JOHN SHEAHAN AS LIQUIDATOR OF ATSIKBASIS NOMINEES PTY LTD (IN LIQUIDATION) (ACN 007 769 557) and ATSIKBASIS NOMINEES PTY LTD (IN LIQUIDATION) (ACN 007 769 557) v ATSIKBASIS NOMINEES NO. 2 PTY LTD

Counsel for the Defendants/Cross-Plaintiffs: Mr P Quinn with Mr P Adams

Solicitor for the Defendants/Cross-Plaintiffs: Nick Xenophon & Co

Counsel for the First, Second and Third Cross-Defendants: Mr S P O'Sullivan QC with Mr D Blight

Solicitor for the First, Second and Third Cross-Defendants Gilchrist Connell

Counsel for the Fourth Cross-Defendant Mr A Rosser

Solicitor for the Fourth Cross-Defendant Cosoff Cudmore Knox

IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 131 of 2012

IN THE MATTER OF ATSIKBASIS NOMINEES PTY LTD (IN LIQUIDATION) BETWEEN: JOHN SHEAHAN AS LIQUIDATOR OF ATSIKBASIS NOMINEES PTY LTD (IN LIQUIDATION) (ACN 007 769 557)

ATSIKBASIS NOMINEES PTY LTD (IN LIQUIDATION) (ACN 007 769 557)

AND: ATSIKBASIS NOMINEES NO 2 PTY LTD (ACN 100 537 415) AS TRUSTEE OF THE ATSIKBASIS FAMILY SETTLEMENT NO. 2

MANUEL ATSIKBASIS AND MARIA ATSIKBASIS IN THEIR CAPACITY AS TRUSTEES OF THE MANUEL ATSIKBASIS FAMILY SUPERANNUATION FUND

NICHOLAS ATSIKBASIS AND FOTINA ATSIKBASIS IN THEIR CAPACITY AS TRUSTEES OF THE NICHOLAS ATSIKBASIS FAMILY SUPERANNUATION FUND

SPIROS ATSIKBASIS, MARIA ATSIKBASIS, PANAGIOTIS (PETER) ATSIKBASIS AND AIKATERINI ATSIKBASIS IN THEIR CAPACITY AS TRUSTEES OF THE PETER & KATHY ATSIKBASIS SUPERANNUATION FUND

MESSARIUS NOMINEES PTY LTD (ACN 100 537 442) AS TRUSTEE OF THE MANUEL ATSIKBASIS FAMILY TRUST NO. 2

NICHOLAS ATSIKBASIS AND FOTINA ATSIKBASIS IN THEIR CAPACITY AS TRUSTEES OF THE FOTINA ATSIKBASIS FAMILY TRUST

MACOBU NOMINEES PTY LTD (ACN 100 537 460) AS TRUSTEE OF THE SPIROS ATSIKBASIS FAMILY TRUST NO. 2

JUDGE: BESANKO J DATE OF ORDER: 24 JULY 2013 WHERE MADE: ADELAIDE

1. The directions hearing be adjourned to Thursday 8 August 2013 at 9.30 am. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 131 of 2012

IN THE MATTER OF ATSIKBASIS NOMINEES PTY LTD (IN LIQUIDATION) BETWEEN: JOHN SHEAHAN AS LIQUIDATOR OF ATSIKBASIS NOMINEES PTY LTD (IN LIQUIDATION) (ACN 007 769 557)

ATSIKBASIS NOMINEES PTY LTD (IN LIQUIDATION) (ACN 007 769 557)

AND: ATSIKBASIS NOMINEES NO 2 PTY LTD (ACN 100 537 415) AS TRUSTEE OF THE ATSIKBASIS FAMILY SETTLEMENT NO. 2

MANUEL ATSIKBASIS AND MARIA ATSIKBASIS IN THEIR CAPACITY AS TRUSTEES OF THE MANUEL ATSIKBASIS FAMILY SUPERANNUATION FUND

NICHOLAS ATSIKBASIS AND FOTINA ATSIKBASIS IN THEIR CAPACITY AS TRUSTEES OF THE NICHOLAS ATSIKBASIS FAMILY SUPERANNUATION FUND

SPIROS ATSIKBASIS, MARIA ATSIKBASIS, PANAGIOTIS (PETER) ATSIKBASIS AND AIKATERINI ATSIKBASIS IN THEIR CAPACITY AS TRUSTEES OF THE PETER & KATHY ATSIKBASIS SUPERANNUATION FUND

