Plaintiffs v Defendants

2 On 16 April 2012, the 'Amcor parties' filed a notice of appeal in each of Hodgson v Amcor and Amcor Ltd v Barnes.[2] An amended notice of appeal in the Barnes proceeding was served on the solicitors for the 'Holihan parties' on 3 December 2012. In April 2013, the parties informed the Registry that the Barnes Appeal and the Hodgson Appeal should await the determination of the counterclaim.[3]

3 On 13 September 2013, the Court of Appeal allowed an appeal by the Amcor parties against a decision of Vickery J refusing them leave to amend the defence to counterclaim and raise a cross-claim.[4] The cross-claim was commenced shortly thereafter.

4 In 2014, the Amcor parties issued a summons seeking to have their appeals heard before the counterclaim. This step was taken after Vickery J adjourned a directions hearing at which the appropriate scheduling of the counterclaim vis-à-vis the appeals had been addressed in order to permit the Amcor parties to approach the Court of Appeal.[5]

5 On 13 March 2014, the Court of Appeal (Whelan and Santamaria JJA) dismissed the summons with costs to be costs in the appeals. Whelan JA gave the principal reasons in support of the ruling, which were essentially as follows:

(a) where there is some complexity in the relationship between decided and undecided issues, and some potential overlap between decided and undecided matters, it is usually preferable to "determine everything that is outstanding";[6]

(b) it was possible that there would be "two separate and substantial appeal hearings and, indeed, the possibility of inconsistent findings in those two appeals";[7]

(c) those who will be parties to the appeals but who were not party to the counterclaim "gave little support to the Amcor parties' contentions that the appeals should be heard first";[8] and

(d) it was not possible to have confidence that the determination of the appeals would render the determination of the counterclaim unnecessary.[9]

6 At the hearing of the Amcor parties' summons on 13 March 2014, in response to a question from Santamaria JA, Senior Counsel for the Amcor parties confirmed that it was 'certainly the case' that they would be making further amendments to the proposed amended notice of appeal they had provided to the solicitors for the Holihan parties in December 2012.[10]

7 The counterclaim brought by the Holihan parties and the cross-claim brought by the Amcor parties were heard together between 25 May 2015 and 15 September 2015. The trial of the counterclaim and cross-claim was conducted by reference to the lengthy statement of issues that was annexed to the orders made by Vickery J on 13 March 2015 fixing the counterclaim and cross-claim for trial.[11]

8 On 28 November 2016, the Court delivered its reasons for judgment.[12] In its reasons for judgment, the Court addressed and answered the 'key issues' in dispute and the twenty or so issues (and sub-issues) that were identified by Vickery J and arranged under the following headings:

A. Issues arising on the Counterclaim regarding the Supply Agreement (Issues 1A, 1B, 1-7).

B. Issues arising on the Counterclaim regarding the Charge (Issues 8-13).

C. Issues arising on the Cross-Claim (Issues 14-18).

D. Liability of Holihan, Achilla and ACB Co Purchaser (Issues 19-20).

9 The dispute between the parties arose from the sale by the Amcor parties to the Holihan parties of the 'ACB Business'. In the lead up to the sale, Mr Craig Holihan, an Amcor executive, was employed as the general manager of the ACB Business, and reported to Mr Trevor Barnes. The ACB Business was an 'in-house', 'short-run' manufacturing operation or 'specialty' packaging business that was owned and operated by an Amcor entity from large factory premises at Wetherill Park in Western Sydney. The ACB Business produced and supplied packaging products made from corrugated cardboard sheets, usually in the form of customised packaging or non-standard boxes, and the business obtained its supplies of corrugated cardboard sheets from the Amcor Fibre Packaging ('AFP') plants at Revesby and Smithfield in New South Wales. The ACB Business catered mainly for smaller customers, or large customers who had specialised box requirements where the quantity of the product required was too small for them to be produced economically in large-scale production facilities, or was 'fiddly work' that would cause bottlenecks in a higher-speed, lower-cost production plant.[13]

10 Before the sale, the largest part of the work undertaken by the ACB Business was in performing what was referred to as 'outside manufacturing enterprise' ('OME') work for customers of the AFP division of Amcor. The ACB Business also did a limited amount of work for other non-AFP customers. Within Amcor, the outside manufacturing work that was sourced from a third party was referred to as 'OME work' and the third parties that supplied it, were referred to as 'OMEs'. However, the work that the ACB Business did for AFP or for customers of AFP was also referred to as 'OME work', even though it was done 'in-house' by an Amcor business. Before the sale to the Holihan parties took place, there were at least eight alternative suppliers (or OMEs) who performed OME work for AFP or for customers of AFP.[14]

11 The reasons for judgment are lengthy. Relevantly, for present purposes, the Court found that following the sale of the ACB Business, the purchaser, 'Achilla' (a Holihan entity, being the first plaintiff by counterclaim) was entitled to be compensated for each job that should have been provided to it on a 'business as usual' basis for the period from 21 March 2005[15] to 31 July 2008 save for work that fell within the contractual 'carve-out' or exception in clause 12.2 of the Second Sale Agreement which was expressed in the following terms: "other than due to Achilla's inability to supply consistently and on a basis which is commercial and reasonably acceptable in terms of price, quality and availability."[16]

12 The Court found that the 'business as usual' concept meant that the outside manufacturing enterprise (or OME) work that had been routed through the ACB Business before the sale[17] was required to be routed through the ACB Business (under Achilla's ownership) after the sale.[18] Further, the Court found that Achilla has the burden of proof on the 'business as usual' question, while Amcor bears the burden in respect of the 'carve-out'.[19] In the case of 'repeat orders', however, the Court found that clause 12.2, on its proper construction, does not encompass within the vendor's obligation (i.e., the Amcor parties) any requirement that Achilla be given work that was a 'repeat order' of OME work that prior to the sale was being sent to one or other of the alternative suppliers.[20] Accordingly, the Court observed that where, prior to the sale, particular OME work was being performed by an alternative supplier, repeat orders of that work ordered after the sale would, in the ordinary course, continue to be made by that supplier.[21]

