[2000] HCA 41
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Barnden v Commissioner of Taxation [2018] NSWSC 1980
Batiste v Gilmour-Latham [2001] NSWCA 392
Blair v Curran (1939) 62 CLR 464
[1939] HCA 23
Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd [2019] NSWSC 410
Broadway Plaza Investments v Broadway Plaza Pty Ltd
In the matter of Combined Projects (Arncliffe) Pty Ltd [2019] NSWSC 1082
Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245
Source
Original judgment source is linked above.
Catchwords
[2000] HCA 41
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175Barnden v Commissioner of Taxation [2018] NSWSC 1980
Batiste v Gilmour-Latham [2001] NSWCA 392
Blair v Curran (1939) 62 CLR 464[1939] HCA 23
Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd [2019] NSWSC 410
Broadway Plaza Investments v Broadway Plaza Pty LtdIn the matter of Combined Projects (Arncliffe) Pty Ltd [2019] NSWSC 1082
Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245[2013] HCA 46
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125[1964] HCA 69
Gibbs v Kinna [1999] 2 VR 19[1998] VSCA 52
Glazier v Australian Men's Health (No.2) [2001] NSWSC 6
Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 64020 ACLC 150242 ACSR 534
H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694nSynergy Pty Ltd and nSynergy International Pty Ltd [2017] NSWSC 1500(2003) 204 ALR 327
Khouri v National Australia Bank Ltd [2007] NSWSC 987
McEvoy v Caplan [2010] NSWCA 11578 ACSR 167
McFadden v Snow (1952) 69 WN (NSW) 8
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589[1981] HCA 45
Ragless v IPA Holdings Pty Ltd (in liq) [2012] SASC 203
Rogers v the Queen (1994) 181 CLR 251
[1994] HCA 42
SLE Worldwide Australia Pty Ltd v Wyatt Gallagher Bassett Pty Ltd [2005] NSWSC 816
Spencer v Commonwealth (2010) 241 CLR 118
[2010] HCA 28
State of Queensland v JL Holdings Pty Ltd (1996-1997) 189 CLR 146
[1997] HCA 1
The Nominal Defendant v Gabriel (2007) 71 NSWLR 150
[2007] NSWCA 52
Thoday v Thoday [1964] 1 All ER 341
[2015] HCA 28
Trustees for the Roman Catholic Church for the Diocese of Bathurst v Mine [2016] NSWCA 213
Tyne v UBS AG (No 2) (2017) 250 FCR 341
Judgment (13 paragraphs)
[1]
Background
There are two sets of proceedings in which the protagonists to the present application are involved: the Broadway proceedings (2016/00282940) and the Arncliffe proceedings (2017/00180712). The present application concerns only the second set of proceedings. The general background to the disputes between the parties has been outlined in my earlier interlocutory decision relating to subpoenas that had been issued in the first set of proceedings (see Broadway Plaza Investments Pty Ltd v Broadway Plaza Pty Ltd [2019] NSWSC 410) (and is summarised and updated in a second judgment to be delivered today - Broadway Plaza Investments v Broadway Plaza Pty Ltd; In the matter of Combined Projects (Arncliffe) Pty Ltd [2019] NSWSC 1082). I do not need here to repeat much of that background. Suffice it to note briefly, as follows, the history to the Arncliffe proceedings which forms the procedural context in which objection to the present application is taken.
The Arncliffe proceedings were commenced on 16 June 2017 by Sayour Holdings, by originating process in the Corporations List seeking, inter alia, orders pursuant to s 247A of the Corporations Act 2001 (Cth) (Corporations Act) for access to the books and records of the first defendant (Combined Projects Arncliffe). (Hence the description of the Arncliffe proceedings in some of the submissions as the 247A proceedings.) The application for access to the company's books and records was made on the basis that Sayour Holdings was (as the ASIC register records) a 50% shareholder of Combined Projects Arncliffe. The director of Sayour Holdings is Mr Moustafa Sayour. As noted above, the second defendant (Deiri Nominees) is also a shareholder of Combined Projects Arncliffe and the third defendant (Mr Deiri) is the sole director of Deiri Nominees. As its name indicates, Combined Projects Arncliffe was involved in a property development in Arncliffe (the Arncliffe project). Mr Moustafa Sayour's late son, Jamil Sayour, was involved in dealings with Mr Deiri in relation to the Arncliffe project. The precise nature of those dealings is in dispute. The Arncliffe proceedings also include claims for relief against oppression.
After Jamil Sayour's death in late 2015, Sayour Holdings made various requests in 2016 for the provision of documentation by Combined Projects Arncliffe. Those requests were initially denied but in 2017 and 2018 Combined Projects Arncliffe did voluntarily produce documents (indeed it is said by Mr Deiri and Deiri Nominees that there was extensive production of documents) to Sayour Holdings. (Sayour Holdings says that the production of that (and other later) documentation is what ultimately led to the formulation of the first cross-claim.)
On 21 December 2018, Mr Deiri and Deiri Nominees filed an interlocutory process seeking to defer the final hearing and determination of Sayour Holding's claim in the Arncliffe proceedings until the hearing of the Broadway proceedings; and to have those proceedings heard together. This was initially opposed by Sayour Holdings (it says on the basis that, inter alia, it would cause substantial delay). That application came before Parker J, sitting in the Corporations List, in February 2019. Orders were made by consent on 28 February 2019, inter alia listing the hearing of both matters together for six weeks commencing on 4 November 2019 (and for evidence in the one proceeding to be evidence in the other proceeding). Sayour Holdings says that it was "common ground" on that occasion that the derivative proceedings that had by then been foreshadowed by it were to be included in that listing (including a dispute as to payments described as a "site identification fee" made by Combined Projects Arncliffe to two companies not then joined as parties to the Arncliffe proceedings - Konstructions Pty Ltd (Konstructions) and Zapphire Investments Pty Ltd (Zapphire)).
Also on 28 February 2019, orders were made by consent in favour of Sayour Holdings, for access by it to all the records of Combined Projects Arncliffe (with the exception of properly privileged matter).
These orders were made in the following terms:
By consent, the Court orders:
1. The first defendant shall on reasonable notice and during business hours give the plaintiff access to all of the books and records of the first defendant, save for any such documents that are properly the subject of a claim of legal professional privilege, and shall permit the plaintiff to inspect, and to make and take copies of, such documents, provided that any reasonable expenses of the first defendant of the plaintiff's inspection and copying of documents shall be borne by the plaintiff.
2. Without admissions, and until further order, that the First Defendant be restrained from paying, and the Second Defendant and Third Defendant from causing or procuring the First Defendant to pay:
(a) unless otherwise agreed in writing by the Plaintiff, any commissions other than commissions on sales of properties that are payable pursuant to bona fide written arm's length commission agreements; or
(b) any other amount to or for or at the direction of:
(i) the Second Defendant, or
(ii) the Third Defendant, or
(c) any entity controlled by the Third Defendant, including Deicorp Constructions (NSW) Pty Ltd ACN 138 180 337, Deicorp Pty Ltd ACN 090 799 885, Deicorp Construction Pty Ltd ACN 117 191 885 and Deicorp Projects (Arncliffe) Pty Ltd ACN 610 030 414,
without at least 14 days' prior notice to the Plaintiff by its solicitors in writing of the amount, purpose and payee of the proposed payment and particulars of the liability proposed to be discharged thereby, with copies of any written contract, loan agreement and or invoice relied upon as the basis for such liability.
3. Notes that the Plaintiff gives to the Court the usual undertaking as to damages in respect of Order 2.
The second and third defendants (Deiri Nominees and Mr Deiri) did not at that time put in issue that Sayour Holdings was a shareholder in (and hence member of) Combined Projects Arncliffe. They say, on the present application, that no issue as to the distribution of entitlements of shareholders was relevant to the relief that Sayour Holdings there sought.
On 24 April 2019, by which time I had assumed the case management of both sets of proceedings, directions were made for the defendants in the Arncliffe proceedings to give notice to Sayour Holdings by 8 May 2019 as to whether they opposed leave being granted to Sayour Holdings under s 237 of the Corporations Act to bring proceedings on behalf of Combined Projects Arncliffe. As it transpired, they did not oppose such leave (for reasons, it is said, of pragmatism).
On 9 May 2019, I made orders by consent as follows:
1. By 4pm on 10 May the Plaintiff in the name of the first defendant file a statement of cross-claim in this proceeding in the form provided to the defendants on 7-9 May 2019.
2. The time for service of the statement of cross-claim be abridged to 5pm on Monday, 13 May 2019.
3. The statement of cross-claim be returnable for directions before Ward CJ in Eq on Thursday, 16 May 2019 at 11.30am at which time the Court will hear argument as to the appropriate undertakings (if any) to be given in relation to the bringing of the statement of claim in the name of the first defendant and the form of the statement of cross-claim.
There was then a notation to the orders in the following terms:
4. Orders 1 and 2 are made without prejudice to the defendants to contend that leave to bring the proceedings on behalf of the first defendant should not be granted without the appropriate undertakings and in the form of the statement of cross-claim which has been filed.
