 July 2023 (Price July Affidavit) and further affidavit of Timothy Randolph Price sworn 25 August 2023 (Price August Affidavit) (save for paragraphs 51 and 52 and confidential annexures 'TRP23' and 'TRP24' which were not read into evidence) in support of the Privilege Challenge.
Bianca and John also rely upon [1] ‑ [42] and [256] ‑ [854] of their opening submissions dated 28 June 2023 (Opening Submissions).
Bianca and John say that the HPPL Parties' and Gina's Privilege Claims cannot be maintained for the following four reasons:
(1)the communications and documents over which legal professional privilege has been claimed were made in furtherance of a fraud on the part of Gina and the HPPL Parties, therefore, legal professional privilege does not exist because there is no confidence in a fraud (iniquity exception);
(2)the HPPL Parties do not advance any justification for the claims of without prejudice privilege and there is no basis upon which the court could find that any of the communications in those documents occurred in the course of attempting to settle a genuine dispute;
(3)any privilege has been waived through Gina and HPPL's conduct; and
(4)part-privilege claims have been made in such a way that the unredacted contents of documents cannot properly be understood.

It is the first of these reasons that is central to the applications, that is the iniquity exception to legal professional privilege. Bianca and John submit that the documents over which the HPPL Parties and Gina claim privilege were created in furtherance of the fraud of Gina and HPPL by the transactions the subject of the Debt Reconstruction Matter. Bianca and John submit that the court can be satisfied that they have made out a prima facie case of fraud (that being all that is required to challenge the HPPL Parties' and Gina's Privilege Claims) based upon their Opening Submissions and the documents referred to therein.
Bianca and John rely upon the case of Commissioner of Australian Federal Police v Propend Finance Pty Ltd[25] in support of the Privilege Challenge. Propend is authority for the proposition that to prove an iniquity exception to privilege, all a party must do is establish that there is a colourable, or prima facie, case that the communications are the product of a fraud. The standard of proof is neither the criminal standard of beyond reasonable doubt nor the civil standard of on the balance of probabilities.
[25] Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 (Propend).
Bianca and John also submit that the application of the iniquity exception also disposes of the HPPL Parties' and Gina's claim for without prejudice privilege. Bianca and John say there was no genuine dispute that the parties were attempting to settle, instead the dispute between Gina and her children over the ownership of the Hope Downs Tenements was a contrived dispute.
Finally, Bianca and John submit that the iniquity exception supports their contention that the HPPL Parties and Gina have waived privilege over the documents. Bianca and John say that Gina and HPPL's fraudulent conduct constitutes a waiver of privilege.
The HPPL Parties' and Gina's position is that the Privilege Challenge on the basis of the iniquity exception is a controversy between the parties which is the subject of an arbitration agreement contained in cl 20 of the Hope Downs Deed, particularly by reference to the covenants and releases provided by Bianca and John in the Hope Downs Deed. The HPPL Parties and Gina say therefore, that the Privilege Challenge is an action brought in a matter which is the subject of an arbitration agreement and must be referred to arbitration pursuant to s 8(1) of the Act.

Issues in the applications

The HPPL Parties and Gina, in bringing the applications, contend that a stay of Bianca and John's challenge to the HPPL Parties' and Gina's Privilege Claims should be ordered for the following reasons:
(1)an action is brought in a 'matter', that 'matter' being whether Gina and the HPPL Parties engaged in the impugned conduct the subject of the Debt Reconstruction Matter, which is the subject of an arbitration agreement and that matter is required to be referred to arbitration pursuant to s 8(1) of the Act; or, alternatively
(2)of the 74 documents over which privilege is claimed by HPPL and/or Gina, [redacted][26] and therefore, Bianca and John's challenge to the HPPL Parties' and Gina's Privilege Claims should be stayed on the grounds of issue estoppel and/or abuse of process.
[26] Wilks First Affidavit confidential [62] and [93], Confidential annexures MAW-19, MAW‑20 and MAW‑35 contain the confidential rulings of the Martin Arbitration [redacted].
Bianca and John oppose the applications for the following reasons:
(1)the controversy in dispute between Bianca and John and the HPPL Parties and Gina is whether the court should make an order to compel the HPPL Parties to produce the documents over which the HPPL Parties and Gina claim privilege. This is not a 'matter' which is the subject of an arbitration agreement for the purposes of s 8(1) of the Act and therefore, cannot be referred to arbitration; and
(2)no issue estoppel or abuse of process arises in relation to [redacted].
In order for s 8(1) of the Act to operate, the following four elements must be satisfied:
(1)an action must have brought in a 'matter' which is the subject of an arbitration agreement;
(2)a party must request that the court refers the parties to arbitration;
(3)the party making the request must have done so not later than when submitting its first statement on the substance of the dispute; and
(4)the arbitration agreement must not be null and void, inoperative or incapable of being performed.[27]
[27] 2022 Stay Appeal [75].

I will refer to these as the first, second, third and fourth elements respectively.
The principal issue that arises in respect of the s 8 stay applications is the first element, that is whether an action has been brought in a matter which is the subject of an arbitration agreement.
There was no issue raised by Bianca and John as to whether the second and third elements are satisfied. Therefore, I find that they are satisfied for the purposes of the s 8 stay applications.
In relation to the fourth element, in the Martin Arbitration, Bianca and John contend that the Hope Downs Deed is null and void. However, in their submissions in response to the s 8 stay applications they state that they 'do not advance that contention on this application'[28]. Senior counsel for Bianca and John confirmed, at the hearing of the applications, that Bianca and John 'don't, in this particular proceeding, say … the arbitration agreement is invalid'[29]. So for the purposes of the applications, I proceed on the premise that Bianca and John do not rely upon a submission that the Hope Downs Deed is null and void.
[28] Bianca and John's submissions in response to the applications dated 25 August 2023 (Submissions in Response) [8].
[29] ts 3797.
However, there is a subsidiary issue that arises in relation to the fourth element. Bianca and John contend that the arbitration clause in the Hope Downs Deed is 'inoperative or incapable of being performed' because the controversy in dispute, that is whether the court should order that the documents over which privilege is claimed be made available for inspection, is inherently capable only of judicial resolution.
Returning to the first element, s 8 of the Act only applies if the action 'is brought in a matter which is the subject of an arbitration agreement'. To determine whether s 8 applies, the court must identify and characterise:
(1)the matter or matters the subject of the action - in other words, 'the matter or matters in which the action is brought'; and
(2)the matter that is the subject of the arbitration agreement.[30]
[30] 2020 Stay Appeal [135].

It is the overlap between the matter or matters in which the action is brought and the matter the subject of the arbitration agreement that enlivens the court's obligation to refer the parties to arbitration pursuant to s 8(1) of the Act.[31]
[31] 2020 Stay Appeal [119].

In order to identify and characterise the matter(s) in which the action is brought and the matter that is the subject of the arbitration agreement, the court must first identify the controversary or dispute between the HPPL Parties and Gina on the one hand, and Bianca and John on the other hand, that it is being asked to determine in the Privilege Challenge.
The HPPL Parties and Gina also contend that Bianca and John are estopped from challenging privilege claims [redacted] and/or their attempt to relitigate those claims in the curial proceedings is otherwise an abuse of process.
Gina separately contends that Bianca and John are bound by the rulings in the Martin Arbitration [redacted].
In summary, the following issues arise for determination:
(1)In relation to the s 8 stay applications:
a.Has an action been brought in a matter which is the subject of an arbitration agreement?
b.Is the arbitration agreement inoperative or incapable of being performed?
If the answer to a is yes and b is no, then the s 8 stay applications must be granted. If the answer to a is no, then the s 8 stay applications fail and must be dismissed (irrespective of the answer to b).

(2)In relation to the inherent stay applications:
a.Does an issue estoppel arise in relation to those documents [redacted]?
b.Does Bianca and John's Privilege Challenge constitute an abuse of process?

If the answer to both a and b is no, then the inherent stay applications fail and must be dismissed. Conversely, if the answer to either a or b is yes, than the inherent stay applications must be granted.

Counsel for Gina raised a third ground in support of Gina's inherent stay applications, that being that Bianca and John are bound by the rulings made in the Martin Arbitration and therefore, are effectively estopped from making the Privilege Challenge. Therefore, there is a third issue for determination in the inherent stay applications, that being 'are Bianca and John bound by the rulings made in the Martin Arbitration?'
Before considering and determining each of these issues, I will first outline the legislative regime relevant to the s 8 stay applications.

Section 8 Stay Applications

Legislative regime relevant to the s 8 stay applications

Section 8(1) of the Act 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. (emphasis added)
In circumstances where parties have agreed to arbitrate their disputes, s 8(1) operates to prevent those parties having recourse to the courts to determine those disputes. The court has, by virtue of s 8(1), an obligation to enforce the agreement to arbitrate matters which are the subject of an arbitration agreement. The court fulfils this obligation by refusing to exercise its jurisdiction to determine the dispute and instead, by referring the parties to arbitration.[32]
[32] 2022 Stay Appeal [319] citing with approval Subway Systems Australia Pty Ltd v Ireland [2014] VSCA 142; (2014) 46 VR 49 [16].
In John Holland v Kellogg Brown & Root Pty Ltd,[33] Hammerschlag J said:
Section 8(1) reflects the modern trend both domestically and internationally to facilitate and promote the use of arbitration and to minimise judicial intervention in the process. It gives full effect to the parties' contractual freedom, which they have exercised by their arbitration agreement, to have disputes comprehended by that agreement arbitrated.
[33] John Holland v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 [85] - [89] cited with approval in the 2020 Stay Appeal [169].
I now turn to consider each of the issues arising in the s 8 stay applications against the background of this legislative regime.

Has an action been brought in a matter which is the subject of an arbitration agreement?

A 'matter' within the meaning of s 8(1) of the Act consists of 'the subject matter in dispute and the substantive questions for determination in the proceedings'.[34]
[34] Full Federal Court decision citing ComandateMarine Corporation v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45 (Comandate) at [238] with approval.
The identification of the controversy between the parties is critical because it informs whether that is a 'matter' or 'matters' in which the action is brought and in turn, whether there is overlap between the 'matter[s]' in which the action is brought and the matter which is the subject of the arbitration agreement. If there is such overlap, that enlivens the court's obligation to refer the 'matter' to arbitration as required by s 8(1) of the Act.[35]
[35] 2020 Stay Appeal at [119]; North West Pilots Pty Ltd as trustee for the Port Hedland Pilots Unit Trust trading as Port Hedland Pilots v Daniel [2023] WASCA 122 [42].
This critical step of identifying the controversy in dispute was described by Deane and Gaudron JJ in Tanning Research Laboratories Inc v O'Brien[36] as follows:
To ascertain whether s 7(2) [of the International Arbitration Act 1974 (Cth) (Cth Act)][37] operates in respect of proceedings pending in a court it is necessary to first identify the subject matter of the controversary which falls for determination in those proceedings. Only when that has been done is it possible to identify whether the proceedings 'involve the determination of a matter … capable of settlement by arbitration: s 7(2)(b).
[36] Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332 [350] (Tanning).
[37] Section 7(2) of the Cth Act, although not in identical terms, is the equivalent to s 8(1) of the Act.
In Australian Maritime Systems Ltd v McConnell Dowell Constructors(Aust) Pty Ltd, Mitchell J (as his Honour then was) noted that, while the language of s 7(2) of the Cth Act differed from the language of s 8(1) of the Act, in that the former refers to a matter capable of settlement in pursuance of an arbitration agreement and the latter refers to a matter which is the subject of an arbitration agreement, 'the context in which the term matter is used in s 8 of the Act is even more likely to invoke the concept of a controversy for determination in legal proceedings as opposed to the legal proceedings themselves'.[38] Accordingly, although there is no specific reference in s 8(1) of the Act to a requirement that a matter must be 'capable of settlement by arbitration', I am satisfied that it is an inherent requirement of s 8 of the Act that the matter or matters must be capable of settlement by arbitration.
[38] Australian Maritime Systems Ltd v McConnell Dowell Constructors(Aust) Pty Ltd [2016] WASC 52 [50].
Further as Quinlan CJ observed, in the 2020 Stay Appeal, Mitchell J's reference to the term 'matter' in Australian Maritime Systems reveals that an important aspect of s 8 of Act is the requirement to identify the parties to the relevant controversy for determination.[39]
[39] 2020 Stay Appeal [134].
In determining whether an action has been brought in a matter which is the subject of an arbitration agreement, the following considerations are relevant:
(1)the word 'matter' is a reference to the differences between the parties that fall within the scope of the arbitration agreement;[40]
(2)the scope of the matter can be ascertained from the pleadings and from the underlying subject matter upon which the pleadings are based,[41] however, it is ultimately the dispute or controversary that constitutes the matter, not the pleadings;[42]
(3)a 'matter' need not encompass all claims within the scope of the controversy in the court proceedings; [43]
(4)the proper construction of the arbitration agreement is relevant to identifying the 'matter' - if the arbitration agreement requires a connection between the resolution of an issue and the operation of the arbitration agreement, then in order to identify the 'matter', the dispute between the parties must have that connection. However, if the proper construction of the arbitration agreement means that there is only required to be a broad focus on the overall dispute, then the characterisation of the 'matter' will be broader.[44]
[40] Comandate [235].
[41] Recyclers of Australia Pty Ltd v Hettinga Equipment Inc (2000) 100 FCR 420 [18].
[42] 2020 Stay Appeal [212].
[43] Full Federal Court Decision [327].
[44] Full Federal Court Decision [157].
Expanding upon these general principles, it is well established that it is not necessary for a matter that is the subject of the arbitration agreement to be the whole matter in issue in an action. Deane and Gaudron JJ in Tanning[45] said:
In the context of s 7(2), the expression 'matter… capable of settlement by arbitration' may, but does not necessarily, mean the whole of the matter in controversy in the court proceedings. So too, it may, but does not necessarily encompass all the claims within the scope of the controversy in the court proceedings. Even so, the expression 'matter… capable of settlement by arbitration' indicates something more than a mere issue which might fall for decision in the court proceedings or might fall for decision in the arbitral proceedings if they were instituted…. It requires that there be some subject matter, some right or liability in controversy which, if not co-extensive with the subject matter in controversy in the court proceedings, is at least susceptible of settlement as a discrete controversy.
[45] Tanning [351].

In the HC Decision,[46] the plurality (Kiefel CJ, Gageler, Nettle & Gordon JJ) said:
[I]t is unnecessary that the issues that the defence puts in controversy in the proceedings be limited to the matter capable of settlement by arbitration. The two need not be co-extensive. It is sufficient that the defence puts in issue, among other things, some right or liability which is susceptible of settlement under the arbitration agreement as a discrete controversy.
[46] HC Decision [68] (Kiefel CJ, Gageler, Nettle & Gordon JJ).

In the 2020 Stay Appeal,[47] Quinlan CJ said:
The fact that the 'whole' of the proceedings (or even the 'whole' of the counterclaims) may be said to involve a 'four-way dispute' in relation to the Tenements, and that that 'four-way dispute' cannot be the subject of an arbitration under the Deed, does not deprive a discrete controversy within the 'four-way dispute' (such as that between the parties to the Deed) of its character as a 'matter which is the subject of an arbitration agreement'.

