Plaintiff and Second Defendant by Counteralim v First Defendant and Plaintiff by Counterclaim

The Application

1 This is an application by the first defendant to stay or strike out that part of the plaintiff's amended statement of claim in which it claims contribution from the first defendant under s.23B of the Wrongs Act 1958 (Vic).

The Factual Background

2 An affidavit in support of the application was sworn on 15 September 2005 by John James Boon Cooper, the solicitor for the first defendant. That affidavit referred in turn to the earlier affidavit of Mr Cooper, sworn on 21 April 2005. The following factual background, which for present purposes seemed to be common ground, is taken from statements in, and exhibits to, Mr Cooper's two affidavits and from the pleadings in the proceeding. Reference to the affidavits was permissible under r.23.04 of the Supreme Court Rules, because, as will be seen, essentially the application was for a stay, under r.23.04, because the alleged claim was said to be bad in law rather than for an order, under r.23.02, striking out the relevant part of the amended statement of claim with leave to replead the claim in the proper way.

3 By an agreement made on or about 20 June 1996 between the second defendant, Minara Resources Limited (then known as Anaconda Nickel Limited) ("Minara"), and the plaintiff, Fluor Australia Pty Ltd ("Fluor"), ("the EPCM Agreement"), Minara engaged Fluor to provide engineering, procurement, construction and management services for the design, construction and commissioning of a facility to treat nickel and cobalt bearing lateritic ores at Murrin Murrin in Western Australia ("the Facility").

4 By an agreement made on or about 21 February 1997 between Minara and the first defendant, ASC Engineering Pty Ltd ("ASC"), Minara engaged ASC to design, manufacture and supply four acid leach autoclaves to the Facility ("the ASC Contract"). Fluor was not a party to the ASC Contract, although it was named in that Agreement as the "Engineer".

5 In or prior to August 1997 Minara transferred the whole of its interest in the Facility, including the development of the Facility, to its wholly owned subsidiary Murrin Murrin Operations Pty Ltd (then known as Anaconda Operations Pty Ltd) ("MMO") as agent for the Murrin Murrin Joint Venture between Murrin Murrin Holdings Pty Ltd ("MMH"), a wholly owned subsidiary of Minara, as to 60% and Glenmurrin Pty Ltd ("Glenmurrin"), a wholly owned subsidiary of Glencore International AG, as to 40%, which interest it purchased from Minara. MMO was appointed the manager under the Joint Venture Agreement and each of MMH and Glenmurrin appointed MMO to act as its agent.

6 By an agreement dated 27 August 1997 but executed and operative from 21 August 1997 and made between Fluor and MMO, as agent for MMH and Glenmurrin ("the EPC Agreement"), Fluor agreed to assume responsibility for the design and construction of the Facility.

7 The autoclaves were designed and manufactured by ASC in South Australia and installed by ASC at the Facility in early 1998. Alleged defects were subsequently found in wear plates affixed to the inside of the autoclaves. ASC attempted unsuccessfully to repair the wear plates. In November 2000 MMO engaged ASC to remove all of the wear plates, which task was completed by April 2001.

8 MMO commenced arbitral proceedings against Fluor under the EPC Agreement in respect of, among many other things, the allegedly defective wear plates in the autoclaves. The Commercial Arbitration Act 1984 (Vic) was the Act under which the arbitration was conducted. Under the interim and final arbitral awards delivered in late 2002 Fluor was ordered to pay MMO $3,276,189 plus interest in respect of the defective wear plates.

9 Fluor appealed the arbitral award in MMO's favour to this Court. Judgment was delivered on 28 July 2003.[1] The appeal was largely unsuccessful and, relevantly, Fluor remained liable to pay MMO $3,276,189 plus interest in respect of the defective wear plates. A further appeal to the Court of Appeal was settled. On 5 May 2004 Minara, MMO, Fluor and three other parties entered into a Release by which, among other things, MMO and Minara purported to agree to assign or novate the ASC Contract to Fluor.

The Proceeding

10 Fluor commenced this proceeding by writ and indorsement of claim on 7 May 2003. It filed a statement of claim on 1 July 2004 and then an amended statement of claim on 23 August 2005. Three claims are pleaded by Fluor. First, Fluor seeks damages from ASC for breach of the ASC Contract, the benefit of which it alleges is held by Minara on trust for it ("the contract claim"). Secondly, Fluor seeks damages from ASC in negligence. Thirdly, and alternatively, Fluor claims contribution from ASC under s.23B of the Wrongs Act 1958 (Vic) ("the contribution claim"). It pleads that as it was Minara's intention that MMO would have the benefit of the contractual promises of ASC pursuant to the ASC Contract, ASC is therefore liable to MMO for the same damage for which Fluor has been held liable to MMO in the arbitration.

