HANCOCK PROSPECTING PTY LTD -v- WRIGHT PROSPECTING PTY LTD [2019] WASCA 141 (9 September 2019) - WASCA 2019 case summary — Zoe

HANCOCK PROSPECTING PTY LTD -v- WRIGHT PROSPECTING PTY LTD [2019] WASCA 141 (9 September 2019) - WASCA 2019 case summary — Zoe

[39]

The factual and procedural background to the consolidated appeals is exceedingly complex. A full exposition of that background is not necessary to understand the issues arising on the applications for an interim stay of the learned primary judge's case management directions. Accordingly, what follows is a very abbreviated summary that suffices to place the interim stay applications in context.
There are two proceedings before the learned primary judge. Wright Prospecting Pty Ltd (WPPL) is the plaintiff in consolidated actions CIV/3041/2010 and CIV/2617/2012 (WPPL proceedings). DFD Rhodes Pty Ltd and others (Rhodes parties) are the plaintiffs in action CIV/2737/2013 (Rhodes proceedings). Hancock Prospecting Pty Ltd (HPPL) and its subsidiary Hope Downs Iron Ore Pty Ltd (HDIO) are defendants to the WPPL proceedings and the Rhodes proceedings. WPPL is also a defendant to the Rhodes proceedings. Broadly, the two proceedings concern mining tenements known as the Hope Downs tenements and the East Angelas tenements (although often referred to collectively as 'Hope Downs'). The tenements are held by HDIO.
The WPPL proceedings and the Rhodes proceedings have been case managed together.
The WPPL proceedings concern ownership rights and royalties in relation to the tenements. The Rhodes proceedings also concern the tenements. The Rhodes parties claim that HPPL, HDIO and WPPL hold any interest they have in the tenements on trust for the Rhodes parties to the extent of the Rhodes parties' entitlements to royalties.
In 2016, shortly before a trial was to commence in each of the WPPL proceedings and the Rhodes proceedings, WPPL and the Rhodes parties made application to join Bianca Rinehart, John Hancock, Hope Welker and Ginia Rinehart as defendants to the WPPL proceedings and the Rhodes proceedings. (Given the familial relationship between those parties, to avoid confusion and without disrespect, counsel referred to those parties by first names. We will adopt the same convention, also intending no disrespect.) Those joinder applications were successful and the trial was vacated. The learned primary judge held that Bianca and John claimed a proprietary interest in the Hope Downs tenements and the East Angelas tenements which was inconsistent with the claims of WPPL and the Rhodes parties as well as the defendants in the WPPL proceedings and the Rhodes proceedings.[1]
Bianca, John, Hope and Ginia (collectively 'Children') are the children of Georgina Rinehart (Mrs Rinehart). Mrs Rinehart is alleged to be the controlling mind of HPPL. From 2003 John began to make various allegations against Mrs Rinehart and HPPL. Much later, in 2014, Bianca and John commenced proceedings in the Federal Court of Australia against Mrs Rinehart, a company associated with Mrs Rinehart (150 Investments Pty Ltd), Hope, Ginia, HPPL, HDIO and various other entities related to HPPL (collectively with HPPL the 'HPPL parties'), as well as other entities and persons.
The nature of Bianca's and John's claim in the Federal Court proceedings has been described in the recent decision of the High Court in Rinehart v Hancock Prospecting Pty Ltd.[2] Essentially, as was explained by the learned primary judge in his reasons on the joinder application, Bianca and John claim that the Children are in equity entitled to an interest in the Hope Downs tenements.
HPPL, Mrs Rinehart and other respondents to the Federal Court proceedings made an interlocutory application seeking orders pursuant to s 8(1) of the Commercial Arbitration Act 2010 (NSW) that the dispute be referred to arbitration and the proceedings dismissed or permanently stayed. The application relied on a number of deeds. Most important of those was an August 2006 deed referred to as the 'Hope Downs Deed' (to which Bianca, among others, was a party). John adopted the Hope Downs Deed in an April 2007 deed. Importantly, the deeds contain an arbitral clause. The cl 20 arbitral clause in the Hope Downs Deed was set out in full in the learned primary judge's decision in Hancock Prospecting Pty Ltd [No 10].[3] Also important is cl 7(b) of the Hope Downs Deed by which the parties undertook not to challenge the right of any member of the Hancock Group (including HPPL and HDIO) to any of the Hancock Group Interests (including the interest in the Hope Down tenements) at any time.
In Rinehart v Hancock Prospecting Pty Ltd Kiefel CJ, Gageler, Nettle and Gordon JJ record:

[41]

Bianca and John sought declarations in the Federal Court proceedings that the Hope Downs Deed and the April 2007 Deed did not bind them. Those claims were known as the 'validity' claims. At first instance in the Federal Court a judge of that court held that the validity claims were not subject to the arbitral clause.[5] However, an appeal to the Full Court of the Federal Court was successful.[6] The Full Court of the Federal Court stayed the proceedings in the Federal Court, thereby permitting the arbitrators to deal with all issues including validity.
That, in substance, was the prevailing position when - in late May 2018 in the WPPL proceedings and the Rhodes proceedings - the HPPL parties, Mrs Rinehart and 150 Investments Pty Ltd made an application to the learned primary judge for orders referring certain matters to arbitration and otherwise a stay of the proceedings generally pending the outcome of arbitration.
Those applications were brought in circumstances where some of the issues being pursued in the Federal Court proceedings spilled over into and were replicated in the litigation before the learned primary judge. Bianca and John had filed joint defences in the WPPL proceedings and the Rhodes proceedings. Bianca and John also filed counterclaims naming as defendants to the counterclaims the respondents to the Federal Court proceedings (including Mrs Rinehart and the HPPL parties) together with, among others, WPPL and the Rhodes parties. The relief claimed included a declaration that HDIO held the Hope Downs tenements on constructive trust for Bianca, John, Hope and Ginia. That relief was also sought as against WPPL and the Rhodes parties to the exclusion of their claims for proprietary relief in respect of the Hope Downs tenements.
In determining the applications for referral to arbitration and consequential stay the learned primary judge noted the overlap between the matters raised in Bianca's and John's defences and counterclaims in the proceedings before him and the claims made in the Federal Court proceedings.[7] More specifically his Honour noted that:

[45]

The learned primary judge also noted the referral to arbitration and stay orders in the Federal Court proceedings.[11]
The HPPL parties, Mrs Rinehart and 150 Investments Pty Ltd sought that the parties, other than WPPL and the Rhodes parties, be referred to arbitration in respect of the defences and counterclaims of Bianca and John. In aid thereof they sought that those defences and counterclaims be stayed pursuant to s 8(1) of the Commercial Arbitration Act 2012 (WA). The HPPL parties, Mrs Rinehart and 150 Investments Pty Ltd also sought a stay of the whole of the WPPL proceedings and the Rhodes proceedings to await the outcome of the arbitration.
Bianca and John opposed any referral to arbitration or stay of the proceedings.
WPPL was neutral as to whether there should be a stay of Bianca's and John's counterclaim. However, WPPL opposed a general stay of the proceedings. In particular WPPL opposed a stay of the proceedings between WPPL, on the one hand, and HPPL and HDIO, on the other. The Rhodes parties took a similar position.
Hope and Ginia are parties to the WPPL proceedings and the Rhodes proceedings (being defendants to the main action and defendants by counterclaim to Bianca's and John's counterclaim). However, they did not appear to make submissions on the stay applications before the learned primary judge.
The learned primary judge delivered reasons on the substantive stay applications on 21 December 2018. Those reasons are Hancock Prospecting Pty Ltd [No 10]. The consolidated appeals presently before this court are not appeals against the orders made pursuant to those reasons. Accordingly, it is not necessary to address his Honour's reasons on the stay applications. It suffices to note that the learned primary judge stayed the proceedings in respect of Bianca's and John's counterclaims only. The applications on the part of the HPPL parties, Mrs Rinehart and 150 Investments Pty Ltd were otherwise dismissed. Relevantly, for present purposes, there was no referral to arbitration in respect of Bianca's and John's defences (which, it will be recalled, repeated the allegations and claims made in Bianca's and John's counterclaims) and no corresponding stay of proceedings. Nor was there a stay of the totality of the two proceedings - WPPL's and the Rhodes parties' claims were to continue despite Bianca's and John's counterclaims being referred to arbitration.
Subsequently applications have been made for leave to appeal against the orders made pursuant to Hancock Prospecting Pty Ltd [No 10]. Consolidated appeals CACV/12/2019 and CACV/13/2019 are appeals by the HPPL parties. Consolidated appeals CACV/16/2019 and CACV/17/2019 are appeals by Mrs Rinehart and 150 Investments Pty Ltd. Bianca and John have sought to cross-appeal. The parties have referred to these appeals as the 'Substantive Appeals'.
Hope and Ginia have filed submitting appearances in the Substantive Appeals.
On 1 March 2019 the learned primary judge heard argument as to whether case management directions should be made programming further interlocutory steps in the WPPL proceedings and the Rhodes proceedings pending the determination of the Substantive Appeals. WPPL and the Rhodes parties sought such orders. WPPL sought orders programming its proceedings to trial whereas the Rhodes parties merely sought orders in relation to pleadings and discovery. The HPPL parties, Mrs Rinehart and 150 Investments Pty Ltd contended that no further interlocutory steps should be taken until the Substantive Appeals were resolved. Ginia and Hope resisted orders being made which would require them to put on a defence in the two proceedings
In substance the parties who are appellants in these consolidated appeals sought a de facto indefinite stay of the WPPL proceedings and the Rhodes proceedings pending the determination of the Substantive Appeals.
On 24 July 2019 the learned primary judge delivered written reasons determining that he should give directions for further interlocutory steps to be taken to progress the WPPL proceedings and the Rhodes proceedings.[12] Following his Honour's reasons there was some debate as to the precise form of the orders. Orders were then made on 1 August 2019 (in the Rhodes proceedings) and 2 August 2019 (in the WPPL proceedings). The learned primary judge gave further written reasons for those orders on 9 August 2019.[13]
The case management directions as made by the learned primary judge are as follows:

[51]

On or before 18 October 2019, [Bianca] and [John] provide discovery in relation to all matters in question in the proceedings.
On or before 18 October 2019, the parties to the Plaintiff's proceedings (excluding the Third Party) are to provide any further discovery.
Order 6 of the learned primary judge's 23 September 2016 orders was to the effect that the defendants were not required to file a defence or amended defence until ordered by the court to do so. That order was made at the time that the Children were joined as defendants to the WPPL proceedings and the Rhodes proceedings. At that time orders were also made for WPPL and the Rhodes parties to file an amended statement of claim so as to reflect the joinder of the Children.
The learned primary judge stayed the operation of the case management directions of 1 and 2 August 2019 until 27 August 2019.
The HPPL parties (CACV/88/2019 and CACV/89/2019), Ginia (CACV90/2019 and CACV/91/2019), Mrs Rinehart and 150 Investments Pty Ltd (CACV/92/2019 and CACV/93/2019) and Hope (CACV/94/2019 and CACV/95/2019) have all sought leave to appeal against the case management directions. The parties have referred to the appeals, now consolidated, as the 'Programming Appeals'. The appellants also applied by interim applications dated 20, 21 and 22 August 2019 for a stay of the case management directions pending the determination of the Programming Appeals. However, Ginia's and Hope's applications for an interim stay of the case management directions is limited to orders 1, 2 and 7. As the learned primary judge's stay of the case management directions expired on 27 August 2019 it was necessary for the applications to be heard urgently and determined on 27 August 2019.
The applications for an interim stay of the case management directions are the subject of these reasons.
Three further matters are relevant.
First, after the learned primary judge's determination in Hancock Prospecting Pty Ltd [No 10], but before his Honour determined to make the case management directions, the High Court handed down its decision on an appeal against the stay determination of the Full Court of the Federal Court.[14] Bianca's and John's appeal was dismissed. A cross-appeal was allowed. The High Court, by majority, held that certain of the HPPL parties who were not named in the Hope Downs Deed nevertheless claimed 'through or under' a party to the arbitration agreement.
At the hearing of the interim stay application before this court the legal representatives for various of the appellants sought to emphasise what was said by the plurality in Rinehart v Hancock Prospecting Pty Ltd as to preservation of confidentiality:

[55]

