Hancock v Rinehart [2017] NSWSC 1869

Supreme Court New South Wales

Medium Neutral Citation: Hancock v Rinehart [2017] NSWSC 1869 Hearing dates: 28 June 2017 Date of orders: 28 June 2017 Decision date: 28 June 2017 Jurisdiction: Equity Before: Brereton J Decision: Motion dismissed with costs Catchwords: PROCEDURE – application for stay of proceedings pending other proceedings – summary dismissal of application Cases Cited: Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd (1992) 34 FCR 287; [1992] FCA 71 Category: Procedural and other rulings Parties: John Langley Hancock (First Plaintiff) Bianca Hope Rinehart (Second Plaintiff) Gina Hope Rinehart (First Defendant) Representation: Counsel: C H Withers with P Meagher (Plaintiffs) B McClintock SC with C N Bova (First Defendant)

Solicitors: Yeldham Price O'Brien Lusk (Plaintiffs) Speed and Stracey (First Defendant) File Number(s): 2011/285907

Judgment (ex tempore) 1. The Court is and has, for more than 18 months, been seized of a motion – called, for convenience, the "3 September 2015 motion" – by which the second plaintiff seeks a number of orders for production of documents and examination of the first defendant in aid of enforcement of the substantive orders made in these proceedings in March of 2015. In support of that motion, the plaintiffs contend that the first defendant has failed to hand over to the second plaintiff all the trust documents. In that motion, there are issues as to the content of the term "documents of the trust" and, consequent upon that, whether there are such documents which the first defendant has failed to deliver up to the second plaintiff. 2. On the 3 September 2015 motion, the evidence has been closed and re-opened on too many occasions than I can now recall. On the last such occasion (being 4 May 2017), a claim for privilege by the first defendant in respect of certain documents in the possession of Freehills was overruled, and access was granted to those documents. At that time, I made orders as follows: (1) The first defendant's motion filed 31 January 2017 be dismissed with costs. (2) There be general access to the documents produced by Freehills pursuant to the subpoena of 2 December 2016. (3) The plaintiffs have leave to reopen the evidence on the 3 September 2015 motion and for that purpose lodge with my associate by 11 May 2017 a folder containing: (a) an index; (b) copies of the documents so tendered; and (c) any submissions they wish to make in respect of the tender, and the documents if admitted. (4) The defendants lodge with my associate by 18 May 2017 a folder containing: (a) an index; (b) any evidence in reply to the additional evidence; (c) any objections and submissions they wish to make in respect of the tender, and the documents if admitted; and (d) a statement whether they oppose the question of the admission of any documents so tendered, and any submissions made in respect of them if admitted, being dealt with on the papers without any further oral hearing. (5) The plaintiffs lodge with my associate by 25 May 2017 any evidence and submissions in reply. THE COURT FURTHER ORDERS THAT the operation of order 2 be stayed until 11 May 2017 or further order with liberty to apply by arrangement with my Associate in the meantime for an extension of time. 1. Those orders have subsequently been varied, sometimes by agreement, and at least once over the plaintiff's opposition, to extend time, first for the plaintiff and later for the first defendant, to comply with orders 3, 4 and 5 respectively. 2. On 24 May 2017, the plaintiffs, pursuant to order 3, lodged submissions and the documents they wished to tender upon reopening. 3. Although, thereafter, time for the first defendant to comply with order 4 was extended, at least to 16 June, the first defendant instead filed, on 19 June, a motion seeking a referral of the proceedings in respect of certain matters raised in the plaintiff's reopening to arbitration, and a stay consequent upon that referral; and, alternatively, an interlocutory adjournment or stay of the 3 September 2015 motion, pending the determination of proceedings currently pending in the Federal Court of Australia, on appeal therefrom, in the Supreme Court of Western Australia and in an arbitration before Mr Fitzgerald QC. 4. In turn, the plaintiffs move orally for summary dismissal of that motion, essentially on the basis that it does not have reasonable prospects of success. 5. The first defendant no longer presses an application for referral to arbitration, and so her only application before the court is one in the nature of an adjournment or interlocutory stay, of the kind referred to and considered by Lockhart J in Sterling Pharmaceuticals. [1] That decision makes clear that the question is one of balancing justice and convenience, and is a discretionary judgment. Relevant considerations include the degree of progress of the competing proceedings, and the time at which each of the proceedings will be heard and determined. 