11 By a summons filed on 16 September 2005 ASC sought an order, pursuant to r.23.01 of the Supreme Court Rules, staying the contract claim and the contribution claim, alternatively an order, pursuant to r.23.02, striking out the contract claim and the contribution claim.

The Appropriate Test

12 The traditional statement of when a court can summarily determine a proceeding by, for example, staying the proceeding or a claim in the proceeding, under r.23.01, on the ground that it does not disclose a cause of action has been expressed in a variety of ways. In General Steel Industries Inc v Commissioner for Railways (NSW)[2], Barwick CJ summarised past approaches. His Honour said:

"The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense'... 'so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed'; or 'so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument'; 'so to speak apparent at a glance'."

13 When the application came on for hearing before me on 14 October 2005 I raised with counsel whether any consideration had been given to the question of treating these issues as preliminary points for final determination, rather than as presently framed with the obviously lower hurdle for Fluor to overcome. After seeking instructions, counsel for ASC announced that it would seek to adjourn that part of the summons which related to the contract claim, so that further consideration could be given to that question, but that it wished to proceed with the argument on the contribution claim. Counsel for Fluor did not oppose this course, although he indicated that the plaintiff was ready and willing to argue the contract claim there and then. As the contribution claim did not involve the second defendant, Minara, I excused its counsel from further attendance. As counsel also indicated that Minara had come to Court to argue the contract claim, I reserved the question of Minara's costs.

Contribution under the Wrongs Act 1958 (Vic)

14 The relevant provisions in Part IV of the Wrongs Act 1958 (Vic) ("the Wrongs Act") are as follows:

"23A. Definitions

(1) For the purposes of this Part a person is liable in respect of any damage if the person who suffered that damage, or anyone representing the estate or dependents of that person, is entitled to recover compensation from the first-mentioned person in respect of that damage whatever the legal basis of liability, whether tort, breach of contract, breach of trust or otherwise.

23B. Entitlement to contribution

(1) Subject to the following provisions of this section, a person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with the first-mentioned person or otherwise).

(4) Subject to section 24(2B), a person who in good faith has made or agreed to make any payment in settlement or compromise of a claim made against that person in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not the person who has made or agreed to make the payment is or ever was liable in respect of the damage provided that that person would have been liable assuming that the factual basis of the claim against that person could be established.

...

(6) References in this section to a person's liability in respect of any damage are references to any such liability which has been or could be established in an action brought against that person in Victoria by or on behalf of the person who suffered the damage and it is immaterial whether any issue arising in any such action was or would be determined (in accordance with the rules of private international law) by reference to the law of a place outside Victoria."

Staying the Contribution Claim

15 ASC accepted that under Part IV of the Wrongs Act a person who is liable in contract for damage suffered by another person may recover contribution from a third person who is liable for the same damage. For the purposes of the argument, ASC assumed that Fluor would be able to make out the allegation that it was liable to MMO for the same damage as Fluor was. It submitted, however, that this legislation had no application to contribution rights in this proceeding because the dispute had nothing whatsoever to do with the substantive law of Victoria. There was no nexus between the events giving rise to the claim and Victoria. This was important because the Victorian legislation "has no precise analogue in other Australian jurisdictions."[3] Thus, under Western Australian legislation, contribution was only available as between persons who were liable in tort[4] and Fluor was not liable to MMO as a tortfeasor.

16 It was common ground between the parties that the proper law of the EPC Contract, between MMO and Fluor, was Western Australian law and that the proper law of the ASC Contract, between Minara (for the benefit of MMO) and ASC, was Western Australian law. Insofar as it was relevant, ASC also submitted that whether the alleged negligence was committed in Western Australia or South Australia did not matter. In either case the appropriate choice of law was the law of the place of the tort, which was not Victoria.