On 10 May 2019, pursuant to the leave so granted, Sayour Holdings filed (in the name of Combined Projects Arncliffe) an amended statement of first cross-claim against Mr Deiri (as first cross-defendant) and Deiri Nominees (as second cross-defendant). Also joined as cross-defendants to the first cross-claim were the following entities: Konstructions (the third cross-defendant); Zapphire (the fourth cross-defendant); Deicorp Properties Pty Ltd (Deicorp Properties) (the fifth cross-defendant); and Deicorp Construction Pty Ltd (Deicorp Construction) (the sixth cross-defendant). Each of those additional cross-defendants is separately represented in the Arncliffe proceedings. Deicorp Properties and Deicorp Construction are both properties controlled by and associated with Mr Deiri.
The first cross-claim seeks to impugn a number of transactions made by Combined Projects Arncliffe and seeks declaratory relief and other orders. Claims are made against Mr Deiri of breach of fiduciary and equitable duties, as well as breach of statutory duties owed to Combined Projects Arncliffe in his capacity as an officer of that company. Relief is sought against Mr Deiri and his corporate entities for some $42 million. The claims made against Konstructions and Zapphire are limited to the particular impugned payments made to them (of a lesser, but not inconsequential, amount).
On 17 June 2019, directions were made for Deiri Nominees and Mr Deiri to file and serve any defence to the first cross-claim, and any cross-claim, by 24 June 2019. They did not comply with those directions. (Had they done so, the question of leave being necessary for the filing of the proposed pleadings would not necessarily have arisen; or at least would not have arisen in the present context, noting that Sayour Holdings here submits that leave is necessary in any event on the basis that the proposed pleadings seek to withdraw admissions that have earlier been made - see further below.)
On 3 July 2019, Mr Deiri and Deiri Nominees served on Sayour Holdings a proposed defence and a third cross-claim (those being the pleadings the subject of the present application) (see Exhibit 1 on the present application).
In their proposed defence, among other things, allegations are made as to the formation and control of Combined Projects Arncliffe (see from [2]). In particular, it is sought to be alleged that Deiri Nominees was the sole shareholder of Combined Projects Arncliffe from at least 30 January 2014 up to and including April 2018 (see at [3(a)]); and that no shares in Combined Projects Arncliffe were validly issued to Sayour Holdings and it was never a member of Combined Projects Arncliffe (see at [6(i)(ii)], which appears to contain a typographical error at [6(i)(iii)]). It is further sought to be alleged that at all material times during the period from 16 December 2013 to date, Sayour Holdings has had no directors (see [109]ff).
In the alternative, it is sought to be alleged (see from [126]ff) that Sayour Holdings is bound by an agreement (the Arncliffe Agreement) under which (as varied on 8 January 2015 and again in late September or early October 2015) Sayour Holdings would receive no greater share of any profits or distributions from Combined Projects Arncliffe than its proportionate share of financial contributions, relative to the total financial contributions made by shareholders to the company, plus the return of any financial contributions it made to the company (see, in particular, [133]).
The proposed third cross-claim by Deiri Nominees and Mr Deiri against Sayour Holdings, its directors (Mr Moustafa Sayour and Ms Yesmine Sayour, Moustafa's daughter and the late Jamil Sayour's sister), and Combined Projects Arncliffe, makes similar allegations as to the membership of the company and the alleged Arncliffe Agreement.
[2]
Summary
As adverted to above, Sayour Holdings opposes the filing of the proposed defence and third cross-claim. In summary, it contends that the pleadings: are precluded by way of issue estoppel or Anshun estoppel; involve withdrawal of admissions made in pleadings filed in relation to the s 247A application; would cause prejudice by wasted costs; lack bona fides; and are an abuse of process.
Deiri Nominees and Mr Deiri maintain that Sayour Holdings' objections are unfounded. They say that there is no issue estoppel or Anshun estoppel; that they are not required to withdraw any admissions made in the s 247A proceedings in defending the new claims pleaded in the first cross-claim; and that there can be no prejudice to Sayour Holdings (since it would have needed to prepare the first cross-claim in order to seek leave to file it in any event and, if the proposed defence and cross-claim had been raised earlier, the question of leave would have been deferred to the final hearing).
For the reasons set out below, I consider that leave should be granted for the filing of the proposed defence to the first cross-claim and the third cross-claim and I will make directions for the time frame within which that is to occur (noting that the respective sets of proceedings are listed for hearing before Slattery J for six weeks commencing on 4 November 2019). Costs should follow the event.
[3]
The proposed third cross-claim
Before turning to the respective submissions, some further detail is relevantly to be noted in relation to the proposed pleadings.
The relief proposed to be sought in the third cross-claim is based on a primary case (Part A) in which declarations and orders are sought as to the membership and directorship of each of Sayour Holdings (prayers 1 to 9) and Combined Projects Arncliffe (prayers 10 to 13); and an alternative case (Part B), predicated on the basis (which is disputed by Deiri Nominees and Mr Deiri) that Jamil Sayour did have authority to act for and on behalf of Sayour Holdings in relation to the Arncliffe development, in which declaratory relief is sought in relation to the alleged Arncliffe Agreement (prayers 14 to 18); together with other relief (Part C) predicated on a finding that the share issue resolutions in Combined Projects Arncliffe were invalid (prayers 19 to 21).
As part of the relief sought on the primary case there propounded, an order is sought that the leave granted on 9 May 2019 to Sayour Holdings to file a statement of cross-claim in this proceeding in the name of Combined Projects Arncliffe be withdrawn nunc pro tunc, on the basis that Sayour Holdings cannot act, and never authorised or consented to the filing of such a claim (prayer 8) and an order dismissing the first further amended originating process and the second further amended statement of claim filed in these proceedings on 10 December 2018 on the same basis (prayer 9). (Sayour Holdings maintains that this is, in effect, a retainer challenge after the making of final orders for the bringing of the first cross-claim.)
In relation to the relief sought in respect of the shareholding of Sayour Holdings in Combined Projects Arncliffe (prayers 10 to 3), this includes a declaration sought (prayer 13) that the agreement purportedly entered into by Jamil Sayour on 29 January 2014 and purported variations to that agreement on 8 January 2015 and late September or early October 2015, allegedly agreed to by Jamil Sayour for and on behalf of Sayour Holdings, did not give rise to any valid or enforceable agreement and were of no legal effect. Alternatively, if it is found that Jamil Sayour did have authority to act for and on behalf of Sayour Holdings in relation to the Arncliffe development (the alternative case), the relief sought includes declarations as to the alleged Arncliffe Agreement, as varied (see prayers 16 to 18); and, in particular, that Sayour Holdings is entitled to no greater than 5% of the total amount available for distribution from Combined Projects Arncliffe (representing its 5.1% contribution to the total moneys contributed to Combined Projects Arncliffe) or in the alternative, that Sayour Holdings holds its entire shareholding in Combined Projects Arncliffe, or alternatively 89.8% of the shares it holds in Combined Projects Arncliffe, on trust for Deiri Nominees (prayer 18).
[4]
Sayour Holdings' submissions
Turning to the parties' respective submissions on the present application, it is convenient first to summarise the submissions made by Sayour Holdings in opposition to the grant of the leave sought by Deiri Nominees and Mr Deiri.
Sayour Holdings submits at the outset that the proposed third cross-claim would give effect by way of relief to positions that are also expressed as a basis of defence and that, as adverted to above, because each document involves the withdrawal of admissions made for the purpose of these proceedings those documents cannot be filed without leave (reference being made to Commonwealth Bank of Australia v Xiong; Landmax Developments Pty Ltd v Commonwealth Bank of Australia [2010] NSWSC 1518). (Leave, or an extension of time, for the filing of the pleadings is necessary in any event as there was non-compliance with the orders made on 17 June 2019.) Deiri Nominees and Mr Deiri cavil with the proposition that any withdrawal of admissions is necessary.
The position of Sayour Holdings, in essence is that the proposed pleadings would amount to an abuse of process. It is said that they: are inconsistent with other pleadings of the same parties; challenge the basis of final orders; seek without a proper basis to withdraw admissions and to depart from concessions repeatedly made; are seriously and unfairly burdensome and prejudicial; lack bona fides; and are not supported by a sufficient explanation to justify the indulgence here sought.
In particular, it is submitted that the proposed pleadings seek impermissibly to traverse: first, the issue as to Sayour Holdings' membership of Combined Projects Arncliffe, which was the necessary basis of final consent orders made on two occasions (this being raised by reference to the principle of res judicata or issue estoppel); and, second, the underlying issue as to the control of Sayour Holdings (said essentially to be a retainer challenge) that it is said ought to have been raised and decided before those final orders were made (here invoking the principles of Anshun estoppel and noting that these proceedings have been on foot for two years and have been fixed for hearing later this year).
