Surfing Hardware International Holdings Pty Limited v McCausland

Federal Court of Australia|2008-10-14|Before: Foster J

The present application 1 By Notice of Motion filed on 5 August 2008, the respondent (Mr McCausland) sought an order striking out the whole of the proceedings. 2 When the Motion was called on for hearing, Senior Counsel for Mr McCausland sought and was granted leave to amend the Notice of Motion so as to seek in the alternative an order that the whole of the proceedings be stayed "until further order of the Court". 3 Mr McCausland contends that the causes of action articulated in the Statement of Claim filed in these proceedings are frivolous, vexatious or embarrassing. In the alternative, Mr McCausland contends that the proceedings in this Court are an abuse of the process of the Court. 4 Mr McCausland relies upon O 20 r 5 of the Federal Court Rules and the inherent power of the Court to control its own processes. 5 Order 20 r 5(2) Federal Court Rules is in the following terms: … (2) The Court may order that the proceeding be stayed or dismissed generally or in relation to the claim for relief. … 6 The application before me was argued upon the basis that, for the reasons advanced on behalf of Mr McCausland, the proceedings should be summarily terminated. Although Senior Counsel for Mr McCausland did not specifically seek an order that the whole of the proceedings in this Court be dismissed, he did rely upon O 20 r 5 of the Federal Court Rules as the principal source of the Court's power to deal with Mr McCausland's application. That rule empowers the Court to dismiss proceedings in an appropriate case. 7 For these reasons, I think that no injustice will be caused to the applicants in this Court if I approach the application before me upon the basis that, notwithstanding the fact that, in the Amended Notice of Motion, Mr McCausland does not claim an order dismissing the whole of the proceedings, it is nevertheless open to me to make such an order if I consider that an order for dismissal is the appropriate order in the circumstances of this case. I propose to adopt that approach to the question of relief should I accede to Mr McCausland's application.

The relevant facts 8 On 27 August 2004, Mr McCausland commenced proceedings in the Industrial Relations Commission of New South Wales (the IRC). The Commission in Court Session is now called the Industrial Court of New South Wales. In those proceedings, Mr McCausland claims relief pursuant to ss 105 and 106 of the Industrial Relations Act 1996 (NSW) in respect of his employment by one or other of three corporate entities which were named as the first to third respondents in those proceedings. 9 The corporate respondents in Mr McCausland's IRC proceedings are Surfing Hardware International Holdings Pty Limited (Surfing Hardware), SHI Holdings Pty Limited (SHI Holdings) and Surf Hardware International Pty Limited (Surf Hardware International). These three entities are the applicants in the proceedings in this Court. Two individuals were also named as respondents in Mr McCausland's IRC proceedings. Mr Timothy Bosher, who is said to have been Chairman of the Board of Directors of each of the above corporate entities at all material times, is the fourth respondent in those proceedings. Mr Timothy Ford, who is said to have been the Chief Executive Officer and a Director of each of those corporate entities, is the fifth respondent in those proceedings. Neither Mr Bosher nor Mr Ford is a party to the proceedings in this Court. 10 In his IRC proceedings, Mr McCausland claims orders varying his contract of employment and other associated transactions and contracts and seeks the payment of damages or compensation. 11 Mr McCausland was employed by one or more of the applicants. He complains about the termination of his employment. He was terminated on 28 August 2003. He asserts that that termination was invalid and ineffective. He also complains about various alleged unfair aspects of a Shareholders' Agreement dated 20 December 2002 (the Shareholders' Agreement) and seeks compensation in respect of what he contends was a forced sale of his shares in SHI Holdings at an undervalue. The allegations made by Mr McCausland cover many events and transactions involving the applicants in this Court, Mr McCausland and others over a 20 month period between about mid-2002 and February 2004. Mr McCausland contends that he was squeezed out of the applicants' business, losing his employment, his directorships and his shares. According to Mr McCausland, there was a restructure of the Surfing Hardware businesses in early 2003 which led to friction between Mr McCausland and the new investors' representatives. By July 2003, relations between Mr McCausland and the other directors were strained. On 21 July 2003, Mr McCausland was directed to take leave and to stay away from the applicants' business premises. Mr McCausland contends that this directive led to his suffering panic attacks, anxiety and depression. His employment was terminated soon after. He was thereafter excluded from the applicants' business premises and from the management of the applicants' businesses and affairs. 12 The power to declare void or vary unfair contracts and related arrangements pursuant to the provisions of ss 105 and 106 of the Industrial Relations Act 1996 is the exclusive province of the IRC. Absent a valid removal of such proceedings into the Supreme Court of New South Wales pursuant to the provisions of s 8(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW), the Supreme Court has no jurisdiction in respect of such matters. The Supreme Court may exercise a power in appropriate circumstances to make orders of a prerogative nature in order to supervise and control the IRC's assumption of jurisdiction but the present matter does not involve considerations of that kind at the moment. 13 In a separate proceeding commenced in the IRC on 1 September 2005, Mrs McCausland, who is Mr McCausland's wife, brought proceedings on her own account. The respondents in Mrs McCausland's proceedings are the same persons and entities as are respondents in Mr McCausland's proceedings. 14 In Mrs McCausland's IRC proceedings, she seeks relief in respect of her shareholding in SHI Holdings and in respect of the Shareholders' Agreement. That relief is substantially the same as the relief in respect of those matters which is being sought by her husband in the IRC proceedings brought by him. In the proceedings brought by Mrs McCausland, Mrs McCausland seeks to vary the arrangements which she made concerning her shareholding in SHI Holdings with a view to obtaining compensation for what she asserts was a compulsory acquisition of those shares at an undervalue. Mrs McCausland's proceedings are built upon Mr McCausland's contract of employment and the other associated arrangements relied upon by him in his IRC proceedings. 15 The IRC proceedings brought by Mr and Mrs McCausland have not yet been heard. Mr and Mrs McCausland have filed evidence in support of the claims which they make in those proceedings. The respondents to those proceedings have not yet filed any of the evidence to be adduced by them on the final hearing. 16 There have been various interlocutory skirmishes in the IRC. One manoeuvre undertaken by the respondents in the IRC proceedings is to seek to have those proceedings dismissed upon the basis that the IRC has no jurisdiction to hear and determine those proceedings. Various grounds in support of that contention have been notified. 17 As part of their strategy to challenge the jurisdiction of the IRC in relation to both Mr McCausland's IRC proceedings and Mrs McCausland's IRC proceedings, on 10 January 2005, the respondents in Mr McCausland's IRC proceedings filed a Notice of Motion in which they sought an order dismissing the whole of those proceedings. One of the grounds relied upon was that the remuneration earned by Mr McCausland in the 12 months prior to the termination of his employment exceeded the statutory jurisdictional limit provided for in s 108A of the Industrial Relations Act 1996. Subsequently, a Notice of Motion was also filed in Mrs McCausland's IRC proceedings seeking an order that those proceedings also be dismissed. Essentially the same grounds were propounded in support of that application. Alternative claims for the dismissal of certain parts of the two sets of IRC proceedings were also made. The dismissal applications brought by the respondents in the IRC have not yet been heard. 18 In support of those dismissal applications, the respondents in the IRC have pleaded precise details of the remuneration received by Mr McCausland in the period from 29 August 2002 to 28 August 2003. This is the relevant period for the purpose of s 108A. Those details have been verified on oath in an affidavit filed in support of the dismissal applications. 19 Paragraph 2(a) of the respondents' Reply to Mr McCausland's Further Amended Summons (the pleading which is equivalent to a Defence in this Court) is in the following terms: 2. In reply to the summons as a whole, the Respondents say as follows:

(a) In accordance with s108A of the Industrial Relations Act (the Act), the Applicant cannot make an application under s106 of the Act as he was paid or received (or there was payable to, or receivable by, him) a remuneration package that exceeded $200,000 in the 12 months prior to the termination of his employment. 20 Paragraph 45 of the same document is in the following terms: In the 12 months prior to the Termination, the Applicant received remuneration in excess of $200,000.

(a) Gross salary: $175,933.55

(b) Superannuation: $15,668.01

(d) Income protection insurance: $2,862.52;

(e) Cash advances: $2,381.55;

(f) Value of fringe benefits: $5,108.31;

(g) Private phone expenses: $291.17

(h) Discount given on purchase of motor vehicle: $4,335.00

21 Allegations to the same effect are made in the equivalent pleading in Mrs McCausland's proceedings (see par 2(d) and par 33 of that pleading). 22 In an affidavit sworn on 6 January 2005 and filed in Mr McCausland's IRC proceedings, the then Chief Financial Officer of Surf Hardware International, David John Hawkins, swore that, in the period from 29 August 2002 to 28 August 2003, Mr McCausland's remuneration included cash advances totalling $2,381.55. He swore to the truth of this assertion based upon his own knowledge, information and belief and also based upon information obtained from the files and business records of the applicants which, so he testified, were in his possession when he swore his affidavit. As at 6 January 2005, Mr Hawkins had been the Chief Financial Officer of the applicants since 8 December 2003. This affidavit was filed in support of the applicants' dismissal Motions in the IRC and is intended to be read at the hearing of those Motions.

The proceedings in this Court 23 On 30 January 2008, the corporate respondents in the IRC proceedings brought by Mr and Mrs McCausland commenced proceedings against Mr McCausland in this Court. He is the only respondent in those proceedings. Mrs McCausland is not a party to the proceedings in this Court. 24 In the proceedings in this Court, the applicants allege that Mr McCausland withdrew cash totalling $1,120 by eight separate withdrawals from a credit card account issued in the name of Surf Hardware International; that Mr McCausland has failed to account to any of the applicants in respect of any of those cash withdrawals; and that, in the circumstances, Mr McCausland's failure to account as alleged constitutes breaches of the duties owed by him as a director of each of the applicants embodied in ss 181(1), 182(1)(a) and 182(1)(b) of the Corporations Act 2001 (Cth) and also constitutes a breach of the duties owed by him to the applicants as their employee. In this Court, it is also alleged against Mr McCausland that his failure to account in the circumstances outlined above constitutes a breach of the fiduciary duty said to have been owed to each of the applicants by him. The amount of damages or compensation sought in these proceedings is $1,120 in total. The account of profits, which is claimed as an alternative to damages or compensation, is also limited to the sum of $1,120. 25 In the Application which accompanied the Statement of Claim filed in this Court, the applicants seek relief pursuant to s 1317H of the Corporations Act 2001. The precise orders sought are as follows: 1. A declaration that the respondent breached the fiduciary duties which he owed to the first applicant.

A declaration that the respondent breached the fiduciary duties which he owed to the second applicant.

A declaration that the respondent breached the fiduciary duties which he owed to the third applicant.

(a) the first applicant was entitled to summarily dismiss the respondent; or, in the alternative,

(b) a declaration that the second applicant was entitled to summarily dismiss the respondent.

Compensation of $1,120 under s.1317H of the Corporations Act and/or damages for breach of contract.

Further or in the alternative, an account of profits in equity.

Further or in the alternative, equitable compensation.

Alternatively to 8, interest pursuant to s.51A of the Federal Court Act 1976 (Cth).

Such further or other order as the nature of the case may require. 26 On 7 February 2008, the corporate respondents in the IRC proceedings brought by Mr and Mrs McCausland filed a Summons in the Supreme Court of New South Wales. Mr and Mrs McCausland were both named as defendants in those proceedings. 27 The relief claimed in those proceedings is as follows: 1. An order that the proceedings commenced by the first defendant against the plaintiffs before the Industrial Court of New south Wales pursuant to s.106 of the Industrial Relations Act (NSW) (1996),being proceeding No. IRC 5174 of 2004, be removed to the Supreme Court of New South Wales pursuant to s.8(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987.

An order that the proceedings commenced by the second defendant against the plaintiffs before the Industrial Court of New South Wales pursuant to s.106 of the Industrial Relations Act (NSW) (1996),being proceeding No. IRC 4589 of 2005, be removed to the Supreme Court of New South Wales pursuant to s.8(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987.