13 The Court invited the parties to consult regarding the jobs that might remain the subject of Achilla's claim in light of the Court's findings, and failing agreement, the Court proposed that an expert be appointed under s 65M of the Civil Procedure Act 2010 (Vic) to assist in identifying the jobs for which Achilla was entitled to be compensated, in order that the loss may then be quantified. However, the parties indicated on 5 April 2017 that they would prefer the appointment of a special referee under Order 50 of the Supreme Court (General Civil Procedure) Rules 2015. By orders made on 12 April 2017, the parties were required to file documents articulating their respective positions regarding the jobs to which Achilla was entitled.[22]

14 The parties' respective positions in relation to the claimable jobs are set out in the following documents:

(a) rectified details of claim by the Holihan parties dated 10 July 2017 ('Details of Claim'), setting out the jobs for which Achilla makes a claim ('Claimed Jobs') and the reasons for those claims by reference to the evidence at trial;

(b) details of response by the Amcor parties dated 1 September 2017 ('Response to Claim'), setting out the Amcor parties' responses in relation to the Claimed Jobs and the reasons for any objections, by reference to the evidence at trial; and

(c) details of reply by the Holihan parties dated 17 November 2017 ('Reply to Claim').

15 The parties have not been able to reach agreement as to what jobs Achilla is entitled to be compensated for, but they have agreed that the task of identifying those jobs should be referred to a 'Special Referee' to be appointed under Order 50 of the Supreme Court (General Civil Procedure) Rules 2015 (rather than to an expert appointed under s 65M of the Civil Procedure Act 2010).[23] The parties are also in agreement that the consolidated version of the claim document they have been preparing (i.e., comprising in a tabular form the Details of Claim, Response to Claim and Reply to Claim), is one that can usefully be provided to the special referee for the purposes of performing the adjudication task.

16 After significant efforts, the parties have now identified Mr Ronald Mines as a person with relevant experience in the corrugated cardboard industry, and in particular with experience in dealing with invoices.[24] The parties agree that Mr Mines would be suitable for appointment by the Court as a special referee to consider their respective submissions concerning each contested invoice and determine whether Achilla was entitled to the particular job and thus whether damages are recoverable for that job. Mr Mines has indicated that he is ready, willing and able to undertake the task forthwith, and he estimates that it will take him approximately 12 weeks to complete.

17 Once the identification of compensable jobs has been completed, the quantification task is to be performed by the two expert accountants who gave evidence at the trial, Mr Greg Meredith and Ms Dawna Wright. Mr Meredith and Ms Wright agree that the model can be readily adjusted to accord with the Reasons such that they can undertake the quantification task and prepare their expert reports within a relatively short time frame.

18 At the same time as the parties have been working on the Details of Claim/Response to Claim/Reply to Claim document and making progress towards the resolution of counterclaim (and cross-claim), some steps have been taken in the Hodgson and Barnes appeals against the principal judgment. In particular, the Court of Appeal brought the parties in for directions hearings on 6 September 2017 and 17 October 2017. On the last occasion, the Court of Appeal foreshadowed that the current appeals would, in due course, be dismissed without adjudication and without prejudice so that fresh applications for leave to appeal may be commenced under the new appeals regime.

19 Against that background, there are effectively two competing applications before the Court for determination.

The Holihan parties' application (to proceed with the reference)

20 The first is the Holihan parties' application seeking to have the Court proceed to refer the matter to Mr Mines so that he can undertake the reference. However, they have identified three additional legal questions that must be determined by the Court before Mr Mines could complete the reference.

Legal questions to be determined by the Court before the reference could be completed

21 The three legal questions raised by the Holihan parties are:

(a) Whether the Holihan parties have discharged their burden of proof in respect of jobs for which invoices and purchase orders are missing or illegible.[25]

(b) Whether the Amcor parties are entitled to rely on the carve-out in relation to any work other than 'repeat order' work.

(c) Whether the Amcor parties are entitled to raise any issues with respect to 'partitions' jobs.

22 The Holihan parties have also identified a fourth legal issue which is not the subject of the referral directions (the 'Amcor Displays issue') but which they contend needs to be considered and resolved by the Court, noting that it may affect the procedure to be followed in finalising the counterclaim. The Amcor Displays issue concerns the Court's finding that:

while the ACB Business was doing some 'work' for Amcor Displays prior to the sale, it was not doing all or even a significant proportion of the Amcor Displays' OME work. The ... 2003 profit & loss statement suggest[s] that a small component of the Amcor Displays work was being performed by the ACB Business notwithstanding the arrangement in place with ACE Print .... Accordingly, I am satisfied that on a 'business as usual' construction of the clause 12.2 obligation, Achilla would likely have received some small amount of the Amcor Displays' work, unless the exception was enlivened.[26]

23 The Holihan parties contend, and the Amcor parties "agree in principle", that the Amcor Displays jobs raise considerations additional to those that apply to the remainder of the contested jobs.[27] That is, while the referee will determine what Displays jobs satisfy the 'business as usual' criterion and are not the subject of any carve-out (the 'Refereed Displays Jobs'), that will not be the end of the Displays enquiry. The parties apprehend that in order to finally determine the fate of the Displays jobs, the Court will most likely need to know:

(a) the value of the Refereed Displays Jobs (by application of the experts' methodology);

(b) the value of all of the Displays jobs (i.e. the Refereed Displays Jobs and those rejected by the referee or otherwise excluded by the Reasons);

(c) the value of the Displays work done by the ACB Business prior to the sale; and

(d) the value of all the Displays work prior to the sale.

24 As the size of the proportion of the available Displays work performed by the ACB Business before the sale was not the subject of pleadings, evidence or submissions at trial, there is a prospect that unless the assessment and quantification exercises clearly demonstrate that the quantum of the Refereed Displays Jobs answers the description of a "small component" of all of the Displays jobs in the Claim Period, the Holihan parties might need leave to re-open their case at the quantification stage to allow the parties to address the matters noted at sub-paragraphs (c) and (d) above. (The parties have effectively agreed that submissions should be directed to that prospect following the preparation of evidence at the quantification stage.)

