Commissioner of Australian Federal Police v Xin; Tara Global Pty Ltd v The Official Trustee in Bankruptcy

The application for a stay of proceedings

1. A party who or which invokes the jurisdiction of a court has a prima facie right to insist that the court exercise its jurisdiction to hear and determine the matter. [13] However, there is a statutory power for all courts to stay any proceedings before the court, either permanently or until a specified day: CPA s 67. This Court also has inherent power to stay proceedings which are an abuse of process: Walton v Gardiner (1993) 177 CLR 378; [1993] HCA 77 ("Walton"); Jago v District Court of NSW (1989) 168 CLR 23; [1989] HCA 46. [14]
2. Presently, the Commissioner seeks a stay of the proceedings brought by the amended negligence motion until forfeiture orders are made or the POCA proceedings are otherwise resolved. The Official Trustee seeks a similar order with respect to the negligence proceedings.
3. There are two bases upon which these orders are sought, and I am here paraphrasing, if not recasting and simplifying, the arguments. First, it is submitted that making orders in the negligence proceedings would be futile until there is a resolution of the application for forfeiture of the King Street property. Secondly, it is submitted that to maintain both sets of negligence proceedings is an abuse of process in the sense that there is a duplication of both the particulars of the allegation of negligence and the relief sought.

Abuse of process and the general right of litigants to access the courts for resolution of its claim

1. The notion of an "abuse of process" is applied in a variety of circumstances and there is no exhaustive definition because the categories of abuse of process is not closed. At a basic level, an abuse of process occurs when a court's process is used for an improper purpose or in circumstances where it is not capable of achieving the purpose it was intended to serve, that is, where processes which exist to "administer justice with fairness and impartiality" are converted into "instruments of injustice or unfairness": Walton at 393 per Mason CJ, Deane and Dawson JJ.
2. In Rogers v The Queen (1994) 181 CLR 251; [1994] HCA 42, McHugh J summarised the categories of abuse as follows (at 286): "Inherent in every court of justice is the power to prevent its procedures being abused. Although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories: (1) the court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court's procedures would bring the administration of justice into disrepute. Many, perhaps the majority of, cases of abuse of procedure arise from the institution of proceedings. But any procedural step in the course of proceedings that have been properly instituted is capable of being an abuse of the court's process."
3. This analysis has been approved and adopted on many occasions: see, for example, Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48 at [89] per Gummow ACJ, Hayne, Crennan and Bell JJ; Batistatos v Roads and Traffic Authority of NSW (2006) 226 CLR 256; [2006] HCA 27 ("Batistatos") at [15] per Gleeson CJ, Gummow, Hayne and Crennan JJ; PNJ v The Queen [2009] HCA 6; (2009) 83 ALJR 384 at [3] per French CJ, Gummow, Hayne, Crennan and Kiefel JJ.
4. In GLJ v Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32; (2023) 97 ALJR 857 ("GLJ"), the High Court held that to enliven the power to grant a permanent stay requires a degree of "exceptionality". As Deane J explained in Re Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia [1987] HCA 27; (1987) 61 ALJR 393 at 399, there is "a basic element of the rule of law, namely, that every person and organisation, regardless of rank, condition or official standing, is 'amenable to the jurisdiction' of the courts".
5. In GLJ, Kiefel CJ, Gageler and Jagot JJ said at [17]-[18]: "The extreme step of the grant of a permanent stay of proceedings demands recognition that the questions whether a trial will be necessarily unfair or so unfairly and unjustifiably oppressive as to constitute an abuse of process each admit of but one uniquely right answer. As Leeming JA observed in Moubarak by his tutor Coorey v Holt, while the 'distinction between a trial being necessarily unfair and a trial which is so unfairly and unjustifiably oppressive as to constitute an abuse of process is no doubt a fine one', the distinction exists and was the ratio in Walton v Gardiner and the extant test for abuse of process when s 6A of the Limitation Act was enacted. Every case in which a fair trial cannot be held will also involve such unfairness to or oppression of a defendant as to constitute an abuse of process. But such unfairness to or oppression of a defendant as to constitute an abuse of process may exist even if a fair trial can be held. In both cases, while the answer to each question involves an evaluative process, the law tolerates but one correct answer. … A trial which will be necessarily unfair or which acts as an instrument of unfairness and oppression to a defendant cannot yield a legitimate verdict within that system and thereby the holding of the trial and rendering of a verdict will bring the administration of justice into disrepute. The doctrine of abuse of process is one element in a court's armoury to protect the administration of justice, but it is to be understood as a measure of last resort to be exercised only in exceptional circumstances."