17 ASC submitted that there was a fundamental distinction between the jurisdiction of a court on the one hand and the law which applies to the issues in the proceeding on the other. Reference was made to the following passage from the joint judgment of Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in John Pfeiffer Pty Ltd v Rogerson:

"Questions of jurisdiction (in the sense of authority to decide) are better kept separate from questions of the applicable law. A court has jurisdiction in a civil action either because the plaintiff has served the originating process on the defendant while within its territorial jurisdiction or because applicable 'long arm' provisions have been invoked. The assumption of jurisdiction raises no question as to the law to be applied in deciding the rights and duties of the parties. That last question might, in some cases, affect whether the court should decline to exercise its jurisdiction and stay the proceedings. But the authority of a court to decide a question of forum non conveniens and, also, to decide the substantive rights and duties of the parties comes from the fact of service of the process."[5] (Footnotes omitted.)

18 The second point made by ASC, which it described as "trite law", was that the law of the forum governs matters of procedure whereas matters of substance were determined according to the law of the cause - in a contract dispute that being the proper law of the contract and in a tort dispute the law of the place of the tort. So much is clear from the often cited passage from the judgment of Mason CJ in McKain v R.W. Miller & Co (SA) Pty Ltd:

"As has been said, underlying the argument in this case is the proposition that, in the context of private international law, matters procedural or adjectival are to be determined according to the law of the forum. Notwithstanding the observation of Lord Wilberforce in Black-Clawson Ltd v Papierwerke A.G. that '[f]or English law to abolish the distinction between substance and procedure ... might be an intelligible objective', it remains the fact, as one writer has put it, that:

'It is perhaps the most inveterate doctrine of the conflict of laws that all questions of procedure in a given instance are governed by the lex fori, or the law of the court invoked, regardless of the law under which the substantive rights of the parties accrued.'

Not only is such a rule firmly rooted in precedent, it is soundly based in common sense. That the courts of the forum should apply their rules of procedure is both sensible and legitimate by reason of the judges' practical familiarity with those rules and because those rules, no doubt developed and refined over time, are designed to facilitate the process of litigation in a particular jurisdiction and to ensure that cases are heard efficiently and expeditiously. The fact that one party has chosen and the other party has submitted to a forum's jurisdiction indicates a willingness on the parties' part to litigate their cause in the courts of that forum, according to the ordinary way in which litigation in that forum is conducted.

However, while the proposition that matters of substance should be determined according to the law of the cause and matters of procedure according to the law of the forum is clear and relatively uncontroversial, its simplicity belies the difficulty of identifying just what is procedural and what is substantive."[6] (Footnotes omitted.)

19 The difference between procedural matters and matters of substance was considered by the majority in Pfeiffer. Their Honours said:

"... matters that affect the existence, extent or enforceability of the rights or duties of the parties to an action are matters that, on their face, appear to be concerned with issues of substance, not with issues of procedure. Or to adopt the formulation put forward by Mason CJ in McKain, 'rules which are directed to governing or regulating the mode or conduct of court proceedings' are procedural and all other provisions or rules are to be classified as substantive."[7] (Footnotes omitted.)

20 The next step in ASC's argument was that s.23B of the Wrongs Act is a law dealing with matters of substance, not matters of procedure. In Alexander v Perpetual Trustees WA Limited[8], for example, it was accepted by both the parties and the Court that the Victorian legislation applied to the proceeding in the Supreme Court of New South Wales because the alleged breaches of trust had been committed in Victoria.[9]

21 ASC further submitted that the reasons for this distinction between matters of substance and procedure were helpfully summarised by Kirby J in Pfeiffer:

"It may be reasonable to recognise the right of a litigant to choose different courts in the one nation by reason of their advantageous procedures, better facilities or greater expedition. However, it is not reasonable that such a choice, made unilaterally by the initiating party, should materially alter that party's substantive legal entitlements to the disadvantage of its opponents. If this could be done, the law would no longer provide a certain and predictable norm, neutrally applied as between the parties. Instead, it would afford a variable rule which particular parties could manipulate to their own advantage. Such a possibility would be obstructive to the integrity of a federal nation, the reasonable expectations of those living within it and the free mobility of people, goods and services within its borders upon the assumption that such movement would not give rise to a significant alteration of accrued legal rights."[10]

22 This, ASC submitted, was precisely what Fluor was seeking to do in making the contribution claim. By bringing its proceeding in this Court, Fluor was seeking to take advantage of the broader Victorian contribution legislation when the dispute itself had nothing to do with Victoria. If the proceeding had been brought in Western Australia, there would be no question that the Court would have regard to the Wrongs Act.

