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[2019] VSC 580
Supreme Court of Victoria
2019-08-30
Sifris J
Original judgment source is linked above.
PRACTICE AND PROCEDURE - Joinder of parties - Necessary parties - Trial in stages - Findings of breach of fiduciary duty by first and fourth defendants made after first stage - Plaintiffs sought constructive trust over property in the hands of first to fourth defendants - Reasons given but no orders made - Plaintiffs seek to trace proceeds of property to family members of the fiduciary - Family members were not parties at the trial of the first stage - Family members joined as seventh to twelfth defendants after reasons delivered - Whether seventh to twelfth defendants bound by findings or are entitled to have the reasons set aside - Whether a new trial should be ordered before a different Judge - Seventh to twelfth defendants were not directly affected by the findings or orders made at the first stage - Seventh to twelfth are bound by the findings made at the first stage - Boyd v Thorn (2017) NSWLR 390.
1 On 22 February 2019, I published reasons (the Reasons)[1] following the trial of the first stage of this proceeding held in November 2018 (the Principal Proceeding).
2 The Reasons include various findings of breach of fiduciary duty and of the Partnership Act 1958 (Vic) (Partnership Act) by the fourth defendant, Gary Graco (Graco) and a company controlled by him, the first defendant, Zphere Pty Ltd (Zphere). Two of Graco's associated companies, the second and third defendants, GFBR Nominees Pty Ltd (GFBR) and Glenaldon Pty Ltd (Glenaldon) respectively, were found to be liable as accessories to the various breaches. Despite publication of the Reasons, I did not make any substantive orders or grant substantive relief in favour of the plaintiffs. That is to say, I did not order compensation, disgorgement or impose or declare constructive trusts over assets (or proceeds) the subject of the various breaches.[2]
3 At a directions hearing held on 1 March 2019, Queen's Counsel for the plaintiffs indicated that in addition to pressing appropriate relief against the defendants, the plaintiffs would seek relief, by way of tracing, against other non-parties comprising various family members, individuals and corporate entities associated with Graco. The stage, following the delivery of Reasons, will be referred to as the Tracing Stage.
4 The additional parties were joined partly on the basis of evidence given by Graco in the course of the hearing of the Principal Proceeding to the effect that some of the traceable proceeds of the Investment and Additional Payment had been received by them. Findings that they had received such property were not made in the Reasons. Such proceeds were not identified. It was foreshadowed that the plaintiffs would be seeking to enforce a proprietary interest in the property held by such added defendants.
5 Presently before the Court is an application to set aside the Reasons, and orders for a re-trial before a different Judge, on the issues that were the subject of the Principal Proceeding and the remaining issues against the recently added defendants. The application was heard on 31 July and 1 August 2019.
6 The critical question raised by the application is whether the joinder of the added defendants entitles them to, as of right, have the Reasons set aside and have a new trial before a different Judge. For the reasons that follow, the added defendants have no such right, and the orders they seek will not be made. The application will be dismissed.
8 While acting for the Partnership, Graco sat as a non-executive director on the board of one its clients, Swisse Wellness Group Pty Ltd (Swisse). While on the board of Swisse, he was offered the Opportunity to subscribe for shares in the company (the Investment). Through GFBR, he took up that offer and invested $203,780 in the Investment. The majority of Swisse's shares were later purchased by Biostime, a Hong Kong company. In September, 2015, Graco caused GFBR to sell its Swisse shares, and GFBR realised a profit in the amount of $11,593,544.71.
9 Soon after the takeover of Swisse, on 4 November 2015, a payment of $4,861,000 was made by entities formerly associated with Swisse to the account of Glenaldon (Additional Payment). The Additional Payment was gratuitous in nature, but represented the difference between the value of the Investment, and the value of a 1 per cent shareholding in Swisse. Put another way, it was a 'top-up' payment that had arisen by virtue of Graco's fiduciary position.[5]
10 Graco or Zphere did not disclose to the Partnership their shareholding in Swisse, or the Investment or Additional Payment that GFBR or Glenaldon received. The plaintiffs alleged, that as a result of their failure to disclose the investment opportunity, and to seek approval and then to account for the benefits derived from the Investment and the Additional Payment, each of Zphere and Graco breached various contractual, statutory and fiduciary duties owed respectively under the terms of the Partnership Deed, Partnership Act, and the general law.
11 A further claim of accessorial liability was made against Graco in relation to the breach of fiduciary duties on the part of Zphere. Finally, the plaintiffs claimed that each of GFBR and Glenaldon were accountable to the Partnership for their knowing receipt of property obtained in breach of fiduciary duty, and knowingly inducing or procuring the breaches of fiduciary duty by Zphere or Graco.
12 The plaintiffs were successful on almost all claims they pressed. They were not successful in establishing that Zphere breached the 'no profit' rule or s 33 of the Partnership Act. Likewise, I declined to find that Graco engaged in a dishonest and fraudulent design, and consequently, GFBR and Glenaldon were not liable on the 'knowing participation' limb of Barnes v Addy.[6] In summary, I found the following:
(a) Graco is liable as a fiduciary in breach of each of the 'no profit' and 'no conflict' obligations.
(b) Graco is liable as a Partner in breach of ss 32 and 33 of the Partnership Act.[7]
(c) Zphere is liable as a fiduciary in breach of the 'no conflict' obligation.
(d) Zphere is liable as a Partner in breach of s 32 of the Partnership Act.
(e) Graco is liable, as an accessory, for knowingly inducing or procuring Zphere's breach of fiduciary duty.
(f) GFBR is liable, as an accessory, for knowingly receiving property (the Investment) obtained in breach of Graco's fiduciary duty.
(g) GFBR is liable, as an accessory, for knowingly inducing or procuring Graco's breaches of fiduciary duty.
(h) Glenaldon is liable, as an accessory, for knowingly receiving property (the Additional Payment) obtained in breach of Graco's fiduciary duty.
(i) Glenaldon is liable, as an accessory, for knowingly inducing or procuring Graco's breaches of fiduciary duty; and
13 Having made various findings and having dealt with the issues as pleaded, I did not, as noted, make any orders. I proposed to deal with the nature, scope and extent of relief that flowed from the breaches, any allowances, and any other matters, including the proportionate entitlement of the fifth and sixth defendants,[8] at a separate hearing. This brings me to the events that following publication of the Reasons.
14 On 5 March 2019, I made orders joining the following parties:[9]
(a) Frana Maude Graco (Mrs Graco), the wife of Graco was joined as seventh defendant.
(b) FBR Fund Management Pty Ltd (FBR Funds), a company controlled by Graco or Mrs Graco, was joined as eighth defendant.
(c) Baden Rhain Graco (Baden), the son of Graco, was joined as ninth defendant.
(d) Rhian Victoria Graco (Rhian), the daughter of Graco, was joined as tenth defendant.
(e) Emily Denise Graco (Emily), the spouse of Baden (and daughter-in-law of Graco), was joined as eleventh defendant.
15 On 15 May 2019, the plaintiffs filed a Further Amended Originating Process and Statement of Claim (FAOP and FASOC) which added Danijel Francis Lloyd (Danijel), the spouse of Rhian (and son-in-law of Graco) as the twelfth defendant.
16 Collectively, the seventh to twelfth defendants will be referred to as the Added Defendants. The first to fourth defendants will be referred to as the Graco Defendants.
17 Following the joinder of the Added Defendants, summonses were filed:
(a) on 20 May 2019, by the seventh defendant;
(b) on 20 May 2019, by the eight to eleventh defendant; and
(c) on 27 May 2019, by the twelfth defendant.
18 The summonses are in substantially the same form and seek the following orders:
(a) An order pursuant to the inherent jurisdiction of the Court that the Reasons be set aside;
(b) Further or alternatively, an order that there be a new trial on all issues before a different Judge of the Court;
(c) Further orders or directions for the further conduct of the proceeding consequential upon the making of Orders 1 and/or 2;
(d) Alternatively to Orders 1 to 3 above:
(i) An order pursuant to r 46.08 of the Supreme Court (General Civil Procedure) Rules (the Rules) that the Orders made on 5 March 2019 or 3 May 2019, joining each of the Added Defendants as defendants in this proceeding be set aside; or
(ii) Alternatively, an order pursuant to r 9.06(a) of the Rules that each of the Added Defendants cease to be a party to this proceeding.
(e) An order that the plaintiffs pay the costs of the Added Defendants of and incidental to this application.
19 Mrs Graco seeks a further order that the claims against her, set out in paragraphs 58 to 64 of the FASOC be struck out or dismissed.
20 Danijel seeks a further order that pursuant to s 90(3) of the Transfer of Land Act 1958 (Vic) that the caveat lodged by the fifth plaintiff in dealing number AS104789T over the title to the land described in certificate of title volume 8342 folio 600 and known as 11 Jennifer St, Cheltenham, Victoria 3192 be removed.[10]
21 In summary, the Added Defendants seek orders setting aside the Reasons, and a re‑trial on all issues, or alternatively orders setting aside their joinder or causing them to cease being parties to these proceedings. Substantial submissions were exchanged and responded to, which are summarised below.
22 The Added Defendants submitted that the Reasons should be set aside, and a new trial held on all issues. It was submitted, that they were necessary parties from the point in time at which the plaintiffs claimed an order that the Investment, Additional Payment or the proceeds thereof were held on constructive trust for the Partnership. At that point in time, the Court was invited by the plaintiffs to make orders which directly affected the rights or liabilities of the Added Defendants, who were not yet parties to the proceeding. As such, the plaintiffs' tracing claim depended on orders that the Graco Defendants hold or held that property on constructive trust, and those orders directly affected their rights or liabilities.
23 They submit that they were each entitled to be heard and to adduce evidence, as necessary parties and as a matter of natural justice. Further, it was submitted that the fact that the Added Defendants have now been joined as defendants does not regularise or remedy the failure for them to be joined earlier.
24 The submissions fall into three broad categories:[11]
(a) the setting aside of the Reasons and the need for a new trial;
(b) the new claims that have now been advanced against Mrs Graco and FBR Funds; and
(c) the need for a new Judge of this Court to hear the re-trial to avoid any reasonable apprehension of bias.
25 The Added Defendants[12] relied principally on John Alexander's Clubs Pty Limited v White City Tennis Club Limited (JACS),[13] Cameron v Cole,[14] Boyd v Thorn,[15] and Hampshire Automotive Centre Pty Ltd v Centre Com Sunshine Pty Ltd (Hampshire Automotive).[16] These decisions are discussed below.
26 It was submitted that the Added Defendants ought to have been joined prior to, or during the course of the trial of the proceeding - from the point in time at which the plaintiffs became aware that they had received various items of property from the Graco Defendants, alleged to be the traceable proceeds of the Investment and Additional Payment. They submitted that it is not to the point that the Added Defendants had knowledge or notice of the proceeding as the duty is on the plaintiff to join all necessary parties at the point in time at which they ought to be joined.
27 The Added Defendants submitted that, where a court is invited to make, or proposes to make, orders directly affecting the rights or liabilities of a non-party, the non-party is a necessary party and ought to be joined. As such, where the orders sought establish or recognise a proprietary interest in property, all persons who have or claim an interest in the subject matter are necessary parties, the rule being that a person directly affected by an order or determination made in a proceeding to which that person was not party is entitled as of right to have that order or determination set aside. That is to say, the Added Defendants are entitled to have the Reasons set aside as of right, quite aside from the exercise of any discretion.
28 It was submitted further that the Added Defendants were and are entitled to call evidence, and be heard, on all aspects of the plaintiff's cause of action which leads to the claim for orders directly affecting them. That is to say, that right is not restricted to disputing the claims against them. They were and are entitled to claim that the plaintiffs' substantive case (the Principal Proceeding) was not strong enough to succeed. They were and are entitled to call evidence against that substantive case and even if they did not wish to call evidence, to make submissions on weaknesses in the plaintiff's case.
29 In other words, their right, it was submitted, is not just in respect of what relief should follow from any findings of breach, but also on the questions whether Graco and Zphere owed any (and if so, what) fiduciary duties to the plaintiffs and if they did, whether they breached those duties and then whether GFBR and Glenaldon were accessories to those breaches.
30 It was further submitted that a re-opening of the Principal Proceeding would not be sufficient. Such a re-opening could only proceed on the basis that the determinations made in the Reasons are not binding on any of the Added Defendants. Further, it would have to be before a different Judge. It was submitted, that if I were to permit a re-opening of the Principal Proceeding before me, I would effectively be conducting an appeal from my earlier decision.
31 As a consequence of the plaintiffs not having joined the Added Defendants to the Principal Proceeding, each of the Added Defendants submitted that the Judgment should be set aside and a new trial ordered before a new judge on all issues.
32 The FASOC advances new claims against each of Mrs Graco and FBR Funds. These claims go beyond a simple tracing exercise and leave was not sought in respect of them. The plaintiffs alleged that FBR Funds and Mrs Graco knowingly received property obtained through Graco and Zphere's breaches of fiduciary duty.
33 Mrs Graco and FBR Funds each submitted that the new claims, sought without leave, and dependent on the findings of breach of fiduciary breach made in the Principal Proceeding further necessitate the need for a new-trial.
34 Mrs Graco and FBR Funds further submitted that the new claims alleged specific knowledge and were dependent on breaches of fiduciary duty of other defendants, on the fault of other defendants, and on other matters of fact and law, as to which the trial had concluded, and findings had already been made. As such, they had an entitlement, but were not permitted, to adduce evidence, and to be heard, against all aspects of the plaintiffs' cause of action. Therefore, it was submitted, a new trial must be ordered.
35 The Added Defendants submitted that if a new trial is ordered, or a re-opening permitted, such trial or re-opening ought to occur before a different Judge of this Court. This is necessary to 'avoid any appearance of pre-determination'.
36 It was submitted, that where the questions for determination at the new trial will be the very same questions in respect of which I have already made considered findings in the Reasons, which were intended as final findings dispositive of those issues, a fair-minded lay-observer would reasonably apprehend that I would not be able to bring an impartial mind to the resolution of those questions.
37 The plaintiffs challenged the application on five primary grounds:
(a) First, the giving of reasons is different from the entry of judgment. As no judgment has been entered, there is nothing to set aside.
(b) Second, the Added Defendants were not necessary parties to any of the issues determined in the Reasons. It was submitted that no claim, and in particular no claim for proprietary relief, was made against the Added Defendants in the Principal Proceeding. The question of whether Graco and Zphere were liable as fiduciaries, and GFBR and Glenaldon as accessories, did not directly affect the rights or liabilities of the Added Defendants. The Reasons found and ordered nothing (adverse or otherwise) about any non-party's proprietary rights or personal liability, and as such the Added Defendants were not necessary parties. As they were, it was submitted, neither directly affected or necessary parties, they do not have the right to set aside the Reasons.
(c) Third, even if the Reasons 'touched on' their proprietary rights, the Added Defendants are not third parties who have independent proprietary rights that ought to have been taken into account. The plaintiffs referred to McNab v Graham,[17] University of Technology v Wilson[18] and Youssef Victoria University of Technology[19] and submitted that the Added Defendants were volunteer recipients and, as such, it was submitted that they had no greater rights than the fiduciary wrongdoers, the Graco Defendants. That is to say, JACS, Boyd v Thorn, and Hampshire Automotive can be distinguished as cases concerned with third parties who were good faith purchasers for value and without notice. They were not, as the Added Defendants are here, volunteer recipients of property obtained in breach of fiduciary duty.
(d) Fourth, it was submitted that even if the Reasons were set aside or the case reopened, the evidence already tendered by the plaintiffs and by the first to fourth defendants, which was sufficient to prove Graco and Zphere's breaches, remains as evidence in the proceeding even now that the Added Defendants have been joined. On this point, the plaintiffs further submitted that there were almost no disputed facts in the Principal Proceedings. The issues were, or were almost, entirely legal in nature. As such, it was submitted that it is fanciful for the Added Defendants to now suggest that they would have given any evidence that could affect the result. In this sense, it was submitted, that it 'beggers belief that the Added Defendants would be privy to any factual information about the conduct of the Graco Defendants that was not known to, and deployed by, the Graco Defendants in their defence at trial.' As such the findings would be entirely the same on any re-trial. The Added Defendants could bring nothing fresh, relevant or of value.
(e) Fifth, all questions of relief and remedy remain to be determined by the Court. The Added Defendants remain free to put on additional evidence and make submissions on those questions.
38 On the Added Defendants' submissions that any new trial must take place before a new judge, the plaintiffs submitted that:
(a) the Court has expressed no view, however tentative, about any evidence or additional arguments that the Added Defendants may now wish to proffer and questions relating to remedies remain wholly unexplored; and
(b) no reasonable apprehension of bias and no denial of procedural fairness, can arise simply because the same judge is required to determine a legal or factual contention that has not previously been put.
39 In challenging the Added Defendants' submission that a new judge hear the proposed new trial, the plaintiffs submitted that their reliance on Hampshire Automotive was inapt, stating that in contrast to that case, there can be no reasonable apprehension of bias in this case for the following reasons:
(a) no question touching any party's proprietary rights had been considered by the Court;
(b) no final orders have been made; and
(c) no determination, however preliminary, has yet been made on any issue between the plaintiffs and the Added Defendants.
40 The seventh, and eighth to eleventh defendants each filed submissions in response to those filed by the plaintiffs. They will be dealt with and referred to in the course of these reasons as is necessary or desirable. In summary, the Added Defendants submit that the principles of natural justice expressed by the authorities are not limited or confined in the manner contended by the plaintiffs. That is to say, they are applicable to all persons, and not mere those who are 'unconnected' with the fiduciary wrongdoing.
F Setting aside the Reasons - were the Added Defendants necessary parties to the Principal Proceeding?
41 As the authorities below demonstrate, if the Added Defendants were directly affected by orders or findings made in the Principal Proceeding, they are necessary parties and required to be joined, either at the commencement of the proceeding or at the earliest possible opportunity, so that they may participate in the trial, the outcome of which directly affects them. The failure to join a party directly affected is in effect a denial of procedural fairness and natural justice and usually results in the setting aside of any judgment or order.
42 Whether the Added Defendants are or were directly affected by the findings (no orders have been made) in the Principal Proceeding is the critical issue in the application.
43 Having considered the detailed submissions of the parties, both written and oral and having considered the numerous authorities referred to, I am of the opinion that the Added Defendants, were not relevantly directly affected by the findings in the Principal Proceeding. Further, I am satisfied that they were properly joined at the right time.
