EMANUEL MANAGEMENT (IN LIQ) & ORS v FOSTERS & ORS No. SCGRG-98-411 Judgment No. S68 [1999] SASC 68

There are two groups of defendants. The first group of defendants are companies which formerly were part of the Elders Group of Companies. All of those companies were later the subject of a takeover by the Fosters Group of Companies. I will refer to all of these companies as "the Fosters companies". Four of those companies lent money to companies in the Emanuel Group. I will refer to them as the "Fosters finance companies". The remaining two defendants in this first group are individuals, Messrs O'Grady and Crosby, who were at different times directors of some or all of the companies. I will call them collectively "the Fosters directors". I will collectively refer to all of the first group of defendants as the "Fosters defendants".

The second group of defendants is the accounting firm Coopers & Lybrand and two of its partners, Messrs Anderson and Cuming. I will refer to them collectively as "the Coopers defendants". The Fosters defendants and the Coopers defendants have both made applications to transfer the action to the Supreme Court of Queensland.

The Statement of Claim is divided into six parts. Part 1 is introductory. Parts 2, 3 and 4 deal with claims against the Fosters defendants. Part 5 deals with the claim against the Coopers defendants. Part 6 contains the prayers for relief. I will in a moment summarise the respective claims. I emphasise that it is a very broad summary for the purposes only of providing an overview. I acknowledge that the broad nature of the summary results in some inaccuracies in detail. It is convenient to begin with the claims in Parts 3 and 4 of the Statement of Claim.

The companies in the Emanuel Group were at all relevant times under the control of Mr Guiseppe Emanunele. The Group was engaged in the business of acquiring and developing real estate. In 1987 companies in the Group acquired large tracts of land in broadacre form to the north of Brisbane. In the pleadings this land is called "the Brisbane Northern Corridor". In order to acquire the land the Group borrowed $43 million from the Fosters finance companies, all of which were then in the Elders Group of Companies. The loan was made in June 1987 and was secured by mortgages, debentures and guarantees in favour of the Fosters finance companies. Between September 1988 and November 1993 the loan agreement was varied from time to time. Further monies were lent to companies in the Emanuel Group. The plaintiffs allege that the loans were made for the purposes, among others, of paying interest to the Fosters finance companies, to repay mortgages to persons other than the Fosters finance companies, and to pay fees to the Fosters finance companies. Eventually, the Emanuel Group defaulted in its obligations under the loan agreement and variations thereof. The parties dispute when the default began. The plaintiffs say that the default began in 1987 and thereafter the Fosters finance companies, or some of them, threatened to realise the securities for the loans.

In March 1992 twenty seven of the plaintiff companies executed a document called "a deed of cross-collateralisation" with certain of the Fosters finance companies. The effect of the deed was to make available to the Fosters finance companies all of the securities which had been given by the 27 plaintiff companies for the indebtedness of any other of the companies.

On 11 March 1993 a document called "a deed of orderly realisation of securities" ("DOOR") was executed between the same 27 of the plaintiffs and the Fosters finance companies. By that deed, those plaintiffs acknowledged that they were in default on their loan agreements and that the Fosters finance companies were in a position to exercise their rights as mortgagees. For their part, the Fosters finance companies allowed a period of grace during which the relevant companies in the Emanuel Group would proceed to sell and realise their assets in discharge of the liability to the Fosters finance companies. The companies in the Emanuel Group sold some, but not all, of their assets.

On 1 December 1994 the Fosters finance companies demanded from those same 27 plaintiffs payment forthwith of the sum of $181,645,881.21 together with interest. The demand was made pursuant to a clause in the DOOR agreement. The demand was not satisfied. On 20 December 1994 the Fosters finance companies issued a writ claiming the sum of $186,880,302.71. Defences were filed. The Fosters finance companies applied for summary judgment and on 27 February 1995 judgment was entered in the sum claimed. The judgment debt included the judgment debts arising under the initial loan agreement made in June 1987 and the subsequent variations thereof. I will refer to the judgment as "the Queensland judgment".