Such further or other orders as the Court thinks fit. 28 No substantive relief has been sought by the plaintiffs in the Supreme Court proceedings against either Mr or Mrs McCausland. For example, no claim is made for relief under or in respect of any of the contracts which are to be considered in the two IRC proceedings nor has any claim been made for relief pursuant to the Corporations Act. Nor has any case based upon some alleged claim in equity been advanced. 29 The notion that Mr McCausland may owe to the applicants $1,120 and may have breached contractual, statutory and fiduciary duties owed by him to the applicants in respect of their claim for $1,120 was first raised in a letter dated 16 November 2007 from the solicitors for the applicants to the solicitor for Mr McCausland. In that letter, those solicitors called upon Mr McCausland to provide an explanation and reconciliation in respect of each of the cash withdrawals listed in the letter. The withdrawals listed in that letter are the same withdrawals which are the subject of the proceedings in this Court. 30 It is common ground amongst the parties to the present application that the figure for cash advances of $2,381.55 referred to in par 45 of the respondents' Reply pleading in the IRC proceedings brought by Mr McCausland and par 33 of the respondents' Reply pleading in the IRC proceedings brought by Mrs McCausland includes within it each and every one of the cash advances claimed in the present proceedings in this Court. The same may be said in respect of the amount of $2,381.55 referred to in Mr Hawkins' affidavit. 31 By letter dated 30 November 2007, the solicitor for Mr McCausland responded to the letter dated 16 November 2007. The letter included the following statements: Being as Mr McCausland has ceased to be a director for many years, it does seem somewhat extraordinary that these matters are now being raised if they are totally unrelated to issues arising in the substantive proceedings, especially after such a lengthy period of time and when one would have thought that if the questions were of any real commercial concern, and in the ordinary course of business, your clients would have asked those questions well before now.

Having said this, we are confident that all of the matters raised by you are capable of explanation, however, we are instructed that our client is currently medically unfit to attend to the tasks of providing the information requested by you at least within the time frame requested. Furthermore, your client ought to explain why it cannot determine these matters from its own records.

We are instructed that our client has an appointment with his psychiatrist early next week after which, we shall revert to you in relation to his current medical capacity to assist with the issues raised by you. 32 No reply was ever sent to that letter. As I have already mentioned, the proceedings in this Court were commenced on 30 January 2008. The proceedings in the Supreme Court were commenced a week after that. 33 In a further letter from the solicitor for Mr McCausland to the solicitors for the applicants, which letter was dated 11 July 2008, the solicitor for Mr McCausland purported to address in detail the many queries raised in the letter dated 16 November 2007 from the solicitors for the applicants. The 11 July 2008 letter provides a great deal of detail about many of the transactions which were the subject of the prior letter. However, the explanations offered in respect of the cash advances were somewhat thin. This is not particularly surprising since the withdrawals were made over a period of about nine months beginning in mid-October 2002. The explanations which were sought related to eight separate cash withdrawals, each of which was for a small amount and each of which had been made many years before. None of these withdrawals had ever been the subject of query or complaint prior to mid-November 2007. The transactions appear to have been accepted by the applicants and taken up in the relevant company's accounts. 34 The evidence before me does not suggest that there has been any response from the solicitors for the applicants to the letter dated 11 July 2008. 35 The applicants in the proceedings in this Court read an affidavit of Sheila Margaret Barry sworn on 10 September 2008 upon the hearing of the present application. In that affidavit Ms Barry, upon information and belief, offered an explanation as to why certain codes had been endorsed on the American Express documentation kept by the applicants which recorded the making of the cash withdrawals which are the subject of the proceedings in this Court. The purpose of Ms Barry offering this explanation for the presence of the codes on that documentation was to provide a basis for challenging assertions made by Mr Dunstan (the solicitor for Mr McCausland) to the effect that the endorsement of codes on that documentation signified that the withdrawals had been approved as legitimate expenses of the applicants. On the evidence before me, there is a contest between the respective camps as to the significance of the presence of these codes on the relevant documentation. To my mind, the presence of the codes does tend to suggest that the cash withdrawals have actually been expensed in the accounts maintained by the applicants. However, I do not need to resolve this factual contest for the purpose of deciding the present application. 36 Perhaps more important than the argument concerning the significance of these codes is the absence of any evidence tendered on the present application on behalf of the applicants in this Court to the effect that the cash withdrawals, which are the subject of the proceedings in this Court, remain unreconciled and not properly accounted for. The only support for these fundamental contentions is to be found in the certificates by the solicitor for the applicants which have been attached to the Application and the Statement of Claim filed in this Court. Those certificates have no evidentiary value. In my view, they carry no weight when I come to consider the application presently before me. The absence of any verification of the allegations made by the applicants in the proceedings in this Court is a significant matter. 37 In her affidavit, Ms Barry also said: 22. On 7 February 2008, the applicants filed a Summons in the Supreme Court, seeking an order that the IRC Proceedings be removed to the Supreme Court pursuant to s.8(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) first cross-vesting application).

The applicants have further instructed Henry Davis York that, if the first cross vesting application is successful, an application in the Federal Court of Australia should be filed, seeking an order that the Federal Court Proceedings be removed to the Supreme Court pursuant to s.8(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) (second cross-vesting application).

On the basis of my knowledge of the various proceedings, I am of the opinion that there is a very substantial overlap in the issues as between the respondent's IRC Proceedings and the Federal Court Proceedings. All of the evidence which is to be filed by the applicants in the Federal Court proceedings will be relevant to issues to be determined in the respondent's IRC Proceedings. In particular, if the applicants are successful in substantiating the allegations made in the Federal Court Proceedings, Henry Davis York is instructed to raise those findings of fact in answer to the respondent's claim for payment in lieu of notice in the respondent's IRC Proceedings.

I am of the further opinion that it is in the interests of all parties and in the interests of all of the relevant courts, to avoid the confusion which could arise, and the duplication of time and additional costs which would be incurred, in running the respondent's IRC Proceedings and the Federal Court proceedings in separate courts and at separate times.

The respondent's IRC Proceedings and Mrs McCausland's IRC Proceedings have not formally been consolidated. However, since Henry Davis York has been instructed on behalf of the applicants, the Industrial Court has deemed it appropriate for the respondent's IRC Proceedings and Mrs Mc Causland's IRC Proceedings to be listed for consideration at the same directions hearings. I am of the opinion that the respondent's IRC Proceedings and Mrs McCausland's IRC Proceedings should be heard by the same court at the same time, to avoid duplication of time and additional expense being generated for all parties.

A copy of Mrs McCausland's affidavit filed in the Supreme Court Proceedings is annexed and marked 'SB7'. 38 It is plain from the documents filed in the IRC proceedings that, in answer to the claims brought by Mr and Mrs McCausland, the respondents in the IRC will contend that certain payments were made in the 12 months prior to Mr McCausland's termination which, when taken together, lead to the conclusion that the IRC is without jurisdiction because the jurisdictional remuneration cap spelled out in s 108A of the Industrial Relations Act has been exceeded. The cash withdrawals are relied upon by the respondents in the IRC as payments made to Mr McCausland for the purpose of challenging the jurisdiction of the IRC.

