Bell, Michael Charles & Anor v Macquarie Bank Ltd & Anor [1998] FCA 1763

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 1042 of 1997

BETWEEN: MICHAEL CHARLES BELL AND CHARLES JOSEPH BERG

ApplicantS

AND: MACQUARIE BANK LTD

first Respondent

macquarie international capital markets ltd

second RESPONDENT

JUDGE: LEHANE J

DATE OF ORDER: 15 may 1998

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. The matter be stood over for further directions to Friday, 27 November 1998

at 9.30am. 2. The parties have liberty to apply on 21 days' notice. 3. The application and statement of claim need not be served upon the second respondent named on the application until further order. 4. The applicants need not apply for leave to serve or for confirmation of service on the second respondent outside the Commonwealth until further order. 5. The question of costs of the motion be stood over to Friday, 27 November 1998 at 9.30am. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 1042 of 1997

BETWEEN: MICHAEL CHARLES BELL and CHARLES JOSEPH BERG

Applicants

AND: MACQUARIE BANK LTD

first Respondent

macquarie international capital markets ltd

second respondent

JUDGE: LEHANE J

DATE: 15 may 1998

PLACE: SYDNEY

EX TEMPORE REASONS FOR JUDGMENT The applicants have commenced two sets of proceedings against the respondents. On 5 December 1997 they filed in this Court an application seeking relief under the Trade Practices Act 1974 (Cth) on the footing of claims, set out in a statement of claim dated 5 December 1997, that the respondents have engaged in misleading or deceptive conduct resulting in loss to the applicants. Then on 9 December 1997 each applicant commenced proceedings against the respondents in the Industrial Relations Commission of New South Wales seeking relief under s 106 of the Industrial Relations Act 1996 (NSW). The relief sought in those proceedings includes variation of alleged contracts between the parties and orders for the payment of money. There will be issues in the proceedings in this Court as to whether the initiating process has been served properly on the second respondent, whether service outside the jurisdiction should be permitted on the second respondent or whether service already purportedly effected should be confirmed. I understand that similar questions arise in the proceedings in the Industrial Relations Commission. In each case the facts alleged and relied on, in support of the relief claimed, are substantially the same. In very broad terms they arise from what the applicants claim to have been contracts of employment entered into between each applicant and each respondent and the circumstances in which those contracts came to an end. In each case there are allegations that the first respondent made representations to the applicants, that those representations were false (or perhaps were falsified in the event) and that as a result the applicants suffered loss or were deprived of benefits to which they were entitled. The particular representations relied upon in each proceeding are substantially the same. The statement of claim in the proceeding in this Court gives particulars, whereas the grounds annexed to the summonses for relief in the Industrial Relations Commission do not, of the persons by whom, on behalf of the first respondent, and the dates on which, the alleged representations relied upon are said to have been made; but nothing of substance turns on that difference. In short, then, the applicants have commenced within a period of a few days two proceedings against the same respondents, seeking to a large extent similar relief, arising out of substantially the same circumstances. The motion before me in those circumstances is somewhat unusual. It is a motion of the applicants, seeking what is described as an adjournment of these proceedings pending the final determination of the proceedings in the Industrial Relations Commission, or alternatively an order that these proceedings be adjourned to a date six months hence, so that during that period the proceedings in the Industrial Relations Commission may continue without any steps being required to be taken in these proceedings. The motion is strongly contested by the respondents. One matter does appear to be common ground between the parties: that is that it is inappropriate that both proceedings should continue simultaneously. The respondents have indicated that they will seek a stay of each proceeding in the Industrial Relations Commission and contend that the proceedings in this Court should continue in the ordinary course. The applicants, on the other hand, intend to oppose the stays sought in the Industrial Relations Commission and seek to have these proceedings adjourned. I was referred to several authorities for the proposition that ordinarily it is vexatious to commence or conduct concurrently two proceedings in different courts in relation to the same issues. The reason why two proceedings have been commenced in the present circumstances is, the applicants say - and there appears to be no particular dispute about this - that the particular relief sought in the Industrial Relations Commission is available only in that forum, whereas the relief sought in this Court cannot be sought in the Commission. In short, there is no court which can entertain both proceedings based on Pt 5 of the Trade Practices Act and s 106 of the Industrial Relations Act. In those circumstances, the question is, simply, which proceedings ought to proceed