Idoport Pty Limited and Anor v National Australia Bank Limited & Ors, National Australia Bank Limited v OAMPS Limited and Ors [2004] NSWSC 695

New South Wales Supreme Court

CITATION : Idoport Pty Limited and Anor v National Australia Bank Limited & Ors, National Australia Bank Limited v OAMPS Limited and Ors [2004] NSWSC 695 HEARING DATE(S) : 2/08/04, 3/08/04, 4/08/04 JUDGMENT DATE : 13 August 2004

JURISDICTION: Equity Division Commercial List JUDGMENT OF : Einstein J DECISION : Orders for equitable discovery to be made as sought except qua identification of assets of Efficiency Investment B.V.

CATCHWORDS : Practice and procedure - Abuse of process - Discovery - Principles generally - Limits and extent of jurisdiction to order discovery - Equitable discovery in aid of prospective third party costs applications - Supreme Court Rule Part 52A rule 4 (5) (d) - Whether funding as a commercial venture for reward by third parties of litigation who cloak their identity in order to avoid assuming liability for adverse costs orders is capable of amounting to an abuse of process of the court - Whether depending upon particular circumstances the degree of a funder's active participation, involvement or control of litigation is capable of amounting to an abuse of process of the court - Consideration of whether parties who use the courts process and funders who stand behind them should be at risk in relation to costs if the proceedings be successful - Companies - Piercing the corporate veil - Costs of proceedings - Applications for gross sum costs orders Equity Act 1901 (NSW) Legal Profession Act LEGISLATION CITED : Maintenance, Champerty and Barratry Abolition Act 1993 (NSW) Supreme Court Act 1970 (NSW) UK Supreme Court Act 1981 United States Federal Rules of Civil Procedure, introduced in 1938 A v C [1981] 2 WLR 629 Abraham v Thompson [1997] 4 All ER 362 Adams v Cape Industries plc [1990] Ch 433 Arab Monetary Fund v Hashim (No 5) [1992] 2 All ER 911 Arkin v Borchard Lines Limited & Ors (No 2) [2004] Vol 1 Lloyd's Law Reports 88 Ashworth Hospital Authority v MGN Ltd [2002] 4 All ER 193; 1 WLR 2033 Atlas Maritime Co SA v Avalon Maritime Ltd, The Coral Rose (No. 1) [1991] 4 All ER 769 Attorney-General v Logan [1891] 2 QB 100 Australian Broadcasting Corporation v Lenah Game Meats Pty Limited (2001) 208 CLR 199 Bankers Trust Co v Shapira [1980] 3 All ER 353 Beneficial Finance Corporation v Price Waterhouse (1996) 68 SASR 19 Bentley Fragrances Pty Ltd v GDR Consultants Pty Ltd (1985) 11 FCR 29 Breen v Williams (1996) 186 CLR 71 Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549 British Steel Corporation v Granada Television Limited [1981] AC 1096 Canada Limited 155569 v 248524 Alberta Limited (1999) 176 DLR (4th) 479 Cardale v Watkins (1820) 5 Madd 18 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 Cincinnati and St. Louis Railroad Co. (1887) 11 N.E. Rep. 540 Clairs Keeley (a firm) v Treacy [2003] WASCA 299 Cojuangco, Re Application of (1986) 4 NSWLR 513 Computershare Ltd v Perpetual Registrars Ltd [2000] 1 VR 626 Condliffe v Hislop [1996] 1 All ER 431 Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 Cresvale Far East v Cresvale Securities (No 2) (2001) 39 ACSR 622 CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 Cummings v 2KY Broadcasters Pty Ltd [1981] 1 NSWLR 246 Dymocks Franchise Systems (NSW) Pty Ltd v Todd & Ors [2004] UKPC 39 (21 July 2004) Evans v Rees (1842) 114 ER 131 Fenton v Hughes (1802) 7 Ves Jun 287 Gardiner, In re ; Ex parte Orgill (1890) 16 VLR 641 Giles v Thompson [1994] 1 AC 142 Glaxo Wellcome PLC v Minister of National Revenue (1998) 162 DLR (4th) 433 Gore v Justice Corporation Pty Ltd (2002) 119 FCR 429 Hallett's Estate In re; Knatchbull v Hallett (1880) 13 Ch D 696 Hamilton v Al Fayed (No 2) [2003] QB 1175 Harpur v Ariadne Australia Ltd (No 2) [1984] 2 Qd.R of 523 Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298 Hayward v Giffard & Grove ("Hayward") (1838) 4 M&W 194, 150 ER 1399 Heimann v Commonwealth (1935) 54 CLR 126 Hill v Archbold [1968] 1 QB 686 Hill (t/as RF Hill & Associates) v Van Erp (1997) 188 CLR 159 Hooper v Kirella Pty Ltd (1999) 96 FCR 1 Hunter v Chief Constable of