It is submitted that the points now sought to be raised would involve a "collateral attack" on the grant of leave for the first cross-claim to be brought; and that the result of permitting the filing of the proposed pleadings is that the Court might proceed to hear the first cross-claim (and find its allegations to be made out), but might nonetheless dismiss it for want of authority to bring it; an outcome that it is said would be highly prejudicial to the plaintiff and to Combined Projects Arncliffe, both in terms of the work already undertaken to formulate the claim and the effort already expended in obtaining the s 247A relief. It is submitted that if this point was to have been taken then it should have been taken at an early stage.
[5]
Issue estoppel
Insofar as Sayour Holdings raises a contention of res judicata (namely, that the pleadings sought to be filed raise the issue of whether or not it was a shareholder of Combined Projects Arncliffe and, because that issue was necessary to the basis of final consent orders made on two occasions, doing so is precluded), Deiri Nominees and Mr Deiri (while accepting that consent orders can give rise to issue estoppel), maintain that the relevant question is what, if any, issues were "necessarily decided" by the consent order (referring to Isaacs v Ocean Accident and Guarantee Corp Ltd [1957] 58 SR (NSW) 69 (Isaacs) at 75 per Street CJ and Roper CJ in Eq). They note that, in this regard, reference may be made to the terms of the order as well as to the pleadings or other material showing the issues raised and decided (referring to Trustees for the Roman Catholic Church for the Diocese of Bathurst v Mine [2016] NSWCA 213 at [23] (per Meagher JA, Leeming and Simpson JJA agreeing, citing Isaacs).
As to the first consent order relied upon by Sayour Holdings (the order made by Parker J on 28 February 2019 involving access to documents), it is submitted that (although Sayour Holdings had commenced proceedings seeking relief under s 247A of the Corporations Act), contrary to Sayour Holdings' submissions, Parker J did not make "a s 247A order" (see the orders extracted above at [7]).
It is noted that the order made by Parker J was not expressed to be pursuant to s 247A of the Corporations Act; that there was no hearing as to whether or not the requirements of s 247A were satisfied; and that Parker J did not make any findings in that regard. It is said that the consent order merely reflected a resolution of the dispute between the parties. Reference is made to what was said by Austin J in Glazier v Australian Men's Health (No.2) [2001] NSWSC 6 at [73], namely that:
... the record only shows that the defendants consented to the orders, and there is nothing to indicate that they consented to any aspect of the plaintiff's case. It is not appropriate to look behind the orders and construct a chain of implied consents to various parts of the plaintiff's evidence and submissions.
Deiri Nominees and Mr Deiri say that the approach taken by them in this regard was "a pragmatic one to resolve the production issue", referring to Barnden v Zulian; Barnden v Commissioner of Taxation [2018] NSWSC 1980 at [43], where Parker J said:
In my view, the settlement of interlocutory applications by the making of a consent order should be encouraged. Sometimes that may lead to a point, which could otherwise have been deployed, being shelved. If that means that at a later stage the point may be raised and have to be dealt with, so be it. The Court should be slow to adopt an approach which would lead to arguments that parties are fettered in the line they can take in procedural applications because of their consent to earlier procedural orders. Such an approach would only increase disputation and costs, and reduce the flexibility which is an important element of modern case management.
[6]
Anshun estoppel
As to the contention by Sayour Holdings that the issues as to whether Mr Sayour is a shareholder and director of Sayour Holdings and whether Sayour Holdings is a shareholder of Arncliffe ought to have been raised and decided before the two consent orders were made (and hence the pleadings sought to be filed are precluded by Anshun estoppel), Deiri Nominees and Mr Deiri note that the relevant inquiry when Anshun estoppel is invoked is whether the matter relied on is so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it (referring to Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 602; [1981] HCA 45 - Gibbs CJ, Mason J and Aickin J (Anshun)). It is noted that that analysis "is not to be made mechanistically, but rather there is a value judgment to be made referable to the proper conduct of modern litigation" (referring to Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245; [2010] NSWCA 33 (Champerslife v Manojlovski) at [3] per Allsop P, as his Honour then was).
Deiri Nominees and Mr Deiri say that, in the present case, proceedings were brought by Sayour Holdings for access to the books and records of Combined Projects Arncliffe, and for the appointment of a person to its board; and that, in those circumstances, it was not unreasonable for the defendants not to have put in issue Sayour Holdings' membership of Arncliffe or Sayour Holdings' membership and directorship. It is said that, in so doing, the scope of the dispute was minimised. Reference is made to the observation of Gibbs CJ, Mason and Aickin JJ in Anshun at 600 that "[to] require that the defendant always raise his cross-claim or set-off at the first available time could cause great inconvenience". It is submitted (and I agree) that it would also undermine the overriding purpose under s 56 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) if parties were "required to raise or dispute every issue in every case".
Deiri Nominees and Mr Deiri say that there is now a very different situation in that Deiri Nominees and Mr Deiri are presently being sued in Combined Projects Arncliffe's name for some $42 million. It is submitted that in such a case it is reasonable that all legal and factual defences available to them would be raised, including those in the proposed defence and third cross-claim. It is noted that, in Anshun, Gibbs CJ, Mason and Aickin JJ said at 603:
there are a variety of circumstances ... [in which] a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few.
[7]
Allegations of "bad faith"
Insofar as Sayour Holdings contends that the pleadings sought to be filed are "lacking in bona fides" because the case sought to be advanced concerning the Arncliffe Agreement pleaded is "strange" and "preposterous", Deiri Nominees and Mr Deiri say (and, again, I agree) that this contention amounts to no more than an "emphatic assertion about the merits of the case", and that the merits are "a matter for trial".
It is noted that Sayour Holdings makes no submission that there is no reasonable defence or cause of action disclosed in the proposed defence and third cross-claim; and it is submitted that nor could Sayour Holdings reasonably do so, since such a contention would fail to meet the threshold identified in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130; [1964] HCA 69 (Barwick CJ); reference also here being made to Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57]. It is submitted that the Court would be particularly cautious in accepting such a contention (and the other objections raised by Sayour Holdings) where to do so would effectively involve a summary disposal of the defence and third cross-claim, noting that in Spencer v Commonwealth (2010) 241 CLR 118; [2010] HCA 28 at [24], French CJ and Gummow J said:
The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process.
It is further said that there is no requirement for Mr Deiri to swear an affidavit to persuade the Court of his bona fides; that the pleaded claims are clearly arguable; and that if Sayour Holdings wishes to contend that the pleadings are brought in bad faith, it bears that onus. Deiri Nominees and Mr Deiri submit that the reliance placed by Sayour Holdings on Batiste v Gilmour-Latham at [28] is misplaced, in that that case involved an application to set aside a default judgment and has no bearing on the present circumstances.
[8]
Withdrawal of admissions
Finally, as to the complaint that the pleadings sought to be filed would involve departure from "express formal admissions on the pleadings that Sayour Holdings is a member of Arncliffe and that Moustafa Sayour is a member and director of Sayour Holdings", and that no leave has been sought to withdraw such admissions under r 12.6 of the UCPR, Deiri Nominees and Mr Deiri disavow any intention to seek to withdraw any admissions. They say that they do not need to do so because there is no rule precluding them from taking a different position in relation to the membership of Combined Projects Arncliffe or Sayour Holdings in different pleadings or proceedings.
It is submitted that there is ordinarily no reason why a party must admit a fact in one pleading or proceeding and maintain the same admission in a wholly different pleading or proceeding.
Moreover, Deiri Nominees and Mr Deiri say that the first cross-claim, the defence to it and the third cross-claim are in substance part of a separate proceeding to the s 247A proceeding. It is submitted that the fact that the proceedings have been allocated the same proceeding number "is a happenstance because they have been brought by cross-claim". It is submitted that ordinarily, when leave is granted to commence a derivative claim under s 237, fresh proceedings are commenced; and that in this case, the first cross-claim was brought by cross-claim in the same proceedings because the proceedings had been set down for hearing commencing November 2019, together with the Broadway Proceedings. They argue that the proceeding brought by the first cross-claim in the name of Combined Projects Arncliffe, should properly be considered and treated as separate proceedings to the s 247A proceedings.
Deiri Nominees and Mr Deiri contend that it is not an abuse of process for them to take a different position in pleadings in relation to the derivative action against them for some $42 million, in circumstances where the earlier s 247A proceedings involved a fundamentally different set of claims, in different pleadings, about access to documents and the board of Combined Projects Arncliffe.
[9]
Res judicata or issue estoppel and Anshun estoppel
The principles relating to res judicata or issue estoppel and Anshun estoppel have been set out in numerous authorities and are well known. (See, for example, the explanation by Diplock LJ in Thoday v Thoday [1964] 1 All ER 341 at 351-352; [1964] 2 WLR 371 of the concept of issue estoppel as a species of estoppel res judicatam, and the principle underlying Anshun estoppel, as articulated by Sir Wigram VC in Henderson v Henderson (1843) 3 Hare 100 at 115.)