The submissions made by the parties 39 Senior Counsel for Mr McCausland submitted that the whole of the current proceedings should be struck out or stayed because the proceedings are frivolous and vexatious or embarrassing. He also submitted that they were an abuse of the process of the Court. 40 His first contention was that the applicants in the present proceedings are claiming as due to them monies which they have asserted in both sets of IRC proceedings were monies to which Mr McCausland was legitimately entitled. In the IRC, the respondents in those proceedings have relied upon Mr McCausland's entitlement to those payments in order to argue in the IRC that the IRC did not have jurisdiction because the jurisdictional monetary cap set forth in s 108A of the Industrial Relations Act had been exceeded. Counsel submitted that the stance adopted by the respondents in the IRC was completely inconsistent with the basis of the claim being made in this Court. He further submitted that I should conclude that the true or real facts concerning these payments are those which have been alleged in the IRC because they have been earnestly pressed in a serious context and verified on oath by a responsible officer of the applicants based upon a consideration of the applicants' business records. In the event that I did so conclude, Counsel submitted that the present proceedings should be summarily terminated because they were frivolous, vexatious or embarrassing or an abuse of the process of the Court. 41 The second broad submission advanced on behalf of Mr McCausland was that the proceedings in this Court were brought not in order to litigate a genuine claim but rather were brought for the sole (or, alternatively, for the predominant) purpose of providing a springboard or platform for the removal of both sets of IRC proceedings into the Supreme Court of New South Wales, a result which could not be achieved unless, at the time that an order is made removing the IRC proceedings into the Supreme Court, there were proceedings of the relevant kind pending in this Court. Senior Counsel for Mr McCausland submitted that the claim for an account or the repayment or reimbursement of the sum of $1,120 the subject of the claims in the present proceedings could be litigated in the IRC. He also submitted that the claim was, in effect, dressed up as a Corporations Act claim when in truth it was nothing more than a claim for money had and received on a simple common money count. He also pointed to the long delay in bringing the claim and the circumstances in which the claim was brought as indicating a lack of genuineness in the claim. 42 As to the first point advanced by Senior Counsel for Mr McCausland, Senior Counsel for the applicants submitted that the applicants had not pleaded inconsistent cases. In the alternative, Senior Counsel submitted that, even if the two cases were inconsistent, the remedy was for this Court to put the applicants to their election and to give them an opportunity to choose which of the two cases they would prefer to run rather than have the proceedings in this Court struck out or dismissed. Mr West QC submitted that the applicants " … had a right to elect …" which case they would pursue. 43 As to the broader abuse of process point, Senior Counsel for the applicants submitted that the present case was on all fours with a number of decisions in this Court which have dealt with the cross-vesting legislation. In particular, he relied upon Palm Springs Limited v Darling (2002) 123 FCR 527 and Morningstar Research Pty Ltd v Fiduciary Ltd (2003) 131 FCR 236. 44 Counsel for the applicants went on to submit that the claim which the applicants make in this Court was genuine in the sense that it has been made with a view to having the issues raised by that claim determined by this Court whether or not these proceedings are transferred to the Supreme Court of New South Wales. He said that the applicants were entitled to take the benefit of any advantages that might accrue to the applicants under the cross-vesting legislation by dint of the fact that proceedings were on foot in this Court. When pressed, Mr West conceded that the claim which is made in this Court could have been made in the Supreme Court of New South Wales or in a Local Court. Ultimately, he was driven to concede that the only reason the proceedings were commenced in this Court was to gain the benefit of the cross-vesting legislation. Mr West contended that there was nothing improper or inappropriate in the applicants taking advantage of that opportunity in the way that they have.