Duplication of proceedings and the regulation and control of the Court's process

1. However, granting a stay of proceedings is not confined to the kind of abuse of process that warrants an order for a permanent stay of proceedings. Section 67 of the CPA is of sufficient breadth to provide a means by which a court can regulate its own process. As the Commissioner submitted in oral submissions by reference to the decision in GLJ (particularly at [24]): "It is an instructive judgment, because the High Court has in that judgment given close attention to s 67, reinforcing it as a broad power that your Honour, as a judicial officer, has the discretion to regulate your processes and manage cases before you in accordance with the objects of the Civil Procedure Act." [17]
2. The "power to order a stay provided by s 67 of the CPA is available as a tool to resolve the problem presented by multiple proceedings": Wigmans v AMP Ltd (2021) 270 CLR 623; [2021] HCA 7 ("Wigmans") at [14] per Kiefel CJ and Keane J. The power overlaps with the Court's inherent power to stay a proceeding to prevent abuse of its processes, which extends to staying proceedings that are frivolous, vexatious or oppressive: Wigmans at [72] per Gageler, Gordon and Edelman JJ.
3. Kermani v Westpac Banking Corporation (2012) 36 VR 130; [2012] VSCA 42 ("Kermani") at [97] per Robson AJA (Neave and Harper JJA agreeing) (references and footnotes omitted): "… (9) It is prima facie vexatious to bring two extant civil actions where one will lie. (10) This prima facie rule applies whether or not the two proceedings are in separate courts or one. (11) The prima facie rule applies where the issues overlap or significantly overlap or there is a similarity of subject matters of the proceedings. (12) The fact that the parties may not be identical, or the relief different, does not necessarily disentitle relief under this principle. (13) In considering whether the rule should apply, the court should consider whether there was no reasonable justification for the second proceeding based on legitimate considerations of convenience, cost or the like."
4. In Moore and Others v Inglis (1976) 9 ALR 509; (1976) 50 ALJR 589 Mason J (as he then was, and sitting as a single judge of the High Court) stayed proceedings because the plaintiff had already instituted proceedings in another court on the same subject matter. The plaintiff commenced proceedings in the Supreme Court of the Australian Capital Territory seeking damages arising from an alleged conspiracy. While those proceedings were pending, the plaintiff commenced proceedings in the original jurisdiction of the High Court alleging the same conspiracy formulated differently. The two proceedings were extant and neither had been determined. Mason J noted that if a proper case were made out, the Supreme Court proceeding could be amended to add or remove parties. His Honour said (at 515): "Although I acknowledge that the plaintiff may not secure all the amendments which she desires it is neither just nor fair that she should, after commencing one action which is about to come to issue on the pleadings, bring another action on the same subject matter, making minor alterations only to the substantive allegations and to the parties. She must make up her mind once and for all as to how she is going to present her case."