For issue estoppel, the principle as explained by Dixon J in Blair v Curran (1939) 62 CLR 464 at 531-532; [1939] HCA 23 (cited recently by Leeming and White JJA at [8] in Williamson v Elders Rural Services Australia Ltd [2019] NSWCA 137) is that:
A judicial determination directly involving an issue of fact or of law disposes once [and] for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment … necessarily established as the legal foundation or a justification of its conclusion …
In Champerslife v Manojlovski at [106], Handley AJA said:
The test for an issue estoppel or a cause of action estoppel is objective. For issue estoppel it is whether the precise question of fact or law sought to be litigated in the later proceedings was decided in the earlier as a fundamental basis for the decision. For cause of action estoppel it is whether the cause of action in the later proceedings is in substance the same as that litigated to judgment in the former.
Writing extra-judicially in "Res Judicata: General Principles and Recent Developments" ((1999) 18 Aust Bar Rev 214), Handley AJA, as his Honour then was, noted (at 216) that the doctrine of issue estoppel extends to issues that were assumed or conceded in the prior litigation.
As to Anshun estoppel, as mentioned above, in Anshun at 602-3 Gibbs CJ, Mason and Aickin JJ said:
… there will be no estoppel unless it appears that the matter relied upon … was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a [matter] if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of a particular issue, motives extraneous to the actual litigation, to mention but a few.
[10]
Withdrawal of admissions/adoption of inconsistent positions
Turning then to the question whether the proposed pleadings would require the withdrawal of admissions, the matters the subject of express admissions are as to Sayour Holdings being a member of Combined Projects Arncliffe (i.e., see at [3]-[4] of the existing defences, where it is admitted that Sayour Holdings is the registered holder of shares in Combined Projects Arncliffe and has been a 50% shareholder in that company since the day of its incorporation - 29 January 2014). (The defendants denied the allegation that "at all times from 21 August 2014 until his death, Jamil Sayour was also a director of the plaintiff" (see [270] of the existing defences)). Sayour Holdings also submits, as referred to earlier, that inherent in the consent to the grant of leave for the filing of the first cross-claim on 9 May 2019 (subject only to the express reservations that were made at the time on a limited basis) there was express acceptance (by Deiri Nominees and Mr Deiri) that the first cross-claim was a reasonable claim and an implied acceptance by them that it was in the interest of Combined Projects Arncliffe to bring it.
Thus it appears to be said that there is an implied admission (based on the status of membership of the company being a necessary predicate for the making of orders for access to books and records pursuant to s 247A or for the grant of leave to bring derivative proceedings) as well as an express admission as to the status of Sayour Holdings as a member of Combined Projects Arncliffe. It is relevant here to note the definition of 'admission' in the Dictionary to the Evidence Act 1995 (NSW) (see also the discussion by the Australian Law Reform Commission (ALRC) (ALRC Report 38, Appendix C at [19]) and Stephen Odgers, Uniform Evidence Law (14th edn, 2019, Thomson Reuters) at [EA.81.60]).
There is also an issue as to inconsistency of pleading in relation to the reliance or otherwise to be placed by Deiri Nominees and Mr Deiri on the alleged Arncliffe Agreement and/or the alleged variations thereof.
As to the express admission of Sayour Holdings' status as a shareholder, there may be an issue as to whether this goes further than an admission as to what appears on the ASIC register (and has appeared on the ASIC register since incorporation of the company) as opposed to whether the entries on the ASIC register were validly recorded at the time. As to the question of any withdrawal of the admission (though, as Sayour Holdings notes, no such application is here made), there are said to be two competing policies at least in relation to the withdrawal of formal admissions (first, that an admission should not be permitted easily to be withdrawn, so as to make the procedure for formal admissions meaningless, but, second, on the other hand not to discourage parties from making admissions out of fear that once given they cannot be withdrawn - see Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 (Panfida Foods) per Rogers CJ). In McFadden v Snow (1952) 69 WN (NSW) 8, Kinsella J said:
The question of a party's right to withdraw an admission was discussed in Ell v Hunter District Water Supply & Sewerage Board. Although in that case the court was concerned with admissions of fact made pursuant to the District Courts Act 1912, and rules thereunder, its decision was based not upon the interpretation of that Act and the rules but on general principles which are to be applied at the discretion of the tribunal according to the facts of each case in order to do substantial justice between the parties. Street CJ, after citing from a number of cases, including the following passage from Bowen LJ in Cropper v Smith: "Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace", proceeded at 441: - "We are not told how it was that this admission came to be made, or, if a mistake was made, why it was that this was not discovered sooner, but there can, of course, be no question of bad faith or anything of that kind in the matter … Is there any reason therefore why it should not be allowed to repair the error which it made? I can see none. The mistake has not brought about any alteration in the position of the plaintiffs, which will prevent them from getting justice done, and any injury that they may have sustained by reason of it can be compensated for by costs. I think therefore that the Board should be allowed to withdraw its admissions …" [footnotes omitted]
[11]
Other complaints
Insofar as complaint is made as to lack of bona fides in the raising of particular arguments at this stage of the proceedings or as to the merits of the allegations here sought to be made, those are matters to be ventilated at the final hearing. There is certainly no basis on which at an interlocutory stage I could conclude that the proposed pleadings are not propounded on a bona fide basis, whatever their ultimate merits might be.
As to the complaint that Mr Deiri has filed no affidavit deposing to the circumstances in which these allegations are now being raised or as to why they were not raised before, or as to why leave or an extension of time is sought for the filing of the proposed pleadings, and reliance is placed on what was said in Aon Risk v ANU by the High Court, it must here be remembered that the delay in the filing of the proposed pleadings (having regard to the time at which the proposed pleadings were served) was then only a matter of days.
In Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303; [2013] HCA 46, in a dispute as to the inadvertent disclosure of documents, the High Court considered what had been said earlier in Aon v ANU, noting that the decision in Aon v ANU (concerned with the relevant court rules in the ACT as they applied to amendments to pleadings) confirmed as correct an approach to interlocutory proceedings which has regard to the wider objects of the administration of justice. The High Court there emphasised that the dictates of justice referred to in s 58 of the Civil Procedure Act require that, in determining what directions or orders to make in the conduct of the proceedings, regard is to be had in the first place to how the overriding purpose of the Civil Procedure Act can be furthered, together with other relevant matters, including those referred to in s 58(2).
In the present case, the complexity of the two sets of proceedings (i.e. both the Arncliffe and the Broadway proceedings) derives in no little measure from the expansion of the allegations raised by Sayour Holdings itself. I say this without criticism of Sayour Holdings (which was not privy at the outset to the extensive documentation which has now been produced in relation to the dealings between Mr Deiri and others in relation to the respective property developments and Jamil Sayour) but simply to note that the ambit of the proceedings has to some extent been a moveable feast. I am not persuaded in those circumstances that Sayour Holdings can assume the moral high ground in terms of additions to the pleadings or the scope of the matters to be determined in the final hearing.
[12]
Orders
For the above reasons, I make the following orders:
1. Grant leave to the first and second cross-defendants to the first cross-claim in these proceedings to file their defence dated 3 July 2019 and to file their proposed third cross-claim of the same date.
2. Direct that the first and second cross-defendants to the first cross-claim in these proceedings file the said pleadings within two business days of the making of these orders and file and serve any additional evidence on which reliance is to be placed for the purposes of the third cross-claim within seven days of the making of these orders.
3. Direct the cross-claimant to the first cross-claim to file and serve within 14 days any reply to the first and second cross-defendants' defence to the first cross-claim.
4. Direct the cross-defendants to the third cross-claim to file and serve their defence to the third cross-claim and any evidence on which they rely by way of defence to the third cross-claim within 28 days of the filing and service of the third cross-claim.
5. Order that the costs of the application for leave to file the said pleadings be costs in the cause.
6. Grant the parties liberty to apply on three days' notice for any variation of the above timetable or if any issues arise in the implementation of the above orders.