25 In other words, there is consensus between the parties that the determination of the Holihan parties' entitlement to damages for work obtained by Amcor Displays will involve two steps:

(a) Mr Mines will first determine whether the Holihan parties are entitled to compensation in respect of the Displays jobs, just as he will do in respect of other jobs by reference to the 'business as usual' criterion and the carve-out; and

(b) the Court will then determine how much compensation, if any, the Holihan parties are entitled to receive having regard to the finding that the Amcor parties' obligation did not extend beyond providing "some small amount of the Amcor Displays work" to Achilla.

Whether a party should have leave to reopen their case will be a matter for formal application and submissions once Mr Mines has completed his work.

The referee could commence the 'stage 1 work' in advance of the Court determining the legal questions

26 The Holihan parties submit, and the Amcor parties agree "in principle",[28] that there is a subset of contested jobs (listed in Annexure B to the Holihan parties' submissions) that will not be affected or impacted by the Court's findings in relation to the additional legal questions, and were the Court minded to refer the matter to the special referee now, directions could be given requiring him to adopt a staged approach to the assessment, dealing first with the jobs listed in Annexure B. The Holihan parties submit that it would be appropriate to refer the matter to Mr Mines now so that he may commence this 'stage 1 work', while the Court works towards addressing the legal questions identified. Once the Court has determined the legal questions, it can refer the remaining jobs to Mr Mines and give him any directions necessary to give effect to the Court's findings. At the same time, the accounting experts can be working together to adjust their model to take account of the findings made in the Reasons.[29]

27 The Holihan parties' initial form of proposed order for the reference is set out in Annexure A to their submissions.

28 The Amcor parties oppose the Holihan parties' application to have the Court refer the matter to the special referee. Notwithstanding that opposition, the Amcor parties have reviewed the current form of the Holihan parties' proposed order, and the parties have now reached agreement upon a suitable form of order for the reference, subject to the Court ruling on or determining certain specified matters. Subject to any matters raised by the Court, if the Court is minded to proceed with the reference, then the parties are generally content for the reference to be made in that form.

29 The Amcor parties do, however, seek an opportunity, as a matter of 'procedural fairness' to respond to some matters raised by the Holihan parties in their 'Reply to Claim' made in reply to the Amcor parties' 'Response to Claim'. They contend that in respect of the remaining jobs,[30] in cases where the Amcor parties have asserted a matter positively, such as those instances where they contend that the clause 12.2 carve-out has been enlivened, or where the Amcor parties have effectively done so by invoking a ground going to the scope of clause 12.2 (for example, repeat orders), then the Amcor parties effectively have the onus of proof and are entitled to make a reply. The Amcor parties submit that the scope and content of any further submission will depend upon the Court's ruling in respect of the additional legal matters agitated by the Holihan parties and could not be settled until the actual rulings were made.[31] But counsel for the Amcor parties indicated that affording them an opportunity to reply would not delay the referee's consideration of the stage 1 jobs, and that any such reply could be prepared within three weeks.

30 The Holihan parties opposed this course. The Court informed the parties that if there were any jobs of the kind indicated where considerations of 'procedural fairness' would militate in favour of a further reply from the Amcor parties, then the Court was open to considering that course. In that regard the Court noted that when the original conception of the Claim/Response to Claim/Reply to Claim document was discussed at the directions hearing on 5 April 2017, it was envisaged that the parties would have the opportunity to file additional submissions in support before the special referee, but that is now considered to be largely unnecessary in view of the detailed submissions already contained in the Claim/Response to Claim/Reply to Claim document. Further, the Court noted that in cases where the Amcor parties bore the onus of proof, it was important to ensure that the absence of any response to the Holihan parties 'Reply to Claim' was not misunderstood or misinterpreted by the special referee as conveying the impression that there was nothing further that could usefully be said by the Amcor parties.

31 The Court indicated to the parties that in circumstances where it was likely that any 'procedural fairness' necessity for a reply could only be determined once the particular jobs were identified, and the Amcor parties had articulated the substance of the reply they wished to make, the sensible and efficient course was for the Amcor parties to commence preparing any such reply so that it might be considered further by the parties and the Court.

The Amcor parties' summons (seeking formal answers to the questions raised in the statement of issues)

32 The second application is one made by summons filed by the Amcor parties on 27 November 2017, and as revised by an amended summons dated 21 December 2017 provided to the Court and the Holihan parties. In essence, the Amcor parties seek:

(a) an order recording the Court's answers to each of the questions posed in the statement of issues (6 key issues and 20 specific issues) that were addressed in the Reasons; and

(b) orders that the further hearing or determination of the counterclaim (and cross-claim) be stayed until further order - in effect, pending the determination of:

(i) any appeal against the order recording the Court's answers (the 'Counterclaim/Cross-claim Appeal**')**; and

(ii) the separate appeals against Vickery J's principal judgment delivered in 2012 (the 'Hodgson Appeal' and the 'Barnes Appeal').

33 The relief sought by way of a stay was added to the summons (as paragraph 1A) following the mention on 15 December 2017.[32] At the mention, the Court enquired as to whether the parties, and in particular the Amcor parties, were amenable to the questions being formally answered and the reference to the special referee proceeding, effectively at the same time. Counsel for the Amcor parties indicated that he thought it was unlikely that they would acquiesce in that course, and counsel for the Holihan parties was of a similar view. The position has now been clarified by the amended summons.

34 The Amcor parties prepared a form of answer to the questions raised in the statement of issues which was exhibited to an affidavit of Ms Janet Whiting, solicitor for the Amcor parties, made in support of the summons. The Holihan parties responded with a revised form of answer (see Annexure G to their submissions), and during the course of the hearing the parties reached consensus on the appropriate content of the answers to the questions as formulated in the Reasons. Accordingly, the position is that if the Court is minded to formally answer the questions and stay the further hearing or determination of the counterclaim (and cross-claim), the parties are agreed that the form of answers jointly proposed accurately reflects the Reasons. Further, if the Court decides to make the orders sought in the summons, the Amcor parties submit that the Court "should rule on the pleading issue expeditiously so that the parties may appeal that ruling should they choose to do so" and they contend it "would be desirable for the Court to rule on the jobs for which there is no invoice also", but add that the latter is, in the Amcor parties' submission, "less significant and pressing."[33] To the extent that this submission required some adjustment of the relief sought in the summons by way of stay, the Amcor parties sought (and obtained) leave to file a further amended summons.