The learned primary judge recorded that the parties had proceeded before him on the basis that the principles that apply to an application for a stay pending appeal were relevant. His Honour agreed that whether the court should stand over the making of further directions pending resolution of the Substantive Appeals was informed by the general principles governing the grant of a stay pending appeal. The learned primary judge then recounted those principles making reference to Eastland Technology Australia Pty Ltd v Whisson.[16]
His Honour accepted that, if the Substantive Appeals were successful, the result would only be to defer the hearing of the two proceedings until after the arbitration between the appellants, Bianca and John. In his Honour's view, WPPL's and the Rhodes' parties claims had to be resolved by the court and any stay of the proceedings would delay the resolution of their claims (which had already been substantially delayed by the stay application before the learned primary judge and the proceedings in the Federal Court).
The learned primary judge held that making directions as to pleadings and discovery would not render the Substantive Appeals nugatory in any real sense. His Honour also held that making directions relating to pleadings and discovery would not defeat HPPL's prima facie rights created by cl 7(b) of the Hope Downs Deed and the arbitration agreement. In this regard his Honour noted that it was to be expected that the parties to the arbitration would have to disclose their contentions as to the proprietary claim being advanced as to the Hope Downs and East Angelas tenements, as well as relevant documents, to the other parties to the arbitration. As to confidentiality, the learned primary judge noted that persons, other than parties, were not entitled to access pleadings and discovery lists as filed with the court without leave. His Honour noted that documents and information produced in the proceedings would be protected by the 'implied undertaking' as acknowledged to be a substantive obligation imposed by law in Hearne v Street.[17]
The learned primary judge accepted that the Substantive Appeals had reasonable prospects of success. His Honour found, however, that the balance of convenience did not favour a stay. The learned primary judge considered that the proposed interlocutory steps would not cause irremediable harm to the appellants if, following the Substantive Appeals, the whole of the proceedings were stayed. However, to effectively informally stay the proceedings would cause a further substantial delay that would be inimical to O 1 r 4A and r 4B. For those reasons his Honour determined to proceed to make programming directions dealing with pleadings and discovery.
On delivery of the learned primary judge's reasons in Hancock Prospecting Pty Ltd [No 11] the parties did not agree what directions the court should make for the progress of the two proceedings. His Honour then gave further reasons in Hancock Prospecting Pty Ltd [No 12] for the case management directions as made.
It followed from his Honour's earlier reasons in Hancock Prospecting Pty Ltd [No 11] that directions should be made for defences (or amended defences) to be filed. However, Hope and Ginia took the opportunity to seek to re-argue that they should not be required to file a defence before the resolution of the Substantive Appeals. Effectively, Hope and Ginia argued that they should not be required to file a defence as it would destroy an alleged right - said to arise under the Hope Downs Deed - to have any matter in dispute under the deed resolved by confidential arbitration. The learned primary judge concluded, however, that a defence of Hope and Ginia responding to WPPL's and the Rhodes parties' claims was not within the scope of the arbitral clauses. Otherwise, consistently with his Honour's earlier reasons, the learned primary judge was satisfied that no irremediable harm would be done to Hope and Ginia by requiring them to file and serve a defence.
The learned primary judge fashioned the discovery orders as made so as to be consistent with his Honour's earlier reasons. In so doing reference was made to some outstanding issues as to whether each party should give discovery in relation to matters in question in the action which were not in question between the party seeking discovery and the party giving discovery. The learned primary judge did not resolve that issue but suggested that the parties confer and, if there was no agreement, bring application for the further discovery as sought.

[68]

The appellants contended that the consolidated appeals would be rendered nugatory if the case management directions of 1 and 2 August 2019 were not stayed until the hearing of the Programming Appeals. This was because the appeals would not be heard until 18 and 19 November 2019 and the orders had to be complied with before then. It was also said that serious consequences would arise for the Substantive Appeals should the case management directions not be stayed. Why that was said to be so was bound up with the argument advanced as to s 5 of the Commercial Arbitration Act 2012 (WA) as outlined below.
A series of alleged House v R[29] type discretionary errors were suggested to have been made by the learned primary judge. Those need not be developed in these reasons. The prospects of success on those grounds are not sufficiently compelling to justify this court exercising its exceptional power to in effect stay the ongoing conduct of the WPPL proceedings and the Rhodes proceedings pending the hearing of the Programming Appeals.
The appellants also contended that the learned primary judge erred by failing to find, or consider whether, the case management directions would be in contravention of the appellants' contractual rights to have their disputes with Bianca and John determined confidentially in arbitration. Prima facie the second part of that contention has difficulties on a fair reading of the learned primary judge's reasons for decision.[30] As to the former the learned primary judge found that the defence of Hope and Ginia will respond to the claims of WPPL and the Rhodes parties and those matters were not within the scope of the arbitral clauses.[31] That finding does not appear to be challenged in any of the appellants' proposed grounds of appeal.[32] It is the case, however, that a defence by Hope and Ginia will have to traverse the pleas by which WPPL and the Rhodes parties state that in the Federal Court proceedings an allegation is made that they, as one of the Children, are entitled in equity to an interest in the relevant tenements (see par 18(2) above). It was argued that addressing this allegation would inevitably see Hope and Ginia having to plead to things referred to arbitration and would derogate from the appellants' rights (and - with Hope and Ginia - correlative obligations) to have such matters addressed confidentially by arbitration.
For the appellants the critical issue was said to be whether the learned primary judge had committed an error of law in failing to find that the case management directions contravened s 5 of the Commercial Arbitration Act 2012 (WA).
The argument was advanced by reference to the Substantive Appeals. It was said that if the Substantive Appeals succeeded all disputes between the appellants, Bianca and John would be determined in confidential arbitration under the auspices of the Commercial Arbitration Act 2012 (WA). The appellants argued that, if this was so, the case management directions contravened s 5 of the Act. Section 5 provides:

[70]

The appellants contended that, conformably with s 8(1) of the Act, the 'matters governed by this Act' under s 5 included any matter the subject of an arbitration agreement. It was said that the disputes involving the appellants and Bianca and John as to proprietary interests in the Hope Downs tenements were such a matter. From there it was submitted that, by s 5, the court could not intervene and the case management directions amounted to intervention. In that sense the argument was advanced as going to the jurisdiction of the court.
The Rhodes parties said that the contention based on s 5 of the Act was not put to the learned primary judge. In the course of oral argument this court was taken to various passages in the transcript before the learned primary judge where the contention was said to have been made.[33] In fairness to his Honour it should be said that while there was (somewhat passing) reference to s 5 the point as developed before this court was not made with any particular vigour at the hearings before his Honour. Nor was it made with the same elaboration as was contained in the appellants' written and oral submissions before this court. The fleeting references to s 5 which were suggested to have put the point to the learned primary judge were elliptical at best. In the circumstances it is unsurprising that the learned primary judge's reasons do not consider the s 5 argument. Nevertheless, if the point is good, prima facie it would go to jurisdiction.
Finally, the appellants alleged that they would be prejudiced if the interim stay was not granted. Prejudice was primarily advanced in terms of alleged deprivation of statutory and contractual rights to having the arbitral matters determined in a confidential arbitration. The appellants asserted a right to confidentiality in connection with the disputes the subject of the arbitration. It was also said that, so far as pars 5 and 7 of the case management directions were concerned, that might give Bianca and John a forensic advantage in the arbitration proceedings. Conversely it was argued that any discovery by Bianca and John might give WPPL and the Rhodes parties a forensic advantage in the WPPL proceedings and the Rhodes proceedings.
The latter two matters of alleged forensic disadvantage were without substance in the context of the interim stay applications. The asserted right of confidentiality that would allegedly be infringed is not concerned to deprive other persons of available forensic tools. In any event it is likely that, in due course, Bianca and John will be able to access the materials to be discovered by using means that are standard within arbitration proceedings (eg documentary disclosure and the issue of subpoenas).
WPPL and the Rhodes parties emphasised that the consolidated appeals were interlocutory appeals, requiring leave, in relation to matters of practice and procedure. Moreover, they were appeals of that type where the learned primary judge - an experienced trial judge and CMC List case manager - had carefully considered and balanced the arguments as to whether the Substantive Appeals would be rendered nugatory and the appellants prejudiced. WPPL, in particular, suggested that the appellants were not seeking to prosecute an appeal but in reality were seeking to agitate afresh the same arguments as had been before the learned primary judge.
On whether recourse to this court would be nugatory in the absence of a stay, WPPL and the Rhodes parties suggested that, while in form the consolidated appeals were appeals against the case management directions of 1 and 2 August 2019, in substance the question of what was required to preserve the subject matter or the integrity of the litigation was to be determined by reference to the Substantive Appeals. WPPL, in particular, contended that the appellants should have sought a stay of the proceedings following the orders of 21 December 2018 and cautioned against the court entertaining the application for an interim stay by reference only to the consolidated appeals insofar as that might, by a sidewind, result in a de facto stay of the proceedings notwithstanding that there was no stay application following the decision in Hancock Prospecting Pty Ltd [No 10]. The Rhodes parties made the same point in a slightly different way in suggesting that the appellants ought to be seen as having, in substance, created an appeal vehicle by which to argue that unless an interim stay were granted the Programing Appeals would be rendered nugatory.
The Programming Appeals were characterised as being hopeless and the grounds of appeal were said to have poor prospects of success.
Finally, WPPL and the Rhodes parties contended that the alleged prejudice on the part of the appellants was theoretical and illusory. In that regard the Rhodes parties adduced affidavit evidence to demonstrate that there were proportionately very few confidential documents and that there was, in any case, an extensive confidentiality regime in place which the case management directions were to observe. By contrast WPPL and the Rhodes parties were said to be prejudiced by continued delay in the form of their proceedings (which had to be determined by the court) being delayed due to an intra-familial dispute from which they (WPPL and the Rhodes parties) were excluded. In that regard the Rhodes parties referred to the age of some of their intended witnesses.
In oral addresses, however, senior counsel for both WPPL and the Rhodes parties accepted that WPPL and the Rhodes parties would suffer very little or no immediate prejudice were WPPL and the Rhodes parties not to receive a copy of any defence of Hope or Ginia pending the hearing of the Substantive Appeals. WPPL's and the Rhodes parties' concern was that their proceedings should not be allowed to continue to drift and be delayed by an arbitration to which they were not parties and in respect of which they had no insight. WPPL and the Rhodes parties wanted their proceedings to progress and supported the learned primary judge's case management directions as a considered and measured way of accommodating the various parties' interests and concerns in the context of the Substantive Appeals.
Submissions were also made on behalf of Bianca and John as the fourth and fifth respondents to the consolidated appeals. A point was taken as to Mrs Rinehart's and 150 Investments Pty Ltd's standing to appeal against the case management directions. It is not necessary to resolve that question. There is no doubt that some of the appellants have the requisite standing. Otherwise, while contending that the Programming Appeals did not have reasonable prospects of success and challenging the appellants' contentions as to prejudice, Bianca and John pointed that that the alleged prejudice as to discovery was asserted in the abstract. Bianca and John suggested that any concern could be accommodated by allowing the HPPL parties first access to the documents with liberty, where necessary, to make application to restrict access.

