PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS –
PLEADINGS – STRIKING OUT – OTHERWISE ABUSE OF
PROCESS – where
first respondent, by originating application, sought to pay monies into court
Source
Original judgment source is linked above.
Catchwords
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS –PLEADINGS – STRIKING OUT – OTHERWISE ABUSE OFPROCESS – wherefirst respondent, by originating application, sought to pay monies into court–where applicant and secondrespondent are competing claimants to thosemonies – where second respondent filed an application seeking adeclaration thatit was entitled to the monies paid into court – whereapplicant and two other parties had previously commenced separate proceedingclaiming declaratory relief against second respondent but for which leave toproceed was required and not yet granted – whereapplicant contends thatsecond respondent’s application in this proceeding ought be stayed as anabuse of process, struck outor dismissed, or struck out pursuant to UCPR r 171– whether appropriate to grant stay, strike out or dismiss the secondrespondent’sinterlocutory application in the circumstancesPROCEDURE – STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND
GENERALLY – INHERENT AND GENERAL STATUTORY POWERS –
TO PREVENT AN
ABUSE OF PROCESS – GENERALLY – where general purpose liquidators and
special purpose liquidators appointed
to second respondent by orders of the
Federal Court – where applicant contends prosecution of second
respondent’s application
by the general purpose liquidators is in breach
of those orders – whether the nature and significance of the alleged
breach
is an adequate foundation for the relief claimed by the applicant in the
circumstances
Judgment (9 paragraphs)
[1]
[1] On 15 April 2016, two joint venture companies and the manager of their joint venture, Queensland Nickel Sales Pty Ltd ("Queensland Nickel Sales") commenced a proceeding by originating application seeking relief against the former manager of the joint venture, Queensland Nickel Pty Ltd (in liquidation) ("Queensland Nickel"). The originating application sought both substantive relief and also leave to proceed in respect of the claims for substantive relief. It is convenient to refer to that proceeding as the Queensland Nickel declarations proceeding.
[2] It is sufficient for present purposes to note that the claims in respect of which leave was sought included claims for -
(a) a declaration that any property held in the name of Queensland Nickel was Joint Venture Property within the meaning of the Joint Venture Agreement;
(b) a declaration that Queensland Nickel did not have any beneficial rights to or in Joint Venture Property; and
(c) an order that, in accordance with cl 5.6(d) of the Joint Venture Agreement, Queensland Nickel transfer any such property to Queensland Nickel Sales.
[3] The "property" the subject of those claims was said to encompass choses in action which Queensland Nickel had against third parties in respect of debts owed to it in its capacity as manager of the joint venture.
[4] On 13 June 2016 the claimants in the Queensland Nickel declarations proceeding delivered a proposed statement of claim which pleaded the claims in respect of which leave would be sought.
[5] On 23 June 2016 Glencore International AG commenced the present proceeding by originating application. Glencore was conscious that it owed US$3,759,246.71 to one or other of the old joint venture manager, Queensland Nickel, or, its replacement, Queensland Nickel Sales, and that those two parties were in dispute as to which of them was entitled to that sum.
[6] The relief which Glencore sought was an order that it pay the disputed sum into court and ancillary orders aimed at ensuring the disputing claimants could advance no claim against it, but could be left to fight out their entitlement in respect of the monies paid into court. Amongst other things, Glencore applied for "such orders and directions as the Court thinks fit for the determination of all matters in dispute between [Queensland Nickel] and [Queensland Nickel Sales] in respect of [the amount of US$3,759,246.71 which Glencore proposed to pay into court]."
[7] It is convenient to refer to the proceeding commenced by Glencore as the Glencore interpleader proceeding.
[8] On 30 June 2016 Queensland Nickel filed an interlocutory application within the Glencore interpleader proceeding, seeking -
(a) a declaration that Queensland Nickel was entitled to be paid the amount of USD $3,759,246.71; and
(b) an order that Glencore pay that amount to Queensland Nickel or an equivalent amount in Australian currency.