In light of the authorities discussed above, in my view the involvement of WPPL and DFD Rhodes in the broader dispute (or the 'matter' in a Chapter III sense) does not deprive the dispute between the parties to the Deed (and those claiming under or through them) of the character of a 'matter' within the meaning of s 8(1) of the Commercial Arbitration Act. That dispute in the counterclaims against the parties to the Deed (in the extended sense) is in my view clearly a 'matter' in the latter sense. In this regard it is no different from the claims brought by Mr Hancock and Ms Rinehart in the Federal Court proceedings.
[47] 2020 Stay Appeal [194] - [195].

Given the proper construction of the Hope Downs Deed is relevant to identifying the controversy in dispute between the parties and therefore, whether the action is brought in a 'matter' which is the subject of an arbitration agreement, I will outline the relevant clauses of the Hope Downs Deed and then consider the proper construction thereof.

Hope Downs Deed

The parties to the Hope Downs Deed[48] are HPPL, Gina, Bianca, Hope, Ginia, John, HML, HFMF, Gina as trustee of the Hope Margaret Hancock Trust (HMF Trust), Mr Tadeusz Jozef Watroba (a director of HPPL), Westraint Resources Pty Ltd, HMHT Investments Pty Ltd and 150 Investments Pty Ltd.
[48] Wilks First Affidavit, Annexures MAW 50 and MAW 51.
One of the fundamental purposes of the Hope Downs Deed was the quelling of disputes about the title to the Hope Downs Tenements.[49]
[49] HC Decision [27].

Clause 4 of the Hope Downs Deed provides:
4.HPPL/HDIO OWNERSHIP OF HOPE DOWNS
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.
The 'Hancock Group Interests' are defined in cl 1.1 of the Hope Downs Deed to mean:
(a)the Hancock Group's Interest in the Hope Downs Tenements and the Hope Downs Joint Venture;
(b)all other mining tenements, licences, permits and interests therein currently held by any member of the Hancock Group including without limitation any joint venture interests in any State or Territory of Australia;
(c)any partnership or royalty interests, choses in action, real property and any other property or asset of any nature or description held or owned by the Hancock Group.

The 'Hancock Group' is defined to mean HPPL and any 'Related Body Corporate' of HPPL.
The 'Hope Downs Tenements' are defined as the tenements held under the Iron Ore (Hope Downs) Agreement Act 1992 (WA) and the subject of the 'Hope Downs Joint Venture'. The Hope Downs Joint Venture is, in turn, defined as the unincorporated joint venture between members of the Hancock Group and members of the Rio Tinto Group.
Clause 6 of the Hope Downs Deed provides for various releases by the parties:
6RELEASES
Each party hereto both in its own right and in any representative capacity hereby:
(a)releases and discharges each of the other parties hereto now and in the future from any Claims,
(b)Irrevocably covenants not to take any proceedings against any of the other parties to this deed in relation to any matter arising in any jurisdiction, in respect of the Claims;
(c)Withdraws and forever abandons any and all allegations made against any of the other parties to this deed in respect of or arising (in whole or in part) directly or indirectly out of:
(i)the Proceedings and any of the other Claims;
(ii)the subject matter of the Proceedings;
(iii)any claim relating to an undertaking given or costs orders made in the Proceedings,
wherever and whenever arising, whether;
(iv)known or unknown at the time of execution of this deed;
(v)presently in contemplation of such parties; or
(vi)arising under common law, equity, statute or otherwise.
These releases were given both in relation to specific 'Proceedings' (defined to refer to action CIV 1327 of 2005 in the Supreme Court of Western Australia) and also to a broad class of 'Claims' generally.
'Claim' is defined in cl 1.1 to mean:
(a)any claim, demand, action, suit or proceeding whether existing or discontinued, whether at law, under statute, in equity or otherwise:
(i)for damages, injunctions, debt, restitution or other remedy including, without limitation, breach of fiduciary duty of whatever nature and howsoever arising with respect to events or matters arising or actions taken prior to the date of this deed but not including any claim, demand, action, suit or proceedings arising as a consequence of the obligations and releases which any of the parties to this deed have agreed to in the Deed of Obligation and Release or the Deed of Loan or the Porteous Settlement Deed;
(ii)with respect to any attempt to remove or vary the Trustee or any subsequent Hancock Family Group Member as trustee of the HMH Trust and replace the trustee with a person or entity who or which is not a Hancock Family Group Member; and
(iii)any damage, loss, liability, costs, charge, expense, outgoing or payment;
(iv)any action against any of the Directors of any company within the Hancock Group, including without limitation, the Other Directors; and
(b)without limitation of clause (a) includes any claim made in the Proceedings;
(c)any damage, loss, liability, costs, charge, expense, outgoing or payment; and
(d)without limitation of sub-clause (a) includes any claim made in the Proceedings; and
(e)without limitation of sub-clauses (a) and (b) includes any claim made in any proceeding or any discontinued proceeding and any documents to support such claim and without limitation and for clarity in the case of the Proceedings includes the unsigned draft affidavit of [John].
Clause 7(b) provides:
7.UNDERTAKINGS
Each of the parties to this deed undertakes with each of the other parties to this deed …
(a)…
(b)not to challenge the right of any member of the Hancock Group to any of the Hancock Group Interest at any time.
Clause 20 provides:
20.CONFIDENTIAL MEDIATION/ARBITRATION
In the event that there is any dispute under this deed then any party to this deed who has a dispute with any other party to this deed shall forthwith notify the other party or parties with whom there is the dispute and all other parties to this deed ('Notification') and the parties to this deed shall attempt to resolve such difference in the following manner
…
20.2.Confidential Arbitration
(a)Where the disputing parties are unable to agree to an appointment of a mediator for the purposes of this this clause within fourteen (14) days of the date of the Notification or in any event any mediation is abandoned then the dispute shall on that date automatically referred to arbitration for resolution ('Referral Date') and the following provisions of this clause shall apply:
…
(b)the dispute shall be resolved by confidential arbitration by the arbitrator agreed to by each of the disputing parties or appointed pursuant to paragraph (2)(a)(i) above ( or if more than one is appointed pursuant to paragraph (2)(a)(ii) then as decided by not less than a majority of them) who shall resolve the matter pursuant to the Commercial Arbitration Act of Western Australia and whose decision shall be final and binding on the parties.
…

Unsigned draft affidavit of John referred to in the Hope Downs Deed

The definition of Claim, at subclause (e) of cl 1.1, includes any claim made in the unsigned draft affidavit of [John].
The unsigned draft affidavit of John was sent to Gina's solicitors in October 2004.[50] The draft affidavit alleges that:
[50] Wilks Second Affidavit, Confidential Annexure MAW 2.
(1)Mr Lang Hancock established the Zamoever Trust for his four grandchildren (Gina's children) over shares in Zamoever. (The Zamoever Trust is later rebranded as the HFMF Trust);
(2)Gina became the trustee of the Zamoever Trust on the death of Lang Hancock;
(3)Lang Hancock, as the trustee of the Zamoever Trust, controlled HFMF via Zamoever;
(4)on 27 March 1990, HPPL transferred its shares in HRL to HFMF
(5)HFMF was the sole shareholder of all issued shares in HML and HRL;
(6)prior to his death on 27 March 1992, Lang Hancock controlled all of these companies;
(7)Gina has long disagreed with the way Lang Hancock had conducted the affairs of his companies. In particular, Gina argued that valuable assets of HPPL were being transferred to the other entities, particularly HFMF. These included the issued shares in HML and HRL (which companies held various mining tenements), and further mining tenements subsequently transferred to HML and HRL by HPPL;[51]
(8)after Lang Hancock's death, Gina embarked upon a sustained campaign to return assets to HPPL which she considered were the rightful property of the family, HPPL being the family company;[52]
(9)Gina breached her duties as trustee of the Zamoever Trust, by divesting a company ultimately controlled by the Zamoever Trust of most of its valuable assets;[53]
(10)at all times in the 10 years prior to October 2004, Gina acted in conflict with her various positions as director and trustee of the Zamoever Trust, to her sole benefit. It was John's strong belief that Gina must be removed as trustee and that there should be some form of redress from the calculating and astounded breaches of fiduciary Gina displayed in divesting HFMF, which was always intended to solely for the benefit of Gina's children, of all of its valuable assets, particularly its shareholding in HPPL;[54] and
(11)Gina also divested HFMF of the Hope Downs Tenements, which would have provided a huge source of income to HFMF.[55]
[51] Wilks Second Affidavit, Confidential Annexure MAW 2 [130].
[52] Wilks Second Affidavit, Confidential Annexure MAW 2 [132].
[53] Wilks Second Affidavit, Confidential Annexure MAW 2 [142].
[54] Wilks Second Affidavit, Confidential Annexure MAW 2 [258].
[55] Wilks Second Affidavit, Confidential Annexure MAW 2 [259].
In summary, the unsigned draft affidavit of John raises, inter alia, claims that Gina, in breach of her duties as trustee, divested HFMF of its interest in the Hope Downs Tenements in favour of HPPL. The draft affidavit is very broad and the breadth of the claims raised in the draft affidavit extend to any breach of trust found to have occurred.[56]

Proper Construction of Hope Downs Deed

[56] Full Federal Court Decision [63] and [224].

The Full Federal Court held, in the Federal Court proceedings, that the construction of any arbitration clause in a contract is governed by the principles of the common law construction and interpretation of contracts:[57]
The construction and interpretation of written contracts is to be undertaken by an examination of the text and document in the context of the surrounding circumstances known to the parties, including the purpose and object of the transaction or of the subject matter of the agreement and by assessing how a reasonable person would have understood the language in that context.
[57] Full Federal Court Decision [163].
The Full Federal Court described the overall dispute between Bianca and John on the one hand, and Gina and the HPPL Parties on the other hand, as follows:[58]
Here, at one level, the overall dispute can, without intended disrespect to the parties, be described as follows. The applicants accuse their mother of wholesale breaches of equitable and contractual duties in wrongfully transferring hugely valuable commercial assets from the control of entities that owned the assets significantly for the benefit of the children to entities and ownership structures controlled by Mrs Rinehart. The companies controlled by Mrs Rinehart are said to be legally complicit in these wrongs. Mrs Rinehart and the companies concerned set up various provisions of the deeds in answer to these claims, deeds that are said to have been entered by the applicants when they were adults and after proper advice. Very often, even if not always, the answer to the claims is said to be a complete answer. The applicants, in turn, deny those matters, and apart from pointing to what they say is the limited operation of the deeds, say that the deeds should be set aside for various reasons based on equity, common law and statute [158].
[58] Full Federal Court Decision [158].
The Full Federal Court in the Federal Court proceedings considered that the phrase 'dispute under this deed' contained in cl 20 of the Hope Downs Deed should be 'given a liberal meaning as including disputes in which the operation of the deed is a substantial issue'.[59]
[59] Full Federal Court Decision [217].
In support of a liberal or wide construction of the Hope Downs Deed, the High Court said the following in relation to the proper construction of cl 20:[60]
The background to and purposes of the Deeds, as reflected in their terms, point clearly to arbitral clauses of wide coverage with respect to what was to be the subject of confidential processes of dispute resolution … One of the fundamental purposes of the Deeds, their Honours said, was the quelling of disputes about the title to assets, which was of great commercial importance to the prospective arrangements with a joint venturer. [26] - [27].
…
Accordingly, a critical object of the Hope Downs Deed was the maintenance of the confidentiality about the affairs of the Hancock Group, the trusts, the intra-family dispute and the provisions of the Deeds themselves. This object could not be clearer. Contrary to the submissions for the appellants, the parties were indeed agreeing to avoid public scrutiny. [46]
[60] HC Decision [26] - [27] and [46].

This approach was endorsed by Quinlan CJ in the 2020 Stay Appeal:
As a matter of contractual construction, in my view, cl 20 cannot be confined to circumstances in which disputes in relation to the Hope Downs Tenements arise, and only arise, between the parties to the [Hope Downs] Deed (or those claiming under or through them).
Rather, in my view, the Hope Downs Deed, objectively construed manifests an intention that any dispute, as between the parties to the [Hope Downs] Deed, under the Deed, must be dealt with by way of confidential arbitration, regardless of whether that dispute is connected with, or falls within, a broader dispute involving strangers to the Deed. That is, on its proper construction, the Hope Downs Deed manifests an intention on the part of the parties to the Deed that, insofar as they are able, the parties would resolve the disputes between them confidentially.
… As a matter of construction of the Hope Downs Deed, however, it is clear that all disputes between the parties to the Deed inter se, however they arise, are intended to fall within the scope of cl 20[61] (emphasis added)
[61] 2020 Stay Appeal [185] - [190].

In accordance with this wide or liberal construction of the Hope Downs Deed, the Full Federal Court concluded that all the substantive and validity claims raised by Bianca and John against Gina and the HPPL Parties fell within the definition of 'any dispute under this deed' as contained in cl 20 of the Hope Downs Deed.[62]
[62] Full Federal Court Decision [266].
Similarly, in the 2022 Stay Appeal, Quinlan CJ and Beech JA described the matters that are the subject of the Hope Downs Deed as including:[63]
The first matter which is the subject of the arbitration agreement is the capacity in which HML and HRL acquired and held the tenements before they were transferred to HDL in 1992. In that regard, the judge recorded that:
'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 and had the consequence that HML and HRL held the tenements on constructive trust for HPPL. 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.'
The second matter which is the subject of the arbitration agreement concerned the transfer of the tenements to HDL, HPPL and HDIO. In that regard, the judge observed:
'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.'
[63] 2022 Stay Appeal [78] - [79].
As I have outlined, these matters are a reference to the Acquisition Matter and the Debt Reconstruction Matter respectively. The subject matter of both the Acquisition Matter and the Debt Reconstruction Matter has been held to be within the scope of the arbitration agreement, and the dispute in relation to each of these matters has been determined as arising between parties to the arbitration agreement.[64]
[64] No 13 Decision [90] - [93]; 2022 Stay Appeal; Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 16] [2022] WASC 432 [38].
The Full Federal Court were also of the view that there was 'a sustainable argument that all the substantive claims were claims for the purpose of cl 1.1 of the Hope Downs Deed' and that it followed there was a clearly sustainable argument that Bianca and John had released and discharged those claims pursuant to cl 6(a) of the Hope Downs Deed and irrevocably covenanted not to sue by virtue of cl 6(b) of the Hope Downs Deed.[65]

Characterisation of dispute between the parties

[65] Full Federal Court Decision [225].

On either of the HPPL Parties' and Gina's contentions on the one hand or Bianca and John's on the other hand, the Privilege Challenge concerns a controversy between their two 'sides'. Each side of the controversy is a party to the arbitration agreement, that is the Hope Downs Deed. Where the two sides diverge is how the controversy between them is to be characterised.
The HPPL Parties and Gina contend that the controversary in dispute between the HPPL Parties and Gina on the one hand, and Bianca and John on the other, that is required to be determined on the Privilege Challenge, is whether Bianca and John can establish, to a prima facie standard, that Gina and the HPPL Parties engaged in the impugned conduct the subject of the Debt Reconstruction Matter. In other words, they say that the subject matter of the controversary which falls for determination in the Privilege Challenge is whether there is a prima facie case that the iniquity exception applies to the HPPL Parties' and Gina's Privilege Claims.