35 The Holihan parties oppose the grant of the relief sought in the amended summons (or as further amended).

The Court's determination: The preferable course is to proceed with the reference rather than by making orders formally answering the questions raised in the statement of issues

36 Having read the written submissions filed by the respective parties, heard oral argument on the rival applications, and considered them at some length, I have reached the view that the preferable and most efficient course is for the Court to proceed with the reference to a special referee pursuant to Order 50. This is so notwithstanding that the notion of the Court formally answering the questions posed in the statement of issues was one that was raised by the Court on 28 November 2016, when the Reasons were delivered, as a possible means for establishing a vehicle for enabling any appeals from those answers to be pursued by the parties contemporaneously with the Hodgson Appeal and the Barnes Appeal.

37 I have summarised below the thrust of the submissions advanced by the respective parties, and indicated the factors or issues that I regard as the most important, or as carrying greater weight, in the exercise of the Court's discretion. The summary of the arguments does not purport to be exhaustive. As will be apparent, I have found the factors emphasised by the Holihan parties to be the most important, in particular the risk of prejudice to them, the risk of fragmentation of the proceeding and further consequent delay, and its impact on the availability of the special referee and the accounting experts to complete the work required.

38 In their amended summons, the Amcor parties seek orders as follows:

1. That the Court answer the questions in the Joint Statement of Issues in the form exhibited to the Affidavit of Janet Mary Whiting dated 20 November 2017.

1A That the further hearing or determination of the [Holihan parties'] counterclaim be stayed until further order.

39 The Amcor parties rely upon the Court's inherent jurisdiction, supported by ss 47, 50A and 53 of the Civil Procedure Act 2010, as providing a proper basis for the relief sought in their amended summons. Save that the Holihan parties take issue with the stay sought, they agree that the Court has inherent jurisdiction to make an order to the effect sought in paragraph 1A of the amended summons, and that the judicial powers of active case management set out in s 47 are relevant to the exercise of the Court's jurisdiction.

40 In circumstances where the orders setting down the counterclaim and cross-claim for trial required amongst other things that 'pursuant to section 50 of the Civil Procedure Act 2010, the trial of the proceeding be conducted by reference to the statement of issues annexed to this order,'[34] the proposed procedure is not dissimilar to that which applies where a preliminary question is stated and answered, and leave to appeal is sought. In my view, at a conceptual level, the proposed procedure is one that could be ordered or directed by a Court, in its discretion, when seeking to 'further the overarching purpose' by reference to the objects set out in s 9 of the Civil Procedure Act 2010. And if it be relevant, I note that the transcripts of the recent mention and directions hearing before the Court of Appeal indicate that the parties have informed the Court of Appeal of the steps taken in this matter since the Reasons were delivered.

The delay on the part of the Amcor parties in making their application is not fatal to its success

41 When the matter was listed for directions on 5 April 2017, the parties were required to file submissions in advance. In those submissions, each of the parties submitted that the question of what jobs Achilla should receive compensation for was a matter should be referred to a special referee under Order 50 of the Rules, rather than to an expert appointed under s 65M of the Civil Procedure Act 2010. To that point in time, neither party had demonstrated any enthusiasm for the Court making orders formally answering the questions posed in the statement of issues. At the hearing, however, the Amcor parties informed the Court (somewhat belatedly) that they were giving serious consideration to the notion of the Court formally answering the questions, in order that they might pursue an appeal. The Holihan parties informed the Court that they opposed that course, and wished to proceed with the reference as soon as possible. In those circumstances, the Court indicated that in the absence of consensus, the Amcor parties would need to bring on an application to pursue that course. In the meantime, the Court required the parties to proceed with the preparation of the Claim/Response to Claim/Reply to Claim document and a timetable was fixed for completion of that task.

42 Notwithstanding the progress made towards completion of the Claim/Response to Claim/Reply to Claim document, at the directions hearing held on 8 September 2017, the Amcor parties again raised the prospect of them pursuing an application for the Court to formally answer the questions raised by the statement of issues. Once again, the Court indicated that if they wished to pursue that course, an application would have to be filed. On 20 November 2017, in advance of the directions hearing listed for 24 November 2017, the Amcor parties filed a summons seeking the foreshadowed relief and Ms Whiting's affidavit in support. At the directions hearing, the Court established a timetable for the exchange of submissions concerning the relief sought in the summons and also the reference sought by the Holihan parties, and fixed the matter for hearing on 29 January 2018. A further mention of the matter was held on 15 December 2017 to progress the matter and confirm the hearing date.

43 The Amcor parties accept that it may have been preferable for them to have brought on their application earlier, but they submit that any delay has not been prejudicial, and that it does not bar the making of the orders sought by them. They observe that:

. . . while bringing on the summons earlier would have avoided the time and expense spent on the tables to date, preparation of those tables has, at least, served to identify issues which the Court should resolve between the parties (viz, the matters agitated by the Holihan Parties), and to put the matter in a position where it can be picked up by a referee at whatever time.[35]

44 In my view, the delay on the part of the Amcor parties in making the application is not fatal, but it does bear on the exercise of discretion and the Court's assessment and weighing of the merits of the alternative courses advanced by the parties. If the application had been made in a timely way when it was first foreshadowed on 5 April 2017, it is likely that the parties would not have incurred the significant cost and expense associated with the preparation of the Claim/Response to Claim/Reply to Claim document. At that point, however, each party was willing to embark upon the extensive and burdensome work required to prepare that document as a means of progressing the finalization of the counterclaim (and cross-claim). In my view, there is a real benefit to the parties and the Court in them having completed (or substantially completed) that document as a record of the rival positions on the individual jobs that are contested. The work involved in that process has also served to enable the parties to better identify the further legal questions that require determination by the Court before the reference could be completed. The identification of those legal questions is also relevant in the context of the Amcor parties' application in that, as the parties have noted, it would be desirable for those legal questions to be determined before any application for leave to appeal is heard.