[9] On 8 July 2016, Queensland Nickel Sales filed by leave its own interlocutory application within the Glencore interpleader proceeding. It sought orders that Queensland Nickel's interlocutory application within the Glencore interpleader proceeding be stayed as an abuse of process, struck out or dismissed, or struck out pursuant to UCPR r 171 on the grounds that it -
(a) may prejudice or delay the fair trial of the proceeding;
(b) was unnecessary or scandalous;
(c) was frivolous or vexatious; or
(d) was an abuse of the process of the Court.
[10] On 8 July 2016, the following orders were made by consent of all three parties:
[2]
1 Pursuant to section 19(1)(c) of the Civil Proceedings Act 2011 (QLD), [Glencore] pay into the Court the amount of US$3,759,246.71 (the "Final Amount") claimed against it by each of the Claimants, less the deductions authorised by Order 4.
[3]
2 No action be brought against [Glencore] by any of the Claimants in respect of the Final Amount.
[4]
3 [Glencore] be excused from further appearance in these proceedings.
[5]
4 [Glencore's] cost incurred in these proceedings be fixed at AUD 25,000 and be deducted from the Final Amount.
[6]
5 The Application of the First Claimant filed 30 June 2016 and the application of the Second Claimant filed and read by leave 8 July 2016:-
[7]
(b) be set down, for mention only, before His Honour Justice Bond at 4.30pm on 11 July 2016
[8]
6 Costs of the First Claimant and Second Claimant be reserved.
[9]
[11] On 12 July 2016, I made an order that a number of proceedings - including the Queensland Nickel declarations proceeding and the Glencore interpleader proceeding - be listed on the commercial list. The Glencore interpleader proceeding was to be managed by me together with a number of other proceedings, and the question whether the Queensland Nickel declarations proceeding be managed with them was postponed, but ultimately that decision was made.
[12] On 2 August 2016, I heard argument in respect of the application for leave to proceed by the two joint venture companies and Queensland Nickel Sales in respect of the claims they sought to advance in the Queensland Nickel declarations proceeding. The applicants were seeking leave nunc pro tunc in relation to the substantive claims advanced in the originating application filed 15 April 2016. I reserved my decision. I ultimately heard further argument on 28 August 2016 and on 29 September 2016 I dismissed the application. My judgment is to be found at QNI Resources Pty Ltd v Park[2016] QSC 222.
[13] On 4 August 2016, I heard argument in respect of the application for stay and/or strike out by Queensland Nickel Sales in respect of Queensland Nickel's interlocutory application within the Glencore interpleader proceeding. Of course, at that time, as was the case at the time Queensland Nickel's interlocutory application had been filed, no leave to proceed had yet been obtained in respect of the claims made in the Queensland Nickel declarations proceeding, but neither had the application for leave yet been dismissed. I will deal with the application without having regard to the fact that I subsequently refused leave to proceed.
[14] The first argument advanced by Queensland Nickel Sales was that Queensland Nickel's interlocutory application was an abuse of process as it was an attempt to litigate in the Glencore interpleader proceeding issues which were already the subject of extant proceedings involving the same parties, namely the Queensland Nickel declarations proceeding commenced on 15 April 2016.
[15] I have already indicated that Glencore's originating application had sought such orders and directions as the Court thought fit for the determination of all matters in dispute between Queensland Nickel and Queensland Nickel Sales in respect of monies which Glencore proposed to pay into court. Thus that proceeding was also an appropriate vehicle for obtaining such orders and directions as the Court thought fit as to the resolution of the competing claims to the monies. It had been regularly commenced. It was hardly surprising that Queensland Nickel identified the order it sought by filing the interlocutory application which it filed within that proceeding. It could not be criticized for doing so.
Parties
Applicant/Plaintiff:
# Queensland Nickel Sales Pty Ltd
Respondent/Defendant:
Glencore International AG & Anor \[2016\] QSC 269
Legislation Cited (1)
Proceedings Act 2011
[16] On the other hand, it would have been neither surprising nor inappropriate if Queensland Nickel Sales had sought orders staying Queensland Nickel's application pending determination of the leave to proceed application in the Queensland Nickel declarations proceeding. Given the issues which would have been involved in that proceeding if leave to proceed was granted (as to which see the analysis in QNI Resources Pty Ltd v Park at [77] to [118]), there would have been much to be said for that course being taken. But that is not how Queensland Nickel Sales couched its application: it sought a permanent stay or a strike out of the interlocutory proceeding. The suggestion that it was an abuse of process or somehow vexatious for Queensland Nickel to seek the relief it did in the Glencore interpleader proceeding was an overreach by Queensland Nickel Sales.