44 Where a court is invited to make, or proposes to make orders that will directly affect the rights or liabilities of a non-party, that non-party is a necessary party and ought to be joined to the proceeding. In JACS, the High Court adopted the following statement of principle expressed in News Ltd v Australian Rugby League Ltd (News Ltd):[20]
There are some classes of case where the ascertainment of the necessary parties who "ought to have been joined" is not difficult. Where the orders sought establish or recognise a proprietary or security interest in land, chattels or a monetary fund, all persons who have or claim an interest in the subject matter are necessary parties. This is because an order in favour of the claimant will, to a corresponding extent, be detrimental to all others who have or claim an interest ... Where the subject matter of the proceedings is not of this kind, the ascertainment of necessary parties who ought to have been joined may be more difficult.
45 In JACS, White City Tennis Club (the Club) commenced proceedings, alleging that a piece of land was held by Poplar on constructive trust for the Club. The trial judge declared the land to be held on constructive trust. This was upheld by the New South Wales Court of Appeal (NSWCA). After the decision in the NSWCA, Walker, a finance company, applied to the NSWCA to be joined as a party to the appeal and sought an order that the previous declaration of a constructive trust over the land be set aside. The NSWCA refused that application.
46 Walker held an unregistered mortgage over land that had been specifically identified in the orders White City was seeking and over which a constructive trust had been declared. On appeal, the High Court considered, that Walker was, as of right, entitled to have the declaration of constructive trust set aside. The declaration adversely affected Walker's rights as it exposed Walker to a priority dispute with the Club. The High Court said:[21]
[133] The relief claimed and granted - a constructive trust and a transfer of the land subject to the trust to the Club so as to make the interest transferred indefeasible on registration - directly affects the interests of any other person, like Walker Corporation, claiming an interest in the land, because orders in the Club's favour would, to a corresponding extent, be detrimental to those other persons.
47 A non-party has no duty to seek to be joined, and they do not need to explain why it is that they have not sought this. In this regard, the non-party's knowledge or notice of the proceeding is entirely irrelevant. The plaintiff must properly constitute their suit, and it is at their peril to not do so. This was the case in JACS, where the affected non-party knew of the proceeding, but simply thought that it would fail.[22]
48 A person who is directly affected by such orders in a proceeding, to which that person was not a party is entitled to have it set aside and to a new trial.[23] While the order is not a nullity, that person is entitled to have the order set aside, as of right, rather than needing to seek the favourable exercise of a discretion from the court.[24] This position does not depend either on the person being a party or on the rules of court, 'it depends on matters of right affecting non-parties which rest on general law principles of natural justice.'[25]
49 Where that non-party is a necessary party because they are directly affected, they are not restricted to disputing the particular claims against them. The non-party is entitled to claim, if it wished, that the plaintiff's substantive case is insufficiently strong to succeed at all. The non-party is entitled to call evidence against that substantive case, and even if it did not wish to do that, it is entitled to be heard on the weaknesses in the substantive case.[26] As the High Court said in JACS:[27]
[116] ...the field for contention was not subsequent litigation of what is described as disputed priority between the Club and Walker Corporation; rather, the issue should have been whether that dispute was to be created in the first place by the decision, in the absence of Walker Corporation, to declare Poplar a constructive trustee for the Club.
50 In Cameron v Cole, Cameron had not received notice of a petition and subsequent hearing to make him bankrupt. A sequestration order was made against him, which had the effect of vesting his property in his trustee in bankruptcy. Cameron succeeded in having the sequestration order set aside on the basis that he did not have the opportunity to contest it. Rich J said:[28]
It is a fundamental principle of natural justice, applicable to all courts whether superior or inferior, that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case. If this principle be not observed, the person affected is entitled, ex debito justitiae, to have any determination which affects him set aside; and a court which finds that it has been led to purport to determine a matter in which there has been a failure to observe the principle has inherent jurisdiction to set its determination aside: .... In such a case there has been no valid trial at all. The setting aside of the invalid determination lays the ghost of the simulacrum of a trial, and leaves the field open for a real trial (citations omitted)
51 The test regarding whether a non-party is a necessary party was stated by Lord Diplock delivering the advice of the Judicial Committee of the Privy Council in Pegang Mining Co Ltd v Choong Sam (Pegang Mining):[29]
The cases illustrate the great variety of circumstances in which it may be sought to join an additional party to an existing action. In their Lordships' view one of the principal objects of the rule is to enable the court to prevent injustice being done to a person whose rights will be affected by its judgment by proceeding to adjudicate upon the matter in dispute in the action without his being given an opportunity of being heard. To achieve this object calls for a flexibility of approach which makes it undesirable in the present case, in which the facts are unique, to attempt to lay down any general proposition which could be applicable to all cases.
It has been sometimes said as in Moser v. Marsden [1892] 1 Ch 487 and in Farbenindustrie Agreement [1944] Ch 41 that a party may be added if his legal interests will be affected by the judgment in the action but not if his commercial interests only would be affected. While their Lordships agree that the mere fact that a person is likely to be better off financially if a case is decided one way rather than another is not a sufficient ground to entitle him to be added as a party, they do not find the dichotomy between 'legal' and 'commercial' interests helpful. A better way of expressing the test is: will his rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action? (emphasis added)
52 In News Ltd, the Full Court refined the test proposed by Lord Diplock:[30]
In our opinion, the question should be decided according to the test proposed by Lord Diplock. The test involves matters of degree, and ultimately judgment, having regard to the practical realities of the case, and the nature and value of the rights and liabilities of the third party which might be directly affected. The requirement that a third party's rights against, or liability to, any party to the proceedings be directly affected is an important qualification that recognises that many orders of a court are likely to affect other people to a greater or lesser extent. This is particularly so with remedies in the nature of an injunction: see Silktone Pty Ltd v Devreal Capital Pty Ltd (1990) 21 NSWLR 317 at 322 per Kirby P. The requirement of a direct effect on rights or liabilities differentiates the case where a person ought to be joined, from other cases where the effect of the order on non-parties can be characterised as only indirect or consequential.
Where, before trial, a question arises whether a necessary party has been joined, attention should be directed to the orders sought in the proceedings. It is the effect of the orders upon the third party that must be determined. The test is not whether the conduct of the third party is raised in the pleadings between the existing parties, or whether the third party is a party to a contract, the meaning or effect of which is pleaded as a matter relevant to the ascertainment of the rights between those parties. Where the question arises after final orders have been made in the proceedings, the inquiry must be directed to the orders actually made, or which, on appeal it is contended should be made: cf Associated Grocers Co-operative Limited v Hubbard Properties Pty Ltd (1986) 42 SASR 321 at 341. (emphasis added)
53 The High Court endorsed and applied this test in JACS.[31]
54 In Associated Grocers Co-operative Limited v Hubbard Properties Pty Ltd (Associated Grocers), the plaintiff, who was entitled to a first right of refusal (to lease a shop) against a landlord (the defendant), claimed specific performance in circumstances where the landlord had, in breach of the right, granted a lease to Coles. Coles, not a party to the action, applied to be joined on the appeal. The application was opposed by the plaintiff on the basis that no relief was claimed against Coles in the proceeding. Jacobs J said:[32]
The notice of cross-appeal is dated 13th September, 1985 and it is to be observed that at that time Coles was not, and never had been, a party to the action. The learned trial Judge had pointed to this difficulty in the course of the trial, particularly in dealing with the plaintiff's claim for specific performance and an injunction, which involved a challenge to the agreement for lease said to have been entered into between Hubbards and Coles. In resisting that claim, counsel for Hubbards was able to inform the trial Judge that he had instructions to resist it on behalf of Coles as well as on behalf of Hubbards. In the result, the primary judgment did not adversely affect the interest of Coles, and there the matter was allowed to rest for the time being. The notice of cross-appeal, however, posed a further direct challenge to the purported agreement for lease between Hubbards and Coles in the terms already stated, and Coles accordingly applied at that late stage to be joined in the action as a defendant. The application was opposed by the plaintiff but it was granted and, in my opinion, properly granted, by order of a Master dated 19th November, 1985. The plaintiff objected to the joinder on the ground that it did not seek, and never had sought, any relief against Coles, but that begs the question, because the relief it sought against Hubbards in the action, and in the cross-appeal would, if granted, quite plainly affect Coles to the detriment of Coles. It was necessary for the due administration of justice, and to avoid a multiplicity of suits, that Coles should be heard as a party, and should be bound by the judgment in the action.
When the appeals were called on in this Court Mr Gray QC and Mr Bagot duly appeared as counsel for Coles, whereupon counsel for the respondent informed the Court that the respondent did not now intend to prosecute its cross-appeal, or to challenge the order discharging the injunction, and that accordingly the only issue to be litigated on the appeal is whether Hubbards, as found by the learned trial Judge, is liable in damages for breach of contract. An order was therefore made by Mohr J, who had made the order discharging the interim injunction, and the Court made the following order as to costs ...
55 In State of Victoria v Sutton (Victoria v Sutton), there was a question as to whether either CFMEU or (members of) BLF had a beneficial interest in certain property. The members of BLF were, however, not parties to the proceeding and should have been. McHugh J said:[33]
[78] The test for determining whether a person is a necessary party has usually arisen in the context of a person seeking to join proceedings rather than a failure to join a relevant person. But the same principle must apply in both situations. Thus, in News Ltd v Australian Rugby Football League, the Full Federal Court held that an order "which directly affects a third person's rights against or liabilities to a party should not be made unless the person is also joined as a party. If made, the order will be set aside." The Full Court pointed out that O 6, r 7 of the Federal Court Rules which states that proceedings will not be defeated by a misjoinder or non joinder was "intended to give effect to the abolition of the plea of abatement". The Court said that the rule was directed "to cases where there is a curable defect, for example the misnaming of a party".
[79] In the present case, the learned Chief Justice of the IRCA made several binding declarations of right, including that:
"3. CFMEU is beneficially entitled to the funds and property presently in the possession, custody or control of the first respondent, Ian Gordon Sharp, including any funds or property vested in him as Custodian under an Order in Council, subject to deduction therefrom of any costs, charges and expenses properly incurred by him as Custodian pursuant to an Order in Council."
[80] The declaration as to the right of the beneficial entitlement to the property in par 3 clearly affects the interests of members of the BLF and the registered proprietors of the real estate. Prior to the amalgamation agreement, the members of the BLF were beneficially entitled to the property in question. In Bacon v O'Dea the Federal Court held that the beneficial interest of the property was vested in all the members but that each individual member only holds a contractual right to have that property dealt with in accordance with the rules. That may be so, but a declaration concerning the entitlement to the beneficial interest in the property affects the interest of all of the members of the BLF.
[81] Both before and after the filing of the Custodian's pleading, the beneficial interest in the property belonged either to the CFMEU or to the members of the BLF. Consequently, they were entitled to be heard and should have been represented in the proceedings. It may be that the interests of the BLF members could have been represented at trial by relevant officers of the federal executive council or a member in a representative capacity. However, the only members joined did not represent all members of the BLF. In addition, neither the Federal Executive Council nor the Trustees were joined as parties or heard in the proceedings. Accordingly, O 3 at least ought not have been made in the absence from the proceedings of the members of the BLF.
56 In Tiao v Lai [No 2], the critical question related to the authority of purported directors to represent an association and make what was contended to be an unauthorised sale of its property. Although the case was concerned with the internal workings of the Association, the purchaser of the property sold by the Association was not joined as a party to the proceeding. After referring to Pegang Mining, News Ltd and JACS, Buss JA said:[34]
[118] In my opinion, declaration 7 and order 5 of the final orders made by the trial judge on 22 May 2009 directly affected Level Holdings' rights against and the liabilities to the Association in respect of the Level Holdings Contract. Declaration 7 directly affected Level Holdings' rights in relation to claiming specific performance of the contract and claiming damages for any breach by the Association of its obligations under the contract or for any repudiation of the contract. Declaration 7 also directly affected Level Holdings' liabilities to the Association by potentially exposing Level Holdings to a claim for damages or other relief in connection with work carried out and other action taken by Level Holdings on or in respect of the Land pursuant to or in reliance on the contract.
[119] Order 5 directly affected Level Holdings' rights against and liabilities to the Association in respect of the Level Holdings Contract and the Land by enabling the Association, upon satisfaction of the conditions specified in order 5, to apply to the court for an order that, despite the terms of the Level Holdings Contract and the work carried out by Level Holdings on the Land, at its cost, pursuant to the contract, Mr Tiao and Mr Hui Wang be ordered to restore the Land to the condition in which it was before the contract was entered into on 11 May 2004. If this were to occur, the amount expended by Level Holdings in carrying out the work would be wasted, and the benefit it would otherwise have enjoyed under the Level Holdings Contract as a result of that expenditure would be lost.
...
[125] In my opinion, the general rule that a third person is entitled to have an order made by a court set aside where the order affects the third person, and the third person should have been, but was not, joined as a necessary party, should be applied in the present case. The orders contended for by counsel for the Association do not resolve adequately the situation which has arisen. Declaration 7 and order 5 must be set aside. My reasons are as follows.
[126] First, the dispute between Level Holdings and the Association (and, at least, Mr Lai) as to the validity and enforceability of the Level Holdings Contract should not be determined on a piecemeal basis. It should be determined by a trial on the question of authority as a whole, and not merely on the question of apparent (or ostensible) authority alone. Secondly, Level Holdings had a right to be heard before the trial judge (and will have a right to be heard at a subsequent trial) on the issue of Mr Tiao's express or implied actual authority to enter into the contract on behalf of the Association. Level Holdings may adduce evidence, cross-examine the Association's (or Mr Lai's) witnesses and make submissions. Thirdly, there is the potential for inconsistency of reasoning and inconsistent judgments if declaration 7 and order 5 are not set aside.
57 In Australian Securities and Investments Commissioner v Lanepoint Enterprises Pty Ltd (Receivers and Managers Appointed) (ASIC v Lanepoint), the High Court held that in an application to wind up a company it was not necessary to join any other company within the first company's corporate group to the application, notwithstanding that they may be affected by it. The High Court said:[35]
[49] It is not apparent why the majority in the Full Court considered that other parties were necessary to be joined in the proceedings. Their Honours did not elaborate upon the matter. Generally speaking, consideration is necessary to be given to the joinder of other parties where orders might be made directly affecting the rights and liabilities of a non-party. An order that Lanepoint be wound up in insolvency may have financial, and even legal, implications for other entities within the Westpoint Group, but it does not itself affect their rights and liabilities.
58 At first instance, the trial judge opined that various intra-group transactions could have been voidable pursuant to an application made by the liquidator brought under s 588FF of the Corporations Act 2001 (Cth) (Corporations Act). This was a further basis on which the Full Court of the Federal Court thought that the group companies ought to have been joined. The High Court held that the trial judge was merely offering an opinion on that matter, as an application under s 588F section was not before his Honour. Their interests could not have been affected as there had been no final determination on the validity of the transactions. The High Court said:[36]
[47] In his findings his Honour described the transactions as being improper and accepted ASIC's submission that they were ineffective. His Honour's views in this regard were relevant to his rejection of the evidence which sought to explain and justify the changes to the accounts. His Honour's reference to the transactions being "ineffective" should be understood in this context and not as suggesting some legal consequence which was not relevant to the questions before his Honour.
[48] His Honour said that the transactions were liable to be set aside under s 588FF. His Honour clearly appreciated that he was volunteering an opinion, and was not making a ruling under the section, for he stated on more than one occasion that they were liable to be set aside at the instance of the liquidator of Westpoint Management. No such application was before his Honour. His Honour appears to have offered his opinion about s 588FF in response to a submission to that effect by ASIC. But it was not necessary for the determination of the issues before his Honour to do so. His non-acceptance of the explanations about the alterations to the accounts was sufficient for that purpose.
...
[50] The majority might have in mind the possibility that an issue estoppel might later be said to have arisen from Gilmour J's determination about the monies owed by Lanepoint and the findings along the path to that conclusion and that this had the potential to affect the other companies involved. There may be some difficulties in raising an issue estoppel, but they do not need to be expanded upon for present purposes. If such a question did arise, the position of those companies vis-à-vis the winding up proceedings might assume some relevance. But this could provide no warrant for their joinder to those proceedings.
[51] The majority expressed concern that officers and employees of Lanepoint and other Westpoint companies were exposed to findings concerning their conduct without the benefit of pleadings in that regard. Their Honours no doubt had in mind that a plea akin to fraud requires detailed particulars and that such pleadings would not usually be provided in proceedings for winding up. The concern rather overlooks the fact that any questions concerning the propriety of the conduct of these persons, in relation to the financial affairs of the WIF and Lanepoint, did not arise from allegations made by ASIC. The persons in question were called by Lanepoint to prove that the alterations to the accounts were for a legitimate purpose.
59 In Martin Bruce Jones v Miami Waterfront Developments Pty Ltd, receivers sought declarations as to the validity of their appointment and joined the director as a party. The director unsuccessfully sought his removal as a party. Edelman J said:[37]
[3] Mr Reiffer was properly joined as a defendant to these proceedings. The orders sought have a direct effect on his powers and duties as a director. And Mr Reiffer's joinder to the action is further supported by case management considerations.
...
[30] In Pegang Mining Co Ltd, Lord Diplock said of the rule concerning joinder of an additional party:
[O]ne of the principal objects of the rule is to enable the Court to prevent injustice being done to a person whose rights will be affected by its judgment by proceeding to adjudicate upon the matter in dispute in the action without his being given the opportunity to be heard.
[31] Another rationale is case management. It has been held that the meaning of the words 'necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined' encompasses 'modern notions of case management and the desire of the justice system to minimise time and costs in litigation'. This also reflects the remarks concerning the direct effect test that '[t]he test involves matters of degree, and ultimately judgment, having regard to the practical realities of the case, and the nature and value of the rights and liabilities of the third party which might be directly affected.'
Is Mr Reiffer a necessary and proper party to the action?
[32] Mr Reiffer is a necessary and proper party to be joined to the proceeding. Mr Reiffer accepted, as he must, that his powers as a director are affected by the appointment of the Receivers. The powers of the Receivers diminish Mr Reiffer's powers as a director.
...
[40] Mr Reiffer's argument was essentially that because he disputed the entirety of the Receivers' appointment, rather than merely the scope of their powers, the claim by the plaintiffs 'does not affect any disputed legal rights of [Mr Reiffer]'. This submission must be rejected. The declaration sought by the plaintiffs seeks to bind both Miami Waterfront and Mr Reiffer. By challenging the entirety of the appointment of the Receivers, Mr Reiffer implicitly asserts that his powers and duties as a director are unaffected by the appointment. It is not to the point that there is no dispute currently raised concerning the scope of his powers as a director.
