F The objections of the Janlok applicants
64 The express objections of the Janlok applicants can be broadly placed into five categories, as follows:
(a) that "there are few people that will speak against the [Indian] government, which is SEBI" and so "it's going to be difficult to get someone who will act fairly against the government";
(b) the fact that a large number of proposed senior practitioners and judges who would be appropriate referees are likely to have conflicts in acting against SEBI which is, given its statutory role, an important regulatory authority in India;
(c) the cost of obtaining expert assistance in India;
(d) delay occasioned by the inability to have matters resolved at the present hearing; and
(e) that the question of SEBI's 'standing' can be resolved in a way which is fatal to SEBI even if their contentions as to the position under Indian domestic law were correct.
65 Before coming back to the factors I have identified in [57], I will deal briefly with each of these matters in turn.
66 As to the first objection, when it was first raised in the course of submissions, I indicated to Ms Kenny that if such a submission was to be maintained, there must be some proper evidentiary basis for it. As a consequence, Ms Kenny called Mr McArdle to give evidence. Mr McArdle's evidence, which I accept (insofar as it went), was that a very large amount of money had been paid already on the provision of the Patnaik report. Further, an additional, very large sum was estimated as likely to be charged in the event that cross-examination proceeded. Mr McArdle also gave evidence about the way the Indian legal system worked in obtaining access to an expert of the calibre of a former justice of the Supreme Court of India. Given the absence of large transnational law firms in India, it was necessary, in order to obtain the assistance of an appropriate expert, to retain a local firm of lawyers, which additionally contributed to costs.
67 Mr McArdle also gave evidence about the fact that numerous senior practitioners were approached and were conflicted (advising Mr McArdle that they had an "ongoing relationship" with SEBI). What is critical, however, is that no evidence was adduced to suggest that there was a reasonable basis for the contention made that it will be "extremely difficult" in the circumstances of this case to obtain a referee that will "act fairly against the government". Despite this, during the course of submissions, Ms Kenny returned to this contention and called in aid two matters upon which it was submitted I should find that the Court should have a legitimate concern that it would be extremely difficult to have a referee in India conduct the proposed reference fairly (or at least in such a way as to avoid a reasonable apprehension of a lack of objectivity).
68 The first matter related to the terms of an order made by the Supreme Court of India which provided that the chairman of a committee (Lodha committee), the former Chief Justice of India, Justice R M Lodha, was entitled to fix his own remuneration (T 83). The second matter was the absence of evidence adduced on this application that monies had been distributed to any Indian investor pursuant to the activities of the Lodha committee (T 84-5).
69 It was said that based on the matters referred to in the previous paragraph, I should draw an "inference" or that, alternatively, I should take "judicial notice" of the fact that the Indian legal system operating differently from that in Australia, meaning that a reference conducted in India could not be completed appropriately (T 81). As I noted to Ms Kenny, apart from the fact that this submission as to "judicial notice" is unable to be reconciled with the terms of s 144 of the Evidence Act, when an opportunity was given to lead any evidence which would provide a basis of such a submission, such evidence was not adduced in chief; indeed, if inferences were relevant to the determination of this question, the only inference would be one adverse to the Janlok applicants: see Commercial Union Insurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418E (per Handley JA).
70 In any event, not only do I reject the submission, but I also consider it lacked and lacks any reasonable evidentiary foundation. The Indian legal system has a common heritage with ours. It would be quite wrong, in my view, for any assumption to be made that a referee appointed pursuant to the orders of this Court to conduct a reference in India would not diligently and impartially discharge his or her obligations as a referee. There is no substance to objection (a) identified at [64] above).
71 The second objection is the difficulty, as referred to by Mr McArdle, of obtaining a non-conflicted referee. Although there may be some delay occasioned by the fact that it is necessary to make extensive enquiries in order to find someone suitable, and it may be that any reference orders may need to be revisited in the event (which, I presently consider unlikely) that it is impossible to obtain a suitable un-conflicted referee, I do not think this potential or speculative difficulty is a particularly important factor militating against the course proposed. Accordingly, I reject objection (b) identified at [64] above.
72 The third objection is the cost of the proposed reference. It is troubling that the provision of expert evidence in relation to Indian domestic law appears to have cost so much. I was informed from the Bar table that the costs associated with obtaining the Radhakrishnan report by SEBI have not reached anything like the amount paid by the Janlok applicants. Disparity in costs between experts is, however, hardly an unusual factor and this is somewhat beside the point. What is relevant is that it became evident, during the course of submissions, that in the event that I was not disposed to order a reference, the position of the Janlok applicants was that orders should be made facilitating the service of additional expert reports directed more precisely to the questions that need to be addressed with regard to the Relevant Issue. Once this is appreciated, not only are there no costs savings in not ordering a reference, but the opposite is highly likely to be true.
73 Moreover, consistently with the submissions made on behalf of SEBI, I would be reluctant to make a determination on a matter such as Indian domestic law without the considered views of the experts that have been briefed. Leaving aside the questions that have been addressed (to which I will return), there has been no intellectual engagement with the contrary views expressed by the other expert. The experts are not to be criticised for this in the least. It is a consequence of the instructions they have received, and timing.
74 On any complex expert question, the accumulated experience of the Court is that joint reports and some exchange between the experts is important in assisting the Court. It follows that a conclave of some type would have been desirable in any event, and I do not consider that the costs associated with the course that I propose are likely to exceed a supervised conclave process. I would be disposed to make orders, in due course, 'capping' the costs of the reference in any event, to provide some protection for the parties. It follows that I reject the third objection identified at (c) at [64] above.
75 The fourth objection is in relation to the prejudice occasioned to the Janlok applicants in delaying resolution of the Relevant Issue, when such delay has been largely caused by SEBI's dilatory service of the Radhakrishnan report. There is some substance to this contention. I do not regard the tardy provision of the Radhakrishnan report, particularly after the last case management hearing, as being satisfactory. If that report had been served immediately after the case management hearing, it may have been that the issues (which first arose following the service SEBI's submissions on 8 September 2017) would have been evident much earlier, and the parties may well have been in a position to approach the Court and obtain orders, in advance of the current hearing, for proper expert assistance to be obtained. Despite this, we are where we are - with unsatisfactory opinion evidence and no exchange between the experts. The real question is what, in these circumstances, is the best remedial response? Although there has been delay, there will now be further delay irrespective of a reference being ordered; accordingly, although there is substance in the complaint of the Janlok applicants, it is not a valid objection to the course proposed. It follows that I reject the fourth objection identified at (d) at [64] above.
76 Finally, the fifth objection is that the Janlok applicants submitted that the Relevant Issue could be resolved, even if the contentions of SEBI as to Indian domestic law were correct. In this regard, the focus of the Janlok applicants' submissions was directed to the question of whether there was a "justiciable controversy" between SEBI and MiiResorts and it was contended that SEBI cannot satisfy that requirement. This was said to be separate from the issue of 'standing'.
77 The submission that these issues are separate should be accepted; it is plainly correct. As the High Court explained in Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd [1998] HCA 49; (1998) 194 CLR 247 at 264 [43] per Gaudron, Gummow and Kirby JJ:
In private law there is, in general, no separation of standing from the elements in a cause of action. Further, the requirement of a legal right determines the availability of injunctive relief and there is no separate requirement which determines entitlement to approach a court of equity.
78 This is a different question as to whether there exists an extant justiciable controversy. Reference was made by the Janlok applicants to the observations of the High Court in CGU Insurance Ltd v Blakeley [2016] HCA 2; (2016) 90 ALJR 272. With respect, however, those submissions paid insufficient attention to what was actually in issue in Blakeley. The determinative issue in Blakeley was whether the relevant trial Court (the Supreme Court of Victoria) was exercising federal jurisdiction. Given the fact that the case involved, among other things, the application of the Insurance Contracts Act 1984 (Cth), it is plain that the Court was exercising federal jurisdiction. In those circumstances, the ability of the Court to grant declaratory relief was constrained by the requirement that the power to grant an injunction was a licit exercise of judicial power pursuant to Chapter III of the Constitution. The determination of the Court, in substance, was that the declaratory relief sought in that case was an appropriate subject for the exercise of federal judicial power by reason of the fact that there was a "real interest" involved.