The reasons advanced by the Amcor parties (in support of their summons)

45 The Amcor parties contend that if the Court were to proceed to make orders formally answering the questions posed in the statement of issues, that would facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute between the parties, as required by the Civil Procedure Act 2010 (Vic). They advance five major reasons in support of their submission. First, they submit, making such orders would "permit the parties to progress the appeals against Vickery J's judgment, any appeal against this Court's judgment, and ultimately the bulk of the real issues in dispute between the parties."[36] Secondly, they say the outcome of the appeals may avoid the need to progress the counterclaim any further, in the sense that if the Amcor parties were successful in appealing against Vickery J's judgment and in setting aside the Second Sale Agreement, then it would follow that the Holihan parties are not entitled to damages and any further time and expense used in finalizing the counterclaim would be avoided.[37] Thirdly, they observe, albeit somewhat speculatively, that the resolution of any appeals and determination of the principal matters in dispute between the parties "might make it easier to settle the counterclaim."[38] Fourthly, they submit that there is no evident prejudice to the Holihan parties from this course. And fifthly, they contend that the position is different now compared to what it was when the Court of Appeal (Whelan and Santamaria JJA) dismissed the Amcor parties' summons to have the appeals determined before the counterclaim. The relevant differences were said to be that the counterclaim (and cross-claim) have now been heard and substantially determined, albeit in a longer time-frame than was envisaged, substantial appeals may now be heard together, and there is no longer any realistic prospect of inconsistent judgments.

46 The Holihan parties submit that the Amcor parties, as the moving party, bear the onus of persuading the Court that the orders proposed in the amended summons should be made. They submit that in so far as the stay sought in paragraph 1A relates to any appeal in relation to the counterclaim (and cross-claim), the principles relating to a stay of judgment pending appeal apply. In this regard, they rely upon the principles relating to a stay as described by Kyrou and McLeish JJA in Cross Country Realty Victoria Pty Ltd v Ubertas 350 William Street Pty Ltd,[39] and in particular, their Honours' clear statement that "[t]he power to order a stay of execution is to be exercised only where special or exceptional circumstances exist" and that "[a] stay should not be granted unless there is at least an arguable ground of appeal, although otherwise speculation as to the ultimate prospects of success is usually inappropriate."[40]

47 The Holihan parties also draw support from the principles that apply in the analogous context of an application for adjournment that is made where a trial is part-heard, pending the hearing of an appeal. They submit that the following two factors are of particular relevance to the present application:

(a) Where an adjournment is sought pending the hearing and determination of an appeal, the speed with which the appeal is likely to be resolved is relevant to the exercise of the discretion - especially in terms of convenience to parties and the trial court itself.[41]

(b) The background to a case is "highly relevant" to determining whether to grant an adjournment. Where the facts the subject of a claim occurred some time ago and a matter has been pending in the Court for some time, any application for a further delay "must have powerful supporting evidence."[42]

48 Further, insofar as the Amcor parties' application for a stay is premised on the basis that there are separate related proceedings (being the Hodgson Appeal and the Barnes Appeal) which in the ordinary course might be adjudicated before the present proceeding is completed, and on the basis that any Counterclaim Appeal should run in tandem with those appeals, the Holihan parties also pointed to the list of factors articulated by Lockhart J in Sterling Pharamceuticals Pty Ltd v Boots Company (Australia) Pty Ltd,[43] as relevant to whether a stay should be granted in such circumstances. They noted that of the factors articulated by his Honour, those listed in sub-paragraphs (b), (c), (f), (h) and (j) below are relevant to the determination of the present application:

(b) Whether the [de][44]termination of one proceeding is likely to have a material effect on the other.

(d) The undesirability of two courts competing to see which of them determines common facts first.

(e) Consideration of circumstances relating to witnesses.

(f) Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted.

(g) The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues.

(h) How far advanced the proceedings are in each court.

(i) The law should strive against permitting multiplicity of proceedings in relation to similar issues.

(j) Generally balancing the advantages and disadvantages to each party.

49 They also cited as relevant, the further additional criteria that were identified by Santow J in The Environmental Group Ltd v Croudace[45] and later endorsed by the New South Wales Court of Appeal in L & W Developments Pty Ltd v Della,[46] being the conduct of the parties with respect to the relative progress of each proceeding, and whether there are other parties to either proceeding.[47]

50 The Amcor parties accept that the Court can take some 'guidance' from the list of factors articulated by Lockhart J in Sterling Pharamceuticals and related principles set out above, that apply when one seeks a stay of a proceeding because of some other proceeding that is on foot, but they do not accept that the other cases and principles relied upon by the Holihan parties are fair or appropriate analogies for the Court to have regard to in this rather unique case.[48] They submit that the principles developed in the context of the grant of a stay of judgment pending appeal, and in particular the requirement that 'special or exceptional circumstances' must be demonstrated before a stay is granted, are inapposite and not relevantly analogous because that threshold exists to protect the entitlement of a successful party to enjoy the fruits of his or her victory. In the present case, however, there are no final orders, nor could there be any suggestion that any appeal would be rendered nugatory unless a stay were granted.

51 The Amcor parties focussed on the real factual differences between the decided cases referred to by the Holihan parties and the present case, noting its rather unique features. Mr Tran submitted that the guidance from the decided cases is helpful as a starting point but acknowledged the difficult task the Court faces here. In my view that task is really one of determining how, consistently with the Civil Procedure Act 2010, the Court's powers can be exercised in a way that is likely to further the overarching purpose of that Act and facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute between the parties.

The Holihan parties' response (reasons why the relief sought in the summons should be refused)

52 The Holihan parties advance a range of reasons why the Amcor parties' application should be refused.

The number, scope and implications of the appeals are unknown

53 The Holihan parties noted that while the Amcor parties have indicated an intention to appeal, Ms Whiting having deposed that "at present, the Amcor parties propose to appeal limited parts of this Court's decision on the counterclaim",[49] they have not provided them or the Court with a notice of appeal in the form upon which they intend to rely. Reference to the 'proposed appeal' at the earlier directions hearings and in the written documentation filed by the Amcor parties in advance of this hearing had conveyed the impression that the proposed appeal related to the counterclaim, but during the course of the hearing, counsel for the Amcor parties informed the Court that it would concern the cross-claim. The Holihan parties submit that in circumstances where neither they, nor the Court, have been informed of the proposed grounds of appeal, or the issues likely to be raised on appeal, the Court simply cannot make any assessment of the impact of any such appeal on the counterclaim (and cross-claim), the volume of work required to manage and determine the appeals and their likely timing, the parties' respective interests and, in particular, the implications on the counterclaim and cross-claim of the appeals succeeding or failing. It follows, they contend, that the Amcor parties cannot discharge their onus to convince the Court that the interests of justice are served by interrupting the part-heard counterclaim and cross-claim to allow the appeals to run.

The Holihan parties would likely suffer real prejudice

54 The Holihan parties asserted that if the stay sought is granted, they will lose the benefit of the findings that have been made in the part-heard counterclaim (and cross-claim), and the right to have their claim heard and determined. In the absence of articulation of the Amcor parties' proposed grounds, however, it is difficult for the Court to make any real assessment of the prejudice they might suffer.

55 The Court is yet to determine which of the contested jobs that were ordered during the relevant period satisfy the 'business as usual' criterion and do not fall within the contractual carve-out, etc., and what compensation is payable in respect of those jobs. Until those two tasks are complete, the Holihan parties contend it is impossible to determine what might be at stake on any appeal; and until the first of those tasks is complete it is impossible even to make a proper estimate of quantum. That is especially significant from the Holihan parties' perspective, because once orders answering the questions are made, time will begin to run under r 64.05 for the filing of any applications for leave to appeal. Both the Amcor parties and the Holihan parties would then be compelled to elect whether to attempt to appeal against any of the answers within 28 days.[50] Importantly, in making that decision, they would be obliged to comply with the overarching obligations under the Civil Procedure Act 2010,[51] including the obligation not to make claims that are frivolous,[52] the obligation to narrow the issues in dispute,[53] the obligation to ensure that costs are reasonable and proportionate,[54] and the obligation to minimise delay.[55] Until some reliable estimate of quantum can be made, however, the Holihan parties would be placed in the difficult position of having to decide whether to launch an appeal (and on what grounds) in circumstances where the implications of the answers given by the Court cannot be quantified or assessed in any meaningful way. They submit that "[s]eeking to appeal would risk spending money disproportionate to what is at stake and potentially infringing the overarching obligations; deciding not to appeal might result in the loss of valuable rights the worth of which was not appreciated when the decision was made."[56]

Further fragmentation and delay is likely to result

56 The Holihan parties submit that it is only in the event that the Amcor parties were entirely successful in invalidating the Second Sale Agreement on the Barnes Appeal or in overturning all of the findings pursuant to which Achilla is entitled to compensation on the Counterclaim/Cross-claim Appeal that the matter would not need to return to the Trial Division in order to allow completion of the counterclaim (and cross-claim). They acknowledge the possibility of that outcome being achieved, but reiterate that the Amcor parties have not provided the Court with any grounds of appeal upon which it might consider the likelihood of it resulting.

57 Perhaps more relevantly, the Holihan parties point out that if any Counterclaim/Cross-claim Appeal were allowed to proceed in tandem with appeals from the principal judgment before the Trial Division had determined the remaining issues on the counterclaim (and cross-claim), there is a very real risk that one or more of the parties may bring a further appeal, resulting in further fragmentation. Whereas, if the counterclaim (and cross-claim) were to run their course in the usual way and final orders were made following the assessment and quantification stages, all appeals arising from their determination could then be commenced, and be managed and heard together with the Hodgson Appeal and the Barnes Appeal.

58 The Amcor parties readily accept that the risk of fragmentation exists, and is prima facie a reason not to make the orders they seek. But they submit any such risk is minimal.[57] Further, they say that finalisation of the counterclaim will take a substantial amount of time, albeit that they accept the timeframe for the referee process is now likely to be shorter than that estimated by Ms Whiting in her affidavit.[58]

59 The Holihan parties have identified the series of steps that are likely to be required to be completed before the appeals can be finally determined. They include:

(a) obtaining orders from Vickery J against all relevant parties to the various appeals;

(b) approaching the Court of Appeal for orders in relation to the extant appeals and application for leave to appeal;

(c) issuing any applications for leave to appeal against the orders now sought;

(d) formulating grounds of appeal against the orders now sought;

(e) case management of the three appeals having regard to the respective positions of the seven different 'camps' of appellants, applicants and respondents;

(g) determining the appeals and publishing judgments (bearing in mind the number and length of the judgments under appeal, the volume of evidence involved in the determination of the trials and the number of legal issues that arise).

60 The timing for the hearing of the appeals is unclear. The Holihan parties submit that the counterclaim and cross-claim will likely 'conclude by the third quarter of 2018, which is almost certain to be well before the appeals have been heard and determined.'[59] The Amcor parties effectively submit that the reverse position would apply.

The risk of costs incurred in finishing the counterclaim being wasted

61 The parties are agreed that the time spent working on the Details of Claim/Response to Claim/Reply to Claim document has been useful in advancing the adjudication phase of the counterclaim, but it has been costly.

62 The Holihan parties accept that there remains significant work to be done in relation to both the adjudication phase and the quantification phase. They "concede that there are circumstances in which the cost of that further work would be wasted if the counterclaim was completed before the appeals were determined".[60] Indeed, the Amcor parties rely heavily on that possibility as a factor in support of the grant of the relief sought in their summons. But, as the Holihan parties observe, those circumstances would only arise if the Amcor parties were entirely successful in either (a) setting aside the Second Sale Agreement; or (b) setting aside all of the findings which establish Achilla's right to compensation. Further, they say, while any wastage of costs would be unfortunate, that is a risk associated with large litigation and a natural consequence of the counterclaim being heard and determined separately to the primary claims.

63 The Holihan parties submit that the risk that the costs of the remainder of the counterclaim might be wasted cannot be elevated to the status of a risk of prejudice to the Amcor parties should a stay not be granted. The circumstances in which costs might be thrown away are circumstances which could ordinarily be ameliorated by the making of orders in relation to the costs of the proceedings. The Holihan parties contend that, in any event, such a risk must be balanced against the very real prejudice to them and to the administration of justice if the counterclaim is not completed first.