7. Stand the matter over to directions before the trial judge on a date to be fixed.
[13]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 22 August 2019
Conference & Exhibition Organisers Pty Ltd v Johnson [2016] NSWCA 118
Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738
Essex Securities Pty Ltd v Lunt [2006] WASC 58
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303; [2013] HCA 46
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69
Gibbs v Kinna [1999] 2 VR 19; [1998] VSCA 52
Glazier v Australian Men's Health (No.2) [2001] NSWSC 6
Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640; 20 ACLC 1502; 42 ACSR 534
H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694; 1 All ER 934
Hackett v Nambucca Valley Quarries Pty Ltd [2012] NSWSC 1189
In the matter of Akierman Holdings Pty Limited [2015] NSWSC 1395
In the matter of Jimmy's Recipe Pty Ltd [2018] NSWSC 1331
In the matter of Legal Practice Management Group Pty Ltd; nSynergy Pty Ltd and nSynergy International Pty Ltd [2017] NSWSC 1500;
In the matter of Mycorp Group Pty Limited (and others) [2013] NSWSC 1344
Isaacs v Ocean Accident and Guarantee Corp Ltd [1957] 58 SR (NSW) 69
J Huang v D Wang [2015] NSWSC 510
Jeans v Commonwealth Bank of Australia Ltd [2003] FCAFC 309; (2003) 204 ALR 327
Khouri v National Australia Bank Ltd [2007] NSWSC 987
McEvoy v Caplan [2010] NSWCA 115; 78 ACSR 167
McFadden v Snow (1952) 69 WN (NSW) 8
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45
Ragless v IPA Holdings Pty Ltd (in liq) [2012] SASC 203
Rogers v the Queen (1994) 181 CLR 251; [1994] HCA 42
SLE Worldwide Australia Pty Ltd v Wyatt Gallagher Bassett Pty Ltd [2005] NSWSC 816
Spencer v Commonwealth (2010) 241 CLR 118; [2010] HCA 28
State of Queensland v JL Holdings Pty Ltd (1996-1997) 189 CLR 146; [1997] HCA 1
The Nominal Defendant v Gabriel (2007) 71 NSWLR 150; [2007] NSWCA 52
Thoday v Thoday [1964] 1 All ER 341; [1964] 2 WLR 371
Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28
Trustees for the Roman Catholic Church for the Diocese of Bathurst v Mine [2016] NSWCA 213
Tyne v UBS AG (No 2) (2017) 250 FCR 341; [2017] FCAFC 5
Williamson v Elders Rural Services Australia Ltd [2019] NSWCA 137
Texts Cited: Evidence (ALRC Report 38, 1987)
KR Handley, "Res Judicata: General Principles and Recent Developments" (1999) 18 Aust Bar Rev 214
Ritchie's Uniform Civil Procedure NSW
S Odgers, Uniform Evidence Law (14th edn, 2019, Thomson Reuters)
Category: Procedural and other rulings
Parties: Sayour Holdings Pty Ltd atf Sayour 2 Family Trust (Plaintiff)
Combined Projects (Arncliffe) Pty Ltd (First Defendant/Cross-Claimant to First Cross-Claim)
Deiri Nominees Pty Ltd (Second Defendant/Second Cross-Defendant to First Cross-Claim)
Fouad Deiri (Third Defendant/First Cross-Defendant to First Cross-Claim)
Konstructions Pty Ltd (Third Cross-Defendant to First Cross-Claim)
Zapphire Investments Pty Ltd (Fourth Cross-defendant to First Cross-Claim)
Deicorp Properties Pty Ltd (Fifth Defendant to First Cross-Claim)
Deicorp Constructions Pty Ltd (Sixth Cross-defendant to First Cross-Claim)
Representation: Counsel:
Relevantly, the alleged Arncliffe Agreement is pleaded (at [35]ff of the proposed third cross-claim and particularised) as being partly express (by reference to an email of 28 January 2014 from Jamil Sayour to Mr Deiri) and partly implied (in circumstances including the (unparticularised) conduct of Combined Projects Arncliffe, Deiri Nominees, Sayour Holdings, Mr Deiri and Jamil Sayour during the period January 2014 to October 2015). The alleged 8 January 2015 variation of the alleged Arncliffe Agreement is particularised as being an express variation orally agreed in a discussion in Lebanon between Mr Deiri and Jamil Sayour and said to have been documented in a minute prepared by Mr Deiri in or about early January 2015 - referred to in the course of submissions as the "Tripoli minute" (see [42] of the proposed third cross-claim).
If, which is denied, the appointment of Mr Deiri as a director and secretary of Combined Projects Arncliffe on 29 January 2014 contravened or did not comply with the Corporations Act or the constitution of the company, by reason of the matters alleged on the first cross-claim, then an order is sought pursuant to s 1322(4)(b) of the Corporations Act declaring that the appointment of Mr Deiri as sole director and secretary of Combined Projects Arncliffe on 29 January 2014 was not invalid by reason of those contraventions or non-compliances (prayer 21). (In respect of this relief, it is said by Sayour Holdings that the proposed pleading at [76] confronts the problem of s 1322(6)(c) (i.e., the issue as to substantial injustice to any person) by asserting that Sayour Holdings was never a member of Combined Projects Arncliffe.)
Sayour Holdings says that in the Arncliffe proceedings final relief has been granted on two occasions that could only be justified if Sayour Holdings was a member of Combined Projects Arncliffe: namely, the making on 28 February 2019 by Parker J of the s 247A order finally disposing of Sayour Holdings' claim for relief under that section; and the making by me on 9 May 2019 of the order granting leave for Sayour Holdings to file the proposed first cross-claim (which was in the name of Combined Projects Arncliffe) (being relief that was sought under s 237 of the Corporations Act). It is said that such relief is final relief (referring to In the matter of Jimmy's Recipe Pty Ltd [2018] NSWSC 1331 at [34] per Brereton J, as his Honour then was).
Sayour Holdings says that each of those orders was made under circumstances where: there were (and still are) express formal admissions on the pleadings that Sayour Holdings is a member of Combined Projects Arncliffe; and there was (and still is) an express formal admission on the pleadings that Mr Moustafa Sayour was a director of Sayour Holdings.
Sayour Holdings submits that inherent in the consent to the grant of leave for the filing of the first cross-claim on 9 May 2019 (subject only to the express reservations that were made at the time on a limited basis) is that there was express acceptance (by Deiri Nominees and Mr Deiri) that the first cross-claim was a reasonable claim and implied acceptance by them that it was in the interest of Combined Projects Arncliffe to bring it. It is submitted that the point now sought to be agitated is outside the reservation contained in the notation to the 9 May 2019 consent orders and would attack the standing of Sayour Holdings to seek s 237 leave at all, as well as its capacity to seek any relief at all in the proceedings, notwithstanding that both s 247A relief and s 237 relief have already been granted.
Sayour Holdings points to the allegations contained in the proposed defence to the first cross-claim as to the alleged Arncliffe Agreement (to which I have referred above), namely the allegations at [128]; [133]; and [139] of the proposed defence to the first cross-claim - pointing out that the second alleged variation is alleged to have been made at a meeting in or about late September or early October 2015 (said by Sayour Holdings to have been on Jamil Sayour's death bed) (see [138]) where Mr Jamil Sayour is alleged to have said that the Arncliffe site had been introduced to him by Mr William Zafiropoulos and that he, Jamil Sayour, had agreed to pay Mr Zafiropolous a fee for introducing the site (assessed by the difference between the valuation of the site with an approved development consent for the construction of residential apartments on the one hand and the purchase price for the site on the other). The allegation at [139] of the proposed defence is that at that meeting Deiri Nominees and Sayour Holdings agreed that Combined Projects Arncliffe would pay the site identification fee that Jamil Sayour had agreed with Mr Zafiropoulos; that Mr Deiri was authorised to cause Combined Projects Arncliffe to pay that fee; and that Deiri Nominees would charge a reasonable development management fee for work performed on the Arncliffe development. (The so-called site identification fee to Zapphire and development management fee to Deiri Nominees are two of the payments impugned in the first cross-claim.)
Sayour Holdings says that "this last part of the story" (i.e., as I understand it, that Jamil Sayour had said to Mr Deiri that he owed Mr Zariopolous the site identification fee) has "only now been mentioned" for the first time "after these proceedings have been going for 2 years".
Sayour Holdings points out that the relief that is sought to bind Sayour Holdings to the alleged agreement in the Tripoli minute comes in circumstances where Mr Deiri and Deiri Nominees have (by [130] of their defences filed on 20 February 2019) stated that, following communication by Sayour Holdings of its denial of the 8 January 2015 agreement, they have communicated that they do not seek to enforce that agreement (referring to a letter dated 27 July 2017 from their then solicitors, Corrs Chambers Westgarth, to the solicitors acting for Sayour Holdings, Adams Partners); and that, in the circumstances, Combined Projects Arncliffe has communicated to its shareholders by letter dated 2 August 2017 from its solicitors that Combined Projects Arncliffe does not propose to give effect to the 8 January 2015 Agreement and proposes to pay any dividend or distribution of capital in accordance with the shareholdings recorded in its register of members, unless there is a claim preventing it from doing so.
Sayour Holdings points out that the above pleading was in the context of the allegation by it in its second further amended statement of claim filed in December 2018 (at [134]) that by reason of the contents of the purported 8 January 2015 minute and its origin from Mr Deiri, and his control of the affairs of Combined Projects Arncliffe, it was reasonable for Sayour Holdings to fear that attempts will be made by Mr Deiri to defeat Sayour Holdings' rights as a shareholder to participate rateably in the profits and capital returns of Combined Projects Arncliffe (an allegation expressly denied at [134] of the 20 February 2019 defence). (Sayour Holdings draws from this denial that Mr Deiri must have been denying that it was reasonable for Sayour Holdings to hold the alleged fear.) That denial expressly refers to [130] of the defence. Thus, it is submitted that it is fundamental to this part of the defences filed on 20 February 2019 that the agreement alleged to be recorded in the Tripoli minute is not going to be relied on and enforced (consistent with the position also put in earlier defences and correspondence between the parties.)
It is noted that [130] of the defences filed on 20 February 2019 also concedes that no formal notice of the alleged general meeting of Combined Projects Arncliffe's shareholders on 8 January 2015 was given and that it is alleged that this was by consent of Jamil Sayour for Sayour Holdings (and Mr Deiri for Deiri Nominees).