[71]

WPPL and the Rhodes parties were correct in their contention that the question of whether an interim stay was necessary to preserve the subject matter or integrity of the litigation was to be considered by reference to the Substantive Appeals rather than the Procedural Appeals.
The appellants' contention that an interim stay was required to prevent the Programming Appeals being rendered nugatory (because the case management directions are to be performed before the hearing of the Programming Appeals) was overly simplistic. If such an argument was accepted many interlocutory appeals from orders relating to matters of practice and procedure would necessitate a stay (or de facto stay) of the primary proceedings. Yet, as the authorities demonstrate, such a stay involves the exercise of an exceptional jurisdiction. The likely consequences for the appellant must be so adverse and severe that the interests of justice dictate intervention. If it were otherwise the interminable delay and indefinite costs warned of by Jordan CJ long ago will inevitably come to pass.
It cannot be enough that an interlocutory appeal might itself otherwise be overtaken by events. That is no more than a bootstrapping argument. In the various appeals before this court involving the parties the true subject matter and integrity of the underlying litigation is not concerned with the Procedural Appeals themselves; it is instead the appellants' alleged absolute right to confidentiality in respect of those disputes falling within the arbitration agreements to which the HPPL parties, Mrs Rinehart and the Children are parties. The appellants seek to prevent any person who is not a party to the arbitral arrangements obtaining information or documents in relation to those matters. The alleged right of confidentiality is asserted against the rest of the world - but most relevantly for present purposes WPPL and the Rhodes parties.
The above analysis rejecting the appellants' contention is confirmed by the fact that the appellants could have brought an application in this court - within the Substantive Appeals - to stay the primary proceedings pending the determination of the Substantive Appeals.[34] In such an application, an argument that the appeals would be rendered nugatory if a stay of the primary proceedings was not granted, would naturally, and properly, focus on the effect that not granting a stay would have on the utility of the Substantive Appeals. The appellants cannot be in any better position through the mere procedural device of first resisting the making of any case management directions by the learned primary judge (such orders being the logical outcome of his Honour's determination in Hancock Prospecting Pty Ltd [No 10]) and then bringing an appeal from those orders.
Nevertheless, we accepted that, to a limited extent, the case management directions will (in the case of defences by Hope and Ginia) or might (as to discovery) irreparably and substantially impair what the appellants contend are their statutory and contractual rights to the arbitral matters being raised and determined solely in the confines of confidential arbitration, even when they arise in the context of WPPL and the Rhodes parties' claims (that being the heart of what is sought by the Substantive Appeals). As counsel for Mrs Rinehart and 150 Investments Pty Ltd put it, what is seen cannot be unseen; what is known cannot be unknown. And so far as pleadings are to be filed and served by Hope and Ginia (par 2 of the orders), and discovery is to be provided (pars 5, 6 and 7 of the orders), WPPL and the Rhodes parties will (with the defences) and might (with the discovery) obtain information or documents concerning the dispute which has been referred to arbitration. In this limited respect intervention was necessary to preserve the subject matter and integrity of the litigation.
Senior counsel for WPPL contended, by reference to Elspan International Ltd v Aerospatiale Holdings Australia Ltd,[35] that protection of any right to confidentiality in relation to an arbitration was simply a procedural matter to be addressed by appropriate directions by the arbitrator. The relevant passage in the decision confirms that, in questions involving a stay, the court is concerned with substantive rights rather than procedural measures and their consequences. What answered the stay application in that case, however, was that it was not clear that the applicant's privacy and confidentiality could not be protected by appropriate directions by the relevant arbitrator and referee.