The power to stay under the POC Act

1. The Commissioner relies on s 319 of the POC Act which provides in sub-s (1): "A court may stay proceedings (the POCA proceedings) under this Act that are not criminal proceedings if the court considers that it is in the interests of justice to do so."
2. For the sake of the argument, and based on the authorities cited by the Commissioner, I accept that the section is broad enough to encompass the amended negligence motion. However, based on a consideration of the terms of the section and the surrounding sections, it is primarily concerned with the primary POCA proceedings, that is the proceedings commenced by the Commissioner seeking (ultimately) forfeiture of the identified property.
3. None of the matters referred to in sub-s 319(2), which prohibits the granting of a stay in certain circumstances, arise in the present case.
4. In determining whether a stay of the POCA proceedings is in the interests of justice, the Court must have regard to the following matters set out in s 319(6): 1. The POCA proceedings should proceed as expeditiously as possible; 2. The cost and inconvenience to the Commonwealth of retaining property to which the POCA proceeding relates and being unable to expeditiously realise its proceeds; 3. The risk of a proceeds of crime authority suffering any prejudice (whether general or specific) in relation to the conduct of the POCA proceedings if the proceedings were stayed; 4. Whether any prejudice that a person (other than a proceeds of crime authority) would suffer if the POCA proceedings were not stayed may be addressed by the court by means other than a stay of the proceedings; and 5. Any order (other than an order for the stay of the POCA proceedings) that the court could make to address any prejudice that a person (other than a proceeds of crime authority) would suffer if the proceedings were not stayed.
5. The Commissioner submitted, and I accept, that s 319 does not preclude the Court from considering other matters that the Court considers to be relevant and does not otherwise interfere with the power of the Court to stay the POCA proceedings so as to prevent an abuse of process.
6. During the hearing Senior Counsel for Tara Global accepted that s 319: "… gives the power but the scheme of 319 is to make it more difficult than normal to stay anything in POCA proceedings. So normally it would be Tara Global or Mr Xin or someone like that seeking to stay where all the injunctions will work against him, but in this unusual instance where it's the Commissioner seeking a stay, then the same presumption against granting a stay applies to the Commissioner as it applies to anybody else, mandatory considerations." [19]

Determination of the application for a stay in the present case

1. I do not accept that the amended negligence motion, or the negligence proceedings, should be subject to a conditional stay of proceedings based on the argument that any such proceedings (or any award of damages arising therefrom) might ultimately be, or is, subject to restraining orders. I accept that this is a possible outcome, but I do not accept the premise (to say the quiet part of the submission out loud) that forfeiture is inevitable. I have insufficient evidence to come to such a conclusion. Staying the proceedings on this basis has a capacity to prejudice Tara Global (and the other defendants who may be impacted) because it will put those proceedings on hold while the primary POCA proceedings make their way towards the final hearing as to forfeiture.
2. However, there is little or no utility in allowing the amended negligence motion or the negligence proceedings to be determined in advance of the substantive proceedings while there is a real prospect that any such cause of action, or any damages that may flow, may be subject to forfeiture.
3. The conclusion stated in the last paragraph is subject to an exception concerning the orders sought in relation to possible action by Perpetual to exercise its right to sale under the mortgage.
4. On the other hand, I accept the Commissioner's submission that "[t]here is substantial overlap between the Amended Negligence motion and the Negligence Proceeding both in terms of the allegations made against the Official Trustee and in the relief sought." While the Commissioner does not go so far as to argue that the maintenance of two sets of proceedings is an abuse of process, that does not determine the appropriateness of a stay of proceedings based on such duplication. I am satisfied that, subject to appropriate orders designed to protect Tara Global's position by allowing it to amend its statement of claim, the amended negligence motion should be stayed pending the outcome of both the substantive POCA proceedings and the substantive negligence proceedings.
5. Accordingly, subject to fashioning orders that protect Tara Global's position, and based on the duplication of the proceedings, I will make an order staying the proceedings on the amended negligence motion.
6. Conversely, I do not accept that it is in the interests of justice to make any order staying the proceedings brought by the separate negligence proceedings. However, I generally accept the Commissioner's submission that those proceedings should not proceed in advance of the substantive POCA proceedings and determination of the question of forfeiture. Even so, Tara Global should be permitted to continue to prepare its negligence case for hearing and take such interlocutory steps as may be appropriate to ensure its cause of action is determined as expeditiously as possible.