The HPPL Parties and Gina say that the fact that the alleged conduct the subject of the Debt Reconstruction Matter is being raised by Bianca and John against them for the purposes of challenging their Privilege Claims does not alter the character of that underlying 'matter'. The HPPL Parties submit that each of the grounds upon which Bianca and John are challenging their privilege claims are separate and discrete 'matters' for the purposes of s 8(1) of the Act, and if one or more of those matters are the subject of the arbitration agreement, they must be referred to arbitration. That is so even if it means that the court must await determination of that matter by arbitration before resolving the ultimate question of whether the documents should be produced for inspection.
The HPPL Parties relied upon the case of Tanning in support of the submission that a controversy is capable of constituting a matter, even where the resolution of that controversy does not resolve the ultimate question in the action.
The HPPL Parties also relied upon WDR Delaware Corporation v Hydrox Holdings Pty Ltd[66] in support of their contention that the iniquity exception required to be determined on the Privilege Challenge is a 'matter' which is the subject of the arbitration agreement.
[66] WDR Delaware Corporation v Hydrox Holdings Pty Ltd [2016] FCA 1164.
On the other hand, Bianca and John contend that the issue (as opposed to the matter) to be determined on the Privilege Challenge is whether the court should make an order, pursuant to O 26 r 9(1) of the Rules of the Supreme Court 1971 (WA) (RSC), that HPPL produce for inspection the 74 documents on its lists of discovery served on 26 May, 6 June and 6 July 2023, in respect of which the HPPL Parties and Gina have objected to production. Senior counsel for Bianca and John says that this is not a 'matter' at all, it is simply a procedural issue to be determined in the curial proceedings.
Bianca and John submit that whether they can prove the impugned conduct to a prima facie standard is a subsidiary factual dispute, which in turn bears upon a procedural issue that arises in the curial proceedings: that is, whether the HPPL Parties should produce documents for inspection. In other words, Bianca and John say that the iniquity exception is merely an issue that arises in determining the ultimate issue in the applications, that is the procedural issue of whether the HPPL Parties should be ordered to produce documents for inspection. Bianca and John submit that this procedural issue can only be determined by the court, and that if the court were to stay the Privilege Challenge, it would be relinquishing the power to control its own processes.
Senior counsel for Bianca and John submitted that the enquiry to determine whether a controversy is an 'issue' or a 'matter' can be framed in these terms 'does the outcome of that … particular dispute give one a clear path to the outcome of the resolution … of the dispute between the parties?'[67] If the answer to that question is no, then the controversy is merely an issue arising in the proceedings. In this context, the 'dispute' that requires resolution between the parties is, senior counsel for Bianca and John submits, whether Bianca and John are entitled to a declaration that they own the Hope Downs Tenements.[68] Senior counsel for Bianca and John submitted that both Tanning and WDR Delaware are authority for the proposition that this is the applicable test.[69]
[67] ts 3799.
[68] ts 3799.
[69] ts 3799 - 3802.

The parties appeared before me on 11 and 24 October 2023 and made oral submissions in support of the orders each of them sought.
There are two issues that are required to be determined following the Reasons for Decision. The first is what substantive orders should be made to give effect to the grant of the s 8 stay applications. The second is what costs orders are appropriate. These reasons use terms defined in, and are to be read together with, the Reasons for Decision.

Substantive orders

HPPL Parties' and Gina's submissions

The HPPL Parties and Gina, by paragraph 2 of the applications, effectively sought a stay, pursuant to s 8(1) of the Act, of Bianca and John's challenge to their privilege claims to the extent that the challenge required a determination of the iniquity exception[128] - that is evident by reference to the paragraphs of Bianca and John's Privilege Submissions referred to in paragraph 2 of the applications, specifically;
(1)by [4.1] and [5] - [19], Bianca and John challenge privilege on the basis that the communications and documents over which legal professional privilege has been claimed, were made in furtherance of a fraud;
(2)by [4.2] and [20] - [22], Bianca and John challenged privilege on the basis that no justification has been advanced by the HPPL Parties and/or Gina to sustain claims of without prejudice privilege, and there is no basis on which the court could conclude that any of the communications, the subject of those claims, was made in an attempt to settle a genuine dispute; and
(3)by [25] - [31], Bianca and John claim that privilege has been waived because Gina's and the HPPL Parties' impugned conduct is inconsistent with the maintenance of privilege.
[128] Reasons for Decision [60], [148].
However, there are other bases upon which Bianca and John challenge privilege - these are contained in [23], [24] and [32] to [42] of Bianca and John's Privilege Submissions. These paragraphs challenge privilege on the following grounds:
(1)by [23], Bianca and John challenge privilege on the basis that the evidence advanced in the affidavit of Kirsty Jane McPhee affirmed 5 July 2023 does not provide a basis for the HPPL Parties and/or Gina to claim without prejudice privilege over documents 1, 18, 23, 25, 26, 29, 56 - 70 and 74;
(2)by [24], Bianca and John contend that the HPPL Parties and Gina have waived privilege on the basis of alleged inconsistent conduct of the HPPL Parties and Gina;
(3)by [32] - [33], Bianca and John contend that privilege has been waived over a number of documents referred to in [33.1] to [33.6] as a result of privileged information being disclosed to parties who, at the relevant time, did not objectively share the same interests;
(4)by [34] and [35], Bianca and John contend that privilege has been waived over document 73 because the HPPL Parties have discovered other documents that relate to the same settlement negotiations referred to in that document. Bianca and John say that the HPPL Parties and Gina cannot consistently maintain privilege over some documents relating to these negotiations, having discovered other documents that relate to the same negotiations;
(5)by [36] - [38], Bianca and John contend that privilege has been claimed over part of documents 15 - 20 and 30 - 37 in such a way that the unredacted contents of those documents cannot properly be understood; and
(6)by [39] - [42], Bianca and John contend that the HPPL Parties and Gina have not discharged their burden of establishing facts upon which their claims of privilege are based.
Senior counsel for the HPPL Parties and counsel for Gina say that the entirety of Bianca and John's challenge to privilege ought be stayed for the following reasons:
(1)the substantive orders sought by the HPPL Parties and Gina give effect to the Reasons for Decision;
(2)each of the grounds relied upon by Bianca and John to challenge privilege invoke the iniquity exception;
(3)by paragraph 4 of the applications, the HPPL Parties and Gina sought further orders as the court thinks fit - the court should see fit not to make orders that result in the bifurcation of the privilege challenge with respect to the same documents over which privilege disputes have been referred to arbitration and stayed;
(4)the references to certain paragraphs of Bianca and John's Privilege Submissions in paragraph 2 of the applications did not involve an acceptance by the HPPL Parties and Gina that there was a real, substantive, separable and identifiable controversy that remained to be determined apart from the privilege challenge on the basis of the iniquity exception - it is impossible to disentangle the privilege challenge on the basis of the iniquity exception from any purported additional privilege challenges;
(5)O26 r 12(1) of the RSC provides that an affidavit of discovery is prima facie evidence of privilege and it is Bianca and John who bear the evidentiary onus of establishing that the privilege claim by the HPPL Parties and Gina is unfounded or mistaken - as a result any challenge to privilege based upon grounds that the HPPL Parties and Gina have not adduced sufficient evidence to establish a claim for privilege, have waived privilege or are not entitled to claim privilege over redacted documents should not be entertained by the court; and
(6)any challenge to privilege on the basis of unfairness should not be entertained by the court as the proper test, as elucidated in Mann v Carnell,[129] is whether there is inconsistency of conduct giving rise to waiver.
[129] Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1.
Counsel for Gina submitted that any further challenge to privilege by Bianca and John would need to be the subject of an application made by Bianca and John for inspection of documents pursuant to O 26 r 9 of the RSC. This is because, counsel says, it is not for the HPPL Parties and Gina to guess what privilege challenges remain when they are not clearly delineated in Bianca and John's Privilege Submissions. Counsel for Gina accepts that if Bianca and John elect to make an application for inspection of documents outside of the iniquity exception, they can do so.[130]

Bianca and John's submissions

[130] ts 4487.