That is not this case. The arbitrators in the arbitral proceedings cannot enjoin access to information and documents by WPPL and the Rhodes parties as might occur under the case management directions.
The case management directions did not all meet the substantial impairment and necessity criteria previously outlined. In particular:
- par 1: removing the previous dispensation that parties not be required to file a defence or amended defence unless otherwise ordered did not compel Hope or Ginia to file and serve a defence.
- par 4: the filing of a reply by WPPL and the Rhodes parties to Bianca's and John's defences cannot derogate from the appellants' alleged right of confidentiality.
There was no basis for an interim stay of pars 1 and 4 of the case management directions.
Paragraph 3 was in a different category. It contemplated that Bianca and John may file and serve a defence. Two things should be observed about that possibility. First, Bianca and John have said, though counsel, that they do not intend to file any further amended defence.[36] Second, under the rules any party has a right to file an amended defence without leave until seven weeks before the date fixed for trial.[37] A stay of par 3 of the case management directions would not affect that possibility. In those circumstances an interim stay of par 3 of the case management directions would have been without utility.
There was thus a potential basis for an interim stay in relation to pars 2 and 5 to 7 of the case management directions. It remained necessary to consider the questions of prospects of success and balance of convenience.
The learned primary judge found that the Substantive Appeals had reasonable prospects of success.[38] No respondent sought to challenge that finding. In the applications for an interim stay in this court the appellants primarily advanced their position by reference to the contention based on s 5 of the Commercial Arbitration Act 2012 (WA). A similar argument has been raised in the Substantive Appeals.[39] The respondents argued that the contention based on s 5 of the Act was misconceived. WPPL and the Rhodes parties contended that the Act had no application to their proceedings as WPPL and the Rhodes parties were not bound by any arbitration agreement. Accordingly, there was said to be no matter 'governed by this Act' within the purpose and for the meaning of s 5. The Rhodes parties also said that the case management orders did not amount to any relevant 'intervention' in the arbitration proceedings. Bianca and John said that s 5 could not displace the court's power to order discovery as there was no arbitration agreement to which WPPL and the Rhodes parties were bound.
In the limited time available to hear and determine the urgent applications for an interim stay it was not possible for the parties to fully develop their arguments based on s 5 of the Act. Regrettably, due to the fleeting and offhand manner in which s 5 was mentioned before the learned primary judge, the question was not considered by his Honour. No criticism can be levelled at the learned primary judge for not addressing the point. His Honour did not address the argument as it was not advanced before his Honour in any substantial way. It did mean, however, that this court did not have the benefit of the learned primary judge's analysis as to the reach and effect of s 5.
It sufficed for the purpose of the interim applications to conclude that, in the absence of any prior curial consideration of the metes and bounds of s 5, the appellants' contention based on s 5 of the Commercial Arbitration Act 2012 (WA) was arguable. In that sense there were reasonable prospects of success. Whether the contention is right or wrong could not be determined summarily at the hearing of the interim stay applications. It must await the final hearing of the Substantive Appeals and the Procedural Appeals. Separately, the fact that the argument is essentially a new point, not having been advanced seriously before the learned primary judge, did cause us to consider whether the contention should be entertained. All the more so whether it could ground an interim stay. Ultimately, however, the point is a legal one going to the jurisdiction of the court. For that reason we were persuaded that it could not be discarded summarily.
The balance of convenience was affected by two things that were not known at the time the learned primary judge made the case management directions on 1 and 2 August 2019:

[75]

The intention was that the interim stay be no more than that required to preserve the asserted confidentiality consistent with the appellants' case as advanced on the Substantive Appeals.
This did not, in our view, justify an interim stay where pars 2 and 5 to 7 of the case management directions were suspended entirely. That course would have seen no steps being taken as to a defence by Hope or Ginia or further discovery pending the hearing of the Substantive Appeals. It was feasible to provide for a modified regime that recognised and gave effect to the learned primary judge's conclusion that further interlocutory steps should be taken without affecting the claim to ongoing confidentiality.
On par 2 of the case management directions we were persuaded that in responding to WPPL's and the Rhodes parties' statements of claim it is likely that Hope and Ginia will have to traverse - in some way - Bianca's and John's proprietary claim as to the Hope Downs tenements. But there will be much of any defence where Hope and Ginia will not be required to plead to things referred to arbitration. That aspect of any defence could not even arguably infringe the appellants' asserted right to have matters addressed confidentially by arbitration. We gave consideration to requiring that any defence be in two parts - one open and the other confidential. To the extent, if any, that the defences traversed the proprietary claim to the Hope Downs and East Angelas tenements being advanced by Bianca and John the defence would have been subject to confidentiality orders.
Ultimately, however, we considered that this approach was unnecessarily complicated in circumstances where WPPL and the Rhodes parties accepted that there was little or no prejudice in not being provided with the defences immediately. We required that the interim stay be on condition that any defence by Hope or Ginia by filed by the date originally ordered by the learned primary judge. However, the defences will only be served on those parties to the primary proceedings who are also parties to the arbitration proceedings. Confidentiality orders were made restricting inspection of the defences as filed.
If the Substantive Appeals succeed, the defences may be uplifted. The asserted right of confidentiality - then established - will not have been infringed. If, however, following the hearing of the Substantive Appeals it is determined that the interim stay should not be maintained, the confidentiality restriction will be discharged. The defences will then be immediately available to WPPL and the Rhodes parties without further delay to the conduct of the primary proceedings.
Similar reasoning informed our approach to the discovery orders in pars 5 to 7 of the case management directions. With the discovery orders there was, however, no need to provide for any further confidentiality restrictions (noting that there are already confidentiality orders as to par 5). The discovery orders will only result in the further exchange of lists and expert reports. Loss of confidentiality will only occur on inspection. In oral submissions senior counsel for the HPPL parties sought to contend that prejudice was suffered by reason of non‑arbitral parties becoming aware of the existence of confidential documents even by description. We reject that submission. The interest sought to be preserved is not affected by listing a description of any alleged confidential document; the true concern is what happens to the documents themselves and the information revealed in them. That may be accommodated through the orders made for inspection of the documents produced and the terms on which the inspection may take place.[40]
We considered that, so far as the discovery orders in pars 5 to 7 were the subject of the interim stay, there should still be discovery consistent with that ordered by the learned primary judge. However, the appellants' concern as to preservation of confidentiality pending the Substantive Appeals could be accommodated by appropriate conditions as to inspection. Effectively the appellants, Bianca and John may inspect first but not take copies. Any of those inspecting parties may then make application to the learned primary judge for an order to prevent inspection of one or more documents by non-arbitral parties. Pending determination of the application inspection is not to be provided to WPPL or the Rhodes parties.
The intention - consistent with the basis grounding the interim stay - is that such an application to restrict access be based on preservation of the asserted confidentiality consistent with the appellants' case as advanced on the Substantive Appeals. It would not be consistent with the basis on which the interim stay was granted for the appellants to apply to prevent inspection of all of the documents the subject of discovery pursuant to pars 5 to 7. Prima facie only those documents relating to Bianca's and John's proprietary claim to the Hope Downs and East Angelas tenements should be the subject of application to the learned primary judge.