23 Thus, ASC submitted that statutory claims for contribution were governed by the substantive law governing the underlying claims, the law of the cause, not by the law of the place where the proceeding was brought. The contribution legislation of the jurisdiction with the closest connection to the cause was Western Australia.

24 It seems to me that ASC's submissions gained some support from the following statement in Dicey & Morris: "The Conflict of Laws":

"The appropriate law to govern a claim for contribution will in principle be that with which the claim for contribution is most closely connected."[11]

25 Fluor submitted that ACS's argument ignored the operation and effect of s.23B(6) of the Wrongs Act. That provision meant that it did not matter that the question of whether the person from whom contribution was sought was liable for the same damage would be determined by reference to the law of a place outside Victoria, provided that such liability had been or could be established in an action brought against that person in Victoria. The cases relied on by ASC, Fluor submitted, dealt with the choice of law for determining liability in contract or tort, including whether a person from whom contribution was sought was liable for the same damage. They were not authority for the proposition that the Wrongs Act could not apply to Fluor's claim for contribution. In Borg Warner (Australia) Ltd v Zupan[12]it was stated that the statutory right of indemnity given by s.64 of the Workers Compensation Act 1926 (NSW) should not be classified "as either an action in contract or an action in tort." It was neither.

26 Fluor further submitted that it was not a question of what choice of law rule applied in respect of a statutory claim for contribution. Choice of law questions were involved in deciding the subsidiary question of whether ASC was liable to MMO, and it was conceded that the law to be applied was Western Australian, but that did not determine the issue of Fluor's claim for contribution under the Victorian legislation. Fluor submitted that s.23B(6) of the Wrongs Act meant that it could bring such a claim against ASC because there was a connection with Victoria. Either the statutory provision applied to the circumstances of this claim or it did not. It was a question of interpreting the section. It seems to me that this submission by Fluor gained some support from the following passage in the Australian Law Reform Commission's Report on "Choice of Law":

"The choice of law rules should apply to issues arising in claims, rather than globally to the whole claim. This will ensure that issues like contribution between tortfeasors may be determined by a different law to the main claims."[13]

27 Fluor argued that none of the authorities relied upon by ASC provided support for the contention that Fluor was not entitled to seek contribution under s.23B of the Wrongs Act, in respect of a liability against it arising in an arbitration conducted under the Commercial Arbitration Act 1984 (Vic) ("the Victorian Arbitration Act"). Fluor submitted that its liability to MMO having arisen in an arbitration conducted pursuant to a Victorian Act, the result of which could be registered in a court in Victoria, the terms of s.23B(6) made it at least arguable that the Victorian Parliament intended s.23B to apply in the circumstances. If that was so then there was no reason why it should not apply, even if the result was that the Act had extra territorial application. Fluor submitted that ASC's argument had not addressed the fundamental question of what, if any, were the territorial limitations on the application of the Wrongs Act. Fluor therefore submitted that the question of whether s.23B(6) had effect as a statutory "choice of law" and the validity of its operation in the context of this proceeding if it did so, were at the very least issues which were tenable and which should be decided at trial rather than on a summary application.

28 ASC responded by submitting that, in the present case, the substantive rights and obligations of ASC, Fluor and MMO were exclusively governed by the law of Western Australia, by reason of the governing law clauses in the ASC Contract and the EPC Contract. It submitted that any Australian court hearing and determining a dispute between these parties arising out of those contracts would have to apply the substantive law of Western Australia, including the substantive law of Western Australia concerning rights of contribution between parties. Such a court was not free simply to elect to apply some part of the substantive law of another jurisdiction such as Victoria.

29 ASC submitted that sub-s.23B(6) of the Wrongs Act did not avail Fluor. Because s.23B was part of the substantive law of Victoria, and the substantive law of Victoria played no part as a matter of private international law in the resolution of the dispute between the parties, sub-s.23(b)6 simply had no application.

30 It was further submitted by ASC that sub-s.23B(6) was not, as Fluor contended, a "statutory choice of law" provision. It was a provision directed to a different issue, and had an important role to play. Sub-section 23B(6) operated, ASC submitted, where the rights as between a plaintiff and one defendant were governed by the law of Victoria (thereby resulting in the court having to apply the substantive law of Victoria to part of a dispute), while the rights as between a plaintiff and a second defendant were governed by the law of some other State or Territory. In such a case, sub-s.23B(6) made it clear that the second defendant could not contend that s.23B did not apply to matters of contribution as between the defendants. That, however, was not this case. This case did not involve the substantive law of Victoria at all.