Adjournment and ordering that the proceedings be heard together.

1. In the alternative to a temporary or conditional stay, the Commissioner and the Official Trustee sought an order adjourning the amended negligence motion and/or the negligence proceedings until the forfeiture hearing.
2. The Court has both an inherent power and a specific statutory power to adjourn the hearing of proceedings if it is appropriate to do so "in order to do justice between the parties". [20] The exercise of such a power must accord with the overarching purpose of the CPA (s 56) to facilitate the just, quick and cheap resolution of the real issues, in line with the dictates of justice (s 58) and the need to eliminate delays (s 59).
3. In Sali v SPC Ltd [1993] HCA 47; (1993) 67 ALJR 841, the majority of the High Court observed at 844: "In determining whether to grant an adjournment, the judge of a busy court is entitled to consider the effect of an adjournment on court resources and the competing claims by litigants in other cases awaiting hearing in the court as well as the interests of the parties … What might be perceived as an injustice to a party when considered only in the context of an action between parties may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of court resources."
4. I am satisfied in the circumstances of the present case that it is appropriate to order that the negligence proceedings be heard together with the substantive POCA (forfeiture) proceedings and that the proceedings be adjourned to allow that to occur. However, there will be a potential carve out of that part of the proceedings whereby Tara Global may seek injunctive relief to prevent the sale of the property by Perpetual. At this stage, while Perpetual's application for its interest in the King Street property to be excluded from the restraining orders is outstanding, that is a moot point. However, any orders I make at this stage must acknowledge, and preserve, Tara Global's interest and right to bring such a motion and to do so before the final resolution of the substantive proceedings.

Differences between the amended negligence motion and the negligence proceedings and orders calculated to protect the interests of Tara Global

1. I have already indicated my conclusion that it is not in the interests of justice that both the amended negligence motion and the negligence proceedings remain on foot, and that a conditional stay of the former is appropriate. However, in deference to the submissions made on behalf of Tara Global, I should set out the extent to which the proceedings overlap and the differences that exist between them. That analysis will inform any orders that should be made to protect Tara Global's interests.
2. It was Tara Global's position, as conveyed by Senior Counsel for the Commissioner and the Official Trustee at the hearing, that Tara Global seeks to maintain both sets of proceedings because different relief is sought in each. That is conveyed in the following exchange: "HIS HONOUR: You will have to forgive me if I ask questions that might be considered naive, but is the substance of the notice of motion for declarations of negligence, in essence, the same at least factually, if not legally, as the statement of claim in negligence? That is the failure to, if you like, maintain the property by making interest payments? MOSES: We submit, it is. It is a matter that our friends from Perpetual have raised in their submissions. I have raised briefly with my friend this morning the utility of that motion in light of the statement of claim that has been filed… to answer your Honour's question directly, it is the same factual assertions underpinning-- HIS HONOUR: It is more complicated than failing to maintain the mortgage repayments? MOSES: That's correct, that is the essence of the allegation." [21]
3. The amended negligence motion seeks two additional orders beyond an award of damages. The motion seeks an order preventing Perpetual from selling the King Street property and an order that the property be returned to the custody and control of Tara Global (although this contention is made with certain caveats and seems on its face an optimistic application in the circumstances). The restraining order is extremely significant for Tara Global because, as it was put by Senior Counsel, if "[i]t loses its property, it can never get that back, it's just gone." [22]
4. Any orders made should give Tara Global the opportunity to amend the statement of claim in the negligence proceedings to seek such additional relief.