the West Midlands Police (Birmingham Six case) [1982] AC 529 Hutchinson v Greenwood (1854) 119 ER 125 Idoport Pty Ltd & Ors v Efficiency Investment BV and Anor [2001] NSWSC 1197 Idoport Pty Ltd v National Australia Bank Ltd [1999] NSWSC 828, BC9905226 Idoport Pty Ltd & Anor v National Australia Bank Ltd & Ors [2001] NSWSC 744, [2001] 914, [2001] 1081, [2002] 18 CASES CITED : Irving v Thompson (1839) 9 Sim 17 Jago v District Court of New South Wales) (1989) 168 CLR 23 Kebaro Pty Ltd v Saunders [2003] FCAFC 5 Keelhall Pty Ltd t/as 'Foodtown Dalmeny' v IGA Distribution Pty Ltd [2003] NSWSC 816 Kerr v Rew (1840) 5 My & Cr 154 Knight v F P Special Assets Ltd (Knight's case) (1992) 174 CLR 178 Knight, Re; Knight v Gardner (1887) 57 LT 238 Land and Property Trust Co Plc In re [1991] 1 WLR 601 Latoudis v Casey (1990) 170 CLR 534 Leicester v Walton (unreported, NSWCA, 22 November 1995), BC9501770 Lord v Firns [2000] NSWSC 1021 Mark Rich and Co Holding GmbH v Krasner [1999] EWJ No. 210 (UKCA) Magic Menu Systems Pty Ltd & MMS Franchising Pty Ltd v AFA Facilitation Pty Ltd, Janus, Kobble Creek Pty Ltd & Simon (1997) 72 FCR 261 McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623 McFarlane v EE Caledonia Ltd (No. 2) [1995] 1 WLR 366 Mercantile Group (Europe) AG v Aiyela [1994] QB 366 Merchandise Transport Ltd v British Transport Commission [1961] 3 All ER 495 Mobbs v Vandenbrande (1864) 33 LJQB 177 Movitor Pty Ltd (in liq) v Sims (1996) 64 FCR 380 National Australia Bank Limited (NAB) v Market Holdings Pty Limited (in liquidation) [2001] NSWSC 253 National Education Advancement Programs (NEAP) Pty Ltd v Ashton (1995) 33 IPR 281 National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd (No 1) (1995) 132 ALR 514 North South Construction Services Pty Ltd v Construction Pacific Management Pty Ltd [2002] NSWSC 286 Norwich Pharmacal Co v Customs & Excise Commissioners [1974] AC 133 Oshlack v Richmond River Council (1998) 193 CLR 72 Palmer v Walesby (1868) LR3ChApp 732 Pioneer Concrete Services Limited v Yelnah Pty Ltd (1986) 5 NSWLR 254 Post v Toledo, Cincinnati & St Louis Railroad Company (1887) 11 NE 540 Pressed Steel Car Co v Union Pacific Railroad Co (1917) 240 F 135 P v T Ltd [1997] 4 All ER 200 Queen of Portugal v Glyn (1840) 7 Cl & F 466 Ram Coomar Coondoo v Chunder Canto Mookerjee (1876) 2 App Cas 186 UKPC Rogers v R (1994) 181 CLR 251 Roux v Australian Broadcasting Commission [1992] 2 VR 577 R v Greene (1842) 4 QB 646, (1843) 114 ER 1043 Sharp v Lush (1879) 10 Ch D 468 Sinclair Refining Co v Jenkins Petroleum Process Co 289 US 689 Skinner v. Commissioner for Railways (1937) 37 SR (NSW) 261 Societe Romanaise De La Chaussure S.A. v British Shoe Corporation Limited [1991] FSR 1 Vd 18 Smits v Roach (2002) 55 NSWLR 166 Stocznia Gdanska SA v Latreefers Inc (No 2) [2000] EWCA Civ 36 Straka v Humber River Regional Hospital [2000] 51 OR (3d) 1 Survival & Industrial Equipment (Newcastle) Pty Ltd v Owners of the Vessel Alley Cat (1992) 36 FCR 129 Theosophical Foundation Pty Ltd v Commissioner of Land Tax (1966) 67 SR (NSW) 70 Trendtex Trading Corporation v Credit Suisse [1982] 1 AC 679 Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 Walton v Gardiner (1993) 177 CLR 378 Wentworth v Wentworth (2000) 52 NSWLR 602 Wik Peoples v State of Queensland (1996) 187 CLR 1 Williams v Spautz (1992) 174 CLR 509 Idoport Pty Limited ACN 075 318 106 (Plaintiff 50113/98) National Australia Bank Limited ACN 004 044 937 (First Defendant 50113/98, Plaintiff 2571/04)) National Markets Group Limited ACN 071 105 149 (Second Defendant 50113/98) National Australia Financial Management Limited (ACN 000 176 116) (Third Defendant 50113/98) Australian Market Automated Quotation (Ausmaq) System Limited (ACN 062 527 575) (Fourth Defendant 50113/98) Glenn L L Barnes (Fifth Defendant 50113/98) Francis J Cicutto (Sixth Defendant 50113/98) PARTIES : David M Krasnostein (Seventh Defendant 50113/98) Kevin F Courtney (Eighth Defendant 50113/98) Russell A McKimm (Ninth Defendant 50113/98) Oamps Limited ACN 006 743 719 (First Defendant 2571/04) Australian International Insurance Limited ACN 006 544 690 (Second Defendant 2571/04) Robert Porter (Third Defendant 2571/04)