Wileypark Pty Ltd v AMP Limited

LEE J: 1 Coming before me in the duty list this afternoon is an application made pursuant to art 19(1) of the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law (1997) (Model Law), which is sch 1 to the Cross-Border Insolvency Act 2008 (Cth) (Act). 2 Until the hearing of the originating process (an application made under art 15(1) of the Model Law seeking that proceedings in Germany be recognised as a foreign proceeding within the meaning of art 2(a) of the Model Law), the plaintiff (Senvion GMBH) seeks the following relief: (1) no enforcement process or execution against the assets of Senvion GMBH may be begun or proceeded with; (2) no person within the jurisdiction of the Court other than Senvion GMBH may transfer, encumber or otherwise dispose of, take possession of, or otherwise recover any assets of Senvion GMBH; and (3) no proceeding against Senvion GMBH, or in relation to any of its property, may be begun or proceeded with. 3 The third aspect of the interlocutory relief sought raises a particular difficulty. 4 During the course of the interlocutory application I heard from a number of companies, being Pacific Hydro Crowlands Pty Ltd, Pacific Hydro Portland Wind Farm Pty Ltd and Pacific Hydro Yaloak South Pty Ltd (Pacific Hydro entities). The Pacific Hydro entities are the plaintiffs in proceedings against Senvion GMBH in the Commercial List of the Supreme Court of Victoria, currently the subject of orders made by Riordan J (Victorian proceeding). In the Victorian proceeding, the Pacific Hydro entities seek orders in the form of a mandatory injunction that Senvion GMBH deliver up various items of property to the Pacific Hydro entities or the Court, until final determination of the Victorian proceeding. Pursuant to orders made by Riordan J on 1 July 2019, the hearing of the application for a mandatory injunction is adjourned to 9 July 2019. 5 When the matter was called on, I raised two matters with Senior Counsel for Senvion GMBH. The first was whether or not Riordan J had been informed of the intention of Senvion GMBH to bring the application which has now been filed in the Federal Court of Australia. The second matter was why this proceeding was not commenced in the Supreme Court of Victoria, so both the Victorian proceeding and this proceeding could be managed by the one court and potentially by the one judge (given s 10 of the Act allows the Supreme Court of Victoria, exercising federal jurisdiction, to deal with an application for recognition). 6 It seems to me that at the very least, by the time the recognition application was made in this court, there was one broad justiciable controversy between the parties arising in federal jurisdiction constituting the one "matter", to use that word in its constitutional sense. Accordingly, either the Federal Court or the Supreme Court could deal with the whole controversy between the parties. The step taken by Senvion GMBH to commence proceedings in this Court has bifurcated the matter, which brings into focus a further issue that I raised with Senior Counsel for Senvion GMBH. This further issue is that, although not in form, but as a matter of substance, if I was to make the orders that are sought in the interlocutory process, I would perforce be making an order that the hearing currently listed before Riordan J on 9 July 2019 not proceed. 7 Recently, in Wileypark Pty Ltd v AMP Limited [2018] FCAFC 143; (2018) 359 ALR 43, the Full Court of this Court (Allsop CJ, Middleton and Beach JJ) dealt with issues of comity between Supreme Courts of the states and the Federal Court of Australia in the concurrent exercise of federal jurisdiction, describing it as of "the utmost importance" at 46 [10] and 47 [11] per Allsop CJ. 8 Although I am not presently dealing with an application for an anti-suit injunction, the consequence of the order that I make seems to me to be qualitatively different to a stay that would operate pursuant to the operation of the Corporations Act 2001 (Cth), in the event that a specified order was made in relation to the affairs of a corporation. What Senvion GMBH seeks is for me to exercise judicial power in accordance with Ch III of the Constitution in such a way that would have the practical effect of interfering with a current order made by a judge of another superior court. 9 The state courts, although not federal courts, are recognised in Ch III of the Constitution as constituent parts of the judicial system of the Commonwealth. The profound importance of the relationship between the state courts and the federal courts as part of an integrated federal judicature is emphasised in Wileypark and operates as a powerful reason why I should not, as a matter of discretion, make orders that would interfere with the way in which another judge is dealing with a matter currently before another court. 10 Apart from commencing the current proceeding in the Supreme Court, there are other practical steps that could be taken in order to resolve this issue, which I have discussed during the course of argument. Irrespective of the approach taken, it does not seem to me that I should accede to making an order which would tie the hands of Riordan J in any way. If an application for an adjournment is made by Senvion GMBH to his Honour, it will be entirely a matter for his Honour as to how he deals with such an application. 11 Looking at the matter a different way, I do not presently consider that the foundation for provisional relief in accordance with art 9 of the Model Law (being that such relief is "urgently needed"), is sufficiently made out in circumstances where there has been no attempt to ascertain whether the Victorian proceeding would be adjourned until after the recognition proceeding has been completed. 12 For these reasons, I decline to make the order sought by Senvion GMBH in the form that has been proposed. 13 Despite this, I am satisfied the affidavit evidence demonstrates a reason to acknowledge, at least on the material I have thus far seen, that (a) recognition is likely to be granted, and (b) the recognition proceeding could be determined with celerity. The only outstanding matter prior to the proceeding being able to be determined on a final basis, is the making of directions as to service of the originating process. This is a matter which I will hear submissions on following the delivery of these reasons. 14 A different form of interim relief which does not have the difficulties described above does seem to me appropriate, not only because recognition is likely to be granted, but I am informed that there is at least one other creditor of substance. Further, I am told that there may well be other claims which could be advanced in the absence of a stay of enforcement proceedings. 15 In all the circumstances, there is much to be said for the attention of Senvion GMBH and its resources not being diverted away from attempting to achieve a restructuring plan and maintaining the business by any unnecessary litigation or enforcement proceeding in what I consider likely to be the quite short period before the recognition hearing. Senvion GMBH has taken the precaution of serving the originating application on CS Wind Corporation, which has served an adjudication application, and they do not oppose the relief sought. 16 Accordingly, I consider it appropriate that I make the orders sought today, with one important variation, being that the orders will not prevent or impede the continuation of the Victorian proceeding. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee.