FEDERAL COURT OF AUSTRALIA Bulong Nickel Pty Ltd v Bateman Project Engineering Pty Ltd [2001] FCA 1900 PRACTICE AND PROCEDURE - application for leave to serve originating process out of Australia - whether prima facie case for relief established by party obtaining the order. Trade Practices Act 1974 (Cth) ss 51A, 52, 82 Federal Court Rules O 8 r 1 and r 2, O 9 r 7 Merpro Montassa Ltd v Conoco Specialty Products Inc (1991) 28 FCR 387 cited Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102 cited Century Insurance Ltd (NL) v New Zealand Guardian Trust Ltd [1996] FCA 376 cited Trade Practices Commission v Gillette Company (No 2) (1993) 118 ALR 280 referred to Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1995) 58 FCR 365 referred to AIMS Computer Systems Pty Ltd v IPC Corporation (Australia) Pty Ltd [1996] FCA 847 referred to Tycoon Holdings Ltd v Trencor Jetco Inc (1992) 34 FCR 31 referred to Sydbank Soenderjylland A/S v Bannerton Holdings Pty Ltd (1996) 68 FCR 539 referred to Caterpillar Inc v John Deere Ltd [1999] FCA 1503 referred to BULONG NICKEL PTY LTD (ACN 000 807 036) and BULONG OPERATIONS PTY LTD (ACN 008 930 881) v BATEMAN PROJECT ENGINEERING PTY LTD (ACN 056 741 596); KINHILL PACIFIC PTY LTD (ACN 010 241 620); SNC‑LAVALIN ENGINEERS & CONSTRUCTORS INC and KILBORN ENGINEERING & CONSTRUCTION LTD WAG 14 of 2000 LEE J 25 JUNE 2001 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 14 OF 2000 BETWEEN: BULONG NICKEL PTY LTD (ACN 000 807 036) FIRST APPLICANT BULONG OPERATIONS PTY LTD (ACN 008 930 881) SECOND APPLICANT AND: BATEMAN PROJECT ENGINEERING PTY LTD (ACN 056 741 596) FIRST RESPONDENT KINHILL PACIFIC PTY LTD (ACN 010 241 620) SECOND RESPONDENT SNC-LAVALIN ENGINEERS & CONSTRUCTORS INC THIRD RESPONDENT KILBORN ENGINEERING & CONSTRUCTION LTD FOURTH RESPONDENT JUDGE: LEE J DATE OF ORDER: 25 JUNE 2001 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The applicants be granted leave to serve the Application and Amended Statement of Claim outside Australia on the third and fourth respondents by serving such originating process on each respondent in accordance with Canadian law. 2. The copies of the Application served on each of the third and fourth respondents must be endorsed in red ink with the terms of Order 9 rule 7 of the Federal Court Rules set out in full. 3. A copy of this order must be served on the third and fourth respondents concurrently with service of the originating process together with a list of the affidavits relied upon by the applicants to obtain the order for leave to serve the respondents out of Australia, the applicants to provide a copy of any affidavit requested by a respondent. 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 W 14 OF 2000 BETWEEN: BULONG NICKEL PTY LTD (ACN 000 807 036) FIRST APPLICANT BULONG OPERATIONS PTY LTD (ACN 008 930 881) SECOND APPLICANT AND: BATEMAN PROJECT ENGINEERING PTY LTD (ACN 056 741 596) FIRST RESPONDENT KINHILL PACIFIC PTY LTD (ACN 010 241 620) SECOND RESPONDENT SNC-LAVALIN ENGINEERS & CONSTRUCTORS INC THIRD RESPONDENT KILBORN ENGINEERING & CONSTRUCTION LTD FOURTH RESPONDENT JUDGE: LEE J DATE: 25 JUNE 2001 PLACE: PERTH REASONS FOR JUDGMENT 1 This is an application under O 8 of the Federal Court Rules for leave to serve originating process on the third and fourth respondents outside the Commonwealth of Australia. 2 The applicants commenced proceedings by filing an Application and Statement of Claim in this Court on 7 February 2000. 3 On 29 August 2000 the applicants filed a motion and supporting affidavits for leave to effect service of process on the third and fourth respondents in Canada. On 19 October 2000 the first respondent filed notice that it opposed the motion, and a motion for orders that the Statement of Claim be struck out, primarily for failing to disclose a reasonable cause of action. On 1 November 2000 I heard argument on the motion for striking out the Statement of Claim and on the application for leave to serve out of the jurisdiction. I made orders granting leave to the applicants to amend the Statement of Claim, and directed that further hearing of the motion for leave to serve out of the jurisdiction to be adjourned to 9 March 2001. An Amended Statement of Claim was filed on 10 January 2001. On 8 March 2001, by consent, I made orders that the hearing of the motion be further adjourned to a date after 21 March 2001 and that the hearing be conducted ex parte. On 5 June 2001, the applicants filed a notice of change of solicitors and further lengthy affidavits in support of the motion. The applicants were directed to file detailed written submissions, the motion to be determined on those submissions unless the Court required further oral submissions. Written submissions were filed by the applicants on 15 June 2001. 