31 ASC further submitted that if Fluor's contention were correct, absurd consequences would follow, in that it would be open in any case arising anywhere in Australia for a defendant to seek contribution under s.23B, or to institute proceedings in Victoria for contribution under s.23B in respect of a case with no nexus whatsoever to this jurisdiction. It would result in "forum shopping" in its worst sense and would defeat the reason why matters of substance were determined by the law of the cause, not the law of the forum.

32 Finally, ASC submitted that there was no substance to Fluor's submission that there was a nexus with Victoria by reason of the fact that the arbitration between MMO and Fluor was conducted under the Victorian Arbitration Act. Fluor's liability to MMO arose under the EPC Contract, which required the application of the substantive law of Western Australia. Fluor's liability did not arise under the Victorian Arbitration Act. Again, if Fluor's contention were correct, it would be possible for a plaintiff and one defendant to circumvent the operation of the contribution legislation of any other State or Territory, to the prejudice of any other defendant, simply by deciding to conduct an arbitration under the Victorian Arbitration Act.

Is Fluor's Argument Untenable?

33 The Wrongs (Contribution) Act 1985 (Vic), which contained the amendments to Part IV, was largely modelled[14] on the Civil Liability (Contribution) Act 1978 (UK) ("the Contribution Act"). Regrettably, no assistance as to the precise meaning of, or reason for, s.23B(6) of the Wrongs Act or its English equivalent is to be found in either the England and Wales Law Commission's "Report on Contribution"[15] (the source of the Contribution Act); the Victorian Chief Justice's Law Reform Committee Report[16] (the source of the Victorian amending Act); or the Victorian parliamentary debate on that Act.

34 Indeed, despite the relative antiquity of these two amending Acts, it would appear that the Courts are still grappling with the precise meaning of the various provisions. For example, in Alexander the High Court split three all on the question of what was meant by the expression "liable in respect of the same damage" in s.23B(1) of the Wrongs Act. Pursuant to s.23(2)(a) of the Judiciary Act 1903 (Cth), Kirby J was one of the three Justices whose view did not prevail. After referring to "the remedial and reformatory character of the legislation" amending the Wrongs Act, his Honour stated as follows:

"Instead of analysing the meaning, application and purpose of the reformatory provisions of the Wrongs Act, the learned judges of the Court of Appeal (even, in my respectful opinion, in their supplementary reasons) focused upon judicial exposition. It is important that this Court should not to make the same mistake. The amendments to the Wrongs Act introduce deliberate and important reforms to the written law. They require of judges a fresh look at the availability of contribution, freed from restrictions earlier devised by judges which, in part, the remedial provisions were designed to overcome. Where there is written law, as here, our duty is to the text and purpose of the legislature. Especially where new written law is adopted following a careful law reform process, it is essential that courts should not adopt a restrictive interpretation that undermines the attainment of the reform, to the full extent possible in the statutory language."[17] (Footnote omitted.)

35 One matter dealt with by the recent decision of the House of Lords in Moy v Pettmann Smith[18] was the applicability of s.1(5) of the Contribution Act. The particular issue in that case was what was meant by the expression "a judgment given in any action", but not surprisingly the decision does not assist resolution of the present problem.

36 In Re Nichi (Singapore) Pty Ltd (Third Party); University of South Australia v GNB Battery Technologies Ltd[19], the University of South Australia and other plaintiffs had sued GNB Battery Technologies Ltd ("GNB") in the Supreme Court of South Australia for damages resulting from a fire allegedly caused by faulty lights manufactured by GNB. The defendant issued a third party notice against Nichicon (Singapore) Pte Ltd [sic] ("Nichicon"). Prior to the commencement of the South Australian proceeding, GNB had commenced a proceeding against Nichicon in this Court. Nichicon applied for a permanent stay of the third party proceeding on the ground that it was an abuse of process because it raised the same issues of law and fact as the Victorian proceeding.

37 Counsel for GNB conceded that, to a large extent, the issues raised by the two sets of litigation were the same. However, he drew attention to one aspect of the South Australian proceeding which was not part of the Victorian proceeding, namely a claim for contribution by GNB under s.26 of the Wrongs Act 1936 (SA). Having quoted s.23B(6) of the Wrongs Act, Duggan J upheld the submission by GNB that the issue of contribution raised by GNB in the South Australian proceeding could not be litigated in the Victorian proceeding, because:

"... the Victorian Supreme Court Rules would not permit an action in relation to the fire to be brought by the University of South Australia and the other plaintiffs against Nichicon in Victoria."[20]

38 As I understand it, this is yet another approach to what is meant by s.23B(6) of the Wrongs Act. It gives emphasis to the question of whether in fact the same liability could be established in an action in Victoria. With respect, the very brief reference does not deal with the issue of whether the Victorian Act would apply to the question of contribution by virtue of its wording or whether the South Australian Act would apply because it was the law of the obligation.