first. The respondents say that these proceedings ought to continue, on the footing that they were commenced before the proceedings in the Industrial Relations Commission: that in the absence of special circumstances litigation between the same parties, concerning the same issues, commenced in two courts should be required to be pursued first in the court in which the litigation was first commenced; and that no relevant special circumstances exist here. The respondents say that although the legal principles on which this Court and the Industrial Relations Commission will proceed, in dealing with the issues between the present parties, are different, nevertheless, in substance the same monetary relief is claimed in each proceeding and will require decisions about substantially the same factual issues between the parties. Thus, they say, there is no particular forensic advantage justifying the applicants in a contention that the proceedings in the Industrial Relations Commission should be allowed to proceed first. The respondents say also that the documents filed in this Court, to which some publicity has been given, allege what might be described as discreditable conduct against senior officers of the first respondent, a publicly listed and significant corporation which has reporting obligations in relation to its listing on the Australian Stock Exchange. The conduct referred to is, of course, the alleged making of the representations upon which the applicants rely. The matters to which the respondents refer are not, I think, lightly to be dismissed. Plainly, in my view, they are entitled to have serious allegations against them and their senior officers determined as promptly as may conveniently be done. It is, however, evident, in my view, that findings will be made in relation to those allegations in whichever forum first deals with the claims, and it must be regarded, I think, as highly unlikely that in whichever forum the claims are first dealt with the issues as to whether the representations were made, or if made were false, would then arise again in the other jurisdiction. In other words, it appears to me that there is nothing arising from the nature of the allegations made by the applicants which requires, as a matter of justice to the respondents, that the matter proceed first in one forum rather than the other. The applicants opened through their senior counsel, Mr Gyles, with a bold proposition that prima facie a plaintiff or applicant can choose which of two proceedings, such as those commenced here, are to be pursued first. As a general proposition, I doubt that that is right though, for reasons which will appear, it is unnecessary, and therefore inappropriate, for me to reach any final conclusion about it. In the end, I think, the real question is this: given that it is undesirable in the interests of justice that both proceedings continue concurrently, where do the interests of justice require the claims to be dealt with first? I would be inclined to accept the proposition put to me by the respondents that the burden rests upon the applicants to establish that their choice of venue is that which should be preferred, or that that is so at least where the matter comes before the Court, as unusually it does here, upon the motion of the applicants. In the end, however, I think questions of which party bears the burden are unlikely to be determinative. The applicants put their case principally upon the circumstance that, as they put it, the procedures of, and relief available in, the Industrial Relations Commission offer greater flexibility than the corresponding procedures and relief here, so that both the applicants seek a legitimate forensic advantage by proceeding first in the Commission and a resolution of the claims by the Commission is more likely than a resolution of the Trade Practices Act issues here to result in a final determination of the claims made by the applicants against the respondents. That is so, it is put, because of the greater flexibility to which I have referred and because, since any monetary relief granted by the Commission is unlikely to be less than monetary relief which might be available here, principles against double recovery would be likely to render any further steps in the proceedings in this Court both unnecessary and nugatory. Matters of this sort undoubtedly involve a degree of speculation. It is, however, plainly true that whereas the proceedings in this Court would require the Court to determine by reference to findings of fact, a series of well-established principles of law, the Industrial Relations Commission has powers, under the Industrial Relations Act, to act more flexibly, both by way of varying contractual relations between the parties and by making orders having regard to more general notions of justice and fairness. Certainly the remedial armoury of this Court, in claims under the Trade Practices Act, is wide and to a large extent flexible, but I think the applicants point to a legitimate forensic advantage in referring to the very wide flexibility available to the Commission under section 106, and I think there is, so far as one can judge these matters, considerable merit in the proposition that a determination in the Commission is likely at least very significantly to narrow the range of matters to be determined here, and perhaps to eliminate the need for further proceedings here altogether. The decision of the English Court of Appeal, to which I was referred, in