The application by Tara Global for injunctive relief against Perpetual

1. An important issue for Tara Global (and those with an interest in that company) is its application for injunctive relief against Perpetual. That application is raised in Prayer 5 of the amended negligence motion and seeks to restrain Perpetual from selling the King Street property.
2. On 1 March 2023 Perpetual issued a notice on Tara Global under s 57(2)(b) of the RPA which provides: 57 Procedure on default … (2) A registered mortgagee, chargee or covenant chargee may, subject to this Act, exercise the powers conferred by section 58 if - … b) where - (i) the default relates to that payment, or (ii) in the case of a mortgage, the default does not relate to that payment and notice or lapse of time has not been dispensed with under section 58A, a written notice that complies with subsection (3) has been served on the mortgagor, charger or covenant charger in the manner authorised by section 170 of the Conveyancing Act 1919.
3. Section 58(1) of the RPA confers the power to sell land subject to a mortgage, or any part thereof, "where a mortgagee, chargee or covenant chargee is authorised by s 57(2) to exercise the powers conferred by this section".
4. The amended negligence motion seeks to restrain Perpetual from taking any steps to enforce the notice issued under s 57(2)(b) or any future notices it may issue. However, as I have said, no such order is sought in the amended statement of claim. This results in the potential for injustice if the amended negligence motion is stayed. However, I can see no reason why an amendment could not be made to the initiating process or, alternatively, that urgent injunctive relief could not be sought by notice of motion in the negligence proceedings.
5. Accordingly, to prevent prejudice to Tara Global - who I understand brought the separate proceedings after comments or orders made by another Judge of this Division - the stay will be conditional upon it having leave to amend its statement of claim or to bring an application for injunctive relief of the kind sought in the amended negligence motion.
6. Whether Tara Global would be likely to succeed in obtaining emergency injunctive relief will depend upon whether it could establish that: 1. There is a serious question to be tried as to their entitlement to relief; 2. They are likely to suffer injury for which damages would not be an adequate remedy; and 3. The balance of convenience favours the granting of an injunction. [23]

Delays in the proceedings

1. The restraining and control orders were made in January and February of 2023. One of the mandatory considerations under s 319 of the POC Act is that the proceedings be dealt with as expeditiously as possible. From what I was told at the hearing, there is no suggestion on Tara Global's part of any "dragging [of the] heels" on the part of the Commissioner and "multiple examinations" have been conducted in accordance with the orders made last year and under the POC Act.
2. However, while not directly contradicting the Commissioner's submissions, Senior Counsel for Tara Global did express concerns at the hearing that the POCA proceedings may take "many years … for all these examinations to take place" and noted that the Commissioner had explained "how slow things are going and how they're going to be slow and are necessarily slow".
3. There has been some delay in the delivery of this judgment, although I note Senior Counsel on behalf of the Commissioner indicated "there is no, for our part, urgency". [26] I also understand that judgment on Perpetual's application that its interest in the King Street property be excluded from the restraining order has been reserved for some time. While delay is perhaps inevitable when dealing with proceedings as complex as the present, which concerns 20 named defendants and assets valued at over $200 million, I will simply note my expectation that the proceedings will be conducted expeditiously in order to resolve the property rights of those impacted by the restraining orders. I make no formal orders in this regard but simply put my thoughts on the record lest it becomes an issue between the parties as the matter progresses.

Orders

1. For the forgoing reasons, I make the following orders: 1. The notice of motion brought by Tara Global Pty Ltd on 3 July 2023 and amended on 15 October 2023 in proceedings 2023/32255 is stayed on the following conditions: 1. Tara Global Pty Ltd shall have leave to amend its statement of claim in proceedings 2023/263865 in accordance with this judgment including (but not limited to) by adding the Commissioner of the Australian Federal Police as a defendant to those proceedings. 2. The staying of the proceedings does not prevent Tara Global Pty Ltd from seeking injunctive relief in accordance with its notice of motion but should do so in proceedings 2023/263865. 3. Such stay to remain in force until resolution of proceedings 2023/32255 and 2023/263865. 1. The application to stay proceedings 2023/263865 is dismissed. 2. Any amendment to the statement of claim in proceedings 2023/263865 is to be filed and served on or before Friday 9 August 2024. 3. Proceedings 2023/263865 shall be joined with proceedings 2023/32255 and are to be heard together. 4. Each of those proceedings is adjourned for mention and case management before the Registrar on Monday 12 August 2024. 5. Costs of each of the notices of motion are reserved to the trial Judge.