Counsel for Bianca and John say that only those challenges referenced at the specified paragraphs of Bianca and John's Privilege Submissions ought be referred to arbitration and stayed pursuant to s 8(1) of the Act. Counsel accepted that the iniquity exception was the aspect of the challenges that was the subject of the s 8 stay applications.[131]
[131] ts 4488.
Counsel for Bianca and John submits that the HPPL Parties and Gina cannot obtain a stay of additional privilege challenges merely by relying on paragraph 4 of the applications.
Counsel for Bianca and John say that the following privilege challenges have not been stayed pursuant to s 8 of the Act:
(a)whether the HPPL Parties and/or Gina have established proper grounds for their claim of legal professional privilege;
(b)whether the HPPL Parties and/or Gina have established proper grounds for their claims of without prejudice privilege;
(c)whether the HPPL Parties and/or Gina have waived privilege as a result of sharing privileged documents (on the assumption they are privileged); and
(d)whether the HPPL Parties and/or Gina have claimed part privilege in the proper way.
Bianca and John say that if privilege is not established or, assuming the documents are privileged, it is established that privilege has been waived, then the court will order production of the documents for inspection and the challenge to privilege on the basis of the iniquity exception is not required to be determined.

Disposition

By paragraph 2 of the applications, the HPPL Parties and Gina specify the paragraphs of Bianca and John's Privilege Submissions which they seek to stay pursuant to s 8 of the Act. There is no dispute between the parties that those paragraphs invoke the iniquity exception. What is in dispute is whether the remaining paragraphs of Bianca and John's Privilege Submissions give rise to separate grounds upon which privilege is challenged, apart from the iniquity exception and whether, even if they do, they should now be programmed for hearing by the court (prior to any arbitral hearing).
The Reasons for Decision must be read in the context of paragraph 2 of the applications. The HPPL Parties and Gina cannot now contend that the s 8 stay applications apply to all paragraphs of Bianca and John's Privilege Submissions, when they did not seek that relief by their applications. It is not sufficient to rely upon paragraph 4 of the applications as a 'catch-all' prayer for relief, when that was not the basis upon which the applications were argued at the hearing.
Senior counsel for the HPPL Parties and counsel for Gina made submissions and referred me to authority in support of their contention that a claim of privilege does not require evidence in support.[132] This is a matter which must be programmed for determination - it is not a reason to make an order which stays this ground of Bianca's and John's challenge to privilege.
[132] Rinehart v Rinehart [2016] NSWCA 58.
Further, if it was the position of the HPPL Parties and Gina that a s 8 stay of the paragraphs specified in paragraph 2 of the applications would necessitate a stay of every paragraph of Bianca and John's Privilege Submissions, then it was incumbent upon them to put that to the court at the hearing of the applications. They did not do so.
Having said that, to give effect to the Reasons for Decision is relation to the s 8 stay applications, Bianca and John's Privilege Submissions, to the extent that they seek to raise the iniquity exception, have been referred to arbitration and stayed pursuant to s 8(1) of the Act. That means that Bianca and John cannot rely upon a technical argument that, if a paragraph of Bianca and John's Privilege Submissions is not referred to in paragraph 2 of the applications, then the court is required to determine a privilege challenge that is referred to in another paragraph of Bianca and John's Privilege Submissions, even if it raises the iniquity exception. Counsel for Bianca and John accepted this to be the case.[133]
[133] ts 4504.
I agree with the submissions of Bianca and John that the orders for a referral to arbitration and stay pursuant to s 8 of the Act applies only to those challenges which raise the iniquity exception - it is not however, appropriate to limit the substantive orders to refer to only those paragraphs of Bianca and John's Privilege Submissions specified in paragraph 2 of the applications. That is because the following additional paragraphs of Bianca and John's Privilege Submissions also invoke the iniquity exception:
(1)[4.3] states 'any privilege has been waived through Gina and HPPL's conduct'. This ground of challenge to privilege is addressed in Part IV of Bianca and John's Privilege Submissions which contains [24] - [35] and refers to three 'aspects' of the challenge on the basis of waiver. [25] - [31] are specified in paragraph 2 of the applications and are the first 'aspect' the waiver challenge, that being an assertion that the conduct of the HPPL Parties and Gina which constitutes the waiver of privilege is the impugned conduct. The second 'aspect', referred to in [32] - [33], is that disclosure of documents to parties who did not share the same interest constitutes waiver of privilege. The third 'aspect', referred to in [34] - [35], is that the HPPL Parties and Gina cannot consistently maintain privilege over some documents, specifically document 73, relating to settlement negotiations when they have discovered other documents that relate to the same settlement negotiations. Therefore, to the extent that the challenge to privilege on the basis of waiver engages the first 'aspect' of the challenge, [4.3] is also captured by the s 8 stay applications;
(2)[24] states '[t]o the extent the Court concludes (contrary to the above) that privilege attaches to any of the documents, John and Bianca challenge the privilege claims on the basis that any privilege which attaches to the documents has been waived and is not maintainable by reason of the inconsistent conduct of HPPL and Gina'. This is immediately followed in [25] by the sentence '[t]he conduct which constitutes the waiver in this case is interrelated and an indicia of the impugned conduct'. Therefore, in my view, [24] is also captured by the s 8 stay applications;
(3)[35] states '[e]ven if the dispute and negotiations were genuine, they cannot have it both ways. Moreover, they cannot have the benefit of privilege simply because the same legal representation in related litigation was imposed without recognising the separate and different interests. Indeed, that feature which is sought to be deployed now for the privilege claims is another indica of the impugned conduct.' To the extent that it invokes the iniquity exception, [35] is captured by the s 8 stay applications; and
(4)[37] states 'John and Bianca challenge the part-privilege claims on the same grounds as set out above (as applicable). To the extent that it invokes the iniquity exception, [37] is captured by the s 8 stay application.
There is one further paragraph that requires consideration - [43] refers to the 'colourable case of fraud' and seeks to have the judge hearing the privilege claims sit in court to hear Bianca and John's oral submissions in relation to fraud - this submission was not accepted by the court and has fallen away. There is no need to make any further orders in relation to [43].
That leaves the remainder of Bianca and John's Privilege Submissions that still require determination, given the inherent stay applications were dismissed.
I consider that there is merit in the submissions of counsel for Gina that there is some difficulty in ascertaining exactly what remains to be determined, given the intermingling of the grounds of challenge to privilege in Bianca and John's Privilege Submissions.
I have had regard to the submissions of Bianca and John that the orders of Smith J in the curial proceedings made on 30 June 2023 put in place a procedure for a privilege challenge without the need for an application. Those orders provided, inter alia, that:
1.On or before 14 July, any party who wishes to contest a claim for privilege made as part of … the HPPL Parties' Privilege Claims must serve on the other parties and [Gina] (to the extent applicable) a list of the privilege claims being contested, together with evidence and submissions in support of the challenge to those claims.
2.On or before 24 July 2023, the HPPL Parties, John and Bianca and [Gina] are to serve any evidence and submissions in response in support of the challenged claims for privilege.
3.On or before 1 August 2023, the HPPL Parties, John and Bianca and [Gina] are to serve any evidence and submissions in reply.
4.Any contests to the John and Bianca Privilege Claims or the HPPL Parties' Privilege Claims be listed for hearing on the earliest date convenient to the Court after 1 August 2023, before a Judge other than the trial Judge.