4 According to the Amended Statement of Claim, the case asserted by the applicants is as follows. 5 Until November 1998 the applicants were members of the "Resolute group" of companies. Another entity in the Resolute group was Resolute Resources Limited ("Resolute Resources"). In 1989 Resolute Resources and the second applicant entered a joint venture agreement to explore and exploit certain mining tenements owned by those parties in Western Australia ("the Bulong tenements"). Resolute Resources was appointed the "operator" of the joint venture. In 1996 the first applicant acquired the interests of Resolute Resources in the Bulong tenements and in the joint venture. 6 The first and second respondents are Australian companies which carry on business as suppliers of engineering, planning and project management services. In September 1992 the first and second respondents formed a partnership known as "Bateman Kinhill". The third respondent is a Canadian company. In January 1999 it merged with another Canadian company, Kilborn Inc., a member of the "Kilborn Group" of companies. For the purposes of these reasons, "Kilborn Inc." will describe the third respondent. The fourth respondent is also a Canadian company and another member of the Kilborn Group of companies. The third and fourth respondents carry on business as suppliers of engineering, project management and construction services. 7 It is pleaded that at a time prior to February 1995, the first and second respondents, through the partnership "Bateman Kinhill", and another member of the Kilborn Group of companies, in all relevant respects represented by Kilborn Inc., formed the Bateman Kinhill Kilborn ("BKK") joint venture to tender for and undertake a study of the feasibility of mining and processing laterite nickel ore deposits on the Bulong tenements ("the Bulong Nickel Project"). It is said that the BKK joint venture may be inferred from presentation documents prepared by the tenderers for the feasibility study; a draft agreement in respect of the tender for the feasibility study; an agreement between Bateman Kinhill and another member of the Kilborn Group; a memorandum by one of the parties; and from letterheads used by the first and second respondents and another member of the Kilborn Group. 8 In February 1995, BKK made a presentation in support of a tender to Resolute Resources for the conduct of a feasibility study of the Bulong Nickel Project. The proposed feasibility study incorporated the use of a new processing technology and considerations of the associated effects thereof on plant design. In March 1995, Resolute Resources and the second applicant agreed with BKK that BKK undertake the feasibility study of the Bulong Nickel Project as proposed in the presentation and tender ("the Feasibility Study Agreement"). Drafts of an agreement for a feasibility study were exchanged between the parties but the Feasibility Study Agreement is said to be partly oral and partly in writing. The material terms of the Feasibility Study Agreement pleaded were that a study of "bankable quality" be produced by BKK for a calculated fee, to consist of a comprehensive statement of the plans, analyses and models to be employed, estimates of the operating and ongoing capital costs of the Bulong Nickel Project within a range of plus or minus 10 percent of the actual costs. 9 BKK commenced a feasibility study in March 1995. The applicants plead that by June 1995, Resolute Resources had expressed concern to BKK about the manner in which work on the study was being performed. In response to these concerns, the first and second respondents wrote to Resolute Resources proposing that they assume full leadership of the study with the third respondent to act as a subconsultant, and that the study be carried out in Perth, with personnel of the respondents being based in Perth for this purpose. Enclosed with this correspondence was a letter on the letterhead of the fourth respondent on behalf of either the third respondent or the fourth respondent, stating that the third respondent agreed to these proposals, and further, that the third respondent would "stand behind the quality of the document". The letter further stated that the author of the letter or another employee of the third respondent would travel to Perth to review the study, and that the third respondent was committed to the feasibility study and believed that it could be completed within the scheduled time and budget, and was prepared to offer financial commitments in that regard. In July 1995, the first and second respondents wrote to Resolute Resources confirming that BKK agreed to these proposals. The applicants state that these variations to the Feasibility Study Agreement were accepted by the applicants. 10 In September 1996 the first, second and third respondents delivered to Resolute Resources a feasibility study ("the September feasibility study") and an addendum to the study. In November 1996 a further feasibility study ("the November feasibility study") was prepared on altered parameters, in particular an increase in the amount of ore to be put through the processing plant. 11 In summary it is pleaded that the first, second and third respondents expressly stated in the September feasibility study that, in their opinion, the processing plant as designed by them for the study would be capable of performing within the overall parameters of the performance criteria; that they endorsed the suitability of the process design; that the economic evaluation provided was based on performance criteria which they regarded as "acceptable"; and the capital cost estimate was based on the "scope" developed during the feasibility study which was of sufficient detail to allow an estimate within plus or minus 10 percent of the actual cost. 12 In respect of the November feasibility study, the applicants plead that the first, second and third respondents confirmed that the proposed plant design used for the September feasibility study was capable of meeting the performance criteria relied on for that study; that an improved plant design was relied upon for the new parameters of the November feasibility study; that the Bulong Nickel Project would have an implementation and construction period of 21 months and would be able to be commissioned on 1 April 1998; that the estimate of capital costs was based on the "scope" and data produced for the September feasibility study, modified for the different study parameters of the November feasibility study; and that the capital cost estimate included commissioning expenses and a spent contingency allowance, and was of sufficient detail to allow the estimate to be within plus or minus 10 percent of the actual cost. 13 The applicants plead that by reason of the expertise of the first, second and third respondents; the fee paid by Resolute Resources for the preparation and delivery of the studies; the known purpose and objects of the studies; and the statements that the estimates of costs would be accurate to within plus or minus 10 percent, it was impliedly represented by the first, second and third respondents that they would exercise reasonable care, skill and diligence in undertaking the studies and in making representations. It was also impliedly represented that the first, second and third respondents would provide their engineering services and undertake the feasibility studies in a prudent, efficient and workmanlike manner. 14 It is alleged that the applicants and Resolute Resources took a number of actions in reliance on the representations made in the November feasibility study. Resolute Resources prepared financial analyses of the Bulong Nickel Project using the estimated capital and operating costs provided in the November feasibility study. The applicants made an agreement in December 1996 to buy out the interest of Resolute Resources in the Bulong Nickel Project and the Bulong Joint Venture. On 7 February 1997 Resolute Resources, on behalf of the applicants, entered an agreement under which the first and second respondents and a Kilborn Group company agreed to provide design and engineering skills, and engage and manage contractors, for the construction and commissioning of the Bulong Nickel Project, including initial performance testing of the processing plant. The applicants borrowed and raised funds to undertake the Bulong Nickel Project and commenced an operation on the Bulong tenements that was based on the level of throughput assumed in the November feasibility study. In doing so, the applicants incurred liabilities they would not otherwise have incurred. 15 It is claimed that reliance on the representations in the November feasibility study caused detriment to the applicants because the true capital and operating costs of the project were substantially higher than those portrayed in the November feasibility study. Additionally, the time taken for commissioning the upgraded processing plant was much longer than that estimated in the November feasibility study. 16 The applicants allege against the first, second and third respondents that the representations contained in the November feasibility study constituted misleading or deceptive conduct in breach of s 52 of the Trade Practices Act 1974 (Cth) ("the Act"). Section 51A of the Act is relied upon where representations are said to have been made with respect to future matters without reasonable grounds existing for making them. The applicants allege, alternatively, that the third respondent knew that the studies were compiled from work to which it had contributed, and further knew of the contents of the report, including the statements of endorsement by the third respondent made in the letter on its behalf to Resolute Resources. The third respondent also knew to whom the studies would be delivered. With this knowledge, it is alleged the third respondent authorised and joined with the first and second respondents in making the representations contained in the studies, and therefore engaged in misleading or deceptive conduct. In the alternative, it is alleged the third respondent aided and abetted, or was directly or indirectly knowingly concerned in or a party to, the contravention of s 52 of the Act. 17 Further or alternatively, the applicants allege that the first and second respondents breached the Feasibility Study Agreement by failing to exercise care, skill and diligence in undertaking the feasibility studies and in making the representations contained therein. It is also alleged that the Feasibility Study Agreement was breached by reason of the capital and operating cost estimates not being accurate to within plus or minus 10 percent of the actual costs. It is further pleaded that the statements contained in the letter to Resolute Resources relating to the involvement of the third or fourth respondents, were accepted by Resolute Resources and the second applicant and, amounted to a collateral contract under which either the third or fourth respondent promised, or warranted, that the feasibility study would be a high quality bankable study undertaken according to the terms of the Feasibility Study Agreement. On the grounds relied upon to support the pleadings of a breach of the Feasibility Study Agreement, and contravention of s 52 of the Act, it is claimed that the collateral contract was breached. 18 Further, or alternatively, to the claims of misleading or deceptive conduct and breach of contract, the applicants say that the first, second and third respondents were bound by duties of care. It is alleged that the first, second and third respondents were negligent in that a reasonably competent engineer acting prudently, in a workmanlike manner, exercising reasonable care, skill, diligence and applying standard engineering practices, would not have (a) estimated the length of time to commissioning of the project to be only 21 months; (b) produced a deficient capital cost estimate by reason of insufficient cost detail; and, (c) stated the cost estimates to be within plus or minus 10 percent without adequate allowance for risk. 19 The applicants claim against the first, second and third respondents damages and interest for misleading or deceptive conduct and for negligence. The applicants claim damages and interest against the first and second respondents for breach of the Feasibility Study Agreement, and against the third and fourth respondents for breach of the collateral agreement. 20 The evidence filed in support of the application for leave to serve proceedings out of the jurisdiction consisted of affidavits sworn by the Chief Financial Officer of Preston Resources Ltd, the controlling entity of the company which acquired the whole of the interests of the applicants in the Bulong tenements and the Bulong Nickel Project in November 1998, and an affidavit sworn by an engineer with expertise in the relevant field. 21 Documents relied upon by the applicants were identified and exhibited to the affidavits. 22 Perusal of the presentation and feasibility "scope" documents designed for the tender to undertake the feasibility study show the covering page of the presentation booklet as entitled "BULONG FEASIBILITY STUDY PRESENTATION: OVERHEADS, Prepared by BATEMAN KINHILL KILBORN 47 Burswood Road, Victoria Park, Western Australia…22 February 1995". Subjects included in the agenda for the presentation included a description of "Bateman Kinhill" and the "Kilborn Group of Companies"; the personnel for the feasibility study and their duties; details of the planned feasibility study including recommended processing techniques, a study schedule and an estimate of the cost of the study. The BKK joint venture is described as being "[a] 50/50 joint venture between Bateman Kinhill and Kilborn formed to secure and undertake the feasibility study for the Bulong Nickel Project for Resolute Resources". Detailed representations were made as to the capability and experience that the joint venturers were able to offer. Under a heading "FEASIBILITY STUDY SCOPE", it is stated that "[c]ompletion of [the scope of work to be undertaken during the study] will lead to the production of [a] feasibility study of bankable quality, comprising a comprehensive statement of the project's ore resources, mining plan, processing plan, infrastructure facilities plan, transport plan, project and operating costs and timings, product sales and detailed financial analyses and models". Under the heading "CAPITAL AND OPERATING COSTS", it is stated: "The core of the financial work involved in the study requires estimating of both operating and capital cost. The Engineer will [amongst other things]: · provide an estimate quality to ±10% on capital and operating costs; · provide estimates of indirect costs…; · estimate contingency and escalation allowances…; · present operating costs on a monthly basis for the first twelve months of operations, on a quarterly basis for the next four years and an annual basis thereafter; · estimate ongoing capital requirements; [and] · present the capital estimate based on the construction implementation plan such that each financial decision during construction can be related to a study estimate." The estimated fee for preparing the feasibility study was calculated as $2,275,140. 23 Correspondence between Resolute Resources and the respondents, between 15 June 1995 and 5 July 1995, indicated the dissatisfaction of Resolute Resources with the progress of the study. The dissatisfaction appears to have been resolved by the respondents proposing, and Resolute Resources agreeing, that Bateman Kinhill would assume leadership of the study with Kilborn Inc. acting as a "subconsultant". Also in the letter of confirmation from Bateman Kinhill dated 5 July 1995, it is stated that "Kilborn acknowledges that its responsibilities with respect to its inputs to the study remain as before, particularly with respect to the requirement to produce a high quality "bankable" standard document, [and] the need for Kilborn to 'stand behind' its contribution". It is stated that to achieve the required standards, Kilborn Inc. had offered to provide the services of certain personnel to conduct periodic reviews and to assist the study team, and to revise the organisation of its personnel working on the feasibility study. 24 The September feasibility study states "Bateman Kinhill and Kilborn are of the opinion that the plant as designed will be capable of performing within the overall parameters of the feasibility study performance criteria" and "Bateman Kinhill and Kilborn endorse the suitability of the process design as represented by the flowsheets and design criteria for the Bulong ores". Representations were made as to the costs and start-up time of the project. As to the capital cost estimate, the executive summary states that the "feasibility study was structured to allow an overall estimate accuracy of plus or minus 10 percent". The operating costs were similarly estimated to an accuracy of plus or minus 10 percent. The addendum to the September feasibility study states that it was prepared after potential plant improvement "scenarios" had been identified, and Resolute Resources had directed Bateman Kinhill to carry out further study in that regard. The estimated costs were calculated to be within plus or minus 40 percent. Bateman Kinhill recommended that further work be conducted in order to provide a level of accuracy commensurate with that contained in the main study, that is, accuracy within plus or minus 10 percent of the actual costs. 25 The November feasibility study provided the more accurate estimates forecast in the addendum to the September feasibility study. The letterhead of the covering letter to the November feasibility study contains the description "Bateman Kinhill Kilborn Joint Venture", each name being in the print type characteristic of that company. The letter states that Bateman Kinhill "were specifically directed to omit EPCM, contingency and insurance costs"from the estimated costs contained in the September addendum. However, contingency, insurance and EPCM [engineering, procurement and construction management] costs were included in the November feasibility study and were calculated using the same estimating techniques and criteria as that used in the September feasibility study. The implementation and construction period was estimated to 21 months, notably the same period estimated in the September feasibility study. Estimates were specified for the capital and operating costs under the conditions assumed in the November feasibility study, and were stated to be at a level of accuracy within plus or minus 10 percent of the actual costs. 