39 In light of the above, I am not convinced that the point raised by Fluor concerning the construction of s.23B(6) of the Wrongs Act is unarguable or so clearly untenable that it could not succeed. In my opinion, the meaning of s.23B(6) of the Wrongs Act or of its equivalent, s.1(6) of the Contribution Act, is far from clear. In stating that the point is arguable, I am not saying anything, at this stage, about which approach I prefer.

40 On 25 October 2005 I received further short written submissions from Fluor and ASC. It appears that following the hearing a reference had been found by Fluor's lawyers to a decision of Chadwick J concerning s.1(6) of the Contribution Act which, it was submitted, was entirely consistent with Fluor's submissions in this application.

41 In Arab Monetary Fund v Hashim and Others (No. 9)[21] the claimant banks, First National Bank of Chicago and three related entities, sought contribution from Dr Hashim in respect of the payment in September 1992 by the claimants to the Arab Monetary Fund ("the Fund") of $13,450,000 in full and final settlement of the Fund's claims against them. Chadwick J ordered Dr Hashim to pay a contribution of $10 million to the claimants. According to the The Times report, in his reserved judgment his Lordship held that in construing the Contribution Act:

"The correct approach was not to ask whether, under some rule of English private international law which was to be found or ascertained independently of and without regard to the provisions of the Act itself, the contribution claim was to be determined by reference to the Act but, rather, to ask whether under the rules of law applicable in an English court, which included the provisions of the Act itself, the contribution claim ought to succeed.

In a case involving foreign elements that required the court to decide whether, on a true construction of the Act, the legislature intended to confer on B a right of contribution against C which was to be recognised and enforced in England. The court was not concerned with any obligation to contribute which might exist between C and B independently of the Act.

It would therefore be strange if, before it came to construe the Act at all, the court were required to answer a preliminary question which was unrelated to and inconsistent with the basis upon which the statutory right of contribution arose under English law.

To ask whether a right of contribution, arising out of any relationship between B and C other than their relationship as persons each of whom was liable to A in respect of the same damage, ought to be determined by English domestic law would be to ignore the basis upon which the right arose under that law.

...

His Lordship was not persuaded, therefore, ... that he should alter his prima facie view on consideration of the Act itself, namely that in order to decide whether a claim was properly brought under the Act it was necessary to construe the statutory language.

If B and C were each persons against whom liability had been or could be established in an action brought against them by A in an English court, applying the appropriate law in accordance with English private international law rules, then the Act conferred on B a right of contribution against C to which the court had to give effect. There was no preliminary question as to proper law the answer to which determined, independently of the Act, whether the Act applied."[22]

42 In its responding submissions, ASC made the valid point that it was impossible from The Times report of the case to identify the relevant facts. It was not clear whether the claimants' liability to the Fund or Dr Hashim's liability to the Fund arose under foreign law or English law. Nor was it clear as to the basis upon which the Court had jurisdiction to hear and determine the contribution claim. However, the relevant facts become tolerably clear when one reads the judgments[23] in an earlier application in the proceeding involving the Fund's claim against Dr Hashim alleging that he, the Fund's former director-general, stole about $50 million of its money and that the First National Bank of Chicago and its subsidiaries enabled him to launder a substantial part of the money through numbered accounts in Geneva. The Fund's headquarters were in Abu Dhabi and the fraud on which it relied was alleged to have been committed in Abu Dhabi. Dr Hashim and most of the other individual defendants were resident in England and the First National Bank of Chicago had a place of business in London.

43 In any event, ASC submitted that the context in which the decision of Chadwick J, a single Judge in the Chancery Division in the United Kingdom, was made was fundamentally different to the Australian federal context. It submitted that central to the Australian approach, as illustrated by the High Court's decision in John Pfeiffer, is the recognition that the law must provide certain and predictable norms neutrally applied between the parties, rather than variable rules based upon the plaintiff's choice of forum.