Bianca and John effectively seek a revival of Orders 2 - 4 of the 30 June Orders with appropriate amendments to the dates therein.
We have moved on from the 30 June Orders. In the Reasons for Decision, I have determined that any challenge to the HPPL Parties' and Gina's claim of privilege which seeks to invoke the iniquity exception must be referred to arbitration and stayed pursuant to s 8 of the Act. Bianca and John's Privilege Submissions and the evidence filed in support thereof in accordance with the 30 June Orders, to a large extent, sought to rely upon the iniquity exception to challenge privilege. It is appropriate that the substantive orders I make reflect the Reasons for Decision and effect an efficient and practical way to determine the remaining challenges to privilege.
To avoid any confusion or contest as to what remains in issue, it is appropriate, for reasons of efficiency and practicality, for Bianca and John to articulate their remaining grounds of privilege in a formal application by way of chamber summons. I do not consider that there is any prejudice caused to Bianca and John as a result - their counsel has submitted that it is clear what remains in issue. It should therefore, not be an onerous task to record the remaining privilege challenges in a separate application.

Substantive orders

I therefore make the following substantive orders in the HPPL Proceedings:
1.The privilege challenge of the third and fourth defendants set out in paragraphs [4.1], [4.2], [4.3] (to the extent it invokes the iniquity exception), [5] - [22], [24], [25] - [31], [35] (to the extent it invokes iniquity exception) and [37] (to the extent it invokes the iniquity exception) of their privilege submissions dated 17 July 2023 (Bianca and John's Privilege Submissions) is stayed and referred to arbitration pursuant to s 8(1) of the Commercial Arbitration Act 2012 (WA).
2.The amended chamber summons filed by the first and second defendants dated 29 August 2023 (HPPL Chamber Summons) and the chamber summons filed by Georgina Hope Rinehart dated 26 July 2023 (Gina Chamber Summons) are otherwise dismissed.
3.On or before 7 days from the date of this order, the third and fourth defendants file and serve any application to contest the claim for privilege made as part of the HPPL Parties' Privilege Claims and/or Gina's Privilege Claims on the grounds set out in Bianca and John's Privilege Submissions that are not stayed by reason of order 1 herein, together with evidence and submissions in support of the challenge to those claims.
4.On or before (7 days from the date in order 3), the HPPL Parties, and Gina are to serve any evidence and submissions in response in support of the challenged claims for privilege.
5. On or before (7 days from the date in order 4), John and Bianca are to serve any evidence and submissions in reply.
6.Any contests to the HPPL Parties' Privilege Claims and Gina Privilege Claims be listed for hearing on the earliest date convenient to the court after [the last date for compliance with order 5], before Whitby J.
I make mirror orders in the Rhodes Proceedings.

Costs Orders

HPPL Parties' and Gina's Submissions

The HPPL Parties and Gina seek an order that Bianca and John pay their costs of the applications to be taxed, if not agreed. They also seek special costs orders that the costs be taxed without reference to the limits provided for in the relevant items in the 2022 Scale or the hourly rates provided for in the 2022 Scale. They also seek an order that they be permitted to claim reasonable allowances for work undertaken by multiple counsel and senior counsel.
The HPPL Parties referred to a previous decision of the Court of Appeal in the Rhodes Proceedings - Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [No 2].[134] In that case, an application for leave to appeal by the HPPL Parties against Bianca and John in relation to discovery orders was dismissed. The HPPL Parties sought an order that they should only pay 80% of Bianca and John's costs, as the HPPL Parties had success in opposing Bianca and John's notice of contention.
[134] Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [No 2] WASCA 108 (S).
The Court of Appeal accepted that the notice of contention gave rise to a more detailed focus on the context of the making of the primary judge's orders than would otherwise have been necessary or reasonably to be expected. However, the Court of Appeal found that it was doubtful that the issues raised by the notice of contention could fairly be said to be discrete and severable from the issues raised by the grounds of appeal.[135] The Court of Appeal was not persuaded that the HPPL' Parties' success in relation to the notice of contention justified a departure from the ordinary position that costs follow the event.
[135] Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [No 2] WASCA 108 (S) [11].

The HPPL Parties and Gina say that the vast bulk of costs associated with the applications were incurred in relation to the s 8 stay applications which they submit was a complex matter. They say that this is not a case that can be characterised as one of mixed success, as the applications were effectively to stay the challenge to privilege and they were successful on the most important ground, that being the s 8 stay applications. They say that the arguments on which the applications were unsuccessful were, to a large extent, alternative routes to the same outcome that they achieved by their s 8 stay applications.
The HPPL Parties and Gina say that they were ultimately the successful parties and that costs should follow the event.

Bianca and John's Submissions

On the other hand, Bianca and John seek an order that there be no order as to costs on the applications. This is on the basis that, while the HPPL Parties and Gina were successful on the s 8 stay applications, Bianca and John were successful on the inherent stay applications, and therefore, both parties ought to pay their own costs.
Bianca and John referred to the case of Koh v Buckeridge.[136] In that case, Smith J ordered that each party bear their own costs. Smith J found that each side had their own failures and successes on discrete and severable issues where those issues occupied equal submissions and reasons for decision.[137]

Disposition

[136] Koh v Buckeridge [No 3] [2023] WASC 42 (S).

[137] Koh v Buckeridge [No 3] [2023] WASC 42 (S) [35].