64 The present case is, as the Amcor parties acknowledge, a rather unique one that does not have any ready comparator in the decided cases. And the task the Court faces here is a difficult one, in seeking to ensure that its powers and discretion are exercised in a way that is likely to further the overarching purpose under the Civil Procedure Act 2010, and facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute between the parties.

65 The Amcor parties bear the onus of persuading the Court that the relief set out in their summons (as amended) should be granted. Given that a stay of the counterclaim is sought pending the hearing and determination of the appeals, in circumstances where the timeframe for the hearing of those appeals in not known, that burden is, in my view, a heavy one for which 'powerful supporting evidence'[61] is required. That expression was the language used by J Forrest J in Grace v El Masri to articulate the test that applies where a further application for adjournment is made concerning a trial that has not commenced but which has been pending in the Court for some time. That situation is analogous to the present situation, where an adjournment of a part-heard trial is sought, pending the hearing of an appeal. In my view, 'powerful supporting evidence' is an apt descriptor for the test that applies in the present case because it reflects the weighing process the Court must embark upon by reference to the guiding factors articulated by Lockhart J in Sterling Pharmaceuticals, and captures the threshold that must be demonstrated. It is, in my view, more apposite in the context of the present case than the Cross Country Realty test of 'special or exceptional circumstances', which applies where a final judgment has already been rendered by the Court.

66 On the material before the Court, the Amcor parties have not discharged their onus.

67 In my view, the risk of further fragmentation is a real one, and it weighs heavily in the assessment of the merits of the competing courses. Perhaps most importantly, there is a significant risk that further fragmentation would cause delay to the final resolution of this proceeding. Given the difficulties the parties have experienced in identifying and obtaining the services of a suitably qualified person to undertake the task of special referee, and mindful of the further work that will be required to be performed by the accounting experts in undertaking the quantification task, there is a risk that a delay of an unspecified duration may present problems in terms of their respective availability at some later point in time.

68 In the case of the accounting experts, it is preferable that the quantification phase take place soon as possible, while the issues are relatively fresh in their minds. The parties are agreed that Mr Mines' task is likely to take up to 12 weeks, and he is available to start the task now. The quantification task will involve some adjustment of the model used by the accountants to take into account the Reasons (which is likely to take no more than two weeks) with the quantification exercise to follow and be the subject of expert reports (which is likely to take two to three weeks). As the parties are agreed that the reference could proceed as a 'staged process', should a further reply from the Amcor parties prove necessary to address those jobs for which they bear the onus, it can be accommodated within the proposed timeframe.

69 On current indications, there is a window of opportunity which would allow the special referee to undertake and complete the reference, with the experts doing preparatory work in the meantime in order that they might proceed with the quantification exercise once the referee's work has been completed. Seizing that opportunity will promote the final resolution of the counterclaim (and cross-claim) in as timely a way as possible.

70 There is no utility in speculating as to what the timing for the hearing of the appeals might be. No doubt the Court of Appeal will take whatever steps are necessary to bring them on for hearing and determination in a timely way. Nevertheless it is plain that the appeals will involve some complexity, and that is a matter which is also relevant to the exercise of the Court's discretion.

71 If the questions were answered and a stay were granted, the Holihan parties would be placed in an invidious position, in the sense that they would have to determine whether to appeal in respect of those answers, without knowing the financial implications of the relevant findings. Senior Counsel for the Holihan parties summarised their position as follows:

[MR MAIDEN:] They will, as we say in our submissions, be put in a position where they either commit to risking further significant sums of money in the pursuit of an appeal brought just in case their rights will be affected to a degree that justifies the appeal, and on the other hand be put at the risk of bringing an appeal which once those factors are eventually known, might turn out not to have been worth the candle, and therefore breaching obligations under the Civil Procedure Act. So that is a significant matter, and not one that's worth only faint weight.[62]

72 The prospect that the course embarked on might encourage a party to bring on and pursue an appeal (or grounds of appeal) out of an abundance of caution, in circumstances where the value of the ground asserted is unknown and possibly worthless, is not a course that would commend itself. It is one that is unlikely to be consonant with, or satisfy the objectives under the Civil Procedure Act 2010. Any prejudice that the Amcor parties might suffer as a result of the delay in the determination of the appeals is difficult to gauge, given that a not insignificant body of work is required to be undertaken before they can be heard or determined. To the extent that the course the Court has decided upon will involve any wastage of costs associated with the completion of the further work required in relation to both the adjudication phase and the quantification phase, that should be capable of being ameliorated by the making of orders in relation to the costs of the proceedings.

73 In my view, essentially for the reasons advanced by the Holihan parties, the relief sought in the amended summons should be refused.

74 At the hearing on 29 January 2018, both parties pressed for the determination of the three additional legal questions that have been identified. There was consensus, however, that if the Court dismissed the summons, then the reference should proceed and Mr Mines should be appointed forthwith in order that he might commence the 'stage 1 work' in advance of the Court determining the legal questions. The Court has informed the parties that its ruling on the legal questions will follow as soon as may be convenient following the delivery of these reasons.

75 In the case of the Amcor Displays jobs, the position reached at the hearing was to the effect set out in paragraph 25 above, namely that Mr Mines will first determine whether the Holihan parties are entitled to compensation in respect of the Displays jobs, and then it will be a matter for the Court to determine how much compensation the Holihan parties are entitled to receive having regard to the finding that the Amcor parties' obligation did not extend beyond providing "some small amount of the Amcor Displays work" to Achilla. The parties foreshadowed that they may require leave to re-open their cases, but that will be a matter for formal application and submissions once Mr Mines has completed his work.

76 At the hearing on 29 January 2018, the Court made a number of observations and raised several queries about the parties' proposed form of order for the appointment of Mr Mines as special referee. As a result, some adjustment of the proposed form of order will be required. Accordingly, I propose to re-list the matter for mention at some convenient time so that the necessary order may be made.