In Part 3 of the Statement of Claim, the plaintiffs seek to set aside all of the transactions made between the 27 plaintiffs in the Emanuel Group and the Fosters finance companies in the period 1988 to 1994. The plaintiffs claim that the transactions were entered into at a time when the 27 plaintiffs were insolvent, that the Fosters finance companies and the Fosters directors knew or had reasonable grounds to suspect that the transactions were entered into to enable the 27 plaintiffs to trade when they were insolvent and were made for the purpose of benefiting the Fosters finance companies and to give them an improper priority. The plaintiffs claim to set aside the transactions on a number of grounds including unconscionability, undue influence, breaches of fiduciary and statutory duties by the directors of the Emanuel Group which breaches are alleged to have been known to and acquiesced in by the Fosters finance companies, breaches of fiduciary duties by the Fosters directors as de facto directors of the 27 plaintiffs, and fraud on the part of the directors. The liquidator also claims to recover pursuant to certain grounds under the Companies Code and the Corporations Law. Alternatively, the plaintiffs seek to set aside the 1988 to 1994 transactions on the ground that they are fraudulent and are voidable on other grounds.

In Part 4 of the Statement of Claim, the plaintiffs seek to set aside an arrangement which they allege was made between July 1993 and March 1995 which they call the "1995 scheme". The plaintiffs allege that an agreement or understanding was put in place between Mr Guiseppe Emanuele and his son Rocco, certain solicitors, and the Fosters finance companies by which, among other things, the lands in the Brisbane Northern Corridor and other assets of the Emanuel Group would be transferred to the Fosters finance companies, that an amount of $186,880,302.71 would be fixed as the amount due by the Emanuel Group to the Fosters finance companies and that debt would be supported by a judgment, thus giving the Fosters finance companies sufficient voting power to control meetings of creditors of the Emanuel Group and of Mr Guiseppe Emanuele. The plaintiffs also allege that, in consideration of the foregoing, the Fosters finance companies would pay $4.6 million to the nominee for Mr Guiseppe Emanuele; would permit several parcels of land held by members of the Emanuele family and subject to charges in favour of the Fosters finance companies to be transferred to the nominees of Mr Guiseppe Emanuele for $1.3 million which sum would be deducted from the sum of $4.6 million; that a sum of money would be made available for distribution among creditors of the Emanuel Group; and that certain fees would be paid to the solicitors for the Emanuel Group. The plaintiffs allege that the 1995 scheme was put into effect. They further allege that, among other things, a deed called "DOFR" gave effect to the understanding and other issues. The obtaining of the Queensland judgment in the sum of $186,880,302.71 is alleged to have been effected as part of the 1995 scheme. The plaintiffs say that the 1995 scheme was conceived and created for unlawful and improper purposes and that it was the result of collusion between companies in the Emanuel Group and their directors, the Fosters finance companies and the Fosters directors. The plaintiffs seek to set aside the 1995 scheme on grounds including duress, unconscionability, undue influence, breaches of fiduciary and statutory duties and on grounds available to them pursuant to s1317HD of the Corporations Law and s588FF of the Corporations Law.

The claim in Part 2 of the Statement of Claim concerns an issue by Emanuel Management Pty Ltd of A and B class preference shares made on 17 August 1983 to the second defendant, EFG Finance Ltd ("EFG"). Dividends were paid on those shares in each of the years 1984 to 1991. The plaintiffs allege that there were no profits or insufficient profits to permit payment of the dividends and that the payment was thereby wrong. In 1990 EFG requested redemption of the shares and the shares were redeemed in a total sum of $22,301,136.00. The plaintiffs allege that the redemption was in breach of the Articles of Emanuel Management, in breach of the Companies Code and made at a time when Emanuel Management was insolvent. They allege that they are entitled to restitution both for the dividends paid and the amount paid on redemption on the grounds that the payment of dividends and the redemption were made as a result of unconscionable demands by the Fosters companies, that the Fosters companies knew or ought to have known that Emanuel Management had not generated profits out of which the dividends and redemption could be paid, that the Fosters companies knew that the directors of Emanuel Management were acting in breach of their duties as directors, and that the payment of the dividends and the redemption were made for the purpose of improperly giving the Fosters companies a priority ahead of other creditors of Emanuel Management and of other companies in the Emanuel Group. The plaintiffs seek orders declaring that the Fosters companies hold the monies paid as dividends and on the redemption of the shares as constructive trustees and seek the sum of $17,862,269.00 paid as dividends and the sum of $22,301,136.00 paid to redeem the shares be paid to Emanuel Management and the companies in the Emanuel Group. Other orders are also sought for the purpose of recovering the monies paid as dividends or to redeem the shares.