44 ASC finally submitted that if the decision in Arab Monetary Fund bore the interpretation which Fluor sought to place on it, it was inconsistent with the High Court's decision in Alexander, which applied s.23B of the Wrongs Act in a proceeding brought in New South Wales. If Fluor's contention were correct, then the Victorian Act would have had no application and the Court would simply have applied s.5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). Alternatively, ASC submitted that the Court would have had to find some other mechanism for resolving which of the NSW and Victorian Acts applied. ASC submitted that in that case the only answer consistent with authority would have been to apply the contribution law of the cause (Victoria) and to ignore the contribution law of the forum (NSW).

45 I note that according to the report of his judgment, Chadwick J referred to following statement from The Law Commission's Working Paper No. 75: "Classification of Limitation in Private International Law":

"76. First, it should be borne in mind that the 1978 Act [the Contribution Act] will only apply to those claims for contribution involving rules of private international law where the law governing the contribution claim (as opposed to P's right of action) is English law. There is no direct English authority on the law to govern a contribution claim but the better view would seem to be that it is a matter to be governed by the proper law of the obligation."

I would also refer to the next paragraph from that Working Paper:

"77. If the contribution claim is governed by the 1978 Act, liability under that Act to make contribution requires the liability of D1 and D2 to be such that it has been, or could be, established by an action in England and Wales, taking into account rules of private international law. If, therefore, D1 alleges that D2 is liable to P for breach of contract under French law, though not under English law, D2 will be regarded as liable if the English courts held or would have held French law to be the proper law of the contract."

The footnote at the end of the first sentence in that paragraph cited s.1(6) of the Contribution Act.

46 It seems to me that these competing submission concerning the decision of Chadwick J in Arab Monetary Fund simply confirm the view which I had already reached, namely, that the point raised by Fluor is arguable.

Should the Question be Finally Determined?

47 Having decided that, in my opinion, the contribution claim is, at least, arguable and that it was not so clearly untenable that it could not succeed, the question arises whether that is sufficient to conclude the application. ASC submitted not. At the end of its oral submissions and in a short written submission after the hearing concluded, ASC argued that I should finally determine the matter in circumstances where:

"(a) the competing submissions of the parties were exclusively directed to points of law;

(b) the moving party invited the Court to assume that its adversary will establish all of the relevant pleaded facts at trial;

(c) the relevant points of law were fully ventilated in written and oral submissions; and

(d) the Court will not be in any better position to adjudicate upon those points of law after the trial of the proceeding."

48 In Dey v Victorian Railways Commissioners, Latham CJ said in respect of a summary dismissal application:

"... if a court is of the opinion that the plaintiff cannot succeed there is every reason for protecting a defendant from vexation by the continuance of proceedings which must be useless and futile. ... If, as a result of argument, the court reaches a clear decision which could not be altered by any evidence which could be adduced at the trial, then it is proper in the interests of both parties to dismiss the action instead of allowing the parties to incur completely useless expense."[24]

49 Reference was made by ASC to the approach described by Woodward J in Inglis v Commonwealth Trading Bank of Australia[25], where his Honour was faced with an analogous question. After surveying various authorities, including the judgment of Latham CJ in Dey, Woodward J stated as follows:

"The principles, relevant to the present case, which I would derive from these three decisions binding on me are as follows:

(a) an application for summary judgment for a defendant should be approached with great caution;

(b) if it becomes apparent at any stage of the proceedings that there is a substantial and difficult question of law involved in deciding the matter, the application should be dismissed and the defendant left to proceed pursuant to O.29, r.2, or in such other way as he may be advised; but

(c) if the question has in fact been fully argued, either because it appeared at first to be more simple than in reality it was, or because the point could only be developed and explained at some length, then the court or judge has a discretion to rule on the matter in the interests of preventing unnecessary costs. The pressure to follow such a course will be particularly apparent in an appellate court."[26]

50 I am not persuaded that this is an appropriate case for me to finally determine the contribution claim. Most importantly, it seems to me that rather than "preventing unnecessary costs" such a course would have little effect on costs and potentially could even increase the costs. This is not like the situation considered by Latham CJ in Dey where making a final decision would have brought the action to an end. Instead, here the remaining claims would continue to be litigated with the possible additional cost of an appeal from my present decision and then a subsequent appeal from the final decision. This does not appear to me to be a cost effective way of litigating this dispute.