[17] I accept that starting separate proceedings when there are already extant proceedings covering the issues is capable of being regarded as an abuse of process. But in this case there was more than one extant proceedings which were relevant and I have indicated that Queensland Nickel could not be criticized for choosing the Glencore interpleader proceeding as the one in which it would commence its claim for the monies paid by Glencore. And in any event, once I became seized of all the matters on the commercial list, there was no utility in Queensland Nickel Sales continuing with its argument that the interlocutory application should be stayed or struck out. The question how and when issues arising in the proceedings before me on the list and being managed by me should be determined became essentially a case management decision.
[18] For these reasons I reject the first argument which Queensland Nickel Sales advanced.
[19] The second argument advanced by Queensland Nickel Sales was that Queensland Nickel's interlocutory application was an abuse of process because it was being prosecuted in contravention of the orders of the Federal Court of 18 May 2016. The elements to that argument were as follows:
(a) Dowsett J appointed Special Purpose Liquidators to Queensland Nickel and limited that appointment to matters set out in paragraphs 4(b) to (d) of his order.
(b) Dowsett J ordered that the General Purpose Liquidators of Queensland Nickel "not do any of the things specified in paragraphs 4(b) to (d) above in relation to the matters set out in the Special Purpose Liquidators Tasks other than with the prior written consent of the Special Purpose Liquidator or further order of the Court"
(c) One of the things specified was "pursuing any claim, including by commencing legal proceedings, that may be available to the company ... in relation to any of the matters identified in the Special Purpose Liquidators' Tasks". The matters in the Special Purpose Liquidators' Tasks included "All dealings or transactions between [Queensland Nickel] ... and [the two joint venture companies] ... including ... dealings or transactions under the Joint Venture Agreement."
(d) By causing Queensland Nickel to bring the interlocutory application in the Glencore Interpleader proceeding, the General Purpose Liquidators were "doing a thing" contrary to that order.
[20] The proposition that by commencing the interlocutory application Queensland Nickel was commencing legal proceedings in relation to dealings or transactions under the Joint Venture Agreement was an arguable proposition because the relationship between Queensland Nickel and Glencore was a relationship created by Queensland Nickel exercising its authority under the Joint Venture Agreement. However Queensland Nickel contended that the phrase "dealings or transactions arising under the Joint Venture Agreement" was to be construed as a reference to "dealings or transactions between Queensland Nickel and the two joint venture companies or their directors or officers arising under the Joint Venture Agreement". That proposition also seems arguable.
[21] There is no merit in forming a view as to the merits of these competing arguments because the Special Purpose Liquidators by their Senior Counsel informed me that the Special Purpose Liquidators supported the course which Queensland Nickel had taken and supported the view that there was no breach of the order of Dowsett J. At worst for the General Purpose Liquidators then, both they and the Special Purpose Liquidators were wrong to think that the order of Dowsett J permitted Queensland Nickel to file the interlocutory proceeding without the prior written consent of the Special Purpose Liquidators. But as the Special Purpose Liquidators in fact do consent, it is difficult to imagine any court seriously entertaining the notion that such a breach would have any significant consequences.
[22] In appropriate circumstances this Court would regard proceedings commenced in breach of a Federal Court order as an abuse of process and grant relief of the nature of that sought by Queensland Nickel Sales. But, the circumstances are presently not appropriate. The nature and significance of the alleged breach is plainly a relevant consideration on an application such as this. In this case and in light of the circumstances I have addressed in the previous paragraph, the alleged breach could not possibly be an adequate foundation for the discretionary relief which Queensland Nickel Sales now seeks from me. I reject the second argument which Queensland Nickel Sales has advanced.
[23] The application of Queensland Nickel Sales filed by leave on 8 July 2016 should be dismissed. I will hear the parties on costs.