Part 5 of the Statement of Claim contains the plaintiffs' claim against Coopers & Lybrand and its partners Messrs Anderson and Cuming. Between 1984 and 1985 Coopers & Lybrand had been retained by the Emanuel Group for various purposes. There is a dispute as to the terms of the retainer. It is, however, admitted that Coopers & Lybrand was retained as the tax agent for the Group, that it provided tax and accounting advice, that it audited the accounts of the Emanuel Group and that Mr Cuming was appointed liquidator of a number of companies in the Emanuel Group which, for convenience, are called "the Cuming companies". The plaintiffs allege that Coopers & Lybrand failed to state that Emanuel Management and the Emanuel Group were insolvent and wrongfully treated the preference shares and payment of dividends in the financial statements of Emanuel Management for the financial years 1984 to 1991. They further allege that Mr Anderson and Coopers & Lybrand knowingly assisted in the payment of dividends on the preference shares when they knew that Emanuel Management was insolvent and that they knowingly aided and abetted the Emanuel directors in acting in breach of their fiduciary and statutory duties as directors in paying the dividend. In addition, they allege that Mr Cuming failed properly to perform his duties as liquidator of the Cuming companies. They claim that Coopers & Lybrand and Mr Anderson are liable to Emanuel Management for the monies wrongfully paid as dividends on several grounds which include a liability as constructive trustee, equitable damages or for breaches of their statutory or contractual duties to Emanuel Management. They also claim that Mr Cuming acted in breach of his duties as liquidator of the Cuming companies, that that breach caused loss to those companies, and that the plaintiffs are entitles to orders that Mr Cuming pay to them an amount equal to the loss sustained by those companies.

Central to the application of the Fosters defendants to transfer the action to the Supreme Court of Queensland is the Queensland judgment obtained by the Fosters companies on 27 February 1995 in the sum of $180,880,302.71. Mr Wells QC, who appeared for the Fosters defendants, submitted that the proper adjudication of the issues in this action required a court to go behind the Queensland judgment and determine whether it had been properly entered. The only proper court to do that, he said, was the Supreme Court of Queensland.

The provisions of s118 of the Constitution and s185 of the Evidence Act 1995 (Cth) require this court to recognise and to give full faith and credit to the Queensland judgment: see also Harris v Harris [1947] VicLawRp 6; [1947] VLR 44. This court has undoubted jurisdiction to hear this action.

There is no plea in the Statement of Claim which seeks to set aside the Queensland judgment or seeks to go behind it or otherwise call it into question. However, the claims made in respect of the preference shares and the 1988-1994 transactions both raise issues which directly touch upon the judgment. The claim in Part 2 for restitution of the monies paid by members of the Emanuel Group as dividends or to redeem the preference shares includes a claim in para 115.3 of the Statement of Claim for restitution, among other things, of

"that component of the judgment debt that represents the aggregate of monies lent for payment as dividends and redemption".

In their Defence, the Fosters defendants rely on the judgment and in para 115(b) plead:

"that unless and until the judgment is set aside the plea is barred as res judicata, by issue estoppel under the principle in Port of Melbourne Authority v Anshun Pty Ltd ("Anshun") or as an abuse of process".

The claim to recover the aggregate amount lent to pay dividends and to redeem the preference shares is for the amount in excess of $40 million. It plainly represents a substantial part of the judgment debt. Although the plaintiffs do not directly attack the judgment, the proper adjudication of the claim requires the court to determine issues which could have been relied upon as a defence to the claim by the Fosters finance companies for the amount for which the Queensland judgment was ultimately entered. If the plea in para 115 is not upheld and the plaintiffs otherwise succeed, the court will be pronouncing a judgment which will affect the enforcability of the Queensland judgment.

The claim in Part 2 in respect of the preference shares also includes pleas that both the directors of the Emanuel companies and the Fosters directors, as de facto directors of the Emanuel companies, acted in breach of their fiduciary and statutory duties: see paras 121 and 123 of the Statement of Claim. It is then pleaded that, in consequence of those breaches of duty, the Emanuel companies suffered loss and the Fosters finance companies unlawfully profited in that a substantial debt accrued to the Fosters finance companies which then obtained judgment for that debt: see paras 125 and 126 of the Statement of Claim. The Fosters defendants again rely on the judgment and say that any claim to recover interest or to recover as profits amounts comprised in the judgment is barred by res judicata, issue estoppel, by the principle in Anshun, or as an abuse of process: see paras 125(c) and 126(c). Here again, the proper adjudication of the claim requires the court to consider questions which could have been relied upon as a defence to the claim by the Fosters finance companies, which culminated in the Queensland judgment. Furthermore, if the plaintiffs succeed, the court will be pronouncing a judgment which will affect the enforcability of the Queensland judgment.