MESSARIUS NOMINEES PTY LTD (ACN 100 537 442) AS TRUSTEE OF THE MANUEL ATSIKBASIS FAMILY TRUST NO. 2

NICHOLAS ATSIKBASIS AND FOTINA ATSIKBASIS IN THEIR CAPACITY AS TRUSTEES OF THE FOTINA ATSIKBASIS FAMILY TRUST

MACOBU NOMINEES PTY LTD (ACN 100 537 460) AS TRUSTEE OF THE SPIROS ATSIKBASIS FAMILY TRUST NO. 2

JUDGE: BESANKO J DATE: 24 JULY 2013 PLACE: ADELAIDE

REASONS FOR JUDGMENT 1 The plaintiffs bring a claim against 13 defendants. The proceeding was commenced on 21 June 2012. The defendants sought to cross-claim against its legal and accounting advisers. On 5 June 2013 I extended the time for the defendants to file cross-claims against four parties that are now cross-defendants. The extension of time involved a considerable extension in terms of the period specified in the Rules (see r 15.04 of the Federal Court Rules 2011 (Cth)). 2 I am told that the plaintiffs' case against the defendants is ready for trial. The defendants' claims against the cross-defendants are not ready for trial. 3 The defendants by interlocutory application dated 10 July 2013 and the cross-defendants (the first to third cross-defendants by interlocutory application dated 3 July 2013 and fourth cross-defendant by oral application made on 9 July 2013) seek directions concerning the trial of the plaintiffs' claim and the trial of the defendants' cross-claims. The plaintiffs were heard on these matters. 4 No party suggests that the defendants' claims for relief against the cross-defendants are not related to the subject of the plaintiffs' claims against them. That is a pre-requisite to the right to issue a cross-claim against a third party (see r 15.01). The prima facie rule is that the trial of a cross-claim will take place at the same time as the trial of the claim (r 15.10(1)(c)). Precisely what this involves is not made clear by the Rules. The Court has the power to make a wide range of orders with respect to the hearing of cross-claims and claims (r 15.13). 5 It is desirable where there are common issues of fact in relation to a claim and a cross-claim that all parties be bound by one determination in relation to those facts. The possibility of there being inconsistent findings of fact is to be avoided (Barclays Bank v Tom [1923] 1 KB 221 at 224 per Scrutton LJ). 6 There are common issues of fact in this case although the extent of the overlap between the claim and cross-claims is difficult to determine on the papers. There is a plea by the defendants of reliance on information or advice provided by others (s 189 of the Corporations Act 2001 (Cth)). It is sufficient for me to conclude that one set of findings is desirable. 7 The plaintiffs submitted that the trials should proceed sequentially. The cross-defendants could appear at the trial between the plaintiffs and defendants and be involved (i.e., cross examine witnesses) to the extent that issues between the plaintiffs and the defendants affect them. The plaintiffs claim that their case is largely, if not entirely, documentary and should be completed within two or three days. They do not want to be involved (and incur the costs of being involved) in a long professional negligence trial. Under the plaintiffs' proposal, there would still be only one set of findings and no possibility of inconsistent findings. There is certainly authority which supports the plaintiffs' approach: Seton HW, Seton's Judgments and Orders (6th ed, Stevens & Sons, 1901) pp 148-149; Coles v Civil Service Supply Association (1884) 26 Ch D 529. 8 The position advanced by the first to third cross-defendants represented something of a middle position between the plaintiffs' position and that of the defendants. They submitted that the trials should proceed sequentially, but that witnesses should only give evidence once. The former aspect of the submission is similar to the plaintiffs' position, but the latter differs. Under the plaintiffs' proposal, the cross-defendants could cross examine witnesses only insofar as issues between the plaintiffs and the defendants affected them, whereas under the first to third cross-defendants' proposal they could cross examine more generally with respect to issues arising on the claim and cross-claims. A related matter and one of the principal concerns of the first to third cross-defendants was to ensure that the defendants are required to identify the evidence they seek to tender against them. 9 The position advanced by the fourth cross-defendant was neutral as between the defendants' proposal and that of the first to third cross-defendants. It made the point that it will need further time to prepare properly for trial. 10 Whilst the plaintiffs' points are fairly made, I think, having read the papers, that the trials should be carried out at the same time and witnesses should give evidence only once. There are too many disadvantages in witnesses being cross examined twice or potential disadvantages such as the plaintiffs' case not being as simple as envisaged and not being completed within two to three days. I think the trial of the claim and the trials of the cross-claims should be heard together and that all parties should be bound by the findings of fact made at the one trial. I would add that it may well be possible to structure the trial in a way that means the plaintiffs do not have to be present when issues which do not concern them are being considered. 11 This resolves the principal difference between the parties. I will hear the parties as to the appropriate orders. It needs to be borne in mind that it may not be possible to foresee or resolve all potential difficulties at this stage and that it may be appropriate to revisit the orders closer to trial or at the beginning of the trial. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.