Sayour Holdings points to the terms of the so-called Tripoli minute, noting that it: is expressed to be a minute of a general meeting of members; records as the only persons present, Jamil Sayour and Fouad Deiri; was first produced to Sayour Holdings on 1 May 2017 and was asserted to be the only minute of any general meeting of Combined Projects Arncliffe (an assertion that Sayour Holdings says is now said by the defendants to have been wrong); and does not on its face purport to record any agreement as such but, rather, to record strong disagreement between Mr Deiri and Jamil Sayour (with Jamil Sayour demanding to be made a director of Combined Projects Arncliffe, which the minute records Mr Deiri refusing to countenance; and with Mr Deiri refusing also to accept any further financial contributions from Sayour Holdings to the development venture and asserting that he would do things his own way). It is submitted that the position there recorded ("evidently regardless of the wishes of Jamil Sayour or [Sayour Holdings]") belies Mr Deiri's belated attempt to assert that it is "somehow unjust" for Sayour Holdings to rely on its legal rights in circumstances where it did not contribute funds such as those which, in the alleged Tripoli minute, Mr Deiri says he would not allow to be contributed.
Sayour Holdings maintains that the proposed allegation that this document records an agreement is "preposterous"; and says that it is contrary to the terms of the document that is supposed to embody it. It is submitted that "[t]he idea that Mr Deiri having made this tough bargain, just relented at the end, but never bothered to tell anyone else in the Sayour family is even more preposterous".
Sayour Holdings further contends that the allegation here sought to be pleaded is lacking in bona fides. It is noted that, on an application to set aside default judgment (in Adams v Kennick Trading (International) Ltd (1986) 4 NSWLR 503 at 507C-D) Hope JA observed that a judge is entitled to disbelieve in the bona fides of a defence and explained the difference between such a finding and a finding that merely prefers the evidence of one witness to another.
Complaint is made that Mr Deiri has not provided an affidavit supporting his "strange assertions" concerning the alleged ''site identification fee" (including in this complaint the assertion at [138] of the proposed defence to the first cross-claim that Jamil Sayour had asked Mr Deiri to get the company to pay money which Jamil Sayour had agreed to pay), noting that in an affidavit that Mr Deiri has provided earlier in these proceedings (his 26 June 2017 affidavit) at [22], Mr Deiri said that Jamil said that he was pursuing this venture "for my family". It is submitted that a full and sufficient explanation for the allegation now sought to be made would include an explanation of where this "site identification fee" money actually went and where it is now.
Pausing here, Mr Deiri's 26 June 2017 affidavit was tendered by Sayour Holdings on the present application, and I provisionally admitted it (as Exhibit A), over the objection (to all but [22] of the affidavit) of the defendants. Particular attention was drawn by Counsel for Sayour Holdings to the passages contained at [19]-[39] of that affidavit. The basis of the objection to the admission of the bulk of this affidavit was that, save insofar as it is alleged that it contains admissions, the affidavit is inadmissible and that (other than in relation to [22]) there had been no notice of an intention to rely upon it; and hence the defendants were prejudiced in that (not knowing what reliance was placed on the affidavit), the defendants were unable to say whether evidence would have been called (perhaps from Mr Deiri) in relation to certain aspects of the affidavit. It was submitted that the defendants ought to have been given an opportunity to deal with the specific paragraphs, and it was said that perhaps further evidence of further conversations with Mr Sayour would have been able to be called.
The relevance attributed to this affidavit by Sayour Holdings is that it was the account that Mr Deiri has previously given of the genesis of the Arncliffe project. It was said that it particularly bears on the defence that Mr Deiri now wishes to adduce (that there was an agreement between his company, Deiri Nominees, and Sayour Holdings, through Jamil Sayour, as to the basis of association with the shareholders in Combined Projects Arncliffe; which agreement was subsequently varied on two occasions - and on the latter occasion to provide a basis for payments to Zapphire which are now sought to be the subject of the defence).
Significance is also attached by Sayour Holdings to [39], which is said to be the culmination of passages of evidence about the financial contribution (or lack of it) of Jamil Sayour and Sayour Holdings to Combined Projects Arncliffe; namely, that, beyond the sum of $670,000, neither Jamil nor Sayour Holdings has contributed any further capital to the Arncliffe Project and that Deiri Nominees and its related entities provided all the capital including the funds required for the purchase.
It is said that that is the previous basis upon which Mr Deiri was conducting the Arncliffe proceedings and that the position now sought to be agitated by the defence is a departure from that at a very late stage in the course of these proceedings (relevant to the submission that Mr Deiri is in effect departing from positions previously taken in this case).
I accept that the fact that Mr Deiri has previously deposed to certain matters is of relevance to the current application (at least insofar as Sayour Holdings submits that he has adopted an inconsistent position in relation to the proposed amendments from that which had earlier been adopted - it cannot amount to an admission however as it has not yet been read in the proceedings). On that basis, I will treat the admission of the affidavit no longer as provisional.
Sayour Holdings submits that a judge ruling on an application such as the present is entitled to insist on the defendant adducing satisfactory evidence to justify the indulgences that are sought (referring to Batiste v Gilmour-Latham [2001] NSWCA 392 (Batiste v Gilmour-Latham) at [28] per Hodgson JA; his Honour there dealing with a case where the defendant had applied to remove a financial condition from the grant of leave to defend).
Sayour Holdings accepts that a genuine issue should be allowed to go to trial but says that "[t]hat does not mean that a party who has expressly abandoned a preposterous argument should be allowed to reinstate it without so much as explaining how the change of heart comes about or putting his oath to a sufficient exposition of the facts as to persuade the Judge of his bona fides".
Sayour Holdings submits that the argument now sought to be reinstated (i.e., as I understand it, the argument based on the alleged Arncliffe Agreement) was "expressly, formally and repeatedly abandoned by competent solicitors and counsel, and for good reason" and says that no explanation is now provided for the attempt belatedly to revive it, in circumstances where "a complex hearing is already planned". Sayour Holdings says that now to revive it now would be contrary to the principles stated in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 (Aon Risk v ANU).
Sayour Holdings says that the direction to file the first cross-claim made on 9 May 2019, was in circumstances where it was accepted that leave should be given, subject to the two express reservations that were made. It is said that this direction resolved the question of the s 237 leave, subject only to those reservations provided for in the order, namely as to any debate on the form of the pleading (a reservation not subsequently pursued) and the reservation as to the basis of costs (which was separately pursued and is the subject of the second judgment being handed down today). It is submitted that "[a]ll of that involved substantial time, cost and attention on a basis that Mr Deiri now wishes … belatedly [to] challenge".
Sayour Holdings argues that the present application would take the parties back to the position in which they were on 24 April 2019 but to defer to a final hearing the issue of the very claim for which Deiri Nominees and Mr Deiri seek to revoke the grant of leave (and in circumstances where the same defendants also seek very substantial security for the costs of that first cross-claim). It is submitted that the course proposed would be "egregiously unfair and burdensome", noting that the revocation of leave to sue is expressly sought nunc pro tunc (see prayer 8).
Reliance is placed on Rogers v the Queen (1994) 181 CLR 251 at 272; [1994] HCA 42 (per Deane and Gaudron JJ) at [7] where it was said that it is well settled, so far as civil proceedings are concerned, that, if a judicial determination directly involves an issue of fact or of law that issue cannot afterwards be raised between the same parties; and Ayoub v Perpetual Trustee Company Limited [2011] NSWSC 606 where Macready AsJ dismissed a derivative claim that a shareholder sought to bring that would have involved a "collateral attack" on a consent judgment binding his company.
Sayour Holdings notes that r 12.6 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) provides that a party may not withdraw any admission, or any other matter that operates for the benefit of another party, except with the consent of the other party or by leave of the court; and points to the discussion of the relevant authorities by Kirby J (as his Honour then was) in Bank of Western Australia v Salmon [No 1] [2009] NSWSC 224 (Salmon) (at [40]-[46]). It is submitted that the principles there stated receive additional force or emphasis from the circumstance that Salmon was decided before the High Court decision in Aon Risk v ANU "displaced the old Cohen v McWilliam approach" ((1995) 38 NSWLR 476).
It is noted that no application for leave to withdraw admissions has been made. Complaint is made that there is no explanation as to why the admissions were made; no evidence to show that they were wrongly made; and that the position of Deiri Nominees and Mr Deiri now appears to be "a purely tactical change of mind".
It is submitted that, in respect of the allegation that the Tripoli minute constituted a shareholders' agreement, Sayour Holdings would be faced with inconsistent pleadings (i.e., pleadings still on foot in answer to the oppression and injunction claims saying that reliance on this agreement has been abandoned, yet a pleaded defence to the first cross-claim and allegations in the proposed third cross-claim, that reliance is still placed on it). Sayour Holdings says that this is not an acceptable position.
It is submitted that his Honour's comments are apposite on the present application. It is said that, in taking the approach they did to consent to production, the defendants cannot be seen as consenting to a determination that Sayour Holdings was a shareholder in Arncliffe; rather, all they consented to do was to provide documents.