79 This is a separate issue from what I understood to be the core submission of the Janlok applicants, that is, that SEBI did not have a sufficient interest such that, as a matter of power or discretion, the Court would refuse or decline to grant declaratory relief. This is a matter that arises quite separately from the question as to whether or not a court is exercising federal jurisdiction. Courts have long shown a great reluctance to grant declaratory relief unless there is a real controversy between the parties. This finds reflection in a number of ways, including the traditional reluctance of equity to grant declaratory relief in circumstances where there is no real contradictor or the proposed relief lacks utility because it serves no useful purpose (for a recent example of relief being refused on this basis, see Dillon v RBS Group (Australia) Pty Ltd [2017] FCA 896 at [38]-[39]).
80 Having set out this particular objection, the immediate difficulty will already be obvious. The point of departure for considering the question of whether or not there is sufficient 'standing' or a "real interest" requires a consideration and an assessment of the precise position of SEBI under Indian domestic law and the rights, if any, it has to agitate claims directly on behalf of investors or to seek declaratory relief in pursuance of its statutory obligations and orders of the Supreme Court of India. It seems to me practically impossible to separate consideration of the "real interest" of SEBI, from the question of its duties and rights under Indian domestic law.
81 I pause to note that I did raise with Ms Kenny whether it was possible to adopt a demurrer type procedure and determine the Relevant Issue upon identified facts, including the correctness of the contentions of SEBI as to its legal position under Indian domestic law, enabling the Court to declare whether or not those facts provide for the cause of action sought to be the agitated by SEBI on its pleading and in its originating application: see Bass v Permanent Trustee Co Ltd [1999] HCA 9; 198 CLR 334 at 357 [50] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ. For understandable reasons, Senior Counsel for SEBI was not disposed to adopt that course.
82 It follows that I reject the fifth objection identified as (e) at [64] above.
83 Having dealt with the explicit objections of the Janlok applicants, for the sake of completeness, I should also deal with an objection which was implicit. That is, that the expert material currently filed is sufficient to allow the Court to determine the issue in respect of the Relevant Issue.
84 Apart from the lack of intellectual engagement between the experts, what has occurred is that the Radhakrishnan report was obtained prior to the identification of the issue as to 'standing' framed by Murphy J, which it does not directly address. It will be recalled that question (9) set out at [13] above was directed to whether or not SEBI had 'standing' to seek the relief it sought in the separate proceeding. The question addressed to Justice Radhakrishnan was somewhat different, namely, his opinion was sought on whether or not, by reason of SEBI being a statutory body established to protect the interests of investors, and by reason of the orders of the Supreme Court of India, SEBI was a trustee for the investors and was entitled or empowered to represent the investors in any judicial forum, including in this Court. Although the letter of instruction was not in evidence, it appears from the Patnaik report, that Justice Patnaik was asked to address the following questions:
1. Considering the terms of the three Supreme Court of India orders, as properly interpreted as a matter of Indian Law, does SEBI have the right or power to bring proceedings (and if so, to do so in a jurisdiction outside of India) on behalf of Indian investors (without obtaining the consent of those investors) to recover damages?
2. Does the order of the Supreme Court of India requiring SEBI to constitute a committee to be headed by the former Chief Justice Lodha confer power on SEBI to bring proceedings to recover damages?
3. Whether under Indian law, PACL will be regarded as having been a trustee or fiduciary when it received investors' funds in India for the purposes of using them to purchase land in India.
85 Contrary to the submission made by the Janlok applicants, the originating application filed by SEBI does not seek damages. Apart from an obligation to account (which is conceptually different), it is trite that there are two possible bases for an order for the payment of money to an aggrieved party in equity. The first arises from the traditional Chancery jurisdiction to make orders for monetary compensation as an appropriate means to address purely equitable wrongs such as breach of fiduciary duty. This, obviously enough, is usually known as equitable compensation. The second (not relevant here) is the ability conferred by statutes, starting with the Chancery Amendment Act 1858 (UK) (commonly known as Lord Cairns' Act), for an order for damages to be substituted for, or added to, specific performance or injunction, when those remedies have been sought in respect of contracts, torts or any wrongful act (commonly known as equitable damages).
86 Although the detail does not matter for present purposes, there must be close attention to the precise questions that are being asked of the experts in circumstances where the issue of 'standing', as framed, is directed to the precise relief sought in the originating application.