26 The contract and supplementary deed entered into by the applicants in February 1997 for the design and engineering of the Bulong nickel ore processing plant, was made with the first and second respondents and Kilborn Engineering Pacific Pty Ltd. 27 Amongst the documents exhibited is a contract dated 1 July 1995 entered into between parties identified as "BATEMAN KINHILL, a partnership between Kinhill Pacific Pty Ltd…and Bateman Projects Engineering Pty Ltd…(hereinafter called 'Bateman Kinhill') and KILBORN PACIFIC PTY LTD (hereinafter called 'Kilborn')". The affidavit relied upon by the applicants states that company searches of "Kilborn Pacific Pty Ltd" show that no company of that name is registered in Australia or Canada. The deponent states a belief that the reference to Kilborn Pacific Pty Ltd is a typographical error and that the party to the contract should have been identified as Kilborn Engineering Pacific Pty Ltd. The recitals to the agreement explain that Bateman Kinhill had been awarded a contract by Resolute Resources to carry out a feasibility study of the various facilities comprising the "Bulong Nickel Laterite Project in Western Australia". It is further stated that "[a]fter completion or during execution of the Services under the Contract, Bateman Kinhill and Kilborn will seek the award of additional contracts to carry out the engineering, procurement and construction management…of the project for [Resolute Resources]. With the award of the Contract, Bateman Kinhill desire to engage Kilborn as a Sub-Contractor to provide specific Services as follows". The contract describes the services to be performed by Kilborn and the responsibilities of Bateman Kinhill in providing for Kilborn to perform those services. The contract is signed by the "MANAGER IT & ADMIN", on behalf of Kilborn, and "W.A. MANAGER", on behalf of Bateman Kinhill. 28 Five invoices from "Kilborn" to "Bateman Kinhill", between 4 August 1995 to 6 December 1995 are produced. The invoices are directed to Resolute Resources. A large portion of the fees tendered appears to have been for the cost of labour provided by certain persons. Several of these names appear in the bundle of exhibited correspondence, wherein it was agreed between Resolute Resources and the respondents that the third respondent would provide services to Bateman Kinhill as a subconsultant. There is contained in this bundle a letter from the third respondent to the managing director of Bateman Kinhill that discusses, amongst other things, the allocation of certain personnel of the third respondent to work on the feasibility study in Perth. These names appear in all five invoices. 29 As previously mentioned, the applicants assert they incurred liabilities in relying upon the feasibility study by deciding to borrow and raise funds for the cost of undertaking the Bulong Nickel Project. Documents show that the amount advanced by a financial institution was $A30,000,000 and that monthly site costs and operating costs were incurred by the applicants in establishing and undertaking the Bulong Nickel Project. 30 For the purposes of this motion, the expert evidence tendered by the applicants may be accepted as establishing, to the standard required by Order 8 r 2, that the feasibility studies produced to the applicants fell below the standard to be expected of a reasonably competent engineer in the circumstances, and that insufficient detail had been considered in attempting to produce capital and operating cost estimates accurate to plus or minus 10 percent. 31 Leave to serve out of the Commonwealth of Australia is governed by O 8 r 2(2) of the Federal Court Rules which, under the heading "Requirements for the grant of leave", states: "The Court may, by order, give leave to serve originating process outside the Commonwealth in accordance with Division 2 or 3 of this Order or, subject to subrule (2B), on such terms and conditions as it considers appropriate, if the Court is satisfied that: (a) the Court has jurisdiction in the proceeding; and (b) rule 1 applies to the proceeding; and (c) the party seeking leave has a prima facie case for the relief sought by the party in the proceeding." 32 I am satisfied that under O 8 r 1, this is a proceeding founded on a cause of action arising in the Commonwealth. I am likewise satisfied that the Court has jurisdiction to determine the claims made in this proceeding, whether under s 82 of the Act or the further attached jurisdiction of the Court. The remaining matter to be determined, therefore, is whether the applicants have established a prima facie case for the relief sought. 33 The meaning of a "prima facie case" as used in O 8 r 2(2), has been considered by this Court from time to time. 34 It appears to be accepted that the requirement that there be a prima facie case does not require assessment of an applicant's case as if a determination were being made at trial. As stated by Heerey J in Merpro Montassa Ltd v Conoco Specialty Products Inc (1991) 28 FCR 387, at this stage the Court might draw inferences more readily in favour of an applicant than at trial. In Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102 at 110 French J said: "a prima facie case is made out if, on the material before the court, inferences are open which if translated into findings of fact, would support the relief claimed". As I said in Century Insurance Ltd (NL) v New Zealand Guardian Trust Ltd [1996] FCA 376, the applicant must show that a case supporting the claim for relief can be found in the material presented to the court and it is assumed that the facts pointed to by that material will be proved. 