The claims in Part 3 in respect of the 1984 to 1994 transactions include a claim in para 213 of the Statement of Claim that the transactions are voidable pursuant to s588FE(6) of the Corporations Law. The liquidator claims, among other things, the monies paid on account of profit fees, interest and monies repaid to the Fosters finance companies in respect of further advances made between 1988 and 1994. One of the answers of the Fosters defendants is to plead the judgment debt. The plea in para 213A(c) is that

"by virtue of the judgment each of the claims is barred as res judicata, or alternatively, by virtue of an issue estoppel, or by virtue of the principle in Anshun or as an abuse of process."

The advances made between 1988 and 1994 constitute a substantial portion of the judgment debt. Again, although the plaintiffs are not directly seeking to challenge the judgment, they are clearly attacking it in an indirect way. This part of the claim seeks compensation for what are said, among other things, to be unconscionable dealings which gave rise to the ultimate indebtedness of 27 of the plaintiff companies to the Fosters finance companies. Again, the grounds now relied upon could have been raised as defences to the claim by the Fosters finance companies.

The claims in Part 4 in respect of the 1995 scheme include an allegation in para 258 that the combination of the entry of the judgment debt, the acknowledgment of the debts, and the general releases pursuant to the DOFR agreement caused loss to the Emanuel Group and that, in consequence, the Emanuel Group or one of its members

"258.1 lost the opportunity to require and obtain an accounting and justification of the debts that comprise the judgment debt;

258.2 was impeded by the releases from pursuing the claims alleged in Parts 2 and 3 herein in a timely fashion, and thus exposed to pleas based upon statutory limitation periods;

258.3 further or alternatively was impeded or barred by contract from pursuing the claims in Parts 2 and 3 herein, and thereby lost the opportunity to pursue those claims."

To those claims the Fosters defendants plead, among other things, in para 258(c)(iii) that the plaintiff companies are estopped by the judgment from denying that they were each truly indebted to the Fosters finance companies in the amount of the judgment debt and in para 258(d)(v) say that the plaintiff companies are estopped by the judgment from asserting that they have any claims as alleged in Part 3 of the Statement of Claim. The Claims in respect of the 1995 scheme also include in para 261 an allegation that the implementation of the 1995 scheme caused the first 29 plaintiffs to suffer loss and expense by reason of several facts including the fact that they were impeded or barred from pursuing the claims alleged in Parts 2 and 3 of the Statement of Claim. To that, the defendants plead in para 261(g)(iii) of their Defence that those 29 plaintiffs "are estopped by the judgment from alleging that the judgment debt was not due and owing to the Elders Finance Group".

The plaintiffs' claims in respect to the 1995 scheme do not seek to go behind the Queensland judgment. The pleas in paras 258 and 261 of the Statement of Claim recognise the existence of the judgment debt and do not challenge it in any way. Instead, it is pleaded that the judgment caused the plaintiffs to suffer other losses. However, the effect of Part 4 of the Statement of Claim is to allege that two directors of the Emanuel Group, the Fosters directors and the Fosters finance companies conspired and colluded with others to put into place a scheme which was a fraud upon both the companies in the Emanuel Group and the creditors of those companies. It is alleged that part of that scheme involved the entry of judgment in favour of the Fosters finance companies. It pleads that, among other things, the judgment debt enabled the Fosters finance companies to control the voting at meetings of creditors of the first 29 plaintiffs. The obtaining of the Queensland judgment is alleged by the plaintiffs to be an integral part of the 1995 scheme. The court is required to make findings whether the parties conspired or colluded as alleged and whether the 1995 scheme included the obtaining of the judgment. The issues in this part of the claim are very material to the validity of the Queensland judgment. The proper determination of the issues concerning the 1995 scheme will require the court to examine questions of fact and law which would be very similar to the questions of fact and law which would be considered and examined on an application to set aside the Queensland judgment.