(FORMERLY AMCOR PACKAGING (AUSTRALIA) PTY LTD) (ACN 004 275 165)

SPECIALTY PACKAGING GROUP PTY LTD (FORMERLY SERVICE CONTAINERS PTY LTD) (ACN 005 319 666)

AUSTRALIAN CORRUGATED BOX CO PTY LTD (FORMERLY ACHILLA PTY LTD)

AUSTRALIAN CORRUGATED BOX CO PTY LTD (FORMERLY ACHILLA PTY LTD)

(FORMERLY AMCOR PACKAGING (AUSTRALIA) PTY LTD) (ACN 004 275 165)

(FORMERLY AMCOR PACKAGING (AUSTRALIA) PTY LTD) (ACN 004 275 165)

AUSTRALIAN CORRUGATED BOX CO PTY LTD (FORMERLY ACHILLA PTY LTD)

[1] Hodgson v Amcor Ltd (2012) 264 FLR 1; [2012] VSC 94.

[2] For convenience I shall use the description the parties used when referring to themselves, and as used in the reasons for judgment on the counterclaim and cross-claim) - see Reasons, at [2].

[3] See Holihan parties' outline of submissions on the summons, at [20] (citing Affidavit of Christiana McCudden sworn in the counterclaim on 7 February 2014 (McCudden Affidavit), at [15]; Exhibit CMM-15). Note that at this point in time, there was only a counterclaim on foot.

[4] [2013] VSCA 223.

[5] See Hodgson v Amcor Ltd [No 11] [2013] VSC 739.

[6] See Ruling of the Court of Appeal delivered on 13 March 2014 ('Ruling') at [14]-[15]. (Attachment E to the Amcor parties outline of submissions dated 17 January 2018).

[10] See extract from the transcript of the hearing which appears as Exhibit EAF-19 to the Third Affidavit of Edwin Adrian Fah dated 24 January 2018 (Third Fah Affidavit).

[11] The annexed statement of issues, which was made pursuant to section 50 of the Civil Procedure Act 2010, set out a summary of the issues that the parties considered to arise from the pleadings. This 'Joint Statement of Issues' document was amended by the parties from time to time, in consultation with one another, during the course of the trial.

[12] Amcor Ltd & Ors v Barnes & Ors [2016] VSC 707 (the Reasons).

[15] I note that in the Details of Claim/Response to Claim/Reply to Claim document the first contested job the subject of Achilla's claim for compensation is dated 27 September 2005.

[16] See cl 12.2 of the Asset Sale Deed dated 2 June 2003 (defined in the Reasons as the Second Sale Agreement) at CB1492.

[17] That is, the sale of the ACB Business effected by the Second Sale Agreement.

[18] See, e.g., Reasons at [299], [303]-[305], [386].

[22] Later orders were made adjusting the timetable by which those documents were to be filed.

[23] The parties informed the Court of this agreement at the directions hearing held on 5 April 2017. The transcript is Exhibit EAF-8 to the Second Affidavit of Edwin Adrian Fah dated 14 December 2017 (Second Fah Affidavit).

[24] See Whiting Affidavit, at [12] as to the difficulties in finding an alternative referee.

[25] The relevant jobs are identified by job number and year in Annexure C to the Holihan parties' outline of submissions dated 17 January 2018.

[26] Reasons at [479] (emphasis added). See also Reasons at [666], [667] and [1703(b)].

[27] See Submissions of the Amcor parties on Referral Directions dated 24 January 2018, at [2.1].

[28] See Submissions of the Amcor parties in support of summons dated 17 January 2018, at [202].

[29] See the Second Fah Affidavit at Exhibits EAF-15 and EAF-16.

[30] That is, the jobs other than the stage 1 jobs listed in the Holihan parties' Schedule B.

[31] See Submissions of the Amcor parties in support of summons dated 17 January 2018, at [207].

[32] Paragraph 1A of the Amended Summons seeks an order that the further hearing or determination of the Holihan parties' counterclaim be stayed until further order.

[33] See the Submissions of the Amcor parties on Referral Directions, at [22].

[34] See Orders of Vickery J made on 13 March 2015.

[35] Submissions of the Amcor parties in support of summons dated 17 January 2018, at [220].

[36] Submissions of the Amcor parties in support of summons dated 17 January 2018, at [210].

[37] In this regard, they submit that the Court should not assess the prospects of success but instead proceed on the basis that it is possible that the Amcor parties might obtain orders avoiding the need to determine the counterclaim finally.

[38] Submissions of the Amcor parties in support of summons dated 17 January 2018, at [213].

[39] [2015] VSCA 347, at [79]-[82], [88]-[90] (Cross Country Realty).

[41] Geelong Football Club Ltd v Clifford [2002] VSCA 212, per Ormiston JA (with whom Callaway JA agreed) at [6]. The application for an adjournment in that case was premised on a pending application for special leave to appeal in another, similar, case.

[42] Grace v El Masri [2013] VSC 432, at [28] (per J Forrest J).

[43] [1992] FCA 72; (1992) 34 FCR 287, at 291 ('Sterling Pharamceuticals').

[44] As interpreted by Hargrave J in UDP Holdings Pty Ltd v lronshore Corporate Capital Ltd & Anor [2016] VSC 400, [29].

[45] Unreported, Supreme Court of New South Wales, Santow J, 7 August 1998.

[46] [2003] NSWCA 140 (L & W Developments).

[47] Ibid, at [52]-[57] (Mason P, Giles and Santow JJA agreeing).

[48] Transcript 29/01/18, at 64-65 (Mr Tran).

[50] Subject to any extension that might be granted by the Court: r 64.05(1)(a).

[51] Section 10.

[52] Section 18(a).

[53] Section 23.

[54] Section 24.

[55] Section 25.

[56] See Holihan parties' outline of submissions on the summons, at [32].

[57] Amcor parties' submissions on the summons dated 17 January 2018, at [217]-[218].

[58] Amcor parties' submissions on the summons dated 17 January 2018, at [219].

[59] Holihan parties' outline of submissions on the summons, at [60(f)].

[60] Holihan parties' outline of submissions on the summons, at [63].

[61] To adopt the expression used by J Forrest J in Grace v El Masri [2013] VSC 432, at [28].