35 There is some doubt as to whether, when more than one cause of action is pleaded, each cause of action must be suggested by a prima facie case. One view is that it is unnecessary for other causes of action to satisfy the test of a prima facie case where one cause of action has done so and the same relief is sought. This view was adopted by French J in Vetter Trittler (at 110) where his Honour, after referring to satisfaction that a prima facie case had been made out in respect of the claim made under the Act, said that a claim of conspiracy was open to doubt, but as the relief claimed under that head was the same as that sought in respect of the claim made under the Act, it was unnecessary to find that there was a prima facie case in respect of the conspiracy plea. This reasoning has since been adopted in several other decisions at first instance. (See: Trade Practices Commission v Gillette Company (No 2) (1993) 118 ALR 280; Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1995) 58 FCR 365; AIMS Computer Systems Pty Ltd v IPC Corporation (Australia) Pty Ltd [1996] FCA 847). 36 A contrary view was expressed by Wilcox J in Tycoon Holdings Ltd v Trencor Jetco Inc (1992) 34 FCR 31. His Honour held that where there is more than one cause of action pleaded, all causes of action must satisfy the requirements stipulated in O 8. The following points were made by his Honour (at 34-35) in support of this view. First, it was said that many of the paragraphs in O 8 r 1 use the words "the proceeding is founded on". His Honour noted that that language was apposite to a case based on a single course of action but less so for a case based on more than one cause of action. Second, where a respondent is to be brought before the Court on a cause of action included within O 8 r 1 it may seem advantageous for other causes of action not within O 8 r 1 to be litigated at the same time, however, such convenience must be weighed against the possible embarrassment to international comity that might result from an Australian court exercising jurisdiction against a foreign party in respect of a cause of action that has no real connection with Australia. Third, although a literal reading of O 8 r 2(2)(c) may suggest otherwise, the intent of the sub‑rule must be taken to be that the rule enables a foreign respondent to restrict litigation against it in this Court to causes of action in which the applicant can show a prima facie case. His Honour stated that a foreign respondent should not be put to the expense and inconvenience of appearing in this Court to meet a claim for which a prima facie case cannot be demonstrated. 37 In Century Insurance I stated that the issue to be determined by the Courtunder O 8 r 2(2)(c) is whether the case made out on the material presented on an application for leave, shows that a controversy exists between the applicant and a foreign party that is within the Court's jurisdiction to resolve, and whether the Court would be justified in causing a foreign respondent to be made subject to the conduct litigation against it in an Australian court. 38 Although the competing arguments have been referred to by Full Courts, it has not been an issue yet required to be decided. (See: Sydbank Soenderjylland A/S v Bannerton Holdings Pty Ltd (1996) 68 FCR 539 per Beaumont, Drummond and Sundberg JJ at 551; Caterpillar Inc v John Deere Ltd [1999] FCA 1503 per Carr, Sundberg and Kenny JJ at [34].) 39 If it is assumed that the material relied upon by the applicants will be received into evidence and the inferences, said by the applicants to be available therefrom, are drawn by the Court on the trial of the matter, it may be said that the applicants could make out a case to be answered by the third respondent in respect of a claim made under s 82 of the Act, or in negligence, and by the third or fourth respondent in respect of a claim of breach of the collateral contract pleaded. 40 I am satisfied, therefore, that a prima facie case exists against the third and fourth respondents in respect of those claims and that it is appropriate in the circumstances that the Court exercise its discretion to grant leave to serve originating process on the third and fourth respondents in Canada. Orders will be made accordingly. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee. Associate: Dated: 28 March 2002 Counsel for the Applicants: M Corboy Solicitor for the Applicants: Hollingdales Counsel for 1st Respondent: M Odes QC with D Goodman Solicitor for 1st Respondent Freehills Date of Hearing: 1 November 2000 Date of written submissions: 15 June 2001 Date of Judgment: 25 June 2001