Costs

1. I have not heard argument as to the appropriate costs order. However, each party has had some success and I have not accepted the Commissioner's principal submission that both sets of negligence proceedings should be stayed until the forfeiture proceedings are finalised or its assertion that Tara Global was engaging in an exercise of "Alice in Wonderland statutory construction." [27]
2. The parties will have 14 days to approach my Associate if they seek to argue that some other costs order should be made. Otherwise, the order will be as per order (6) above.

Endnotes

1. Commissioner's written submissions at paragraph [3.12] Tara Global's written submissions at [7].
2. Tcpt (28/2/24) p 9.
3. This history is derived from affidavits of Caitlin Julia Muddle, a solicitor in the employ of the AFP and Donald Junn, the solicitor for Tara Global. There are perhaps minor inconsistencies as to the history and these are not capable of resolution on the evidence before the Court. However, they are not of significance to the present issues.
4. Affidavit of Donald Junn, at [7].
5. Tcpt 28/2/24 p 6.
6. See, for example, New South Wales Bar Association v Stevens [2003] NSWCA 95 at [83] per Spigelman CJ (Meagher and Sheller JJA agreeing). The Court's inherent jurisdiction is expressly preserved by s 5(1) of the Civil Procedure Act 2005 (NSW).
7. Ruzehaji v Commissioner of the Australian Federal Police (2015) 124 SASR 355; [2015] SASCFC 182 at [19], [56]-[59] per Gray J (Peek and Nicholson JJ agreeing) and Onley v Commissioner of Australian Federal Police [2019] NSWCA 101; (2019) 277 A Crim R 200 at [333], [339], [342]-[345] and [348] per Basten JA (Meagher JA agreeing).
8. Commissioner of Australian Federal Police v Zhao (2015) 255 CLR 46; [2015] HCA 5 at [30] per French CJ, Hayne, Kiefel, Bell and Keane JJ.
9. Commissioner of Australian Federal Police v Zhao (2015) 255 CLR 46; [2015] HCA 5 at [36] per French CJ, Hayne, Kiefel, Bell and Keane JJ.
10. Tcpt (28/2/24) pp 13-14.
11. Tcpt (28/2/24) p 33.
12. Tcpt (28/2/24) pp 33-34.
13. Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 241 per Deane J; [1988] HCA 32; Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 554 per Mason CJ, Deane, Dawson and Gaudron JJ; [1990] HCA 55; Rozenblit v Vainer (2018) 262 CLR 478; [2018] HCA 23 at [10] per Kiefel CJ and Bell J.
14. See also Gore v Van der Lann [1967] 2 QB 31; [1967] 1 All ER 360 and Moti v The Queen (2011) 245 CLR 456; [2011] HCA 50 at [10] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ.
15. See, for example, Johnson v Gore Wood & Co [2002] 2 AC 1; [2001] 1 All ER 481 cited with approval in Livingstone v Mitchell [2020] NSWSC 1464 at [68] per Adamson J.
16. Walton v Gardiner (1993) 177 CLR 378; [1993] HCA 77 at 392 per Mason CJ, Deane and Dawson JJ; Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231 at [79] per McColl JA (Giles and Campbell JJA agreeing); Toben v Nationwide News Pty Ltd (2016) 93 NSWLR 639; [2016] NSWCA 296 at [97] per Ward JA (Payne and Meagher JJA agreeing) citing Williams v Spautz (1992) 174 CLR 509 at 529 per Mason CJ, Dawson, Toohey and McHugh JJ; [1992] HCA 34.