Rinehart v Hancock

Court of Appeal (NSW)|2013-10-02|Before: Macfarlan JA, Meagher JA, Bergin CJ

Judgment 1THE COURT: This is an application by three of the defendants in the Court below for leave to appeal against a decision of Bergin CJ in Eq of 18 September 2013 ([2013] NSWSC 1352) refusing to grant a stay of proceedings in the Equity Division and to order that all or part of the proceedings be referred to mediation and arbitration. There is urgency in the determination of the application to this Court as a hearing of the proceedings at first instance has been fixed to commence on 8 October 2013. In these circumstances it is appropriate that brief reasons only be given and that we not repeat the description given in the primary judgment of the relevant facts and circumstances, including the terms of the "Hope Downs Deed" (the "Deed"). The same abbreviations as used in the primary judgment are used in this judgment. 2Leaving discretionary matters aside, for the applicants to succeed on their application to this Court, they need to demonstrate that at least one of two contentions is correct. The first contention is that the plaintiffs' claims in the Equity proceedings relating to the 2006 Amendments to the Constitution of HPPL are at least reasonably arguably foreclosed by the releases contained in clause 6 of the Deed, with the result that the outcome of those claims is "governed or controlled" by the Deed in the sense referred to in Rinehart v Welker [2012] NSWCA 95 at [125]. The second contention is that the plaintiffs are arguably prevented by the undertaking in clause 7(a) of the Deed from allegedly seeking the appointment of Mr Bruce Carter as an independent trustee of the trust.

The Clause 7(a) undertaking 12In our view, the applicants' second contention also fails. As indicated earlier, clause 7 contains undertakings. The clause does not therefore purport to release or bar any claims. Moreover, clause 11, which permits the pleading of certain provisions of the Deed in bar of any claims or proceeding, is expressed to apply only in respect of releases given under the Deed. 13The applicants contend that the plaintiffs' claims concerning the identity of the trustee of the Trust constitute a breach of the undertaking contained in clause 7(a) not to do anything which could have an adverse impact on the Hancock Group's rights in certain respects. However, even if, by making those claims, the plaintiffs breached that undertaking, those claims would not necessarily fail. That breach of undertaking might be relevant to the Court's consideration of the plaintiffs' claims concerning the trustee but it would not automatically foreclose them. This was the approach, with which we respectfully agree, taken by Bathurst CJ (with the concurrence of Young JA) in Rinehart v Welker [2012] NSWCA 95 to breaches of undertakings contained in the Deed (see the chapeau to [146] and (b) and (c)). Whilst his Honour was dealing with undertakings in other sub-clauses of clause 7 than (a), his reasoning is in our view equally applicable to clause 7(a) 14The primary judge did not expressly refer to clause 7(a) but did refer to this Court, in its earlier decision, having dealt with breaches of undertakings (Judgment [133]), indicating that her Honour considered the Court's reasoning to be applicable to the undertakings relied on in the present case. As we have indicated, that reasoning stands against the applicants' second contention. 15In these circumstances, we do not consider it to be reasonably arguable that a finding that the plaintiffs had breached their undertaking in clause 7(a) would necessarily determine the plaintiffs' claims concerning the 2006 Amendments in favour of the defendants.

Orders 16For these reasons, neither of the applicants' contentions should be accepted. Their application for leave to appeal should accordingly be dismissed with costs. In these circumstances, it is unnecessary to deal with the discretionary considerations relied on by the respondents in opposition to the application for leave to appeal.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 October 2013

At a glance

Court

Decision date

Before

Source

Judgment (5 paragraphs)

Parties

Cases Cited (2)

Cited By (3)