Pursuant to s 37 of the Supreme Court Act1935 (WA), the court has a wide discretion to award costs. This is subject to the requirement that the discretion must be exercised judicially.[138]
[138] Frigger v Lean [2012] WASCA 66 [53].
Order 66 rule 1(1) of the RSC provides that the costs of, and incidental to all proceedings shall be in the discretion of the court, but the court will generally order that the successful party to an action or matter, recover its costs. This is often referred to as the usual order as to costs and/or the rule that costs follow the event.
In determining who is the successful party, the question to be answered is who was successful in the 'underlying, real contest' between the parties.[139]
[139] Frigger v Professional Services of Australia Pty Ltd [No 2] [2011] WASCA 103 (S) at [12].
A court should not, as a matter of course, make a costs order that a successful party only recover a percentage of its costs, even though that party has been wholly successful because it is often the case that a party will not be successful on every issue. An analysis of which party was successful on every issue raised in the application, would result in increased costs and time dedicated to costs argument.[140]
[140] Oshlack v Richmond River Council [1998] HCA 11.
Costs orders should only be apportioned where a successful party failed on discrete and severable issues and only in circumstances where those issues have added to the costs in a significant and discernible way.[141]
[141] Strezelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96 [51].
The exercise of the court's discretion to make a costs order to reflect the limited success of a party should be approached broadly and as a matter of impression, rather than as an exercise in mathematical precision.[142]
[142] Amaca Pty Ltd (formerly James Hardie & Co Pty Ltd) v Moss [2007] WASCA 162 (S).
In summary, in deciding whether costs should be apportioned to reflect issues on which each party was successful, the following factors should be addressed in considering the issues on which the successful party failed[143]:
(1)the degree to which those issues were separate and distinct;
(2)the proportion of the costs incurred and the time taken in arguing those issues;
(3)the importance, strength and merit of those issues; and
(4)the conduct generally of the successful party.
[143] Lexis Nexis, Civil Procedure Western Australia [66.1.10], citing Macks v Viscariello(No 2) [2018] SASCFC 106; BC201809634 at [31] - [33]; Parabanks Shopping Centre Pty Ltd v City of Salisbury (No 2) [2013] SASC 204; BC201316450 at [7].
This court has applied these principles equally to the costs of interlocutory proceedings.[144]
[144] Mercanti v Mercanti [2014] WASC 64 (S); Inpex Operations Australia Pty Ltd v AIG Australia Ltd [No 3] [2023] WASC 332 (S).
Unless there are special circumstances to warrant a departure from the general rule that costs follow the event, the court will not encourage applications regarding costs on an issue-by-issue basis, involving apportionments based on degrees of difficulty of issues, time taken to argue them and the like. It is only in circumstances where the successful party failed on discrete and severable issues, issues with importance, merit and strength and which added to the costs of the applications in a significant and discernible way that an apportionment of costs should be ordered.
In my view, the HPPL Parties and Gina were the successful parties in the applications. By the applications, the HPPL Parties and Gina sought primarily to stay any determination of the iniquity exception in the course of determining a privilege challenge in the curial proceedings - this was the ultimate outcome that they achieved because of the success of the s 8 stay applications. This was of paramount importance to the HPPL Parties and Gina in the applications - this was evident from the fact that they sought determination of the s 8 stay applications prior to the hearing of any inherent stay applications. It was pursuant to my orders that both were heard together.[145] Further, the s 8 stay applications required argument and determination of most of the grounds of privilege, that being the iniquity exception, the without prejudice ground and the waiver ground.
[145] Orders dated 27 July 2023.
Having determined that the HPPL Parties and Gina are the successful parties, that is not an end to the question of costs. I must then determine whether there should be an apportionment of costs.
I am of the view that the inherent stay applications did involve discrete and severable issues that added to the costs of the applications in a discernible way. The inherent stay applications were of importance given that, because they were unsuccessful, there are grounds upon which Bianca and John challenge privilege that still remain to be determined. However, these remaining grounds are much less complex, both factually and legally, then those captured by the s 8 stay applications. I do not accept that the inherent stay applications where of equal importance, complexity or significance to the s 8 stay applications.
As a matter of overall impression, I exercise my discretion to award the HPPL Parties and Gina 70% of their costs of the applications. This reflects the fact that the HPPL Parties and Gina were unsuccessful on the inherent stay applications but recognises the success that they achieved on the s 8 stay applications.
I now turn to consider special costs orders.

Special Costs Orders

By s 141(1) of the Legal Profession Uniform Law Application Act2022 (WA) (Uniform Act), the HPPL Parties and Gin are confined to recovering their costs by the limits provided in the 2022 Scale. Accordingly, both the HPPL Parties and Gina seek special costs orders pursuant to s 141(3) of the Uniform Act.
Section 141(3) of the Uniform Act provides that 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: order the payment of costs above those fixed by the determination or fix higher limits of costs than those fixed in the determination, or remove the limits on costs fixed in the determination, or alternatively, make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or assessed.
Section 141(3) of the Uniform Act requires a two-stage enquiry to be made in determining whether to make a special costs order. The first enquiry is whether the maximum amount allowable under the relevant scale item may be inadequate, ie. whether there is a fairly arguable case that the bill to be presented to the taxing officer may properly tax at an amount which is greater than the limit which would be imposed by the 2022 Scale. The second enquiry is whether that inadequacy of the costs allowable under the 2022 Scale arises because of the 'unusual difficulty, complexity or importance of the matter'. These two enquiries are interrelated in that a fairly arguable case will not be established merely because a party incurred costs greater than the allowance in the relevant scale, the costs incurred must be assessed in the context of the difficulty, complexity and importance of the matter.[146]
[146] Sino Iron Pty ltd v Minerology [No 2] [2017] WASCA 76 (S) [14]
The relevant item of the 2022 Scale which applies to the applications is Item 10:

The HPPL Parties and Gina did not adduce any additional evidence, such as a draft bill of costs, in support of their contention that the costs that are properly allowable upon the applications are greater than the amounts provided for in Item 10. This is however, not fatal to their application for a special costs order. The court may infer, from its own knowledge of the applications, that the amount allowable under the 2022 Scale may be inadequate.[147] The effect of a special costs order removing the 2022 Scale limits does no more than that - it is ultimately a matter for the taxing officer as to what the reasonable allowance is on a taxation.
[147] Mentha as Receiver and Manager of Westgem Investments Pty Ltd (in Liq) v Hughes as Liquidator of Westgem Investments Pty ltd (in Liq) [2014] WASC 478 (S) [5].
The matters raised in the applications were complex - both as a matter of fact and law. There was a large volume of material filed and voluminous affidavits and numerous authorities were relied upon by each party. There were lengthy written submissions filed by each party and the applications were heard over two days. Each party was represented by multiple counsel.
In determining the applications, I was required to examine the history of the proceedings and consider rulings of the Court of the Appeal and the Federal Court in relation to previous stay applications.
I also consider that the applications were of unusual difficulty, compared to the ordinary run of civil cases, because of the interrelationship between these applications and the Martin Arbitration and the history of proceedings between the parties.
Further, the matters in dispute were of importance in that the outcome of the applications had significant consequences for the parties - if the s 8 stay applications were unsuccessful the iniquity exception would have to be determined by this court. The outcome of the applications also had a broader importance generally in the application of s 8 of the Act to matters the subject of arbitration agreements.
In all of these circumstances, I am satisfied, as a matter of overall impression, that the HPPL Parties and Gina have a fairly arguable case that the bill presented to the taxing officer may properly tax at an amount which is greater than the limit which would be imposed by the 2022 Scale because of the 'unusual difficulty, complexity or importance of the matter'.

Costs of hearings on 11 and 24 October 2023

There is a final issue that I turn to consider - that being the appropriate orders in relation to the costs of the hearings on 11 and 24 October 2023. These hearings were, combined, just over 3 hours in length.
As I have determined in these reasons, all parties had some success in relation to the orders they sought to give effect to the Reasons for Decision - Bianca and John were successful in seeking substantive orders (save for some amendments) and the HPPL Parties and Gina were largely successful in seeking costs orders (save for some apportionment). In these circumstances, I consider it appropriate that each party bear their own costs of the hearings on 11 and 24 October 2023.

Costs Orders

For the foregoing reasons, I will order as follows (in addition to the substantive orders) (in each of the HPPL Proceedings and the Rhodes Proceedings):
(1)Bianca and John pay 70% of the HPPL Parties' and Gina's costs of and incidental to the applications pursuant to the chamber summons served by the HPPL Parties on 25 July 2023 as amended on 29 August 2023 and the chamber summons served by Gina on 27 July 2023, including reserved costs, to be taxed if not agreed. Any such taxation of costs is to be undertaken:
(a)without reference to the limits provided for in Table B at cl 18 of the Legal Practitioners (Supreme and District Courts) (Contentious Business) Determination 2022 (2022 Scale);
(b)without reference to the maximum hourly and daily rates and the daily rates provided for solicitors (senior, junior and restricted), clerks and paralegals, counsel and senior counsel in Table A at cl 16 of the 2022 Scale; and
(c)including reasonable allowances for work undertaken by multiple counsel and senior counsel.
(2)There be no order as to the costs of and incidental to the hearings on 11 and 24 October 2023.

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

CB
Associate to the Hon Justice Whitby

3 NOVEMBER 2023