As to the second consent order relied upon by Sayour Holdings (the order made by me on 9 May 2019 that Sayour Holdings in the name of Combined Projects Arncliffe file a statement of cross-claim in the form provided to the defendants), Deiri Nominees and Mr Deiri again say that, in consenting to the filing of the first cross-claim, they adopted a pragmatic approach to the way in which the derivative application and consent orders were made on 9 May 2019, taking the pragmatic position that the first cross-claim be filed so that the matter could be prepared for the hearing set down for November and December 2019.
It is said by Counsel who had appeared on that occasion that "we were very keen at that point in time to have the proceedings moving forward, that my learned friends' clients be served and be brought back to the Court on 16 May so that the hearing dates would not be jeopardised. So the form of this order, in our respectful submission, was a pragmatic attempt to move the case forward that it appears is now being held against my client in relation to the position it has adopted in its defence to the first cross-claim and its proposed third cross-claim".
Deiri Nominees and Mr Deiri say that the allegations sought to be raised in the proposed defence and third cross-claim (i.e., that Sayour Holdings is not a member of Combined Projects Arncliffe, and that Sayour Holdings has no valid director or shareholder) are not matters that would be decided as part of an application for leave under s 237 of the Corporations Act; and that, even if Deiri Nominees and Mr Deiri had raised those allegations prior to the order that I made by consent on 9 May 2019, the question of leave would simply have been deferred to the final hearing; and hence there would have been no substantive difference in outcome. They make the same submission as to the position at the time that the second consent order was made.
For the same reason, it is said that there is no basis for Sayour Holdings' submission that it would suffer prejudice were the pleadings to be filed because of "the work already undertaken to formulate the [First Cross-Claim]", since Sayour Holdings would have needed to prepare the first cross-claim in any event.
It is submitted that it is "unrealistic and unreasonable" to expect that Deiri Nominees and Mr Deiri necessarily would have put in issue the matters they now seek to raise concerning membership of Sayour Holdings and of Combined Projects Arncliffe in proceedings for access to records and ancillary relief, given the amount at stake and the nature of the relief sought.
In addition, Deiri Nominees and Mr Deiri further submit that the order made on 9 May 2019 permitting the filing of the first cross-claim does not create an issue estoppel or an Anshun estoppel (and is not otherwise an abuse of process) for the following three reasons.
First, that, contrary to the submissions of Sayour Holdings, an order granting leave under s 237 is interlocutory, not final (referring to McEvoy v Caplan [2010] NSWCA 115; 78 ACSR 167 (McEvoy) at [4] (Macfarlan JA, Allsop P, as his Honour then was, and Beazley JA as her Excellency then was, agreeing); Hackett v Nambucca Valley Quarries Pty Ltd [2012] NSWSC 1189 at [67]-[74] (Gzell J)). In Huang v Wang [2016] NSWCA 164, Bathurst CJ made specific references to this issue at [58] by reference to McEvoy.
Reference is also made to the decision of White J in the Supreme Court of South Australia in Ragless v IPA Holdings Pty Ltd (in liq) [2012] SASC 203 at [8], where his Honour proceeded on the basis that an order under s 237 is interlocutory and it was open to revoke the grant of leave.
Second, that s 237 requires the Court to be satisfied that all the requirements of that section are met before leave can be granted (referring to Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640; 20 ACLC 1502; 42 ACSR 534 at [27] per Barrett J); and this requirement is not obviated simply because there is consent or a lack of opposition to leave (referring, by way of example, to In the matter of Akierman Holdings Pty Limited [2015] NSWSC 1395 at [2] (per Black J); In the matter of Mycorp Group Pty Limited (and others) [2013] NSWSC 1344 at [6]-[7] (per Black J)), whereas in the present case, no such determination has been made. It is submitted that the fact that the question of leave has not yet finally been determined is consistent with the terms of the order, which simply permitted the filing of the first cross-claim and was not expressed to be a grant of leave under s 237; and with the notation that the order was made without prejudice to the defendants "to contend that leave to bring proceedings on behalf of the first defendant should not be granted without the appropriate undertakings and in the form of the statement of cross-claim which has been filed". (It is submitted that, if the order was a final order which determines the rights of the parties, it is difficult to see how the notation could have be made.)
Third, that, at its highest, the order is more properly characterised as an interim order under s 241 of the Corporations Act for the filing of a derivative claim, made with the pragmatic objective of progressing the proceedings to hearing set down in November and December 2019 (reference there being made to In the matter of Legal Practice Management Group Pty Ltd; nSynergy Pty Ltd and nSynergy International Pty Ltd [2017] NSWSC 1500; J Huang v D Wang [2015] NSWSC 510).
It was further said (at 603-604) that:
It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment … The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgments is obviously an important factor to be taken into account in deciding whether the omission to plead can found an estoppel against the assertion of the same matter as the foundation for a cause of action in a second proceeding. By "conflicting" judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction.
In Champerslife v Manojlovski (at [107]-[109]), Handley AJA, having considered the test for issue estoppel, went on to consider the broadening of the enquiry to be undertaken where the question was one of Anshun estoppel and made it clear that the enquiry in such a case is not restricted to the pleadings and reasons for judgment (and hence in the present case there can be no suggestion that it would be inappropriate to take into account the submissions that were made before the Court in the previous proceedings). His Honour said (at [107]-[108]):
The principle in Henderson v Henderson (1843) 3 Hare 100 [67 ER 313] at p 115 [p 319] widens the scope of both forms of res judicata estoppel without introducing subjective factors. The test is whether the new point "properly belonged to the subject of litigation" in the earlier proceedings. The relevant evidence is restricted to the pleadings in both proceedings and the reasons for judgment in the earlier.
Where the extended form of res judicata in Anshun or Johnson is in issue the enquiry is extended to include the reasonableness of the litigant's conduct in the earlier proceedings, or the existence of an abuse of process in the later.
Allsop P (as his Honour then was) in Champerslife v Manojlovski (at [3]-[4]) said that:
The question of unreasonableness is derived significantly from the matter being so relevant to the subject matter of the first proceeding. There are at least two related assessments that have to be made: was the matter so relevant that it can be said to have been unreasonable not to rely upon it in the first proceeding? Whilst it is necessary to eschew language of abuse of process, the character of the assessments is such as to make relevant to a point what Lord Bingham of Cornhill said in Johnson v Gore Wood & Co [2002] 2 AC 1 at 31:
"It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before." …
Leaving to one side his Lordship's reference to "abusive" and "misusing or abusing the process of the court", what is of assistance from what he said is the recognition that the assessment is not to be made mechanistically, but rather there is a value judgment to be made referable to the proper conduct of modern litigation. [Allsop P's emphasis in italics]
A decision as to whether an Anshun estoppel precludes particular issues later being raised on the basis that it would involve an abuse of process requires an evaluative judgment (see also, for example, McColl J at [5]-[6] in Conference & Exhibition Organisers Pty Ltd v Johnson [2016] NSWCA 118).
Substantial similarity in the factual basis for the claims is said to be a necessary but not sufficient condition for application of the principle (Gibbs v Kinna [1999] 2 VR 19; [1998] VSCA 52 at [23] per Kenny JA).
In Charben Haulage Pty Ltd (in liq) v Beilby [2010] NSWSC 510 at [46], it was noted that there are a variety of circumstances in which a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings (such as expense, the importance of the particular issues, and motives extraneous to the actual litigation). The test was said to remain one of reasonableness having regard to the circumstances.
The gravamen of an Anshun estoppel, as explained by the Full Court of the Federal Court, is "the failure to litigate an issue at a time where it ought reasonably to have been raised and determined" (see Tyne v UBS AG (No 2) (2017) 250 FCR 341; [2017] FCAFC 5 per Dowsett J at [11]).
The High Court in Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 (Tomlinson) outlined the relevant principles in relation to an Anshun estoppel plea (at [22] to [26] - French CJ, Bell, Gageler and Keane JJ): I
Three forms of estoppel have now been recognised by the common law of Australia as having the potential to result from the rendering of a final judgment in an adversarial proceeding. The first is sometimes referred to as "cause of action estoppel". Estoppel in that form operates to preclude assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the proceeding and which was determined by the judgment. It is largely redundant where the final judgment was rendered in the exercise of judicial power, and where res judicata in the strict sense therefore applies to result in the merger of the right or obligation in the judgment. The second form of estoppel is almost always now referred to as "issue estoppel". Estoppel in that form operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment. The classic expression of the primary consequence of its operation is that a "judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies". The third form of estoppel is now most often referred to as "Anshun estoppel", although it is still sometimes referred to as the "extended principle" in Henderson v Henderson. That third form of estoppel is an extension of the first and of the second. Estoppel in that extended form operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding. The extended form has been treated in Australia as a "true estoppel" and not as a form of res judicata in the strict sense. Considerations similar to those which underpin this form of estoppel may support a preclusive abuse of process argument.
The present significance of the recognition of those three forms of estoppel is that each has the potential to preclude assertion of a right or obligation, or the raising of an issue of fact or law, between parties to a proceeding or their privies. Absent a principled basis for distinction - and none has been suggested - one principle must govern the identification of privies for the purpose of all forms of estoppel which result from the rendering of a final judgment in an adversarial proceeding.
