Robinson v Deep Investments Pty Ltd

JUDGE: PERRAM, JAGOT AND COLVIN JJ DATE OF ORDER: 1 APRIL 2019

1. The interlocutory applications dated 31 January 2019 to vary orders be dismissed.
2. Deep Investments Pty Ltd do pay the costs of the applications to be assessed as one set of costs.
3. All parties file and serve submissions in relation to the costs of the proceedings below and the appeal/cross-appeal by 23 April 2019.
4. All parties file and serve submissions in reply by 7 May 2019. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

PERRAM J: 1 In the appeal I dissented. Deep Investments Pty Ltd ('Deep Investments') now applies to the Court to vary the orders which the Court made. I did not participate in those orders. I have had the advantage in reading in draft the reasons of Colvin J and the separate concurring reasons of Jagot J. They favour dismissing Deep Investments' application to vary the orders. 2 There is some controversy as to whether a dissenting judge should take part in an application to vary orders to which he or she was not party. The conflicting views were comprehensively examined by Edelman J in Caason Investments Pty Ltd v Cao (No 2) [2015] FCAFC 192; 237 FCR 351 ('Caason (No 2)') at 360-364 [31]-[55]. It is likely that there is no settled practice. In Caason (No 2) Edelman J, who was in dissent in the main appeal, noted that because the majority had reached a conclusion on how the subsequent application on costs should be dealt with there seemed little point in his deciding the issue. This was not his Honour's only reason for taking that course but he plainly regarded it as material. 3 That is the position in this case. Regardless of what I think Deep Investments' application is to be dismissed by Jagot and Colvin JJ. I might have taken a different position if Jagot and Colvin JJ were in disagreement as to what should happen. It might well then have been useful for me to express a view in that circumstance. However, that is not the case. Accordingly, I will take no part in the debate. I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

JAGOT J: 4 I agree with Colvin J. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

COLVIN J: 5 On 20 December 2018, the Court found by majority that proceedings commenced in this Court on 19 December 2016 by Deep Investments Pty Ltd against seven respondents were an abuse of process: Robinson v Deep Investments Pty Ltd [2018] FCAFC 232 at [121]. The Court ordered that the proceedings be summarily dismissed. On 31 January 2019, Deep Investments applied to vary those orders. 6 In the statement of claim in the proceedings, various causes of action had been pleaded. In the way the claims were cast, each depended upon demonstrating wrongdoing by Mr Robinson and companies with which he was associated in managing a share portfolio held by Deep Investments. 7 In support of the application to vary the orders made on 20 December 2018, it is submitted for Deep Investments that its claims for breach of fiduciary duty and for contravention of s 12DA of the Australian Securities and Investments Commission Act 2001 (WA) (ASIC Act) 'were capable of being pleaded' in a way that did not depend upon demonstrating that there had been mismanagement of the portfolio (described as a common law damages approach). It is said that at the time of pleading the statement of claim, Deep Investment's lawyers 'chose to plead the equitable compensation loss and the statutory loss under s 12GM ASIC Act on the same basis as the common law damages claims for negligence and breach of contract'. These submissions recognise, correctly, that all causes of action as pleaded alleged as a material part of the claim that there had been mismanagement of the portfolio. 8 The Court is now asked to vary its orders in a manner that would summarily dismiss claims that 'can only succeed upon proof of mismanagement of the portfolio' and allow Deep Investments to re-plead so as to only make claims 'which do not require proof of mismanagement of the portfolio to succeed'. In effect, Deep Investments asks the Court to grant leave to allow it to amend its claim to plead a different case to that which until now (both before the primary judge and on appeal) it has claimed that it was entitled to advance, notwithstanding the fact that it had consented to judgment in earlier proceedings in the Supreme Court of New South Wales in which it had alleged that there had been mismanagement of the portfolio. 9 In substance, by the application to vary, Deep Investments invites the Court to make orders that would allow it to commence a different type of claim to that considered by the primary judge and the Full Court on appeal. It says those new claims can be advanced without inviting the Court to scrutinise whether there was mismanagement of the portfolio. It says it can make claims in respect of breach of fiduciary duty and for contravention of s 12DA of the ASIC Act which 'are capable of being prosecuted to judgment without necessarily requiring proof of mismanagement of the portfolio by Mr Robinson'. Having regard to the nature of the claims as described that proposition is contentious. However, for present purposes I assume that it can be made out. 10 An issue is also raised as to whether the orders made on 20 December 2018 were interlocutory in nature and therefore able to be varied under r 39.05 of the Federal Court Rules 2011 (Cth). I assume also that there is power to set aside the orders made on the basis that they are interlocutory. 11 The difficulty with the justification for the application to vary is that it seeks to authorise a new claim of a kind not adjudicated in the appeal. In the course of the appeal, Deep Investments did not seek to demonstrate that its application should not be summarily dismissed because the arguments advanced in support of summary dismissal might be addressed (wholly or in part) by an amendment to the statement of claim. 12 It is not uncommon for an applicant facing a strike out or summary dismissal on a pleadings summons to say in the course of argument that the appropriate order would be for there to be leave to re-plead, but no such argument was presented for Deep Investments. 13 In those circumstances, it was summary dismissal of the claim as pleaded that the Court was asked to determine. The appeal determined no more and no less. The Full Court should not entertain on appeal what is, in substance, an application to bring a different type of claim in circumstances where Deep Investments did not raise the possibility of such an outcome in the course of the appeal. If the applicant now wants to bring a different case it will need to consider advancing a new claim and the prospect that there will be a complaint (articulated in some of the submissions opposing the application to vary the orders) that any such proceeding is an abuse of process. 14 Therefore, having regard to the nature of the appeals and cross-appeals the subject of the reasons delivered on 20 December 2018 and the arguments advanced on those appeals, it has not been demonstrated that there was an error arising from an accidental slip or omission or that the orders made did not reflect the intention of the majority reasons. 15 A further submission is advanced for Deep Investments that the members of the majority should deliver reasons on certain legal issues that arose in the appeals in circumstances where the claims were not to be summarily dismissed. The reasons delivered sought to deal with all of the factual matters raised by the parties and made findings for the purposes of the application as to those matters. In those circumstances, given my view that there should be no variation to the orders made, I remain of the view that it is not necessary to consider legal arguments that only arise if the proceedings were to remain on foot in whole or in part. 16 It follows that the application by Deep Investments should be dismissed with costs. Although separate applications were filed in each of the appeals the submissions on each raised the same issues and the costs on the applications should be assessed as one set of costs. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Colvin.