Consideration and decision 45 In substance, the claim in this Court is for $1,120 on a common money count for money had and received. It is correct, as Mr West QC submits, that the conduct of Mr McCausland may also amount to breaches of the statutory and equitable duties pleaded against him if the applicants succeed in this Court. Therefore, the proceedings in this Court cannot be struck out upon the basis that the pleadings do not disclose a reasonable or arguable cause of action (cf O 11 r 16 of the Federal Court Rules). 46 Nonetheless, the amount claimed is trifling and the claim is a simple one which could have been brought in a Local Court. 47 The entitlement of the applicants (or one or more of them) to dismiss Mr McCausland summarily from his employment is an issue which can and will be litigated and determined in the IRC. Further, in my view, should it be necessary or important to decide it, the question of whether Mr McCausland's conduct in relation to the relevant cash withdrawals is of such a nature and of such seriousness as to amount to the breaches of duty alleged against him in the proceedings in this Court can also be the subject of findings in the IRC. 48 Whilst I accept that it would be difficult and perhaps impossible for the applicants to obtain an order in the IRC requiring Mr McCausland to refund or reimburse to them the total amount of the relevant cash withdrawals, such a claim can be made in a Local Court or, if the applicants so choose, in the Supreme Court of New South Wales. 49 Therefore, in my judgment, the proposition that the declaratory relief sought in this Court will somehow provide a basis for contentions to be made in the IRC by the applicants, which contentions could not otherwise be made by those parties in the IRC, is incorrect. Furthermore, the money claims made in this Court can be made in a Local Court or the Supreme Court of New South Wales and, if proven, will provide a sufficient basis for recovery of those sums. Those claims are not claims which would ordinarily engage this Court. 50 The applicants' claim has been brought forward for the first time many years after the dates when the cash withdrawals were made. No explanation has been given by the applicants for the delay in bringing the claim so long after the relevant events. The applicants' solicitors have not responded to the letters from Mr McCausland's solicitor dated 30 November 2007 and 11 July 2008. 51 No effort has been made by the applicants to resolve their claim for $1,120. 52 The relevant records concerning the withdrawals and any subsequent accounting therefor are in the possession of the applicants yet no evidence has been tendered by them to the effect that Mr McCausland has failed to provide an adequate reconciliation or accounting in respect of any of those withdrawals. All that I am left with are unverified assertions to that effect made in the letter of 16 November 2007 and again in the Statement of Claim. 53 Notwithstanding the terms of O 10A r 5(1)(b) of the Federal Court Rules which require that the applicants bring forward any application which they intend to make for an order transferring these proceedings to the Supreme Court of New South Wales pursuant to s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) "… as soon as practicable …" after the applicants form the view that they wish to seek such an order, no cross-vesting application has yet been made in this Court. Mr West QC informed me that the applicants did intend to make such an application. It is quite obvious that the applicants have intended to make such an application since at least November 2007. However, the timing of the making of that application is being dictated by the applicants' strategic aims and not by the requirements of the Rules of Court. It has not yet been brought forward because the applicants first wish to obtain a cross-vesting order from the Supreme Court the effect of which will be to remove the two sets of IRC proceedings into that Court. 54 In light of the above matters and for the reasons which I will briefly set out below, I make the following findings: (a) The allegations pleaded in par 45 of the applicants' Reply pleading in the IRC involve assertions to the following effect, namely, that: (i) Mr McCausland withdrew cash by eight separate withdrawals from the corporate credit card account over which he had legitimate general control; and (ii) the total amount of those cash withdrawals was money to which Mr McCausland was entitled either because he had given a proper reconciliation or accounting in respect of those withdrawals or because he was not obliged to do so. In my judgment, the second proposition set out above is necessarily implicit in the allegations which have been made in the IRC by the applicants when one has regard to the circumstances in which, and the purpose for which, those allegations have been made. In the IRC, the respondents in those proceedings rely upon and invoke in their favour the fact that certain monies (including the relevant cash withdrawals) were paid to and receivable by Mr McCausland. They do so in order to support the contention made both in the pleadings in the IRC and in their Notice of Motion filed on 10 January 2005 that the IRC does not have jurisdiction to hear and determine Mr and Mrs McCausland's cases because Mr McCausland received a total remuneration in the 12 months prior to the termination of his employment in excess of $200,000 which, of course, is the jurisdictional cap set by s 108A of the Industrial Relations Act 1996. The applicants could not rely upon the cash withdrawals in this way if the amount of those withdrawals was subject to a genuine claim for reimbursement. (b) The necessarily implicit assertion to the effect that the total of the cash withdrawals is a sum of money to which Mr McCausland is properly entitled was and is supported by the affidavit of Mr Hawkins who must be taken to know the true position when one has regard to the terms of the affidavit sworn by him. In particular, he must be taken to have known in early 2005 that Mr McCausland had, in fact, made the cash withdrawals and that whatever reconciliation procedures ordinarily required by the applicants to be carried out in respect of such matters had been complied with. Otherwise, the amount of the cash withdrawals ought not to have been included in Mr McCausland's total remuneration for the purpose of the applicants' dismissal Motions in the IRC. (c) The allegations pleaded and relied upon in support of the respondents' dismissal motions in the IRC have not been withdrawn and are being persisted in right up to the present time. They are being seriously pressed. (d) The case pleaded in this Court is founded upon a contention that, in the absence of a proper accounting and reconciliation, the cash withdrawals comprise monies to which Mr McCausland was not and is not entitled and that, no such accounting or reconciliation having been given, his retention of those monies constitutes the pleaded breaches of duty. (e) The pleaded case in this Court is thus wholly at odds with the case being advanced by the respondents in the IRC (three of whom are the applicants in this Court). (f) The applicants should be taken to have made the verified assertions concerning Mr McCausland's remuneration which they have made in the IRC advisedly and after making all appropriate enquiries from all relevant employees of the applicants. They should also be taken to have conducted all appropriate searches for relevant documents and to have read and considered all such documents for the purpose of ascertaining the true position in respect of the eight identified cash withdrawals. The question of whether or not the applicants' reconciliation procedures have been complied with is a question the answer to which must be known to the applicants. The only sensible conclusion to be drawn from the claims made in the IRC in relation to the cash withdrawals is that, by January 2005, the applicants were satisfied that Mr McCausland was not in breach of his duties to them by failing to account to them in respect of these withdrawals. In short, the true position concerning these withdrawals is the position which the applicants have adopted in relation to those withdrawals in the IRC. (g) The claim made in this Court was not raised with Mr McCausland until between four and five years after the cash withdrawals were made. The amount claimed is miniscule. The delay in raising this claim and the small quantum involved are factors which cause me to doubt the bona fides of the applicants in making that claim now. (h) The failure on the part of the solicitors for the applicants to respond to the letters dated 30 November 2007 and 11 July 2008 from the solicitor for Mr McCausland is also some indication of a lack of bona fides on the part of the applicants. (i) Having regard to all of the above circumstances, the claims pleaded in this Court have not been brought forward for the purpose of having this Court adjudicate upon them but rather only for the purpose of providing a platform or springboard for removing the IRC proceedings into the Supreme Court of New South Wales. The claim is plainly being made as part of a strategy to deny to Mr and Mrs McCausland whatever legitimate advantage they seek to gain by suing in the IRC. 55 In light of the above findings, I now move to consider what relief, if any, should be granted to Mr McCausland. 56 In Issitch v Worrell (2000) 172 ALR 586, the Full Court of this Court considered the question of whether the appellant in that case would be permitted on appeal to conduct her case in a way which was "… factually inconsistent in a radical way …" with the case which she had conducted at trial. 57 In Issitch 172 ALR 586 at [32] (pp 594-595), Drummond J (with whom Spender and Katz JJ agreed) said: [32] But once the appellant decided to answer the claim made on her in respect of the $110,167 in the way she did, she was not entitled thereafter to set up in the alternative the inconsistent answer she now suggests she would also have relied on, if only absence of consideration had been specifically pleaded by the trustee. A party can as a general rule plead inconsistent sets of facts in the alternative (cf O 11 r 8(2); Re Morgan (1887) 35 Ch D 492 and Delfino v Trevis (No 1) [1963] NSWR 191 at 196), but not where one of those sets must be known to the party to be false. It has long been recognised that such a pleading is embarrassing and will be struck out. In Brailsford v Tobie (1888) 10 ALT 194 at 195, the defendant pleaded two factually inconsistent accounts in justification for not having paid the moneys claimed by the plaintiff. Holroyd J ordered that the defendant elect which one of these two cases she would maintain, saying:

… I think it would be most improper to allow the defendant to plead as she has done. The actual facts must be within her own knowledge, and that being so she has set up two sets of facts inconsistent with one another. If this were allowed it would be permitting a party knowing the facts to deliberately place on the record statements, one or other of which must be known to be a lie. This, in my opinion, ought not to be allowed. 58 The requirement to elect imposed by Holroyd J on the defendant in Brailsford v Tobie (1888) 10 ALT 194 occurred in circumstances where the two inconsistent sets of facts appeared in a single pleading, not in different pleadings in different courts as is the case here. The applicants do not plead inconsistent sets of facts in the Statement of Claim in this Court if the pleading is viewed in isolation. However, the principle which underlies the observations made by the Full Court in Issitch 172 ALR 586 is that a litigant ought not to be permitted to advance a pleaded case which is inconsistent with another pleaded case in circumstances where one of those cases is known to the litigant to be a false case. Whilst it must be accepted that inconsistent sets of facts may be pleaded in the alternative in the same pleading, pleadings of that kind need to make very clear that the cases are to be put in the alternative and need also to make very clear what the alternatives are. The principle which permits the pleading of inconsistent sets of facts in the alternative does not authorise the pleading of inconsistent cases where one of the cases is known to the party who pleads it to be false. This is so whether the cases are pleaded in one pleading or in different pleadings. Propounding a case which is known to be a false case is an abuse of process. Doing so solely in order to obtain a strategic advantage by invoking the cross-vesting legislation is a flagrant abuse of process. 59 In the present case, in my judgment, the pleading in this Court is wholly inconsistent with the cases pleaded by the respondents in the IRC proceedings and the contentions which they have made in support of their applications to have the IRC proceedings dismissed. The applicants' position in the IRC is supported by the affidavit of Mr Hawkins. Their position in this Court is not supported by any evidence. In my view, I should find that the case propounded by the applicants in this Court is a case which is known by the applicants to be a false case. In those circumstances, it is not appropriate for the Court to permit the applicants in this Court (who are three of the five respondents in the IRC) to elect whether to pursue the case in this Court or to pursue their jurisdictional defences in the IRC. For the Court to permit such a course would be to ignore the finding which I have made to the effect that the case being advanced in this Court is a case which is known by the applicants to be a false case. I am not prepared to permit the applicants now to elect between the two inconsistent positions which they have adopted. 60 The appropriate remedy is to dismiss the proceedings in this Court with costs and I intend to do so for the reasons which I have already expressed. Mr McCausland has not sought an order for dismissal although he did seek an order that the whole of the proceedings be struck out. As I have already mentioned, O 20 r 5 of the Federal Court Rules was specifically addressed during submissions. I consider that no injustice will be done if the proceedings are dismissed rather than struck out or stayed. 61 However, lest I be wrong in the conclusions which I have just expressed, I will consider the broader ground of challenge. This ground is not unrelated to the first ground. Both grounds depend to some extent on coming to a view about the bona fides of the applicants in bringing the claim which they have brought in this Court. 62 As noted earlier in these Reasons, Mr West QC, Senior Counsel for the applicants, directly confronted this point in his submissions. Mr West submitted that the applicants preferred the Supreme Court of New South Wales as the forum in which the claims made in the IRC proceedings and the claim made in this Court should be determined. He submitted that the applicants were entitled to pursue such an outcome in their own strategic forensic interest. Mr West submitted that the dispute was really a commercial dispute over which the IRC was never supposed to have jurisdiction. 63 Be all that as it may, if the IRC truly lacks jurisdiction in the proceedings brought by Mr and Mrs McCausland, the applicants have their remedies in the IRC and probably in the Supreme Court of New South Wales in due course. In addition, it must be remembered that the strategy being pursued by the applicants owes its existence to the simple and undoubted fact that the IRC has exclusive jurisdiction to hear and determine claims made pursuant to ss 105 and 106 of the Industrial Relations Act 1996 (NSW). Properly constituted claims for such relief are directed by the legislature to be heard in the IRC and nowhere else. 64 After reviewing two authorities in this Court (Palm Springs 123 FCR 527 and Morningstar 131 FCR 236), Mr West QC submitted that it was a legitimate tactical procedure for the applicants to engage the jurisdiction of this Court so as to enable the proceeding commenced in this Court as part of that strategy to be transferred to the Supreme Court of New South Wales in circumstances where the facts that such proceedings were pending and were related to other proceedings in a State court or tribunal were critical factors in enabling the applicants to have the McCauslands' IRC proceedings removed into the Supreme Court even though no substantive proceedings were on foot in that Court and even though that Court ordinarily had no jurisdiction to hear and determine those IRC proceedings. Mr West said that, expressed in those terms, such a use of this Court's processes was not improper nor did it constitute an abuse of the process of this Court. 65 I disagree. 66 In my view, Mr West's submission expresses the principle too widely and does not pay appropriate regard to the reasoning in the two cases relied upon by him nor does it pay appropriate regard to the facts in respect of which the statements of principle were made in those cases. 67 Section 8 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) is in the following terms: 8 Orders by Supreme Court

(a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in:

(i) a court, other than the Supreme Court, of the State, or

(ii) a tribunal established by or under an Act, and

(i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Federal Court, the Family Court or the Supreme Court of another State or of a Territory and, if an order is made under this subsection in relation to the relevant proceeding, there would be grounds on which that other proceeding could be transferred to the Supreme Court, or

(ii) an order should be made under this subsection in relation to the relevant proceeding so that consideration can be given to whether the relevant proceeding should be transferred to another court,

the Supreme Court may, on the application of a party to the relevant proceeding or of its own motion, make an order removing the relevant proceeding to the Supreme Court.

(2) Where an order is made under subsection (1) in relation to a proceeding, this Act applies in relation to the proceeding as if it were a proceeding pending in the Supreme Court.

(3) Where a proceeding is removed to the Supreme Court in accordance with an order made under subsection (1), the Supreme Court may, if the Supreme Court considers it appropriate to do so, remit the proceeding to the court or tribunal from which the proceeding was removed. 68 In the present case, in their Supreme Court proceedings, the applicants rely upon s 8(1)(a)(ii) and s 8(1)(b)(i) of the above Act. The contention is that the two sets of IRC proceedings are "… proceedings pending in … a tribunal established by or under …" the Industrial Relations Act 1996 (NSW) (see s 8(1)(a)(ii) and that those proceedings "… arise out of, or are related to, another proceeding pending in the Federal Court …" (viz the proceedings commenced by the applicants in this Court) " … and, if an order is made under [s 8(1)] in relation to [the IRC proceedings], there would be grounds on which that other proceeding [referring to the current proceedings in this Court] could be transferred to the Supreme Court"(see s 8(1)(b)(i)). 69 Section 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) is in the following terms: … (4) Where:

(a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Federal Court or the Family Court (in this subsection referred to as the first court); and

(i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of a State or Territory and it is more appropriate that the relevant proceeding be determined by that Supreme Court;

(A) whether, in the opinion of the first court, the relevant proceeding or a substantial part of it would have been incapable of being instituted in that court, apart from this Act and any law of the Australian Capital Territory or the Northern Territory relating to cross vesting of jurisdiction; and

(B) whether, in the opinion of the first court, the relevant proceeding or a substantial part of it would have been capable of being instituted in the Supreme Court of a State or Territory, apart from this Act and any law of a State or Territory relating to cross vesting of jurisdiction; and