To explain contemporary adherence to the comparatively narrow principle in Ramsay v Pigram, it is appropriate also to explain the relationship between the doctrine of estoppel and the doctrine of abuse of process as it has since come to be recognised and applied in Australia. The doctrine of abuse of process is informed in part by similar considerations of finality and fairness. Applied to the assertion of rights or obligations, or to the raising of issues in successive proceedings, it overlaps with the doctrine of estoppel. Thus, the assertion of a right or obligation, or the raising of an issue of fact or law, in a subsequent proceeding can be simultaneously: (1) the subject of an estoppel which has resulted from a final judgment in an earlier proceeding; and (2) conduct which constitutes an abuse of process in the subsequent proceeding.
Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel.
Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. Similarly, it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel. [footnotes omitted]
Turning first to the question of issue estoppel, there is no doubt that, while standing on which to bring an application under either s 237 or s 247A of the Corporations Act was dependent on Sayour Holdings' status as a member of Combined Project Arncliffe, that issue was not the subject of any considered determination when either of the relevant consent orders was made; nor were the respective consent orders as made expressed to be made pursuant to those sections. Accepting as a general proposition that the doctrine of issue estoppel may extend to issues assumed or conceded in prior litigation, nevertheless I cannot here conclude that the respective orders involved a necessary or implicit concession as to the status of Sayour Holdings, as a member of Combined Projects Arncliffe - in relation to Parker J's document production order because it could equally have been made in the exercise of the discretion to order the production of documents relevant to issues in the proceedings; and in relation to the derivative suit order because it was clear from the notation that the defendants were reserving their position as to the leave so granted (albeit by reference to the undertakings to be proffered) and it is clearly the case that there was no actual determination (let alone consideration) of any contested issue as to standing on that occasion.
In other words, no issue as to standing was considered or necessarily decided by the making of either of the consent orders (and none was argued or expressly conceded at the time).
Furthermore, I consider there is force to the observation that all that the record shows in relation to the making of the respective consent orders is that there was consent (or at least no opposition) to the making of the orders and that it is not appropriate to look behind the orders. I accept Mr Deiri and Deiri Nominees' Counsel's explanation that what was adopted was a pragmatic means of progressing the matter in view of the November-December 2019 hearing date (noting Parker J's view that the settlement of interlocutory applications by the making of consent orders should be encouraged - or at least not discouraged).
I am not persuaded that there is an issue estoppel that here precludes Deiri Nominees and Mr Deiri from pleading the matters proposed to be included in the proposed defence and third cross-claim.
As to the issue of Anshun estoppel, I am not persuaded that the test has here been met - in other words, I am not persuaded that it was so unreasonable for Deiri Nominees and Mr Deiri not to raise the issue of standing when the earlier interlocutory orders were made by consent so as to preclude them from now raising the issues sought to be raised as to Sayour Holdings' membership of Combined Projects Arncliffe and related issues. It is clear from the authorities (including Tomlinson), that the mere fact that an issue could have been raised at an earlier time in the proceedings is not determinative of the question of unreasonableness and that this requires an evaluative judgment. In my opinion it cannot be said that the failure to raise the issue of Sayour Holdings' status as a shareholder in the context of a dispute as to access to documents (or in the context of the commencement of a derivative suit), is so unreasonable as to preclude the issue now being raised in the context of what is a substantial claim (in the order of some $42 million).
Insofar as complaint is made that the proposed pleadings would involve a collateral attack on the consent orders that have been made, it involves no attack at all on the order for access to the company's books and records; and the attack raised on the standing to seek leave to bring a derivative suit is raised in circumstances where the issue as to standing was not the subject of considered argument (and, had it been, would more appropriately been left to be dealt with at the substantive hearing), and where that order was not a final order but one that was open to variation.
Thus, I do not consider that the complaints made as to issue or Anshun estoppel are made good so as to warrant refusal of leave to file the proposed pleadings.
In the case of formal admissions, leave for withdrawal of the admission is necessary and it is said that what constitutes proper grounds for withdrawal will necessarily depend on the nature of the admission and the stage of the proceedings when the application is made. Further, it is said that ordinarily this will require explanation of the circumstances in which the admission was made and those relied on to justify the withdrawal (see Ritchie's Uniform Civil Procedure NSW (Ritchie's) commentary at [17.2.6] and the cases there cited).
In Ritchie's (at [17.2.7]) it is said that it will not usually be appropriate to grant leave to withdraw an admission where, among other things, the admission has been made after obtaining relevant advice and is deliberate and clear (for example, Panfida Foods at 745 and 748); or the party with the benefit of the admission is likely to be prejudiced by the withdrawal, either as a result of having changed its position in reliance upon the admission (H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694; 1 All ER 934) or as a consequence of the unavailability of evidence, or because of the likely significant deterioration in its quality, as a result of the delay (SLE Worldwide Australia Pty Ltd v Wyatt Gallagher Bassett Pty Ltd [2005] NSWSC 816 at [57]-[59]); or where the application is made at a late stage of the proceedings (Jeans v Commonwealth Bank of Australia Ltd [2003] FCAFC 309; (2003) 204 ALR 327 (Jeans v CBA); Essex Securities Pty Ltd v Lunt [2006] WASC 58 at [34]). Conversely, leave to withdraw an admission may be appropriate where the admission was made inadvertently or without due consideration of the material matters (Ritchie's at [17.2.9]; Khouri v National Australia Bank Ltd [2007] NSWSC 987 at [12]).
It is suggested that admissions made otherwise than in the formal course of proceedings have merely an evidentiary significance and that the "admitting" party is entitled to dispute the accuracy of the admission (by evidence that it was influenced by mistake, misunderstanding or ignorance, or that it is otherwise inaccurate or unreliable - see The Nominal Defendant v Gabriel (2007) 71 NSWLR 150; [2007] NSWCA 52 at [113], [144]).
In Jeans v CBA, the Full Court of the Federal Court (Hill, Madgwick and Conti JJ) noted that the question whether to permit withdrawal of an admission was ultimately one of "the attainment of justice" (citing the observations of Dawson, Gaudron and McHugh JJ in State of Queensland v JL Holdings Pty Ltd (1996-1997) 189 CLR 146; [1997] HCA 1) involving a balancing of all relevant circumstances including the prejudice which must attach to one party or the other.
In the present case, the issue regarding consent to withdrawal of an admission does not arise (since the making of any such application is disavowed). Relevantly, the issue is whether leave should be given to file pleadings that raise an inconsistent position in relation to the issue of the status of Sayour Holdings as a member of Combined Projects Arncliffe. As already noted, there may well be scope for dispute as to the ambit of the admission made on the existing pleadings. There is also scope for dispute as to whether there is any admission implicit in the consent to the making of the relevant orders as to that matter.
As to the position of Deiri Nominees and Mr Deiri that there is no rule precluding them from taking a different position in relation to the membership of Combined Projects Arncliffe or Sayour Holdings in different pleadings or proceedings, the fact is that the first cross-claim is in fact brought in the Arncliffe proceedings (notwithstanding that it might have been commenced as separate proceedings). Nevertheless, it seems to me that the inconsistency is reconcilable to the extent that the pleaded position at present goes to the position as recorded in the ASIC register and the contentions now sought to be raised go to the position as the defendants contend should properly be reflected in the ASIC register. In those circumstances, it seems to me that the appropriate course is not to refuse leave for the filing of the proposed pleadings by reference to that inconsistency but, rather, to leave it to be explored at the final hearing with all of the other factual disputes.
As to the inconsistency between the position reflected in the existing pleading (disavowing an intention to rely on the so-called Tripoli minute or alleged variation of the Arncliffe Agreement by reference to that minute) and the position now sought to be adopted, again it seems to me more appropriate for that to be dealt with at the final hearing rather than summarily to preclude any argument based on the so-called Tripoli minute. If it be contended that there has been detrimental reliance on a representation made to the effect that there would be no reliance placed on the Tripoli minute, that can be a matter for reply and will need to be the subject of evidence at the hearing.
Insofar as it was made clear in Aon Risk v ANU that a satisfactory explanation was required for leave to amend that would cause a delay in the hearing, here there has been an explanation in the present case (albeit proffered by Counsel) that a pragmatic approach was taken to the consent orders in question; and I am not persuaded that permitting the filing of the proposed pleadings will prevent the proceedings being heard in the time that has been made available for them at the end of this year. Insofar as Sayour Holdings complains of the prejudice that will flow if it turns out that the costs of progressing the matter to hearing will be wasted if leave to file the first cross-claim is set aside nunc pro tunc, and the originating process and statement of claim dismissed, on the basis of the challenge to Sayour Holdings' membership of Combined Projects Arncliffe, it seems to me that (unless there had been a full blown hearing of that issue in advance) it would have been exposed to the risk of wasted costs in any event. I consider that the course most aligned to the just, quick and cheap resolution of the real issues in dispute, having regard to the dictates of justice and case management issues, is to permit the filing of the proposed pleadings and thus to permit all issues in dispute between the parties to be dealt with in the hearing at the end of this year.