51 As Lord Templeman observed in Williams and Humbert Ltd v W&H Trademarks (Jersey) Ltd, it may be appropriate to strike out a claim where doing so:

"will obviate the necessity for a trial or will substantially reduce the burden of preparing for trial or the burden of the trial itself." [27]

52 In my opinion, staying the contribution claim will not obviate the necessity for a trial and will not make any significant difference to the length of the hearing or to the burden of preparing the case for trial. An important factor for deciding to finally determine the contribution claim is therefore missing.

53 The above reasoning is sufficient to conclude my consideration of ASC's submission that I should finally determine the matter. However, for the sake of completeness I add the following. First, I do not accept that it can be so confidently asserted that the Court will not be in any better position to adjudicate upon this question after the trial of the proceeding. Despite the excellence of the submissions, I am left with the uneasy feeling that at the trial some further point may emerge from this complicated set of facts which may throw light on this issue. This is particularly the case where, to some extent, the question of the extra territorial operation of s.23B(6) was not fully explored.

54 Finally, it would have been inappropriate, in my opinion, to accede to ASC's submission when it elected to press on with the application to stay or strike out the contribution claim after I had raised for consideration of the parties the question of dealing with these issues finally by way of preliminary questions. The point I had in mind was to avoid the very issue now sought to be overcome by ASC, namely that in order to defend the application to stay or strike out ASC's application, Fluor only had to show that its claim was not so clearly untenable that it could not succeed.

55 In all the circumstances, therefore, I consider that the application by ASC to stay, alternatively to strike out, paragraphs 41 and 42 of the Amended Statement of Claim filed 23 August 1995 should be dismissed.

[1] Anaconda Operations Pty Ltd v Fluor Australia Pty Ltd [2003] VSC 275 per Dodds-Streeton J

[2] [1964] HCA 69; (1964) 112 CLR 125 at 129

[3] Alexander v Perpetual Trustees WA Limited [2004] HCA 7; (2004) 216 CLR 109 at [4] per Gleeson CJ, Gummow and Hayne JJ

[4] See s.7(1) of the Law Reform (Contributory Negligence and Tortfeasors' Contribution)Act 1947 (WA)

[5] [2000] HCA 36; (2000) 203 CLR 503 at [25]. See also at [115] and [118] per Kirby J.

[6] [1991] HCA 56; (1991) 174 CLR 1 at 21-22

[7] [2000] HCA 36; (2000) 203 CLR 503 at [99]. See also at [161] per Kirby J and at [192] per Callinan J.

[8] [2004] HCA 7; (2004) 216 CLR 109

[9] [2004] HCA 7; (2004) 216 CLR 109 at [4] per Gleeson CJ, Gummow and Hayne JJ; at [67] per McHugh J; at [76] per Kirby J and at [147] per Callinan J

[10] [2000] HCA 36; (2000) 203 CLR 503 at [129]

[11] Dicey & Morris: "The Conflict of Laws", Thirteenth Edition, 2000, at para.34-035

[12] [1982] VicRp 44; [1982] VR 437 at 442 per Murphy J, with whom Starke J agreed

[13] ALRC Report No. 58: "Choice of Law", 1992, at para.6.77

[14] See Victoria: Chief Justice's Law Reform Committee, "Contribution" (1979), pp.1-2.

[15] England and Wales: The Law Commission, "Report on Contribution", No. 79 (1977)

[16] See Victoria: Chief Justice's Law Reform Committee, "Contribution" (1979)

[17] [2004] HCA 7; (2004) 216 CLR 109 at [88]

[18] [2005] UKHL 7; [2005] 1 WLR 581

[19] [1997] SASC 6194

[20] [1997] SASC 6194 at [17]

[21] The Times Law Reports, 11 October 1994, p.502. Judgment 29 July 1994

[22] The Times Law Reports, 11 October 1994, p.503

[23] Arab Monetary Fund v Hashim (No 3) [1991] 2 AC 114

[24] [1949] HCA 1; (1949) 78 CLR 62 at 84-85

[25] (1972) 20 FLR 30

[26] (1972) 20 FLR 30 at 35

[27] [1986] AC 368 at 436. See also Sun Earth Homes Pty Ltd v Australian Broadcasting Corporation (1990) 98 ALR 101 at 112-113 per Burchett J; Dorfler v ANZ Banking Group Ltd [1991] FCA 409; (1991) 103 ALR 699 at 706 per Spender J; Wickstead v Browne (1992) 30 NSWLR 1 at 6 per Kirby P