6. The first defendant's contention is that, in her reopening, the second plaintiff has raised issues concerning what the parties have called the Debt Reconstruction Deed, which are also issues in the Federal Court proceedings, the Western Australian proceedings, and the arbitration proceedings. I have been taken in some though not exhaustive detail to the relevant allegations in the Federal Court proceedings. Those in the other proceedings have been only mentioned. It is fair to say that it is possible, but it seems a remote likelihood, that any decision I would make about the Debt Reconstruction Deed would decide any issue tendered by the pleadings in the Federal Court. That is because the fundamental issue before me is whether the Debt Reconstruction Deed and documents associated with it are "documents of the trust", which the first defendant ought to have delivered up, and that issue should be informed essentially by the capacity in which the first defendant entered into and gave instructions concerning that transaction. While it is correct that there are allegations in the Federal Court pleadings about the capacity in which the present first defendant was acting, those allegations do not, at least at first sight, appear to raise, distinctly or directly, the issue which I will be required to decide on this application. 7. For that reason it seems to me a remote prospect, although not an impossible one, that I would be required to decide, in this proceeding, any question which would found an issue estoppel in the Federal Court proceeding. That seems to be a view shared by the first defendant; where solicitors have observed, in a letter of 27 June 2017, that: While we think that in the context of Brereton J determining your client's motion it is unlikely that any such findings (if made) will create an issue estoppel, there is no doubt that in certain circumstances an issue estoppel may arise... 1. Against that remote possibility needs to be considered the circumstance that the proceeding before this Court presently is in the nature of an enforcement application, to enforce and vindicate orders already made by the Court if they have not been complied with, or if they have been misunderstood. Further relevant context is that that proceeding has been on foot, as I have said, for more than 18 months, and re-opened on multiple occasions. Still further relevant context is that the length of any adjournment is unknown and indefinite, inter alia, because in the Federal Court proceedings no defence has yet been filed, pending resolution of the question as to whether the matter should be referred for arbitration. At least it can be said that an adjournment is likely to be lengthy. 2. The strongest issue argued in favour of the application is that these issues would be determined with due process and on pleadings in the Federal Court proceedings, whereas their determination here would be more summary because of the nature of the proceeding. While there is some force in that, it is important to note that order 4 of 4 May 2017 provides the defendants here with an opportunity to tender any evidence in reply to the additional evidence that they may wish to tender, any objections and submissions they wish to make in respect of it and, if they wish, to request an oral hearing on the reopening. In those circumstances, the first defendant would have every opportunity to which she is entitled, by the rules of natural justice, to contest the issue before me, if minded to do so. 3. I am conscious that I am asked at this stage only to decide whether the motion should proceed or not, but I am also conscious of the inordinate time for which the present motion has been on foot. It seems to me that it would be most unjust and inconvenient to defer the finalisation of this long outstanding motion, to permit issues which it potentially raises to be resolved in other proceedings in order to avoid a risk that a decision on the present application might found an issue estoppel in those other proceedings, where that risk appears to be a remote one. 4. In my view, the discretion could be exercised only one way, and that would be against the adjournment. In those circumstances, it seems to me that the motion does not have reasonable prospects of success, and should be dismissed with costs. 5. The Court orders that time for the first defendant to comply with order 4 of 4 May 2017 be further extended to 12 July 2017, and that the motion filed on 19 June 2017 be dismissed with costs.