Attorney-General v Arthur Andersen & Co. (United Kingdom) [1988] ECC 224, clearly establishes - if authority is required for the proposition - that the Court has power to make orders of the sort which the applicants seek here and will, in a proper case, exercise that power. The Court refers, at 229 to the general principle that, as Mustill LJ puts it: ..... if a plaintiff has thought fit to commence an action, which all the hardship to the defendant which this involves in terms of expense, worry and disruption, he should in general be made to face up to the situation which he has chosen to create and should not be permitted to conduct the action to a timetable which corresponds only to his own whimsy. Having put his hand to the plough he should continue to the end of the furrow. This is only fairness and common sense. But as his Lordship proceeds to point out, the same considerations must demand that in some instances the approach should be different, and this is ultimately to be decided as a matter of convenience and justice: where do the proper management of proceedings and the justice of the case require the matter to proceed first? Where two proceedings have been commenced within a short period of each other, as they were here and where, as here, there was a particular reason (in the form of a limitation period about to expire) for the commencement of the earlier proceedings at the time when they were commenced, not a great deal of weight, in my view, ought to be attributed to the order in which they were commenced. In summary, the reasons which I have given indicate, in my view, that the applicants seek what might be described as a legitimate forensic advantage in seeking to have these proceedings adjourned pending the proceedings in the Industrial Relations Commission and that no identifiable injustice results to the respondents in having those proceedings heard before these. Accordingly, in my view the applicants should succeed on the substance of their motion. I am not inclined, however, to order either that these proceedings be adjourned pending the final determination of the proceedings in the Industrial Relations Commission or, without qualification, that these proceedings be adjourned for a particular period. The precise orders should perhaps be made only after counsel have had the opportunity to make submissions about them, but I think the appropriate course is that these proceedings ought to be adjourned so that the proceedings in the Industrial Relations Commission may be continued with all appropriate diligence. The matter would need to be reconsidered, perhaps, if the respondents were to be successful in motions which they are presently pursuing in the Commission. It was suggested to me that the result of the present motion might affect what will happen in the Commission, but I am not prepared to speculate about that. Perhaps the matter may be dealt with most conveniently by setting a date for further directions in these proceedings, perhaps approximately 6 months from now, while giving the parties liberty to apply. Those orders would be substantially those sought in paragraphs 2 and 3 of the notice of motion. I am inclined to indicate, but it is not appropriate to make any particular orders, that the Court would be likely to require steps to be taken in these proceedings if it should appear that the proceedings in the Commission are not being diligently prosecuted, or are likely to be subject to serious delay. There is no suggestion at present that either of those is the case. Accordingly, the orders I propose to make, and subject to any submissions that counsel may wish to put to me, are to stand the matter over for further directions to Friday, 27 November 1998 and to grant the parties liberty to apply on 21 days' notice. It is probably appropriate, also, to make orders 4 and 5 sought in the notice of motion, which would defer any need to pursue proceedings to enable the second respondent to be properly served but I shall hear the parties as to any submissions they may wish to make about that and as to costs. [DISCUSSION WITH COUNSEL ENSUED] HIS HONOUR: I make the orders I have indicated: that is, I stand the matter over for further directions to Friday, 27 November 1998 at 9.30am. I grant the parties liberty to apply on 21 days' notice. I make the orders numbered 4 and 5 in the notice of motion, with the addition in the order numbered 5 after the word "serve" of the words "or for confirmation of service on". The question of costs may, I think, be dealt with in this way. The matter before me is of course an interlocutory motion. Without a special order it would not be possible to tax or require payment of costs at this stage and in the circumstances, although I have heard no argument about this, it would not be appropriate, in accordance with the ordinary practice of the Court, to make an order of that kind at this stage. My tentative view, and I put it this way for a reason which will appear, is that this is a case where ultimately the applicants should be entitled to their costs of the motion. It is evident that the costs have been fairly considerable. The applicants have, over substantial opposition, been successful: subject, of course to this, that the outcome of matters before the Commission over the next short while might conceivably cast a somewhat different light on it. I think, therefore, that I do no injustice, having given that indication, by not dealing immediately with the question of costs of the motion.