(C) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in sub-subparagraph (B) and not within the jurisdiction of the first court apart from this Act and any law of the Australian Capital Territory or the Northern Territory relating to cross vesting of jurisdiction; and

it is more appropriate that the relevant proceeding be determined by that Supreme Court; or

(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of a State or Territory;

the first court shall transfer the relevant proceeding to that Supreme Court. 70 In due course, if the proceedings in this Court remain on foot, the applicants will make an application to this Court to have those proceedings transferred to the Supreme Court. 71 There is no cross-vesting application before me at the moment. But it is necessary to bear in mind the precise terms of the above provisions when one comes to consider the true import and relevance to the present case of the authorities relied upon by Mr West QC. 72 In Palm Springs123 FCR 527 a Full Court of this Court said at [26]-[32] (pp 533-534): 26 There can be no doubt, and Palm Springs has frankly conceded from the outset of the Federal Court proceeding, that its intention is to seek to have the Federal Court proceeding cross-vested to the Supreme Court. It is equally clear however, and his Honour in the passage at [27] obviously accepted, that Palm Springs could not itself determine whether or not the Federal Court would make a cross-vesting order. If such an order were to be refused, Palm Springs' intention, as accepted by his Honour, is to pursue its claim to conclusion in the Federal Court.

27 We do not consider that any abuse of process was, or is, involved. What Palm Springs seeks is relief under the Trade Practices Act and the Corporations Act. If its cross-vesting application succeeds it will seek that relief in the Supreme Court, in the same proceeding. That proceeding will have been lawfully submitted to the jurisdiction of the Supreme Court pursuant to the Commonwealth Cross-Vesting Act. So what Palm Springs hopes to achieve is the very relief the Trade Practices Act and the Corporations Act hold out. The present case is a world away from the kind of collateral benefit that Dr Spautz sought: the acquiescence of defendants to demands which had no connection with his criminal defamation action. Palm Springs is not seeking an object "beyond that which the legal process offers": Williams v Spautz at 523. Seeking one forum in which all issues could be tried is a legitimate advantage for Palm Springs, indeed, as we shall later observe, for both parties: Bell Group (In liq) v Westpac Banking Corporation (1996) 20 ACSR 762 at 774 per R D Nicholson J.

28 Thus, the most that can be said is that the Federal Court proceeding was commenced in this Court, rather than in the Supreme Court, because of the forensic advantage that was perceived to be available under the cross-vesting legislation. There is no basis in the material before the primary judge to conclude, and his Honour did not conclude, that the predominant purpose for commencing the Federal Court proceeding, claiming the relief set out in the application, was other than to obtain that relief. There is no reason to conclude that the claims for relief would not be prosecuted to finality in the Federal Court, if an application for transfer under the cross-vesting legislation is refused, or in the Supreme Court, if such an application is granted.

29 In Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 725 Rogers AJA said:

"It is important that full effect be given by the courts to the imaginative and detailed code for ensuring that throughout Australia, disputes are dealt with by the one court and that be the court most appropriate for the particular dispute. Consistently with the preservation of dual State and Federal Court systems and with the State Courts dispensing justice within the State boundaries in appropriate cases, no longer is it appropriate to view the court of another State as a foreign court."

30 The cross-vesting scheme, in its Federal to State and State to State aspects, remains fully operative and, to that extent, the observations of Rogers AJA, with which we agree, are still applicable. To have all disputes between a set of litigants resolved in the one Australian court which is the most appropriate is a legitimate, indeed self-evidently desirable, objective. If, as in the circumstances of the present case, that involves the Federal Court becoming a "jurisdictional transit point", we do not see that as in any way derogating from the dignity of the Court. The Federal Court will only make a cross-vesting order if, inter alia, it is satisfied that the interests of justice will be served. Determining whether the interests of justice are served by the making of an order for which a Commonwealth Act confers express jurisdiction seems to us to be not remote from the judicial function.

31 If Mr Darling's argument is correct, s 5(4) of the Commonwealth Cross-Vesting Act has a severely limited field of operation, at least insofar as applicants are concerned. Applicants seeking cross-vesting orders would need to show that the idea only occurred to them after their proceeding was instituted. To the extent they had cross-vesting in mind when they commenced the proceeding, they would be at risk of having it struck out as an abuse of process before any cross-vesting order could be obtained.

32 In any case, where litigants institute genuine claims with the hope or expectation that they will not proceed to judgment that, in itself, does not mean there is an abuse of process. Many claims are instituted in the hope, often reasonably based, that a settlement will be reached, but in the realisation that, in the absence of settlement, the matter will have to proceed to trial and final determination. 73 In Palm Springs123 FCR 527, there were two sets of proceedings instituted in the Supreme Court of New South Wales which had some real connection with the proceedings which had been brought in this Court. The first of those two sets of proceedings involved a claim for rectification of a share sale agreement. The second set of Supreme Court proceedings was a proceeding in which Palm Springs sought an order removing the IRC proceedings into the Supreme Court and an order that those proceedings then be consolidated with the extant rectification proceedings in that Court. In the Federal Court proceedings in Palm Springs123 FCR 527, relief was sought under the Trade Practices Act 1974 (Cth) alleging misleading and deceptive conduct in respect of the very same share sale agreement. In the related proceedings in the IRC in Palm Springs123 FCR 527, orders were sought varying that same share sale agreement based upon substantially the same misrepresentations as were to be litigated in the Federal Court. 74 It is thus quite clear that the observations which the Full Court made in Palm Springs 123 FCR 527 were in a setting where there was a substantial overlap in the allegations made in the IRC and in the Federal Court and a very real connection between the claims made in those two sets of proceedings and the subject matter of the Supreme Court proceedings. In every sense, there were genuine disputes raised in each of the three Courts where proceedings were on foot. 75 In Palm Springs 123 FCR 527, the Full Court held that there was no basis for a conclusion in that case that the predominant purpose for commencing the Federal Court proceedings was other than to obtain the relief claimed in those proceedings and that there was no reason to conclude that the claim for relief made in the Federal Court would not be prosecuted to finality if an application for transfer to the Supreme Court under the cross-vesting legislation were refused. The Court also held that there was no reason to conclude that that claim would not be prosecuted to finality in the Supreme Court, if an application for transfer were granted. 76 I have formed the contrary view in the present case. 77 In pars 45-54 and 58-59 of these Reasons, I have made certain observations and findings. The matters to which I have referred in those paragraphs are relevant to the second and broader of Mr McCausland's grounds of challenge to these proceedings. I will not repeat them here. 78 The important factors for present purposes may be summarised as follows: (a) The issues raised by the non-money claims for relief made in these proceedings can be adequately ventilated and determined in the IRC. This Court need not be engaged in order to deal with those claims; (b) The money claim is tiny and would not ordinarily have been brought in this Court; (c) The claim is a relatively simple one and has been put in the way that it has solely in order to present it as legitimately being within this Court's jurisdiction; (d) The relevant events occurred between five and six years ago. There has been significant delay in bringing forward the claim. The delay has not been explained; and (e) The claim in this Court is inconsistent with the defences adopted by the applicants in the IRC. Those defences have been supported by affidavit evidence whereas there has been no verification of the claim made in this Court. 79 In my judgment, the proceedings in this Court have been instituted solely (or, at the very least, predominantly) for the purpose of enabling the removal of the IRC proceedings brought by Mr and Mrs McCausland into the Supreme Court by order of that Court: (i) Against the wishes of Mr and Mrs McCausland who had the right to choose the IRC as the forum in which to litigate their claims; (ii) In circumstances where there is no substantive claim on foot in the Supreme Court and where the Supreme Court has no jurisdiction to hear and determine claims made pursuant to ss 105 and 106 of the Industrial Relations Act 1996 (NSW); and (iii) In circumstances where there is no genuine intention on the part of the applicants to prosecute to finality the claims made in this Court should it be necessary to do so (whether in this Court or in the Supreme Court). 80 Mr West also referred me to Morningstar 131 FCR 236. In Morningstar, Hely J succinctly explained the way in which the current cross-vesting legislative scheme is being utilised by litigants (see 131 FCR 236 at [15]-[18], pp 239-240). 81 In Morningstar 131 FCR 236, as in Palm Springs123 FCR 527, there were real disputes in several courts on foot at the same time. The first of those proceedings was a suit in the Equity Division of the Supreme Court brought by the group which Hely J described as "the Rich interests". The second proceeding was a proceeding commenced in the IRC by the Rich interests seeking relief pursuant to s 106 of the Industrial Relations Act 1996 (NSW). The next important proceeding was the filing by the Morningstar interests against the Rich interests of a significant cross-claim in the Supreme Court proceedings. The last proceedings to be commenced were the proceedings in the Federal Court commenced by the Morningstar interests. The Statement of Claim in the Federal Court proceedings in effect replicated the cross-claim filed by the Morningstar interests in the Supreme Court proceedings. 82 The basis of the contention advanced by the Rich interests in Morningstar 131 FCR 236 to the effect that the Federal Court proceedings were an abuse of the process of the Court was that there were two sets of proceedings substantially seeking the same relief upon the same grounds on foot at the same time. These duplicate actions were the action on the cross-claim in the Supreme Court proceedings and the Federal Court proceedings. The Rich interests contended that the Federal Court should not permit both actions to be prosecuted at the same time and that, in the circumstances of that case, the Federal Court proceedings having been commenced last, those proceedings should be dismissed or stayed. Critical to his Honour's reasoning was the circumstance that the Morningstar interests conceded that they could not prosecute at the same time both the cross-claim in the Supreme Court and their claims in the Federal Court. The Morningstar interests also tendered evidence to the effect that they would never have filed a cross-claim in the Supreme Court proceedings had they been aware at the time that they did so that the Rich interests had commenced their IRC proceedings. His Honour accepted that evidence. 83 In effect, his Honour approached his consideration of the application before him as if the cross-claim in the Supreme Court proceedings was no longer on foot, given the terms of an undertaking provided to the Court by the Morningstar interests to the effect that they would not prosecute the claims articulated in that cross-claim and given the evidence tendered on their behalf as to what they would have done had they known of the existence of the IRC proceedings. 84 In Morningstar 131 FCR 236 at [26] (p 242), his Honour said: [26] I accept, as the submissions of the Morningstar interests concede, that their purpose in commencing the Federal Court proceedings was to have the entirety of the disputes between them and the Rich interests dealt with by one court, utilising the procedures under the cross-vesting legislation. However, this is an advantage for which the law provides, and the decision of the Full Court in Palm Springs Ltd v Darling establishes that it is not an abuse of process to commence a proceeding for the purpose of achieving that advantage. His Honour said at [29] (p 242) as follows: [29] As the Full Court observed in Palm Springs Ltd v Darling, the present case is a world away from the kind of collateral benefit that Dr Spautz sought: the acquiescence of defendants to demands which had no connection with his criminal defamation action. The Morningstar interests are not seeking an object beyond that which the legal process offers. If there is a problem for the Morningstar interests it does not lie the fact that they do not genuinely seek to obtain the relief sought in the cross claim and in these proceedings. Clearly they do. If there is a problem, it lies in the fact that the Morningstar interests have asked for that relief twice, and from two different courts. 85 There was an acceptance by the Rich interests in Morningstar 131 FCR 236 that the claims made by the Morningstar interests in their cross-claim in the Supreme Court and in their Statement of Claim in the Federal Court were genuine claims and were not being agitated for an improper purpose such as the type of collateral benefit sought by Dr Spautz in the proceedings to which reference was made by the Full Court in Palm Springs 123 FCR 527 at [22] (p 532) and again at [27] (p 533). 86 In my judgment, the present case can be distinguished from Morningstar 131 FCR 236. My reasons for doing so are substantially the same as the reasons which I have given for distinguishing Palm Springs 123 FCR 527. To use the words of Hely J: The applicants "… do not genuinely seek to obtain the relief …" which they have sought in the proceedings in this Court. 87 Accordingly, I am of the view that neither Palm Springs123 FCR 527 nor Morningstar 131 FCR 236 requires me to reject Mr McCausland's application. On the contrary, the reasoning in both of those cases requires that I should accede to it. 88 I have already indicated that I think that the appropriate order is to dismiss these proceedings in their entirety. Therefore, the orders of the Court are: (1) Order that these proceedings be wholly dismissed. (2) Order that the applicants in the proceedings pay the respondent's costs of both the respondent's Notice of Motion filed on 5 August 2008 and amended on 12 September 2008 and of the proceedings generally. I certify that the preceding eighty-eight (88) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster.

Associate: Dated: 14 October 2008 Counsel for the Applicants Mr JN West QC, with Mr T Saunders (Respondents on the Motion):

Solicitor for the Applicants (Respondents on the Motion): Henry Davis York

Counsel for the Respondent (Applicant on the Motion): Mr MS Willmott SC, with Mr M Easton

Solicitor for the Respondent Dunstan Legal (Applicant on the Motion):

Federal Court Act 1976(Cth)

Trade Practices Act 1974(Cth)

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