...
[45] As explained above, this conclusion is also supported by case management considerations which aim to ensure that all matters in dispute are effectually and completely determined. A small selection of matters can be referred to from the voluminous correspondence in evidence. For instance, in correspondence Mr Reiffer has said that he is not prepared to give any undertakings in relation to the property of Miami Waterfront unless and until the issues concerning the validity of the Receivers' appointment are determined. Mr Reiffer has requested that DOS Foxtrot (the second plaintiff) circulate his director's report to the shareholders of Miami Waterfront. And the plaintiffs say that Mr Reiffer, as sole reporting officer of Miami Waterfront, has continually refused to provide a statutory report required by the Receivers to perform their statutory functions.
60 In Fletcher and Anor (as liquidators of Octaviar Administration Pty Ltd) v Anderson, the New South Wales Court of Appeal held that where a liquidator sought an extension of time within which to file proceedings against the Commissioner of Taxation, which would necessarily have a flow-on effect in the nature of indemnity proceedings against the directors of a company, both the Commissioner of Taxation and the directors were directly affected and necessary parties to the application. Barrett JA said:[38]
[97] In the present case, for the reasons I have stated, the liquidators had, as at 19 September 2011, well developed plans to institute s 588FF proceedings against the Commissioner in respect of payments made by OA that are within s 588FGA(1) categories. The liquidators correctly acknowledged that the Commissioner was therefore a person who had a relevant right, interest, or expectation that would or might be affected by the extension order under s 588FF(3)(b) for which they moved before Ward J on that day.
[98] Given the distinct likelihood that any such s 588FF proceedings would be brought in "the Court" and the statutory liability that would accrue automatically under s 588FGA(2) if such proceedings were successful, the persons who were directors of OA when the payments in question were made (Mr Anderson and Mr White) also had a relevant right, interest, or expectation that would or might be affected by that extension order. Their identities were known to the liquidators.
[99] Failure of the liquidators to give Mr Anderson and Mr White notice of the application that came before Ward J therefore rendered the extension order, once made, liable to be set aside as it affected them. The primary judge was correct so to conclude. Furthermore, there was no scope for his Honour to exercise his discretion otherwise than by ordering that the order be set aside to the extent necessary to protect the rights of Mr Anderson and Mr White. It is relevant to quote again from the judgment of Spigelman CJ in Miltonbrook Pty Ltd v Westbury Holdings Kiama Pty Ltd (above) at [85]-[87]:
"It is axiomatic that when a statutory power like s 601AH(2) is conferred on a court, the legislature intends that procedural fairness will be accorded to all who may be affected by the order, unless there is a clear statement to the contrary. The denial of procedural fairness by a court is a fundamental irregularity which would entitle a person aggrieved to set aside an order as a matter of unconditional right. (See Cameron v Cole (at 591); Taylor v Taylor [1979] HCA 38; (1979) 143 CLR 1 at 16). The exercise of the discretion under r 36.15 must be similarly clear cut.
The respondents' submission that the circumstances of this case do not constitute an irregularity or 'sufficient cause' within r 36.15 should be rejected.
In my opinion, the fundamental nature of the irregularity flows through to the exercise of the discretions under s 1322(4)(b) and under r 36.15. This Court must not be, nor appear to be, an instrument for procedural unfairness."
[100] In this case too, to allow to stand an order that was made in circumstances where rights of Mr Anderson and Mr White were denied would be to cause the court to be an instrument for procedural unfairness.
61 In Ross v Lane Cove Council, orders for the demolition and reinstatement of residential building works were set aside because the current registered proprietor (Ms Chami) had not been joined. The parties to the litigation were the Council, the former owner and the builder. Leeming JA said:[39]
[64] Ms Chami was directly affected by the orders sought by Council. First, on its proper construction, the order requires Mr Ross to enter onto Ms Chami's land and perform work there. He would have a defence of lawful authority to what would otherwise be a trespass to her land, even if she later applied to the Court for the order to be discharged. "Acts done according to the exigency of a judicial order, afterwards reversed, are protected: they are 'acts done in the execution of justice, which are compulsive'": Commissioner for Railways (NSW) v Cavanough [1935] HCA 45; (1935) 53 CLR 220 at 225, citing Dr Drury's Case [1572] EngR 109; (1610) 8 Co Rep 141b at 143a; [1572] EngR 109; 77 ER 688 at 691; MacIntosh v Lobel (1993) 30 NSWLR 441 at 459.
[65] What the orders involve is no small trespass. As will be seen from its terms, what is required includes (a) refilling an underground double garage, (b) removing concrete slabs under the eastern end of the house and along the entire width of the building's rear wall, (c) removing the concrete poured over most of the backyard, (d) removing a 2.5m high block wall at the rear of the site, (e) removing an external concrete stair and a concrete block lift core shaft, and (f) removing some windows and reinstating others.
62 Earlier in the decision, his Honour noted that in modern times, proceedings would not be dismissed for want of parties (a point reiterated in Boyd v Thorn), and then said:[40]
[61] All of that said, because the underlying concern is (as McHugh J said in Victoria v Sutton) natural justice, joinder is not always necessary. That reflects a very old approach. Although the common law knew nothing of the joinder of a party merely for the purpose of having that party bound by the judgment, equity was not so strict. Where no prejudice would be suffered by a party not being joined, his or her presence could be dispensed with: see for example Smith v Brooksbank [1834] EngR 852; (1834) 7 Sim 18; 58 ER 743, where the non-joinder of the executors who were alleged to have assented to the bequest was held not to be fatal. The direct ancestor of the rules in the UCPR governing joinder of parties is the rule of procedure contained in O XVI r 13 in the First Schedule to the Supreme Court of Judicature Act 1875 (UK). That in turn reflected chancery practice. In particular, and relevantly for present purposes, UCPR r 6.23 "Proceedings are not defeated merely because of the misjoinder or non-joinder of any person as a party to the proceedings" is merely a modern formulation of the chancery practice.
[62] The positive assent to an order by the executors who were not joined in Smith v Brooksbank has its modern counterpart in the course adopted by Preston CJ in Woollahra Municipal Council v Sahade. His Honour, recognising that the owners corporation was directly affected by the proposed demolition of a staircase which extended onto the common property, proceeded on the basis that the practical impact was low and its attitude to the orders was abundantly clear (the owners corporation was notified of the proposed order, and informed the Court through the applicant local council that it wished neither to be joined nor heard, but had passed a resolution supporting the orders proposed).
63 In Seller v Jones, McColl JA (with whom Ward JA agreed) said:[41]
[49] A person or entity should be joined as a party to litigation where orders might be made directly affecting that person or entity's rights and liabilities_: State of Victoria v Sutton_ [1998] HCA 56; (1998) 195 CLR 291 (at [76] - [81]) per McHugh J; John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1 (at [131]); Australian Securities and Investments Commission (ASIC) v Lanepoint Enterprises Pty Ltd (recs and mgrs apptd) [2011] HCA 18; (2011) 244 CLR 1 (at [49]).
[50] The threshold as to whether orders may have the effect referred to in [49] is not high. In State of Victoria v Sutton (at [77]) McHugh J said it was "the invariable practice of the courts to require a person [whose rights or interests may be affected by an order a court was asked to make] to be joined as a party if there is an arguable possibility that he or she may be affected". The reason for that "practice" is, at minimum, observance of the rules of natural justice and the desirability of avoiding a multiplicity of suits (cf s 63 Supreme Court Act 1970 (NSW), s 56 Civil Procedure Act) and inconsistent decisions: State of Victoria v Sutton (at [77]); Associated Grocers Co-operative Ltd v Hubbard Properties Pty Ltd (1986) 42 SASR 321 (at 341).
[51] In News Ltd v Australian Rugby Football League Ltd [1996] FCA 870; (1996) 64 FCR 410 ("News Ltd") (at [525]) the court said that where the question whether a necessary party has been joined arose after final orders had been made in the proceedings, the inquiry as to whether a necessary party has been joined must be directed to the orders actually made. The court referred for that proposition to Associated Grocers Co-operative Ltd v Hubbard Properties Pty Ltd (at 341). In that case GJ Coles and Coy Ltd ("Coles") had been joined as a defendant following a trial, and pending appeal, where a notice of cross appeal directly challenged a purported agreement for lease between Hubbards and Coles. This was because, while the plaintiff did not seek relief against Coles, the "relief it sought against Hubbards in the action and in the cross-appeal would, if granted, quite plainly affect Coles to the detriment of Coles": Associated Grocers Co-operative Ltd v Hubbard Properties Pty Ltd (at 341).
64 In Parker v BHP Billiton Ore Pty Ltd (Parker), Edelman J (as his Honour then was), gave two examples of cases where a consequential or "knock on" effect was a direct effect, for the purposes of the principle: [42]
[66] Two examples can be given in which the direct interest test was applied to find that third parties to a contractual dispute had a direct interest and were appropriately joined.
[67] The first case is Pegang Mining Co Ltd itself. That case concerned a tripartite agreement between a lessee of a mining lease, a sublessee, and a subsublessee. Each of the three parties was a party to the litigation. However, one person, described as the Contractor, was not party to the litigation or the tripartite agreement.
[68] The Contractor had entered into a separate agreement with the subsublessee by which the sub-sublessee promised the Contractor that she would grant the Contractor liberty to enter on the lands, and to win and work the materials.
[69] The question for the Privy Council was whether the Contractor should have been joined to the appeal. The Privy Council held that the Contractor was directly affected by an order made in the action. Although the Contractor was not a party to the tripartite agreement, the Contractor's interest was sufficiently direct because the success or failure of the appeal would affect whether the Contractor could exercise separate rights under his licence from the subsublessee to enter the land and to win the minerals for the sub-sublessee in exchange for a share of the proceeds of sale.
[70] The second case is News Ltd v Australian Rugby Football League Ltd. That case involved proceedings to set aside Commitment Agreements and Loyalty Deeds between the Australian and NSW Rugby Leagues and associated clubs. A cross-claim brought by Australian and NSW Rugby Leagues and loyal clubs alleged breach of contractual and fiduciary duties by rebel clubs who had joined the Super League.
[71] The Full Federal Court held that players and coaches allied with the Super League should have been joined. Although the players and coaches were not parties to the contracts, the orders sought would directly affect their rights to choose the employer for whom they would work.
65 In China First Pty Ltd v Mount Isa Mines Limited (China First), Gotterson JA (with whom McMurdo and Fraser JJA agreed) expanded on the 'direct effect' test:[43]
[60] These cases reveal a systematic approach taken by courts to the determination of whether orders made or sought have had, or if made, will have, a direct effect on a legal right or liability. That approach has involved an identification of the specific legal right or liability said to have been affected or liable to be affected, and an assessment of its legal characteristics. Next, the court has inquired into whether the right or liability itself has been affected, or is liable to be affected. Typically, the inquiry has sought to establish whether there is an effect on the existence of the right or liability or on its legal characteristics; or whether there is an effect on the legal environment in which the right might be exercised or the liability discharged, such as would impact upon its exercise or discharge from a legal perspective. An effect of either kind has been regarded by courts as a direct effect on the right or liability for the purposes of the test.
...
[63] None of these provisions expressly confers a right on the Chargee, as each appellant is. They impose obligations on the Chargor. The orders made on 20 November 2017 do not impact upon the existence of those obligations or their legal characteristics. From a legal perspective, their nature and content are unaffected by the orders.
[64] As well, the orders do not affect the legal environment in a way which impacts upon the enforcement of such obligations by the Chargee against the Chargor. If, with the benefit of Orders 1 and 3, MIM causes the Equipment to be dismantled, removed and delivered to QNS, then such conduct will be that of MIM. The orders do not have the effect of attributing MIM's conduct to the Chargor. For example, the Chargor would not thereby dispose of, part with possession of, or otherwise deal with the Equipment in contravention of clause 2.4.
...
[68] Such effects are not effects upon the legal characteristics of the Chargee's rights or upon the legal environment in a way which affects the exercise of such rights from a legal perspective. They are not direct effects for the purpose of the test. They are appropriately characterised as consequential effects, which are financial, rather than legal, in nature. As Lord Diplock observed in Pegang Mining, such effects have consistently been recognised by courts as an insufficient basis for joinder.
[69] Similarly, any effect that the orders might have on the viability of the refinery business as a security are both indirect and consequential. Her Honour was correct in finding that the effects on the Equipment and on the refinery business relied on by the appellants are not direct effects within the current context.
66 In Lowe v Kladis,[44] orders had been made at first instance requiring certain neighbours to consent to the construction by the respondent of an elevated driveway over several adjacent parallel strips of land, one of which the respondent owned and two others over which he had rights of carriageway. Other neighbours, the owners of No 24, Musgrave Street, had a right of way over the respondent's strip of land. They had not been joined as parties. On appeal, the orders made at first instance were set aside. The court concluded that the owners of No 24 should have been joined. Sackville JA (with whom Meagher and White JJA agreed) explained the reasons for that conclusion as follows:
[76] In my view, the owners of No 24 should have been joined as parties to the Equity Division proceedings. It was not simply a matter for the appellants to decide whether or not they wished to advance arguments based on the adverse impact of the proposed development application on No 24. It was the responsibility of Mr Kladis as the party seeking relief from the Court to join those whose rights were directly affected.
[77] The orders sought by Mr Kladis would not of themselves result in works that would impair the rights of carriageway appurtenant to No 24. The lodgement of a development application would only result in work being carried out if the Council, as the consent authority, granted development consent. Even so, the orders made by the primary Judge required the owners of the properties on which the proposed development was to take place to give their consent to the development application. The owners of No 24 could still lodge an objection with the Council to the development application. But the objection would be limited to planning matters that a consent authority can take into account under the Environmental Planning and Assessment Act 1979 (NSW). The owners of No 24 could not successfully object to the development application simply on the ground that the proposed works would interfere with their rights of way.
67 In Hampshire Automotive, a tenant commenced proceedings against his neighbour for trespass, after having used the tenant's property for access and ingress from its own property and for storing motor vehicles used in its business. The tenant counterclaimed, seeking the declaration of an easement over the subject property. VicTrack was the registered proprietor of the land. One issue was whether VicTrack ought to have been joined as a proper party to the proceeding. The Court of Appeal said:[45]
[128] In our view, at least where the easement has not been recognised by the owner of the dominant tenement and the tenant seeks a declaration as to the existence of the easement, the owner should be joined as a party to the proceeding. The orders sought by the applicant are plainly apt to affect the legal interests of VicTrack. VicTrack should be bound by the judgment.
[129] Further, where, as here, it is to be contended that the easement does not exist or has been abandoned it is important that the party with the legal interest in the fee simple be a party to the proceeding. The applicant submitted that it was not necessary to join VicTrack and that, as a party in possession, the applicant was the only necessary party in relation to the dominant tenement. We do not agree.
[130] In John Alexander v White City the High Court held that where a court is invited to make, or proposes to make, orders directly affecting the rights or liabilities of a non-party, the non-party is a necessary party and ought to be joined. The declaration sought was as to a proprietary interest in the land owned by VicTrack; it was thus not simply a suit that affected the applicant and the respondents. Further, as we have discussed above and do so further below, an issue remains as to whether, on the assumption an easement was created and has not been abandoned (both of which directly affect VicTrack) the easement was included in the lease to the applicant. A suit that determines the terms of a lease is plainly apt to affect the legal interests of the parties to the lease.
68 In Re GRP, after referring to the relevant authorities, the court held that executors were proper and necessary parties to the motion to discharge an adoption order. Hallen J said:[46]
[78] There are a "great variety" of circumstances where persons may be necessary parties and a "flexibility of approach" is required to determine whether they are necessary parties: Pegang Mining Co Ltd v Choong Sam [1969] UKPC 16; [1969] 2 MLJ 52, at 56.
[79] I have little doubt that the executors are both proper, and necessary, parties to the discharge motion.
[80] A discharge order will have a direct effect on the administration of the deceased's estate. As executors, the applicants for joinder have a substantial interest in the efficient administration of the deceased's estate. The order that will be made on the discharge notice of motion will be very relevant to them in a legal sense.
[81] Considering the practical realities of the discharge motion, this is not a case in which the effect of an order discharging the adoption, on the executors, can be characterised as only indirect or consequential. One has to consider the orders sought in the Queensland proceedings. If the order sought by GRP in the discharge notice of motion is made, he will be a person eligible to continue with the Queensland proceedings, and if those proceedings are successful, any order for additional provision will have a direct, and material, effect, on the value of the deceased's estate.
69 The parties placed much emphasis on this case. Although helpful, in the final analysis the court did not decide the critical issues engaged by the application before me.
70 In Boyd v Thorn, Mrs Thorn, as executor of the estate of Mrs McAuley (the Estate), commenced proceedings against Mr Boyd. She alleged that he improperly obtained $260,000 from Mrs McAuley.[47] Mrs Boyd, then a joint tenant of the subject property, was not a party to the proceeding when it was heard by Robb J in 2014 and 2015.
71 The proceeding was heard in two stages. At first instance, and by a Judgment delivered on 25 August 2014, Robb J found that Mr Boyd had procured the sum from Mrs McAuley by undue influence and unconscionable conduct (Robb J 2014 Judgment).
72 On 6 November 2014, Robb J made declarations that Mr Boyd acted unconscionably and in breach of fiduciary duty, and the Estate was entitled to trace the sum into any property to which it had been applied (Robb J 2014 Orders).
73 On 13 March 2015, by a further Judgment, Robb J declared that Mr Boyd held his interest in the subject property on a constructive trust for the Estate of Mrs McAuley to the value of $200,000 and that the Estate's judgment debt constituted an equitable charge on Mr Boyd's interest in the property (Robb J 2015 Orders).
74 On 24 March 2016, Mrs Boyd filed a summons in a fresh proceeding, seeking orders setting aside the Robb J 2015 Orders. She did not seek to set aside the Robb J 2014 Orders. She claimed that 'as a registered owner and occupant of the property', she was a 'necessary (indispensable) party to the proceeding who ought to have been joined.[48]
75 On 11 May 2016, White J set aside the relevant declarations and orders, finding that Mrs Boyd had been a necessary party to the proceedings before Robb J, at least from the time that the Estate pursued its claim for the declarations and orders made on 13 March 2015. His Honour considered that the declarations and orders 'directly affected Mrs Boyd as they expose[d] her to the prospect of the property of which she in a co‑owner being sold upon the appointment of trustees for sale'. Further, she 'had an interest in denying that the breaches of duty that Mr Boyd was found to have committed should result in the grant of a proprietary remedy.'[49] Orders were also made joining her to the principal proceeding.