To summarise, each of the plaintiffs' claims against the Fosters defendants requires the determination of questions which could have been grounds of defence to the action in the Supreme Court of Queensland. The fact that these grounds were not relied upon plainly forms part of the case for the plaintiffs to set aside the 1995 scheme. That fact only serves to emphasise the extent to which the determination of these issues bears upon the validity of the Queensland judgment. Expressed another way, many, if not most, of the issues in the current proceedings will be issues which would be canvassed in an action to set aside the Queensland judgment. The only court which properly has jurisdiction to set aside the Queensland judgment is the Supreme Court of Queensland as the court which initially pronounced the judgment. While the Queensland judgment stands this court must give effect to it. That judgment stands in the way and presents a number of difficulties in the determination of some of the issues in this action. Any orders made in this action for damages and restitution would confront headlong the orders made in the Supreme Court of Queensland. Indeed, the orders in the Queensland judgment intrude so much into the determination of the issues in this action and, in particular, into the issues concerning DOFR, that it will be difficult to prosecute the action unless and until the Queensland judgment is set aside. If this court were to hear and determine this action and a later application is made in the Supreme Court of Queensland to set aside the Queensland judgment, the possibility might arise of what Dawson J described in Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21; (1988) 164 CLR 502 at 512 as "contradictory judgments which ought not be permitted save in special circumstances": see also Hubner v Australia & New Zealand Banking Group Limited (unreported, Federal Court of Australia, Beaumont J, 21 November 1997). The fundamental difficulty for the plaintiffs is that there is a risk of conflicting judgments if two superior courts separately hear and determine actions in which there are issues common to both actions.

Where the exercise of jurisdiction by this court is likely to involve a question whether an order of another superior court should be contradicted, or should be so dealt with that the result appears to be a contradiction of it, considerations of comity between courts and, indeed, of the ordinary exercise of courtesy in dealings by this court, necessarily require that this court should consider whether it is better to transfer the matter to the other court so as to give it the opportunity of considering whether its order ought to be insisted upon or whether it should be contradicted: Re McKean (unreported, Federal Court of Australia, Burchett J 16 April 1996). See also Re Sabri (1995) 60 FCR 131. In this action, the plaintiffs ask the court to decide certain questions of fact and law which will in all likelihood be agitated in an action to set aside the Queensland judgment. If the plaintiffs succeed, the orders of this court will have the appearance of contradicting the Queensland judgment.

As Burchett J pointed out in Re McKean, other considerations might arise in individual cases which will prevail over interests of comity. But, for the above reasons, I do not think they obtain in this case. The plaintiffs ultimately seek orders for monetary compensation. The claims to recover the aggregate amount lent to pay dividends and to redeem the preference shares and to recover monies paid on account of profit, fees, interest and monies repaid to the Fosters finance companies in respect of the further advances made between 1988 and 1994 will be measured in terms which directly mirror the claims determined in the Queensland action. In other words, the plaintiffs seek a judgment and orders from this court which will be contradictory of or at least which will appear to be contradictory of or inconsistent with the Queensland judgment. The interests of justice, as well as comity, require an order transferring this action to the Supreme Court of Queensland.

Mr Meagher QC submitted that there were two reasons why this court should not find it necessary in the interests of comity to transfer the action. He first submitted that the court is exercising an insolvency jurisdiction and can, therefore, go behind the Queensland judgment. It is, of course, well established that a court of insolvency can go behind a judgment for the purpose of determining whether there is a debt due to a petitioning creditor: see Wren v Mahoney [1972] HCA 5; (1972) 126 CLR 212 and the cases there cited. But there are two reasons why that principle does not apply in this case.

First, when determining the issues in this case, the court is not exercising an insolvency jurisdiction or exercising a jurisdiction which entitles it to go behind the Queensland judgment. Instead, this is an action to be determined by the court in the ordinary exercise of its jurisdiction in civil matters. The fact that the liquidator is a party and the action is brought by the other plaintiffs in the course of the winding up does not alter the nature of the action.

