FEDERAL COURT OF AUSTRALIA Cambridge Consolidated NL v Zephyr Minerals NL [2001] FCA 515 JURISDICTION – transfer of cross-claim – concurrent proceeding in State court. PRACTICE AND PROCEDURE – motion for leave to discontinue application – whether application should be dismissed – amendment of defence to cross-claim to withdraw significant admission. Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 5(5) State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 referred to CAMBRIDGE CONSOLIDATED NL v ZEPHYR MINERALS NL & ORS WAG 67 OF 1995 LEE J PERTH 3 MAY 2001 IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAG 67 OF 1995 BETWEEN: CAMBRIDGE CONSOLIDATED NL APPLICANT AND: ZEPHYR MINERALS NL FIRST RESPONDENT ANDREW JAMES DRUMMOND SECOND RESPONDENT AUSTRALIAN KIMBERLEY DIAMONDS NL THIRD RESPONDENT ZEPHYR MINERALS NL FIRST CROSS-CLAIMANT AUSTRALIAN KIMBERLEY DIAMONDS NL SECOND CROSS-CLAIMANT CAMBRIDGE CONSOLIDATED NL FIRST CROSS-RESPONDENT CAMBRIDGE GULF HOLDINGS NL SECOND CROSS-RESPONDENT BRIAN JAMES DENNIS CONWAY THIRD CROSS-RESPONDENT JUDGE: LEE J DATE OF ORDER: 3 MAY 2001 WHERE MADE: PERTH THE COURT ORDERS THAT: Applicant's motion filed 1 March 2001: 1. The name of the applicant, and the first cross-respondent, be amended to "Cable and Telecoms Ltd ACN 059 458 374". 2. The application be dismissed with costs. 3. The cross-claim be transferred to the Supreme Court of Western Australia. 4. Costs of the motion be reserved. Cross-claimants' motion filed 2 April 2001: 1. The motion be dismissed. 2. Costs of the motion be cross-respondents' costs in any event. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAG 67 OF 1995 BETWEEN: CAMBRIDGE CONSOLIDATED NL APPLICANT AND: ZEPHYR MINERALS NL FIRST RESPONDENT ANDREW JAMES DRUMMOND SECOND RESPONDENT AUSTRALIAN KIMBERLEY DIAMONDS NL THIRD RESPONDENT ZEPHYR MINERALS NL FIRST CROSS-CLAIMANT AUSTRALIAN KIMBERLEY DIAMONDS NL SECOND CROSS-CLAIMANT CAMBRIDGE CONSOLIDATED NL FIRST CROSS-RESPONDENT CAMBRIDGE GULF HOLDINGS NL SECOND CROSS-RESPONDENT BRIAN JAMES DENNIS CONWAY THIRD CROSS-RESPONDENT JUDGE: LEE J DATE: 3 MAY 2001 PLACE: PERTH REASONS FOR JUDGMENT 1 The applicant seeks orders permitting it to change its name in this proceeding and leave to discontinue the whole of its claim against the respondents. 2 Those orders are not opposed save that the respondents contend that the applicant's claim should be dismissed and not discontinued. 3 Further, the applicant seeks an order that it be given leave to amend its defence to a cross-claim brought against it by two of the respondents, by withdrawing an express admission set out in that pleading and a further order that the cross-claim be transferred to the Supreme Court of Western Australia under s 5(5) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) ("the Cross-Vesting Act"). 4 In response, the respondents, by motion, seek an order that any further proceedings on the cross-claim be stayed pending disposal of the proceeding between the parties in the Supreme Court. 5 With regard to the question of leave to discontinue the application, the applicant states that its claims would be statute-barred if they were to be re-litigated and, furthermore, the applicant offers an undertaking to the Court not to bring any further proceeding against the respondents on the facts pleaded in the statement of claim. 6 Normally such circumstances may be sufficient for leave to be granted to discontinue a proceeding but there is another factor in this case which makes it appropriate that future conduct in the matter not rest upon limitation provisions or upon an undertaking. The applicant's statement of claim sought exemplary damages from two respondents for slander, said to have been committed with malice. If that claim and others in the statement of claim are now to be abandoned, it is appropriate that the application be disposed of with finality by an order dismissing it, and I will so order. 7 With regard to the request for leave to withdraw an admission in the defence to the cross-claim, the circumstances are unusual. 8 When these proceedings were commenced in June 1995 a director of the applicant, Conway, gave express instructions to the applicant's solicitors to admit in the defence to cross-claim that the applicant had found diamonds in exploratory drilling on mining tenements in the Kimberley region. The cross-claim alleged that diamonds found by the applicant had been taken from mining tenements of the cross-claimants. 9 In September 1997, Conway died and the Board of Directors of the applicant changed. Enquiries made by the incoming directors have been unable to establish any facts that would have permitted Conway to say that the applicant had found diamonds as asserted, whether on the applicant's mining tenements or on adjacent mining tenements of the cross-claimants. 10 The cross-claimants say they have been prejudiced in that they were encouraged by the admissions to prosecute a cross-claim seeking damages for conversion of its property, and for trespass, in that the location of holes drilled by the applicant made it likely that any diamonds recovered by the applicant were found on the cross-claimants' mining tenements. The cross-claimants had no knowledge that the applicant had found diamonds in its exploratory drilling and relied upon the assertions to that effect made by Conway. 11 That the cross-claimants have suffered prejudice may be so, but it is a prejudice that arises from the making of the assertion, and not from the grant of leave to withdraw the admission in the defence to the cross-claim. Furthermore, such prejudice as has been suffered may be compensated by an order for costs if the respondents are able to show entitlement to such an order in due course. (See: State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146.) 12 Leave should be given to the first cross-respondent to amend its defence to the cross-claim as sought in the motion. 13 With regard to the application for an order that the remainder of the proceeding, namely, the cross-claim, be transferred to the Supreme Court, I am satisfied, as required by s 5(5) of the Cross-Vesting Act, that it is in the interests of justice that the proceeding be determined in the Supreme Court. Either the same substratum of facts supports the proceeding in this Court and the proceeding on foot in the Supreme Court, or the matters have such a relationship in respect of matters of fact, and the parties thereto, that it is desirable that one court undertake the management of the whole of the litigation in which the parties are engaged. Efficient conduct of the litigation by elimination of duplication and by removing the prospect of separate courts deciding like issues in different ways, may only be realised by single management of the litigation and it is obvious that the relictual proceeding in this court should be transferred to the Supreme Court to be managed with the principal proceedings under way in that Court. 14 Orders should be made accordingly. 15 The motion of the respondents/cross-claimants for stay of the cross-claim should be dismissed. ORDERS: Applicant's motion filed 1 March 2001: 1. The name of the applicant, and the first cross-respondent, be amended to "Cable and Telecoms Ltd ACN 059 458 374". 2. The application be dismissed with costs. 3. The cross-claim be transferred to the Supreme Court of Western Australia. 4. Costs of the motion be reserved. Cross-claimants' motion filed 2 April 2001: 1. The motion be dismissed. 2. Costs of the motion be cross-respondents' costs in any event. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee. Associate: Date: 3 May 2001 Solicitor for the Applicant and First Cross-Respondent: Jackson McDonald Solicitor for the First, Second and Third Respondents and First and Second Cross-Claimants: Freehills Date Submissions Filed: 3 and 12 April 2001