76 The proceeding came before Sackar J on 19 and 20 September 2016. Mr and Mrs Boyd were unrepresented and filed no evidence. On 22 September 2016, Sackar J made orders which in effect reconstituted the orders which had been set aside by White J on 11 May 2016. This included a declaration that Mr Boyd held his interest in the property on a constructive trust to the Estate to the value of $200,000, and an order under s 66G of the Conveyancing Act 1919 (NSW) (Conveyancing Act) appointing trustees for sale of the property.
77 Mr and Mrs Boyd appealed the decision of Sackar J on three grounds, the first of which is relevant to the Summonses before me. The Boyds submitted that, Sackar J erred in granting declarations that were founded upon the factual findings of breach of fiduciary duty made by Robb J, in circumstances when Mrs Boyd was not, at that point in time, a party to the proceeding.[50]
78 Macfarlan and Leeming JJA and Emmett AJA each delivered separate Judgments, and it is necessary to refer to each in turn. The Court unanimously found that Mrs Boyd was not a necessary party to the proceeding before Robb J in 2014, and also was not entitled to set aside the findings of breach of Mr Boyd's fiduciary duty. However, their reasoning, and the consequences of that finding, differs in critical respects. That is, in terms of whether Mrs Boyd was bound by the findings of breach of fiduciary duty, and the extent to which she was able to challenge those findings.
79 Macfarlan JA did not consider that the declaration of a charge affected Mrs Boyd's interest - it related only to Mr Boyd's. However, the orders under s 66G of the Conveyancing Act prejudicially affected her interest in the property as they 'required the sale of a property of which she was a part owner.'[51] She had a right to object to the making of those orders.[52] As part of her entitlement to object to those orders, Mrs Boyd 'was entitled to contend that the Estate did not have any standing to seek the orders', by submitting that there was no evidence before Sackar J that Mr Boyd had procured money from his late aunt by undue influence or unconscionable conduct.'[53]
80 His Honour considered that unless Mrs Boyd was effectively represented by Mr Boyd as her privy at the hearing leading to the Robb J 2014 Orders, the findings would not be binding on her.[54] The Estate argued there was such a privity of interest as between Mr and Mrs Boyd.[55] McFarlan JA rejected this - Mrs Boyd did not have a legal interest in the outcome of the proceeding. Those proceedings were concerned solely with Mr Boyd's personal liability, and the Estate's entitlement to trace the money Mr Boyd was found to have wrongfully procured.[56]
81 McFarlan JA disagreed with Leeming JA on the question of whether Sackar J erred in precluding Mrs Boyd from contending that she was not bound by the findings made in Robb J's Judgment of 25 August 2014, reflected in the Robb J 2014 Orders. Macfarlan JA remained 'of the view that at the hearing before Sackar J Mrs Boyd was entitled to assert that the 2014 findings and orders of Robb J were not binding on her.' As she was not a party, and was not privy, those findings and orders were not binding on her.[57]
82 Macfarlan JA then discussed the point in time at which Mrs Boyd became a 'proper and necessary party':[58]
[36] In 2014 the Estate did not need to join Mrs Boyd as a party. This obligation only arose in 2015 when the Estate commenced to pursue claims for relief in relation to the property of which Mrs Boyd was a co-owner. At that stage her interests became directly affected and she was entitled, and required, to be joined as a party.
[37] That Mrs Boyd became a proper and necessary party to the proceedings in 2015 did not mean that what had occurred in the proceedings in 2014 became in some way defective. It [the proceeding in 2014] was perfectly effective against the then sole defendant, Mr Boyd, and that remains the case. Because she was not a necessary party in 2014, Mrs Boyd does not have, and never has had, a right to set aside Robb J's 2014 findings and orders. For this court to have set them aside at Mrs Boyd's instance would have been to allow a non-party, whose interests were not directly affected by the proceedings, to interfere unjustifiably in perfectly proper proceedings against another person. In this respect, the present case differs from John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1...where the appellant should have been joined at the outset of the proceedings and was therefore found entitled to have orders made while it was not a party set aside.
[38] In these circumstances, neither any failure of Mrs Boyd to apply to set aside Robb J's 2014 findings and orders, nor any lack of success on her part in making any such application, adversely affects her position. Those findings were never liable to be set aside at her instance. The Estate did not suggest that there were any other means by which Mrs Boyd might have become bound by Robb J's 2014 findings and orders. ... (emphasis added)
83 Further, his Honour disagreed with the Judgments of Leeming JA and Emmett AJA as the effect of such Judgments caused Mrs Boyd to bear an onus to take affirmative action to have Robb J's findings and orders set aside.[59] His Honour continued:
[39] I do not agree that she had [to take such action], as [those findings and orders] never became binding on her. Not having joined Mrs Boyd as a party to the proceedings before it obtained those 2014 findings and orders, it was for the Estate to take steps to re-prove the relevant matters at a time when Mrs Boyd was a party. No difficulty of conflicting findings or orders would have arisen if the Estate had been unsuccessful in doing this because the parties at the time of Robb J's 2014 findings and orders (that is the Estate and Mr Boyd) remained parties and later different findings and orders in the proceedings would have superseded those made in 2014. I do not consider that the dismissal by Rein J and Sackar J of motions filed by Mrs Boyd, when unrepresented, seeking to set aside the 2014 findings and orders estops her from contending for the correct position as I have described it. These dismissals embodied findings that Mrs Boyd was not entitled to have the 2014 findings and orders set aside, not that they were binding upon her. (emphasis added)
84 In summary, Macfarlan JA found that Mrs Boyd's failure to challenge the Robb J 2014 Orders was not to the point. The Robb J 2014 Orders were not binding upon her. Nor were the findings of breach of fiduciary duty, unconscionable conduct or undue influence. Two points followed:
(a) First, those findings related solely to the personal liability of Mr Boyd. She was not a necessary party and nor did she possess privity of interest with Mr Boyd, with the consequence she lacked standing to set aside the findings or orders.
(b) Secondly, flowing from this first point and practically speaking, the result is much the same as if she were to have it set aside. The Estate could not rely on those findings in support of their claim to an order under s 66G of the Conveyancing Act. A new trial and a new set of findings would be necessary, notwithstanding that the previous orders and findings need not be set aside. Macfarlan JA makes this absolutely clear:
[40] ... The Estate sought to prove that [Mr Boyd had acted unconscionably] by relying on Robb J's 2014 findings and orders. However, as I have indicated, Mrs Boyd was not bound by those findings. There was nothing to preclude her making submissions to that effect and she attempted to do so. In my view, Sackar J erred in holding that she was not entitled to put that contention. She should have been allowed to put the contention, it should have been accepted and the s 66G application should have failed for want of proof that the Estate had standing to seek such an order.
...
[54] Whilst the orders of Sackar J should be set aside, it is still open to the Estate to make a further application for s 66G orders for sale and seek to prove its standing to do so. ...
...
[58] ... If, as I have concluded is the case, Mrs Boyd was not bound by Robb J's 2014 findings and orders that Mr Boyd acted unconscionable, there was no evidence before Sackar J sufficient to prove that the estate had a proprietary interest in the subject property and that the Estate therefore had standing to seek a s 66G order. For that reason, Sackar J's orders should be set aside and the Estate's claim to a s 66G order fails. (emphasis added).
85 Leeming JA provided an 'illustrative example' in order to expose the issue and applicable principles. The example is important as it reflects the position of the Added Defendants.
86 Leeming JA's example runs as follows: A company alleges that an employee has misappropriated corporate funds. The employee denies the allegation. The company sues the employee, including for breach of fiduciary duty, and obtains a money judgment and an order that the employee provide an affidavit explaining what has happened to the money. The employee's affidavit discloses that she used some of the misappropriated funds to buy a car for her daughter, which is registered in her daughter's name and used some to acquire a holiday house jointly owned by her and her husband.[60]
[82] The company has other avenues open to it as well, following from the fact that prima facie the money in the employee's hands is held on trust for the company. The company can sue the daughter directly, as a volunteer who received the traceable proceeds of property which in equity remained that of the company. It can also sue the husband, for he too has obtained for no consideration an aliquot interest in the holiday house which represents the traceable proceeds of property which in equity was the company's. The company's claims against daughter and husband may be both proprietary (for example, a constructive trust may be imposed on the car or the holiday house when the daughter or husband learned that the funds had been misappropriated) and personal (requiring them to account for the misappropriated funds retained by each of them): ... For the purposes of this simplified example, which is directed to a plaintiff's choices, I am not seeking to be exhaustive, and I am putting entirely to one side such defences as the daughter or husband may have.
...
[84] ...Mrs Thorn has sought to obtain a proprietary remedy against a particular asset to which Mrs McAuley's money contributed, namely, Mrs Boyd's interest in the Boyd family home.
[85] To return to the example, the issue which underlies this appeal is analogous to the company's right to assert a proprietary claim against the employee's aliquot interest in the beach house. Mrs Thorn is not seeking a proprietary interest in Mrs Boyd's aliquot interest in the family home, nor is she seeking to execute the money judgment against Mr Boyd's interest in the family home. (emphasis added)
88 Leeming JA went on to consider the procedural consequences that flowed from the claim and, in particular, when the various family members became necessary parties to the suit:[63]
[87] First, the company does not need to join the daughter or husband to the litigation until and unless it seeks a proprietary remedy in the holiday house, the car or the family home. That is so irrespective of whether the company believes that funds have been used to acquire assets now owned or co-owned by the daughter or husband, or is entirely ignorant of how its funds have been disbursed. The question of parties turns, at least primarily, on whether the orders sought directly affect the rights and liabilities of the daughter and husband: ...
[88] Secondly, from the moment the company seeks a proprietary remedy in respect of the car, the daughter is a necessary party. That is because an order in favour of the company is detrimental to all others who have or claim an interest in that property: John Alexander's Clubs at [131]-[132].
[89] Thirdly, from the moment the company seeks a proprietary remedy in respect of the holiday house considered as a whole, or more narrowly in respect of the husband's interest in the holiday house, the husband is a necessary party, for the same reason.
[90] Fourthly, if and when the company seeks a proprietary remedy in respect of the employee's interest in the holiday house, then the position as to joinder of the husband is more complex. Certainly, if granting the remedy would amount to a severance of the joint tenancy of the employee and her husband, then the husband's joinder is necessary. ... I respectfully share the view expressed by White J in this litigation (see [2016] NSWSC 588 at [25]) that where the effect of an order sought by a plaintiff is to sever a joint tenancy, then there is a sufficient direct affectation of the other joint tenants' rights to render them necessary parties. Apart from anything else, severance of the joint tenancy deprives the co-owner of any hope that he or she might succeed to ownership of the entire property. That must amount to the requisite direct affectation of the co-owner's interest. (emphasis added)
...
[93] ... It follows that at least if the company seeks to have the employee's interest in the holiday house held on constructive trust for it, then (a) no later than when such an order is made, the joint tenancy would be severed in equity and (b) accordingly, the other joint tenant, the employee's husband, is a necessary party from such time as a constructive trust is claimed. ...
[94] Fifthly, it is for the plaintiff to join all necessary parties. ...If the plaintiff obtains orders from a superior court directly affecting non-parties, those orders are not nullities but are, as a general proposition, apt to be set aside, as a matter of right. ...
89 Leeming JA turned back to the facts and noted that the appeal had been run on the basis that Mrs Boyd was a necessary party from 'at least from the time Mrs Thorn sought to trace into Mr Boyd's interest in the Miranda property'.[64]
90 His Honour rejected the submission that the proceeding against Mrs Boyd ought to be dismissed by reason of the failure to join her at the outset. As noted, 'Proceedings are no longer dismissed for want of parties.'[65] His Honour was satisfied, 'on any view', that Mr Boyd would be bound by the declarations made in 2014 that he acted in breach of fiduciary duty and held the sum on trust.[66]
91 The critical question on the appeal was whether Mrs Boyd was entitled to adduce evidence and be heard on the substantive matters of Mr Thorn's breach of fiduciary duty and unconscionable conduct. Leeming JA answered this in the negative. First, as Mrs Boyd had not challenged those matters, she had no such entitlement. Secondly, and in any event, there was no miscarriage in denying Mrs Boyd a further hearing.[67]
92 On this first ground,[68] Mrs Boyd was not entitled to challenge the Robb J 2014 Orders, or the findings the subject of his Honour's Judgment that led to those orders, because she had not originally sought this. His Honour said:
[71] ...Mrs Boyd only challenged some of the orders made in the litigation when she was not joined. Mrs Boyd did not challenge the declaratory and substantive orders made on 6 November 2014 [Robb J 2014 Orders] which were expressly based on findings that her husband had obtained $260,000 of the plaintiff's money in circumstances involving unconscionable conduct and breach of fiduciary duty. The scope of the rehearing [before Sackar J] was confined by reference to the remaining unchallenged orders. Mrs Boyd's entitlement to adduce evidence, and to be heard on weaknesses in the plaintiff's substantive case, in accordance with what was said in John Alexander's Clubs was not unqualified. Instead her entitlement to do so was circumscribed by her choice not to challenge some of the orders already made, and she was not at liberty to seek to establish issues in the rehearing which are inconsistent with the unchallenged orders in the litigation. That is the approach adopted by the primary judge, Sackar J, and in my view, his Honour was correct to do so. (emphasis added)
[72] That is sufficient to resolve the main ground of this appeal. However, if that be wrong, I would still dismiss this ground on the basis that I am not satisfied that a further hearing is necessary to avoid a substantial wrong or miscarriage_._ Mrs Boyd to this day is in default of the rules. She has filed no defence. Nor has she has proffered any draft defence. She served no evidence before Sackar J. There is no indication as to the evidence she wishes to adduce, and this Court is left to guess what submissions she wishes to make, at any further rehearing. The potential merits of the case which Mrs Boyd wishes to advance at a rehearing also fall to be assessed against the facts that Mrs Boyd has made a series of further challenges to set aside various orders, all of which have failed, from none of which has any appeal been brought, and the underlying claim is based upon Mr Boyd's use of $200,000 plus interest, which in the scheme of Supreme Court litigation is not a large amount, especially when there have been at least 11 days of hearings before 7 judges to date.
[73] Assuming that the hearing before the primary judge was unduly narrow, I do not consider that that entitles Mrs Boyd to judgment in her favour; the best she can seek is a rehearing. The combined effect of the matters mentioned in the previous paragraph causes me not to be persuaded that "a substantial wrong or miscarriage has been thereby occasioned", which is necessary before there be yet another hearing: UCPR r 51.53.
[160] When the matter was reheard by Sackar J, Mrs Boyd had not supplied any evidence. Instead, she sought to have further orders set aside (an application substantially identical to one dismissed by Rein J), and when that failed, she sought an adjournment. No appeal has been brought from the orders dismissing the various applications by her.
[161] The obligation upon this Court, as well as on Mrs Boyd and her legal advisors under s 56 of the Civil Procedure Act is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. The passages referred to above in the interchange immediately upon delivery of White J's first judgment demonstrate that White J told her this in terms. The absence of any indication of what those real issues are is a consequence of Mrs Boyd's failure to comply with the ordinary rules of courts requiring the filing of defences and the directions as to her serving evidence. Even then, it would, perhaps, have been open to her to have supplied, in connection with her application to set aside the orders against her on appeal, the proposed draft defence and an indication of the matters which she wished to agitate. After all, if there were to be a further hearing, it is necessary for this Court to be satisfied that "a substantial wrong or miscarriage has been thereby occasioned": UCPR r 51.53.
...
[176] In addition to the above, I bear in mind the time and cost that this litigation has taken to date. There have been six days of hearings before Robb J, two days before White J, two days before Rein J, and two days before Sackar J, in addition to the appeal in this Court. Mr and Mrs Boyd have been unrepresented in each of those hearings, save in this Court, but that has not of course prevented the executrix, Mrs Thorn, from incurring legal costs. It seems likely that the costs incurred by Mrs Thorn would be of the same order of magnitude, and may even have exceeded, the $200,000 which is the amount of principal presently in issue. Section 60 of the Civil Procedure Act obliges this Court to implement its practice and procedure with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute. That is a further consideration which tells against a further hearing.
...
[178] Nor would I order a retrial. I am not satisfied that there has been a substantial miscarriage of justice given the limited relief sought by Mrs Thorn. Ultimately, the onus lies on an appellant who seeks a new trial to satisfy the Court that the errors pointed to have occasioned some substantial wrong or miscarriage, failing which the prohibition in UCPR 51.53 prevents an order of a new trial. For the reasons summarised above, I do not consider that Mrs Boyd has discharged that onus. Although the parties' written submissions did not address the possibility of a rehearing or the matters summarised above telling against it, the difficulties faced by Mrs Boyd by reason of the failure to supply a defence or draft defence, or the evidence she would seek to adduce at any such hearing, were exposed during the argument on the appeal ...
95 Leeming JA did not decide, and did not need to decide 'when Mrs Boyd became a necessary party'. His Honour considered this to be a nice question that did 'not arise in this appeal'.[71] Further, his Honour considered that '[t]here may be a nice question whether the effect of Mrs Boyd's joinder in 2016 meant she became bound by the order made in 2014'. His Honour then decided to 'avoid deciding it because it is not necessary to do so'.[72] These are, however, critical matters before me.
96 Although expressly not deciding these issues, his Honour nevertheless appears to have assumed that Mrs Boyd was able to challenge the findings against Mr Boyd (presumably because she was directly affected by the Robb J 2014 Orders) but specifically elected or failed to do so. His Honour said:
[150] It may be accepted that a necessary party who is only belatedly joined has an entitlement to adduce evidence, and to be heard, against all aspects of the plaintiff's cause of action which lead to the claim for orders directly affecting that party. In John Alexander's Clubs at [134], the non-party (Walker Corporation) was held to be "entitled to claim, if it wished, that the [plaintiff's] substantive case was insufficiently strong to succeed at all, whatever the remedy available if it did succeed to any extent. Walker Corporation was entitled to call evidence against that substantive case. Even if it did not wish to do that, it was entitled to be heard on the weaknesses in the substantive case" (emphasis in original).
[151] But Mrs Boyd was in a different position from Walker Corporation. ...