Secondly, the power of the insolvency court is exercised only in limited circumstances, namely, when the court is determining whether the judgment can be relied on by the petitioning creditor in support of the application for a sequestration order, or when a debtor relies upon the judgment as a set off when opposing an application for a sequestration order: Cameron v Cole [1944] HCA 5; (1944) 68 CLR 571. It must be noted also that, in the case of the winding-up of a company, the liquidator is not estopped by a judgment from considering the admissibility of a proof of debt arising out a judgment binding the company: Re Quatrovision Pty Ltd (In Liq) [1982] 1 NSWLR 95; Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332, 340 to 341, except where the judgment debt is a debt upon which the winding-up order was made: Direct Acceptance Investments Pty Ltd v Blackwell (1995) 17 ACSR 89. Where the liquidator rejects a proof of debt, the ordinary remedy of the person claiming to be admitted as a creditor is to apply to the court to reverse or modify the decision: Tanning Research Laboratories Inc v O'Brien (supra) at 340. The proceeding is an appeal by the creditor pursuant to s1321 of the Corporations Law which enables a person aggrieved by a decision of a liquidator to appeal to the court. Though called an appeal, the proceeding is an originating proceeding which the court hears de novo: Tanning Research Laboratories Inc v O'Brien at 341. If the liquidator rejects the proof by the Fosters defendants of the judgment debts, they will be at liberty to appeal against his decision by commencing proceedings in either the Supreme Court of Queensland or in this court. It is reasonable to expect that they will commence those proceedings in the Supreme Court of Queensland which will have jurisdiction to hear the appeal notwithstanding that the liquidator is in South Australia: s42 of the Corporations (South Australia) Act 1990 and s58AA(2) of the Corporations Law. If the proceedings were commenced in this court, considerations of comity would require the proceedings to be transferred to the Supreme Court of Queensland. Thus, however the matter is regarded, one continually returns to the necessity for proceedings to set aside the Queensland judgment.

Mr Meagher's second submission was that the Queensland judgment can be treated by the plaintiffs as a nullity so that there is no occasion for the application of comity as between this court and the Supreme Court of Queensland. A judgment obtained by fraud can only be set aside in separate proceedings: Huddersfield Banking Co Limited v Henry Lister & Son Ltd [1895] 2 Ch 273 and Jonesco v Beard [1930] AC 298. In those courts in which exists a rule similar to Rule 84.12 of the Rules of this court, it may be possible to avoid the necessity of a fresh action. Until it is set aside, the judgment stands. The only court which properly has jurisdiction to set aside the Queensland judgment is the Supreme Court of Queensland. In Cabassi v Vila [1940] HCA 41; (1940) 64 CLR 130 at 147 Williams J noted the observations of Willes J in R v Saddler's Co [1863] EngR 91; (1863) 10 HLC 404 at 431[1863] EngR 91; , 11 ER 1083 at 1093 to 1094 that a judgment obtained by a fraud could be treated as a nullity, though it had not been set aside or reversed and its nullity may be alleged in a collateral proceeding. But I do not understand Willes J to be excluding the necessity for at least collateral proceedings to set aside the judgment. Indeed, it would be absurd to suggest otherwise because it will require separate proceedings to prove the collusion. Mr Meagher's submission requires that the Queensland judgment is a nullity although it has not been set aside. The judgment will not be a nullity unless and until it is set aside. The submission, therefore, fails.

I acknowledge that an order transferring this action to the Supreme Court of Queensland will cause a good deal of difficulty to the liquidator. The liquidator's offices are in Adelaide and the administration and winding-up has been conducted from Adelaide. Extensive examination of the affairs of the Emanuel Group has been conducted by the liquidator in this court. Those examinations have involved 20 witnesses and some 6700 pages of transcript. The liquidator has prosecuted several actions in this court in the course of the winding-up. The records and documents relating to the affairs of the Emanuel Group are stored in Adelaide. There are approximately 75000 documents. They have been perused and recorded by the liquidator's staff in Adelaide. These are strong reasons why the liquidator should be able to prosecute the action in this court. But the risk of inconsistent judgments has the consequence that, in the interests of justice as well as comity between the courts in this federation, this action must be transferred to the Supreme Court of Queensland. This conclusion makes it unnecessary to examine the other arguments relied upon by the Fosters defendants.

Given that the application against the Coopers defendants has been consolidated with the action against the Fosters defendants, the application by the Coopers defendants to transfer this action to the Supreme Court of Queensland must also succeed. That conclusion is reinforced by the fact that the plaintiffs did not submit that that part of the action against the Coopers defendants should be heard separately from the actions against the Fosters defendants. For these reasons, I allow the application by the Coopers defendants.

For all of these reasons, I propose to order that this action be transferred to the Supreme Court of Queensland. The plaintiffs may choose to reconsider the manner in which they seek to litigate the various issues the subject of this action and to consider whether they will seek to set aside the Queensland judgment. I, therefore, propose to stay the operation of this order for a period sufficient to give the plaintiffs an opportunity to consider their future course of action. I will hear the parties as to what is a reasonable time for which to delay the making of the order.