[152] Accepting that in accordance with John Alexander's Clubs reproduced above it was open to Mrs Boyd to challenge the findings of breach of duty and unconscionability once Mrs Thorn had determined to seek proprietary relied against land of which Mrs Boyd was a joint owner, that was not what she did. Her limited application did not challenge the 2014 orders.
97 His Honour disagreed with Macfarlan JA on the point that she was not bound by the findings or orders that had been made in the proceeding before her joinder. Leeming JA thought that she was bound by all such orders and findings, but (notwithstanding that he did not decide the issue) entitled to challenge all aspects of the plaintiff's claim to a proprietary interest. As she did not seek to challenge the Robb J 2014 Orders, she could not then seek a re-trial on those same issues and it would lead to inconsistent findings and other novel issues.[73] His Honour said:
[157] These difficulties arise because of the inconsistency in orders involving the same conduct in the same litigation between different parties. A principal reason for the joinder of all necessary parties was to prevent inconsistent findings such as this. Had Mrs Boyd sought to set aside the 6 November 2014 orders, or indeed had Mr Boyd sought to appeal from them, those difficulties would go away. But those things have not occurred. The result in my respectful opinion is that Mrs Boyd was not entitled to ask the Court on the rehearing obtained by her to make orders which are inconsistent with those made on 6 November 2014. (emphasis added).
98 Emmett AJA agreed, that Mrs Boyd's interests were directly affected by the orders pursuant to s 66G of the Conveyancing Act, as those orders related to the property as a whole, which property she was a tenant in common of.[74]
99 Justice Emmett agreed, largely, with the reasoning and orders proposed by Leeming JA. Like Leeming JA, his Honour opined that '[t]here can be no doubt that Mr Boyd is bound by the determinations made by Robb J in 2014 that he acted in breach of fiduciary duty and unconscionably and held $260,000 on trust.'[75] His Honour reasoned that: [76]
(a) the rehearing by Sackar J did not extend to the Robb J 2014 Orders which she did not challenge; and
(b) as she obtained a rehearing, by reason of having set aside the Robb J 2015 Orders, she cannot now be entitled to contend for findings the effect of which would be inconsistent with the Robb J 2014 Orders.
100 In my opinion, the Added Defendants are not, in the relevant legal sense, directly affected by the Reasons delivered following the Principal Proceeding and prior to the Tracing Stage. The relevant findings set out in the Reasons have an effect which can only be described as indirect or consequential to the rights and liabilities of the Added Defendants.
101 The findings relating to the existence, scope and breach of fiduciary duties and breaches of the Partnership Deed and Partnership Act related to and affected the rights and obligations of the Graco Defendants and the Partners. The only parties with a proprietary claim to the proceeds of the Investment and the Additional Payment, remaining in the hands of the Graco Defendants, are the Partners as found and referred to in the Reasons. The Added Defendants do not have a proprietary claim to proceeds remaining in the hands of the Graco Defendants, and therefore, their legal rights were not directly affected. There are, of course, consequences arising out of the Reasons, and particularly in relation to subsequent dispositions of property from the Graco Defendants to the Added Defendants. The ultimate recipients (the Added Defendants) were plainly affected, but only in a general sense, as the Reasons would permit the Partnership to trace the proceeds into their hands. Those issues, however, remain to be determined. Unlike the Graco Defendants, and the non-parties in the authorities referred to above, who were directly affected, the Added Defendants had no pre-existing rights, interest, claim or entitlement to any part of the subject property identified by the dispute, which here was the property remaining in the hands of the Graco Defendants. Either Graco and his associated entities were entitled to retain that property or they were not. If not, the only other interested parties were the Partners. Had it been found that neither Graco nor Zphere breached their duties, the Added Defendants could not maintain their claim that they were directly affected by the Reasons. The same could be said, had or were I to find that proprietary relief was or is inappropriate, with the consequence that the Partnership is only entitled to an account of profits against the Graco Defendants personally. No one's rights, other than those of the Partnership and Graco Defendants, were relevantly affected and no one else had a right to make any claim. The rights, such as they may be, of the Added Defendants, were not to the proceeds in their hands but derived and depended entirely on Graco and his associated entities' right to retain such proceeds. To this extent they no doubt had a keen interest. But it was an indirect interest. They were not in a position to make any claim to the proceeds in the Principal Proceeding.
102 The reason why I have referred to many of the cases is because they illustrate an interest where the nature, degree and extent of the connection to the finding, order or determination has direct effect on a non-party's interests so as to require their joinder. This is contrasted with the position, as it is here, where the effect is indirect, consequential or derivative with the consequence that, because they are not directly affected, joinder prior to the trial of Principal Proceeding was not required.[77] Of course, there often is joinder, which in many cases may be desirable or prudent even though it may not strictly be required.[78]
103 In JACS, the finding and declaration that property was held on constructive trust directly affected Walker's proprietary interest, namely the unregistered mortgage in that very same property. Walker was a necessary party to the proceeding that gave rise to the finding and declaration.
104 In Cameron, an ex-parte sequestration order was made. This self-evidently directly affected the bankrupt's proprietary interest, as his property vested in his trustee in bankruptcy. Cameron was a necessary party to his own sequestration proceeding.
105 In Associated Grocers, the order sought to give effect to the first right of refusal over a shop, related to the very shop in respect of which an agreement for lease had been entered into with Coles. Coles had a leasehold interest in that property, which would be disturbed by the order of specific performance sought. Coles' proprietary and contractual rights were directly affected.
106 In Victoria v Sutton, the beneficial interest in certain property belonged either to the CFMEU or to the members of the BLF. As the dispute concerned whether the CFMEU had an interest in the property, it directly concerned them. A declaration made concerning the entitlement to the beneficial interest of the property affected the interests of the members of BLF.
107 In Tiao v Lai [No 2], an issue concerned the authority to sell a property, yet the purchaser of that property was not joined as a party to the proceeding, where the validity of the sale was an issue. It affected the purchaser's rights in relation to its ability to seek specific performance of the contract of sale and in claiming or being liable for damages against the vendor.
108 In Ross v Lane Cove Council, orders were made requiring work to be done on land owned by a person who was not joined as a party to the proceeding. The orders would permit an extensive trespass to land of which he was a proprietor but, by virtue of the order, to which the trespasser would have a complete defence to.
109 In the two examples given by Edelman J in Parker's case the interests of parties were directly affected through a 'knock-on' effect even though they were not parties to the relevant contract giving rise to the litigation. In each of these cases, the effect of the orders sought or made would restrict personal rights that they were otherwise free to exercise.[79]
110 His Honour explained that in Pegang Mining, a non-party, who had contracted with a sub-sublessee of a mining lease for a licence to mine on leased land, was held to be directly affected by litigation over whether there was an entitlement to the sub‑sublease. That was because the success or failure of the litigation would affect whether the non-party could exercise separate rights against the sub-sublessee under the licence.
111 As to News Ltd, Edelman J pointed out that players and coaches allied to the Super League should have been joined in litigation, the object of which was to restrain the conduct of a Super League competition. The restraints sought would have directly affected the rights of the players and coaches to choose the employer for whom they worked.
112 In Lowe v Kladis, the owners of properties on which a proposed development was to take place were not joined as parties. The orders granted would require (therefore imposing an obligation upon) the owners to give their consent to the development application.
113 In Hampshire Automotive, the finding and order of the original proceeding was a declaration of the existence of an easement on VicTrack's property. It directly affected VicTrack's absolute interest in the fee simple, as owner of the subject property. VicTrack was a necessary party.
114 In each of the cases referred to above a decision, finding or order relating to the subject matter of the dispute would change, affect and have a direct bearing on the interest, rights and obligations (whether proprietary or personal) of the party not joined. These parties were direct stakeholders in the dispute. This is not the position with the Added Defendants. They are all[80] the subject of tracing claims[81] and their interests were only directly affected when they were joined and specific relief was sought against them. No specific claim was made before they were joined, nor could it[82] or should it[83] have been made. It had been foreshadowed, on the limited information available, but understandably not then claimed.
115 In the other cases referred to, the relevant parties' interest in the very subject matter of the dispute was direct in the sense that any determination dealt with, considered and had a direct bearing on their rights and obligations. The result or findings determined what they could or could not do. It restricted their right to deal with, enjoy or use property specifically identified by the dispute and in which they had an interest. It invalidated their contractual arrangements or restricted their ability to exercise contractual rights. It imposed on them personal obligations on which they had no say. This is to be contrasted to the cases in which a non-legal interest is affected, or in which a finding or order has only a consequential effect on the legal interest of the individual, such as to provide the opportunity for a claimant to seek orders against that individual at a later time and consequent upon further findings of fact.
116 In Boyd v Thorn, the finding and order of the original proceeding was a finding that there had been a breach of fiduciary duty by Mr Boyd, entitling the Estate to a tracing claim. The finding did not directly affect Mrs Boyd's interest. That finding only concerned the personal liability of Mr Boyd. Mrs Boyd was not a necessary party until orders were sought under s 66G of the Conveyancing Act to appoint trustees for sale to the joint property.
117 In China First, a chargee was held not to be directly affected by orders relating to property the subject of the charge, for the reasons set out earlier.[84] The orders made did not affect the existence of the charge or the ability, manner or circumstances in which it could be exercised. The orders permitted property to be removed from the chargor (which would thereby remove that property from the scope of the charge), but this did not, in a legal sense, affect the nature or content of the chargee's obligations and rights.
118 In ASIC v Lanepoint, the High Court recognised that a winding up might have financial consequences between the group companies inter se, but it did not affect their rights or liabilities.[85] That winding up might have permitted or granted standing for a liquidator to commence proceedings under the avoidance provisions of the Corporations Act, but that too did not in and of itself directly affect the interests of the group companies. It is an indirect or consequential effect.
119 In each of the three cases referred to above the issue did not involve proprietary or security interests in the subject matter and the joinder of the identified parties was not necessary to prevent any injustice. Having found that the orders had no direct effect, it was not necessary to hear from or afford procedural fairness to the non-parties. In my opinion the position is the same in relation to the Added Defendants.
120 The Added Defendants are in precisely the same position as the daughter described by Leeming JA in his 'illustrative example'.[86] As the illustrative example makes clear, the daughter, and by extension the Added Defendants, only become necessary parties from the moment the plaintiff seeks a proprietary remedy in respect of property held or owned by them. This reflects what was said by Lord Diplock in Pegang Mining. The question is, is whether the rights claimed by the non-party will be affected by any order which may be made in the proceeding.[87] Further, as the Full Court said in News Ltd, a non-party is only a necessary party 'where the orders sought establish or recognise' a proprietary interest in the plaintiff in property held by the non-party or in which the non-party has an interest.[88] A declaration of constructive trust affecting the property or interests of the Added Defendants was not an order either available to or sought by the plaintiffs following the Principal Proceeding. Rather, it was concerned with the antecedent factual and legal position concerning the Partners, in the specific circumstances referred to and the subject matter of the pleaded case. Any orders or findings which could have been but were specifically not made (and were indeed specifically deferred) would only concern the Partners and Graco Defendants.
121 Putting to one side that orders and declarations have not been made following the Reasons,[89] and were indeed specifically deferred, the Reasons only ever went, and were intended to deal with findings of breach of fiduciary duty by Graco and Zphere (and associated accessorial liability of GFBR and Glenaldon). The declarations and orders now sought against the Added Defendants were not orders which may have been made at the conclusion of the Principal Proceeding against the absent defendants. For this reason and the other reasons referred to, the nature of the Added Defendants' interest in the Principal Proceeding was unlike the direct interests referred to in the relevant authorities. It was an 'indirect' interest. They were not necessary parties, until they were joined and specific relief was sought against them.
122 The Added Defendants pointed to the Amended Statement of Claim (ASOC) and various portions of the trial transcript to contend that proprietary relief was in effect being sought against the absent Added Defendants. In this respect, Queen's Counsel for the plaintiff said that 'we do seek' a constructive trust, as claimed in the ASOC. However, the prayer for relief contained within ASOC and submissions made in opening clearly qualified the statement.[90] The Added Defendants highlighted the following extracts from Queen's Counsel's opening submissions:[91]
...the Partnership is therefore entitled to a constructive trust over all property in the hands of any volunteer, representing the proceeds of the Investment or the Additional Payment, including traceable proceeds.
We can take the tracing process some way, but we seek a constructive trust over whatever the traceable proceeds are, and we have been drip fed information throughout the proceeding and it's not complete. So we are going to make enquiries, including by asking Mr Graco and his wife, what happened to the proceeds
We don't know if...there are any non-parties involved. And, of course, we accept that if there is property held by a non-party to obtain relief against that non-party, that non-party would have to be joined ... But that's the problem about the failure to account to us. We just don't know. So it may be that it gets to the stage in the trial where a decision has to be made whether to join the parties now or to defer that for another day. (emphasis added)
We seek, at the end of the day, a declaration that whatever represents the traceable proceeds of the investment, the shares, and the payment ... whatever represents the proceeds of those two things are held on constructive trusts for the partnership. ... It may be that there are non-parties that also hold the traceable proceeds, and that may well be for another day. (emphasis added)
123 The extracts referred to do not have the effect that the Added Defendants contend for. The emphasised portions illustrate the position of the plaintiffs to the effect that proprietary relief was not being pressed by the plaintiffs against the Added Defendants during the Principal Proceeding. Queen's Counsel submitted:[92]
We press - at least at this stage, whilst inquiries are continuing throughout the trial, we seek an order against the first to fourth defendants that they account, provide a proper account, whether before Your Honour at a later stage or an associate judge or another judge. (emphasis added)
124 The plaintiffs did not, in substance or effect, seek or press proprietary relief at the conclusion of the Principal Proceeding. Proprietary relief in respect of what property, and held by whom? They simply did not know. They required findings which would entitle them to an accounting and tracing exercise so that they could identify precisely what it was that they could seek proprietary relief in respect of. The orders sought by the plaintiffs during the Principal Proceeding did not, in any direct way, relate to property in which the Added Defendants had an interest. The ASOC claimed a constructive trust but against property in the hands of the Graco Defendants only,[93] and in any event, it was clear from the plaintiffs' submissions that such a declaration was not and could not be pressed at that stage.
125 Such relief was not granted, nor was it capable of being granted at that stage. Submissions and findings on the regular considerations relevant to the imposition of a constructive trust were not considered. That is to say, the questions of whether lesser relief would have been appropriate, or whether there would be hardship or whether third-party interests would be affected. These were matters which would be, and have been deferred to a later time. I made this clear in the Reasons:
[203] Proprietary remedies may well be available against each of GFBR and Glenaldon because they are recipients of property in breach of fiduciary duty. They may well hold that property on constructive trust for the benefit of the Partnership. I propose to deal with the nature, scope and extent of relief that flows from each of the breaches identified, any allowances, and any other matters, including the proportionate entitlement of the fifth and sixth defendants, at a separate hearing. (emphasis added)
126 Accordingly, for the reasons given, I am satisfied that the Added Defendants were not directly affected by and were not necessary parties to the Principal Proceeding. They only became necessary parties at the Tracing Stage of the proceeding when they were joined and specific relief sought against them. This is where the proceeding presently is.
127 Having found that the Added Defendants are not directly affected by the findings or the Reasons, I consider that they were joined at the right time, notwithstanding that the general framework of the case contemplated (albeit and understandably at the outset) a later joinder of any recipients of property contingent upon favourable findings and forthcoming information to facilitate the tracing claim.[94] Accordingly, they are not entitled to the orders that they seek.
128 The Added Defendants are of course entitled to raise any matter concerning the specific relief sought against them. The further question is whether, although not directly affected, they are able to challenge any findings made in the Principal Proceeding, or insist upon a new trial.
129 In my opinion, the Added Defendants, joined appropriately at a time only when relief was sought against them and as parties not directly affected are not entitled to challenge or set aside the Reasons following the Principal Proceeding. The authorities clearly establish that only those directly affected are (once belatedly joined) generally entitled to such relief. Accordingly, they are bound by or compelled to accept the Reasons. The point is that although joinder may take place at any time and usually when orders are sought, the right to challenge or set aside earlier findings, following such joinder, depends on whether the party joined was directly affected by the relief granted (or here, claimed) in the earlier proceeding. Otherwise, the joined party is compelled to accept the decision or determination as binding upon them.
130 That parties who are not directly affected must, in subsequent litigation, accept the previous findings is supported by high authority.
131 In Executor Trustee and Agency Company of South Australia Limited v The Deputy Commissioner of Taxes (South Australia) (Executor Trustee),[95] the Full Court of the Supreme Court of South Australia declared that the trustee of a trust was empowered in its discretion to pay from time to time surplus income equally amongst all the annuitants per stirpes. The Commissioner was not a party to that proceeding. The High Court held that the Commissioner was nonetheless obliged to give effect to the declarations, and take the situation as it had been determined by the Supreme Court. Latham CJ said:[96]
The Commissioner of Taxation who takes moneys from a taxpayer as a contribution to the revenue cannot be described as a privy in estate to the taxpayer where rights have been determined in a proceeding to which the commissioner was not a party. But when, in duly constituted proceedings before a competent court, the rights of a cestui que trust against a trustee and the corresponding duty of the trustee towards the cestui que trust have been defined, there is no means whereby those rights can be otherwise defined, because each party is conclusively bound by the order of the court. If the right in question is a right of the cestui que trust to receive money, such as income, from the trustee, the order necessarily and in the nature of the case finally determines, so far as it goes, the nature and extent of the right of the cestui que trust. When the revenue authorities come to impose a tax in relation to such rights, they must, in my opinion, take them as they in fact actually exist between the parties. Thus, although the commissioner cannot be said to be "bound" by the order of the Supreme Court as res judicata or in any other way, he has no option but to assess the trustee or the cestuis que trust upon the basis of their duties and rights as declared by the order.
132 Executor Trustee was considered recently by the High Court in Commissioner of Taxation (Cth) v Thomas (Thomas) where the Court held that the principle in Executor Trustee did not extend to compel the Commissioner to accept a declaration as to the application of taxation laws in a proceeding to which it was not a party. It would only compel the Commissioner where they were not a party to a proceeding, to accept determinations as to the rights of parties inter se. In Thomas, Kiefel CJ, Bell, Keane, Nettle, Gordon and Edelman JJ said:[97]
[52] In Executor Trustee, a testator had left directions for the application of his estate. The trustee applied to the Supreme Court of South Australia for, and was granted, directions as to the application of the estate. Dixon J described the orders made by the Supreme Court in the following terms:
"The orders define the interests of the six beneficiaries. It is true that they do not purport to give new interests and that in law they operate only as declarations determining, as between trustee and beneficiary, the interests otherwise existing, that is, arising under the will. But it is none the less true that the beneficiaries can, after the making of the orders, have no interest in the land inconsistent with the orders." (emphasis in original)
[53] Contrary to those orders and declarations, the trustee, who had been a party to the earlier proceedings, sought to depart from those orders by claiming six deductions under the Land Tax Assessment Act 1910 (Cth) on the footing that the six beneficiaries were joint owners of certain land, as persons entitled to its income in the will. The High Court held that the order of the Supreme Court had declared the position. As Latham CJ stated:
"The order of the Supreme Court is certainly conclusive in relation to the rights inter se of the parties to the proceedings in which it was made. It could have been challenged upon appeal, but so long as it stands, the rights of the annuitants to receive income from the trustee are the rights declared in the order - no more and no less. There is no means whatever whereby either the trustee or the annuitants can, as a matter of right, vary those rights ...
The question which arises in this appeal depends entirely upon the rights of the annuitants against the trustee. Those rights have been defined by a court of competent jurisdiction in a manner which excludes the definition of them now preferred by the annuitants - or any other definition inconsistent with the order of the court. The commissioner is entitled to take, and must take, interests in land as he finds them". (emphasis in original)
[54] Executor Trustee is authority for the proposition that the general law rights of trustee and beneficiary inter se, to the extent that they are defined by a decision made in duly constituted proceedings, are defined as against the Commissioner unless the decision is set aside. In Executor Trustee, the earlier proceedings had determined rights inter se. There was no question of res judicata or of issue estoppel, and the separate declaration did not generate rights in rem against third parties. And, importantly, the earlier proceedings did not determine the application of the taxation law to those rights.
133 The position here, while arising in a different context, is entirely the same.[98] The Reasons determined the rights of the parties inter se. They were the rights of the Partnership on the one hand, enforceable against the Graco Defendants on the other, determined in duly constituted proceeding in which all of the necessary parties had been joined and participated. While orders have not been made, the findings sought and made in the Reasons did conceivably generate or recognise rights in rem.[99] That is, however, only to the extent that they recognised the potential for proprietary remedies in respect of any proceeds of the Investment or Additional Payment, that remained in the hands of the Graco Defendants, who were parties to the proceeding.[100] They did not generate or recognise rights against third-parties, in the manner discussed above. The most that can be said, is that rights were (potentially) recognised in the Partnership, which were capable of enforcement against third-parties in later proceedings but only in a consequential manner and dependent on favourable factual findings that the Investment and Additional Payment are indeed held on trust by the Graco Defendants, and that the Added Defendants are volunteers holding traceable proceeds of such property. This is not the same as recognising an interest in specified property (such as in JACS), in circumstances where the third-party also claims an interest in that same specified property. The Added Defendants have no claim to any proceeds remaining in the hands of the Graco Defendants. Rights in rem, in favour of the Partnership, and capable of enforcement against the Added Defendants, were not recognised in the Principal Proceeding.
134 In Solak v Registrar of Titles,[101] the Registrar sought declaratory relief in respect of the construction of a mortgage, and the effectiveness of the mortgage as security as between a mortgagor and bank. In an earlier proceeding, it had been determined that the mortgage had not been obtained by fraud, was effective as security and validly registered. The Registrar was not a party to that earlier proceeding. In this later proceeding, the Registrar sought to argue that the mortgage was void, having been obtained by fraud or reckless indifference to fraud on the part of the bank.
135 Davies J accepted that the Registrar was not bound by res judicata or issue estoppel to accept the findings in the previous proceeding on the construction of the mortgage, but with reference to Executor Trustee, could not re-litigate the matters previously determined between the mortgagor and the bank. Davies J said:[102]
[27] It does not follow that a person, although not a party to that litigation but whose rights may be affected by that litigation, is able to re-litigate the rights of the parties, inter se, which have been determined. As the learned authors of The Doctrine of Res Judicata stated:
This is not the result of estoppel: it is a consequence of being compelled to accept facts.
...
[28] In the present case, the Registrar seeks declaratory relief in relation to the same parties concerning the same subject matter which has been decided on already and which is binding on, and conclusively determined as binding on, those parties. In my opinion, the Registrar cannot in this litigation, agitate the very matter determined in the original proceeding in respect of the rights, inter se, between Mr Solak and Bank West in relation to the construction of the mortgage and the effectiveness of the mortgage as security for the obligation to Bank West created under the Home Loan contract.
136 In Page v McKensey,[103] the parties were partners in an accounting firm. The litigation involved various actions and appeals over a substantial amount of time. In this proceeding, the Master refused leave for the plaintiff to file a further amended statement of claim. The plaintiff and defendants were each partners in the accounting firm. The plaintiff appealed this decision to a single Judge of the Court, Gzell J.
137 A previous action in the proceeding involved (as parties) other partners in the partnership, but not the appellant to this application. In that previous action, Einstein J found that certain payments had been made in breach of a fiduciary duty of disclosure. The Court of Appeal overturned that finding and held that there was no fiduciary duty to disclose the true nature of the payment in dispute. In the present proceeding, the appellant sought to include a claim that the same payment constituted a breach of fiduciary duty. The Master refused the application to amend the pleading to include that claim, as in light of the Court of Appeal's findings, it would constitute an attempt to re-litigate an issue already determined after contested proceedings which constituted an abuse of process of the Court.[104]
138 Gzell J held that there was sufficient identity between the appellant and the parties to the action in the Court of Appeal to render him a privy for the purposes of res judicata or estoppel.[105] However, his Honour went further and said that the appellant was precluded by Executor Trustee from re-litigating the matter:[106]
[41] If I be wrong in my view that res judicata estoppel applies to the appellant, there is another basis upon which the Master's decision that it was an abuse of process to raise the issues canvassed in the Second Action and the Second Appeal is justified. As noted in Spencer Bower, Turner and Handley, The Doctrine of Res judicata, 3rd ed, Butterworths, London, 1996, at para230 there are circumstances in which a person, not a party to proceedings, is affected by the litigation, not as the result of estoppel, but as a consequence of being compelled to accept facts.
[42] Thus, in Executor Trustee and Agency Co of South Australia Ltd v Deputy Federal Commissioner of Taxes (SA) [1939] HCA 35; (1939) 62 CLR 545 the Full Court of the Supreme Court of South Australia, in proceedings to which the Commissioner was not a party, declared that the appellant was empowered in the exercise of its discretion as trustee of a certain trust, to pay from time to time surplus income equally amongst all the annuitants per stirpes.
...
[44] In the Second Appeal, the nature of the payments under the retirement agreement and the lack of a fiduciary obligation with respect to disclosure of it were defined with respect to the partnership of which the appellant was a member. In those circumstances, it is not open to the appellant to seek re-definition of the rights and obligations inter se the respondents with respect to those issues.
139 Accordingly, in my opinion, the Added Defendants, while not bound by issue estoppel or res judicata, are compelled to accept the facts as found and the subject of the Reasons, in litigation properly constituted in order to determine the rights and obligations of parties to such litigation. The Graco Defendants, as parties, are bound by the result and the Reasons, and so are the Added Defendants, as parties subsequently joined who are those not in the relevant legal sense directly affected.
140 In my view, the Added Defendants did not (and correctly in my view) contend that if they only had an indirect interest and were not directly affected in the sense used in the authorities, they were nonetheless entitled to a new trial. Such a proposition is, as referred to above, unsupported by authority, and I would have refused any such application. As the authorities demonstrate, the right to a new trial is understandably the general rule or the default position where a party is directly affected. The position cannot be, and is not the same where a party is not directly affected. This would render the 'direct effect' test meaningless as any party, regardless of the remoteness of their interest or connection, would be entitled to a new trial in relation to matters which have been determined and do not concern them. This is the position because there is usually no procedural unfairness to the indirectly affected party. There is no procedural unfairness as they usually have no right to be heard.
141 In summary, as I have found that the Added Defendants are not directly affected by the Reasons they have no right to challenge or set them aside or to a new trial.
142 However, even when a party is directly affected, the suggested automatic (and non-discretionary) right to a new trial, may not be as absolute and unqualified as suggested by the Added Defendants.[107] Other considerations, including the procedural history of the litigation, the rules of court or principles of natural justice may apply in particular cases to alter or qualify that position. In exceptional cases, whether or not there has been an absence of procedural fairness, which lies at the heart of the judicial function, may need to be examined, lest the asserted automatic and unqualified right be abused by a dissatisfied recently added party, in circumstances where there has been no procedural unfairness and there is no need for a new trial. Although it is not necessary for me to decide whether this is such a case, there are powerful indications that it may well, given the specific critical issues, the identity of the parties, case and trial management directions and procedures, and more generally the circumstances of the case. This aspect is dealt with more fully in the next section.
143 As noted, the claims against the Added Defendants are in the nature of tracing claims. It is alleged that the Added Defendants received traceable proceeds as volunteers and for no consideration. However, as noted in relation to Mrs Graco and FBR Funds, there is a further knowing receipt claim. In relation to this claim I do not consider that Mrs Graco and FBR Funds were directly affected by the Reasons and ought to have been joined earlier. Indeed, for the reasons given they were unable to be joined earlier by the plaintiffs. They were properly joined when specific relief was sought against them. No such relief was sought before the joinder and no relevant interest of Mrs Graco and FBR Funds was affected, other than the indirect interest referred to above. Any application by the plaintiffs to re-open the case and adduce further evidence in relation to the knowing receipt claim, if that is necessary, will be dealt with as part of the next stage of the proceeding.
144 The critical question however, is whether, having been joined, Mrs Graco and FBR Funds are, having regard to the new knowing receipt claim, entitled to challenge and revisit the Reasons, in the manner that they suggested, namely a new trial before a different Judge. It is important to emphasise at this stage that I did offer, on more than one occasion, to re-open the case and permit Mrs Graco, FBR Funds (and the other Added Defendants) to adduce any further evidence or cross-examine any witness and make any further submissions challenging any of the findings and the Reasons. That offer was rejected. Counsel submitted that any re-opening would need to be before a different Judge because given my clear findings there was an apprehension of bias. As any such re-opening and referral to another Judge would be impractical and present substantial difficulties, it was submitted that my only option was a new trial before a different Judge.
145 In my opinion, for the reasons given, Mrs Graco and FBR Funds are not entitled to revisit the Reasons. They are bound or compelled to accept them.
146 However, the question as to whether Mrs Graco and FBR Funds are directly affected is not free from complexity and falls within the 'difficult' category referred to in News Ltd.[108] Although not directly affected in the sense used by the authorities where the issue is more straightforward, the finding of breach of fiduciary duty - a critical finding - which I have found the Added Defendants are bound by, is an important element in the new cause of action alleged against each of them. However, as I have found, it is in a qualitative sense, no more than an element or foundation for the new claim in respect of which orders are specifically sought against them. In this sense, it is similar to the factual position in ASIC v Lanepoint, where a winding up can be considered an element in, or circumstance necessary to commence, future causes of action by a liquidator to avoid transactions under the Corporations Act, and in relation to which, potential defendants (there, other companies in the corporate group) to voidable transaction claims are not necessary parties to the wind-up proceeding. It is not every finding comprising an element that forms part of a cause of action that, by virtue of such a fact or finding, creates a direct effect. This is the case notwithstanding the usual procedure, where a person alleged to be liable as an accessory to a breach of fiduciary duty (such as Glenaldon and GFBR) is joined prior to the trial. However, Glenaldon and GFBR were known to be recipients or participants at the time the proceeding was commenced. Where parties are belatedly joined because of a lack of such knowledge, they are only entitled to a new trial, subject to what is set out below, if they were directly affected by any order made or proposed.
147 If I am wrong, and upon such joinder Mrs Graco and FBR Funds, given the nature of the knowing receipt claim, are considered to be directly affected by the Reasons,[109] I would in the particular circumstances of this case, be disinclined to order a new trial. The ordering of a new trial is a drastic step (which often occurs in the context of fraud or perjury) and should only be done in exceptional circumstances.[110] This is an important matter and I respectfully intend to state my reasons.
148 In Boyd v Thorn, Leeming JA went further (in obiter dicta) to consider what the position would have been had Mrs Boyd challenged the Robb J 2014 Judgment and Robb J 2014 Orders. His Honour considered that (despite the suggested automatic rule) she would not have been entitled to set aside or re-agitate those matters, as this was not 'necessary to avoid a substantial wrong or miscarriage' of justice.[111] I am of the same view, in the particular circumstances of this case.
149 Like the view that I have expressed, Leeming JA considered that the principle expressed in JACS may not necessarily be absolute or applicable to all situations involving a belatedly joined necessary party. His Honour said:[112]
[153] The proposition in John Alexander's Clubs is not a universal proposition. There are few propositions universally true in law. Like all judicial statements of principle, what was said in John Alexander's Clubs must be read bearing in mind the context in which they were uttered: Quinn v Leathem [1901] UKHL 2; [1901] AC 495 at 506; Arinson Pty Ltd v City of Canada Bay Council [2015] NSWCA 199 at [65]:
"... every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found."
150 His Honour considered that the rules of court, and Civil Procedure Act 2005 (NSW) (and in that case, the steps taken and elections made by Mrs Boyd as to what she wished to challenge) could very well operate to qualify what might be characterised as the 'default position' expressed by JACS and the other authorities referred to. His Honour said:[113]
[161] The obligation upon this Court, as well as on Mrs Boyd and her legal advisors under s 56 of the Civil Procedure Act is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. The passages referred to above in the interchange immediately upon delivery of White J's first judgment demonstrate that White J told her this in terms. The absence of any indication of what those real issues are is a consequence of Mrs Boyd's failure to comply with the ordinary rules of courts requiring the filing of defences and the directions as to her serving evidence. Even then, it would, perhaps, have been open to her to have supplied, in connection with her application to set aside the orders against her on appeal, the proposed draft defence and an indication of the matters which she wished to agitate. After all, if there were to be a further hearing, it is necessary for this Court to be satisfied that "a substantial wrong or miscarriage has been thereby occasioned": UCPR r 51.53.
...
[176] Section 60 of the Civil Procedure Act obliges this Court to implement its practice and procedure with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute. That is a further consideration which tells against a further hearing.
151 The principles expressed in JACS, Boyd v Thorn and the other decisions referred to above are an illustration or application of the 'hearing rule' which forms part of the fundamental rules of natural justice or procedural fairness. The rules of procedural fairness are afforded to all persons, but the content of those rules are flexible. In Kioa v West, Mason J said 'the expression "procedural fairness" more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case.'[114] This necessarily entails consideration of the nature of the particular 'right' a party contends they have been deprived of, and the consequences or prejudice resulting from them being deprived of that right. In Re Minister for Immigration and Multicultural Affairs; Ex parte Lam, Gleeson CJ emphasised that:[115]
[37] ... Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice.
an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial. An order for a new trial in such a case would be a futility.
... not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial. By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial.
153 The Court further cautioned that:[118]
It is no easy task for a court of appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact.
154 Referring to, Stead, in Neav v Monash University, Dixon J said:[119]
[87] The University reminded me of the principle in Stead's case. This principle is well known. Not every departure from the rules of natural justice at a hearing will entitle the aggrieved party to a new hearing, particularly where that denial relates to the opportunity of making submissions on a question of law. All that an applicant needs to show is that the denial of natural justice deprived her of the possibility of a successful outcome. To negate that possibility it is necessary for the appellate court to find that a properly conducted trial could not possibly have produced a different result. (emphasis added)
155 Similarly citing Stead, in Papas v Westpac Banking Corp, Rangiah J said:[120]
[74] ... In that case, the High Court held that a departure from the rules of natural justice will not entitle the aggrieved party to a new trial if the new trial would inevitably result in the making of the same order. An order for a new trial in such a case would be futile.
156 A party need only show the possibility of a different outcome. In Ucar v Nylex Industrial Products Pty Ltd, Redlich JA described two circumstances in which such relief (consisting of a new trial) would be refused:[121]
[75] It will be refused if upon analysis of the basis for the decision there is an incontrovertible fact or point of law which provides a discrete basis for the decision which cannot be affected by the procedural unfairness. It will then be concluded that the applicant could not possibly have obtained a different outcome. Second, even where the subject of the procedural unfairness touched upon an issue in dispute that was material to the decision, relief may be refused if the respondent can demonstrate that it would be futile to hold a further trial because the result would inevitably be the same.
157 Leeming JA's second ground in Boyd v Thorn, in effect, applied this proviso, as reflected and modified by r 51.53 of the Uniform Civil Procedure Rules 2005 (NSW) and Civil Procedure Act 2005 (NSW), requiring that 'the Court must not order a new trial on any of the following grounds... unless it appears to the Court that some substantial wrong or miscarriage has been thereby occasioned.'[122] An analogous rule does not exist in Victoria.[123]
158 I am satisfied that a re-trial would not lead to a different conclusion. I have taken into account and considered the warning expressed in Stead itself_,_ and the views of Macfarlan JA expressed in Boyd v Thorn, where his Honour considered that permitting Mrs Boyd to re-litigate matters might well have resulted in a different outcome:[124]
[60] I add that if any question of a new trial had arisen, the starting point for consideration of the issue would have been my conclusion that Mrs Boyd was denied procedural fairness in a significant respect, in that she was prevented from contending that an essential element of the Estate's claim before Sackar J for a s 66G order had not been satisfied. In such a case it is sufficient for an appellant who seeks a new trial to show that the denial of procedural fairness deprived him or her of the possibility of a successful outcome. In order to negate that possibility it is necessary for the Court "to find that a properly conducted trial could not possibly have produced a different result" (Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54 at 147; [1986] HCA Mastronardi v New South Wales [2007] NSWCA 54 at [83]-[86]; Lu v Heinrich [2014] NSWCA 349; 68 MVR 277 at [148]). As the High Court said in Stead at 145-6, "[i]t is no easy task for a court of appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact".
[61] I would not have been so satisfied in the present case. That Mrs Boyd has not revealed how she would have opposed the making of a finding that Mr Boyd acted unconscionably is not to the point. It was for the Estate to adduce evidence to prove that allegation before Sackar J and it did not do so. At least where the evidence of unconscionability that was before Robb J in 2014 is not before this Court, this Court cannot conclude that there is no possibility that the Estate would fail to prove at a retrial that Mr Boyd acted unconscionably.
159 Further, I note the statement of the High Court, referring to the rule in Stead, in DWN042 v The Republic of Nauru, where Keane, Nettle and Edelman JJ said:[125]
[21] The respondent was correct not to submit that this appeal could be dismissed on the basis that a properly conducted hearing could not possibly have produced a different result. That principle does not apply where, as was the case with the appellant's notice of motion, a party receives no hearing at all. The appellant was, and is, entitled to a hearing in the Supreme Court. It is not for this Court to attempt to provide the hearing that the appellant has not had, or to attempt to give any judgment such as might be thought to have been appropriate in the Supreme Court. There is, therefore, no basis upon which this ground of appeal requires consideration of the interpretation or effect of the Constitution of Nauru. (emphasis added)
160 The Added Defendants submit that I am precluded from considering that the Stead principle, or its application, disentitles them to a new trial. First, because their right to a hearing is an inalienable and secondly, because they received 'no' hearing. I do not accept this submission. First, the High Court was not considering the relationship between JACS (and the other authorities referred to) and Stead. Secondly, Leeming JA considered such matters in Boyd v Thorn, where Mrs Boyd received 'no hearing' at which she was able to contest the findings of fiduciary duty made by Robb J in 2014, and where his Honour opined that the right to a new trial was not a 'universal principle' and might well be limited in particular circumstances, and specifically by the rules of court and considerations of civil procedure. Likewise, Macfarlan JA expressly referred to Stead in Boyd v Thorn, although his Honour found that he could not be satisfied that there would not have been a different outcome. Thirdly, DWN042 concerned the Supreme Court of Nauru's complete failure to hear the applicant's notice of motion prior to delivering final Judgment. In the case before me there has, to the knowledge of Mrs Graco (and the other Added Defendants), been a substantial hearing.[126] Finally, this application provided them with the opportunity to make submissions and adduce evidence on substantive matters that they would or could have raised in the Principal Proceeding. They have done so, and that material does not assist them.
The futility of a new trial - the outcome would be the same
161 I am entirely satisfied, for the reasons that follow, that on an application of the Stead principle, the outcome of any new trial would be the same. Mrs Graco and FBR Funds and indeed all of the Added Defendants cannot establish that they had been deprived of the possibility of a successful outcome. Therefore, they have suffered no substantive unfairness or injustice.
162 The crucial and critical point which leads me to conclude as I have is that the Reasons involve no facts which could, on any relevant view, be considered contentious or disputed. The facts were incontrovertible. Mr Graco's own evidence was that:[127]
(a) Becoming a director or client-related entities was part of the service he regularly offered clients in his capacity as principal of the Partnership;
(b) He had no prior connection with Swisse or its officers before he commenced his work for them as a principal of the Partnership and its predecessor firms;
(c) He was not engaged or remunerated by Swisse otherwise than in his capacity as a principal of the Partnership;
(d) He (and the other Principals) offered client-related investment opportunities to the other principals of the Partnership and took up such opportunities;
(e) He had a relationship of trust and confidence with his fellow Principals;
(f) The terms on which the Partnership was engaged by Swisse encompassed a wide range of professional services relating to the board and corporate governance;
(g) His work as a director of Swisse and other companies was invoiced by the Partnership to the relevant client;
(h) His work that was invoiced by the Partnership to Swisse occurred within and outside business hours;
(i) There was a direct practical conflict between his interests as a shareholder in Swisse and his duty as a principal of the Partnership so far as the invoicing of professional services to Swisse was concerned;
(j) He actively turned his mind to the question of whether he was obliged by the Partnership Deed to disclose the opportunity to invest in Swisse to the Partnership, and deliberately decided not to;
(k) It would ordinarily have been proper to disclose the Opportunity to invest in Swisse to the Partnership;
(l) The Partnership found out about the payment (the Additional Payment) from Fiske by accident.[128] Mr Graco agreed that he had no intention to ever to disclose the payment to the Partnership.
163 The Reply Submissions of the Seventh Defendant referred to a number of matters which it sought to characterise as disputed 'matters of fact'. I refer to each and comment accordingly:
(a) That each of the Principals of the Partnership, including Graco, were Partners of the Partnership pursuant to the Partnership Deed. This was, purely, a question of contractual interpretation.[129] The Partnership Deed spoke for itself.
(b) That each of the Principals, including Graco, were parties to the Partnership Deed. This was a mixed question of fact and law, answered with reference to the objective intentions of the parties, drawn exclusively from the terms of the Partnership Deed.[130]
(c) That it followed from a breach of cl 11.4 of the Partnership Deed that the Investment and the Additional Payment represent an unauthorised benefit or profit received by Mr Graco (and at his direction GFBR and Glenaldon) to the detriment and against the interests of the Partnership and in breach of fiduciary duty. This was a question of law, which flowed as a matter of common sense from the breach, and required no further evidence other than that of Graco.[131]
(d) That the Opportunity and its implementation or exploitation placed Graco in a position of actual or potential conflict. This was a question of fact and law, and was established by Graco's own evidence that he took up the Opportunity, in breach of cl 11.4, without disclosing it to the Partnership.[132]
(e) That Graco was or accepted that he was in a position of conflict when considering this write-off, because of his position as a shareholder, and that he had acted improperly by not disclosing his shareholding to the Partnership. He also accepted that he was in a similar position of conflict when considering subsequent write-offs or the fees that would be payable by Swisse to the Partnership. This was a question of fact, established by Graco's own evidence.[133]
(f) The following may be dealt with together, on the basis that they were questions of fact and law, each having been established by Graco's own evidence:
(i) That there was any real or sensible conflict of interest or potential conflict of interest.
(ii) That Graco, ignoring his duty of loyalty, fidelity and trust and in breach of his fiduciary duty, acted entirely in his own interests.
(iii) That by taking up the offer of shares, in his nominated entity, Graco used the Partnership's business connection to Swisse.
(iv) That Graco received a 'benefit' within the meaning of s 33(1) of the Partnership Act, being the Investment (and proceeds of sale in the amount of $11,593,544.71 that resulted therefrom) and the Additional Payment in the amount of approximately $4,861,000.
(v) Graco entered into the confidentiality undertaking for his own befit and in his interest, and that the undertaking was for his own benefit and in his own interests.
(vi) That GFBR and Glenaldon were knowing recipients of the Investment and the Additional Payment.
(vii) That GFBR and Glenaldon caused, procured or induced Graco to breach his duties to the Partnership.
(g) The Swisse investment was within the business of the Partnership. This was largely irrelevant to the Judgment.[134] In any event it was answered by reference to cl 11.4 of the Partnership.
164 The eighth to twelfth defendants similarly pointed to the following finding of 'fact':
(a) The finding,[135] that had Graco asked the directors of Swisse whether the Opportunity could be extended to the Partnership, the directors would likely have said 'yes', and Graco would have been permitted to put the Opportunity to the Partnership. This was not a fact critical to determining whether Graco was in breach.[136]
(b) The finding,[137] that the nature, extent, scope and content of the fiduciary duty included the requirement, obligation or duty not to profit from the relationship with Swisse and not to place himself in a position of conflict. That conclusion arose from the terms of the Partnership Deed.[138]
(c) The finding,[139] that the fiduciary duties owed by Graco specifically included the obligations referred to in cl 11.4 of the Partnership Deed. That conclusion, too, arose from the terms of the Partnership Deed.
(d) The finding, that the Opportunity was a part of the Partnership business endeavour. That arose directly from cl 11.4.[140]
165 The plaintiffs submitted, both at the trial of the Principal Proceeding and on this application, that it was not necessary for me to resolve any disputed facts. I accepted that submission then, and I am again satisfied of it on review of the Reasons and the evidence.[141] The Reasons involved no contentious findings of fact on the critical questions of liability. Any matters that were denied by the pleadings, apparently contentious (or contended now to be so) were established by Graco's evidence, and in this sense, they cannot be deemed 'contentious issues of fact'.
166 To put this into context, the following critical facts were not disputed or were admitted by Mr or Mrs Graco or by other evidence:
(a) The Partnership, as a part of its business, often had Partners or Principals sit on the board of directors of its clients.
(b) Prior to his appointment, Graco had no relationship with Swisse.
(c) Graco was not remunerated by Swisse other than in his capacity as a Principal or Partner of the Partnership.
(d) A relationship of trust and confidence existed between the Partners and Principals of the Partnership.
(e) Graco received (through GFBR and Glenaldon) the Investment and Additional Payment from Swisse or related entities.
(f) Graco did not disclose, and had no intention of disclosing, to the Partnership, the shareholding in Swisse, the proceeds of that Investment, or his receipt of the Additional Payment.
(g) Graco accepted that his shareholding in, and his entry into the confidentiality undertaking in favour of Swisse put him in a position of conflict with the obligations he owed to the Partnership, first with respect to Cl 11.4 of the Partnership, and then in relation to when he was considering write-offs to the Partnership's Swisse account.
(h) Graco ran the affairs of Zphere, GFBR and Glenaldon.
(i) Mrs Graco and Baden's role, as directors of GFBR, was limited to the extent that they would sign documents when that was required of them.
167 It was made plain, not by reference to evidence, but only by reference to the construction of the Partnership Deed that Graco was a party to the Deed and a Partner of the Partnership in his own right, in addition to Zphere. Further, Cl 11.4 made it plain that the investment in Swisse was a concern and part of the Partnership business. By the express words of Cl 11.4, Graco was required to present that opportunity to the Partnership. He did not. That was precisely what made the profit unauthorised. Evidence was unnecessary to establish that fact or the scope of the Partnership endeavour. The Partnership Deed, which no party sought to qualify through evidence, spoke for itself. In this regard, I adopt the observations of Leeming JA (with McFarlan JA and Sackville AJA agreeing) in Zhang v ROC Services (NSW) Pty Ltd:[142]
[217] ... A denial of procedural fairness on the question of the construction and application of an exclusion clause cannot be an independent ground of appeal. It was not suggested that the evidence would have been different. If the construction is right, any denial is immaterial. If the construction is wrong, then it will be corrected on appeal. Either way, nothing turns on the complaint that the determination of a question of law is not procedurally fair. This is the point made in Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 at 145. It has been repeatedly applied: see for example CSR Ltd v Eddy (2008) 70 NSWLR 725; [2008] NSWCA 83 at [42] and Peregrine Mineral Sands Pty Ltd v Wentworth Shire Council [2014] NSWCA 429 at [194]-[195].
168 These were the critical facts necessary for the plaintiffs to succeed. They were made out on the defendants' (principally, Graco's) own evidence. I must assume that the evidence adduced by the defendants would be the same as it was adduced in the original trial. The Graco Defendants could not use the first trial as a practice run for a further trial in terms of how they should or could run their case or what evidence they would adduce. The Graco Defendants have not appealed those findings. That is the avenue by which the Reasons, and in particular the findings on questions of law and the construction of the Partnership Deed, may be tested or challenged. No further cross-examination would qualify the answers given by Graco. No further submissions would colour the evidence in another light. It is what it is. That evidence irrefutably made out the plaintiffs' claim.
169 As such, no disputed factual questions were determined by the Judgment, let alone disputed facts on which the interests of Mrs Graco or the other Added Defendants diverged from those of the Graco Defendants.
170 Mrs Graco submitted that the question of whether she would call further evidence, or whether the evidence previously admitted would be admitted is not to the point of this application - it is entirely irrelevant. I cannot accept that submission. The Added Defendants do not articulate any basis on which the evidence of Graco is now said to be inaccurate or otherwise capable of controversion.[143] On this basis, I must accept that the evidence of Graco stands now as it would in a subsequent retrial. That is to say, on Graco's evidence alone the findings of fact necessary to establish both the existence and breach of his (and by extension, Zphere's) fiduciary duties are there (as are the facts necessary for the accessorial liability claims). The evidence necessary to make those findings was there then, and those findings would be made again if that evidence were unnecessarily elicited again. In this sense, how could it be suggested that there could even be the possibility of a different or successful outcome.
171 I do not accept that the Added Defendants would be or are privy to any factual information about the conduct of the Graco Defendants or Partnership that was not known to, and deployed by, the Graco Defendants in their defence at trial.
172 It is entirely clear that the Added Defendants could provide no evidence in chief that would be of any relevance to the questions of the operation of the Partnership, the dealings of Graco or Zphere vis-à-vis the Partnership or Swisse, or the knowledge or actions of GFBR or Glenaldon. Of these, Mrs Graco is the closest associated, and the children are one step removed.[144]
173 Mrs Graco gave evidence at the trial of the Principal Proceeding. That evidence was vague, hearsay in nature, and went to an irrelevant point, to the effect that the Investment was not an 'investment' in the traditional sense, but a much needed capital injection to Swisse. Mrs Graco offered various opinions to the effect that there was 'nothing wrong' with receiving the Investment or Additional Payment by GFBR or Glenaldon. The plaintiffs objected to 8 paragraphs of her evidence (which ran to 13 paragraphs) on the basis that it was 'pretty egregious inadmissible material' on the grounds of irrelevance and hearsay.[145]
174 I acceded to that objection, giving due leeway to the Graco Defendants and the weight I would place on that evidence, by way of a ruling during the trial:[146]
I have initially thought that I should strike out the whole statement and not accept any evidence as being irrelevant. On consideration, I propose to allow the objection in relation to paragraphs 5, 6, 8 and 11 and 12. Five, six, eight, 11 and 12 should come out. The reasons will appear as part of the judgment. Paragraph 9, I will receive that evidenced directed to state of mind not proof of the truth of the contents of the particular statement.
And I should also add that I have some doubts about the weight to be attached to any of the evidence but if Mr[s] Graco desires to give evidence, I will permit the evidence to be given as set out in one, two, three, four, seven, nine, 10 and 13, and there can be cross-examination.
175 That evidence was referred to once in the Reasons, and rather than going to any matter of any substance or contention, it merely confirmed the already established fact that Graco was the directing mind and will of GFBR.[147] That is to say, it was on her own evidence that Graco 'generally runs the affairs of GFBR.'[148]
176 In relation to the position of the Added Defendants, other than Mrs Graco, I am of the same view as Leeming JA, in respect of Mrs Boyd:[149]
[178] ... Although the parties' written submissions did not address the possibility of a rehearing or the matters summarised above telling against it, the difficulties faced by Mrs Boyd by reason of the failure to supply a defence or draft defence, or the evidence she would seek to adduce at any such hearing, were exposed during the argument on the appeal.
177 The eighth to twelfth defendants pointed to two matters which they would have, at the Principal Proceeding, or at a retrial, cross examined the plaintiffs' witnesses on:
(a) The character of the venture, undertaking, or business for which the Partnership exists, and whether the Opportunity was a part of that business or endeavour;
(b) Whether any fiduciary relationship which existed (or which might otherwise have existed) between Graco/Zphere and the other partners of the Partnership was modified or excluded by agreement of the other partners, so as to take the impugned conduct of Graco and Zphere outside the scope of any fiduciary duties owed by them to the other Partners.
178 The first matter fails to grapple with the fact that such matters were absolutely established by the Partnership Deed which spoke for itself and did not require explanation by evidence. It also was not a point critical to the issues.[150] Further, and in any event, these were matters which Queen's Counsel for the Graco Defendants cross-examined on.[151] It is difficult to accept that had the Added Defendants been present or later afforded the opportunity, and these precise topics had been cross-examined on, that their counsel would have then proceeded to cover the same topics, but somehow bring to light a point that was crucially relevant to the conclusion but woefully missed by the Graco Defendants or myself.
179 The same point can be made about the second matter. The question of the nature, extent and scope of the fiduciary obligations of the parties was the subject of cross-examination.[152] Further, no question of modification or exclusion of fiduciary duty by the Partnership Deed, nor of variation to the Deed, arose in the case.[153] As discussed above, the nature, extent and scope of the fiduciary obligations was a question of mixed fact and law, answered by reference to the Partnership Deed and in particular Cl 11.4,[154] which no party attempted or succeeded in qualifying through evidence.[155]
180 There is one further point, of a more general nature, that fortifies my view. Where new parties are joined, the Court must afford justice to all parties, and must facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. That is made plain by ss 7 and 8(a) of the Civil Procedure Act. Like Leeming JA, I do not think that there is anything unjust in refusing a new trial, my offer to re-open the case having been rejected. Substantive injustice has not been suffered. I am entirely satisfied, that had the Added Parties been present, or if they were given a chance to be heard, it is inevitable that the findings would be precisely the same as they were made in the Reasons. It would be futile. A re-trial would cause the costs to blow out astronomically and unnecessarily. A second, ten-day trial (or perhaps longer given the additional parties) would not serve the litigants, or the Court well in resolving the real issues remaining in the case. Those issues are not the liabilities of the various Graco Defendants, on which the Added Defendants can say nothing of relevance or value; but relief as against the Graco Defendants, including relief and any allowances, the whereabouts and nature of the proceeds, and the defences and liability in respect of those proceeds as far as it concerns the Added Defendants.
181 It would be absurd if, every time a fiduciary is found to have committed a wrong and an order is made for an accounting, which reveals a gift thereof to a third party, no matter how far detached from the wrongdoing, that the third party is entitled to say that the court's original decision against the fiduciary must be set aside, either for want of parties, or because the third party wanted to be heard on whether the fiduciary actually was a fiduciary or whether they had done anything wrong. It follows, that there would have to be a fresh trial, on all issues, against all parties, and before a different judge if it later transpired that the third party gifted part of the proceeds to a fourth party, and then the fourth party gifted part of the proceeds again to a fifth, and so on. If it were a 'universal principle' that would be the outcome, no matter how detached the recipient was to the wrongdoing.
182 This may be tested another way. Suppose we have a similar situation, involving a defaulting fiduciary who misappropriated corporate property and gifted that property or its proceeds. Suppose then, that throughout the course of the proceeding the fiduciary only provides very limited information to the plaintiffs as to the true destination of the misappropriated proceeds. The hearing proceeds and it is found that the fiduciary breached his duties. An accounting is ordered and the destination of those proceeds is only then discovered to be the fiduciary's spouse. The spouse is wholly unconnected with the fiduciary wrongdoing, or the beneficiary to whom the fiduciary's duty is owed. The conduct of the defendant led to this situation; but must the plaintiffs suffer the consequences of the fiduciary's default by having to yet again be put to proof on the issue of their liability?
183 That example may be taken one step further. Let us say that rather than having drip‑fed information to the plaintiffs in relation to the whereabouts of the proceeds of property allegedly acquired in breach of fiduciary, the fiduciary intentionally and wilfully, in breach of their disclosure obligations (not this case), withholds information or provides false information in order to shield the fact that the property acquired in breach was gifted to his or her family. Again, the family have not been joined to the fiduciary stage of the proceeding. On their joinder, it could not seriously be contended that they can hide behind the fiduciary's objectionable conduct in the litigation. It cannot be a universal principle. In other words, the right to be heard could not in those circumstances be absolute. It must be subject to the flexible content of the rules of procedural fairness, and the doctrines of abuse of process and estoppel that seek to prevent such abuses.[156]
184 The remedial consequences of the breach of the Graco Defendants remains to be determined. For the purpose of this application, I have assumed that proprietary relief is available to the plaintiffs flowing from the Reasons. That is not to say that the claim for such relief has been made out.[157] The precise scope of what property they have received has not been determined. It has not been determined whether they received such property as volunteers, or for good value without notice, or whether they have any other applicable defences, whatsoever they may be. In that determination it is open for the Added Defendants to resist the proprietary relief now sought by the plaintiffs, by seeking to establish some defence. However, the Added Defendants cannot resist the orders sought by the plaintiffs by contesting the legal consequences of the determination of indisputable facts or legal consequences of events that did not concern them or their proprietary interests and on which they can say nothing.
185 In conclusion, the Added Defendants are entitled to be heard on the question of their amenability to any remedies. They are not entitled to put the plaintiffs to proof all over again, in the same or a new proceeding, to establish the same inevitable findings that they have already been made. In other words, the Added Defendants are entitled to put forward evidence and make submissions to resist their own liability. That does not extend to asking this Court to re-run the trial on the Graco Defendants' liability.
186 The remaining claims in this proceeding will proceed in the ordinary manner. The Added Defendants will not be entitled, whether by a re-trial or re-opening, to adduce matters challenging or contradicting the findings made in the Reasons. The summonses will be dismissed.
[1] Chickabo Pty Ltd v Zphere Pty Ltd [2019] VSC 73 (Sifris J). I will assume familiarity with the Reasons and defined terms bear the same meaning. No orders were made.
[2] The Reasons did not deal with or make any findings as to the identity or whereabouts of such proceeds.
[3] An issue in the Fiduciary Proceeding was whether Graco and the natural person plaintiffs (the Principals) were Partners of the Partnership in their own right. I found that they were. See Reasons [83]-[121].
[4] The fifth and sixth defendants, not presently relevant, were also formerly Partners in the Partnership. They contend that they are entitled to a proportion of the benefits derived by Graco and recovered by the plaintiffs. This question has not yet been dealt with.
[7] Section 32 of the Partnership Act requires Partners to render true accounts to the Partnership and to give the Partnership full information of all things affecting the Partnership. Section 33 requires Partners to account for a benefit derived without consent from a transaction concerning the Partnership or from the use of a Partnership business connection.
[9] The joined parties were not present or represented at the directions hearing of 1 March 2019. The Graco Defendants were present and represented.
[10] On 4 July 2019, the solicitors acting for Danijel notified the Court that he would no longer be taking an active role in the proceeding and would abide by the outcome as far as it concerns him. As such, it is not necessary to deal with the application for removal of the caveat.
[11] Submissions were filed separately by the seventh defendant (Mrs Graco), the eighth to eleventh defendants (FBR Funds, Baden, Rhian and Emily), and the twelfth defendant (Danijel). The submissions cover the same matters and have been discussed together.
[12] Mrs Graco was represented by the same solicitors and counsel as the Graco Defendants. The remaining Added Defendants have retained separate solicitors and counsel. I have dealt with their respective submissions together.
[20] JACS [2010] HCA 19; (2010) 266 ALR 462, 492-3 [131]-[132] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ) citing News Ltd [1996] FCA 870; (1996) 64 FCR 410, 524-5 (Lockhart, von Doussa and Sackville JJ).
[21] JACS [2010] HCA 19; (2010) 266 ALR 462, 293 [133] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ).
[25] Ibid 500 [157] citing Victoria v Sutton [1998] HCA 56; (1998) 156 ALR 579, 598 [77] (McHugh J). See also Ross v Lane Cove Council [2014] NSWCA 50; (2014) 86 NSWLR 34 [57] (Meagher JA and Tobias AJA agreeing).
[26] JACS [2010] HCA 19; (2010) 266 ALR 462, 493 [134] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ).
[28] [1944] HCA 5; 68 CLR 571, 589 (Rich J).
[29] [1969] 2 MLJ 2, 56 (Lord Diplock).
[30] News Ltd [1996] FCA 870; 1996) 64 FCR 410, 525 (Lockhart, von Doussa and Sackville JJ).
[31] [2010] HCA 19; (2010) 266 ALR 462, 492-3 [131] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ).
[32] [1986] 42 SASR 321, 341 (Jacobs J).
[33] [1998] HCA 56; (1998) 156 ALR 579, 598-9 [78]-[81] (McHugh J).
[34] [2010] WASCA 189 [118]-[119] and [125]-[126] (Buss JA with Owen and Murphy JJA agreeing).
[35] [2011] HCA 18; (2011) 277 ALR 243, 254-5 [49] (Gummow, Heydon, Crennan, Kiefel and Bell JJ).
[37] [2012] WASC 483 [3] and [30]-[45] (Edelman J).
[38] [2014] NSWCA 450 [97]-[100] (Barrett JA with Beazley P and McColl JA agreeing).
[39] [2014] NSWCA 50 [64]-[65] (Leeming JA with Meagher JA and Tobias AJA agreeing).
[41] [2014] NSWCA 19 [49]-[51] (McColl JA with Ward JA agreeing).
[42] [2015] WASC 95 [66]-[71] (Edelman J).
[43] [2018] QCA 350 [60] (Gotterson JA).
[44] [2018] NSWCA 130 [76]-[77] (Sackville JA with Meagher and White JJA agreeing).
[45] [2019] VSCA 77 [128]-[130] (Tate, Niall and Emerton JJA).
[46] [2019] NSWSC 710 [78]-[81].
[47] Boyd v Thorn [2017] NSWCA 210; (2017) 96 NSWLR 390, 393 [4] (Macfarlan JA). Mr Boyd was Mrs McAuley's tutor, and she was his elderly aunt and used it to repay a mortgage on his property.
[63] Ibid 409-11 [87]-[94] (Leeming JA).
[77] This is not a case where the full extent of the claim against the Added Defendants was known and a conscious decision had been taken not to join them. Rather, they were joined when sufficient information was known by the plaintiffs.
[78] The rules relating to joinder are wider than requiring that parties be directly affected. See e.g. Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 9.0 providing that a person may be joined if that person is 'necessary to ensure that all questions in the proceeding are effectually and completely determined and adjudicated upon' or if they are 'a person between whom and any party to the proceeding there may exist a question arising out of, or relating to, or connected with, any claim in the proceeding which it is just and convenient to determine as between that person and that party as well as between the parties to the proceeding'.
[79] That is to say, prior to the order they could exercise the identified rights and afterwards, those rights no longer existed or could not be exercised. It might be argued, unsuccessfully, that a similar 'knock-on' effect arises here as, by virtue of the Reasons, the rights of the Added Defendants to deal with their property is limited in a manner that they were not prior to the delivery of the Reasons. However, as stressed, proprietary relief (potentially) recognised did not extend to property in the hands of the Added Defendants.
[80] There are new 'knowing receipt' claims against Mrs Graco and FBR Funds. This aspect is dealt with later.
[81] The process of tracing from one asset to another requires a 'proprietary base'. Although no orders were made the 'proprietary base' was established in the Principal Proceeding (see Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6 at [560]).
[82] The plaintiffs were still in the process of establishing the facts.
[83] The Principal proceeding did not and was not intended to deal with these claims.
[85] See e.g. Knights Quest Pty Ltd v Daiwa Can Company [2018] VSC 551 at [5]- [12] (Sifris J).
[86] Boyd v Thorn [2017] NSWCA 210; (2017) 96 NSWLR 390, 409 [87]-[89] (Leeming JA).
[87] According to the observations of Lord Diplock, I am to look to the orders which have been made. No orders have yet been made. As such, I have considered the test in a manner more favourable to the Added Defendants, by looking to the orders which may be made consequent to the findings, including a declaration of constructive trust. See paragraph [184].
[88] News Ltd [1996] FCA 870; (1996) 64 FCR 410, 524-5 (Lockhart, von Doussa and Sackville JJ).
[90] T36:15. The Added Defendants pointed to the plaintiffs' broad prayer for relief. The prayer is as follows: The plaintiffs claim 'as against the first to fourth defendants', 'A declaration that they hold the Investment, the Payment and any part of the traceable proceeds thereof, on constructive trust for the Partnership.' This does not affect the direct interests of the Added Defendants. It only affects the proprietary interests of the Graco Parties, insofar as they hold that property of the proceeds thereof. See Boyd v Thorn [2017] NSWCA 210; (2017) 96 NSWLR 390 at 408 [84]- [85] (Leeming JA).
[91] Reply Submissions of the Eighth to Eleventh Defendants [29]-[30].
[92] T36:27-31. The Added Defendants' excerpt set out in the submissions for some reason omits the words 'throughout the trial ...'.
[94] In many cases, like this case, the precise position is unknown. Indeed property or assets, the subject of the established 'proprietary base' may pass through many hands. To suggest that a third or subsequent recipient (who is as much affected by any findings as a first recipient) is entitled to participate in the original case and, as in this case, call for a new trial before a new judge is extravagant and self-evidently ridiculous. See [180]- [183] below.
[96] Ibid 562. His Honour also said: 'The case would not be the same when the question was one of ownership of property which did not consist solely of rights enforceable against a person such as a trustee. A and B may litigate about the ownership of a horse. The court may order B to return the horse to A on the ground that A and not B is the owner of the horse. But C may, independently of any dealings with A, challenge A's ownership, and he would not be affected in any way by the decision in the case of A versus B. In such a case C would not be bound by the previous decision because he was neither a party to it nor privy to any party in interest.' In my view, this refers to the situation in which a party is directly affected, such as the situation in JACS, where a finding or declaration is made in specified property in favour of A, which C has an interest in and which A may enforce as against C. As discussed above and noted below, this is not the position here.
[97] (2018) 357 ALR 445, 456 [52] (Kiefel CJ, Bell, Keane, Nettle, Gordon and Edelman JJ).
[98] The precise relationship between the principle expressed in Executor Trustee, and those expressed in JACS and the other decisions referred to have not been sufficiently analysed. In my opinion, Executor Trustee reflects the position of an added party or non-party, being compelled to accept findings or orders which only indirectly affect them, in a separate proceeding or an earlier stage or proceeding..
[100] Even then, the extent of that right has still not been determined. The Court is yet to consider whether Graco or his associated entities are entitled to an allowance for their efforts.
[107] Boyd v Thorn [2017] NSWCA 210; (2017) 96 NSWLR 390, 422-3 [153]-[158].
[108] [1996] FCA 870; (1996) 64 FCR 410, 524-5 (Lockhart, von Doussa and Sackville JJ). See paragraph [44] above.
[109] To be clear, I do not see how the inclusion of these claims, to be pursued in the future against Mrs Graco and FBR Funds, could change the nature of the effect of findings made previously, in the Reasons. The most that can be said is that the breach of fiduciary duty found previously is an 'element' in the knowing receipt claims against those defendants. This is not dissimilar to how the breach of fiduciary duty provides a proprietary base to enable tracing against those same defendants.
[110] See, for example, what was said by Kirby P in relation to judgments tainted by fraud in Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, 539: 'In summary, he or she must establish that the case is based on newly discovered facts_; that the facts are material and such as to make it reasonably probable that the case will succeed_; that they go beyond mere allegations of perjury on the part of the witnesses at the trial; and that the opposing party who took advantage of the judgment is shown, by admissible evidence, to have been responsible for the fraud in such a way as to render it inequitable that such party should take the benefit of the judgment'. Of course, different considerations apply in that context, but it is said that where a judgment has been obtained by fraud, like it is where a necessary party was not a party, there has been no 'real trial' which is only provided for by setting aside the irregular judgment. See also Commonwealth Bank of Australia v Quade (1991) 178 CLR 134, 143. Whether or not there has been a real trial involves a consideration of the circumstances of the particular case.
[111] Boyd v Thorn [2017] NSWCA 210; (2017) 96 NSWLR 390, 406 [75] (Leeming JA).
[113] Ibid 423-4 [161] and 426 [176].
[114] Kioa v West [1985] HCA 81; (1985) 62 ALR 321, 347 [33] (Mason J).
[115] [2003] HCA 6; (2003) 195 ALR 502, 511 [37] (Gleeson CJ).
[116] Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, 147.
[119] [2010] VSC 563 [87] (Dixon J). See for example, in the context of winding-up orders made in the absence of defendant companies, but in relation to a discretion to set them aside, and in which the outcome would inevitably be the same had that opportunity been afforded: Labraga v Pomfret [2005] NSWSC 654 at [44] per McDougall J: 'Equally, if the evidence as to (for example) solvency ... showed that on any view the company was hopelessly insolvent, so that it was inevitable that even after the affected parties were given a chance to be heard, the order would be made, then it might be thought to be a pointless exercise of discretion to postpone the inevitable by setting aside the existing winding up order.'
[120] [2014] FCA 290 [74] (Rangiah J).
[121] [2007] VSCA 181; (2007) 17 VR 492, 519 [75] (Redlich JA).
[122] [2017] NSWCA 210; (2017) 96 NSWLR 390, 426 [178] (Leeming JA).
[123] Rule 64.37 of the Rules is similar, but more confined in the sense that it applies only to the Court of Appeal and would not apply in the circumstances of this case. The limits of the Civil Procedure Act 2010 (Vic) (CPA) and of the other common law principles (Executor Trustee and Stead's case) referred to have not been fully considered. In this regard, I note that the CPA (and in particular Pt 4.2) provides the court with a wide power and discretion to make orders or directions which it considers to be appropriate, in the interests of justice and in the interests of the overall conduct of a civil proceeding.
[124] Boyd v Thorn [2017] NSWCA 210; (2017) 96 NSWLR 390, 403-4 [60]-[61] (Macfarlan JA).
[125] [2017] HCA 56; (2017) 350 ALR 582, 588 [21] (Keane, Nettle and Edelman JJ).
[126] A hearing which Mrs Graco's counsel and solicitors (acting for the Graco Defendants) participated fully, particularly in relation to the very matters that it is suggested she was directly affected by. Had they acted for her, it is inconceivable that they would have done anything differently.
[127] Plaintiffs' Submissions at [7] and transcript and court book references therein.
[128] Fiske is an entity formerly associated with Swisse.
[131] Reasons [122], and in particular 'it must follow that the Investment and the Additional Payment represent an unauthorised benefit or profit'.
[133] See Reasons, fn 73: 'During his cross-examination, he accepted that he was in a position of conflict when considering this write-off, because of his position as shareholder, and that he had acted improperly by not disclosing his shareholding to the Partnership. He also accepted that he was in a similar position of conflict when considering subsequent write-offs or the fees that would be payable by Swisse to the Partnership.' See also fn 74.
[136] Reasons [126] and [66]: 'Consequently, whether a beneficiary was able or willing to avail itself of an opportunity (or whether the opportunity would have been available to the beneficiary) has no bearing on whether there has been a breach of fiduciary duty.'
[142] [2016] NSWCA 370 [217] (Leeming JA).
[143] In this regard, the Added Defendants assert that they may or may not adduce evidence, and would make different submissions but do not articulate the ambit or content of either. They submit that they are entitled to consider that matter and are not required to either put anything before the Court at present, or indeed at all. See Reply Submissions of the Seventh Defendant at [28], [30], [51] and [53]; Reply Submissions of the Eighth to Twelfth Defendants at [49].
[144] While Baden is a director of GFBR, it is unlikely that he could say anything of value in relation to that company. See Witness Statement of Frana Maude Graco dated 1 November 2018 at [3] where she said: 'Gary [Graco] generally runs the affairs of GFBR. My involvement mainly consists of signing documents as required....Our son Baden is in a similar position to me.'
[148] Witness Statement of Frana Maude Graco dated 1 November 2018.
[149] Boyd v Thorn (2017) 96NSWLR 390, 427 [178] (Leeming JA).
[150] See for instance, Reasons fn 4, and paragraphs [156] and critically, [125].
[151] See cross-examination of Sakkas at T130:17-T131:25, T132:1-4; T136:11-14; T142:4-14; T144:5-12: T148:13-T149:8; T150:16-21: T156:8-13; T161:2-11; T162:12-T163:8. Cross-examination of Mullen at T189:20-192:12. Cross-examination covered, inter alia, directorships on the board of clients, investments with clients and other matters relevant to the business of the Partnership.
[152] See cross-examination of Sakkas, where Queen's Counsel for the Graco Defendants challenged the witness on their belief as to whether they believed that they, and the remaining Principals, were Partners (in their own right) of the Partnership: T152:18-153:25. In any event, a Partners' subjective belief as to whether they are a Partner is irrelevant in circumstances where the Partnership Deed defined the term 'Partner'. Whether the Principals were Partners was primarily a question of construction. See Reasons at [83]-[121]. As is evident, there is no reference to the evidence of any witness in that section.
[154] Reasons [73], [78], [81] and [164].
[155] See footnote 152. In fact, the opposite is true. In the transcript reference referred to above, it is clear that Sakkas believed and continually advised Graco, that Graco was bound by the Partnership Deed, and obliged by Cl 11.4 to make disclosure, which he did not. This was cross-examined on. Any further cross-examination on the matter would attempt to go behind the incontrovertible evidence given by the witness.
[156] See e.g. Tomlinson v Ramsey Food Processing [2015] HCA 28; (2015) 256 CLR 507.
Chickabo Pty Ltd & Ors
Zphere Pty Ltd & Ors
(1990) 21 NSWLR 317
(1986) 42 SASR 321
(1979) 143 CLR 1
(1935) 53 CLR 220
(1993) 30 NSWLR 441
(1998) 195 CLR 291
(2010) 241 CLR 1
(2011) 244 CLR 1
(1996) 64 FCR 410
(1939) 62 CLR 545
(1986) 161 CLR 141
(2008) 70 NSWLR 725
(2010) 266 ALR 462
(1944) 68 CLR 571
(2017) 96 NSWLR 390
(1998) 156 ALR 579
(2014) 86 NSWLR 34
(2011) 277 ALR 243
(2018) 357 ALR 445
(1986) 6 NSWLR 534
(1991) 178 CLR 134
(1985) 62 ALR 321
(2003) 195 ALR 502
(2007) 17 VR 492
(2017) 350 ALR 582
(2015) 256 CLR 507